§ 1.52 a.m.
§ Mr. Greville Janner (Leicester, West)
I am happy to have the opportunity to raise at this ungodly hour the subject of the job creation programme and to congratulate the Government on the increase, however modest, in the appropriation for that programme. I should like to do so, if I may, by using the city of Leicester and its unemployment problems, the sort of help which the job creation scheme has been able to give and, indeed, the help which it should be giving, as a spotlight both upon the programme and upon the problems with which it is designed to deal.
The city of Leicester—part of which I am privileged to represent in this House, as my father was before me—was 1750 called until recently the richest city in Europe. For generations it has enjoyed prosperity. Indeed, even during the recession in the 1930s it managed to maintain a high level of employment and a low level of unemployment.
Unfortunately, that situation has now changed. The old craft industries of boot and shoe manufacture, of hosiery and textiles and the modern industries of light engineering are all suffering in a recession which is causing a blight to fall upon cities such as Leicester and has resulted in those cities needing help—help which they can to some extent promote for themselves but which must also come from the Government.
I well recall, in the days of the last Conservative Administration, asking time after time about the unemployment situation in Leicester and being told with total complacency that Leicester's unemployment was well below that of the average city and far below that of the depressed and under-privileged areas. Time after time I begged the Government of the day to recognise that unless something was done to help the city of Leicester it would join the ranks not merely of the average but of those suffering worse unemployment than the average. Alas, that has been happening, but now the trend has evened out. Now the numbers are only—I specifically use the word "only" in sad parenthesis—those of the average. However, cities like Leicester need help. The job creation programme is a beginning, but only a beginning, to the type of help that they need.
I shall briefly give the House some figures. The unemployment rate in Leicester in February 1975 was 3.1 per cent. of the working population, or 7,043. In January 1976 it had risen to 14,366, or 6.4 per cent., dropping in February to 12,306, or 5.5 per cent., when 1,700 students were taken off the list. There has been a doubling of the number of unemployed in one year. These figures will cause unhappiness not merely in the city of Leicester but to all who are concerned with the preservation of employment in similar areas.
The national unemployment average is 5.5 per cent. and this month Leicester's unemployment is also 5.5 per cent. Therefore, this once very prosperous city is now along with the average. This city of 1751 initiative, verve and industrial enterprise is battling hard to try to create jobs at a time when the number of vacancies is falling heavily. The number of unfilled vacancies, for example, in Leicester in February 1975 was 1,398 and it is now down to 840. Worse still, in July 1975 11 per cent. of those who were looking for jobs were under the age of 20. Today they comprise 14 per cent. It is in the sector of youth that the job creation scheme can prove so supremely valuable, if only acting as a means of keeping young people busily and happily engaged at a time when they would otherwise be rotting in the heap of unemployment, just when they should be starting to enjoy the understanding of work and the comradeship of labour.
The job creation scheme in Leicester—the number of jobs is small—is sponsored by the council. The riverside improvement scheme provides 10 jobs; the Belgrave neighbourhood decorating scheme five skilled trades; the watercourse clearance scheme, which is council-sponsored, nine jobs; and the Saffron Lane building of an adventure playground, three jobs. There are two other schemes which have not yet been approved, but I hope that they will be soon approved—namely, the derelict land clearance and re-utilisation scheme, five jobs, and the Severn-Trent Water Authority scheme, four jobs. The total is 36 jobs. Although this is a very small and, indeed, minuscule drop in a pool of unemployment which is too great, nevertheless it is something hopeful, and at this time it is as well that we look for something hopeful. Leicester is looking all the time.
We also have a scheme to boost the jobs—a scheme which the council itself is promoting. I am sure that the Government will be pleased about this because the less job creation that is done outside and the more inside, the happier everyone will be.
Councillor the Reverend Ken Middleton said:We want a more flexible attitude to the Industrial Development Certificate to maintain Leicester's economic health and to arrest further economic decline.I am sure that my hon. Friend the Minister will bear this in mind. The job creation scheme is only one aspect of a 1752 series of programmes. I am sure that my hon. Friend will be good enough to draw to the attention of the Secretary of State what Councillor Middleton said and what is being done in the new drive to attract and promote new industry and jobs in the city.
This is a sad situation which is being reflected elsewhere. There are other areas with higher rates of unemployment. There are no areas which have better absorbed a vast influx of immigrants than Leicester. The city is to be congratulated and helped to do its job properly. Its problems deserve understanding and its leaders deserve congratulation for the efforts they are making. The job creation programme should be extended far wider among young people in the city.
We are witnessing a trend in which the Government are trying to help, and I know how concerned the Government are. We have problems which require cooperation from the Government, from industry and from local Members of Parliament. I appeal to all industrialists whose companies are in trouble not to wait until the last minute to make the nature of their problems clear. I appeal to them not merely to give notice of redundancies as required from 8th March by the Employment Protection Act, not merely to help with the job creation programme, but to let people know what is happening as early as possible so as to prevent closures which are not inevitable.
I wish to draw attention to the sort of problem which is created unnecessarily. We had in Leicester the firm of Stibbe-Monk, which employed 1,800 people. One day it was discussing with the unions a rise in pay for the employees, and the next day it called in the receiver and threw 1,800 people out of work. When I spoke to the chairman about it, he had the gall to tell me that it was none of my business and to ask why I was "interfering" and "getting so cross". The answer was, of course, that 1,800 of my constituents were out of work. I told him to forget the past and to tell me what I could do to help for the future. At that he said "Perhaps you would go to Tony Benn and ask him for help". With three months' warning I might have been able, even with that company, which was riven with inefficiency and driven apart by family quarrels on the board, to do something to help. But with only one day's 1753 notice of closure, there is little that can be done.
One particular company among others has seen fit to act properly, and I congratulate it on doing so. The job creation programme will be needed for part of its work force, but for only a part. That company is Decca, which has an audio-visual plant on the new Parks Estate in my constituency. Several months before it planned to close that plant, it warned the unions, which informed me. After a series of meetings it decided to keep the plant open. It will employ only 100 people for the moment, but the plant will be ready for the upturn in trade. I hope that there will be an extension of the temporary employment subsidy to enable firms to plan further ahead.
We have the firm Bootons, which is a branch of Courtaulds and is proposing to close. It gave notice well ahead—even though that happened well before the coming into force of the Employment Protection Act requiring notice of redundancies. I compliment this company on giving more than three months' notice. Now a meeting has been arranged between the responsible main board director of Courtaulds, the chairman and managing director of Bootons and myself for next week to see whether there is any way in which something can be done to preserve those jobs. I can hold out no hope of results, but unless we try we are bound to fail. Decca also announced its intended closure, but the plant has continued working. If we can work together to keep plants open and alive, we may get results. We need the Government's help to keep jobs open and to promote employment in the city of Leicester so that the city's trade may boom again. In the meantime, we need help in the form of temporary employment subsidies from the Government and, alas, help over job creation for young people, who are most likely to be adversely affected by the sort of conditions that exist throughout the country.
I congratulate the Government on the help they give. I hope that the Minister will indicate that that help will be extended both generally and in the city of Leicester.
§ 2.6 a.m.
§ Sir Anthony Meyer (Flint, West)
The entire House must be grateful to the horn and learned Member for Leicester, West (Mr. Janner) for having raised this matter tonight. I am sure that his constituents will be as impressed as I hope mine will be that we are here at 2 a.m. to tell the Government of our very real concern for the plight of those in our constituencies whose jobs are now at risk.
It always seems to be my misfortune to have to start being querulous about the Government's employment policies when I am faced with so able and amiable a Minister as the Under-Secretary. However, at least on this occasion I can avoid the rather harsh exchanges which necessarily occur at Question Time when one has the impression that Mr. Speaker thinks that two words instead of three would suffice.
Although I appreciate the motives which prompted the Government to embark upon this job creation programme, I still have some fundamental reservations about the programme as a whole. Whatever view one may take about the effect of this programme on long-term employment prospects, it would be absolutely wrong to under-estimate in any way the appallingly demoralising effect which unemployment has on young people. They leave school full of high hopes after a period of studying, absorbing knowledge and sitting listening to what they are told. They long to get out and to do their own thing, to stand on their own feet and to start making their own way in the world. For such young people to find that there are no jobs for them and that they must stand in dole queues is a demoralising experience and can have a bad effect on them for the rest of their careers.
If only on that account, there would be justification for the Government to some extent to get outside the laws of economics and sound marketing principles, and to influence events in such a way as to enable young people to have some kind of work to do, even if it is a long way short of a satisfactory job. I want to emphasise that I fully sympathise with and understand the motives of those who have started this programme with this consideration at the front of their minds.
1755 I listened with a feeling of envy to the hon. and learned Member for Leicester, West when he spoke of his unemployment rate of 5.5 per cent. I am not wishing to cast any scorn on that, because for a city that has known full employment, as Leicester has, a 5.5 per cent. unemployment rate represents a very severe setback to hopes and expectations, and hardship consists every bit as much of frustrated expectations as it does of actual loss of job. None the less, in my part of the world, and particularly in the western part of my constituency, I have a rate of male unemployment which at the last count was 18.7 per cent., and which I very much fear, according to news which has been reaching me in the last day or so, is liable to go higher still before we see any downturn, because of redundancies being notified to me by ITT at Rhyl.
§ Mr. Greville Janner
I fully accept what the hon. Gentleman has said. I hope that I have made it plain that even within cities such as Leicester, unemployment is very patchy. I went to one school at which I understand that even today 45 per cent. of the children have one or both parents unemployed. Even if the overall city rate is only 5.5 per cent., that is not spread out evenly through the city and there is great hardship for that 5.5 per cent., although that in no way denigrates the cities that have a worse rate of unemployment.
§ Sir A. Meyer
I fully accept that. Having previously represented a constituency with a very high immigrant population, I know how patchy unemployment can be, and how it can badly affect the immigrant community in particular.
I am very much concerned by the impact that the job creation programme could have on the appallingly high unemployment level in my constituency. I am naturally very much under the sway of pressures which build up for the Government to do something, to take short-term measures and to take steps to give people a feeling of hope. In addition to the job creation programme, when one has a situation such as is developing at Courtaulds on Deeside, of very large-scale redundancies—about 600 have been declared—there is a need, quite apart from schemes such as the job creation programme, for people who have been made 1756 redundant to feel that the Department is sending people in straight away to advise and to help them.
I take this opportunity of paying tribute to the hon. Gentleman and his Department, who in this respect, as always in the past, have been very prompt in providing advice and help to people whose jobs are about to be taken away from them in this terrifying manner.
However, now I pass from the complimentary to the more critical aspect of what I wish to say. We can see from the Estimates that provide the justification for this debate that this programme is by no means an inexpensive programme. It is a programme to provide—by admission, I think—jobs of low qualification, unskilled jobs in the main, and principally for young school leavers, in addition to the other aspect which is less open to criticism—that of inducing firms to keep on people whom they would otherwise declare redundant.
This is where I begin to cross the line. One of the difficulties that have bedevilled the economy of North Wales has been the excessive preponderance of low-paid, relatively low-skilled jobs. The area badly needs what the Wrexham industrial area exists to provide—a nucleus of highly skilled technologically advanced employment. In this respect the job creation programme is of no help at all. On the contrary, precisely because it is an expensive programme, it constitutes a further burden on industry and, in particular, on the kind of industry which areas such as North Wales—areas of low economic activity and low average wages—so badly need.
It is a kind of equation or balance. On one side of the scales we have the jobs which are created or saved by this programme. On the other side of the scales we have the jobs which are lost or not created because the cost of the programme has to a large extent to be borne by industry which is thereby prevented from creating new jobs or is obliged to cut down on the jobs which it already provides.
Almost all the jobs on the plus side of the scales are of the type which we already have in too large numbers in North Wales—unskilled, low-paid jobs—whereas a fairly high proportion of the jobs on the other side of the scales— 1757 jobs which are lost or not created which otherwise would have been created—are of the type we badly need.
It is because of this disparity and the fact that this programme tends to emphasise a trend which is in itself unsatisfactory that I remain markedly unenthusiastic about the job creation programme. I pay full tribute to the good intentions of those who have created the programme, but good intentions do not always produce good results.
§ 2.17 a.m.
§ The Under-Secretary of State for Employment (Mr. John Fraser)
I am grateful for the terms in which my hon. and learned Friend the Member for Leicester, West (Mr. Janner) and the hon. Member for Flint, West (Sir A. Meyer) have made their points in this debate. I am as concerned as they are about this problem. I am particularly concerned about the male unemployment rate in some parts of North Wales referred to by the hon. Member for Flint, West. I share the concern expressed by my hon. and learned Friend the Member for Leicester, West about the unemployment rate in Leicester. Two years ago it was below the national average, but now it is equal to the national average. The figures quoted by the hon. Member for Flint, West speak for themselves.
I am grateful for what has been said about redundancy notices. It is totally unacceptable that a large number of people should be put out on the stones, as it were, at a moment's notice. One of the reasons why we introduced the provision in the Employment Protection Act for a long period of notice was to provide time to mobilise the skill, facility and advocacy of local Members of Parliament and other interests to bring pressure to bear on Government Departments. My hon. and learned Friend has played a particularly constructive part in bringing such pressure to bear and in averting redundancies. I hope that he will continue to do that.
I am sure that the hon. Member for Flint, West will agree that the period of notice which is now given enables Members of Parliament, local industrialists, trade unionists and my own Department and other Departments to bring their minds to bear on the difficult problem 1758 of redundancy. It gives them time to consider whether to make use of the temporary employment subsidy to save jobs and any other remedies which may be available. I am sure that both my hon. and learned Friend and the hon. Gentleman appreciate the provisions in the Employment Protection Act which have operated since 8th March.
§ Mr. Greville Janner
Would my hon. Friend be prepared to echo the appeal I have made to industrialists that they should not merely comply with the law but should harness their local Members of Parliament as early as possible to bring pressure to bear which might avert closures and the loss of jobs—something which cannot be done if Members of Parliament find out about closures only from Press, radio or rumour?
§ Mr. Fraser
I wholly agree. I have been in exactly the same position in my constituency where an electronics factory is closing down, with the loss of about 700 jobs. I was grateful that the firm gave me early notice because I was immediately able to get in touch with the Department of Industry, my local authority and others. I hope that other industrialists, faced with this situation, will mobilise the sort of advocacy which is available.
The Labour Government were born to fight unemployment and the distress flowing from it. We regard the present unemployment figures as unacceptably high and a challenge to the Government and the Labour movement. We have taken unprecedented steps to deal with the immediate symptoms of high unemployment.
The hon. Member for Flint, West has not been too critical and I am grateful to him for the tone that he adopted. What he was saying was that job creation, the temporary employment subsidy, and the training schemes, are not an alternative to the provision of permanent employment. I wholly agree. My hon. and learned Friend was making the same point. I do not regard job creation and the temporary employment subsidy as a substitute for a firmer and more secure industrialised base, either in the constituency of my hon. and learned Friend or that of the hon. Gentleman. It is right, in this situation, to try to deal 1759 with the symptoms as well as to try to achieve the long-term objectives.
That is one of the reasons why we doubled the size of the Community Industry Scheme and why we had a massive effort to increase the amount of training available. Time and again—even now in parts of the country—we find that industry is being held back because of a lack of skilled manpower. The training programme, which is massive, not only brings an immediate amelioration of unemployment but is an investment in our long-term future. We have done a lot to increase the size of the careers service to deal with the immediate symptoms of unemployment.
We have introduced the temporary employment subsidy and, in the light of representations from hon. Members, the trade unions and local authorities, we have three times modified that scheme. Our minds remain open to suggestions for new initiatives that might be taken to deal with the problems facing us. We have done other things. There is the recruitment subsidy for school leavers.
The debate is mainly about job creation. We have taken unprecedented steps to provide work, albeit of a temporary nature. On 9th October the Government announced a £30 million subvention for this scheme, another £10 million on 17th December and another £30 million on 12th February. That amounts to a total of £70 million which will provide about 55,000 jobs. I regard that as a fairly considerable contribution to providing temporary work. While this is not aimed exclusively at the young it is particularly important that young people should not have their ambitions frustrated and become disillusioned at a time when they wish to make a contribution to society.
So far, we expect the scheme to provide a total of 55,000 jobs. By 12th March, there had been 2,204 applications and 13,993 jobs created with a total grant of £16 million. The rate of response in the Principality of Wales has been so good that, later today, the Manpower Services Commission will be making an announcement about further development of the scheme in Wales. In the Midlands—and I am not castigating Leicester, which was one of the first off the ground—there has not been quite such a response. But if hon. Members would like to get in touch 1760 with the Manpower Services Commission and would like to organise local meetings, not just with local authorities but with private interests, charities and youth organisations, the Commission will be willing to give all the help and guidance that it can to that kind of initiative. I emphasise that the sponsors of job creation programmes are not limited to local authorities. There is no limit upon the kind of organisation which can put up a job creation programme.
The hon. Gentleman said that the cost was high. I want to rebut that. It is true that the average gross cost in each man year of employment created is about £2,000. But the net cost, when allowance has been made for the savings in unemployment benefit and social security payments and the proportion of income that is returned in tax, is estimated at only £600. That is a pretty good bargain in terms of getting something useful produced, getting someone into a work situation and of the savings in unemployment benefit. It is money well spent, bearing in mind that it does not take into account the value of the work done and the sponsor's contribution to the costs. The average gross cost of each job created is £1,183, and the net cost is about £350. As I say, about 55,000 jobs will be created under the scheme altogether.
The hon. Gentleman said that the jobs were of low-skill content. There is, of course, a variation from one scheme to another. But we should not look disdainfully at low-skill jobs. For someone who is unemployed and wanting to make a contribution to society, it is better to be voluntarily employed, even on a low-skill project, than doing nothing. What the job creation programmes have tried to do is to create jobs making a useful contribution to the community involving the gaining of basic skills and perhaps an interest in a future career.
I can give three examples. On a visit to Sunderland, where they have been extremely objective in their approach to job creation programmes, I saw some young people, who had been unemployed, working in a school for fairly severely handicapped children. The moment they got into it, their interest in education and in the very difficult problems of caring for these children was aroused. Their interest was heightened. I spoke 1761 to a couple of them, who told me that after some experience in it they were thinking of making their careers in this kind of occupation.
The second example involved a group of young girls and boys working developing a play group. Again, within a matter of days, they began to evince an interest in education and the care of children.
The third example which I saw was of young people working in an old people's home. Immediately, they were not simply doing menial tasks. They were learning something about chiropody, basic physical medicine, exercise and the care of elderly people. Once again, a whole vision was open to them of the careers which they might pursue.
My hon. and learned Friend has stolen my thunder by giving other examples of what has happened in Leicester already. However, the aim of the programme is not only to provide work but to provide a vision of the future potential of a young person. I defend the job creation programme, even though it does not result in the provision of permanent work. It is right, and this is a useful expenditure of money.
I have been asked about permanent jobs. We are facing a difficult situation. Some unemployment factors are within our control but there are others in which we have no autonomy. Those factors within our control involve this country remaining competitive and becoming more competitive. In order to underline long-term job security it is essential to deal with inflation. The £6-a-week pay policy is now recognised as being a long-term guarantee for competitiveness and job security.
The Government have announced investment programmes for factory building and assistance to industry, in machine tools and so on. For too long we have not invested enough in industry. This Government has put more emphasis on investment in production machinery as opposed to investment in title deeds and paper. Other matters, such as the world recession, are outside our control. I do not disagree with the Secretary of State's description of the situation as being a crisis of Western capitalism.
It is not enough to be frozen in mutual timidity, waiting for the tide to turn. We 1762 must not wait for other people to reflate or for the tide to turn. We must make our own contribution to a new system in the international councils such as the International Labour Organisation, OECD and the EEC. Nations can jointly make a contribution towards increasing demand and creating a better and more sensible system for the Western world.