HC Deb 03 March 1977 vol 927 cc621-34
Mr. Speaker

Statement, Mr. Booth.

Mr. Viggers

On a point of order, Mr. Speaker. About 10 minutes ago I observed some papers being passed around in the Press Gallery. An inspired guess leads me to believe that the Press was being briefed in advance of Parliament on the statement which the Secretary of State is about to make. Hon. and right hon. Members are sitting here like dummies waiting to hear something which the Press knows already. Is that a proper exercise of parliamentary democracy?

Mr. Speaker

It is not for me to decide, and it is not my responsibility, what briefing is done by the Government Benches, if any has been done.

3.58 p.m.

The Secretary of State for Employment (Mr. Albert Booth)

Over the last 18 months, the Government have introduced a number of special employment and training measures to mitigate the worst effects of higher unemployment, especially for hard-hit groups such as young people. These measures should assist well over half a million people, and it is estimated that they are currently reducing unemployment by about 200,000.

The Manpower Services Commission has stated in its report, "Towards a Comprehensive Manpower Policy", that the problems of unemployment amongst young people are so serious that it should become an objective of the Commission to ensure that all young people between 16 and 18 years of age who have no job or who are not engaged in further or higher full-time education should have the opportunity of training or part-time further education, of participation in a job creation programme or of work experience. The Government share this ultimate objective, but, as the Commission recognises, it is ambitious and has considerable resource implications.

The Commission has set up a working party on which the education interests are represented, to study all the current measures to help unemployed young people. The working party will report in April. The Commission will inform the Government in due course of its proposals in the light of its working party's report, and we shall then consider with the Commission the feasibility of meeting the objective.

Decisions are needed now, however, on special training measures for 1977–78 and on the future of certain employment measures which mainly affect young people, some of which reach their current terminal dates over the next month or so. In view of the continuing high level of unemployment and the numbers of young people unemployed, including some who have been unemployed for long periods, it is not possible to await the outcome of the Commission's work on the future of measures for young people before reaching decisions on the present schemes.

The measures have, therefore, been reviewed in the light of the unemployment position and the proposals made by the Manpower Services Commission on the schemes it operates and of its views on the other schemes. We have also taken into account in reaching decisions on the training measures, the work experience programme, the community industry scheme, the possibility of assistance from the European Social Fund, which gives a high priority to methods of helping unemployed young people who are seeking their first employment to fit themselves for work.

As a result of this review, we have decided to provide support again this year to keep up the level of training in industry. The measures introduced in 1975–76 and 1976–77 enabled the TSA, in co-operation with the industrial training boards, to sustain the level of training during the recession. This year we are allocating a further £46 million, spread over the next two financial years, for the training of apprentices and technicians, in 1977–78. The sum allocated will support about 41,500 additional training places in industry, mainly for young people.

The number of places for young people taking courses such as short industrial courses and occupational selection courses under the Training Opportunities Scheme will also be increased by 5,000, raising the total number of places for young people to 17,000 this year. About half of these places will be in further education colleges.

Turning to the employment measures, we have decided to extend the present measures affecting young people for a limited period pending the outcome of the Manpower Services Commission's work on the possibility of developing measures for young people on a more systematic and permanent basis.

The job creation programme, which provides temporary jobs mainly for young people but also for adults, will be extended for new applications from the current terminal date of 30th April to 31st August. A further £25 million will be allocated for the programme over this period.

The Work Experience Programme, which supports young people gaining experience in industry, reaches its terminal date for applications this month. The Manpower Services Commission has put a great deal of effort into this scheme, and I am glad to say that it is becoming well established and is attracting increasing support from employers. We have decided that this programme should be extended, like the job creation programme, until 31st August so that it can be reviewed with the job creation programme in the light of the MSC's proposals on the future of measures affecting young people.

The Youth Employment Subsidy, which provides a subsidy of £10 a week to employers recruiting young people who have been continuously unemployed for six months, also reaches its terminal date for applications this month. The scheme is now being well used after a slow start, and we propose to extend it as well to 31st August.

The permanent community industry scheme, which currently provides temporary jobs for up to 4,000 unemployed disadvantaged young people, will be temporarily expanded to provide an additional 1,500 places. The gross cost in 1977–78 will be £2 million.

The 230 additional centrally-funded employment specialist posts for the Careers Service made available in 1975, which have secured extra vacancies and placing for young people, will be increased by a further 90 posts in 1977–78 which will be allocated to areas of particularly high youth unemployment. The scheme will be continued into 1978–79 and reviewed in September 1978. The extra cost of the additional 90 posts in 1977–78 is £300,000.

I should like to take this opportunity of thanking the Manpower Services Commission and its officials working on the special employment and training measures, careers officers, all those concerned with community industry, and the many others involved in my Department and elsewhere for their efforts in launching and developing the measures for young people over the last 18 months. Despite a very difficult unemployment situation, their work has led to many young people securing jobs or training or work experience who would otherwise have been unemployed.

All of the schemes on which I have announced decisions are directed mainly or exclusively at young people, and particularly at young people who have been unemployed for lengthy periods. Decisions on the temporary employment subsidy and job release scheme, which affect adults as well as young people, will be announced nearer to their terminal dates.

Some of these schemes are operated under provisions in Section 5 of the Employment and Training Act which expire before the end of June unless renewed by order subject to affirmative resolution. I propose to make the necessary order, which will be laid before the House in due course.

Mr. Prior

Is the Secretary of State aware that the Opposition share his anxiety about the very serious unemployment problem amongst young people and, therefore, that we welcome any steps which will help deal with the problem?

Is the right hon. Gentleman aware, also, that we believe that it is a problem which will now remain with us for a number of years? Can he give any indication of the number of additional young people who will be requiring jobs over each of the next few years so that hon. Members may form an estimate in their own minds of the seriousness and scale of the problem with which we have to deal?

Is the right hon. Gentleman aware, further, that we shall await the working party's report with a good deal of anxiety and that we hope that the report will be able to share the objective of this House that all young people should have the opportunity of training and/or part-time further education or a job and that we believe that it will be necessary for a fresh look to be taken at all the schemes that we have now, which have been collected together over a period of 18 months or so as the situation has been seen to be deteriorating, and which we believe now should be looked at afresh in the light of the continuing problem and in the light of the fact that a number of these schemes may have had some temporary value but are unlikely to form part of a more permanent training scheme which will be required for young people?

May we have an undertaking from the Secretary of State that, as soon as pos- sible after the working party's report has been made available and the Government have had a chance to look at it, we shall have a debate in this House on what is now becoming an extremely serious matter in which all right hon. and hon. Members have a duty to try to help in any way possible?

Mr. Booth

I thank the right hon. Gentleman for what he said about our shared concern in this matter. It is a matter which should and does concern right hon. and hon. Members of the House as a whole.

Our best estimate, as of now, of the increase in the number of people who will be seeking jobs over the next few years is that it is about an additional 150,000 each year on the current number seeking work. But that is not made up entirely of the greater numbers leaving school as a result of the higher birth rate in the early 1960s. It reflects in part the larger incidence of married women seeking work.

I shall consult my right hon. Friend the Leader of the House about a debate on the report of the working party and the MSC's proposals. I agree that we have reached a stage when it is valuable to try to examine the effect of all the measures collectively to see the way in which they might be altered to meet the immediately foreseeable and longer-term situation so far as we can judge it. But I put it to the House that the working party's report, which the MSC has now set in hand, will provide for the Government and for the House a much needed opportunity to consider the effect of all these measures which have a bearing on youth unemployment.

Mr. Cledwyn Hughes

I welcome my right hon. Friend's statement. Is he aware that there is deep concern in areas such as mine that the agencies seem incapable of devising schemes which are applicable to rural areas and small towns? Is he aware that unemployment in Anglesey is 14.3 per cent. and that the local authorities and the county council have been trying for a long time to get some assistance from the Training Services Agency? Is he aware that they have been told that the money must be found from the rates and not from the millions of pounds that the Government have properly made available for these purposes? Is my hon. Friend aware that I shall continue to press him, other Ministers and the Prime Minister until someone has the imagination to devise a scheme that will cater for the needs of young people in rural areas?

Mr. Booth

I fully accept what my right hon. Friend has said about the particular problems that his own area is experiencing. I assure him that it is not the case that the schemes that we have introduced have been without success in rural areas. Some of them have been highly successful in rural areas, including those schemes that combine the work of the Training Services Agency, the Construction Industries Training Board and rural authorities. Therefore, we must examine why the schemes go better in some areas than they do in others. I welcome the success of some of the combined ventures by local authorities and the Training Services Agency such as that which I opened in Chesterfield the other week.

In announcing now the Government's support for increased training placings in industry and in the colleges of further education over the next 12 months, our aim is to enable plans to be made well in advance. I recognise the importance of this not only as it affects the training of young people but because of the importance of meeting the needs of the country in the upturn of the present slump.

Mr. Penhaligon

The Government deserve congratulations for their efforts and initiatives in this sphere. However, is there not a danger of a "Catch 22" situation with so much time and effort being spent on short-term solutions that leave no energy or money for increasing the number of new jobs which in the long term will finance themselves?

Mr. Booth

A correct balance must be struck between the work that the Government do in this area and the work that they do in developing new industry within the industrial strategy. It is a continuous requirement of my Department and the Department of Industry to ensure that we strike a reasonable balance. I assure the hon. Member that some of the measures to which I have referred today have a long-term implication. They are not all concerned with the short-term problem which both the hon. Member and I recognise as important.

Mr. Crawford

Does the Secretary of State think that his holding operations will keep unemployment in Scotland below 200,000?

Mr. Booth

I hope that the measures will contribute towards reducing unemployment in Scotland. Over recent months, and certainly in the last six months, there has been an increase in unemployment in Scotland relative to other parts of the country.

Dr. Bray

Is the Secretary of State aware that his announcement about the extensions of these schemes will be welcomed in Scotland? Is he aware that a number of them have been well administered and that they are effective both for the young people concerned and for the community as a whole? May we have an assurance that in the review by the Manpower Services Commission the factor of success, which is often the result of the quality of the organisers, will not be overweighted by top-heavy bureaucracy?

Mr. Booth

Yes. When I and other Ministers of my Department met the chairman of the Manpower Services Commission we discussed, among other things, the factors that contribute to the quality and effectiveness of the schemes. We recognise that organisers and instructors on the ground have an important rôle to play. We shall give priority to maintaining the quality of organisers.

Mr. Emery

How much of the money will be spent in the South-West, or is the present position likely to continue whereby the only way in which the young unemployed can benefit is by moving away from the South-West?

Mr. Booth

I expect that there will be a rather large take-up of these schemes in the South-West. Some of the better schemes are developing rather slowly, particularly the Work Experience Scheme. Most schemes are of a high quality and they are praised by both employers and participants. I urge employers in the South-West to look at their fellow employers who are already operating the schemes. If they do so I am sure that they will be more ready to participate.

Mrs. Millie Miller

Does my right hon. Friend acknowledge that during many Question Times over the past year or more the Prime Minister has stressed that much of the unemployment in this country is of a structural nature, as indeed it is in other parts of the world? Does my right hon. Friend accept that it is necessary for the Government to provide a long-term strategy for the provision of work for young and not-so-young people? Will he bear in mind that as we increase productivity we shall decrease employment opportunities in the productive industries?

Mr. Booth

I accept what my hon. Friend says. There is a large structural element in employment. I am greatly concerned at the lack of take-up of the employment transfer subsidy which, if it were more successful, could help to resolve the problem of unemployment in some areas and the problem of vacancies for young people in others. That is one matter to which we should pay attention. It would be of as much importance to adult unemployment as to youth unemployment.

Mr. Steen

Is the Secretary of State aware that in spite of spending £700 million on special remedies for young people there are still about 400,000 young people under the age of 25 without work? What is the point of putting them on job creation programmes and training them if there is no work at the end?

Mr. Booth

At least 70 per cent. of those who undertake training are employed very shortly after the completion of their training. I agree that there is a high level of your unemployment that is not reflected in the school leaver unemployment figures. That is one of the reasons that we have asked the Manpower Services Commission, in its working party, to examine what is required to ensure jobs for young persons in the 16 to 18 years old range, whether or not they qualify to be listed among the school leavers.

Mr. Blenkinsop

Is my right hon. Friend aware that there is strong support on this side of the House as well as on the other for an early debate on training facilities? Is he aware that that debate would reveal how anxious we are to see the day come quickly when the respon- sibility for providing training for all young people in work is accepted?

Mr. Booth

I accept the need to debate this subject. The House will have to consider, and I shall have to consider in discussions with the Leader of the House, how much we can debate in advance of the working party report and when we can have a debate on that report.

Mr. David Hunt

Is the Secretary of State aware that although the extensions of the schemes will be welcomed on Merseyside, this week has been disastrous for that area with the rebuff for Cammell Laird and the problems of the telecommunications industry? Is he aware that on Merseyside 25 per cent. of last year's school leavers are still without a job? Does he accept that the long-term solution is the increased provision of training facilities? Will he therefore ask his right hon. Friend to review his refusal to set up a skill centre on Merseyside?

Mr. Booth

Serious as is the problem on Merseyside because of the Post Office situation, one must also remember that that affects many other areas as well. I accept that there is a special youth unemployment problem on Merseyside where there is a higher percentage of regional youth unemployment than in any other major city or region in the country. Within the scope that is provided, we shall have to review the extent of training on Merseyside. I hope that this might provide a measured answer to the hon. Member's direct question.

Mr. Madden

I welcome this statement. Does the Secretary of State agree that we face the staggering task of creating some 2 million new jobs by 1980 in order to ensure a return to full employment? That need is incompatible with the deflationary economic policies that are being sustained, and the massive cuts in public expenditure. We shall not solve the unemployment crisis unless we have controlled reflation, earlier retirement and a real effort to share work.

Mr. Booth

I would accept that the measures that I have announced this afternoon, and indeed any of my Department's measures, will not in themselves solve unemployment problems. Elements in the measures depend on the achievement of a considerable degree of growth in this country, particularly in manufacturing industry, so that wealth will be created in order to sustain a higher level of public expenditure.

Mr. Hordern

Will the Secretary of State ensure that the report from the working party includes an analysis of the cost-effectiveness of the various schemes, as well as the administrative costs of them? In view of the fact that there are no fewer than 300,000 people coming on to the job market in the next two years, it is essential to secure as full employment as possible. To this end, will he not agree that the whole of the Price Commission and price control structure should be abolished in order to allow a maximum intake for full employment?

Mr. Booth

I canont agree with the implications of the last part of the hon. Member's question. I do not think that the removal of price control would bring about a solution to unemployment. In fact there is evidence that the reverse may well be true. But I agree that we must examine the cost-effectiveness of the various measures that we are running, and we must bear in mind the net cost to public funds of these measures. Much less than the gross cost is involved because of the savings on social security payments and the maintenance of receipts from tax and insurance contributions.

Several Hon. Membersrose—

Mr. Speaker

In order to be fair to the rest of the House, as there are a large number of hon. Members who want to speak on the next debate I shall do my best to call those hon. Members who are standing up, but in order to help me I hope that they will ask brief questions and I hope also that they will receive brief replies.

Mr. Viggers

Does the Secretary of State agree that many people have a rather jaundiced view of job creation schemes in the long run? But one area in which there is support for the schemes is that of disadvantaged people, particularly in view of the fact that they form a high proportion of the long-term unemployed. Therefore, is the Secretary of State doing enough for disadvantaged people, or does he think he could slope more weight towards that area?

Mr. Booth

I have already announced some increase in schemes for disadvantaged people but I agree that it is not enough. We are considering other measures that could be taken in this area.

Mr. Skinner

Would the Secretary of State bear in mind that there are two figures on which he should concentrate his gaze all the time? First, it has cost more than £8,000 million to prop up the ramshackle private enterprise system with tax reliefs and grants since this Labour Government came to power. Secondly, it is also costing £4,000 million to keep 1,500,000 people on the dole. Is it not time to tackle this fundamental problem instead of titivating about with the edges as the Secretary of State has been doing with all the suggestions he has brought in since he has been in office?

Mr. Booth

I would point out to my hon. Friend that the propping up of the private enterprise system did not start with the election of this Government. The manifesto on which both he and I were elected included proposals to deal with this problem in the way that he has suggested. What I said about the net costs, compared with the gross costs of these measures, has a bearing on my hon. Friend's concern about the cost of maintaining employment.

Mr. Rathbone

Will the Secretary of State agree that the difficulties of resources to which he has referred could be partly overcome by bringing to an end the expansion of job centres that do not create one extra job? These centres are costing an enormous amount of money in some areas where they are not necessary.

Mr. Booth

We have found that where jobcentres have opened up and down the country they have increased by up to 30 per cent. the level of placements obtained by the older exchanges. Therefore we consider that they are making a worthwhile contribution.

Mr. Ioan Evans

While the measures are welcome, will the Secretary of State agree that we need a major operation rather than first-aid treatment? Will he consider the possibility of restoring the regional employment premium, which was very important in the regions, and will he persuade his colleagues to introduce selective import controls?

Mr. Booth

The latter point is a matter for my right hon. Friend the Secretary of State for Trade. Of course I am concerned about the employment implications of import controls in certain industries, particularly where manufacturing industry is suffering grievously from certain forms of imports. This matter has been discussed with me from time to time. As far as the regional employment premium is concerned, the decision was taken to terminate that, and we are now examining ways in which other measures of the Department of Industry and the Department of Employment can step in more effectively in areas where jobs are threatened.

Mr. Michael Latham

Is the Secretary of State aware that 250,000 people—that is 18 per cent.—in the construction industry are currently unemployed? What numerical difference will his long statement today make to that figure?

Mr. Booth

I cannot give a precise effect on the construction industry, but I can assure the hon. Member that the combined effects of the Construction Industry Training Board, the Training Services Agency, and the job creation programme are maintaining a level of training and work in that industry which otherwise would not be feasible.

Mr. Spriggs

Can my right hon. Friend give an indication of what he intends to do about unemployed youngsters in my constituency who left school at the end of last term? Will he do something about training them for the higher skilled jobs in the manufacturing industries?

Mr. Booth

There are two measures that should be particularly helpful to these youngsters. One is the Youth Employment Subsidy, which will pay to any employer who takes on a youngster who has been unemployed for more than six months, £10 a week for the first six months of his employment. The second is the fact that in the review of the working party, we shall expect proposals to come forward to cover anyone who leaves school at 16 up to the age of 18 for the purpose of training and work experience.

Mr. Craigen

Can the Secretary of State tell us how the new apprenticeships will be sponsored? Will this be left to the industrial training boards or will reliance be placed on employers to take on young people? Will he tell us in which industries the new apprenticeships will be sponsored? In relation to the job creation programme, will he have a word with the Chancellor to see whether any increase can be made in the rate support grant to areas of urban deprivation, as this would be more helpful in generating employment opportunities for young people?

Mr. Booth

The moneys that I have announced for supporting training will be spent in the main through the industrial training boards and will be allocated among employers. The money will be spent in funding first-year costs of apprentices over and above those employed under the training rebate schemes. Some money for shorter-term courses in Government training centres will be available through the TOPS scheme.

Mrs. Renée Short

Is my right hon. Friend aware that he will have two reports before him on the question of the continuation of the job creation scheme? One will be from the Manpower Services Commission, and the other from the Select Committee of this House, which is hoping to report shortly. Will he wait for both reports before debating this matter, in view of the fear that what we are doing is a palliative measure to deal with the problem of unemployment created by large numbers of large firms bringing about large numbers of redundancies while exporting capital abroad at the same time? Will he initiate an urgent inquiry into the whole question of firms exporting capital abroad and creating redundancies in this country?

Mr. Booth

My right hon. Friend the Chancellor assures me that he is operating measures to restrict the outflow of capital from this country for investment abroad. I sympathise with my hon. Friend's request to delay a debate until we have a report from the Select Committee as well as the report of the committee set up by the Manpower Services Commission, but I hope that she will trust me to convey that request to my right hon. Friend the Leader of the House, with an understanding that the House would not want unduly to delay this debate if one of those bodies were to report much later than the other.