EMPLOYMENT (YOUNG PERSONS)

HC Deb 24 May 1977 vol 932 cc1221-332

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Frank R. White.]

4.54 p.m.

Mr. James Prior (Lowestoft)

The Opposition have put down for their Supply Day a debate on job opportunities for young people. We think that it will give the House an opportunity to discuss the whole question of youth unemployment, the Holland Report, which has just been published, and the general state of unemployment among young people. The House will also have an opportunity to pass judgment on the Government's record so far of measures to bring down youth unemployment and to decide whether the Government have been active enough in the propagation of schemes and incentives to help young people over the last two years.

The seriousness of the situation can be summed up in a few figures. In July 1973 there were 27,000 young people under 18 years of age out of work. In January 1977 the figure was 122,000—an increase of 353 per cent. In July 1973 there were 10,500 females under 18 years of age out of work. In January 1977 the figure was 59,500. One could go on through the list of each category and show enormous increases in the numbers of young people unemployed.

Since February 1974 the total of unemployed has increased by about 686,000–115 per cent. That is a good deal smaller in percentage terms than the increases in the numbers of young people out of work. Therefore, we must recognise that there is an extremely serious situation in the under-18 group.

There is also a serious situation in the under-30 group. If we concentrate on the under-18-year-olds we should not forget that many young people between the ages of 18 and 30 are in a similar position.

The Holland Report summed up the situation in the following words: Success or failure in getting a job is often a matter of luck and frequently determined by factors well beyond the control or achievement of the individual such as the state of the national economy, the local industrial structure or the kind of preparation for work available at school. Unemployed young people are not failures: they are those whom others have so far failed. That is the central message that this House should take on board during the debate.

The Holland Report, in paragraph 121, suggests, on a pessimistic assumption, that there will be 450,000 young people out of work in the third quarter of 1978. We know that, for reasons of a bulge in the numbers of children now leaving school, the numbers coming on to the labour market will go up over the next four or five years and it will be much harder for young people to get jobs. Therefore, there will be a very much more serious situation.

There have been changes in youth unemployment during the last few years, Those changes show that at the top of the cycle employment has been lower and at the bottom of the cycle unemployment has been greater. The problem is particularly bad for females. It is very bad indeed for immigrant workers and their children.

Figures given in the British Youth Council's Report, "Youth Unemployment Causes and Cures", shows that, as a percentage of total unemployed, in 1966 the figure was 19 per cent. for males compared with 36 per cent. in 1976. For females the figures are 40 per cent. in 1966 compared with 65 per cent. now. Therefore, we are dealing with serious and heartrending difficulties. It is against that background that we examine the Government's attitude and record.

Unemployment, particularly among the young, has been rising throughout the Western world, but unemployment amongst the young in this country has gone up more sharply than in nearly every other country. Despite the welcome small improvement in the figures today, there are no grounds for confidence.

Can the Government imagine a situation when they were in opposition in which there were 1.3 million people out of work and youth unemployment was running at the rate at which it is running now? They would be putting down censure motion after censure motion against the Government of the day. We must come to a decision on youth unemployment, because, while we recognise that there are difficulties throughout the Western world, it is time that the House of Commons had a chance to give a judgment on what the Government have done and on what has happened to unemployment figures, particularly among young people.

Although there are excuses that the Government can and will make, the House must look at the situation as it has developed over the last two years or more. I begin with the situation as it was on 5th May 1975 when we had a debate on this subject. At that time 8,000 of 1974's 526,000 school leavers were unemployed. In that debate the Secretary of State said: I do not think that it helps to paint a blacker picture than is justified by the present situation."—[Official Report, 5th May, 1975; Vol. 891, c. 1029.] We warned him then about the storms that were to come, but his hon. Friend who is now Minister of State at the Department of Prices and Consumer Protection said: I hope that the House wil not take too serious a view about the opportunities for school leavers."—[Official Report, 5th May, 1975; Vol. 891, c. 1077.] We warned the House, the Government and the country at the time, but the Government were very slow off the mark, and that is a criticism that we must make today.

If one wants to give quotes the best person to go to is the Chancellor of the Exchequer. One can always find a whole series of quotes from him that bear no relation to the facts and very little relation to the truth. I shall take the House through some of the quotes that indicate the Chancellor's attitude. In December 1975 when unemployment was 1.128 million the Chancellor said: There are, however, many signs that the recession is bottoming out in Britain."—[Official Report, 17th December, 1975; Vol. 902, c. 1402.] In April 1976 when unemployment had reached 1.185 million he said: The target the Government have set themselves is to get unemployment down to 3 per cent. in 1979…it is too soon to say whether we have already reached the peak of unemployment."—[Official Report, 6th April, 1976; Vol. 909, c. 240, 281.] In July 1976 when unemployment had risen to 1.242 million he said: On current prospects I would expect unemployment to start falling before the end of the year."—[Official Report, 22nd July, 1976; Vol. 915, c. 2010.] In September 1976 he said in an American magazine: There should be a substantial decline in the unemployment rate in the next few months. After that there probably will be a slower decline. Throughout the past two years the Chancellor has been prophesying that everything will get better after a few months, and each time he has been proved to be wildly wrong. This is the sort of complacency demonstrated by the Government in some of the utterances that they have made.

Are the Government still seeking their target of reducing the jobless level to 700,000, or 3 per cent. by 1979? The House is entitled to a proper answer. It is no good their saying that they hope it will eventuate or that it would be an admission of defeat if they agreed that they could not reach the target. We need a clear indication about future planning and how the Government see the figure of youth unemployment being reduced. What hard evidence can the Government produce to show that they can provide 900,000 new jobs over the next two or three years, because that is the figure that will be required if the 700,000 target is to be achieved by 1979?

I quote from an excellent article written by my hon. Friend the Member for St. Marylebone (Mr. Baker) in The Guardian on 17th May. He said: To achieve this the economy will have to grow at 5½ per cent. a year and manufacturing output at 8½ per cent. a year for three consecutive years. To believe in the impossible and to hope for the unobtainable is no basis for a constructive policy. That is why we expect the Government to give a more realistic assessment of the figures for the next three years. Let us look realistically, soberly and modestly at the next three years. Whatever Government are in office—and I hope that it will be a Conservative Government before long—we all have to face the fact that it will not be easy.

Where will the new jobs come from? This is a question we must ask ourselves. In previous downturns of the economy we have looked for jobs in the public service. The public service was expanded in 1971–73 and in the early years of this Government but we all know that we cannot do that any more. We must reduce the Budget deficit and the Government's borrowing requirements. We must realise that cash and resources are required for the private sector; therefore, it is no good looking to the public service for an increase in employment. If anything, over the next few years there will be fewer job opportunities in the public service than there are at present.

Mr. Max Madden (Sowerby)

I am grateful to the right hon. Gentleman for giving way. In the weekend Press he was characterised as "the Top Tory with friends in low places". Will he agree that many people in low places are urging restoration of the public expenditure cuts implemented by this Government, and are fearful that public expenditure cuts proposed by the Opposition will be five times greater than those of this Government? Will he tell us how many jobs will be lost if the public expenditure plans of the Opposition are put into effect?

Mr. Prior

I refute straight away that our cuts would be five times greater than those of this Government. Judging by the record of the present Government, they have been cutting pretty drastically and some of the work that needed to be done has been done. Nevertheless, there will need to be a further curtailment of public expenditure.

One of the effects of getting public expenditure under control has been that interest rates have fallen. Once they start falling, and if there is stability for a period, jobs will follow. The construction industry will pick up, houses will be built and the economy will get going. The hon. Member asks how many jobs will be lost by being tough with the public sector. No one can give a direct answer to that, but in all probability being tough on the public sector will create more jobs. This is the message that we want to get through to the electorate.

Precisely the same argument as was used by the hon. Member for Sowerby (Mr. Madden) was used by the Labour Government of 1945–1951. If one looks back and reads the evidence, one sees that they claimed that a Conservative Government would never get jobs because they would leave it to private enterprise to provide jobs. But when we took office in 1951 we were able to get unemployment down to an almost unheard of level and keep it there for many years by tight control on public expenditure, and this is something that we intende to carry out again the next time around.

Mr. Gordon Wilson (Dundee, East)

Is the right hon. Gentleman aware that during that same period unemployment in Scotland began going through the roof, starting from about 1955? What hope can he offer the Scottish people for the future, therefore, in view of the lamentable failure of the Conservatives during that period?

Mr. Prior

A lot of people in Scotland would like to get back to the unemployment levels which existed between 1951 and 1964. Scotland was having particularly and peculiarly difficult problems with shipbuilding and some heavy industries. I remember the former Secretary of State, the right hon. Member for Kilmarnock (Mr. Ross), saying that when unemployment in Scotland reached 100,000 under a Labour Government he would resign. I am not certain what the figure is today, but I imagine that it is about 200,000.

I am surprised that the hon. Gentleman should seek to make out that Conservative policies for Scotland, as for the rest of the United Kingdom, for the 1950s and early 1960s were not a tremendous improvement on anything before or since that period.

Mr. James Sillars (South Ayrshire)

Is the right hon. Gentleman aware that the Scottish economy is different from that of the rest of the United Kingdom in that we rely very heavily on the public sector?

Does he appreciate, therefore, that cuts in the public sector have a disproportionate effect on the Scottish economy? Has he taken that into account?

Mr. Prior

I have no doubt that we shall take that into account, but, equally, I have no doubt that that partly explains why the Scottish economy has lagged behind the economy of the rest of the United Kingdom for so long. It is no good pumping money in at the top in great public service works unless there is the wealth-creating base to sustain it.

I want to turn to the next main sector to which we should look for increasing employment. It is manufacturing industry. Other countries such as Germany and France went in for great investment in the 1960s and the early 1970s, and with the great expansion of production and exports there was an increase—admittedly it was small—in employment. I should like to feel that that could happen now in Britain, but I doubt whether it will. All the signs are that the major industries will be pushed to maintain their existing work forces, even taking account of the considerable increase in production that we hope for over the next few years. One hopes that that is an unduly pessimistic approach, but I believe it to be a realistic assessment of what is likely to happen.

The third area to which we can look for some improvement is the service sector. It could take up a good deal more employment. There could be greater employment in hotels and tourism generally, and I hope that as much encouragement as possible will be given to the hotel industry to take on young people. I hope, therefore, that we can look there for more jobs.

I believe that the main place to which we must look is the small business sector. It is interesting to compare the situation in this respect in Britain with what is happening in Germany. There are 40,000 more small manufacturing businesses in Germany than there are in Britain. There are 25,000 fewer small manufacturing businesses in Britain now than there were in 1945. We are all familiar with the rate of bankruptcies and closures of small businesses over the last few years. I believe that we can make a considerable impact on the problem in this area.

The Government have done many things which have militated against employment in small businesses. I see the hon. Member for South Ayrshire (Mr. Sillars) nodding in agreement. I remember that during the Committee stage of the Employment Protection Bill we moved an amendment to exclude the smallest businesses—those employing four people or fewer—from the operation of the Bill. At that time the hon. Member was of two minds as to whether he should vote with us or with the Government. He raised the question of his secretary and what he would do if he had to change her or if she became a maternity case. Because of a mistake by the Whip we won that Division, but the Government reversed the position when the Bill came back to the Floor of the House. What a great mistake that was! We might have given a bit of confidence to small businesses if the Government had agreed to accept the amendment.

The truth is that the bureaucracy that the Government have imposed on small businesses has frightened a great many small business men from taking on labour and, in many cases, from continuing in business. We require a much greater incentive, much more help and much less bureaucracy for small businesses. If the Secretary of State will only say today that in future he will exclude small businesses from the collection of statistics and the many other burdens that have been pushed upon them recently he will do more to help employment than by any other measure he is likely to mention this afternoon.

Finally, I come to the job creation schemes which are mentioned in the Holland Report. I pay tribute to Mr. Holland and his colleagues who have carried out this large-scale review of job opportunities and job programmes for young people. It is a very thorough and good report. I am not necessarily convinced that this is the best way of helping to create a large number of jobs. Job creation can help temporarily, but it does not provide a long-term answer.

What is the Government's reaction to the Holland Report? Do they accept its recommendations, and will they introduce the new arrangements as quickly as possible? What does the Secretary of State estimate it will cost? How many jobs does he think it will help save, and how many people will be trained under it.

The report makes some strong criticisms of the schemes that have been running up to now. Paragraph 2.43 says that schemes have been introduced piecemeal…Different agencies administer different schemes. Different programmes are in danger of competing with each other. The next paragraph says To the individual young person, the scene has been confusing". It can say that again! It has been a very confusing scene with a lot of young people having no idea of the schemes that they were entitled or expected to take part in. I question whether pouring money in at the top is the right approach. There must be a topping-up exercise but I have doubts about its long-term effects.

One of the Ministers at the Department of Industry is reported as saying that the State is spending £900 million to keep 750,000 at work. I do not think that his figures are quite right, because the State is not providing 750,000 jobs all the time. That is the total number of jobs that it is claimed have been provided. It is significant that those 750,000 jobs are all short-term jobs. There is no long-term employment, no production or wealth creation, and there is little industrial permanence about them. Furthermore, the £900 million corresponds almost exactly to the £900 million that the Government removed from the economy last July through the 2 per cent. surcharge on National Insurance contributions.

One has to look carefully to see the justification for taking out of industry and commerce an extra 2 per cent.—which is:900 million—merely in order to process it through the Government machine and put it back again through other schemes. The jobs so created are not likely to be of greater value than the jobs lost through the additional impositions imposed on industry by the Government. Job creation schemes can destroy jobs as well as create them.

I have with me a comment made by the Nationl Federation of Building Trades Employers that argues that certain jobs that are being carried out through the job creation programme—such as the extension of old peoples' homes, the restoration of churches and the repair of cricket pavilions—ought to be carried out by the building industry, possibly by apprentices in the industry who are now likely to lose their jobs because the work is being carried out through the job creation programme. I am not satisfied that the job creation programme's work in that sphere is necessarily the right way of carrying through such a programme.

What is to be done? I wish to suggest to the House a number of measures that the House and the Government ought to consider. We must create a reservoir of many more skilled people. Unless there are highly skilled people we shall be unable to create jobs and, therefore, the wealth that they and others can share. In order to do that we should provide proper incentives and proper tax incentives. We have really reached a terrible state when a semi-skilled worker in the South of England is paid more than a skilled worker. That happened in the South-East two years ago. There is now no incentive to become highly skilled.

An engineer must reach the age of 35 before his salary adds up to the salary of someone who left school at 16 and went to work in an unskilled job. In his whole lifetime an engineer will be lucky if he earns twice as much as someone without any skills at all.

We need to give a tax incentive for extra skill, and we should consider far more carefully how we can encourage people to take extra training whether at graduate level, professional level, or City & Guilds level. We should be prepared to give tax incentives to match skill so that people will be more prepared to accept and go in for skilled jobs than they now are.

Mr. Tam Dalyell (West Lothian)

The right hon. Gentleman talks about giving tax incentives for skill. That is a seductive idea, but has he put it to the Inland Revenue Staff Federation? I recollect that the right hon. Member for Lowestoft (Mr. Prior) is the Opposition spokesman who has for ever been complaining about the amount of skilled manpower that goes into tax collection and bureaucracy. Is this not precisely the kind of idea that may be worth while at one level but may increase bureaucracy?

Mr. Prior

I am certain that such a scheme could be carried through simply. Of course, I have not yet spoken to the Inland Revenue Staff Federation. I am suggesting to the Government that if they want people to accept extra skills, this is one way that they might persuade them to take up those skills. We all know that there are not anything like enough skilled people. If the hon. Member for West Lothian (Mr. Dalyell) wants me to make a suggestion about how to reduce the staff of the Inland Revenue, I shall do so. We should look more carefully at self-assessment for tax. That would be one way of considerably reducing the numbers employed in the Inland Revenue.

As for small businesses, we need to look much more carefully at the whole concept of the integrated work force unit that has been tried in Northern Ireland and is mentioned in the British Youth Council's report on youth unemployment. We must also look at the results of the Clerkenwell project that my hon. Friend the Member for St. Marylebone mentioned.

We must be far more dramatic in producing schemes to encourage the setting up of small businesses. I have been impressed in my discussions with representatives of large businesses—particularly the most efficient ones—when I have been told that there are many things that large businesses believe that small businesses could do far better than they. I have also been told that businesses could help small businesses by putting more work in their way. We need to have far more consultation between large businesses about the possibility of setting up small businesses. German and Japanese experience supports that view.

Mr. John Farr (Harborough)

On that point, is my right hon. Friend aware that there is a considerable amount of evidence to show that many people are being prevented from setting up small businesses by the network of controls that they face and by the operation of the VAT scheme, and that many small business men are being deterred by this even from beginning?

Mr. Prior

I am certain that my hon. Friend the Member for Harborough (Mr. Farr) is right. Many business men whom I have met have decided that they simply will not bother to set up new businesses because they do not think that it is worth while.

That leads me to my last point. Until we obtain a proper tax incentive we shall not make any progress. That is at the root of the problems of unemployment. We know that many right hon. and hon. Members opposite believe that the right answer is a totally Socialist-controlled economy. They are perfectly entitled to hold that view, but we on this side believe that there is a better and more suitable way for the British to get over their problems and that is by allowing the economy and the market to work, and by providing the incentives and opportunities for those people who take advantage of them. That is the right way and the only way that we shall reduce unemployment.

I regret to say that I have no confidence whatsoever in the Government's ability either to solve the unemployment problem or to get the country moving again. During the last three years production in this country has been absolutely flat and static. Unemployment has been rising to enormous levels and taxation has become higher than ever. Those three facts alone are responsible for the high level of unemployment, and especially the high level of youth unemployment. For those reasons I hope that the House will vote against the Government tonight.

5.28 p.m.

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

Every young person leaving school needs a chance of a job, not only the bright, the qualified, the able, and those of good appearance, but every one of them, not only those who leave in a boom but also those who leave in a recession. That is the subject that we are debating today. It is one that has increasingly engaged the concern of the House, indeed of people from all walks of life outside the House, since the onset of the present economic recession, which is the deepest the world has known since the war. The large increase in the number of young people experiencing or facing unemployment is a consequence of the recession and structural changes in employment. Experience has shown that in any recession young people are disproportionately affected. As job opportunities dry up it is those who have recently left school, rather than adults already well established in jobs, who are most likely to be unemployed.

If school leavers are the first to bear the brunt of recession, it is fair to test the effectiveness of the measures that the Government have taken to deal with unemployment by their effect on school leavers. The drop of 168,000 in the number of unemployed school leavers between July 1976 and March 1977 is, therefore, a measure of our success in tackling the problem. Similarly, the 31,000 school leavers who were still out of work in March is a measure of the failure that we have to acknowledge in seeking to deal with the problem.

One of the most important tests that we have to apply to any set of proposals, whether those submitted by the right hon. Member for Lowestoft (Mr. Prior) or any others, is their effect on these 31,000 young people.

There are other dimensions to the problem, as hon. Members have acknowledged. One was the peak of youth unemployment that occurred in July last year when about 250,000 young people under 18, nearly 200,000 school leavers, were registered as unemployed. Of course the July figure can be held to be misleading. Youth unemployment tends to drop anyway between July and the end of the year because it is the pattern of many employers to recruit young people during that time, but there is no doubt that the special measures introduced by the Government in the past two years have greatly increased that drop and that the reduction would otherwise have been nothing like the 168,000 that I mentioned earlier.

In January there were still 48,000 school leavers awaiting placement in their first job and about 120,000 young people under 18 registered as unemployed. With young people, even more than with adults, there is a considerable turnover. Two-thirds of all young people who register as unemployed find a job within three months, even in a recession. However, there is an increasing problem of long-term unemployment among young people, particularly those in what are described as the vulnerable groups. As long ago as 1974—before the present wave of youth unemployment—the National Youth Employment Council found evidence of a high incidence of long-term unemployment among groups such as the handicapped, the illiterate, the educationally sub-normal and ex-offenders and also among young people who, while not suffering those disadvantages, lacked certain characteristics, such as smart appearance, mental alertness and manual dexterity that employers naturally regard as important when assessing potential recruits.

These groups, which tend to have difficulties in finding employment at the best of times, have been especially hard hit in the current recession because they find themselves in competition with better-qualified youngsters for limited opportunities. It is important to realise that, more than ever before, they are finding themselves in competition with adults as well. Now that the financial incentives to employ young people have been reduced by the improvements in their rates of pay—and rightly so—employers tend to judge young people by very much the same standards as they apply to older workers with a great deal more maturity and experience.

In the Holland Report there was an indication that if one set aside vocations and trades that provided skilled training and considered only those areas of manual work that young people sought, about two-thirds of those jobs paid the adult rate at the age of 18. Therefore, an 18-year-old seeking that sort of work would be competing for the same wage as an adult. Most employers who are considering the possibilities of recruitment judge whether young people compare favourably with the characteristics that they require of potential recruits. One of the dimensions by which we must test any change in the measures that we are using to tackle this problem is whether they will improve the position of youngsters in this area. We have to consider whether any changes will at least give them somewhere nearer an equal chance when seeking work in competition with adults.

The place where a young person lives can be as important as his school and his training in determining his chances of securing employment. Youth unemployment levels vary from area to area in the same way as adult unemployment.

The problem of unemployment among girls is changing. It used to be much less serious than unemployment among boys, but in January 1976 boys accounted for 58 per cent. of youth unemployment and a year later they accounted for only 53 per cent. Longer-term unemployment among girls is increasing faster than among boys, though it is still more serious among boys.

The recessions has occurred at a time when the number of young people reaching school leaving age each year and, therefore, the numbers seeking work each year is steadily increasing. About 100,000 more young pepole left school in 1976 than in 1971 and by 1981 an increase of a further 50,000 is expected. In these circumstances, it would take a very big improvement in the economic situation to bring youth employment back to the levels of a decade ago, even if there had been no structural changes adversely affecting young people.

Mr. Kenneth Baker (St. Marylebone)

The Secretary of State has given an interesting analysis of the problem of youth unemployment. Last year the Government said that their aim was to reduce the present total level of unemployment by half to roughly 700,000, or 3 per cent. Is that still their target? Many commentators see it as wholly unrealistic to base policy upon that sort of target. It is not facing up to the realities that the right hon. Gentleman has been talking about. Many commentators believe that we are coming into a period of rising unemployment with the possibility of levels that we have not witnessed for many decades. Is it still the Government's target to reduce the level of unemployment by half or has that target been abandoned?

Mr. Booth

It is not the target that is in question but the time scale. We now have much better ways of assessing the employment prospects in manufacturing industry. Managers and trade union representative on the sector working parties have delivered in a way that we have not been able to see before their assessment of the share of the market that 39 manufacturing industries in this country can go for and the sort of investment implied in that judgment. We are able to work out much more accurately than ever before the implications of that for employment levels in these industries. No doubt we shall learn that there will be no increse in employment in some industries even if there is an increase in the volume of work, but in others we are finding scope for increases in the numbers employed. It will depend to some extent on the volume of output, and until that aspect of the industrial strategy can be achieved it is not possible to forecast accurately the time scale within which we shall achieve our target. I believe that the target is realistic and one that we must maintain.

Mr. Prior

The right hon. Gentleman has not answered my hon. Friend. If the right hon. Gentleman now says that it is only because of the sector working party that he is in a position in which he can give an accurate forecast, why did he give the other forecasts? What was the origin of the forecast that unemployment would be reduced by 700,000 by 1979? Did the Chancellor of the Exchequer merely pluck it out of the air? Are we now being told by the right hon. Gentleman that there was no justification and no basis for that forecast?

Mr. Booth

I do not say that there is no justification or basis for the forecast. An overall forecast can be made. We can estimate the average growth of productivity in industry and work out the growth volume output, as did the hon. Member for St. Marylebone (Mr. Baker), who was quoted, apparently with approval, by the right hon. Member for Lowestoft. We can make that form of calculation. I am saying that we are now in a position to refine it and to indicate much more accurately where the levels of employment can be increased in manufacturing industry.

We know, for example, that over the past 12 months there has been an increase of over 1,000 a month in the number employed in the vehicle industry. There has been an increase in the number employed in chemicals, in furniture and in woodworking. That is why we are able to announce the drop in unemployment that has taken place over the past month. There can be greater refinement and we can begin to ascertain the areas in which employment will grow. It is no great consolation to those living in an area of high unemployment if capital investment takes place so that more is produced but simultaneously the number of jobs available is reduced. All these factors must be taken into account in trying to assess overall unemployment.

This afternoon I am seeking to concentrate upon the effect of the recession on youth unemployment and the measures that we might use in addition to those already used, or that might supplant some of those that we have already used, to deal with the problem of youth unemployment.

The recession has brought virtually the same problem of youth unemployment to the whole of the Western world. Throughout the European Community about 35 per cent. of the unemployed are under the age of 25. That is a group that accounts for only 20 per cent. of the working population. It is an international problem. I have emphasised that fact over the past year at the European Council and at the recent Economic Summit. It is a problem on which some international action is needed.

The greatest contribution that Governments can make is to get their economies on a footing of renewed growth and get out of the recession as quickly as possible. That will obviously play a major part in securing jobs for young people.

Mr. Emlyn Hooson (Montgomery)

Is there not every indication that even if the economies of the Western world improve there will still be a basic problem of youth unemployment? Is it not being far too sanguine to rely on the recovery of the economy as a permanent answer to the problem?

Mr. Booth

I hope to show that I am in no way sanguine about the problem. I share the opinion of the hon. and learned Gentleman that a recovery of the economy does not automatically guarantee a solution to youth unemployment. Changes have taken place of a democratic structural nature that could leave us with the problem of high youth unemployment even when there is a much greater measure of economic activity.

We must work to improve arrangements for transition from school to work by implementing far better vocational preparation. I am not certain that we have done as much in this respect as has been done in some other countries. That is why the Department of Education and Science and my Department are running pilot schemes combining training and further education, especially for young people who take up jobs that until now have provided no initial training. For the young who are unemployed the Training Services Agency has developed a wide range of short courses giving preparation for jobs below the skilled level. We are beginning to tackle another serious gap in our provision.

Mr. Nigel Spearing (Newham, South)

I am sure that everyone will agree with what my right hon. Friend has just said, but does he not recall that the Select Committee that reported today criticises the limit of £56 on the supervisors in job creation programmes and states that if it were higher far more would be able to be done? Additionally, should we be limited to only 5,500 community industry projects, which would further the objects that my hon. Friend has mentioned?

Mr. Booth

I am aware that criticism is contained in the report. I shall ask my hon. Friend the Minister of State to deal with the matter. It is an issue on which there is no unanimity between the various bodies that are commenting. I have experience of the problem in talking to those who run job creation schemes in various parts of the country.

Over the past two years the Government have introduced a series of measures to respond to the unemployment emergency situation for young people. I do not want to rehearse all the measures this afternoon, because I have mentioned them many times in the House. However, their overall effect is to provide a continued level of over 300,000 temporary jobs and training opportunities, of which perhaps a third are benefiting the under-20-years age group.

For young people the main aim has been to secure the provision of training opportunities at a time when the pressures of the recession are otherwise likely to diminish them. This is in part the answer to the call to build up a stock of skilled people. One of the ways in which we have maintained the number of skilled people and the amount of skilled training has been by a special funding of the industrial training boards, which in 1976–77 helped 41,000 youngsters in addition to those who were undertaking short TSA courses. At the same time we want to get as many youngsters as possible into jobs through a strengthening of the careers service, which in a period of recession comes in for a much more difficult task than at any other time.

We have introduced the recruitment subsidy for school leavers, which has helped some 30,000 school leavers into jobs. That scheme has now been replaced by the youth employment subsidy, which is aimed at the special problems of youngsters under 20 years who have been out of work for six months or more. From the introduction of the youth employment subsidy we have been able to approve about 19,000 applications.

Thirdly, we have provided for many unemployed youngsters to have the chance of community work or job experience through the job creation programme or the work experience programme that is operated by the Manpower Services Commission.

Mr. Dalyell

I hope that my right hon. Friend will appreciate that this is not a hostile question. Some of us are bothered about section 2.43, which states that all these measures have been introduced piecemeal. At this stage I am interested to hear what my right hon. Friend has to say about that statement.

Mr. Booth

I accept that many of the measures were introduced piecemeal. Many of them were in the nature of experiments. I believe that it was right to introduce them on that basis as soon as we identified a way of tackling one of the many problems. If we are to make a judgment on whether these measures are piecemeal, we must realise that unemployment among young people is not one problem but a great many problems. I believe that it was right to bring forward measures to deal with the problems as we saw a way of tackling them. It was only by trying these measures that we were able to find which ones were effective and which were less effective.

Whatever else the running of all these measures has done, it has provided the House and others who are concerned about youth unemployment with a basis of testing our ideas and observing them in practice. It has guaranteed that young people have had experience of working, of carrying out projects and of obtaining training. If we had not introduced the measures, those opportunities would not have been available to them.

Mr. Robin Corbett (Hemel Hempstead)

Is it not the case—I say this in no critical manner—that the assumptions made when many of these schemes were started, including the job creation programme, have been fundamentally altered and that there needs to be recognition of the central problem of youth unemployment? Is it not the case that with more changes in the structure of unemployment the reality is that more young people will be out of work for longer periods in the immediate four or five years whatever happens to the economy?

Mr. Booth

I agree that some of the assumptions made in the introduction of the early measures proved to be invalid. Incidentally, some of the assumptions proved to be correct as well.

Some of the measures, being short-term, had to be introduced against the assumptions which it was reasonable to make in the light of experience at that time. To have said "We shall not take these measures as experience may prove that this judgment cannot be validated" would have resulted in us introducing probably only a quarter of the projects that we introduced. We have come to a time when we must look at what is happening collectively, with all these measures, and see whether there is scope for introducing, as the Holland Committee suggests, an integrated form of training, a wave of combining measures to obtain more effectively an agreed objective, and to find another way of assessing what the scope of these measures should be.

As a result of operating these schemes, we have been able to provide about 35,000 extra places in community work, work experience and the job creation schemes of the Manpower Services Commission. I believe that these may have a permanent part to play.

I accept that assumptions made initially about the nature of the problem have changed. The right hon. Gentleman referred to the debate in the House on 3rd May 1975. At that time the only measures that we had in existence were Community Industry and a few of the TSA short courses. Since then we have responded to the call from the House to do much more and to introduce many more measures. The House looked to us to do something urgently, as did the youngsters concerned and their Mums and Dads. I believe that we have responded.

These measures have to be seen as part of a wider strategy which embraces other steps to tackle unemployment, such as the job release scheme, the temporary employment subsidy and other forms of aids to industry. When the right hon. Gentleman says that we should look to the private sector of industry to create more jobs, and suggests that we do not regard this as a means of helping the problem of unemployment, I wonder how he discounts the tremendous investments grants, the accelerated projects scheme and the tremendous aid that is being provided for industry today.

Mr. Loyden (Liverpool, Garston)

My right hon. Friend may be aware that the grants and supports coming from the Government for private enterprise have not resolved the unemployment problem in Merseyside, or the movement out of small businesses. This has nothing to do with bankruptcies. Would he not agree that the attempts being made in the localities—where people have established clearly in their minds that private enterprise will not provide jobs—should persuade him to listen more attentively to those in Community Industry who have schemes that tie up training to viable employment on a longer term? Does he not feel that the Government should now be turning their minds to this question rather than continuing on the present basis?

Mr. Booth

I accept that my hon Friend's suggestion is important. It has a part to play in a quick reassessment and an early judgment of what the future should be of this series of measures to deal with youth unemployment. But we have already been able to use some of these measures to do that for which my hon. Friend is calling. We have been able, by certain job creation programmes, to find the initial training for the starting of new ventures and new industrial enterprises, up to the point where they could take off on their own commercially and pay their own way. But that, again, is within the range of measures with which we have experimented.

Mr. Andrew Bowden (Brighton, Kemptown)

The Minister referred to the job release scheme. I am sure he is aware that there are some parts of the country where the average unemployment is well above the national average on a consistent basis but where the job release scheme does not operate. Will he look at those areas and see whether he can include them in it so that they may receive direct help from this scheme as well?

Mr. Booth

We must re-examine the scope of the job release scheme. It is run on a limited basis. It is limited to those between the ages of 59 to 64. It is limited by geographical area to assisted areas only. It has a part to play. It has limited funding. I readily give the hon. Gentleman an assurance that, before it comes to the end of that funding, we shall examine the scope of that scheme.

We have now come to the time when we need to take a measured look at what we are going to do in the next few years, in terms of both the substance and the scale of the provision. For that reason, we encouraged the Manpower Services Commission to set up this Working Party on Young People and Work to study the feasibility of ensuring that all young people of 16 to 18 who have no jobs and are not engaged in further or higher education should have the opportunity of training or participating in a job creation programme or work experience.

Mr. Anthony Steen (Liverpool, Wavertree)

The report says that, in spite of the integrated approach, there will still be a large number of young people unemployed. Will the Minister direct his mind to those?

Mr. Booth

Certainly. I believe that that is one of the features of the report that must be most carefully examined. To that extent we can say that the initial terms of the remit have not been fully met by the report. The report produces a way of estimating the scope of the measures. One of the judgments we must make in examining whether we accept the Report in its present form or not, is whether we accept that way of estimating the range of provisions. But the report has only just been published. It concludes that the employment situation for young people is unlikely to improve very much in the next few years. It proposes an integrated programme of opportunities for unemployed young people aged from 16 to 18 which would be developed from, and replace, the present temporary work experience and job creation programmes for that age group, while the training measures and the Community Industry schemes that we now run would be continued.

It suggests that the problem of youth unemployment is too urgent to start experiments with entirely new concepts and approaches. It points out that the present schemes to help young people have been tried and have proved successful and attractive to the young people themselves.

Although it concluded that the existing measures needed to be modified and brought together in a unified programme, the Holland Report certainly gives no support to those who have tried to dismiss existing measures as mere paliatives or cosmetics. The Report says: Present programmes represent real achievements…very many young people have been given opportunities they would never otherwise have had. These opportunities have been of a new kind which have attached and engaged young people and shown that they can help in a practical way those who have achieved little or nothing at school or in more traditional forms of provision. There can be little doubt that the schemes mounted so far have added significantly to the general stock of skills in this country. That is a pretty good testimonial coming from a body as widely representative of concerns in youth employment as was the Holland working party.

To take two examples of what the working party recommended, it says, first, that the work experience programme should be developed from its present level to provide 30,000 places with a 60,000-a-year throughput. To take another, it also recommended the expansion of the Training Service Agency's provision of short industrial courses. The working party, quite clearly from the report, was in no doubt that these schemes had proved valuable and provided useful models for further development. Practically the whole of the expansion which the Holland Committee calls for is the development and extension of two measures already in existence.

The working party notes that there are wide disparities between different Government schemes in terms of the level and the form of remuneration paid to trainees or employees. It argues that these different rates and grants make it more difficult for young people to choose the scheme which would suit them best. The working party has concluded that there should be one common rate, a flat allowance of £18 a week.

The Social Services and Employment Sub-Committee of the Expenditure Committee, whose Report is published today, considers that there should be a unified programme with a standard rate of pay, although it recommends that that rate should be regarded as a wage, subject to national insurance and taxation. I do not know whether the youngsters concerned would welcome the idea, but a quick reading of the Sub-Committee's Report suggests to me that its view is that this would make the youngsters feel that they were really at work. Clearly, that is an important difference of approach to which we must give consideration as a House.

The working party concludes that the programme should not attempt to provide a place for every youngster and that, even if that were possible, it would be unnecessary, since many youngsters are unemployed for only a short period. It goes on to say that this could even damage the prospects of some youngsters by taking them out of the labour market just when they might have obtained a job.

Basically, the working party recommends a total of 130,000 places in the unified scheme, providing about 234,000 opportunities a year for young people. That would mean roughly doubling the existing provision. The Manpower Services Commission has endorsed the working party's report.

On the Holland Committee's own assessment, the gross cost of running what it proposes in place of existing schemes would be £168 million at 1976 prices. It estimates the net cost as £67 million—

Mr. Timothy Raison (Aylesbury)

It is £95 million.

Mr. Booth

I will check that point. On my reading, on a two-thirds' displacement the Committee estimated the cost at £67 million.

Mr. Raison

In paragraph 4.46 the Committee said: Taking account of these offsetting factors, we estimate the net cost of the allowances payable to young people under the programme to be £60.55 million…However, the contribution to capital costs, further education, training, etc. could bring the net cost of the programme as a whole to something in the order of £95 million".

Mr. Booth

I am grateful to the hon. Gentleman and I agree that is the figure which appears in paragraph 4.46. I may have been working on an earlier report. However, I think that we agree that the gross cost is £168 million.

I think that the report is extremely valuable. Whether we finally agree with its conclusions or reject them, the way in which the problem is measured, the size of the problem, the areas which the report has indicated, are, in the view of many well-qualified and concerned people, a basis on which we must now make a decision.

Mr. Prior

Is the right hon. Gentleman really telling us that, given the urgency of a situation that we have all known about for months and years now, and given the fact that the Minister must have had the report for three weeks or a month, the Government cannot make a statement today? Everything that I said about lethargy and complacency is borne out by what the right hon. Gentleman is saying.

Mr. Booth

If I came to the House with a decision today on precisely what we intended to propose in response to Holland, that would deny the House a means of influencing the decision. That would be quite wrong. It would also deny the other organisations, including the British Youth Council and the National Youth Bureau, a chance to make their views known and to have them taken into account.

Of course a number of important decisions must be made, and made quickly, but what the Government have done is fund all existing measures through to August so that there should be time to take these decisions quickly and properly.

We must also take into account—the right hon. Gentleman should bear this in mind—the Report of the Social Services and Employment Sub-Committee of the Expenditure Committee, under the chairmanship of my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short). If we had decided on Holland and reported a decision today, the House could not have compared the differences between Holland and the Sub-Committee. That would have been entirely wrong as well.

Mr. Hooson

Is not a disturbing feature of the whole matter the fact that if the right hon. Gentleman implemented all the measures suggested by the right hon. Member for Lowestoft (Mr. Prior) and all those in Holland, there would, according to all the experience of Western countries, still be a great problem of youth unemployment? Is it not to that problem that the Government should be expected to direct their strategy?

Mr. Booth

I certainly think that there may be a problem, but I would add that if I had come here and said that the Government would implement Holland lock, stock and barrel, every dot and comma, I believe that the right hon. Member for Lowestoft would have attacked the Holland proposals on the ground that they were not the right way to tackle the problem.

If we are to have a sensible debate on this subject, we must recognise that the problem is urgent, that Holland is an important contribution to the debate but that there are bodies outside this House, as well as those represented here, which have an important contribution to make before that decision is taken.

It is to the credit of a great many youngsters that they still have confidence and hope that they can take their place in adult working life. I believe that the House can play an important rôle in justifying that hope and confidence.

6.8 p.m.

Mr. Tim Smith (Ashfield)

It is a happy tradition of this House that on the occasion of his maiden speech a new Member should refer to both his predecessor and his constituency. It is a particular pleasure for me to refer to Mr. David Marquand, who represented Ashfield for 11 years. He was a most conscientious Member on behalf of his constituents. He is of course also a distinguished journalist and biographer, and his recently published biography of the Labour Prime Minister Ramsay Mac-Donald was received with universal acclaim, I think, by the critics. Now that he has been appointed Special Adviser to the President of the European Commission, I am sure that the House will wish him well in his new capacity.

My constituency of Ashfield is part of the industrial heartland of this country. Forty per cent. of the workers there are skilled workers. Six per cent. of the national output of coal is produced at Ash-field's nine pits. The engineering factories and the hosiery factories also contribute disproportionately in total to the national wealth. All that the people of Ashfield ask is that in return for their hard work they should receive fair rewards and be allowed to keep a fair proportion of those rewards. It is a privilege for me to represent those people.

Unemployment affects Ashfield in the same way as it affects the rest of the United Kingdom. I am pleased to say that it is rather less affected than some other areas. Unemployment is a social evil. Its eradication should be high on the agenda of all Governments. Unemployment among the young is especially tragic because for young people it can become more than a temporary setback. Unemployment can condition their whole way of life and attitude to work.

The House will be familiar with the statistics on youth unemployment. They are well known, and my right hon. Friend the Member for Lowestoft (Mr. Prior) referred to them. The most significant is that which refers to males under the age of 19. In 1971 the rate of unemployment was 6.5 per cent. By 1976 it had risen to the staggering level of 21.9 per cent.

As hon. Members will know, this is the last week of the school term. In Nottinghamshire 15,000 boys and girls will be leaving school. At the end of this week 4,500 of them will still be looking for jobs. In Ashfield 1,300 girls and boys will be leaving school. At the end of the week 500 will still be looking for jobs.

I hope that local employers will do all that they can to help, especially those connected with industries that tend to be less popular. I hope that they will advise schoolchildren of the opportunities available through the media, including local radio stations.

Unemployment among young people is now accepted as being both cyclical and structural in nature. I was pleased to hear the Secretary of State say that he recognised that there was a structural element to youth unemployment. Of course the cyclical nature of unemployment has a disproportionate effect upon unemployment among young people. It follows that when the cycle moves forward their position is also alleviated disproportionately. Clearly, whether this occurs in the future depends upon the Government's economic and industrial strategy. I do not propose to enter into that argument, because it might be controversial.

The Government now accept the structural element in unemployment among young people. Therefore, economic recovery by itself will be insufficient to resolve the problem. The Holland Committee points out in its projections, including the most optimistic, that there will still be 100,000 unemployed young people in 1981. Some type of comprehensive approach to the problem, along the lines of the report, is required.

There are three principles that are important in that context. The first—and the report recognises this—is that there should be a common level of remuneration among young people who take part in the various schemes. The report fixes that level at £18 a week but the payment should not be made more attractive than going to work. There is a danger in that. On the other side of the coin is the interface with further and higher education. That needs to be examined so that there is no incentive for young people to go into the scheme rather than stay on in full-time education.

There should be no interference with the labour market. That is more easily said than done. So long as the scheme is not comprehensive and does not embrace all young people who are out of work—and the report does not propose that—interference will be kept to a minimum. Those responsible for the management of the schemes must keep that in mind at all times.

The third principle is that the opportunities made available to young people under the schemes must be both relevant and interesting to the young people concerned. The report suggests that there should be participation by young people in the management of any scheme. Until three weeks ago I was Treasurer of the British Youth Council. That council produced a report written mainly by young people. The report of the council says that young people are often absent from the various processes of decision-making bodies which make decisions about their livelihoods and their future. There is no national forum in which young people can get together to put forward their views. The British Youth Council is the closest body to such a forum.

That third principle is most important. Young people should be allowed to have their say. I was particularly pleased that the Secretary of State is to take into account the views of the council.

No wonder young people feel alienated It is no surprise that disproportionate support for the National Front comes from the young. Fascism feeds on high unemployment and high inflation. It is not enough to hope that the National Front will go away. Something more positive must be done. We must have a lead from the top. Young people must be reassured that solutions exist. They want confirmation that jobs can be found. More than anything, they want a new idealism and sense of purpose that will restore their confidence and give them hope.

6.17 p.m.

Mr. James Dempsey (Coatbridge and Airdrie)

The privilege falls to me to express congratulations on behalf of all hon. Members to the hon. Member for Ashfield (Mr. Smith). He made a most impressive speech on the vexed problem of unemployment among young people. The hon. Member indicated that he has a thorough grasp of the problem. We were all impressed as he dealt cogently with his local situation. Indeed, I detected a note of racism and that was not a bad thing. Sometimes we are inclined to be too academic. We appreciated the fundamental knowledge that the hon. Member displayed in the course of his effective address. I am sure that we look forward to many more enlightened contributions from him.

For many years my area has been affected by unemployment. Before coming to deal with that aspect I have one general comment to make. If the right hon. Member for Lowestoft (Mr. Prior) had a constituency in the West of Scotland he would discover that it is not the Labour Government nor any taxation policy which has caused many small businesses to go out of existence. We have been face to face with that problem in Scotland for many years, because the big brothers from England absorbed such businesses and close them down in order to rationalise production south of the border. That is not a hard hitting nationalist view but a statement of fact.

In the last few years I have seen the closure in Coatbridge of GKN with the loss of 300 jobs. Not so long ago we lost defence jobs because a private enterprise factory was closed down. This week I am trying to arrange a meeting between a new big brother, shop stewards and myself, to prevent the loss of further jobs in Coatbridge. A new Midlands firm is taking over a majority shareholding of a foundry in my constituency.

We have this problem from time to time, year after year. It is this aspect of monopoly private enterprise developments that has done far more damage in the closing of small businesses in my part of the country than any Government, Labour or Conservative, or, indeed, any taxation policy. I should like the right hon. Member for Lowestoft to know that. I cannot help recalling that only two week ago, in a discussion at a certain club, the manager of a medium-sized firm courageously told the audience, which was not a Socialist audience, that he and his firm were never as well off in their history as at present under the Labour Government's policies.

I ask the House, therefore, to realise that the main reason for the disturbing thoughts about the future of small businesses north of the border are the takeover bids and mergers and the development of monopoly capitalism in industry and in practice generally. New businesses are coming along, but they are going south of the border. I understand that GKN is building a huge place in Wales at the expense of Coatbridge and elsewhere. Therefore, let us be fair and factual in approaching a problem which automatically affects the ability of young people to find employment.

I find the Holland Report a most informative document. However, there are many queries that I should like to raise with my right hon. Friend for him to examine when it comes to producing some sort of paper on this subject, which we shall be discussing, no doubt, in the future. For example, I understand that at present we need about 25,000 engineering apprentices a year. Industry recruits only 21,000. We are to train only 4,000 through our training machinery, yet the report seems to imply that there should be a reduction in the number of award places for engineering students throughout the country.

Although that is only an implication, I find it a contradiction in terms that we should reduce the number of places when we require engineers, and especially during a period of very high unemployment. I ask my right hon. Friend to look into that situation. If the implication that I perceive is obvious and if the conclusions that I am drawing are accurate, I hope that he will take decisive steps to avoid any such reduction.

The very first training establishment in Scotland was constructed in my constituency through a valiant effort by a group of employers, supported by the trade union movement, before Parliament had ever introduced any legislation to further engineering training or other forms of training in this country. I speak with some experience. The managers in the Engineering Training Association have done a remarkably good job in this sphere.

However, one thing that is found from time to time, and it is not too clearly explained in the Holland Report, is that there is a degree of wastage in training that is very discomforting, indeed. I have heard from certain sources that in some parts of the United Kingdom it is as high as 50 per cent. If that is so, my right hon. Friend should examine this problem through the committee that he has in mind. I should like to know why young people are not taking full advantage of the training when at the end of the training period they have a much better chance of obtaining employment than they had prior to undergoing any training and when during the training period they enjoy a fair allowance while undergoing skilled tuition. I wonder, therefore, whether some investigation into the subject can be initiated.

Only recently I learned that in one quarter, of 50 boys who had been invited to attend for interviews for training, only one turned up. I am very anxious to find out why the other 49 did not take the trouble at least to attend for an interview. There may be valid reasons; I do not know. However, one thing that my right hon. Friend should grasp is that, while we talk about the number of persons we are training and the efforts being made to encourage apprenticeship development, we also have a duty to try to analyse the cause of the wastage with a view to its elimination and to ensure that our young people take the maximum advantage of the facilities now being provided.

There is, however, one aspect of this matter that irritates and annoys me. That is the lack of provision for young girl school leavers. It is a very serious problem, indeed. Together with some local people, I have gone to considerable lengths to devise schemes whereby we can provide some training facilities for young girl school leavers. For example, I have even travelled from Coatbridge to Leeds to meet the chief executives of the Clothing Board in order to try to get them to father a scheme for the training of young girls. However, the fact is that although we can find the machinery on which to train them, I am dashed if we can find the premises. This is a tragic situation, because in the whole of that part of Scotland about which I am knowledgeable nothing has been done for girl school leavers.

We were very fortunate last year in having the attendance of the Under-Secretary, who very kindly came to Coatbridge and Airdrie to study the problem for himself. He expressed an interest in the efforts that we were making to give our girls equality of opportunity with the boy school leavers. We were unable to find premises, however, simply because the premises that we intended to use had to be fully utilised by the industry concerned because of large increases in European orders—although we all welcomed those.

We have in Coatbridge, for example, a site that is already serviced. The water and drainage services are there. Telephone and electricity cables are there. All that is required is a building. The site is owned by an agency that ultimately comes under the public umbrella of the Department of Employment, yet we cannot use that site to provide a building to use the machinery to train our girls in that part of the country.

Arising out of this debate, therefore, I should like to hear from my right hon. Friend more emphasis on what concrete steps he is taking, not only in Coatbridge and Airdrie but throughout the country, to give our girl school leavers the maximum opportunity for training. Today we have reached the ironical situation that we have employers who would be willing to employ these girls if only they had had some training. However, they have had none and, therefore, they are not employed. That happens not only in my constituency but in every other part of the country.

I earnestly appeal to my right hon. Friend to give the matter his immediate attention. It is very urgent and of great concern to parents. I remind my right hon. Friend that surely we should have no trouble in finding sufficient resources to provide buildings and to equip those buildings with the machinery necessary to give these young girls the same opportunity that is enjoyed, by and large, by male school leavers.

I have always believed that capital is important—of course it is. Land capital is important as is commercial capital. But the most important capital of all is human capital. I ask my right hon. Friend to take note of that and to act immediately.

6.30 p.m.

Mr. Emlyn Hooson (Montgomery)

No Government will cure, as opposed to alleviate, the problem of youth unemployment without massive public investment. A great deal of hypocrisy is talked by the Opposition Front Bench about this matter. I agree with a great deal of what the right hon. Member for Lowestoft (Mr. Prior) said today about the need, for example, to encourage small businesses and the self-employed. I am sure that they could assist by providing more jobs than they do. But the right hon. Gentleman failed to meet the problem, as did the Secretary of State, that this level of youth unemployment is common to all countries in the Western world as far apart in the way in which they run their economies as Spain, West Germany, the United States and Canada. The truth is that if the Government adopted all the measures suggested by the Conservative opposition and put into force all the measures suggested in the working party's report, we should still have a basic problem of youth unemployment.

I was greatly struck by the speech of the hon. Member for Ashfield (Mr. Smith). If the hon. Gentleman continues in that strain, the House will be greatly indebted to him on many occasions. He made not only a sensible speech—perhaps that is the greatest tribute that one can pay to a speech—but a speech of great knowledge and sensitivity about the feelings of his generation. The hon. Gentleman is absolutely right. Youth unemployment is not only a social tragedy in this country, and every other country in the Western world; it is also political dynamite.

The hon. Gentleman was right to emphasise that the National Front—he might have also said the International Socialists—recruits a great deal of its membership from among young people who are unemployed and who are disillusioned with their society and who feel they owe no debt to it and who are therefore intent on its destruction. If the hon. Gentleman delivered that speech twice a week to his Front Bench, he would greatly improve the contribution which the Opposition Front Bench makes to debates of this nature.

Mr. Steen

The hon. and learned Gentleman said that however many measures the Government introduced there would still be unemployment among young people. Is he aware that proposals have been made by Conservatives that would reduce if not eliminate unemployment among young people by giving them a wage in the shape of unemployment benefit to do community work? There are endless opportunities for community work all over the country. Surely it is far better that young people should do something than do nothing.

Mr. Hooson

I do not disagree with that approach, but it is a piecemeal approach.

Mr. Steen

Short term.

Mr. Hooson

I suggest that this country—I do not care which Government do it—has to get down to the basic structural problem of why we have youth unemployment. I believe that 35 per cent. of the unemployment in the Western world, excluding the United States and Canada, is now youth unemployment. I believe I am right in saying that the percentage is even higher in Canada and the United States. This problem will not go away. We can produce all the small community schemes—

Mr. Steen

Short term.

Mr. Hooson

With great respect to the hon. Gentleman, we can produce all the community work schemes we like and we shall not cure this problem. We shall still have 100,000 young men unemployed in 1981 however well the economy does. We ought to be directing our minds to that problem. We know that we have a declining population. Because of the bulge, there is at present a high percentage of young people coming on to the employment market, but in 10 to 15 years' time the position will be greatly changed.

I agree with a great deal of what the right hon. Member for Lowestoft said in criticism of the way in which the self-employed have been dealt with. But in a country like the United States the self-employed are well looked after and special funds are available, yet equally there is an acute problem of youth unemployment. Even a country like West Germany, where inflation has been carefully controlled by means of the money supply and no other measures have been resorted to by the Social Democrat and Free Democrat Government, has a serious problem of youth unemployment.

We ought to take a leaf out of the American book. I suspect that in the end it will be President Carter who does something about this in a basic way, and this country might follow in his wake—just as President Roosevelt before the war first adopted the Keynesian policies for his Tennessee Valley Authority scheme although the idea had been flouted here by Lloyd George. Where I part company with the Opposition Front Bench is that it criticises public expenditure without distinguishing between kinds of public expenditure. This country has been wasteful in public expenditure over the last seven years—that is a neutral period because it covers two Governments. When we consider our administrations, such as the Civil Service, local authorities and the National Health Service and their explosive expansion, what we often see is a misuse of public expenditure. We have used public expenditure as a complete justification to cure the kind of structural defects that we see in youth unemployment.

To go back to what the hon. Member for Ashfield said so effectively, I also think it necessary to give young people not only a sense of hope but a sense of belonging and a sense that they are really involved in some constructive venture. We should not merely give them crumbs from the table to gnaw at because we can think of nothing better to do.

Mr. Ioan Evans (Aberdare)

Does not the hon. and learned Gentleman also agree that the fact that young people are unemployed is a charge on public expenditure? If we can adopt constructive policies that would allow those young people to create wealth, we should be better off as a nation.

Mr. Hooson

I entirely agree with the hon. Gentleman. Where, however, I disagree with many hon. Members below the Gangway on the Government side is that they oppose cuts in public expenditure indiscriminately. If those hon. Members supported some cuts but insisted on better public expenditure in other respects, there would be a great deal more to be said for their point of view.

I want to come to what I believe this country can do. We shall obviously be faced with a major fuel crisis when North Sea oil runs out. We therefore have to ask ourselves what will replace it. In part, coal will obviously replace it, but not entirely. Shall we entirely depend on nuclear energy? Ought we not to be taking a leaf out of Roosevelt's book and providing great public works, for example, barrages such as the Severn barrage, the Dee barrage and the Morecambe Bay barrage, as well as hydroelectric schemes?

One of the features of unemployment among young people at present is that it covers the whole gamut. We find that it affects young people with university degrees. I know of one young person with a zoology degree who has been out of work for 18 months; and another with an engineering degree. It covers the whole range of young people from those who are highly trained and highly skilled to those who have no training or skills at all.

We must also bear in mind that the problem is not only structural but cyclical. In fact, we are facing a declining work force in this country in the years ahead, although not in the immediate years ahead.

Mr. Raison

There is a report just published by the CPRS dealing with population and social services. It shows that the projected number of persons from the ages of 16 to 64 will tend to go up from now until the end of the century and that there will be no decline this century.

Mr. Hooson

But in the longer term the population of the country is bound to decline.

Mr. Raison

Why?

Mr. Hooson

The projections I have seen all suggest it.

In the next few years we need to pursue many public works on the lines I have suggested. We must invest in our own future. This will give young people the feeling that they belong to society, and they will believe that we are investing in their future. We need the kind of imaginative approach that looks at the long-term economic benefits, that brings in young people, and that gives them opportunities across the whole gamut of skills. Young people can be expected to be more mobile in their search for work than can older people. The Tennessee Valley Authority scheme in the United States brought in many young people, who readily moved from other parts of the United States.

What is lacking in the Government's approach—and the Government are the people with the responsibility—is a complete lack of strategy to deal with this problem. The working party suggested palliatives to alleviate the situation. It would certainly be of benefit to our country to have a pool of trained people. They might as well be trained than idle and unemployed.

Having said all that, I still consider that the working party's report only scratches at the surface of the problem. We as a nation must make up our minds what we intend to do about the situation. These young people deserve massive investment. The economy is on the upturn because North Sea oil revenues are coming in. Let us not squander revenues as we have in the past. A great deal of this money should be invested in the future of this country.

I believe in a truly mixed economy. There is scope for encouraging the private sector to provide more jobs, but there is also tremendous scope for massive public investment.

6.43 p.m.

Mr. Anthony Steen (Liverpool, Wavertree)

I wish to talk about the Government's unemployment measures since 1975—which takes us into an Alice-in-Wonderland world. It is a world in which whatever the Government say tends to mean very much the opposite. The effectiveness of the remedies is in inverse proportion to the amount of money spent.

I can trace this Alice-in-Wonderland situation to early 1975, when the Lord Privy Seal in another place made the first of a number of ministerial statements involving Government measures to relieve unemployment. He was at pains to point out that unemployment among young people was a short-term problem. Yet we all knew then, as we know now, as the Holland Report forcefully points out, that it is not a short-term but a long-term problem.

The Lord Privy Seal warned that public expenditure should be controlled, but he promptly offered £100 million to launch a series of new projects. He dressed up a number of schemes, whose titles paradoxically bear little relation to what they are supposed to be about.

Let me take as an example the Labour Mobility Programme. The principal feature of the unemployed is that most of them live in council housing and cannot get transfers because the housing programme prevents a free movement of such tenants. Therefore, the Labour Mobility Programme is a misnomer.

Then there was the Job Creation Programme, which was not so much about jobs but more about the work which local authorities put at the bottom of their priority list but managed to get financed by the taxpayer through Government funds. Therefore, the work tended to be of a more menial nature. These are two illustrations of the Government having a wish-fulfilment and confusing what they would like to happen with what is actually going on.

Perhaps the refusal of the Government to face reality explains why it has taken two years and £600 million to acknowledge that the problem of unemployment among the young is a long-term problem, even though statistics from 1968 have shown an indisputable trend. In 1968 about 28,000 young school leavers were unemployed. In 1971 this figure had grown to 158,000, and last summer it reached 200,000. Yet the statistics conceal the critical path, for whenever the unemployment figures rose beyond certain levels which the Government did not like, they immediately pumped more money into special schemes to reduce the number of the young unemployed. This carried on year after year until the next flood of school leavers came on to the market.

This concealment has been added to by the way in which the Government's statistics are compiled. As soon as a school leaver has been at work, even for a week, or goes on one of the Government bonanzas and then becomes unemployed, he is immediately transferred to the adult register. In this way the figures relating to unemployed school leavers are concealed within the adult figures. This is an important device that the Government have used successfully over the years, and I repeat that it conceals the true situation.

It would be wrong to give the impression that all the schemes introduced by Government are no good, because many are imaginative and have broken fresh ground. But the way in which they have been set up is in some ways as important as the work they are trying to do.

I wish to mention the maiden speech of my hon. Friend the Member for Ash-field (Mr. Smith), who stressed the cardinal importance of participation. What is absent from the Government schemes is the understanding that the young unemployed should be able to participate in the decision-making process. That process is full of adults and young people are excluded.

Mr. John Ryman (Blyth)

Does the hon. Gentleman appreciate that in Community Industry work young people participate to a great degree in relation to the decision-making process in deciding whether an application for help should be made in certain schemes?

Mr. Steen

I am grateful for that comment, because the Community Industry Scheme was started by a Conservative Government, who saw the importance of involving young people at an early stage, whereas the succeeding scheme has been full of bureaucracy and has been run by civil servants.

The Minister of State, Department of Employment (Mr. Harold Walker)

I do not want to detract from what the hon. Gentleman said about the Conservative Government providing the original finance for the Community Industry Scheme, but surely he should give credit to the National Association of Youth Clubs for starting the scheme.

Mr. Steen

I agree that the National Association of Youth Clubs started to put up the scheme but a Conservative Government financed, improved and launched it. It is right to give credit to the association for the marvellous work it has carried out. It points to the advantages of a scheme run by voluntary organisations rather than by the State machine.

Let us now examine the Job Creation Programme which now has an allocation of over £120 million and which will spend that kind of money. What distinguishes that programme from the Community Industry Scheme is that the programme involves applications on a 10-page, tightly printed form which must be completed in full before it goes before an action committee. That is another misnomer, because it is one of the most inactive bodies I have come across. It is bureaucratic stamp. It is made up of trade union officials, chief executives of councils, officials from the Manpower Commission, a number of professors and captains of industry.

For many months I have been suggesting that some of the young people engaged in the scheme, or their supervisors, should be included in these action committees, but my suggestion has fallen on deaf ears. It would be hard to imagine a more unrepresentative panel. I hope that the Holland Report, which mentions voluntary organisations—but only just—will be looked at with very great care by those who consider the composition of local advisory and management groups.

Because of the complexity of the Job Creation Programme and the difficulty of filling in the forms, it is understandable that more than 60 per cent. of applications have come from local authorities, which have the staff to fill in screeds of paper and the funds to pay for any materials that may not be covered by Government grant.

Mr. Corbett

I am sure that the hon. Gentleman does not want to be deliberately unfair about the Job Creation Programme. Is he aware that in many areas there are project advisers, in some cases unemployed professional and commercial people, to assist the sponsoring bodies in filling in and submitting applications for the Job Creation Programme, and in other areas the people whom the scheme is designed to help are involved before the matter goes to the area action committees, which decide whether the scheme is to go ahead.

Mr. Steen

There have been improvements over the years and that is one of the better innovations. There are some very bad ones, too. It is not surprising that, because of the processes and the way in which the programme is structured from the top, a number of the jobs are futile, such as counting road signs in Coventry, clearing seaweed in Hull and, recently, putting ants back on Wareham Heath.

Perhaps the most serious allegation is that the Job Creation Programme overpays its youngsters and thus destroys the work ethic. The programme contains a rather cruel twist, because no one can stay with it for more than a year. After being employed for a year, a person is hurled out of the scheme and back on the dole.

I hope that the Minister will deal with Exhibit 5 on page 48 of the Holland Report's new programme. We should like reassurance that the four headings dealing with work preparation courses, work experience and other schemes will not do exactly the same as the Job Creation Programme. It is stated that the average duration of the work preparation courses is two weeks and the duration of work experience is up to one year. Will young people merely be on a short-term bonanza again rather than a constructive, long-term programme?

The point about a wage, a subject raised by the Expenditure Sub-Committee, needs to be taken very seriously, but I wonder whether the £18 suggested by the Holland Report is the right figure.

Another criticism of the Government schemes is that they have been too concerned with the provision of subsidies to employers to delay redundancies, or with special projects that have lacked vocational training. The Lord Privy Seal, when he made his announcement, stressed that each of the projects would be concerned with vocational training. It is as if the high levels of pay have been a device used by the Government to keep the unions sweet, forgetting that job creation alone has already cost nearly double the amount allocated to the whole urban aid programme in the past eight years.

The Government's whole urban aid policy has cost £76 million over eight years, and the Job Creation Programme has cost £120 million over a year and a half. Perhaps the Government have been gambling that unemployment would start to decline by the end of 1977, but the long-term implications are only too well recognised by the Manpower Services Commission's Report, which mentions a figure of 800,000 youngsters being registered as unemployed in 1976.

It seems that the Government have failed to look at the cause of the disease and have been dealing only with the symptoms. By administering aspirins, they have reduced the temperature but failed to get at the cause of the disease.

The Manpower Services Commission's recommendations may be the same old meal served up with a different sauce. The Commission wants to spend a great deal more public money and provide more opportunities, but it still seems to be curiously out of touch with linking work experience to real work. While the Government continue to get it wrong, a generation of youth will be engaged in trifling tasks with little end product, which will perpetuate the belief that the State will look after them.

The main plank of the Holland Report is that by bringing all these schemes under one grand, co-ordinating ideal all the problems will go. We must be very careful that merely by bringing all the scheme into a central pool we do not develop even more bureaucracy than we have now. However many jobs the Government think they can artificially create and however many courses they decide to run, there will always remain a sizeable number of youngsters who prefer to do nothing and to draw their benefits. Surely it is about time the Government paid some attention to them and gave them opportunities to earn their living alongside everyone else.

6.56 p.m.

Mr. Gerry Fowler (The Wrekin)

It appears to be an inexorable law in this debate that the longer a Conservative Member has been here the worse is the speech he makes, because far and away the best speech was that of the hon. Member for Ashfield (Mr. Smith). The hon. Member for Liverpool, Wavertree (Mr. Steen) has given the House a very misleading account of the Holland Report. It does not suggest that if all the schemes are lumped together the problem will go away—to quote the hon. Gentleman. He will not find that anywhere in the report.

As for the right hon. Member for Lowestoft (Mr. Prior), I entirely agree with him that the prospect for youth unemployment is grim—but not for any of the reasons that he gave. As the hon. and learned Member for Montgomery (Mr. Hooson) pointed out, that problem is of serious proportions in just about every Western country, and in countries with very different levels of taxation from ours, very different systems of taxation, very different levels of public expenditure, and with public expenditure breaking down in very different ways from ours. Therefore, the right hon. Gentleman's analysis cannot be right.

It is important that we get the analysis right, because otherwise we cannot conceivably get the remedies right. The Holland Report spends some time discussing whether youth unemployment is now structural rather than merely cyclical, and comes to no clear conclusion. I can understand that, in a sense. We can be trapped by words. There is not much point arguing whether it is structural, perhaps, so much as whether it is now clearly long-term, as I think it is. There can be little doubt of that.

One of the clearest indications of that is to be found if we look at the relative levels of youth unemployment at comparable stages in the trade cycle from the early 1960s to the present day. Not only are the peaks higher with each recession but so are the troughs in good times, consistently throughout the successive trade cycles.

For the next few years we must cope with a situation in which the labour supply, because of the size of the age groups coming on to the market, will increase by about 750,000 compared with only 168,000 over the past five years. We shall therefore have to have a massive creation of jobs. Lest the hon. Member for Wavertree should seek to intervene, I immediately add that I am not talking about job creation schemes. We shall have to have a massive creation of jobs merely to stand still, to hold unemployment in general, and youth unemployment in particular, at its present level.

Among the reasons for this, I suspect, is that there have been and continue to be certain structural changes in the pattern of employment. There is no doubt that in the post-war period, and most notably, perhaps, in the late 1950s and during the 1960s, there was a very heavy shift away from manual work towards clerical and professional jobs, requiring clerical and professional skills. That is one reason why youth unemployment is heavily concentrated among those who have the lowest level of educational attainment when they leave the education system.

With generally high levels of unemployment we also find that those who have higher levels of attainment have to take jobs which their equivalents would have scorned a few years ago. Hence, they push down upon those at the bottom of the pile who have lower levels of attainment. About 20 per cent. of school leavers have no qualifications, and the notorious 300,000 who leave school at the statutory school leaving age and never have further contact with the education or training system, whether part-time or full-time—these are the sufferers.

There is no easy remedy to this problem. The problem will not go away with a higher level of industrial investment. We need a higher level of industrial investment, but we must recognise that if we get a higher level of industrial investment it will make industries more capital intensive. It will increase employment in some industries, but in others it may result in a reduction in employment. Last night someone in the chemical industry told me of a project involving the investment of £140 million and producing only 300 jobs That is the model of capital intensive industry. We would not expect to see unemployment reduced significantly by investment of that kind.

It is observable that over the past 15 years increases in productivity have sometimes meant not commensurate increases in output but lower employment. Therefore, productivity increases may in the long term result in a reduction of employment opportunities in some industries.

The safety net has in a sense been pulled away. I am not arguing whether that is right or wrong. The restraint on the public sector and the reduction of employment in certain public sector activities has meant that that safety net, which consisted of rising employment in the public sector during most of the 1960s and the early 1970s, is no longer there to mop up the additional youth unemployment. For those reasons, comparing the 1976 figures with the 1972 figures, taking the year as a whole, we find that unemployment among the under 25s has doubled and unemployment among school leavers has trebled. At the same time unemployment among the over 25s has increased by a mere 42 per cent. I say "a mere 42 per cent.", but it is a terrifying increase, but that 42 per cent. is as nothing compared with the increase in unemployment proportionately among the under 25s and most notably among the 16 to 18-year-old group. That is where the problem is concentrated.

If we want a further breakdown, we find that there is relatively little increase in the 25 to 40 age group, but we begin to get a further concentration of unemployment in the older age groups. In a period of rapidly changing technology it is difficult for a man who is declared redundant in his mid-fifties to get further full-time employment unless he has the opportunity of retraining. Therefore, we are getting a concentration of unemployment at both ends of the age scale, but more particularly at the lower end.

What are the remedies? I turn to the Holland Report. I add my congratulations to those already given by others to the members of the working party. The report is a worthy piece of work and it takes us some way forward. I do not want to go at length into those proposals, with which I agree. For example, it is significant that the report clearly recognises that measures to deal with youth unemployment in the present situation may be very cheap. The working party argues that the net cost of these measures is not high. I suspect that we should invest more than the report suggests. It might have gone on to say, but did not, that the opportunity cost is nil, because when providing training and education schemes for people who are otherwise on the dole there is no loss of production. Therefore, not only is the financial cost not high; the opportunity cost of such schemes in present conditions is nil.

I have certain criticisms of the working party's report, which are largely aimed at its terms of reference and the climate or, indeed, the structure of government in which it had to work.

First, what the Holland Report suggests is not in any way integrated with public expenditure policy. I doubt whether it is possible to maintain the thesis that the public sector, at present unemployment levels, is in any way depriving manufacturing industry of the supply of manpower that is required. However, I have heard that thesis advanced repeatedly—not least in defence of Government policies. But the Holland working party could not look at public expenditure policies as a whole.

Secondly, its recommendations are not integrated with a total strategy for employment. I referred earlier to the concentration of unemployment at the lower and upper ends of working life. That is one way of achieving a shorter working life. That is the way that it is achieved in an unplanned economy. People begin work later and finish earlier, not because they want to do so but because they cannot get jobs and, if they lose the jobs that they have in middle age, they cannot get others. That is what happens in an unplanned economy.

But there are other ways of getting a shorter working life. One is to have a shorter working year, another is to have a shorter working week, and a further way is to have either of those methods, to recognise the problems that technology and social change bring and to seek to integrate into the working life recurrent education and training to re-equip people with new skills to cope with new tasks and technologies. There is no total employment strategy in the Holland Report. That is not a criticism of the working party; it is a criticism of the narrowness of its remit. I make that point because I suggest that it is high time that we moved towards a comprehensive employment strategy to go alongside the industrial strategy, adopted by the Government some time ago.

Thirdly, the Holland Report's recommendations are not integrated with education policies. For example, the report suggests that an £18 allowance be given to all on its unified schemes. There may be an incentive for some—I am not suggesting all—who would otherwise stay at school to leave school, to enter one of the Holland-type schemes and to proceed from there into further education. That is one of the options recommended in the report. If a young person goes by that route into further education, the recommendation is that the £18 a week should be continued. But if the young person went straight into further education or stayed at school, he probably would not get an educational maintenance allowance unless his parents were virtually destitute. That will have repercussions on the school and further education system. Unless some attempt is made to redress the balance by giving support to those who go straight into further education or stay at school, the effect on the education system will be wholly undesirable.

I notice that the scheme talks of further education in the training context—as an ancillary exercise to the training function, but, of course, further education is of value in its own right. Personally, I do not recognise the distinction between education and training on the one hand, and educational schemes on the other. Neither do most people internationally. It is only in this country that we persist, with our peculiar organisation of government, in embodying an unreal distinction between the structure of and money invested in training and education. The reason for the distinction is obscure. It seems to depend on whatever is politically popular at a given moment. I think that training and education are basically the same thing.

If we simply adopt the Holland recommendations, I am worried that we will not give enough encouragement to further education colleges to make a genuine attempt to come to grips with the problem of the young unemployed who are least able and have the lowest attainment. The Holland Report devotes only one paragraph to schemes of unified vocational preparation. I can understand that, because there is not enough hard evidence about these schemes.

I hope that we can encourage the further educational system to make its contribution by looking at the problems of those of low attainment, who are sometimes also people in the low ability group, and perhaps devising schemes to bring them up to the standards that they will need, not only for their first jobs but for later life. If they are to learn new skills later in their working lives they will need a broader educational foundation than the one they receive from some narrow training schemes. That means that some money must go into the further education system and should not all be channelled through the Training Services Agency.

I make a plea for closer integration and co-operation between the work of the Manpower Services Commission and the Training Services Agency on the one hand, and the Department of Education and Science and the local education authorities on the other. They should get together and see where the money could best be invested, irrespective of the popular projects of the moment.

I have another criticism of the Holland Report, which is not really a criticism. It is on a subject that the report takes up, but on which it does not provide an answer. The report justifiably makes the point that it is possible to devise schemes which simply lead to a substitution of public expenditure for private expenditure that would have been incurred in any event. We are diverting expenditure from the public purse to replace expenditure that would otherwise have been undertaken by employers. This is very unwise, and it has happened with the youth employment subsidy to some degree and certainly with its precursor scheme.

The Holland Report talks quite rightly of the needs of young unemployed people and says that these are no different from the needs of young people in employment. However, it does not actually make the reverse comparison—that the needs of young people in employment are at this moment essentially no different from those of the young unemployed. Many of those in employment will join the unemployed before too long.

One observable phenomenon in the employment of young people is that far too many have a succession of short-term jobs, interpolated with periods of unemployment. It is imperative to begin to look at ways of getting integrated schemes of employment and education and training for everyone, including those who are currently finding it possible to get work. We must not concentrate on the problem of the young unemployed alone, because we may be making a rod for our own back in future in respect of those with short-term jobs.

The Holland Report is a basis for more discussion and for taking the matter further, but it is not the end of the story in itself.

7.16 p.m.

Mr. Douglas Henderson (Aberdeenshire, East)

In preparing for this debate I went back to the last debate of 21st June 1976 and I noticed some extraordinary coincidences. You, Mr. Deputy Speaker, were in the Chair at the time and I was called at precisely 7.15 p.m. that evening. Some hon. Members may feel that I could dispense with my speech altogether and, after a few changes of figures, suggest that they read my previous comments. But I have some more valuable comments to make which I hope hon. Members will find interesting.

I commend the outstanding maiden speech of the hon. Member for Ashfield (Mr. Smith). I was told that before entering the House he was an accountant. If he continues to make speeches like today's, we shall not hold that fact against him. His speech was lucid, clear, brief and cogent, and we shall all wish to hear more constructive views from him.

Mr. Deputy Speaker (Sir Myer Galpern)

I would indicate that the Chair also weclomes speeches that are cogent and brief.

Mr. Henderson

Knowing your views, I realise, Mr. Deputy Speaker, that I must be one of your favourite Members. I believe that you said something similar on 21st June last year.

The right hon. Member for Lowestoft (Mr. Prior) in reply to an intervention to my hon. Friend the Member for Dundee, East (Mr. Wilson) tried to paint a picture of a golden Conservative past in employment in Scotland compared with the rather bleak present. I must put this picture into perspective.

We should all remember that when we had Tory Governments in Scotland from the end of the war onwards we had very high unemployment and emigration. Emigration averaged 30,000 a year between 1951 and 1974, mostly a period of Conservative Government. In the same period the United Kingdom population rose by 6 million while the Scottish population remained static because of the high emigration resulting from unemployment. There is no reason to believe that the situation would be any better if another Conservative Government came to power.

I turn now to those with responsibility at present. Every hon. Member respects the Secretary of State. He is a man of great sincerity and he must suffer agonies when he gives figures in the House and tells us about the ineffectiveness of Government measures. This situation is due not to him but to some of his more malignant colleagues in the Cabinet who are responsible for shaping policy. The Secretary of State reminds me of the man in Greek mythology who was pushing a muckle stone up a hill, and every time that he paused for breath, the stone rolled back again. Perhaps the Prime Minister should give the Secretary of State a job in which he could announce some good news occasionally for a change.

Looking at the position compared with June 1976, there is no doubt that there has been considerable deterioration in Scotland. Under this Government the employment situation in Scotland between 1974 and 1977 has deteriorated with a savage rapidity. In 1974 there were 90,000 people unemployed—4.1 per cent of the population. By 1977 this had risen to 175,000, or 8.1 cent. In three years of this Government the unemployment rate in Scotland has doubled. The latest figures out today—and unfortunately the Secretary of State always has to rise and tell us when the unemployment figures are published, but perhaps he can get a gleam of comfort from them—show that the Scottish figure is now 164,000, or 7.5 per cent. Although this is an improvement, the gap between the Scottish and United Kingdom figures has deteriorated, to Scotland's detriment.

In January 1976 Scotland's figure was 6.1 per cent. and that for the United Kingdom was 5.2 per cent. The latest figures show that for Scotland it is 7.5 per cent. as against 5.7 per cent. for the United Kingdom. There has therefore been a distinct deterioration in Scotland's position over that period.

The right hon. Member for Lowestoft referred to the former Secretary of State for Scotland, the right hon. Member for Kilmarnock (Mr. Ross), as having once said that he would resign if Scottish unemployment reached 100,000. His successor, the current Secretary of State, has been rather more reticent and coy about the figure at which he might resign. Clearly, he can see it reaching an astronomical level.

I am reminded in this situation of the flak that I and other hon. Members had to take during the Common Market debate. I can remember being assured two years ago that if we did not stay in the Common Market, we should have 1 million people out of work. We were not told that if we stayed in the EEC the figure would be nearer 1.5 million.

We remember all the propaganda about jobs for the boys, the largesse which was to come from Brussels, all the Common Market money that was waiting to be invested here, and the tremendous advantages of this home market. There is a stony silence on that subject now whenever the matter is raised.

The situation for school leavers in Scotland looks very much worse. Taking the March figure as the yardstick, in 1974 there were 849 school leavers unemployed. In March 1977 the figure was 9,761, a 12-fold increase. At the end of the summer term, which is perhaps the high point, in July 1974 there were 6,800 unemployed. The figure for July 1976 was 22,705, three times as much.

The Secretary of State will be aware that within a matter of a few weeks 86,000 children will be leaving school in Scotland and of these 67,000 will be available for employment, according to the evidence we have. These 67,000 young people will be coming out of the playgrounds of Scotland and the first thing that many of them will do will be to sign on at what is still known in Scotland as the "barroo", although many fancy names have now been devised for it.

Tonight we want to hear what sort of hope and advice the Government will hold out to these boys and girls. There is a particular Scottish dimension in this matter, because according to the figures I have 13.3 per cent. of all the Scottish unemployed are teenagers compared with a figure of less than 9 per cent. for the United Kingdom as a whole. The problem of unemployed teenagers is, therefore, much more serious in Scotland.

There is no need to emphasise the psychological problems that this creates for society and the attitudes that it will engender among the young. For young people to come out of school and to find, in the appropriate terminology, that society has no place for them, has rejected them and cannot offer them the opportunity for which many of them have been trained, is to create a serious long-term problem.

I have referred to the emigration figures during the period of Conservative Governments. Perhaps we are coming back to those figures once more. I see the Minister of State, Scottish Office, shaking his head. He usually does that on the Front Bench. In 1974 about 2,000 people emigrated. In 1975 the figure was 19,000. I have not heard what the 1976 figure is. Perhaps the Minister of State is in a position to tell us. I shall gladly give way if he wishes to intervene. Unemployment in Scotland has always been marked by rising emigration. In the survey "Euro-Scot", which was carried out by the Scottish Standing Conference on Voluntary Youth Organisations, the attitudes of Scottish children were analysed in relation to the attitudes of children in the other countries. In Scotland no fewer than 42 per cent. of the children who took part in the survey thought that they would have to leave the country to find work. The figures for Germany and Norway were 12 per cent. and 6 per cent. respectively.

Another worrying feature is the reduction in the number of apprenticeships, and here again I should be grateful for any views that might be put forward. Between 1973 and 1974—the most recent figures I have—there was a drop in the number of apprenticeships in Scotland of 3,000. Perhaps the Minister of State can give us more up-to-date figures.

It is said that unemployment is a worldwide phenomenon and that everyone suffers from it, but the Minister of State ought to look at the figures for other countries. In Scotland unemployment in April was 7.4 per cent. In Sweden it was 1.7 per cent.; in Japan, 1.8 per cent.; in Norway, 1.5 per cent.; and in Switzerland it was too small to be counted.

We in Scotland are becoming fed up with excuses from this place and from the people who are the power in this place. I see no future in it for Scotland, whether it be under a Conservative or a Labour Government. Those who talk about the benefits that the Union has brought to Scotland should look at the emigration and unemployment that we have consistently suffered through generation after generation.

It is worth mentioning training opportunities. The point made by the hon. Member for The Wrekin (Mr. Fowler) was well taken. In 1974 one-third of the boys and 38 per cent. of the girls in Scotland started their first jobs without training. By comparison, the figure in Sweden was only 10 per cent. We need a much more determined attitude towards this problem.

There are specific measures that must be taken in Scotland. We must have an increase in the budget of the Scottish Development Agency. The chairman of the Agency has said that he can get more money by snapping his fingers. Even if he does not snap his fingers, the Secretary of State should, and he should tell the Agency to get on with the work and fulfil some of the hopes held out for it when it was set up.

There is plenty of money pouring in from the North Sea, and much of it is coming through my constituency. This rather pathetic attempt by the Government to carry out the futile operation of designating the Continental Shelf as a planning region will not conceal from the people of Scotland that they are not getting the benefit from a Scottish resource that they soon will get when they are independent.

Mr. Hamish Watt (Banff)

Does not my hon. Friend agree that part of the tragedy in Scotland is that far too many of the jobs that should be accruing from the oil bonanza are going to foreign nationals and not to the youngsters of Scotland because the Government have never provided for training in oil-related skills?

Mr. Henderson

My hon. Friend has made a very valuable comment. If the Government were treating this matter seriously, as the Norwegian Government are, we should have a preference policy for Scottish manufacturers and suppliers in all matters related to oil, and that would create great opportunities in all branches of engineering—civil, electronic, mechanical and electrical.

The Government have announced the withdrawal of the REP. This has the effect of taking about £70 million out of the Scottish economy, because that is how much was paid in REP in the last full year. There has been no indication from the Government of how they propose to put that money back, or even whether they intend to do so. Cannot the Secretary of State get on the telephone to the Chancellor of the Exchequer tonight and get confirmation that the £70 million will be put back to provide additional jobs in Scotland?

More and more people in Scotland are coming to believe that there is no help or hope for their country in London and that the sooner the people of Scotland take control of these matters into their own hands, the better.

7.30 p.m.

Mr. Russell Fairgrieve (Aberdeenshire, West)

Before commencing my brief remarks I should like to make a few references to previous speeches. First, I give my compliments to my hon. Friend the Member for Ashfield (Mr. Smith) on his cogent maiden speech. I also wish to refer to the hon. Member for Aberdeenshire, East (Mr. Henderson) and his ideas about unemployment in Scotland since the war under both Conservative and Labour Governments. I should like to point out to him that from my experience as an industrialist I believe that if his policy of total separation was introduced there would be really heavy unemployment in Scotland—I mean separation as opposed to meaningful devolution.

It has now become popular on all sides of the House to blame the EEC for all our ills. Again, from my experience as an industrialist I believe that there would be much higher unemployment in this country if those European markets were not advantageously available. I also wish to comment on the intervention that was made by the hon. Member for Banff (Mr. Watt) and to point out that he has obviously never heard of Aberdeen University, Heriot-Watt University and other Scottish universities.

Mr. Dalyell

I am fascinated by the idea that in some kind of separate Scottish Assembly a Member would make a speech and then a Minister would ring up the Scottish Chancellor of the Exchequer and say "We want another £70 million. Will you give it by the end of the debate?" Is that not an odd way to run a country?

Mr. Fairgrieve

The mind boggles.

This evening we are discussing job opportunities for young people. We all know the human problem of unemployment and understand that although the financial position of people out of work today is not as bad as it once was, what unemployment does in a human dimension is important. Nine out of 10 people who are out of work do not wish it.

What is important is the effect on their morale when they go about and meet their neighbours. That is the real problem. It is far worse for young people who have been educated and who have come out of schools and colleges and are unable to find work. They feel that society is playing a dirty trick on them, and that could colour their whole view of life and society.

However, there is a limit to what Government plans and legislation can do. We have seen in so many other matters when a Government try to do something that the Government are not the best medium for achieving it. That is why there is not much scope in the nationalised industries and the large public companies for mopping up the pool of unemployment.

It has been said, somewhat rightly, that these industries, both nationalised and private, are already overmanned. But there is one area where there is scope for growth and initiative. If every small company in Britain took on one more person, that would virtually solve the unemployment problem. Some of those companies might not take on any more employees, but others might take on two or three. If firms now employing fewer than 200 people each took on one more person, our unemployment difficulties would be solved.

Why has that not been done? I can give 12 good reasons. They are the level of personal taxation, capital gains tax, capital transfer tax, the Companies Act, the level of corporation tax, multi-rate VAT, the Employment Protection Act, the Sex Discrimination Act, redundancy payments, price and profit controls, the Factory Acts, and the Department of Industry forms. Those are the reasons that discourage people from going into and carrying on small businesses and taking on more people.

Mr. Ryman

I cannot remember what number corporation tax was in that list of reasons—I think that it was about five or six—but the hon. Member argued that it prevented small companies from taking on additional labour. Does not the hon. Member realise that corporation tax liability is reduced if more employees are taken on by small companies, because the amount of money susceptible to corporation tax is less?

Mr. Fairgrieve

I do not follow that argument at all. Corporation tax is involved with profitability.

If the Government would at least scrap, modify or tailor some of these things to encourage small businesses to employ more people, that would solve the unemployment problem.

We need such a wind of change through our centralised bureaucracy to get people back to work, to set the people free and to give employment. That cannot be done by any Government agencies. If the Government really want to reduce unemployment, they should act in the ways that I have mentioned. This is a test between Socialist dogma and job creation.

7.41 p.m.

Mr. John Ryman (Blyth)

This has been a good debate and we have heard some good speeches—as well as one appalling speech from the Opposition Benches. However, we are all agreed that we are facing a most serious problem and that constructive ideas for its solution are required.

Unfortunately, my constituency has one of the highest rates of unemployment in the whole country, for both adults and young people. At the end of April the adut unemployment figures were more than twice the national average. The youth employment officer in my constituency today told me that there are 258 young people out of work there, and four jobs available. By the end of the week, when a number of young people will be leaving school, the position is expected to be even worse, with 500 young people out of work. The position is very serious.

I have a great deal of sympathy with the Secretary of State and his Ministers, who are doing their best to tackle immensely difficult problems in a sensible and realistic way. As a spasmodic supporter of the Government I pay tribute to the work of my right hon. Friend's Department and his officers for the excellent work that they have done, through a number of agencies, to help to relieve unemployment in the North-East. However, there is absolutely no room for complacency. Far more must be done. I have been interested in some of the fine rhetoric that has been heard from both sides of the House about world causes and theories on the future—especially from the hon. and learned Member for Montgomery (Mr. Hooson)—and about President Carter's view, an immediate practical solution must be found to deal with the short term problems. It is no comfort at all to young people who are out of work in my constituency and in the North-East to hear hon. Members' fine theories about the world recession and the problems that Goverments will face even if they manage to control their economies more successfully in the future.

I hope that the Minister will give some specific answers, suggestions and practical solutions in speaking about what will be done this summer to deal with particular problems. I join in the tributes that have been paid to the Job Creation Programme, the Manpower Services Commission, the Community Industry projects, and so on. I entirely agree with the view expressed in the Holland Report, that a great deal has been carried out successfully. However, Opposition Members have a good point when they accuse the Government of inaction and complacency in the face of a progressively deteriorating unemployment problem among young people and adults. Something much more radical must be suggested.

I should like to make a few suggestions. Unemployment in the construction industry has now reached a level that is out of all proportion to the realities of the situation. Unemployment in that industry is now running at about 250,000 and unless the Government help the construction industry in some way, the reduction in apprenticeships—that matter has already been mentioned—and continuing unemployment in the industry will result in the break-up of construction teams as well as having appalling effects on the housing programme. Matters will reach a stage at which irreparable damage will have been done.

What are the Government doing to help the construction industry in the North-East and elsewhere? Absolutely nothing. The whole economic strategy of the Chancellor of the Exchequer is unsound, and until the Government, and particularly the Chancellor, understand the need to alter their economic strategy the underlying problem of long-term unemployment, both adult and youth, will not be effectively cured.

What has the Chancellor done about it? Just before Christmas he abolished the regional employment premium at a stroke and by a peremptory announcement to the House, in order to save about £160 million in public expenditure in the next financial year. It is a sensible argument to say that the premium is not the best device for helping to relieve unemployment in the regions and that this could be better done in other ways. However, it was unforgiveable and it illustrates the incompetence of certain aspects of the Government's policy and administration that it should have been abolished in the way that it was.

Industrialists and trade union leaders in my constituency have told me that they could not understand the Chancellor's abolition of the premium at such short notice. The Chancellor gave only three weeks' notice. That is what did so much damage. A firm in Bedlington, in my constituency, was doing very well, but the withdrawal of the premium caused the loss of 70 jobs and forced it to cut back its industrial training programme. One begins to despair when the Government, with their avowed intention of dealing with inflation and curing unemployment, take such steps without any consultations with the industries concerned. It has had a terrible practical effect.

I should like to make one or two practical suggestions in addition to urging help for the construction industry. Travel assistance must be given to young people to get to work. In the North-East we have no railway system, and the bus system is expensive, inefficient and unreliable. It is no use talking about mobility of labour among young people in the North-East or anywhere else unless they are given help to get to work.

Apprenticeships have declined dramatically and they will not be revived unless there is a positive incentive for companies to have more apprenticeship schemes. The underlying problem is so serious in the motor vehicle industry that apprenticeships have been reduced substantially.

I was appalled to hear the hon. Member for Liverpool, Wavertree (Mr. Steen) criticise the Government's attempts to alleviate unemployment among young people by various schemes. The hon. Gentleman was generally supercilious towards the genuine attempts that have been made. He may be a supercilious fellow, but it did him and his party no credit when he poked fun at such a serious subject. We must give the Government credit for doing their best, even though it is not nearly enough.

A far more drastic solution is required, and I should welcome some form of compulsory civilian national service for young people aged between 18 and 20. It would be a good thing, for a number of reasons. It would provide employment that was genuine and not artificial, at home and abroad. The people who were conscripted could be sent to the Third World, where they could do a lot of good work. Such a scheme would invoke a spirit of hope and purpose in the lives of young people who leave school with no future. At present they sign on the dole, and there are years ahead of them without hope or purpose. A scheme such as that which I have suggested could be financed by the money that would be saved in public assistance and in a number of other ways. This is a serious suggestion, and I hope that Ministers will consider it.

Mr. Nicholas Winterton (Macclesfield)

Is the hon. Gentleman aware that several hon. Members, including myself, have canvassed that idea with the Prime Minister, but the proposal has, regrettably, fallen on stony ground?

Mr. Ryman

Many ideas fall on stony ground with this Government, but that is no reason for not pursuing them further.

I believe that National Service did a lot of people a lot of good. If civilian national service were introduced, it would not only give hope and work to people; it would help to deal with the hooliganism and vandalism that the courts do not seem able to control. It would be a thoroughly helpful proposal. I hope that the Prime Minister will reconsider his attitude. Such a scheme would include men and women.

The Government and their Conservative predecessors have been less than fair to the North-East in the allocation of resources. The North-East has been the Cinderella area of successive Governments, who have given it less aid than other areas in terms of investment, manufacturing industries, social and health services and many other spheres of Government activity. We are now seeing in the North-East unemployment that is far higher than in Scotland and Wales, and we do not have the resources of Scotland and Wales. We do not have our own development agency, although we have been asking for one, and we do not have the special aids that are given to some other areas.

The Government are gravely mistaken if they think that the loyal support that the North-East has given to successive Labour Governments can be relied upon indefinitely. The prevarication of the Government over the placing of the Drax B contract, for example, to Parsons in Newcastle has sorely tried the patience of my constituents working in that company, which faces the threat of a further 1,600 redundancies as a result of Government dithering and prevarication.

I say to the Government that it is morally wrong that the North-East has been neglected for so long in the commitment to youth employment. There are specific steps that the Government could take and I should welcome the view of the Secretary of State on these matters. My right hon. Friend is greatly respected in the North-East. He is one of the most respected figures in the Administration, even though it was he who mentioned a few months ago the possibility of 2 million people being out of work by the end of the year.

My right hon. Friend was reported as having mentioned 2 million unemployed by the end of the year. I do not believe everything that I read in the newspapers but there was no denial of that statement, which was attributed to my right hon. Friend. I hope that I am wrong, but that was the statement attributed to him when the unemployment figures were being discussed. It was reported that my right hon. Friend feared that by the end of the year we would be talking about 2 million unemployed. That would be an immense tragedy.

Statistics are thoroughly misleading, and some of the statistics that have been used by Opposition Members have been used rather as a drunk uses a lamp-post—for support rather than for illumination. The unemployment figures are especially misleading. That is because they do not take account of the fact that when boys and girls leave school they are not put on the register of unemployment until they have attained their 16th birthday. In my constituency next Friday many young people will be leaving school because they have completed the certificate of secondary education. However, they will not be on the youth unemployment register if they do not have jobs. They will not appear on the register until they have attained their 16th birthday.

The figures do not tell the whole story. The situation is worse than they suggest. There are more unemployed young people than are shown in the official statistics. That is because they do not take account of the young people who have not attained their 16th birthday. In plain English, that means that the position is even more serious than we thought after reading the alarming figures.

I ask my right hon. Friend to deal with the matter. Statistics are unreliable, but they give the general impression that the situation is extremely serious. It is no use the Government waffling and making so many feeble excuses—for example, saying that this is a world-wide problem and that the position is the same in Western Europe and America. The country is entitled to expect from the Government some action and an announcement in the immediate future. By the end of this week I shall have 500 unemployed school leavers in my constituency. I am not going to go back to them this weekend to say that the Minister said in the House of Commons that we are all discussing the Holland Report and that there is to be a public debate. The young people in my constituency are entitled to have a specific statement on the Government's intentions in the near future.

Mr. Kenneth Lewis (Rutland and Stamford)

The hon. Gentleman's concern is entirely justified, because an answer that I received today from the Minister indicates that unemployment throughout the country increased by about 6,000 in a month. If we had a 6,000 increase every month for the next 12 months it would total nearly 2 million.

Mr. Ryman

The figures can be misleading, but it is clear that the position is serious.

Mrs. Renée Short (Wolverhampton, North-East)

How does the hon. Member for Rutland and Stamford (Mr. Lewis) come to his conclusion? His sums are wrong. He should go back to school.

Mr. Ryman

The position is serious, and the message that I bring to the House from the North-East is that, whatever the figures may tell us, young people in my constituency are out of work. The tragedy is that I have not heard one sensible and constructive suggestion from the Government Front Bench to deal with the matter in the immediate future. Although there is room for saying that we have tried specific schemes that have been successful to a moderate extent, something much more drastic and radical is required. I hope that I shall hear some suggestions from the Government Front Bench.

It is no use saying that all these matters will be considered and that an announcement will be made in due course. The Government should tell the country tonight what is intended in the near future. It is utterly useless and idle not to give some sort of leadership. The Government cannot shirk their responsibilities. It is the cry of despair not to indicate to young people leaving school this week the sort of future they can expect. Of course, the Government get no help from the Opposition because the Opposition's record in these matters is very bad.

Mr. Nicholas Winterton

Our record is better than yours.

Mr. Ryman

The record of the previous Conservative Administration on employment was absolutely appalling. I believe that there are still many sections of the Tory Party that do not mind unemployment being used as an instrument of economic policy, whereas I think that the Labour Government genuinely desire to cure unemployment, although at the moment they have not succeeded in doing so. There are legitimate criticisms that can be made of the Government and the Opposition, but I prefer a Labour Government, because I believe that they genuinely try to cure the problem. Broadly speaking, the Conservative Party when in Government is indifferent to the problem.

However, the Government must wake up to the realities. They will not get support from the North-East for much longer unless they can show that they are sincere in dealing with the tragedy of youth unemployment as well as unemployment among adults.

Mr. Deputy Speaker

There are about 18 hon. Members who wish to take part in the debate. Despite some criticism of the Chair on a previous occasion, I still feel that speaking for five minutes is preferable to not speaking at all.

7.57 p.m.

Mr. David Madel (Bedfordshire, South)

I agree with the hon. Member for Blyth (Mr. Ryman) when he says that the Government have little time left in which to make recommendations and to act on the workmanlike document entitled "Young People and Work".

It is stated in the document that a 5 per cent. growth rate would be needed virtually to stand still unless other measures are taken. It hints that that will not be attained.

As is stated in page 8, we are facing high levels of unemployment among young people until 1981. Many times in the document is there stressed the importance of the Department of Education and Science and what further education can do in preparing people for a job. For example, in page 9 it is stated that the Department of Education and Science and the local authority associations are considering what has to be done within the context of the programme to provide more opportunities for young people.

In page 17, paragraph 1.15d. we see that there is anxiety among employers about the ability of many young people to have an adequate knowledge of the three Rs. If we go further down the page we see that at h. it is stated: A majority of unemployed young people were prepared to return to full-time education in order to get a qualification which would help them to get a job. It emerges straightaway from the report that there is a genuine desire among many unemployed young people to make extra use, or secondary use, of the education system to gain training and qualifications to prepare them for a job when they finally complete their training.

I note that at the bottom of page 17 the working party does not come to a firm conclusion on whether the unemployment level of young people is structural or whether it would disappear if unemployment generally were to fall. Does the Manpower Services Commission have access to Treasury economic forecasts? It is generally recognised that in this country the Treasury has access to a wide range of economic information. I hope that the Minister will confirm that the Commission has such access. I suspect that it has not. If it had, I do not think it would state that it is not sure whether the problem is structural or otherwise.

Again and again in this document there is reference to education and the preparation that people have for work. On 18th February 1977, when the great debate on education began, The Times said Business has a poor opinion of modern education. This is a report from Newcastle on Tyne. The report continues: Some of the city's big engineering and shipbuilding companies are introducing remedial teaching in mathematics and literacy in their training schemes. That is backed up by an article in the Industrial and Commercial Training pamphlet of May 1977, where the International Labour Organisation says that the causes of youth unemployment lie deeper than a temporary downturn in the economy and include the failure of the educational systems to prepare the young adequately for the world of work, lack of training opportunities and reluctance of many employers to give youngsters a break.

That does not apply only to the situation in this country. That comment in the ILO article refers to Western Europe. We and our partners in the EEC are dealing with an education problem as much as an unemployment problem.

I now refer to paragraph 3.25, of "Young People and Work" which talks about what should be done. It mentions the short industrial courses. It makes the important point that after the average duration of training of about 13 weeks there will come a time when a person will want to leave the training course and take up a job or occupation for which he qualified. We want to ask how much guidance will be given to people on that course as the timing is obviously crucial.

The danger is that some people may feel that they are ready to take jobs and have skills to offer, but are disappointed when they are not selected for a job. For instance, paragraph 3.26 expresses the hope that some will move on to a job and that others may move on, after taking a short industrial course, to a related further education course. That is putting a great opportunity and challenge to the careers advisory service to see that people going on the new programme of short industrial courses get the timing absolutely right as to when they will leave them.

On page 37 reference is made to training workshops. The report hopes that 600 places now available for young people in training workshops can be raised to 1,000 by September 1977. If that is the case, that will be helpful. Will the Minister say whether that target can be achieved?

A great effort is now made to encourage employers to discuss widely their training programmes and proposals. However, there is a rumour that the permission of the local trade union official is needed before an employer goes through with the training programme. If that is the case, it will cause anxiety amongst small businesses which may be non-unionised. We must surely create the maximum number of training opportunities and courses within firms. Nothing should stand in the way of employers wishing to do that.

Paragraph 3.55 says that the careers service must be fully equipped to carry out its new responsibilities. But, reading between the lines of paragraph 3.55, one sees that there is anxiety that there will not be a sufficient number of people in the careers service to carry out the work that will be needed in the new programme. I wonder whether we shall obtain a sufficient number of trainers and supervisors to carry out this work.

The report says that the Commission will be looking among the ranks of the unemployed to obtain a sufficient number of supervisors and trainers to help in these programmes. The difficulty may be that once we have obtained a number of people from the unemployed register to help with training and supervising, if the economy picks up they will drift back into industry where the wage or salary is higher.

The document deals with that danger at length. It says that the programme need not be expensive or slow. But I think that the anxiety will remain about payment and obtaining suitable trainers.

Paragraph 4.19 says that the Commission will be looking to the unemployment register for trainers and supervisors. Unless it obtains a sufficient number of people to supervise the programme, it will not be possible to carry it out.

I now refer to a point made by the Under-Secretary. I am glad to see him in his seat. In February 1977 he made a speech to the Cardiff University Industrial Relations Society. He spoke about the Government's industrial programme and the investment and reorganisation that would occur. He said that the Manpower Services Commission was financing a research project at Warwick University into the effects of new technology on jobs. That was in February 1977. Today we have heard many speeches about how many jobs will be lost if the Government races ahead with the planned reorganisation of industry and reinvestment in British industry. It would be interesting to know, three months after the Minister referred to that project, whether we yet have any information from that study.

The document says that we may look to the European Social Fund for help in the many projects that we shall undertake. For instance, the United Kingdom will receive £100,000 a year for three years for 26 projects to be nominated by the Department of Education and Science relating to careers guidance, teacher training and so on. The country would like to know where those projects will take place, what region they will be in, what they involve and how many people may expect to benefit from them.

I turn to the problem of the sponsored training scheme. I refer to a case in my constituency. I know of a firm which needs more draughtsmen. It cannot obtain a sufficient number of trained people. This firm advertised for school leavers willing to train as draughtsmen. It received a good response. However, when it approached the skill centre it was told that no admissions were possible until the people were over 19 and had had a year's experience in industry. That was said despite the fact that the draughtsmen's courses are under-subscribed.

When I took up this matter with the Manpower Services Commission I was told that on the whole the skillcentres had a rule that only 19-year-olds could be accepted because of the possible conflict with other kinds of training for young people. That is unsatisfactory for this firm, which is in my constituency. I should like the Minister to give a clear answer and to say whether the skillcentres will take people under 19. I underline that point: the shortage of draughtsmen, the good response from school leavers, and the fact that as they were not 19 they could not enter the skillcentres.

In his Budget Statement the Chancellor said that the Government would set aside a sum for teachers to be trained in the teaching of mathematics. How far have we got with that? How many people are benefiting from it? The Government made a lot of it when the Budget was introduced.

Secondly, apprenticeships have very often been based on customs rather than on modern needs. We must change our apprenticeships and our training programmes. I think that the document "Young People and Work" points the right way to do it. But if we cannot get enough trainers and supervisors, this programme will not get off the ground.

In many parts of this document the Manpower Services Commission says that the Government have to act quickly to get the schemes off the ground. Unless we can help young people to get a skill, when industry adapts to the changing world situation of shortage of raw materials and different technologies, they will not be able to use that skill and get into industry. The biggest tragedy facing this country is the number of young unemployed who do not have a skill. This document points the way, but we look to the Government for early action.

8.10 p.m.

Mr. Dafydd Wigley (Caernarvon)

I should like first to correct the false impression given by the hon. Member for Blyth (Mr. Ryman), who spoke of drunks and lamp-posts, when he quoted statistics about Wales and the Northern Region. Unemployment in Wales and Scotland this month is virtually identical with that in the Northern Region, at 7.4 or 7.5 per cent. I only wish that we had the motorway network that they have in the Northern Region.

It is a pity that the debate could not have taken place two or three days later, so that we could have better digested these two publications, particularly the Seventh Report of the Expenditure Committee, which is out today and which contains a lot of valuable work. However, I welcome an early debate on this vital subject.

When I was first elected, I remember speaking to the Chief Constable of North Wales about crime and social problems. I asked him which were the most difficult areas, expecting to be told that they were the industrial areas of Clwyd, such as Wrexham and Deeside. To my great surprise, however, he named two small towns—Caernarfon, in my constituency, and Blaenau Ffestiniog, in the constituency of my hon. Friend the Member for Merioneth (Mr. Thomas). He said that the problems there were related to second-generation unemployment, with children brought up unable to remember their fathers ever being in work. A pattern of unemployment was established, which led to a host of social problems. This is a tragedy that must not be allowed to develop anywhere else and a cancer that must be rooted out where it has hit.

I recently picked up two young hitchhikers who had just left school. They told me that there was virtually no hope of their getting work. They said that they would either stay on the dole or leave the area. They thought that most of their colleagues were in the same position. These young people are not skivers. I get many such young people in my surgeries, eagerly and desperately seeking work. The problems arise years later if they do not get that work.

Unemployment in Wales at the moment is desperately bad, with 12 unemployed people after every vacancy, compared with five in the South-East of England. The overall unemployment figure in Wales, of 7.4 per cent., disguises some astronomical district figures. The figure for Tenby is 22.2 per cent. and for Cardigan, 21.4 per cent. And it is not just the holiday areas—Wrexham's figure is 14.2 per cent., Caernarvon's is 12 per cent. and Anglesey's is 15.4 per cent. Such levels cannot be tolerated.

The figures are bad, and they are even worse for young people. I appeal to employers in areas of high unemployment not to discriminate against young people. It is often thought that because they do not have the responsibilities of married people they will be more footloose and less dependable. If that discrimination were practised widely, it would be a tragedy.

I do not criticise all the Government's measures—some are a good start, but they are inadequate. A total of 317,000 people have been helped by the various schemes, but what worries me is that 200,000 of them were helped under the temporary employment subsidy to stay in work they already had and that those jobs may come to an end or, alternatively, it may be questioned whether the money should be spent in that way. The remaining 117,000 form a small proportion of the total unemployed.

Many of the Government's own measures have neutralised their attempts to overcome the problem—for instance, the public expenditure cuts. One thinks particularly of the effect on young teachers. In recent weeks I have heard from four or five schools which are urgently seeking an extra teacher. There are many unemployed teachers in the area, but we cannot match the need with the supply.

We have heard about cuts in the regional employment premium. A redundancy that occurred in my constituency only this week can be directly attributed, among other factors, to that cause. This is tragic. It is harmful across the board-but particularly to young people.

The root of the problem is a lack of broad economic planning. I should like to see a strategy for ensuring that instead of compensating people for being out of work—the tendency of the Welfare State for 30 years—we provide work for people. That does not mean the direction of labour to one type of work, but there should be packages of work which can be quickly applied, similar to the type developed under the Job Creation Programme. There should be a bank of such packages, brought forward when a major redundancy threatens an area or school leavers flood the market. Then people would be able to choose between two or three projects and could work instead of being compensated for having no work.

It is scandalous that 15,000 construction workers are out of work in Wales when 60,000 new council houses are needed and 150,000 houses are unfit. Again, we cannot match the two. Rather than pay a man £30 a week in unemployment pay and benefits, we should pay him £40 a week for doing a worthwhile job and helping to solve economic and social problems.

The Job Creation Programme has had a good start, but its time limitation of 12 months is causing problems, particularly for key workers. Recommendation No. 15 of the Select Committee, for broader representation on the local committees, could be valuable.

Some supervision problems of the Job Creation Programme also need to be considered, as does the lack of jobs for women, certainly in my area and probably elsewhere. There is a need for labour-intensive jobs, which are a local government responsibility and outside the present scope of the scheme. An example is housing repairs—not the skilled work but other jobs which would come higher in the local priority list than some projects which currently qualify under the job creation scheme. Our area has been successful with a co-operative set up under the scheme at the cost of £40,000. There is scope for development of such co-operatives where the local initiative exists.

There is a serious training problem in Wales. In the United Kingdom as a whole, 31.6 per cent. of boys enter jobs without training. For Wales, the figure is 48.3 per cent., over half as much again. The figures for girls are 34 per cent. for the United Kingdom and 53 per cent. for Wales.

There has been a substantial drop in the number of young people taking certain apprenticeships in Wales, and many skills are in danger of dying out. Only 38 per cent. of young people entering work in Wales takes up apprenticeships; the figure is 43 per cent. for the United Kingdom as a whole. More encouragement and opportunity is needed, particularly in my part of the world.

I suggest that the financial support for those going into apprenticeships should be as great as that given to those going to university. The contribution of apprentices to the community is as great if not greater. There must be equity in this matter.

Last year the Welsh TUC produced a document which proposed a three-year phased programme. Its ideas deserve study. Some of the points in that document appear in last week's report.

I was sad that the Conservative Front Bench did not have any constructive or new proposals to make about youth unemployment. So far this Government have failed to overcome the problems. Unless there is more positive action and results by the next election, I fear that the Government will pay the price.

8.20 p.m.

Mrs. Renée Short (Wolverhampton, North-East)

I am grateful to the Opposition for choosing this subject for debate because it corresponds with the day on which the report of the Select Committee that examined the Job Creation Programme is published. We held a Press conference this morning. I am sorry that printed copies were not available in the Vote Office, but there have been difficulties with the printers. Photostat copies have been made available.

I hope that hon. Members will examine the exhibition in the Upper Waiting Hall. I thought it right that some of the excellent products made by young people who are on the schemes, particularly in Scotland, and which we saw on our visits, should be brought to the House so that people can see what is being done. We did not get the airy-fairy nonsense that we had from the hon. Member for Liverpool, Wavertree (Mr. Steen) who spoke of projects that were not related to those that we saw.

We are concerned about unemployment among young people. In 1974, 25 per cent. of young people entered apprenticeships, 20 per cent. took clerical jobs and 33 per cent. took jobs without any training. Of those who entered jobs with some training, 50 per cent. were boys and only 10 per cent. were girls. That should cause us a great deal of concern.

In January 1970, 35 per cent. of girls were unemployed. Six months ago, 49 per cent. of girls were unemployed. That means that girls are particularly disadvantaged, although there are other groups that are also disadvantaged—young black people and those of low educational attainment, for example. One must not overlook that. It is a serious indictment of what has been happening in our education system over a period of years.

My right hon. Friend the Secretary of State said that when he went to Scotland he met a young man in a workshop. We met the same young man. He was about 17 years of age, and was bright and intelligent. At that workshop boys learn engineering, building and woodwork skills, and they learn to be motor mechanics. The scheme is good. It brings together young and older people. Some skilled workmen who are over 50 years old act as supervisers and trainers. The young man told us that in his last three years at school—from the age of 13 to 16—he had no maths lessons because the school could not get trained maths teachers. That is appalling.

Why has that problem not been dealt with? Why has it not been brought to light? That young man left school an innumerate illiterate. He knew nothing about the metric system. He took to the workshop like a duck to water because he had training there. There must be thousands of young people who are condemned to be low attainers simply because they have not been taught properly. We must take that problem on board. The low attainers are out of work longer and obtain only poor jobs. They are up against it.

That situation is a sad commentary on successive Governments. This is now happening at a time when there is no teacher shortage. We saw teachers on Merseyside being used not to teach but to help young people to fill in application forms and to know what to expect when they applied for jobs. That is a useful thing to do, but the teachers have been trained as teachers at considerable cost to the community. It is appalling that trained teachers are unable to get jobs while we still have oversized classes and certain subjects not being taught it in schools. It is a Gilbertian situation, which we cannot tolerate.

The Holland Report takes a rather optimistic view because it talks about young people going into job creation schemes, for example, for a period of 52 weeks and then entering full employment. I do not believe, and my Committee does not believe, that that is the situation that will face us at the end of 52 weeks of the JCP. We believe that the structural inbuilt unemployment among young people, in particular, and among the over-fifties will be with us for a very much longer time.

Therefore, we need a comprehensive cohesive scheme. That is what my Select Committee will be looking at as of now. We have finished looking at the job creation programme and we shall be looking at all the anti-unemployment schemes that are available. I hope that we shall be able to knit these together in a comprehensive scheme that will be adopted by my right hon. Friend the Secretary of State. We are also hoping to get some experience from abroad. Therefore, it is important that we have an integrated scheme.

It is also important that my right hon. Friend accepts that he must exercise some flexibility in the schemes that we have now. In the job creation programme, the 52-week period is a very difficult barrier. It is very difficult to tell a young person who has been working in a workshop, on a scheme, very conscientiously attending his job every day, week in and week out, that at the end of the 52 weeks he must be sacked—that is how he looks at it—simply because we have to share out scarce opportunities. He does not understand it. It is very disillusioning. My right hon. Friend must accept that there must be much more flexibility and that the schemes must be expanded and extended. I hope that he will feel that this is something about which he can now make a decision, because it is tremendously important.

Local authorities have provided sponsorship for the overwhelming majority of the schemes—well over 60 per cent. Only 2 per cent. have come from private industry. None has come from the nationalised industries. That is a scandal. Hardly any have come from the health authorities, although we saw one in Glasgow, in a hospital in which young people were working in a pathology laboratory and preparing decent medical records for the hospital. But those are a tiny minority of the schemes that are being introduced.

Also, my right hon. Friend must exercise flexibility in the question of the pay that is given to those aged 50 and over who are providing skill, guidance and training for the young people. The top rate of £56 is not enough for these people.

In the same way, my right hon. Friend must exercise flexibility in the length of the employment of trained, skilled people from industry who are coming in and working as project advisers. They are providing a great deal of financial, business and administrative expertise in the schemes and are helping area action committees very much in the vetting of the schemes and their supervision as they continue. I hope that my right hon. Friend will accept that these people, too, need to be employed for as long as they are able to be useful in that area, and that their employment should not be finished at the end of the 52 weeks.

I promised to be brief, so I shall have to cut out a great deal of what I wanted to say. However, I conclude by paying a tribute, on behalf of all of us who saw the Job Creation Programme in action, to the area action committees.

We have criticised the fact that there are not enough jobs for girls. That is a problem that goes right across the board. It stems not from the operation of the Job Creation Programme but from our education system. Although some years ago the Expenditure Committee drew attention to this matter, it still continues in our schools, and our careers teachers, and teachers generally, are too hidebound and too restrictive in the opportunities that they offer to girls—and to boys, as it affects both sexes.

However, the area action committees are doing an excellent job in all of the areas in which we saw them. They bring together academics, people from industry and people from the trade unions. It is difficult to see how their composition can be much improved. I accept that there is probably opportunity for more local people, from the immediate area, to be brought in, although one must bear in mind that the committees cover a very large region of the country so they have to draw from a large area. But there is not one woman chairman of an area action committee in the whole of the British Isles, and on all of the committees there are only two women members. My right hon. Friend really must take that matter on board and bring in some more expertise from women. There must be some good women trade unionists, some good women who are working in industry. I am sure that if we look hard enough we shall find them and they will accept the need to do more for girls.

I hope that my right hon. Friend will study both reports together and that he will be able to announce shortly that he accepts the principle of the arguments which both Committees have put forward, because in many ways they are parallel. In due course I hope that he will feel that he can accept the principle of flexibility and iron out some of the anomalies that now exist in the overlap of the schemes.

8.31 p.m.

Mr. Esmond Bulmer (Kidderminster)

I share the concern of the hon. Member for Wolverhampton North-East (Mrs. Short) that the Holland Report is over-optimistic. I also believe that it deals too much with symptoms and too little with causes.

I should like to return to what I feel is the central problem and that is whether this youth unemployment, which has assumed such horrific proportions, is structural or cyclical. From what the Secretary of State said, I was not clear which he believed it to be. He seemed to be showing the same ambivalence that the Holland Report showed. That report said that one of the issues considered, but not resolved, was whether the problem among young people is structural or cyclical. The Government must clear their mind on this.

I am in no doubt at all that we have severe structural problems. The falling rate of growth of the Western economies, the rate of technical change and the nature of overseas competition all suggest that this is indeed the case. I therefore feel strongly that the measures proposed do not go far enough.

We are, of course, told that this is a problem which is common to the West. If they were present, some Labour Members below the Gangway would no doubt say that it was part of the crisis of capitalism. It is indeed true that in the Socialist countries there is less unemployment of this sort but at a price, and that price is the massive direction of labour.

The same people who bleat about the crisis of confidence in capitalism today would be the first to shout if conscription were reintroduced in order to meet the massive imbalance between the forces of NATO and those of the Warsaw Pact countries. I believe that as long as this imbalance lasts we should do all we can to encourage young people to go into the Forces and to see that the training they get there is as relevant as it can be to civilian life. But I think the Holland Report rightly rejects the direction of labour.

We must concentrate on creating opportunities, particularly opportunities in the wealth-creating sector, and we must concentrate on improving our competitive position in the world. When we compare ourselves with those countries that are so successfully depriving us of trade—Japan, Germany, the United States—I believe the nature of some of our structural handicaps stand out.

Which, indeed, of our industrial competitors has so consistently acquired the commanding heights of yesterday's economy and diverted so many of the nation's resources to the maintenance of structures that are often derelict? Which of our competitors has allowed the level of manufacturing industry to fall so low? Which of our competitors has taken so much trouble to design a taxation structure which drives out of the country all the most able? Which of our competitors allows the ground rules against which industry operates to be changed so often, and very often in a damaging way? Which of our competitors has allowed its small businesses to be squeezed so ruthlessly and the birth of new businesses to fall so low? Which of our competitors has such a powerful and fragmented trade union movement offering such resistence to change? Which of our competitors has civil servants who are so commercially inexperienced?

I find it hard to believe, but it is indeed the case, that neither in the Treasury nor in the Department of Industry at the rank of assistant secretary or above is there a single person with even one year's experience of manufacturing industry. Which of our competitors has allowed the balance between wealth creation and wealth consumption to tilt so far against wealth creation?

The Secretary of State for Employment did not address himself to these problems. These problems are all structural and, if they remain unreformed, that will lead to a further decline of this country and to a loss of job opportunities. That loss will be felt first by the young.

Therefore, our first task must be to see that those of our companies which can compete successfully in overseas markets are sustained and encouraged, and that the productivity gains made by the work people are enjoyed by them so that their standards of living rises and in turn generates employment. How many people these days can afford someone to decorate their house, or to have their car repaired, or to go out for a meal?

The Government no doubt are sincere in saying that they want more employment. However, they seem to have gone out of their way to create the impression that they do not want employers. From the moment the Chancellor of the Exchequer loosed off his first whizz-bang, and predicted the howls of anguish that would follow, employers have been running for cover.

We know that the attack was pressed home. First, there was the cold steel of higher taxes and price controls without wage controls, combined with the steady pounding of the social contract, this ensured that funds were not available in the employers' hands to meet the extra responsibilities placed on them. If this were not enough, land mines with variable time fuses were put under the foundations of every private business in the land in the form of capital transfer tax and capital gains tax in a period of rapid inflation.

Every Government Department seemed committed to loosing off a whiff of bureaucratic gas to ensure that as many people as possible were diverted from the job in hand. It is hardly surprising that many employers are shell shocked and resentful. They see the Chancellor's flag of truce not as white but red—red with the blood of bankrupt business. Even if some employers are inclined to believe that the Government have had a change of heart, that the unaccustomed silence of the Secretary of State for Energy may be construed as a change of heart, the hon. Member for Liverpool, Walton (Mr. Heffer) and his friends will no doubt open up sniper fire and make sure that employers keep their heads down—and that is bad news for jobs.

This loss of confidence is extending overseas and has been exacerbated by the Bullock Report. The chairman of the American Chamber of Commerce is on record as saying that United States industrial investment in the United Kingdom stands at £6 billion and that that figure is capable of considerable expansion. But the overriding factor is confidence in the future economic and political stability of the country.

The first reaction of American business to Bullock is a mixture of disbelief and dismay. We cannot ignore that, nor can the Government. The Government stand indicted for wanton destruction of business confidence. This means that many jobs have been lost. We have seen in many industries the writing on the wall—shipbuilding, steel, textiles, heavy engineering State and his ministerial colleagues.

The Secretary of State said that the sector working parties had reported and that information was available about where the decline in jobs as well as increases in jobs might occur. I hope that he will make that information available to the House at the earliest opportunity.

One of the many gaps in the Holland Report was that this sort of information was not available. In my own constituency the carpet industry is certain to lose many jobs in the next five years. It is vital for all of us, particularly those of us who represent towns where one industry is disproportionately important, to have as early a warning as possible of where the terms of trade or technological change will go against employment prospects.

There is no doubt that the outlook for young people in my constituency is bad. Not only are jobs not on offer to them, but older workers displaced by firms that have gone bankrupt will be preferred, not only because their skills are more developed, but in some part because the Employment Protection Act redundancy provisions and maternity provisions are acting as a disincentive. A pensioner is unlikely to be dismissed unfairly.

The problem that immediately concerns me is the time it takes to organise some form of alternative employment, to acquire sites and produce the infrastructure, and finding what help Government Departments can offer. Anything that the Secretary of State can do to see that help is available—particularly for areas that do not enjoy development area status and are therefore at a disadvantage when competing with those that are and where jobs will be lost—will be much appreciated. This applies particularly in my constituency, where Government action has deprived many people of jobs, especially through the closure of RAF Hartlebury. Anything that the Government can do to make good the loss of jobs in the public sector will be appreciated.

One hon. Member said that unemployment would not be solved without massive public expenditure. I agree. But we have to create the wealth to afford it. In my constituency and many others, road programmes, particularly for bypasses, are needed. If Winchester does not want a bypass, let Bewdley have it. There must be some way of making sure that the money for such programmes is passed on.

I make a plea to the Secretary of State to try to ensure that Government Departments realise the consequences of their actions. When the Department of the Environment puts double yellow lines outside the premises of small retailers and when fire precautions are introduced that affect hotels and boarding houses, Departments should understand some of the employment consequences, however well-intentioned such measures may be. Publicity should be given to the fact that when central area redevelopment takes place nearly half the firms affected go out of business and do not start again elsewhere.

We have to recognise that in some respects our industry is going the same way as agriculture. Fewer people will be employed to produce as much, if not more. That is not a bad thing because it gives us an opportunity for greater leisure. There is no reason why old men should be down a mine or why young married women should be out at work instead of looking after their children.

If we could get the output and productivity and maintain our competitive position in the world, there would be a lot more leisure for everybody. I hope that the Minister will give some indication of Government thinking on the major structural changes which I believe to be essential if we are to solve this terrible problem of youth unemployment.

Mr. Deputy Speaker (Mr. Oscar Murton)

I understand that there are 35 minutes left before the winding-up speeches begin and a considerable number of hon. Members still wish to speak. In the interests of hon. Members themselves short speeches would be acceptable.

8.44 p.m.

Mr. Tarn Dalyell (West Lothian)

I would like to express my wholehearted support for the untiring and caring efforts of my right hon. Friend the Secretary of State and his Ministerial colleagues.

When any criticisms are levelled, particularly in comparison with Germany, let us remember what has happened in Germany. At any one moment the position there may look relatively healthy, but 1,600,000 workers who came to the Federal Republic year after year no longer come. If the unemployment is not in Germany itself, it is in the villages of Thrace, Bosnia and Herzegovina and the Anatolian Highlands, among the Turks, the Yugoslavs and the Greeks. Therefore, this is a world-wide problem, and when set in context the British effort is seen to be nothing like as bad as is popularly made out.

There is one other matter that I want to put gently to the Secretary of State. I shall not dwell on this subject, because I am only too glad not to make a speech on devolution. I hope that he will report to his Cabinet colleagues the speeches made by the hon. Members for Caernarvon (Mr. Wigley) and Aberdeen-shire, East (Mr. Henderson), because the anger that they expressed—incidentally not producing remedies—creates the Plaid Cywru and Scottish National Party votes. Before someone draws us into the second devolutionary war in this House, let us get the analysis right and realise that the speeches that they make on this subject are more important than anything they say about ideas of tinkering with Government Assemblies, devolution and the like, let alone a separate Scottish state.

I am glad that the right hon. Member for Lowestoft (Mr. Prior) has returned to the Chamber. Will the Secretary of State get his officials and Treasury officials to look at the proposal which came not only from the Conservative Opposition Front Bench but from a former Secretary of State for Employment—that there should be tax incentives for skill? The right hon. Member for Lowestoft is right about there being a problem here. Skill must be rewarded, but it seems a strange way of setting about it.

It would be an absolutely hideously complicated problem to define "skill". How can we say that, based on tax criteria—they will have to be serious fiscal criteria—one post is more skilled than another? There are major difficulties. I should not have bothered with this matter had the suggestion not come from a former Secretary of State for Employment and from the Opposition Front Bench as a major proposition. Let us have a full Government reply to that proposition.

We have been asked to make short speeches. I was going to mention my worries about paragraph 2.43 of the Holland Report and the whole amalgam of schemes. I thought that the Secretary of State, in replying to my intervention, dealt with that matter convincingly. However he must no wmake his case to the public, because many others besides me and my like believe that there is something of a muddle here. I make my point in shorthand by referring to paragraph 2.43: "Make a public response".

I am glad that my hon. Friend the Minister of State, Department of Education and Science is present. A great deal has to be looked at from the point of view of education. Here is a plea for a reduction in class sizes. When the physical relationship between pupil and teacher is altered, heaven knows, we shall need smaller class sizes.

There have been various reports about the inadequacy of modern language teaching. Part of this country's failure in exports, in so far as it has been a failure, which I do not concede, is its shortage of people with technical qualifications and certain linguistic ability. I refer particularly to Spanish, South American and, indeed, Arabic languages. Something should be done in this respect. If anyone thinks that the notion of Arabic is far fetched, just let us look at what the Germans have done. Their success in the Arab world is partly due to the marrying of language capability and technical ability.

That brings me to another question relating to education. As time is short, I refer my hon. Friend the Minister of State to the long debate which has been going on in the New Scientist on the way that the HNC has been devalued and the fact that there are now fewer HNC candidates than there used to be. This qualification was the backbone of the engineering industry. It is a difficult problem. I do not propose to make a long speech attacking the CEI, but the institutions face a certain problem. Nevertheless, this is something to which the Department should apply its mind. In the presence of the Scottish Under-Secretary and members of the Scottish Group, such as the hon. Member for Bothwell (Mr. Hamilton), who played a prominent part in saving training colleges I suggest that there should be a liaison between employment and education—in this case the Scottish Office—about ways in which the training colleges could be used.

I have sent a proposition from one of my constituents to the Scottish Office. That suggestion is that a number of List D places—that is, for problem pupils—should be woven into the fabric of certain training college places. Because some people are complaining about a shortage of concrete ideas, I think that this one deserves consideration.

The Secretary of State referred to the problem of handicapped and sheltered people. This is a problem and there is a feeling among many of us in our day-to-day constituency work that many of those who are slightly handicapped are enormously handicapped when it comes to finding a job. Thought should be given to the jobs that these people can do and to moving those who are more capable to other jobs that the handicapped cannot tackle. Many of us would like to see dirigiste policies.

Perhaps the Secretary of State would look at the problem of small firms. The hon. Member for Aberdeenshire, West (Mr. Fairgrieve) gave 12 reasons why small firms were not taking on more people. Eleven of these were nonsense, but the twelfth is a serious problem and one that we should face. Because of the Redundancy Payments Act, many small firms are nervous about taking on new people.

This morning I attended a memorial service in Southwark Cathedral to the late Ray Gunter, who brought in the Redundancy Payments Act. What was good and relevant and looked obvious at the time it was introduced may now be distorting the situation. I may be wrong, but it is up to the Government to show that I am wrong. A number of small firms have made it clear to me that if they were not so nervous about their obligations under the Act, they might take on more people.

Finally, certain specific things should be done by the Government as a whole. They should look at British Rail and the whole Peter Parker idea of the contract and British Rail exports. A lot could be done here and the Government should look at the Export Credit Guarantee arrangements, which are not as favourable as those in certain of our European competitor countries.

A lot of us would like to see the Scottish Development Authority set up a foundry in Central Scotland to serve not only Linwood and Bathgate but other centres. This proposition has been looked up at by the trade unions and I hope that the Ministry will support it. Also I hope that it will support the proposal for skilled training of young people at Her Majesty's dockyard, Rosyth, which is under-used at present.

I urge the Secretary of State to look at the EEC Social Fund and the use of the European Investment Bank. This is a complex issue and I should like an undertaking that it will be looked at, because the Social Fund could be much better used.

The major problem in this country for young people is in Northern Ireland. Like many other hon. Members I appreciate the work that local officers—in my case those at Bathgate and Lothian—are doing to help them.

8.54 p.m.

Mr. Robin Maxwell-Hyslop (Tiverton)

There are steps that we can take in the shorter term without having to wait for an increase in the general level of economic activity. Although the long-term cure for youth unemployment must be related to the general level of economic activity, let us help ourselves where we can, as well as helping the unemployed.

The hon. Member for West Lothian (Mr. Dalyell) referred to the shortage of linguistic schools. This is harming Britain's export effort. Why not have a regional linguistic education instead of a layer of French everywhere. This happens not because this country particularly needs an army of French-speaking people but because there is a plethora of French teachers. It is for no better reason than that.

If, instead, we had schemes whereby unemployed young people could learn languages selected not by the Department of Education and Science but by the Department of Trade, it would be a much more constructive approach. In one region the language to be learned would be Spanish—South-American Spanish, which is spoken by 10 times as many people as speak the classic Castillian Spanish, and which is taught in our schools where Spanish is taught at all. In another region Brazilian-Portuguese could be taught. Half of South America speaks it—many times more than the metropolitan Portuguese spoken on the Iberian Peninsula—and it is very much easier to learn.

The young people who were prepared to learn languages chosen by the Department of Trade could be paid a decent rate while they were undergoing the training, followed by a tax-free capital sum when they passed examinations. That would increase Britain's export performance and we should be generating authentic new employment opportunities. Under this system, different languages would be learned in different parts of the country instead of our having inadequate tuition for a large spectrum of languages with too few people studying each language in any given centre. That would assist both industry and our young people.

I see no reason why a girl should not be employed, for instance, for three days a week as a home help)—heaven knows we need more home helps in many parts of the country—and for two days a week learning a foreign language. Even if she could not find full-time employment subsequently, her life would be much fuller as a result of commanding a foreign language.

There is then the fear that many firms, and not only the small ones, have of taking on additional employees. The way to bell this cat is analagous to the £20 employment premium. Under conditions laid down by the Department of Industry, the Department would accept a firm's financial obligations under the maternity provisions and the security of employment and redundancy provisions for people specifically taken on under those conditions. I think that would open up a new spectrum of employment rather than just shifting unemployment from one part of the country to another.

We should then, incidentally, test the truth of the proposition that it is fear of the redundancy legislation and the maternity and security of employment provisions that is deterring employers from taking on a significant quantum of those who are currently unemployed. If it is said that that scheme would produce two classes of employed people, I would only reply that I would rather have two classes of employed people than two different classes—the employed and the unemployed.

In the case of linguistic studies, I should be prepared for the taxpayer to pay for students in the last few months of their courses to go abroad for a month or six weeks. That is, after all, what the Armed Forces have done for years in connection with interpretership qualifications. Only by having a programme such as that shall we break out of the circle of inadequate linguistic performance. Some of these students might even find permanent employment as teachers of these languages. This is a circle. Until we get enough people who can speak the rarer languages we cannot teach them, because we do not have the teachers.

If we recast our linguistic teaching under the auspices of the Department of Trade—not the Department of Education and Science—along regional lines, it would make a constructive contribution that would stand us in good stead as a nation even when the economic fortunes of this country are more benign.

9.0 p.m.

Mr. Max Madden (Sowerby)

During the weekend Mr. Geoffrey Holland, whose report has been referred to often during this debate, was himself quoted when he referred to the measures and recommendations contained in his report. He said: In the vast generality, people are learning something useful. There is, at least, for many, a reason for getting up in the morning. I found in that quotation echoes of the bitterness and frustration that has been expressed so often by unemployed young people about their plight—an expression of the importance of providing more and better jobs for our young people, and also the concern that many of the measures that we have been discussing today often provide little long term value to those undertaking the schemes—particularly because of the lack of training content in such schemes.

This debate coincides with the concern that has been expressed at the recent Summit, by the European study, by the Report of the Manpower Services Commission, and by today's report of the Public Expenditure Sub-Committee. There have been other such expressions. Numerous individuals, organisations, working parties, public agencies and Government Departments have made a massive effort in the form of paper and words. However, as has been said in today's debate, much of that has created little employment for unemployed young people.

There has been a great provision of employment and I should like to commend the Government's efforts in providing employment for unemployed young people. However, the problem of youth unemployment has been growing worse and all the projections—even the most optimistic—show that that will continue well into the 1980s. In 1976, 800,000 young people aged between 16 and 18 registered as unemployed and it is believed that a further 80,000 did not register at all. The number of young people entering the labour market is expected to rise each year between now and 1981. About 50,000 more young people are expected to enter the labour market in 1981 than in 1976. Those young people will be aged between 17 and 18. Every year more young people will be seeking jobs and competing with an increasing number of older workers, especially married women.

This debate has indicated that we need to create about 2 million new jobs by 1980 if we are to overcome the problems. The prospect of finding more employment for young people and more employment generally will not come from palliatives. The answer rests, to a large extent, in the expansion of the British economy.

I again refer to the Holland Report, which mentions the forecast made by the National Institute for Economic and Social Research. That body estimated that a return to full employment in five years would require an average annual growth rate of 5 per cent. The report says: We make forecasts of the likely levels of unemployment for young pepole over the next 5 years on the basis of three different sets of assumptions about the future time path of unemployment…. None of our projections shows unemployment amongst young people falling below 100,000 and on the basis of the less optimistic projections, the first quarter 'trough' is never lower than 150,000 That is the long-term trend. That is the grim, stark reality for young people who are now unemployed and who will be coming on to the labour market during the next few years.

That expansion, unprecedented in post-war British experience, can come about only through radical changes in Government policy, and a cornerstone of the radical change in economic policy that many of us have been urging is a restoration of the public expenditure cuts announced by the Government. That is essential if we are to reduce unemployment among young people. Public service employment is labour-intensive and we must restore the cuts that are planned to take place between now and 1981–82. There also needs to be an injection of new funds into other forms of public employment to ensure that the maximum number of good jobs is provided for unemployed young people in the public services.

There is also a case for a special national effort to help young people to find jobs. I have many reservations about the present position, the spread of agencies which creates the cancers of confusion and cynicism and the training given to many young people undergoing current schemes.

There is a need for a major effort to improve the co-ordination between the Departments of Education and Employment which straddle the problem of providing jobs for young people. The Department of Industry is also involved. In our last debate on this subject there were criticisms about the absence of Ministers from the Department of Education even to listen to the problems of youth unemployment. I thank the Secretary of State for Education and Science for a fleeting visit to today's debate, and the Minister of State for his rather longer stay.

Listening to the problems is not enough; we need to create a new framework for tackling them. It needs the appointment of a new Minister specifically charged with dealing with the problems of youth unemployment and given substantial powers and a substantial budget. It is no good tinkering with the problem. We are trapped in the traditional approach that Governments have adopted to education, training, employment and industry. We need to reform and change our departmental institutions to take account of modern changing problems that we see manifested in youth unemployment.

Mr. Corbett

Does my hon. Friend agree that there is the greatest need to put more steam behind the decisions that have to be taken on existing schemes? The Holland Report said that some decisions on existing schemes needed to be taken by the end of June if we were to make inroads into the problems outlined in the report. October or September will be too late. The end of June is the latest time by which a number of decisions should be taken.

Mr. Madden

I agree with my hon. Friend. I accept what the Secretary of State said about being reluctant to come to snap decisions on the report and the importance of having consultations with interested parties, but I agree with my hon. Friend for Hemel Hempstead (Mr. Corbett) on the need for an early Government announcement on their reaction to the report of the Manpower Services Commission and an early decision on the future of existing schemes.

It is important to ensure that employers, potential employers, young people and those who come into contact with them regularly, should know exactly what is available. I am sure that other hon. Members find, as I do, utter confusion and ignorance and misunderstandings about the schemes, what they offer, the conditions of eligibility, payments that are made and the conditions for acceptance. We need to standardise not only the conditions—that is why I welcome the recommendations of the Holland Report—but the payments given to young people taking part in these schemes.

We need to go further. I suggest that there should be just one contact in each borough—a single address and a single telephone number, where young people or anyone concerned could ascertain what is available, gain information about the schemes and be referred to the appropriate agency that undertakes each scheme.

We need to undertake measures to improve training. Job opportunities, as the debate has underlined time and again, depend on skills. I believe that additional skills can be provided by grafting on additional training opportunities to colleges of further education, especially in areas such as mine, where there is no skillcentre within the locality. Empty advance factories that have been built at public expense in the development areas could be used for training purposes. I think particularly of the needs of the young disabled who are unemployed. Their plight is especially serious. It is one that needs to be considered in much greater detail than hitherto.

We have heard about the construction industry, which is now bearing 16 per cent. of the unemployment burden. There are 13 unemployed building craftsmen chasing every available vacancy. It is a labour-intensive industry, and I agree with my colleagues who have been urging that we undertake a massive injection of public funds into the building industry.

I suggest that we should be considering ways of enabling local authorities and others to rehabilitate housing. It would be a labour-intensive operation and would provide many unemployed young people with new skills—skills that would provide them with long-term job opportunities for the rest of their working lives.

Our task in this debate, and the Government's task from the debate, is to provide young people with a good reason for getting up in the morning—namely, a good, useful, well paid and secure job. That is not very much to ask but it is something that is now denied to thousands of young people. If the long-term forecasts are correct, it is something that will be denied to many of their brothers and sisters who will be coming on to the labour market in the next few years. It is something that a supposedly civilised society should be able to deal with effectively.

9.12 p.m.

Mr. Nicholas Winterton (Macclesfield)

As a member of the Sub-Committee of the Expenditure Committee, whose report was published today, I am pleased to make a brief contribution in this important debate. In doing so I fully endorse the views expressed by the Chairman of the Sub-Committee, the hon. Member for Wolverhampton, North-East (Mrs. Short).

I believe strongly that the 52-week maximum period under the Job Creation Programme is far too restrictive and should be made more flexible. I share the hon. Lady's concern that only about 2 per cent. of the schemes are sponsored and assisted by private industry. The criteria for qualifying under the scheme must be extended and made more flexible to allow private enterprise and business to make a much more important contribution to the Job Creation Programme, which I hope will be continued for the foreseeable future, as I believe that it plays a valuable part in the solving of unemployment among young people at this time.

I represent an area in the North-West where textiles are of considerable importance. I view with grave anxiety the continuing problems of the textile industry. I say to the Government—I am sorry that the Secretary of State has left the Chamber, although I recognise that he has been in attendance for most of the debate—that I hope that the agreement that has been negotiated by the EEC under the Multi-Fibre Arrangement with Thailand will not be typical of the agreements renegotiated under the arrangement later this year. If it is, there will be further substantial unemployment in the industry.

As many hon. Members are aware, the textile industry is a great employer of female labour. There are grave problems in respect of unemployment among young girls. The industry can perhaps make a valuable contribution towards solving unemployment among young females.

My main point is to float once again the idea that was put forward by the hon. Member for Blyth (Mr. Ryman), in whose speech I intervened. The Government should give serious and sympathetic consideration to the setting up of a national youth service. That would be very much in accordance with the message that was delivered by His Royal Highness Prince Charles in launching the youth and community concept and theme in his appeal for the Silver Jubilee.

A national youth service could make a substantial contribution to solving unemployment among young people. At a time of high unemployment among school leavers, many people are expressing concern that potential talent is being wasted among young people. Hon. Members will see this frequently in their surgeries reflected by the young people who visit them and who write to them about their disillusionment. Often this discontent expresses itself in boredom, which we all know is often reflected in hooliganism, vandalism and in general anti-social behaviour. For many young people, seeking a job in the present economic climate is a frustrating and demoralising experience. Most school leavers desperately wish to obtain employment and to play their part in earning their own living and making their contribution to the community.

The facts of the current economic situation are that there are still many thousands of 1976 school leavers without jobs. In a few weeks' time many more will be added to this long list. There will be no prospect of these young people—who in some cases are qualified and in others have developed expectations—obtaining a job.

School leavers will be entitled to social security benefits. Most will continue to look for jobs. But as the months go by an increasing number will think that receiving money for no work is a satisfactory situation. Surely we do not want this apathy to strike the nation for very long.

To solve this growing problem of youth unemployment, a national youth service could play a valuable part. I shall explain how I see the establishment of such a service. If the number of unemployed school leavers is to fall we must acknowledge some fundamental home truths. Part of the problem stems from the Government assumption that their role is to act as a continuing overlord provider, dishing out social security benefits indefinitely. We all agree that that undermines the work ethic and robs young people of their independence and their sense of initiative. Eventually they will resent the bureaucracy which controls their lives. Instead of receiving pocket money from their parents, they will receive it from the State.

I see a national youth service as primarily open to those who see no prospect of employment. It should, however, be open not only to that group but also to those with brighter chances who wish to give their country some service before embarking on their own careers.

The lack of national military service has left a vacuum for many young people in this country. Perhaps they would see the provision of a national youth service, where they could provide useful service for the community in various forms, as a good way of demonstrating their energy and enthusiasm to the nation. They would be providing a valuable service as well.

The argument in favour of a national youth service naturally begs the question of how it would be financed. This could be done in such a way as to avoid any additional Government spending. The money at present spent on entirely unprofitable unemployment pay could be made available to pay the young people who became members of the national youth service, so that they would not be a financial burden on the State. They would also, in addition, be making a valuable contribution to the community.

I have been involved with a number of voluntary youth movements for most of my years as a Member of this House and in local government. I play a full part in the National Advisory Committee of the Duke of Edinburgh's Award Scheme. I have seen how once young people are motivated, their sense of giving to the community becomes an increasing preoccupation. I envisage that a recruit to a national youth service would be able to choose either a one-year or a two-year commission. Properly organised, a youth movement may establish a greater sense of purpose than the present Job Creation Programme. It is important to note that after leaving the service the young person would inevitably, as a result of his experience, have a saleable asset which a future employer would recognise as an indication of the individual's likely willingness to work.

I have raised this proposal with the Prime Minister, but, regrettably, it has fallen on stony ground. I hope that the Secretary of State will consider it further It has, after all, been supported by some of his hon. Friends. Let us, in every sense of the word, tackle the problems facing young people today.

9.20 p.m.

Mr. Barney Hayhoe (Brentford and Isleworth)

I would first pay a tribute to a remarkable speech by my hon. Friend the Member for Ashfield (Mr. Smith). It was notable for his graceful comments about his predecessor, who was well liked in the House, and for the way in which he spoke from great personal knowledge as a former Treasurer and Chairman of the British Youth Council. As a former Chairman, it is nice to have another member of that "ex-officers club" in the House. My hon. Friend brought to this debate qualities of humanity and knowledge, which are the qualities to which the House always listens with respect. I hope that we shall hear much more from him, in this Parliament and the next.

Perhaps the most damaging aspect of unemployment is that affecting young people. For them, both the cyclical and structural effects are magnified. The effects of a long period without a job last longer for young people leaving school and anxious to work, who then feel rejected by society. The problem is not unique to Britain; it exists in most other industrialised countries. However, the figures show that we are worse than most, and our combination of high unemployment and high inflation is not reflected in most other Western countries. The Government cannot escape their responsibility for this disastrous state of affairs.

The debate has produced from both sides strong, widespread and entirely justified criticism of the Government. The present Secretary of State and his predecessor, the right hon. Member for Ebbw Vale (Mr. Foot), must carry a heavy direct and personal responsibility for this lack of job opportunities. They have consistently failed to appreciate the gravity of the situation.

From both right hon. Gentlemen and from the Chancellor of the Exchequer we have had buckets of false optimism. My right hon. Friend the Member for Lowestoft (Mr. Prior) gave telling quotations to illustrate that. We saw the somewhat shifty response of the Secretary of State. Asked whether the Government still adhered to the target of reducing unemployment to 700,000 by, variously, 1978 and 1979, he said that they had the same target but could not say when it would be achieved. He could not even say, presumably, that they saw any possibility of doing so this century.

We criticise the Government's utter failure to meet those optimistic targets, coupled with their dishonesty in not being prepared to acknowledge that there was never any chance of meeting them. In October last year we had more soothing words and complacency from the Secretary of State. When I asked him at Question Time whether he would accept that the unemployment rates of 1 or 2 per cent. in the Tory years had gone for at least a considerable period, and that any reasonable strategy for the labour market would have to take account of unemployment of around 1 million for many years to come, he pooh-poohed the idea and said that he could not accept any strategies and policies based on such an estimate. But, if anything, that estimate was optimistic, because unemployment will stay at these high levels for a considerable time.

We have heard that these difficulties will continue for many years. The Holland Report turns the spotlight on the appalling lack of job opportunities for young people and the special difficulties facing black and coloured school leavers. Many of them were born in this country. They are suffering deprivation. They see their colleagues from school who are of a different colour and perhaps of lower intellectual attainment obtaining jobs while they are rejected. The frustration and social tension that may develop among these people who feel rejected could be grave.

The Holland Report highlights the difficulties facing young women. That report and the Report of Expenditure Committee refers to these problems. The British Youth Council Report deals with the difficulties that recent legislation and trade union activity have caused to the prospects of young people.

Our vote tonight will express something of the anger of these young people against those whom they hold responsible. Although world conditions make a contribution, they are aware of the dangers of another wage explosion. They have listened to Ministers and trade union leaders warning the country about those dangers.

Tom Jackson said at his conference last week that those who supported a wages free-for-all leading to a wages explosion were prepared to risk economic collapse, hyper inflation, increased unemployment and the repudiation of a Labour Government. If that is true today was it not equally true in 1974? That was the first year of the social contract, when wage increases were let rip by the then Secretary of State for Employment. As a result of that irresponsible attitude, which was aimed partly at achieving the right conditions for the October General Election, we saw economic collapse and hyperinflation. We are now suffering from increased unemployment. The presence of my hon. Friend the Member for Ashfield shows that there has been a repudiation of a Labour Government.

Mr. Eric S. Heffer (Liverpool, Walton) rose—

Mr. Hayhoe

The hon. Member has not even been in the Chamber for the debate and yet he thinks that he can interrupt me. I shall certainly not give way.

Mr. Heffer

On a point of order, Mr Deputy Speaker. I draw your attention to the fact that I have been to the funeral of a member of my family and unfortunately I came late to the debate. I never miss debates of this kind. The hon. Member for Brentford and Isleworth (Mr. Hayhoe) is not being generous in making a statement of that kind.

Mr. Deputy Speaker

Whether an hon. Member gives way to another hon. Member is entirely a matter for him.

Mr. Hayhoe

The hon. Member for Liverpool, Walton (Mr. Heffer) was not present.

Mr. Heffer

He is a dishonest person.

Mr. Hayhoe

The hon. Member knows that the Minister and I have agreed to truncate our speeches to enable more hon. Members to take part in the debate.

Mr. Heffer

Dishonest.

Mr. Deputy Speaker

The hon. Member for Liverpool, Walton (Mr. Heffer) must not use that expression. I am sure that the House has sympathy with the reason for his absence today, but that is no reason for another hon. Member to give way to him.

Mr. Heffer

The hon. Member is being dishonest.

Mr. Deputy Speaker

The hon. Member for Walton must not use that expression.

Mr. Heffer

The hon. Member is being politically dishonest.

Mrs. Elaine Kellett-Bowman (Lancaster)

You always are.

Mr. Hayhoe

We have sympathy with the hon. Member for Walton, who is suffering a personal bereavement. It is unusual for him, but he is misusing the courtesies of the House.

We have seen the Chancellor of the Exchequer seeking to rewrite history. In his speech to the CBI a few days ago he laid the blame for the wages explosion on some employers, including some in the financial sector". One follows with wonder the wild twisting and thrashing about of the Chancellor—from his statement of 8.4 per cent. inflation to this latest nonsense. For most people, if one accuses them of not believing what they say, that may well be an insult. With the Chancellor, the true insult is to accuse him of in fact believing precisely what he says.

The Government's failure to act decisively and early enough on public expenditure has also exacerbated the difficulties. The high and rising levels of public expenditure combined with stagnant or falling production are recipes for disaster, because the increased tax burden and the increased borrowing that the Government have to undertake, with the way in which that forces up interest rates, damages that very sector of the economy which is providing the jobs that are essential.

Therefore, although we have given critical support to all the various short-term palliatives introduced by the Government—we have welcomed and supported them, as the Secretary of State knows—and although we have been critical of the temporary employment subsidy, the youth employment subsidy, the Job Creation Programme, the Job Release Scheme, the Work Experience Scheme and Community Industry, all these, and the additional resources being given to them, we have supported. We go along a great deal with the criticisms that have been made of the Temporary Employment Subsidy and the Job Creation Programme. I think that my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) made some important and critical comments.

Mr. Gerry Fowler

Perhaps the hon. Gentleman would agree that it is normal, in winding up a debate from the Front Bench, to refer to speeches that have been made. It has been pointed out repeatedly in the debate that whatever the level of public expenditure in Western countries, there is high youth unemployment at present. The hon. Gentleman has not addressed himself at all to that point; he is merely ranting politically. Would he mind replying to the debate?

Mr. Heffer

Typical.

Mr. Hayhoe

I referred to that precise point in my opening remarks. I contrasted the situation and mentioned the fact that we have high inflation combined with high unemployment, which does not exist in any of the other countries.

However, I thought that the hon. Member for The Wrekin (Mr. Fowler) made a very helpful and constructive speech. The document circulated by Youth Aid, of which he is Chairman, has much to commend it. I certainly agree with its comment that, in effect, the Holland Report was somewhat over-optimistic. I agree with the hon. Member for Wolverhampton North-East (Mrs. Short), who made a similar comment. I think that the criticisms that the Holland Report looks rather too rosily at the picture are perfectly valid. The comments that are made in the report from Youth Aid about the Holland Report stand up. They include the need for much better co-ordination between the further education area and the Manpower Services Commission.

There is much that we should take from both the Youth Aid report and the British Youth Council report, and I hope that the Secretary of State will continue to study these with great care. Both of these reports, however, draw attention to one of the principal points made by my right hon. Friend the Member for Lowestoft. That is that small businesses and the self-employed—who can, by expansion, become small businesses—are perhaps the most fruitful areas for finding solutions. But these are the very areas of our economy that have been clobbered and nobbled by the present Government in so many ways. My hon. Friend the Member for Aberdeenshire, West (Mr. Fairgrieve) referred to them and, although not wholly carrying support from all quarters of the house, he at least got some support from other hon. Members.

Industrial relations legislation, fiscal policies, planning policies, industrial development certificates, the mistaken concepts about population trends, the way in which city centres have been redeveloped—vast new council estates mowing down areas together with the small businesses that they contained—and the ruin that still exists in London's dockland, have all contributed to mistaken decisions by government, both national and local, which have cost the country dear in terms of jobs.

I believe that it is absolutely vital that we restore confidence in the private sector, particularly in small businesses, if we are to get the new jobs, because heavy manufacturing, the mass-production industries and the nationalised industries are not going to offer more jobs for the future. If anything, the trend will be fewer jobs in those areas—more production, we hope, but fewer jobs.

Increased employment in the non-productive public sector provides no solutions either. I say that wholly realising that being on the dole can be described as public sector employment, with the individual being paid out of public funds for standing around and doing nothing. There is much to commend the argument that it would at least be better if that public money were used to support people doing something that was usefully in the service of the community.

We must re-examine many of the concepts and the categories into which we have placed people when we are thinking about the problem of unemployment and future job opportunities. We must recognise that creating non-productive wealth-consuming work in one place can destroy productive wealth-creating jobs in another. My right hon. Friend the Member for Lowestoft gave an example of that.

I hope that tonight we can reaffirm our rejection of the quack remedies of the Left. We had an echo of that in the speech of the hon. Member for Sowerby (Mr. Madden). Their dream of a Socialist seige economy produces no answer to our unemployment and economic problems. It would if anything diminish, and eventually destroy, both individual liberties and human freedoms. There is no solution down that slippery Socialist slope.

Our best hope is to encourage, help and strengthen those areas of the economy which create real jobs which provide goods and services to sell abroad, or to sell to visitors from abroad, or to reduce goods and services that we import from abroad. It is those areas within our economy that have to be strengthened and improved.

Of course, public money will continue to be deployed in dealing with unemployment, particularly youth unemployment. The message that has come through in the debate is that this money should be concentrated upon training and education and upon helping voluntary effort rather than reinforcing and expanding bureaucratic efforts. It is quite extraordinary that in a debate of this kind the Secretary of State should have nothing to say, not even by way of indication or preliminary reaction to the Holland Report, on this most vital subject of youth unemployment.

The Secretary of State's speech was totally barren. There was no new hope for the thousands of young people whose plight has been so well described today. The hon. Member for Caernarvon (Mr. Wigley) expressed sentiments with which we can all agree. One Government supporter, if he does not object to that description, the hon. Member for Blyth (Mr. Ryman) commented that not a single sensible constructive suggestion had been heard from the Government Front Bench. We hope that the Minister of State will at least have something constructive to say about the Government's reaction to the Holland Report.

It ought to be done soon because the Holland Report itself says in paragraph 5.8 that ministerial decision and announcement is necessary by June if these programmes are not to be disrupted.

It is not against the Government's inaction and indecision today that we vote tonight, but against their record on unemployment, which is truly deplorable and appalling.

9.40 p.m.

The Minister of State, Department of Employment (Mr. Harold Walker)

Hon. Members on both sides of the House will agree that if there is one person who cannot be described as shifty or dishonest it is my right hon. Friend the Secretary of State for Employment. I must tell the hon. Member for Brentford and Isleworth (Mr. Hayhoe) that personal abuse and offensiveness is hardly likely to help the unemployed.

The last speech apart, and setting aside the odd contribution, I think it must be said that we have had a useful, thoughtful and generally constructive debate. If there has been one common theme running through the debate, it is the concern that we all share about the plight of so many of our young people. That shared anxiety leads us all to believe that we must do all that is humanly possible to remove any obstacle that may prevent those people from leading useful lives.

I join in the congratulations which have been paid to the hon. Member for Ashfield (Mr. Smith). He chose his occasion well, and he used it well. His speech was commendable for its content, delivery and restraint. I know that the House will look forward to future contributions. Let me give the hon. Gentleman fair warning, however, that when the next election arrives, he is likely to find himself subject to the underlying principles of the job release scheme.

The hon. Gentleman referred to the proposals put forward by the British Youth Council. My right hon. Friends the Secretaries of State for Employment and for Education and Science and the Under-Secretary of State for Employment, my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), have recently met representatives of the British Youth Council and the National Youth Bureau and discussed the contents of the Holland Report and the reaction of those bodies.

It is lamentable, and indeed regrettable, that no hon. Member in the debate mentioned the welcome fact that the unemployment figures show a continued improvement.

Mr. Prior

I mentioned that matter.

Mr. Walker

If the right hon. Gentleman did so, I did him an injustice. I welcome the fact that he acknowledged that improvement. This is the third month in succession that there has been a decrease in the three-monthly average In three of the last four months we have seen falls in unemployment. Vacancies notified to employment officers are up three months in succession, and the seasonally-adjusted figure of 161,000 is the highest figure for two years. Recently unemployment has not been rising at the rate of the last two years, and there is no doubt that our special measures, which have come in for some criticism, have played a major rôle in that achievement.

I wish to deal with one of the less restrained contributions made to the debate. I refer to the speech of the hon. Member for Liverpool, Wavertree (Mr. Steen), who is an old campaigner on this subject. I have crossed swords with the hon. Gentleman on previous occasions. As usual, he was highly critical of job creation. I wish he had taken time to study the report of the Select Committee. I doubt whether he did so.

Mr. Steen

I read that report.

Mr. Walker

The hon. Gentleman says that he has read the report. I am surprised that he did not modify his criticisms. He owes it to the House to come a little cleaner than he did in his speech. He should put before the House what he said in an article in the Observer on 21st December 1975 in criticising the quality of some of the projects provided under the job creation scheme. He suggested that more imaginative schemes could be opted for—such as, for example, the collection and recycling of litter. I am not sure how high up his imaginative scale this is. The hon. Gentleman in that article went on to say, In a country which has become accustomed to a give-me, give-me society, the concept of the young having a right to create their own work and being paid at the current rate of unemployment benefit may be anathema to some people. He is right, because it certainly is anathema to me. He went on in that article: Those who are unfit and incapable of doing anything at all must continue to receive their unemployment or supplementary benefit. But the 1911 National Insurance Act never envisaged a claim to benefit when there was work to be done". The hon. Gentleman went on: If after two months of searching for paid employment on the open market a school-leaver is unable to find anything of interest, perhaps one could suggest that he ought to have a choice of serving his community in return for a wage (the present unemployment benefit), or doing absolutely nothing and receiving absolutely nothing. When we bear in mind that school-leavers are not eligible for unemployment benefit but receive only the £7-odd supplementary benefit, we see that the hon. Gentleman appears to be saying that the school-leaver will have to work for the £7, or nothing at all, or do nothing and receive nothing if he does not find a job. I leave it to the House to make its own judgment on that alternative.

The hon. Gentleman also referred to the labour mobility scheme introduced by this Government. I have been trying to find out to which scheme he was referring. If he meant the employment transfer scheme, that scheme has been running in various forms for many years and was not the brainchild of this Government.

Without going into any detail, I wish to refute absolutely and categorically the hon. Gentleman's absurd allegations that we indulged in some sinister juggling of the unemployment statistics. What he said was unworthy of him and is quite untrue.

Mr. Steen

What do the Government propose to do with those young people who will never have jobs under his scheme or under schemes proposed by the Holland Report? Will he merely say that they should go on doing nothing and drawing a wage, or will he give them hope tonight?

Mr. Walker

I thought that the hon. Gentleman was about to reply to my rebuke about the allegations that he made so wildly and unfairly. That was why I gave way to him. I regret that he has not apologised for his intemperate remarks after being given the opportunity to do so.

I turn now to some of the more positive matters raised in the debate. Several hon. Gentlemen stressed the importance, in social and economic terms, of maintaining and expanding training. I understood the sense in which they advance that argument, but I could not help reflecting ruefully that the suggestion that there should be a reservoir of skilled labour evoked memories of phraseology about pools of labour which are distasteful to this side of the House.

I stress that the major source of skilled manpower is and must continue to be industry. We must help, and we have helped with the assistance we have given to the industrial training boards, through the provision of substantial amounts of money to assist with training award schemes and premium grants.

But let me say a word about what the Government themselves have done directly through the Training Opportunities Scheme. I can best illustrate the way in which the Government have significantly stepped up their support for training by saying that in 1971 the then equivalent of the TOPS scheme produced 15,000 trainees through skill centres and other provisions. In 1974 the figure had risen to 45,000 and in the past year it increased to 90,000, a significant increase.

In 1974–75 the Government expenditure on training was about £83 million. By 1976–77 it had increased to £282 million, which is also a significant increase. My hon. Friends the Members for Wolverhampton, North-East (Mrs. Short) and Coatbridge and Airdrie (Mr. Dempsey) spoke about the need for more training of opportunities for girls and women. It may be some encouragement to them to know that whereas in 1970 only 620 women completed Government-supported training—3 per cent. of the total—in the first half of 1975, that rose to 12,500, which was 42 per cent. of all trainees.

As for the participation of women in the measures we introduced, in the work experience scheme 55 per cent. of the first 3,000 entrants were girls. Under job creation, the participation of women rose from 17 per cent. to 26 per cent. of the total in 1976. Likewise in community industry, since 1972 it has risen, and this year 34 per cent. of the participants were girls.

Mr. Corbett

Does my hon. Friend acknowledge that the ball game has changed in that almost 50 per cent. of youth unemployed are girls and that their position is getting worse?

Mr. Walker

That is a fair point. I hope that my hon. Friend will understand if I do not pursue it further. I owe it to those who have been present throughout and have contributed to the debate to reply to as many points as possible, unlike hon. Gentlemen who are now jeering and have not been present for the most part.

I turn now to other aspects of the speech made by the right hon. Member for Lowestoft (Mr. Prior). He roundly and boldly declared that market forces and financial incentives were the answer. I think that I quote him fairly. That was the battle cry of the Conservative Party in 1970—financial incentives and market forces. Less than two years later we had over 1 million unemployed. It is no use the hon. Member for Brentford and Isleworth talking of 1 per cent. and 2 per cent. unemployment under the Conservative Government. Throughout the debate the hon. Member for Aberdeen- shire, East (Mr. Henderson) reminded him that Scotland's figures were not very different from those of other parts of the United Kingdom during the period when the Conservative Party was in office.

I am entitled to ask the right hon. Member for Lowestoft what makes him think that, if his nostrums did not work in the 1970–74 period, they will work in future. The odd notion that he canvassed of using tax incentives to encourage skills is challenging to the mind. It begs the question: who will define which skills are to be rewarded and who will define "skills"? How will that help young people—the 16- to 18-year-olds who are not in jobs now and who have not acquired any skills?

One of the more substantive parts of the right hon. Gentleman's speech was where he repeated his oft-made pleas on behalf of small firms. This Government have a pretty good record regarding encouragement of and support for small firms. The Bolton Committee recommended the appointment of a Minister with special responsibility for small firms, but it was left to this Government to appoint such a Minister.

The Budget introduced—[Interruption.] If hon. Gentlemen would listen, they would know. The Budget introduced help for small firms, including the small firms employment subsidy and changes in corporation tax. We have established a pilot counselling project for small firms and developed nursery units in the advance factory programme, amongst other things.

The Opposition have repeatedly said that one of the biggest burdens carried by small firms today was imposed on them by our protective legislation—the Employment Protection Act, the Sex Discrimination Act and so on. Does the right hon. Member for Lowestoft, when he stresses that point, mean that some hypothetical Conservative Government will repeal these measures? I take his silence as assent. It is interesting to know that. We shall bear it in mind.

We should also bear in mind the point made by the hon. and learned Member for Montgomery (Mr. Hooson)—that the impositions by this Government, about which the rght hon. Member for Lowestoft complains, are not suffered by small firms in other countries. That is a significant factor, as I shall show later. However, the hon. and learned Member for Montgomery pointed out that other countries still have high 1 evels of youth unemployment notwithstanding the difference.

Mr. Henderson

I am disappointed that the Minister has not gone for me more fiercely in the course of his remarks. Will he answer my point about the withdrawal of the regional employment premium and the effect on the Scottish economy? What are the Government going to do?

Mr. Walker

The hon. Member really should know that when the REP was introduced it was introduced as a temporary measure. That was made abundantly clear at the time. It was also made quite clear by the Conservatives in 1974, because they were committed to its withdrawal.

Mrs. Kellett-Bowman

Quite right, too.

Mr. Walker

The hon. Lady seems to be a little hysterical tonight.

Several Hon. Members rose—

Mr. Walker

I will not give way. It is getting very late and I have been asked a number of questions. If hon. Members opposite would try to gear their tongues to their brains perhaps they would learn something.

I have been asked by my hon. Friends the Members for Wolverhampton, North-East and for Newham, South (Mr. Spearing) questions concerning the point in the Select Committee Report that the £56 wage. In fact, it is not a wage; it is an allowance made by job creation towards the cost of the salaries or wages of supervisors. It is up to the employer of that person to determine the salary. The allowance has been increased from £56 to £58.80 and payment is up to the discretion of the employer within the pay guidelines.

I emphasise what my right hon. Friend said at the beginning of the debate. The problems we have been debating are not unique to the United Kingdom. It has also been stressed by the Conservative Front Bench, and in other speeches from that side of the House. This is a problem that is shared by other industrial countries. During the early part of this year, 36½ per cent. of the total registered unemployed in this country were under 25. In the Netherlands and Belgium the figure was 38 per cent.; in France it was 42 per cent.; in the United States 46 per cent.; and in Canada it was as high as 48 per cent.

I quote these figures not to minimise in any way the scale of the problem in this country but to emphasise that it is a problem of international character and that, consequently, there is a need for an international approach. The greatest contribution that Governments can make to its solution is to get their economies out of recession and back into growth. There is a need for concerted international

action. We have said that at the Downing Street Summit and in the European Council meetings. We have a duty to maximise employment opportunities for those young people about whom we have so rightly expressed concern today.

The Commission's Report "Young People at Work" may well be a valuable contribution to the evolution of our policy and the development of special measures, as may also the Report of the Select Committee. [Interruption.] Until hon. Gentlemen opposite who have not been here all day started to drift into the House this was a constructive and sensible debate and I believe that it will be of benefit in charting the way ahead.

The overriding concern of us all is reflected in the words of the report: What is needed is a new programme of opportunities for young people—a programme which offers 'as many opportunities as are likely to be needed' and which offers 'each young person an effective bridge to permanent employment and encourages or helps him or her to cross at the earliest available moment'.

We shall be looking very carefully at the report to see to what exent it provides that bridge and we shall do all that we can to make speedy decisions to fulfil that objective.

Question put, That this House do now adjourn:—

The House divided: Ayes 264, Noes 276.

Division No. 145]	AYES	[10.00 p.m.
Adley, Robert	Bulmer, Esmond	Emery, Peter
Aitken, Jonathan	Burden, F. A.	Evans, Gwynfor (Carmarthen)
Alison, Michael	Butler, Adam (Bosworth)	Ewing, Mrs Winifred (Moray)
Arnold, Tom	Carlisle, Mark	Eyre, Reginald
Atkins, Rt Hon H. (Spelthorne)	Chalker, Mrs Lynda	Fairbairn, Nicholas
Awdry, Daniel	Channon, Paul	Fairgrieve, Russell
Bain, Mrs Margaret	Churchill, W. S.	Farr, John
Baker, Kenneth	Clark, Alan (Plymouth, Sutton)	Fell, Anthony
Banks, Robert	Clark, William (Croydon S)	Finsberg, Geoffrey
Bell, Ronald	Clarke, Kenneth (Rushcliffe)	Fisher, Sir Nigel
Bennett, Dr Reginald (Fareham)	Clegg, Walter	Fookes, Miss Janet
Benyon, W.	Cockcroft, John	Forman, Nigel
Berry, Hon Anthony	Cooke, Robert (Bristol W)	Fowler, Norman (Sutton C'f'd)
Bitten, John	Cope, John	Fox, Marcus
Biggs-Davison, John	Cormack, Patrick	Fraser, Rt Hon H. (Stafford & St)
Blaker, Peter	Costain, A. P.	Fry, Peter
Body, Richard	Craig, Rt Hon W. (Belfast E)	Galbraith, Hon T. G. D.
Boscawen, Hon Robert	Crawford, Douglas	Gardiner, George (Reigate)
Bottomley, Peter	Critchley, Julian	Gardner, Edward (S Fylde)
Bowden, A. (Brighton, Kemptown)	Crouch, David	Gilmour, Rt Hon Sir Ian (Chesham)
Boyson, Dr Rhodes (Brent)	Crowder, F. P.	Gilmour, Sir John (East Fife)
Braine, Sir Bernard	Davies, Rt Hon J. (Knutsford)	Glyn, Dr Alan
Brittan, Leon	Dean, Paul (N Somerset)	Godber, Rt Hon Joseph
Brocklebank-Fowler, C.	Dodsworth, Geoffrey	Goodhart, Philip
Brooke, Peter	Drayson, Burnaby	Goodhew, Victor
Brotherton, Michael	du Cann, Rt Hon Edward	Goodlad, Alastair
Brown, Sir Edward (Bath)	Durant, Tony	Gorst, John
Bryan, Sir Paul	Dykes, Hugh	Gow, Ian (Eastbourne)
Buchanan-Smith, Alick	Eden, Rt Hon Sir John	Gower, Sir Raymond (Barry)
Buck, Antony	Edwards, Nicholas (Pembroke)	Grant, Anthony (Harrow C)
Budgen, Nick	Elliott, Sir William	Gray, Hamish
Grist, Ian	McNair-Wilson, P. (New Forest)	Rost, Peter (SE Derbyshire)
Gryll[...], Michael	Madel, David	Royle, Sir Anthony
Hall, Sir John	Marshall, Michael (Arundel)	Sainsbury, Tim
Hall-Davis, A. G. F.	Marten, Neil	St. John-Stevas, Norman
Hamilton, Michael (Salisbury)	Mates, Michael	Scott, Nicholas
Hampson, Dr Keith	Mather, Carol	Shaw, Giles (Pudsey)
Hannam, John	Maude, Angus	Shelton, William (Streatham)
Harrison, Col Sir Harwood (Eye)	Maudling, Rt Hon Reginald	Shepherd, Colin
Harvie Anderson, Rt Hon Miss	Mawby, Ray	Shersby, Michael
Hastings, Stephen	Maxwell-Hyslop, Robin	Silvester, Fred
Hayhoe, Barney	Mayhew. Patrick	Sims, Roger
Henderson, Douglas	Meyer, Sir Anthony	Sinclair, Sir George
Heseltine, Michael	Miller, Hal (Bromsgrove)	Smith, Timothy John (Ashfield)
Hicks, Robert	Mills, Peter	Spence, John
Higgins, Terence L.	Miscampbell, Norman	Spicer, Jim (W Dorset)
Hodgson, Robin	Mitchell, David (Basingstoke)	Spicer, Michael (S Worcester)
Hordern, Peter	Moate, Roger	Sproat, lain
Howe, Rt Hon Sir Geoffrey	Montgomery, Fergus	Stainton, Keith
Howell, David (Guildford)	Moore, John (Croydon C)	Stanbrook, Ivor
Howell, Ralph (North Norfolk)	More, Jasper (Ludlow)	Stanley, John
Hunt, David (Wirral)	Morgan, Geraint	Steen, Anthony (Wavertree)
Hunt, John (Bromley)	Morris, Michael (Northampton S)	Stewart, Ian (Hitchin)
Hurd, Douglas	Morrison, Charles (Devizes)	Stokes, John
Hutchison, Michael Clark	Morrison, Hon Peter (Chester)	Tapsell, Peter
Irving, Charles (Cheltenham)	Mudd, David	Taylor, R. (Croydon NW)
James, David	Neave, Airey	Tebbit, Norman
Jenkin, Rt Hon P. (Wanst'd & W'df'd)	Nelson, Anthony	Temple-Morris, Peter
Jessel, Toby	Neubert, Michael	Thatcher, Rt Hon Margaret
Johnson Smith, G. (E Grinstead)	Newton, Tony	Thomas, Dafydd (Merioneth)
Jones, Arthur (Daventry)	Nott, John	Thomas, Rt Hon P. (Hendon S)
Jopling, Michael	Onslow, Cranley	Thompson, George
Joseph, Rt Hon Sir Keith	Oppenheim, Mrs Sally	Townsend, Cyril D.
Kaberry, Sir Donald	Osborn, John	Trotter, Neville
Kellett-Bowman, Mrs Elaine	Page, John (Harrow West)	van Straubenzee, W. R.
Kershaw, Anthony	Page, Rt Hon R. Graham (Crosby)	Vaughan, Dr Gerard
Kilfedder, James	Page, Richard (Workington)	Viggers, Peter
Kimball, Marcus	Parkinson, Cecil	Wakeham, John
King, Evelyn (South Dorset)	Pattie, Geoffrey	Walder, David (Clitheroe)
King, Tom (Bridgwater)	Percival, Ian	Walker, Rt Hon P. (Worcester)
Kitson, Sir Timothy	Peyton, Rt Hon John	Walker-Smith, Rt Hon Sir Derek
Knight, Mrs Jill	Price, David (Eastleigh)	Wall, Patrick
Knox, David	Prior, Rt Hon James	Walters, Dennis
Lamont, Norman	Pym, Rt Hon Francis	Warren, Kenneth
Langford-Holt, Sir John	Raison, Timothy	Watt, Hamish
Latham, Michael (Melton)	Rathbone, Tim	Weatherill, Bernard
Lawrence, Ivan	Rawlinson, Rt Hon Sir Peter	Wells, John
Lawson, Nigel	Rees, Peter (Dover & Deal)	Welsh, Andrew
Lester, Jim (Beeston)	Rees-Davies, W. R.	Whitelaw, Rt Hon William
Lewis, Kenneth (Rutland)	Reid, George	Wiggin, Jerry
Lloyd, Ian	Renton, Rt Hon Sir D. (Hunts)	Wigley, Dafydd
Loveridge, John	Renton, Tim (Mid-Sussex)	Wilson, Gordon (Dundee E)
Luce, Richard	Rhodes James, R.	Winterton, Nicholas
MacCormick, lain	Ridley, Hon Nicholas	Wood, Rt Hon Richard
McCrindle, Robert	Ridsdale, Julian	Young, Sir G. (Ealing, Acton)
Macfarlane, Neil	Rifkind, Malcolm
MacGregor, John	Roberts, Wyn (Conway)	TELLERS FOR THE AYES:
Mackay, Andrew James	Rodgers, Sir John (Sevenoaks)	Mr. Spencer Le Marchant and
Macmillan, Rt Hon M. (Farnham)	Rossi, Hugh (Hornsey)	Mr. Michael Roberts.
McNair-Wilson, M. (Newbury)
NOES
Abse, Leo	Bradley, Tom	Corbett, Robin
Allaun, Frank	Bray, Dr Jeremy	Cowans, Harry
Anderson, Donald	Brown, Hugh D. (Provan)	Cox, Thomas (Tooting)
Archer, peter	Brown, Robert C. (Newcastle W)	Craigen, Jim (Maryhill)
Armstrong, Ernest	Brown, Ronald (Hackney S)	Crawshaw, Richard
Ashton, Joe	Buchan, Norman	Cronin, John
Atkins, Ronald (Preston N)	Buchanan, Richard	Crowther, Stan (Rotherham)
Atkinson, Norman	Callaghan, Jim (Middleton & P)	Cryer, Bob
Bagier, Gordon A. T.	Campbell, Ian	Cunningham, G. (Islington S)
Barnett, Guy (Greenwich)	Canavan, Dennis	Cunningham, Dr J. (Whiteh)
Barnett, Rt Hon Joel (Heywood)	Cant, R. B.	Davidson, Arthur
Bates, Alt	Carmichael, Neil	Davies, Bryan (Enfield N)
Bean, R. E.	Carter-Jones, Lewis	Davies, Denzil (Llanelli)
Benn, Rt Hon Anthony Wedgwood	Cartwright, John	Davies, Ifor (Gower)
Bennett, Andrew (Stockport N)	Castle, Rt Hon Barbara	Davis, Clinton (Hackney C)
Bidwell, Sydney	Clemitson, Ivor	Deakins. Eric
Bishop, E. S.	Cocks, Rt Hon Michael (Bristol S)	Dean, Joseph (Leeds West)
Blenkinsop, Arthur	Cohen, Stanley	Dempsey, James
Boardman, H.	Coleman, Donald	Doig, Peter
Booth, Rt Hon Albert	Colquhoun, Ms Maureen	Dormand, J. D.
Boothroyd, Miss Betty	Concannon, J. D.	Douglas-Mann, Bruce
Bottomley, Rt Hon Arthur	Conlan, Bernard	Duffy, A. E. P.
Boyden, James (Bish Auck)	Cook, Robin F. (Edin C)	Dunn, James A.
Dunnett, Jack	Lambie, David	Rooker, J. W.
Eadie, Alex	Lamborn, Harry	Roper, John
Edge, Geoff	Lamond, James	Rose, Paul B.
Edwards, Robert (Wolv SE)	Latham, Arthur (Paddington)	Ross, Rt Hon W. (Kilmarnock)
Ellis, John (Brigg & Scun)	Leadbitter, Ted	Ryman, John
Ellis, Tom (Wrexham)	Lee, John	Sandelson, Neville
English, Michael	Lever, Rt Hon Harold	Sedgemore, Brian
Ennals, David	Lewis, Ron (Carlisle)	Selby, Harry
Evans, Fred (Caerphilly)	Lipton, Marcus	Shaw, Arnold (Ilford South)
Evans, loan (Aberdare)	Lomas, Kenneth	Sheldon, Rt Hon Robert
Evans, John (Newton)	Loyden, Eddie	Shore, Rt Hon Peter
Ewing, Harry (Stirling)	Luard, Evan	Short, Mrs Renée (Wolv NE)
Faulds, Andrew	Lyon, Alexander (York)	Silkin, Rt Hon S. C. (Dulwich)
Fernyhough, Rt Hon E.	Lyons, Edward (Bradford W)	Sillars, James
Fitch, Alan (Wigan)	Mabon, Rt Hon Dr J. Dickson	Silverman, Julius
Flannery, Martin	McCartney, Hugh	Skinner, Dennis
Fletcher, Ted (Darlington)	McDonald, Dr Oonagh	Small, William
Foot. Rt Hon Michael	McElhone, Frank	Smith, John (N Lanarkshire)
Ford, Ben	MacFarquhar, Roderick	Snape, Peter
Forrester, John	McGuire, Michael (Ince)	Spearing, Nigel
Fowler, Gerald (The Wrekin)	MacKenzie, Gregor	Spriggs, Leslie
Fraser, John (Lambeth, N'w'd)	Mackintosh, John P.	Stallard, A. W.
Freeson, Reginald	McMillan, Tom (Glasgow C)	Stewart, Rt Hon M. (Fulham)
Garrett, John (Norwich S)	McNamara, Kevin	Stoddart, David
Garrett, W. E. (Wallsend)	Madden, Max	Stott, Roger
George, Bruce	Magee, Bryan	Strauss, Rt Hon G. R.
Gilbert, Dr John	Mallalieu, J. P. W	Summerskill, Hon Dr Shirley
Ginsburg, David	Marks, Kenneth	Swain, Thomas
Golding, John	Marshall, Dr Edmund (Goole)	Taylor, Mrs Ann (Bolton W)
Gould, Bryan	Marshall, Jim (Leicester S)	Thomas, Jeffrey (Abertillery)
Gourlay, Harry	Maynard, Miss Joan	Thomas, Mike (Newcastle E)
Graham, Ted	Meacher, Michael	Thomas, Ron (Bristol NW)
Grant, George (Morpeth)	Mellish, Rt Hon Robert	Thorns, Stan (Preston South)
Grocott, Bruce	Mendelson, John	Tierney, Sydney
Hardy, Peter	Mikardo, Ian	Tinn, James
Harrison, Walter (Wakefield)	Miller, Dr M. S. (E Kilbride)	Tomlinson, John
Hart, Rt Hon Judith	Miller, Mrs Millie (Ilford N)	Tomney, Frank
Hattersley, Rt Hon Roy	Mitchell, Austin Vernon (Grimsby)	Torney, Tom
Hatton, Frank	Molloy, William	Tuck, Raphael
Hayman, Mrs Helena	Moonman, Eric	Urwin, T. W.
Healey, Rt Hon Denis	Morris, Alfred (Wythenshawe)	Varley, Rt Hon Eric G.
Heffer, Eric S.	Morris, Charles R. (Openshaw)	Wainwright, Edwin (Dearne v)
Hooley, Frank	Morris, Rt Hon J. (Aberavon)	Walden, Brian (B'ham, L'dyw'd)
Horam, John	Moyle, Roland	Walker, Harold (Doncaster)
Howell, Ralph (North Norfolk)	Mulley, Rt Hon Frederick	Walker, Terry (Kingswood)
Hoyle, Doug (Nelson)	Newens, Stanley	Ward, Michael
Huckfield Les	Noble, Mike	Watkins, David
Hughes, Rt Hon C. (Anglesey)	Oakes, Gordon	Watkinson, John
Hughes, Robert (Aberdeen N)	Ogden, Eric	Weetch, Ken
	O'Halloran Michael	Weitzman, David
Hughes, Roy (Newport)	Orme Rt Hon Stanley	Wellbeloved, James
Hunter, Adam	Ovenden, John	While, Frank R. (Bury)
Irvine, Rt Hon Sir A. (Edge Hill)	Padley, Walter	White, James (Pollok)
Irving, Rt Hon S. (Dartford)	Palmer, Arthur	Whitehead, Phillip
Jackson, Colin (Brighouse)	Park, George	Whitlock, William
Jackson, Miss Margaret (Lincoln)	Parker, John	Williams, Alan Lee (Hornch'ch)
Janner, Greville	Parry, Robert	Williams, Rt Hon Shirley (Hertford)
Jeger, Mrs Lena	Pavitt, Laurie	Williams, Sir Thomas (Warrington)
Jenkins, Hugh (Putney)	Pendry, Tom	Wilson, Alexander (Hamilton)
John, Brynmor	Perry, Ernest	Wilson, Rt Hon Sir Harold (Huyton)
Johnson, James (Hull West)	Phipps, Dr Colin	Wilson, William (Coventry SE)
Johnson, Walter (Derby S)	Prentice, Rt Hon Reg	Wise, Mrs Audrey
Jones, Alec (Rhondda)	Radice, Giles	Woodall, Alec
Jones, Barry (East Flint)	Rees, Rt Hon Merlyn (Leeds S)	Woof, Robert
Jones, Dan (Burnley)	Richardson, Miss Jo	Wrigglesworth, Ian
Judd, Frank	Roberts, Albert (Normanton)	Young, David (Bolton E)
Kaufman, Gerald	Roberts, Gwilym (Cannock)
Kelley, Richard	Robinson, Geoffrey	TELLERS FOR THE NOES:
Kerr, Russell	Roderick, Caerwyn	Mr. Joseph Harper and
Kilroy-Silk, Robert	Rodgers, George (Chorley)	Mr. James Hamilton.
Kinnock, Nell	Rodgers, Rt Hon William (Stockton)

Question accordingly negatived.