§ The measures which I have announced so far are intended to give companies the confidence to invest and to ensure that the necessary finance is available. A greater volume of industrial investment, together with fuller and more efficient use of the investment we already have, is of critical importance to the solution of our industrial problems and to our strategy for a return to full employment. In the short run, however, there is a risk that action in these fields and the stimulus of expanding trade will not operate fast enough to save all the jobs which will be needed in the upturn. I have therefore looked hard for measures which will act directly on the level of employment without stimulating inflation or imposing too heavy a burden on the public sector borrowing requirement. As the House is aware. I announced a series 253 of such measures in September and December last year and again last February.
§ The schemes for increased training and job creation are continuing, but there is more that can be done. I fully share the concern of the trade unions at the present level of unemployment and the economic and social costs which it entails. I have therefore decided, following a proposal in the TUC Economic Review, that the amount paid per head under the temporary employment subsidy, at present £10 a week, should be doubled to £20 a week, which represents about one-third of average earnings in manufacturing.
§ The temporary employment subsidy is already preserving jobs at the rate of about 60,000 a year, covering over one-quarter of the overall total of eligible redundancies occurring within industry. This increase in the amount payable should make it substantially more attractive to firms as an alternative to declaring redundancies. The increase will operate for new applications received from today, and for existing cases from the date of their next three-monthly renewal.
§ I also propose to extend the scheme to the end of this year. This means that instead of ending in August—a year after it began—the scheme will now be open for new applications until the end of the year and payments will be made throughout 1977. Similar changes are being made to the corresponding scheme which applies in Northern Ireland.
§ The higher rate of subsidy will have time to produce a substantial effect. We estimate that this will preserve another 60,000 or so jobs between now and the end of the year, though rather more than half of these may be at the expense of other jobs. The gross cost will be about £95 million up to the end of 1977 and about £60 million in this financial year, although as I have pointed out before, because of the offsetting savings from unemployment benefit and additional tax revenue, the net cost to the public finances is likely to be only about one-third as much, or £30 million over the whole period. This decision will reinforce and extend a scheme which has already proved its worth and which is becoming well known to employers. It will provide jobs for those who would 254 otherwise have been made redundant, until the recovery is more solidly established.
§ I can also announce a further extension of the Community Industry Scheme which is designed to help socially disadvantaged young people who have difficulty in getting or holding down a job. I announced in December last year that 1,000 additional places would be provided up to March next year, and we have now decided that these can be continued beyond that date if there proves to be a need for them. I am also putting the scheme on the same footing as the job creation programme, by enabling Community Industry to give sponsors—mainly local authorities—a grant towards the cost of materials, of up to 10 per cent. of the labour costs of the project. These changes will cost about £2.3 million in a full year and £500,000 in 1976–77.