HC Deb 03 August 1976 vol 916 cc1440-55
The Secretary of State for Employment (Mr. Albert Booth)

My right hon. Friend, the Chancellor of the Exchequer said in his statement on 22nd July that we should be announcing before the recess further measures to help with the serious problem of unemployment among young people.

We have already taken a number of steps with this end in view—the recruitment subsidy for school leavers, the job creation programme, the expansion of community industry, increases in training and the strengthening of the careers service. We estimate that these measures will be helping as many as 100,000 young people this autumn. Even so, in present circumstances young people reaching school leaving age who have no job to go to would be well advised to consider staying in the education system, and those who have left and have not been able to find a job would do well to consider continuing their education.

More now needs to be done and the Government have decided to take further action. Most of the summer school leavers may be expected to start work this autumn in the ordinary way, but there will be many—particularly those who have already been unemployed for some time—who will not find it easy to get jobs. It is to them that particular help needs to be directed.

The first of the new measures is, therefore, to replace the £5 recruitment subsidy for school leavers, which ends on 30th September, by a new youth employment subsidy of £10 a week, which will be paid for up to six months to any private sector or nationalised industry employer recruiting a young person under 20 who has been registered as continuously unemployed for six months or more. The scheme will be limited to engagements during the six months from 1st October 1976 to 31st March 1977.

The present subsidy has been paid in respect of 29,000 school leavers, but our experience of the scheme suggests that better results are likely to be achieved by concentrating the subsidy on all longer-term unemployed young people. The cost is estimated at £5.4 million for the six months that the new scheme will run and the numbers assisted are likely to be as great as those who have been helped by the present scheme.

Secondly, the Training Services Agency offers a range of training courses for young people below skilled level which are specifically directed towards the needs of unemployed young people. The Manpower Services Commission has decided that it will be possible to increase the number of young people completing these courses by a further 3,000 during 1976 and to do this within its existing programme.

Thirdly, the Manpower Services Commission is urgently working out arrangements for a work experience programme designed to give young people a realistic introduction to the requirements, disciplines and satisfactions of working life. The CBI and TUC have indicated their full support for a programme of that kind, subject of course to the practical arrangements being worked out satisfactorily. Projects would be provided by employers—including the nationalised industries—but the costs of allowances to the young people concerned, which would be linked to the Training Services Agency's allowances to young trainees, would be met by the commission. Opportunities for training and further education would be incorporated into projects to the maximum extent possible, and there would be consultation with individual local authorities to that end.

It would be essential to ensure that projects did not in any way displace normal recruitment of trainees. Employers would be required to give an undertaking to that effect and their proposals would have to have the agreement of trade union representatives in their organisations. The programme would be open to unemployed young people in the 16 to 18 age group who would benefit from an opportunity to learn about working life at first hand and gain systematic practical experience of a range of different tasks. It is difficult to estimate precisely how many young people might benefit from the programme, though perhaps 30,000 would do so and I should welcome it if that number were exceeded. The programme would be additional to and separate from the job creation programme and from Community Industry. Subject to the outcome of current work and consultations on the practical arrangements, the commission would aim to launch the scheme in September, have it open for applications by employers until the end of March 1977 and have all schemes completed by the end of September 1977.

The Government welcome the support of the TUC and CBI for this important new proposal, the aims of which are in line with suggestions made from a number of quarters, including voluntary organisations and careers officers. We are willing in principle to provide the necessary funds to cover the cost of the allowances and the commission's administration of the scheme once the commission has completed its planning and consultations successfully. The cost is estimated at £19 million, of which about half is expected to be offset by savings on unemployment and supplementary benefits.

In reaching these decisions on expanded training and the proposed work experience programme the Government have taken into account the possibility of assistance from the European Social Fund, which gives a high priority to new methods of helping unemployed young people who have never had a job to fit themselves for work. The Secretary of State for Northern Ireland will be announcing corresponding measures to be taken in Northern Ireland.

Taken together, these new measures should help about 60,000 young people to obtain jobs, training or work experience in the course of the next 12 months. These would be additional to the many young people who will be assisted under existing schemes.

In addition to these immediate measures, the Government are urgently considering whether a scheme can be devised to enable older workers who are very close to pensionable age to leave employment and so release jobs for younger unemployed people. They would then receive an allowance from the Government until they reached normal pensionable age. This would be on the condition that the employer undertook to recruit a replacement from the unemployment register and that the worker released did not enter further employment or claim unemployment benefit while in receipt of the allowance. A scheme might last for six months and be concentrated on the assisted areas, which account for 75 per cent. of unemployment in the country. There are substantial difficulties about the operation of such a scheme and it is not certain that practicable and cost-effective arrangements can be worked out. The Government will be consulting the TUC and CBI on the matter and will report to the House in due course.

As a result of the renewed growth of output with the development of the Government's economic and industrial strategy we should see unemployment begin to move down later this year. The level of unemployment among young people, however, is now so high that we consider it socially and economically necessary to introduce these further temporary and selective measures in order to ease the transition. It would be wrong to leave so many young people to suffer long periods of unemployment at the beginning of their careers when much can be done to help them obtain jobs, training or useful work experience. I trust that the House will welcome these measures with that end in view.

Mr. Prior

Is the right hon. Gentleman aware that of course we welcome any steps that will help with the problem of youth unemployment and that we believe that the schemes that he has announced today will mean a great deal to those who are able to be helped? To that extent we give him our 100 per cent. support. We also support the voluntary organisations that will take on additional young people this summer and winter, because the number of young people who are unemployed is very serious. The House will know that the total of young people under 20 years of age who are now unemployed is probably about 500,000 and the House will wish to consider the matter seriously.

We believe that, rather than short-term piecemeal plans, a long-term plan is now required to solve the problems that we shall have to face in the next few years. Our criticism of the Government is that they are dealing with the whole problem on a short-term basis. Too many of the schemes are for a few months or merely replace existing schemes and are not based on any long-term plan. We consider that it is necessary to have greater work experience, greater training and less costly schemes of job creation.

Will the Minister confirm that one of the schemes that he announced today—that to replace the £5 scheme—will not provide 30,000 additional jobs but will merely take the place of 30,000 jobs available under existing schemes? Does he realise that the Opposition believe that the Government have approached the whole problem of youth unemployment in a complacent manner with a characteristic lack of foresight? Does he realise that we are deeply concerned—just as much as hon. Members opposite—and that we expect more action on youth employment to right the situation?

Mr. Booth

First, I welcome the degree to which the right hon. Gentleman has indicated the support of the Opposition for our measures. But I hardly think it fair at a time when we are announcing measures additional to a number of others already running and building up to a package larger than any others have been during a period of recession, for the Opposition to say that we lack concern or foresight. I accept that our measures are short term, but they are set in the context of longer-term measures that we have already announced. They include measures involving collective funding, transferable skills and vocational preparation, on which we are now working. I accept that the 30,000 places to be covered by the £10 a week six months' scheme will not all be additional to those covered by the existing scheme and that some will prove to be alternatives. But I would expect a substantial number to be a net increase in those helped to obtain jobs.

I hope that the House will welcome the fact that that part of the package will concentrate aid at a higher level than previously on young people who particularly need it, because it will be given to provide jobs for young people with the greatest difficulty—those without qualifications on leaving school and those who have been without work for at least six months. It will operate over a wider age range than previously, and to that extent it has a particular contribution to make as well.

Mr. Cyril Smith

Is the Secretary of State aware that Liberal Members equally welcome any measures the Government have taken, including those announced this afternoon, to remove from young people the soul-destroying task of drawing the dole?

The right hon. Gentleman said that the TUC had approved this statement. Will he undertake to make sure that the regional organisers of the trade union movement are aware of the TUC's approval? Is he aware that, for example, one trade union in my constituency is preventing the creation of 30 jobs under the job creation scheme because of trade union objections? Will he undertake to make sure that trade union organisers understand the TUC's policy?

Mr. Booth

I am anxious to investigate any suggestion that there is not the maximum support of the trade union movement for projects designed to deal with youth unemployment, but all the indications I have from the TUC at national and regional levels is that it will support the work experience scheme that I have announced. There is a great deal of consultation to be carried out on the job swap scheme with both the TUC and the CBI. Not until that has been carried out shall I be able to say fully the nature of the support that will be forthcoming, but I considered it right to announce this proposal to the House before engaging in fuller consultation with the TUC or the CBI.

Mr. Cledwyn Hughes

I warmly welcome my right hon. Friend's constructive proposals. Is he aware of the special problems of peripheral areas, such as the one I represent, where opportunities are scarce and unemployment is very high? Will he pay special attention to those areas, because our experience is that when the Government have made such proposals their benefits have not extended to areas such as North Wales and West Wales? Will my right hon. Friend look at the matter again and consider, for example, the possibility of establishing a training centre or skill centre in the Gwynedd area, because the problems of unemployment are as serious there as they are anywhere else in the country?

Mr. Booth

I very much appreciate the problems to which my right hon. Friend refers. One of the great advantages of the work experience scheme is that it can be put into operation in every area and is not limited to areas in which there are Government training establishments. I shall follow up my right hon. Friend's points with the Training Services Agency, because I believe that there is a supplementary and complementary role in Government training establishments that would make them very valuable in the Anglesey area.

Mr. John Davies

Is the right hon. Gentleman aware that the distressing level of youth unemployment is not a phenomenon of Britain alone, but that throughout Europe the same terrible trouble is striking each country? Has he consulted his colleagues in Europe about the methods they are adopting to try to overcome the problem? In particular, in the light of all that he said on the subject of further training, has he considered the possibility of using this distressing experience to attain a better degree of language understanding than hitherto? There is a potential for considerable exchange of unemployed people at youth levels between countries to improve language understanding.

Mr. Booth

I have not considered that last proposition. I shall examine it. I have examined schemes running in a number of other European countries. I hope in the recess to examine certain counter-cyclical measures being deployed in Sweden. I have talked with the Belgian Minister of Labour about a scheme now being run in Belgium. We must be prepared to examine all possibilities. I agree that we can usefully exchange experience, particularly on youth employment measures.

Mr. Cryer

These measures are very welcome. Did my right hon. Friend say that the total number of jobs created will be about 60,000? Does not that leave 140,000 school leavers unemployed, according to the July figures? Does he accept that, although the measures are welcome, they are purely cosmetic, and that the fact that 75 per cent. of unemployment is in the assisted areas shows that all the REPs and persuasion to capitalist enterprise to go there has failed? Fundamentally, what is needed is a different economic strategy, including the use of selective import controls, more investment through the NEB and the application of Clause 4 of the Labour Party constitution. Does my right hon. Friend agree that until we have a fundamentally Socialist approach we shall have this disease of capitalism, which seems to be spreading everywhere?

Mr. Booth

The 60,000 places to which I have referred are additional to those that will be provided by existing measures, with the exception of the £10 subsidy for the six months' unemployed young persons, which replaces the present recruitment subsidy for school leavers. I do not accept that the measures are purely cosmetic. They have a contribution to make to the job opportunities of young people who will be benefited by them during their later working life.

I would not claim—here I agree with my hon. Friend—that these measures alone can solve the fundamental unemployment problem. That depends very much upon economic and industrial policy in this country. What I am seeking to do by announcing these measures is not to solve that problem but to suggest certain additional measures that can be introduced at a time of extremely high unemployment to add to the support that one Department can give to unemployed young people.

Several Hon. Members


Mr. Speaker

Order. I hope—[Interruption.] There is no need to cry out in anguish until hon. Members hear what I say. I hope to call a few more hon. Members to ask questions, but there is another major statement to come, and it will help the House considerably if hon. Members ask brief questions.

Mr. Welsh

The SNP welcomes any move to alleviate unemployment among young persons, but does the right hon. Gentleman accept that student teachers are also young persons? Will he take urgent and specific action to help the young trained teachers now unemployed in Scotland?

Mr. Booth

We are particularly considering whether there is scope within existing schemes to help unemployed young teachers. I welcome the support the hon. Gentleman has just indicated for this project, and I undertake to examine the problem further.

Mr. John Mendelson

The additional measures that my right hon. Friend has announced will in part come to an end on 1st April 1977. That is the time when, my right hon. Friend the Chancellor announced on behalf of the Government yesterday, the impact of new unemployment created by the Government's deliberate policies will begin to take effect. With all the good will that we have for my right hon. Friend's own efforts, does he not accept that economic policy is bound to make nonsense of his other efforts? Does he agree that it is necessary to see that those skilled jobs that are needed are created by an overall policy that does not make it almost impossible for him to succeed because of what the Chancellor does on behalf of the Government as a whole?

Mr. Booth

The measures that I have announced today operate on different time scales. The work experience scheme will run through to September of next year, and others will operate over different periods. These are to be set against two considerations. One is that mentioned by my hon. Friend—the effect of the measures announced by my right hon. Friend the Chancellor. The other is the improved industrial situation that we hope to be then experiencing creating many more jobs in manufacturing industry.

Mr. Steen

Has the Minister any plans to help the other 300,000 young people under the age of 20 who will not be touched by this scheme?

Mr. Booth

The other young people under 20 who will not be touched by the scheme will in the main be aided by existing measures. The total schemes running as from the time of the introduction of these measures will cover most of the unemployed young people.

Mr. Michael McGuire

Is my right hon. Friend aware of the problem in certain areas of the regions? Will he bear in mind the special problems of Skelmersdale New Town, where male unemployment is at present over 20 per cent.? If these schemes touch only the fringes, will my right hon. Friend look seriously at how he can help especially towns such as Skelmersdale New Town?

Mr. Booth

Our intention is that the measures shall operate more flexibly. In examining the application of the work experience programme and the scope of the job swap scheme, one consideration we shall have in mind is the special problem of new towns. If I fail to consider Skelmersdale sufficiently, I am certain that that will be drawn to my attention by my hon. Friend.

Mr. Brittan

Does the right hon. Gentleman agree that for the individual one of the disadvantages of the work experience scheme and job creation programme is that they last only for a short time at the end of which the individual has to seek a job? Will the Minister say for how long the work experience programme will last for an individual so that we may compare that programme with the other programmes he has announced?

Mr. Booth

The period of the work experience courses will vary. As the programme has to end in September next year, I hope that most of the courses will start soon enough to allow a period of six months. I am thinking in terms of a limited period of six months of work experience, and many of the courses which start earlier running longer. In determining this period in discussion with members of the Manpower Services Commission Council we were advised by employers that they would consider schemes operating on this basis because it would lead to better opportunities for the young people who took them to obtain employment and would be long enough to enable them to gain useful experience.

Mr. Park

Am I right in assuming that the schemes will not apply to the West Midlands? If so, there will be great disappointment in the West Midlands, which has an unemployment level as high as or higher than that of some assisted areas. That adds point to our plea for a much more flexible regional policy.

Mr. Booth

The first three measures I announced will apply nationwide. I have also said that, in considering plans for a job swap scheme, the Government are in the first instance considering its application solely in assisted areas. To that extent it will not cover the area in which my hon. Friend is interested.

Mr. Wyn Roberts

Although youth unemployment is general, it is most acute in the assisted areas. Are the Government considering any further measures, in addition to those the right hon. Gentleman has announced, which would be confined to the assisted areas?

Mr. Booth

No. We are not considering any further measures confined to the assisted areas. In considering the job swap scheme in this context, we are conscious that we have to decide whether it shall be a scheme for directly swapping job with job, or a scheme to allow a person to be brought into a job made available on a normal promotional scheme and thus improve the chances of providing a job for a young person.

Mr. Heffer

Does not my right hon. Friend agree that it is an absolute absurdity that yesterday the Chancellor of the Exchequer came to the House to defend cuts in public expenditure that will put building workers and others out of work and today my right hon. Friend comes to the House and puts a patch on an open wound? Is it not time that the Government reconsidered their whole industrial and economic strategy and got back to a policy of full employment? Is it not clear that in the building industry—a labour-intensive industry—young people will get no chance of apprenticeships on the basis of the present policy and the growing unemployment in the industry?

Mr. Booth

The Government have a responsibility to consider the combined effect of a number of measures of economic strategy on total levels of employment. The package I announced today seeks to recognise that the recession affects young people more seriously than it affects others and that there is a special case for introducing measures to help young people at the beginning of what otherwise would be their working life to face a period of unemployment.

Mr. Bulmer

What advice did the Department of Employment give to the Treasury on the effect on youth unemployment of raising the employers' national insurance contribution?

Mr. Booth

The advice that flows between the Department of Employment and the Treasury on employment measures is a matter of continual surveillance by the Chancellor of the Exchequer and myself. In looking at the measure to which the hon. Gentleman referred, as with many others, we have had to consider the effect not only on youth employment but on employment measures generally.

Mr. Craigen

What consultation was there with education authorities about my right hon. Friend's exhortation to young people to say longer at school? Moreover, what are the Government's longer-term plans to offset the job losses that are bound to arise with the continuing pressure on local and central Government authorities to reduce their staffs?

Mr. Booth

I have been in discussion with my right hon. Friend the Secretary of State for Education and Science both about the effect of the work experience scheme and my "exhortation", as my hon. Friend calls it, to young people to remain at school if they have no job opportunity before them. In the course of working out the work experience schemes we shall be involved in discussions with local education authorities throughout the country to determine how far they contribute towards young people staying on at school and increasing access to day-release courses.

Mr. Blenkinsop

I welcome my right hon. Friend's announcement of improvements in training facilities. Will he take the lead in getting a definition of responsibility between the Departments involved, which include the Supplementary Benefits Commission on the one hand and the Departments of Health and Social Security, Employment, and Education and Science on the other? Is it not crazy that people should be able to draw unemployment benefit by sitting tight and doing nothing when those who take advantage of training schemes sometimes receive no allowances?

Mr. Booth

We are looking at the instances where allowances are not available for training schemes. In the overwhelming majority of training schemes administered by the Training Services Agency there is a tax-free training allowance. I readily recognise that there are still some outstanding cases where we could possibly induce more people to take up training, and those we are continuing to examine.

Mr. Kenneth Lewis

Is the right hon. Gentleman aware that the main factor for young people is the acquisition of skill for themselves and the country? I support the measures the right hon. Gentleman announced, but even if young people have work experience for the next year or so, unemployment will still be high at the end of that time. How will the Minister ensure that these young people when they are older can get apprenticeships and secure a skill valuable to them and the country?

Mr. Booth

I agree that that is a very important question. We are considering it in connection with the work experience scheme, which I announced today, and in connection with the vocational preparation pilot schemes, which we are running on the collective funding of transferable skills. My own view as of now and subject to the outcome of these discussions is that there may well be a case for having greater flexibility of entry age for young people into training for skills.

Mr. Speaker

The Lord President—statement.

Mr. John Mendelson

On a point of order. Mr. Sneaker. In view of the importance of the subject and the many occasions on which hon. Members have been asking the Government and the Secretary of State for Employment when they will make the statement, and as we are about to rise for the recess and no hon. Member will have an opportunity to raise this matter, may I appeal to you to allow an deliberate extension in order that more questions may be put by hon. Members on this statement, which surpasses all others in importance?

Mr. Kinnock

Further to that point of order, Mr. Speaker. I realise that your judgment must apply on these things and that there is a further statement to come and important business is to come afterwards. However, as my hon. Friend the Member for Penistone (Mr. Mendelson) says, we are about to go away until 11th October. There is a record level of youth unemployment. Four hon. Members opposite and nine Labour Members still wish to speak. This is a matter of immediate and serious anxiety that would justify our making an application under Standing Order No. 9. It is out of consideration for the House that I have not done so, but I would hope that you would make extra time available for hon. Members to ask further questions.

Mr. Kilroy-Silk

Further to that point of order, Mr. Speaker. I support what my hon. Friends have said. When we have such a high rate of unemployment on Merseyside and when there are so many young people there who have had a very bleak past and who face a very depressing future because they live in an area with the highest rate of unemployment in the country, it is important that we have an opportunity to debate this matter before the recess.

Mr. Speaker

The hon. Gentleman summed the matter up in his last few words. Providing an opportunity for debate is not for me. This is the time for making statements. I would ask hon. Gentleman to realise that there will be some hon. Members here at 4 o'clock in the morning and that other business has to go on. I have allowed 25 minutes for questions on this statement and I have no doubt that the House will require a similar period for the next statement. I gather from his indication that the Lord President thinks not. Maybe not. I understand the deep feelings of hon. Gentlemen who want questions to continue, but my own judgment is that we must now move on.

Mr. Loyden

Further to that point of order, Mr. Speaker. You will be aware that the document that the Secretary of State has read to us has not been available to hon. Members and there are several aspects of it that have not been dealt with. Many of them are very important, particularly that of early retirement and its consequences, but no questions have been asked about that. I appeal to you to allow more time for these questions.

Mr. Speaker

That is a question for debate and not for question and answer. I am in the difficulty that if I decide to allow one question, every hon. Member feels that his should be the one. I am afraid that hon. Gentlemen must pursue their questions through other means.

Mr. John Mendelson

Further to that point of order, Mr. Speaker—

Mr. Speaker

Order. I remind the hon. Gentleman that he has submitted a point of view to which I listened with great respect, and also to his colleagues. I hope, therefore, that he will accept the reply that I have now given.

Mr. John Mendelson

May I point out, Mr. Speaker, that on previous occasions before the war, when we had high levels of unemployment—which, fortunately, we are not yet approaching, although it is the highest level since the war—the House sometimes refused to deal with any other questions at Question Time and the Chair allowed the House, with a full sense of responsibility, to stay on the subject of unemployment, as some hon. and right hon. Members know because they were here at the time. I am appealing to you, Mr. Speaker, to follow that precedent and to allow other hon. and right hon. Members still rising to their feet to ask questions about unemployment.

Mr. Speaker

I have given the House my decision and I am afraid that it must stand. I am not going to take points of order in respect of my own ruling.

Mr. Kinnock

Further to that point of order, Mr. Speaker.

Mr. Speaker

Order. I am ruling that there is no point of order at the moment.

Mr. Kinnock

On a different point of order, Mr. Speaker. In the course of what you said, you indicated that there were opportunities open to hon. Gentlemen to take up the matter in a different form. The one that offers itself most easily and conveniently is an application under Standing Order No. 9—

Mr. Speaker

Order. The hon. Gentleman is raising this matter in respect of what I have already said. I will not allow any argument in respect of the decision that I have already taken.

Mr. Kinnock

I am sorry, Mr. Speaker—

Mr. Speaker

Order. I must ask the hon. Gentleman to resume his seat.

Mr. Kinnock

On another point of order, Mr. Speaker—

Mr. Speaker

Order. I have been very patient. Let me say to the hon. Gentleman that I cannot take further points of order on what I have said, and I want the hon. Gentleman to understand that.

Mr. Kinnock

I understand your great difficulty, Mr. Speaker. I would be the last person to cause you embarrassment or to hold up the House on this matter. But in view of the situation and in view of what you have been obliged to say—and I entirely accept it—I feel I must apply for the adjournment of the House under Standing Order No. 9 on a matter which is urgent, important and specific.

Mr. Speaker