UNEMPLOYMENT

HC Deb 24 July 1978 vol 954 cc1149-287

Motion made, and Question proposed, That this House do now adjourn.—[Mr. James Hamilton.]

3.43 p.m.

Mr. Barney Hayhoe (Brentford and Isleworth)

This is the last Supply Day available in the current Session of Parliament, and it may be the last Supply Day in this Parliament. Therefore, it seemed to the Opposition right and appropriate to choose unemployment as the main subject for debate.

The Government's central and crucial failure to live up to the slogan upon which they won power in February 1974—"Back to Work with Labour"—is central to the charges which the Opposition make of the damage which this Government have done to our country.

In March 1974, there were approximately 600,000 people unemployed in the United Kingdom. The latest figure is 1,585,811. It means that for every hour that this Government have been in power, 25 more people have been added, on average, to the number of unemployed, and 600 for every day.

Mr. Tom Litterick (Birmingham, Selly Oak)

The House will be most anxious to know precisely what the hon. Member for Brentford and Isleworth (Mr. Hayhoe) is talking about. He quoted the figure of 1,585,000. Is that the true figure, or is it the other figure suggested by the right hon. Member for Leeds, North-East (Sir K. Joseph), who says that that is an exaggerated figure?

Mr. Hayhoe

That is an absurd question. If the hon. Member for Birmingham, Selly Oak (Mr. Litterick) had listened to any of our debates on these matters over the years, he would have known that the question had been put before and had been answered before. The answer is that, depending on the definitions given, it is possible to produce a number of different global figures for the number of unemployed and for the percentage rates. For example, the national percentage rate which we publicise in this country is not the same percentage rate as that which appears in the OECD statistics, which are adjusted to make international comparisons. It may be that the hon. Member for Selly Oak had some obscure political point that he was trying to make with that absurd intervention. But certainly, on their merits, I am happy to work on the figures produced by the Department of Employment, recognising its assumptions and recognising both what it says and what it does not say about the unemployment figures.

Let me make my position quite clear. I said that the figure at the moment was 1,585,000 under present definitions. If we were using the same definitions which applied when the last Conservative Government were in power, the figure would be about 1¾ million. This Government have changed the basis of calculation. I have no objection to that. Students have been removed from inclusion in the figures. It was a sensible change to make. But in terms of the raw unemployment statistics, a number of changes have been made during the course of this Government's period in office which have resulted in bringing down the numbers.

The 1 million figure which appeared in January 1972, when Labour Members were parading in the centre of the Chamber and bringing the proceedings of the House to a stop, would, under the present definition, be only about 950,000. That figure is some 600,000 fewer than the figure which has been arrived at under this Government. So, whichever figure the hon. Member for Selly Oak takes, the record of this Government is abysmally bad. What is more, if we look into the future we see that there have been forecasts going ahead—

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

If the hon. Member for Brentford and Isleworth (Mr. Hayhoe) wishes to bandy about statistics and statistical methods, he should bear in mind that the official unemployment figure for February 1972 was more than 1½, million. It was the Conservative Government who then changed the figures, understandably and sensibly. I made no objection at the time, and I make none now. They changed the figures to delete those who were temporarily stopped, and that reduced the figure to below 1 million. But it is on record that in February 1972, the statistical method then in use—and it had been in use for many years—produced a figure in excess of 1½ million. If that statistical method were in use today, the present level of unemployment would be lower than it was in 1972.

Mr. Hayhoe

If the Minister is saying that unemployment was worse in the first months of 1972 than it is now, all I can say is that he needs his head examining.

Unemployment is worse. It is more than 1 million, on the basis which both sides of the House agree is a reasonable one for making these assessments, and it has been running at more than 1 million for about 36 of the 53 months that this Government have been in office.

Mr. William Hamilton (Fife, Central)

I hope that the hon. Member will say what his party would do about it.

Mr. Hayhoe

To suggest that unemployment was generally worse during the period in office of the last Conservative Government is to make a nonsense of these figures.

It is worthwhile reminding ourselves when talking about these figures that they are not abstract statistics. We are talking about real people and their families. There are more real people and their families being hurt by unemployment now than there were in the earlier period to which the Minister of State referred.

There are more than 330,000 unemployed who have been unemployed for more than a year. That is an extremely worrying figure. In July of this year, 240,000 of those were school leavers, though we hope that many of them will be obtaining jobs or training places in the relatively near future.

Sometimes I think that the way in which matters are being arranged is to contrive a very sharp drop in the figures in September of this year, and we can understand this as a window-dressing operation for the General Election which may well follow.

It is not realised by many that about 750,000 of the present 1.4 million or 1.5 million who are unemployed are under 30 years of age. That is an extremely worrying feature. When we consider the composition of the figures, we find that disadvantaged groups within our society are suffering most. The young blacks in our large cities are suffering a higher rate of unemployment than any other group. Those without qualifications are much less likely to get a job on leaving school or in their early years than those who have managed to obtain a qualification at school. Particular problems face the children of the long-term unemployed, as they do the disabled, especially the young disabled. In recent years the incidence of unemployment among young women has risen more sharply than among young men.

I do not know how many of the disadvantaged groups will be following our proceedings today. I suppose that many of them could not care less what takes place in the House. That is because many of them have opted out of the system. Part of the corrosive effect of long-term unemployment is the loss of dignity suffered by the individual, the loss of self-respect between himself and his family and between himself and his neighbours. If we do not understand the human factors that are involved in these problems, we shall not be able to bring sufficient strength of purpose to bear upon their solution.

The Government came to power on the slogan that a Labour Government could get the people back to work. In October 1974 they sustained themselves—

Mr. Leslie Spriggs (St. Helens)

The hon. Gentleman has said that many young people have opted out of the system. Let me assure him that the unemployed youngsters of St. Helens would be only too glad to go to any jobs offered to them. He is wrong to imply that young people have opted out of the system.

Mr. Hayhoe

If the hon. Gentleman thinks that I made that implication, I can understand his indignation. If he reads Hansard tomorrow, he will see that I did not do so. I said that some young people are opting out. Surely the evidence is undeniable.

Many hon. Members will remember the powerful speech made by my right hon. Friend the Member for Sidcup (Mr. Heath) in a debate that took place in January. What my right hon. Friend said on the problem was warmly welcomed in all parts of the House. Part of the purpose of his speech was to draw attention to the grave social problems that flow from high levels of unemployment, especially the disillusion coming to some of the disadvantaged young within our society who feel that society is rejecting them because it is not able to provide them with the job opportunities that they desire.

In October 1974 the Government were saying that unemployment was beginning to fall. However, as I have shown, since that time there has been a consistent and steady rise until the past few months. What is the Government's excuse now that they are challenged? They say "It is nothing to do with us. It is to do with the hiking up of oil prices in 1973. It is to do with the world trade recession. In these circumstances unemployment is increasing throughout the world. We are not to blame."

If we accept that argument—I accept that there is some justification for it—it is very out of tune with what was being said on the hustings in 1974. The hon. Member for Selly Oak does not shake his head on that one. The hon. Gentleman knows only too well the accuracy of that criticism. I accept that there is some justification for claiming that world conditions have led to increased unemployment, but the criticism that I make of the Government is based on our position within the OECD. The year of the oil price hike was 1973–74. During, that year and the following year our unemployment levels were slightly below the average levels of OECD countries. However, in 1975 they began steeply to rise and to overtake the levels of other countries. By 1976 they were well above those in other countries, and for unemployment based on the OECD comparable statistics the United Kingdom is nearly the worst country in 1977–78.

Mr. Eric S. Heifer (Liverpool, Walton)

Does the hon. Gentleman agree that one of the reasons for increased unemployment was that the Government listened far too much to those on the Conservative Benches and accepted their arguments that we had to have drastic public expenditure cuts? The Government went part of the way on public expenditure. Had they gone further—they were prevented from doing so by opposition among some of my hon. Friends—unemployment would now be about 4 million. It is public expenditure cuts that have worsened the world crisis.

Mr. Hayhoe

As sometimes happens with the hon. Gentleman, he is standing the argument on its head. Let us consider these matters in more detail. We saw a rapid rise in unemployment during the early years of the Government's administration. High levels of unemployment were reached during 1975 and 1976. The public expenditure cuts were announced at the end of 1976. Obviously they could not take effect until later. Since the cuts the steep rise in unemployment and the steep change in our relative position has altered somewhat for the better. For the past nine or 10 months we have seen a slight drop in unemployment. The seasonally adjusted figure for July is about 27,000 below the figure for July 1977.

That which produced that improvement is nothing less than the reversal of the Government's earlier policies. The reduction in the sharp rise in unemployment followed the Government's expenditure cuts that were announced at the end of 1976. More than that, it followed the shortfall in public sector spending that was considerable in the previous tinanja1 year. We now know that there was a shortfall running at £3 billion or £4 billion.

Although the Chancellor and others forecast that the reduced public sector borrowing requirement would lead to an extra 1 million unemployed, the rise in unemployment has probably been about 100,000. Indeed, there has been a recent decline. I accept that there is controversy about the figures. There has been a lively correspondence in The Times on the meaning of the statistics. I know of hardly any economic proposition which would not or could not be the subject of a lively controversy in The Times between economists.

It is clear from recent experience that Labour's present cries about Tory policy on public expenditure cutting jobs are an absurdity. I do not contend that cuts in public expenditure will not sometimes cause a loss of jobs. For example, how many jobs have been destroyed by the Government's cuts on defence spending? However, proper overall control of public expenditure need not have the job loss consequence so eagerly and often predicted by Labour Members. The experience of the past two or three years demonstrates that beyond peradventure.

Mr. T. W. Urwin (Houghton-le-Spring)

rose—

Mr. Hayhoe

No, I shall not give way to the hon. Member for Houghton-le-Spring (Mr. Urwin). I have given way on a number of occasions. I must get on.

I turn to another aspect. It may be that I shall give way to the hon. Gentleman at a later stage if he wishes to intervene.

Mr. Urwin

The hon. Gentleman has not finished the story.

Mr. Hayhoe

I have already been speaking for some time. I want to turn to other matters. No doubt the hon. Gentleman will have the opportunity to take part in the debate.

The Prime Minister seeks to misrepresent our position on job subsidies. Labour Members are only too eager to try to find ways of taking words out of context and to use them for political propaganda in their own constituencies, especially marginal seats where job subsidies are being paid.

Of course, the Opposition are against and critical of the indiscriminate use of subsidies. But the Minister of State knows that the Employment Subsidies Bill was given a fair wind by the Opposition. It could have taken longer had we not been very reasonable in our attitude in Committee upstairs.

The scare stories about job subsidies being axed by a new Tory Government are not true. Temporary help can be useful, but it must not drift into permanence. We must recognise that there is a cost attached to it. The temporary employment subsidy helps those who are in receipt of it, but there is a displacement effect. Other people are harmed because it is being paid. The OECD Economic Surveys for this country, published earlier this year, comments: the Temporary Employment Subsidy, for which official estimates show that the 'displacement' effect may eventually approach between one-third and one-half of the jobs provided. We must recognise that these difficulties are occurring and we must make certain that the best use is being made of the money going into employment subsidies.

The problem is much wider than subsidies going into employment as such. There is the money which is paid for people to go into extra training and which is paid as unemployment benefit. In my book, we must see the whole of this money in the round, judge how it is being used and to seek to make the most effective use of it.

At present, enormous sums of money are involved. There has been a constant chopping and changing of the various subsidies which are available. Anyone who tries to follow all this soon sinks into the subsidy morass. We need a guide to steer our way round it.

I am worried about phoney jobs displacing real and necessary work. I believe that the Government must help, not hinder, the creation of new, real jobs within our economy. Surely there is something ludicrous about a Government who subsidise employment in uncompetitive industries by imposing taxes on employment in productive industries. That is just what the Government have been doing with their 2 per cent. national insurance charge of a couple of years ago and the extra 1½ per cent. this year. A straight tax on employment must have an effect upon job opportunities.

We need over 1 million new, real jobs in the course of the next three or four years—the Secretary of State and his colleagues know that I am merely quoting from their publications—in order to stand still. We need those jobs not to reduce unemployment but to keep it at roughly its present level.

It is now widely recognised that the Government and trade union leaders were wildly optimistic in the proposals that they put forward in 1976. I shall not quote from the "Trades Union Congress Economic Review for 1976", but it certainly referred to the target which it was thought the Government had of reducing unemployment to 600,000 or 700,000 by 1978. That was wildly optimistic. It was very far removed from reality.

One can understand the rather shamefaced comment made by David Basnett at the TUC conference last year when, referring to this rise in unemployment, he said: Since 1974, the first year of the Labour Government, the increase in unemployment has been spectacular—160 per cent. Since 1974, school-leavers' unemployment has risen by an incredible 270 per cent. But since 1974 the TUC has been in Trafalgar Square—to demonstrate about pensions, to demonstrate about women's rights, to demonstrate about race relations, but not to demonstrate about unemployment. How is that for a trade union leader representing people about whom he is concerned? Compare the way that Labour Members now behave in stark contrast with their behaviour in 1972 when the figures just peaked momentarily. There has been talk of dogs that do not bark in the night. But they have not been barking now for four years as the numbers have gone up.

Turning to the targets for reducing unemployment, it is necessary to recognise that the problems may be even more complicated as the micro-processor revolution starts. The national officer of ASTMS puts a very pessimistic view on the matter. Other hon. Members take a different view. We need a much wider and more informed public debate about the employment implications of the chip and of the micro-processor.

We charge the Government with complacency. In 1976, they went along with the TUC and talked of targets of 600,000 or 700,000 as possible levels of unemployment in 1978. However, they failed to recognise the seriousness of the problem. They concentrated too much upon palliatives rather than on trying to deal with the long-term solutions necessary to get job prospects moving again.

There is absolutely no doubt in my mind that we need to widen the labour market. We need to try to extend the labour market. The prerequisites are, first, a better tax climate, because we want incentives. We shall not get things moving otherwise. We need incentives not only for the entrepreneurs, the better paid and the skilled people who have been leaving this country too often in the past because they felt that they owed a duty to themselves and to their families to get the rewards which were available to them elsewhere, but for those at the lower end of the scale where the juxtaposition of social benefits and taxation means that there is a surtax on the poor often as high as—sometimes even higher than—the surtax on the highest levels of income. Therefore, we must have a reform of taxation which gives better incentives.

We need improved business confidence, more continuity in Government policies towards industry and more acknowledgement of the common ground so often referred to by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph). We must seek to create more of that common ground in dealing with industrial problems, because often the life cycle of decisions in industry is much longer than the time span of a Parliament. People making investment decisions need a better assurance of continuity.

Mr. Max Madden (Sowerby)

Will the hon. Gentleman give way?

Mr. Hayhoe

No. I think that I should make more progress. Rising productivity is also a prerequisite of getting more jobs. Lower unit costs and less over-manning within industry may sound contrary, but if industry goes on being over-maimed and unit costs keep going up so that it becomes less competitive, that is a certain way of destroying jobs in industry.

It is essential to adopt the right measures to improve productivity. I do not believe that that can be done by the Government or by the House. The Government can help on taxation and by improving the general climate of business confidence, but achieving higher productivity must be a matter for the managements, trade unions and work forces. We cannot solve these problems by passing laws. Some of the laws that have been passed have made it more difficult for management and trade union leaders to resolve difficulties on the shop floor.

Mr. Madden

I should like the hon. Member to clear up his party's position on this matter. Is it now official Tory Party policy to have free collective bargaining in the private sector and an incomes policy in the public sector?

Mr. Hayhoe

That was a splendid way to waste time. We are to have a debate tomorrow in which the Prime Minister and my right hon. Friend the Leader of the Opposition will take part. If the hon. Member for Sowerby (Mr. Madden) thinks that I am going to lead my right hon. Friend on this and steal her thunder, he is much mistaken.

I am sure that the productivity policies advocated by the Conservative Party are more likely to provide a climate in which the managers and work forces can achieve increased productivity than are the policies that have been produced by the Government.

Training is of immense importance. About 40 per cent. of the male unemployed are unskilled people. Over 60 per cent. of the long-term unemployed are unskilled. At the same time there is a shortage of skilled people which is already causing bottlenecks in some industries. It is necessary to improve the training content from formal education through to the working life of our citizens. We must increase their motivation, opportunity, encouragement and rewards.

When I left school I became a tool-room apprentice earning 12s. 6d. a week. That is less than my children now receive in pocket money. I did that because I recognised that three to five years hard graft would give me a skill which then had a premium in the market place, and that it would bring me rewards.

I am worried because the young person today does not have the same encouragement to seek skills. Unless we can recreate that encouragement we shall not have the manpower that we need to meet the challenge, not only from our fellow members of OECD but from Japan, Mexico, Korea and Taiwan. Those are the places which are now producing goods and challenging us in world markets. Our best defence is the skill of our own people. If we do not provide the workers with the necessary differentials and rewards, there is little hope for us.

Mr. Norman Tebbit (Chingford)

Would my hon. Friend be surprised to learn that in my constituency three skilled toolmakers in one factory have left recently to become milkmen? Less than half a mile away a factory is threatened with a production stoppage because it is impossible to recruit unskilled labour since workers are better off on the dole.

Mr. Hayhoe

Those situations are worrying. One of the reasons the skilled toolmaker moves into a job which does not require his skill is his desire for security of employment. Sometimes small or badly managed organisations represent a risk to a man's continuity of employment. Men are tempted to go for jobs which have a secure future.

We must examine this situation. There is a craziness about a system which makes it possible for a man to have more money in his pocket when he is not working than when he is working. This situation is caused by a combination of tax, social benefits, low pay and low productivity. Unless we create more wealth we shall not begin to solve these difficult problems.

More must be done during the transition from school to work. Some of the Government's new schemes under the opportunities programme for young people are helpful. But I should like to see more done. There must also be better co-operation between the Department of Education and Science and the Department of Employment. It is worrying to find that there are vacancies at skillcentres. In a recent parliamentary answer it was revealed that such vacancies amount to about 30 per cent.

We must consider the relative costs of people in skillcentres. About £5,000 appears to be the cost per year—and that is more than many university places cost. We should examine the use of such scarce resources. We must assess whether the resources are being used in the most efficient manner. I should like to see a greater regional and area impact on training so that training matches local needs more than it does at present.

I turn to the question of mobility. There are 12 million people unemployed and many vacancies are unfilled. The mobility of individuals and their families must affect the situation. Present housing policies often freeze people into unemployment. Even when people are offered jobs away from their present homes they cannot be certain of acquiring a house. The advantage of a highly subsidised council house is often so great that, because of housing difficulties, people believe that it is better to stay unemployed where they are than to move and do a useful job somewhere else.

The employment transfer scheme has been running for some time. I am glad to say that it has been changed sine it was discovered that 70 per cent. of the people helped would have moved anyway. But some people do run into difficulties over travel costs. We should look at the matter in a flexible and sensible manner.

Where are the new jobs to come from? They will not come from higher taxes and increased public spending. That would create the difficulties that we faced in 1976. They will not come from the already over-manned basic industries such as steel because if they are unable to slim down they will be at greater risk. They will not come directly from large international manufacturing companies, although their investment creates many jobs in the construction industry and elswhere. Sometimes massive new investment means that more is produced by fewer people, but the indirect effect upon jobs is considerable.

The wealth that such large industries creates provides resources which can be used for improving our health service. The problem with the hospitals in my area is not that we are spending too much on them but that, because of the policies the nation has been pursuing, we cannot afford to spend more. The only way to solve the problem is to create more wealth in the wealth-creating sections of the economy.

There are two areas in which there is real scope for increasing the number of jobs. They are small businesses—[HON. MEMBERS: "Ah."] and the service sector. Perhaps some Labour Members have learnt that their Front Bench does not say "Ah" now. The Front Bench has cottoned on to the importance of this sector, albeit very late and after it has done immense damage. How worrying it must be for the Government Front Bench to see that its Back Benchers have such little understanding of the possibility for increasing job opportunities among small businesses.

We must concentrate on the things we can do well. There should be a growth in personal services. I see an increasing role for private welfare services. We must take another look at the effects of legislation, particularly the Employment Protection Act. How absurd it was to have an independent survey of the effects of that Act and to exclude from the survey firms employing fewer than 50 people. It is from those firms that most of the criticisms of the Act have been flowing in. There is little doubt that the opportunities that the small firms can provide for increasing the number of jobs have been much affected by the Act.

Mr. Alan Clark (Plymouth, Sutton)

Is not the largest potential reservoir for jobs that which exists by employing people to make in this country those items that at present are made abroad and dumped here?

Mr. Hayhoe

If goods are being dumped I expect the Government to take fast action to prevent that. They have anti-dumping powers, but perhaps those powers need to be carefully looked at. I agree that there are great opportunities for our industry to provide the goods and services which must otherwise be imported.

There would be a great deal of extra employment if there were continuity of production in the car industry. The car industry could be producing many more units to meet demand at home and abroad. It is not doing so, and I imagine that the blame attaches to the union leaders and to many of the managers. I hope that the support which was demonstrated for the new management of British Leyland during our debates a short while ago will be recognised by the work force which will set about putting its house in order to produce the goods.

The extra jobs that we require can come only from the extra wealth which is created by our making more goods and providing more services of the right kind at the right price for export or to replace imports. There is no other way.

The damaging myth is circulated by some Labour Members and trade union leaders that when times are hard one should go slow to avoid working oneself out of a job. That is absolute nonsense. The only way to sustain many jobs is to achieve higher productivity and lower unit costs so that we retain a competitive position for our goods in world markets.

We all desire a shorter working week, working year or working life. We are certainly anxious to ensure that in their political activities Labour Members enjoy a shorter working life after the next General Election. In industry, however, this is not the time to make such changes if they make our industry less competitive. No doubt in due course across-the-board improvements will come, but at present a shorter working week for the same pay and producing the same goods would mean higher unit costs. If there is to be a productivity gain there will be no extra jobs. This, therefore, at present is a recipe for disaster one way or the other.

I followed an interesting debate on television on Sunday morning in which my right hon. Friend the Member for Lowestoft (Mr. Prior) took part. Mr. Hugh Scanlon was also featured on the programme, and while I disagreed with many of his comments on the shorter working week I felt that his views on shift working should be picked up. If we could use some of the machinery more intensively in ways that would help the work force and reduce unit costs there would be an all-round advantage. Mr. Scanlon's comments in that respect were of considerable importance.

My speech has taken longer than I intended, partly because of the many interventions from Labour Members. For more than 50 years our politics have been greatly influenced by national high unemployment in the inter-war years. Now once again we have high unemployment. The figures have not fallen below 1 million for more than three years, and the prospects are pretty grim. Thank God the poverty, misery and physical deprivation of that earlier period have gone, I hope for ever—

Mr. Heffer

Thanks to Labour.

Mr. Hayhoe

—but the present levels of unemployment are having psychological effects and creating deep social strains which may serve us ill in years to come.

In the 30 years that I have been in politics the message from the Labour Party and some trade union leaders has been that it is the Conservative Party that wants to create unemployment—

Mr. James Lamond (Oldham, East)

Hear, hear. That is right.

Mr. Hayhoe

These people have sought to label my party as the party of unemployment. Now all that has changed. They may attempt to continue the smear, but the reality and the record are against them. With every Labour Government more people have been unemployed when they left office than when they came into office. Labour Governments have failed to meet the challenge of unemployment, and in failing they have opened up great opportunities for my party to serve the people of this country by implementing the policies which will provide jobs and by killing off the damaging, searing untruth that my party believes in unemployment. It does not. None of us believes in unemployment. Peter Jenkins, who is no friend of ours politically, says that the Labour Party has used unemployment as an instrument of policy. So it has. It has failed to solve unemployment, and it will be both in support of our positive policies and in criticism of the Government's failures that we vote tonight.

Several Hon. Membersrose—

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. Before I call the Minister, I wish to say that Mr. Speaker has asked me to make a special appeal on his behalf for short speeches this day. The list of those desiring to be called is very long.

4.30 p.m.

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

I reject wholly and entirely the charge flung at us by the hon. Member for Brentford and Isleworth (Mr. Hayhoe), using the words of a newspaper columnist. This Government have not used and never will use unemployment as an instrument of economic policy. If I say that with a little feeling, it is perhaps because, in common with many of my hon. Friends but unlike many Opposition Members, I have experienced the hardships and miseries of unemployment at first hand. I can therefore establish my credentials to speak with some conviction in this debate.

I do not charge the hon. Member with insincerity. However, I charge him and his party—including the hon. Member for Glasgow, Cathcart (Mr. Taylor), who is more concerned with making his speech from a sedentary position—with the fact that, overriding any concern they might have for unemployment, they desire to use the unemployed as a political instrument with which to beat the Government over the head.

It is ironic that the hon. Member keeps harping on productivity as an element of Government policy when it was his party which deliberately filleted out the productivity responsibilities of the Department of Employment and Productivity, as it then was, and divested it of those responsibilities which had been built up to improve productivity.

Despite what the hon. Member said, I had not intended to raise this next subject. It is he who dragged in the question who was changing the presentation of statistics. The Department of Employment Gazette for March 1972 shows that the total register of unemployed on 14th February 1972 was 1,574,500. I readily accept that that included those who were temporarily stopped and that, of course, it was certainly a sensible move at that time—

Mr. Hayhoe

How many?

Mr. Walker

I hope the hon. Gentleman will allow me to make my own speech. I did not heckle him on this point. At that time the numbers temporarily stopped were included, and they were subsequently dropped. If the unemployment figures were calculated now on the same basis as then, they would be significantly less than that figure, which is part of the official record.

Equally, I reject the hon. Member's allegation that the Government were contriving to secure a drop in the numbers unemployed in September. I wonder what he means by "contriving. Is he suggesting that civil servants are juggling the figures at the behest of Ministers? I wish that he would make that clear.

One thing that the hon. Gentleman acknowledged—it is perhaps the first time that the Opposition have acknowledged it in these debates—is that an important reason for the increase in unemployment over the last four or five years has been the significant increase in the size of the labour force—at the rate of about 170,000 per annum.

I quote figures from memory, but I believe that between mid-June 1972 and mid-June 1977 the total number added to the labour force was about 900,000. In other words, we should have had to create an additional 900,000 jobs to stand still at the 1972 level. In the event we created about 400,000 additional jobs, and in mid-June 1977 there were more than 400,000 more people in employment than in mid-1972. In other words, while unemployment has risen, so have the numbers in employment.

I believe that the choice of subject for this debate was triggered by what I believe were wildly irresponsible headlines in last Thursday's newspapers about unemployment allegedly reaching 1.7 million in 1979. I want to take advantage of this debate not only to lay that bogy but also to say something about forecasting methods.

The figure of 1.7 million in 1978–79, a figure which had been submitted in a letter by the Chancellor of the Exchequer to the Chairman of the Sub-Committee of the Expenditure Committee, was a working assumption, not a forecast, made in autumn 1977 for the expenditure Estimates published in January 1978. As a figure it was not comparable with the official unemployment figure, because, unlike that figure, it included an allowance for people with jobs but temporarily laid off for a variety of reasons, and it included adult students registering for vacant jobs. Those categories, by long practice, are excluded from the official unemployment figures.

In early July there were about 110,000 adult students and about 11,000 people temporarily stopped. That latter figure is low by normal and historical standards. It has usually ranged between 6,000 and 60,000 in recent years.

Mr. Hayhoe

What was it in 1972?

Mr. Walker

The hon. Member asks how many people were temporarily stopped at the time the unemployment figure was 1½ million-plus. The figure was 500,000 or thereabouts.

Therefore, this figure cannot be predicted, and what it will be a year hence is nothing but a mere guess. However, in making provision for staff and premises for payment of benefit, it seems wise to consider the whole range of possibilities, no matter how unlikely, which means allowing for a number temporarily stopped which takes account of the historical pattern and the normal levels.

In any case, the assumption of 1.7 million which was made last autumn has subsequently been revised downwards. The Government gave the revised assumptions to the Government Actuary, and his report, Command 7232, published in March 1978, showed an estimated level of 1.55 million, which again included the temporarily stopped and adult students. On that basis, the official unemployment figures in 1978–79 would be expected to be lower than at present.

Mr. Hayhoe

We are at that figure now.

Mr. Walker

Yes, and I am saying that the revised assumptions given to the Government Actuary show that, far from rising to 1.7 million in 1978–79, the figure will be lower than at present.

Mr. Tebbit

The Minister described the earlier figure as a wild guess. Is this figure a wild guess too?

Mr. Walker

I hope that the hon. Member will let me continue with my speech. No unemployment forecast can ever be regarded as a sure prediction, but all businesses have to frame working assumptions. It is a sign of the times that so many business forecasts are being produced on such assumptions that one ingenious publisher has brought out a directory of them.

Mr. Reginald Eyre (Birmingham, Hall Green)

Will the Minister think about those figures against the background of reality in the large towns and cities, where unemployment has grown and continues to grow, with the difficulties encountered by big companies? In those circumstances, is it not right that the best hope of creating more jobs lies with the small businesses? Will he realise that any small benefit which might have come from the Inner Urban Areas Bill has been cancelled by the Government's increased levy on jobs—the 1½ per cent. payroll tax—which has lessened the prospects of new jobs being created in those small businesses? Will he take account of the importance of those policies when he is talking theoretically about unemployment figures?

Mr. Walker

That speech would have been better made in the debate. My right hon. Friend the Secretary of State could then reply to the points that the hon. Gentleman has raised. If that is to be the kind of intervention I receive, I may not be able to abide by Mr. Speaker's injunction about short speeches. However, I shall take up some of the hon. Gentleman's points as I make progress.

Mr. Anthony Grant (Harrow, Central)

Will the hon. Gentleman give way?

Mr. Walker

No. Perhaps the hon. Gentleman will forgive me for not doing so. We have been asked by Mr. Speaker to make short speeches. May I be allowed to continue?

Mr. Grant

For clarification—not an intervention.

Mr. Walker

If the attempted intervention were to be half as short as the last intervention, it would be a jolly good speech in its own right. I must get on.

The real difficulties about forecasting lie outside the models that are hypothesised by economists. They arise from the impossibility of knowing the extent to which what seem at one point in time to be reasonable plans and expectations can be realised.

I will give some illustrations. World trade expansion for example, must be a major factor in the Government's economic strategy to secure a return to full employment and sustain economic growth. We seek, in co-operation with the other major industrial countries, at the summit conference at Bonn, and in the EEC and OECD discussions, to revive and to expand world trade. Yet none of us can know how successful the eventual outcome might be. All that we can say is that other countries are as anxious to reduce their unemployment as we are to reduce ours, and rest their hopes of doing so on an expansion of world trade.

Mr. Ivan Lawrence (Burton)

Will the hon. Gentleman give way?

Mr. Walker

No, if the hon. Gentleman will forgive me. I have been interrupted continually before I have been able to utter more than two or three consecutive sentences. If Tory Members want me to express the Government's view on the debate so far, they will have to let me get on with it.

We have sought to revive economic activity by the £2½ billion stimulus by way of reliefs in personal taxation that were provided for in the April Budget. In that way we have given proof of our determination, and we must expect our friends in other countries to apply their own appropriate measures. However, the extent to which their efforts will produce the desired result is beyond accurate prediction.

Everyone accepts that excessive inflation injures employment. The hon. Member for Brentford and Isleworth touched on this point. The Government, supported by the trade union movement, have brought down the rate of inflation from 27 per cent. during 1975 to 7.4 per cent. now. We aim to bring it lower. An important factor in achieving the present level and a lower level is bound to be the attitudes and the response of unions and management. Here again, exact prediction is out of the question, but we shall go on seeking to sustain and to build on what we have already achieved.

Crucially important to future levels must be industrial policy. We must all aim to make British industry competitive so that it will win a larger share of domestic and overseas markets. Yet here again success depends not solely on the Government but on the response of industry itself—both unions and management. We have initiated the industrial strategy exercise and we have provided financial incentives to investment and to modernisation and to the restructuring that is needed to improve industrial efficiency. There are signs that industry is responding. On the latest available estimates, Britain's share of world exports of manufactured goods rose from 8.8 per cent. in 1976 to about 9.25 per cent. in 1977.

The results for 1978 and 1979 will depend on the continued efforts of all sectors of industry. I believe this is the surest—I am sure that the hon. Gentleman was in some way saying exactly the same thing—way to reduce unemployment, by providing that strong base in manufacturing industry from which alone we can secure the expansion of our health, our education and all the other important social services which our people have every right to expect.

The hon. Gentleman was right to stress the importance of small firms. He was right to express the view that we would share his view. Of course we look for an expansion in small firms. The Chancellor of the Duchy of Lancaster announced at the time of the April Budget a number of financial measures designed to help small firms. We shall continue to seek ways of helping them to expand.

In the assisted areas and in the inner city partnership areas my Department has introduced the small firms employment subsidy. Although the subsidy was operating on an experimental basis only until June, it has already helped a number of small firms to expand. It is now open to a much larger range of firms, and it will give greater help.

I reject entirely the allegation that firms have been deterred from recruitment by the employment protection legislation. The report of the Policy Studies Institute has effectively answered that ridiculous charge. The hon. Gentleman alleged that the review by the Institute had not included the smallest firms, those with fewer than 50 employees. He knows full well that together with the review carried out by the Institute my Department instituted a study of the smaller firms, the report of which we are still awaiting.

The Institute's report pointed out that the most onerous piece of employment protection legislation for the firms it had consulted was the unfair dismissals provisions which were introduced, not by the Employment Protection Act or by the present Government, but by the Industrial Relations Act 1971. It strikes me as extraordinary that all these years have passed with those provisions operating year in and year out without Tory Members making any complaint until this Government start to improve them and operate them through their own legislation.

Mr. Tebbit

What about the rest of the Act?

Mr. Walker

I should like to hear from the hon. Member for Chingford (Mr. Tebbit) during the course of the debate, and perhaps from the right hon. Member who is to wind up the debate, whether the Employment Protection Act is so unsatisfactory and, if it has such damaging consequences, exactly what they propose to do. The right hon. Member for Lowestoft (Mr. Prior) has undertaken that he will not introduce any major changes without full consultation. That is a very interesting statement, because it carries the implication that there will be major changes. If the Tories ever have the opportunity to practise what they are now preaching, I hope that the consultation will not be the kind of consultation which Lord Carr carried out with the Trades Union Congress on the Industrial Relations Bill. There was consultation in that case, but the basic proposals were unchangeable and inviolable.

Mr. Tebbit

rose

Mr. Walker

I will give way in a few moments if the hon. Gentleman wants to tell me whether the reported changes that may be part of Conservative Party policy are in fact accurate and reliable. For instance, there is a report in that usually reliable newspaper the Financial Times to the effect that the right hon. Member for Lowestoft has told the 1922 Committee of the Tory Party that he is in favour of exempting young people under 21 and firms with fewer than 50 employees from the scope of the Employment Protection Act. We learn that the right hon. and learned Member for Surrey, East (Sir G. Howe), the Shadow Chancellor of the Exchequer, wants to create buccaneering zones where certain provisions of the Employment Protection Act should not apply. Are these the changes that the Conservative Party is proposing to put before the electorate? Are these the changes that will form part of Conservative Party policy? Hon. Members opposite are silent. I must assume that their silence denotes assent.

Mr. Tebbit

May I advise the Minister, in the classic words, to wait for our party's manifesto and see? In the meantime, if he wants to ask me—-in fact, he did ask me—I will tell him that I think that it would be highly beneficial if exemption were granted to firms employing fewer than 50 people, because there are a number of firms in my constituency which would then be ready to take on more labour than they are now. So I would favour such exemption being granted.

My intervention is designed to point out that the whole of the Industrial Relations Act had to be taken as one. The hon. Gentleman cannot complain, if he takes bits out of it, that they do not have the effect that the whole Act would have had if it had been worked altogether, with a little co-operation from his friends.

Mr. Walker

We now know where the hon. Gentleman, at least, stands. He would be in favour of the exemptions, and I gather from what he says that he would be in favour of the resurrection of the whole of the Industrial Relations Act. Some people are incapable of learning from history. But I take the silence of the Opposition Front Bench as assent to the proposals which I read out—that in some inner city areas there should be exemption from the provisions of the Act, that people under the age of 21 should be excluded and that workers in firms employing fewer than 50 people would be, excluded.

I am prepared to give way to the hon. Member for Brentford and Isleworth if he will tell us frankly and straightforwardly whether those are the changes which the Tories propose or whether he will suggest, as his hon. Friend the Member for Chingford did, that we should wait and see. Otherwise, I shall get on with my own speech.

Mr. Hayhoe

May I deal with the Minister's misquotation? He referred to my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), the Shadow Chancellor, and purported to quote from a speech which he made, I think, in east London a little while ago. That speech is on the record. It would be better if the Minister read the whole speech. He would then understand that he has been misrepresenting what my right hon. and learned Friend said.

Mr. Walker

If the hon. Gentleman is now giving us an assurance that what I have read—

Mr. Hayhoe

Read the speech.

Mr. Walker

The hon. Gentleman suggests that I should read the speech. I shall read it on the assumption that what I read represents official Conservative Party policy.

I turn now to the special measures which we have introduced. I shall not go into great detail because, when we debated these matters as recently as 4th July, my right hon. Friend set out very fully what the special measures had produced in the way of employment opportunities and the number of jobs which they had saved.

Mr. Wyn Roberts (Conway)

Will the Minister give way?

Mr. Walker

I ask the hon. Gentleman to forgive me. I cannot allow hon. Members to use my speech as a vehicle for making their own.

The special measures are at present supporting over 300,000 jobs or training places, and as they develop we plan to extend them to 400,000 by 1979. I was a little concerned to note the lack of support for the special measures evinced by the hon. Member for Brentford and Isleworth compared with what he has previously shown and his lack of recognition of their beneficial effects, especially in training.

I come next to the recently introduced youth opportunities programme and the special temporary employment programme. Here again, it is difficult to predict just how useful they will be because so much depends on local initiative and co-operation. But the youth opportunities programme should help with the summer school leavers—whose addition to the register in July was the major cause of the July increase in the register over June—when the programme is opened to them on and after 1st September.

We expect that by September the youth opportunities programme will be supporting about 130,000 school leavers in training and in work experience. It is good to note that, despite a larger number of school leavers this year compared with last year, the number on the register so far is less than it was last year. We expect the youth opportunities programme to help about 234,000 young people in a full year, and the figure for the special temporary employment programme will be about 25,000 temporary jobs. But, again, all this depends on the Manpower Services Commission receiving the support and co-operation of local communities.

The Government have circulated for comment proposals about a new short-time working scheme. No firm decisions have yet been made about the scheme because the necessary consultations are still in progress. But a decision to introduce such a scheme would obviously affect further levels of unemployment by keeping off the register people whose firms were experiencing difficulties which could cause temporary or permanent layoffs.

I readily acknowledge that, in part, the hon. Gentleman's speech sought to be constructive—certainly, in rather greater measure than the speech of the right hon. Member for Leeds, North-East (Sir K. Joseph), which I have carefully read, when he opened the debate on 4th July. I hope that the debate today, instead of being taken as an opportunity for a mere exercise in Government-bashing or Labour Party-bashing, will be used in an attempt to focus attention on constructive ways to help the unemployed.

I read the right hon. Gentleman's speech with great care because I assumed that it represented the Opposition's policy and reflected the measures which they might take, given the opportunity to do so, to help the unemployed and to reduce the level of unemployment. Unfortunately, I was not able to hear it, but I have to say that, on reading the speech, I find that it carries some echoes of the speeches which we heard both in the House and outside immediately prior to the 1970 General Election. Very much the same philosophy was embodied in it as figured in the speeches which we heard on those earlier occasions and which, after that General Election, the Tories sought to implement, with the consequence that two years later unemployment had doubled. There was an increase of nearly 100 per cent. I have given the unemployment figures from the official record in the Department of Employment Gazette. The policy outlined in the right hon. Gentleman's speech seemed to consist of the following elements, some of which were echoed by the hon. Member for Brentford and Isleworth today. First—this is common ground in all Tory speeches—there would be cuts in taxation, both personal and corporate. Second—my hon. Friend the Member for Sowerby (Mr. Madden) challenged the Opposition on this, and I must tell him that I draw the same conclusion from the speeches of the right hon. Lady the Leader of the Opposition—there would be total abandonment of any pay and prices policy other than for the public sector. That I see as the next element in Tory policy.

Third, there would be swingeing cuts in public expenditure. Fourth, the Tories would carve up and fillet, as we heard again today, our employment legislation. Fifth, they would cut, if not cut out entirely, subsidies and grants to industry and commerce.

The hon. Gentleman seemed to want things both ways, and I must tell him that what he said today about subsidies was not altogether consistent with the line taken by his right hon. Friend on 4th July. I shall quote now some fragments which I quickly noted in the right hon. Gentleman's speech. Referring to subsidies and grants, he said: In aggregate, we believe that these subsidies and grants do more harm than good. They will not make us more competitive… We believe that subsidies and grants and, indeed, the industrial strategy distract management and workers from the key task of putting their own house in order by co-operation between themselves… We believe that the impact for harm via higher taxes and higher interest rates of all these subsidies and grants is greater than the impact for good… Anyway, these grants and subsidies may rescue some jobs but only at the cost of other jobs."—[Official Report, 4th July 1978; Vol. 953, c. 255–6.] If that was not spelling out the greatest distaste for and rejection of subsidies and grants, I do not know what it was. The right hon. Gentleman could not have put it more clearly.

Mr. Wyn Roberts

Will the Minister give way?

Mr. Walker

The hon. Gentleman will have a chance to make his own speech. If he wishes to criticise my speech, he will, no doubt, seek to catch the eye of the Chair.

Those five main proposals are put forward by the Conservative Party as its prescription for full employment. In fact, they are nothing but crude assertions, unsupported by economic analysis, the only sure consequences of which will be a fattening of the bank accounts of the well-to-do friends of the Conservative Party and a dramatic deterioration in industrial relations.

As I have said, these nostrums echo and re-echo the ideas which were advanced by the leaders of the Tory Party in the run-up to the 1970 General Election and they are ideas which, when implemented then, had disastrous effects on both employment and industrial relations. If they had those effects then, what makes the Opposition believe that they will have any different effect in the future?

Let us look briefly at some of the components of Tory philosophy. I take, first, the abandonment of subsidies and grants. I have already quoted what the right hon. Member for Leeds, North-East means by that, which is rather different from what was said by the hon. Member for Brent-ford and Isleworth. Does the abandonment of subsidies and grants mean the abandonment of regional policy as practised by the present Government and their predecessors? Does it mean that Scotland and Wales, Merseyside and Sunderland, for example, will be put on a par for assistance or non-assistance with, for example, High Wycombe and Guildford, where the unemployment rates are a fraction of those in the areas that I mentioned earlier?

Does it mean that Rolls-Royce should, after all, have been allowed to collapse, and that British Leyland should not be assisted? Or perhaps there are those on the Opposition Benches who believe, following the small firms philosophy, that British Leyland ought to be dismembered into small units of 50 or fewer. Does it mean that Chrysler should not have been assisted?

There are those among us in the House who believe that the introduction of the Industry Act 1972, which empowers us to use and to apply this assistance, meant that the Conservative Party had learnt the lessons of the follies of the early 1970s. But it seems that there are some people who are completely incapable of learning from their own experience and from history and who want to repeat their follies of the 1970s.

The hon. Member for Brentford and Isleworth says that the Opposition are in favour of the temporary employment subsidy and that they would not ditch it. But it seems to me that that view is wholly inconsistent with the views that were being expressed on 4th July by the right hon. Member for Leeds, North-East. No doubt if I am wrong and if there is confusion or some ambiguity of meaning, the hon. Member for Glasgow, Cathcart (Mr. Taylor) will put the issue beyond doubt. I am glad to see that he is indicating that he will do that. We shall look forward to that.

How these cuts in assistance can save jobs has not yet been explained. But of course, implicit in the views expressed by the hon. Member for Brentford and Isleworth this afternoon is that the cuts in assistance will make resources available for tax cuts. Then the theory goes that the jobs that have been inevitably lost in the Chryslers, Leylands and Rolls-Royces will be a worthwhile sacrifice if the subsequent tax cuts encourage industrial investment. But tax cuts were tried for this purpose by the previous Tory Government, and they did not work. The then Prime Minister had to go to—what was it?—the packed lunch occasion at the Institute of Directors to say to them "We have done all that you asked. We have cut the taxes. We have cut Government spending, and so on. How have you responded? You have done nowt."

What reason have we now to believe that the position would be any different in the future? The fact is that industry and commerce on that occasion just pocketed the money and left unemployment to stagnate as it was.

Perhaps the Tory Party believes that as a consequence of providing for greater personal spending, by reducing the levels of taxation, by removing fiscal restraints and restraints on pay, there will be a greater demand for consumer products and hence more work available for British industry and commerce. Certainly demand will increase. But it is wide open to question whether that increased demand will result in more orders for British industry. On past form of the Conservative Party, and we know that the only certain think will be an upsurge of imports and a return to balance of payments crisis, and, in the main, the extra employment generated will be generated not in the United Kingdom but in Japan, Taiwan or Korea.

In short, we shall be importing unemployment and at the same time fuelling inflation. We shall be fuelling inflation, first, by injecting excessive purchasing power into the economy through unwise and unwarranted tax cuts, and, secondly, by introducing a private sector free-for-all in wages. When we add the industrial relations consequences of the attacks proposed by the Conservative Party on the employment legislation, the cuts in aid to industry, the cuts in MSC spending, the introduction of hotel charges in the National Health Service and the proposed increases in council house rents, it is difficult to see how the social and economic climate that will ensue from that can be other than wholly unfavourable to business confidence and to the growth of investment and jobs.

I believe that, despite the enormous difficulties, the Government's policies to deal with unemployment are showing signs of success. I have referred to the growth in the labour force—almost static between 1966 and 1972; increasing now at the rate of about 170,000 a year. A good deal of this growth has been due to the increasing number of married women who have been entering the labour force for the first time or returning to the labour force and therefore playing a larger part in the unemployment figures than they did in the past, particularly as there is now more inducement for married women to register as unemployed because of the withdrawal from newly married women of the option to drop out of national insurance.

We have had to contend with the most severe recession of the whole post-war period, yet in spite of this the latest employment figures, as the hon. Member for Brentford and Isleworth acknowledged, suggest an upward movement. The trend rate of unemployment has been going down between September 1977 and June 1978. The slight rise in the July 1978 seasonally adjusted figures is too small to be regarded as a change in trend. It is possible that the seasonal adjustments do not yet take full account of the changed pattern of female employment and its effect on the register.

Of course, there can be no room for any complacency whatsoever so long as we have a figure of 1½ million people unemployed. That figure is too serious for that. I readily acknowledge and assert that the downward movement is far too slow. But given the support of workers and management for the Government's policies to reduce inflation and to improve British industrial competitiveness in a world emerging from recession, I see no reason why unemployment should not continue to fall.

I close my speech by doing something which I have always refused to do myself and have urged other Ministers not to do. That is to make a prediction about unemployment. That is to assert now, to make a forecast, that certainly in the short term, by the autumn, the numbers of jobless people will fall and will continue to fall.

5.6 p.m.

Mr. Geoffrey Rippon (Hexham)

With respect, I feel that what the Minister said today is not adequate to the situation. He adopted a rather narrow statistical approach and he skated entirely over the great issues which are so fundamental to the good economic health of the country and so to employment.

The one thing that is certain concerning jobs, is that we have gone a long way downhill since the Chancellor of the Exchequer asserted at the last General Election that any party which contemplated unemployment at a level of 1½ million was a party unfit to govern.

However one defines the statistics, the fact is that since the present Government took office, unemployment has doubled. An extra person has joined the dole queue every three minutes. Even more disastrously, youth unemployment has risen by more than eight times over the level that it was three years ago.

We have been told, albeit extraordinarily reluctantly, of a Treasury forecast of 1,750,000 unemployed—not in the autumn but next year. The Prime Minister has said that that has now been revised downwards, and that has been confirmed by the Minister today. One thing is absolutely certain. That is that if the forecast had been, let us say, for 750,000, it would have been trumpeted to the ends of the earth. We would not have heard the Minister talking about the difficulties of forecasting.

But what experience we have shows that the Government's downward revisions are usually inaccurate. The Chancellor of the Exchequer said that Britain would have 1 million unemployed in 1975. In act the figure reached over 1 million—1,100,000. He then said that there would be a continuous fall in 1976. In fact, the figure reached 1,400,000. So he then said in 1976 that the Government aimed to reduce the jobless figure to 700,000 in 1979. Now we hear that it could be 1 million more. The Minister may well say that some of this forecasting proves to be very difficult and inaccurate.

These basic facts of high unemployment in the nation as a whole are reflected in the regional figures. The unemployed in the northern region, my own region, are up from a monthly average of 62,000 in 1973 to over 115,000 this year.

In his television broadcast last week, the Prime Minister implied—and the Minister has done the same thing today—that this is in large measure due to the general world recession. As my non. Friend the Member for Brentford and Isleworth (Mr. Hayhoe) said, there is some truth in that. I shall turn to the international aspect later in my speech. But it is quite wrong to believe that some of the remedies are not in our own hands.

In the television broadcast the Prime Minister referred rather complacently to his hopes that with the pound growing stronger the economic position would improve. What is this about the pound growing stronger? It is a totally misleading statement, because the pound is growing stronger only because the dollar is falling. It is not growing stronger against the deutschemark or the Swiss franc or currencies in a similar position. Indeed, the effective exchange rate of the pound has fallen by about 5 per cent. since the beginning of the current year. That was the figure given to us last week by the Chief Secretary to the Treasury.

That, coupled with rising interest rates, is discouraging private investment and lending credence rather than otherwise to the gloomy Treasury forecast. The truth is that Socialist budgetary, taxation and economic policies are all fundamentally unsound. The need for real productivity and real growth can be met only by a fundamental shift in the thrust of those policies—for example, in the basis of taxation, in particular from direct to indirect taxation, with a greater emphasis on incentives.

What is most relevant about public expenditure is not so much the total—although that is admittedly too high—but the balance between productive and nonproductive expenditure, between annual and capital expenditure and between public consumption and public investment. In the short term, there may be much to commend a job-creation and job-saving scheme, which may help approximately the numbers to which the Minister referred. But we must bear in mind that it is short term and is costing gross this year £530 million.

At the best, such schemes are only palliatives. They may be necessary in the short term, but they certainly do not get to the root of the problem. Not to have the defence cuts might well be one way in which to create more jobs. That would be more effective and certainly more in the national interest than almost any other restoration of public expenditure.

What I have said about the short term applies equally to unemployment benefit, which I suppose is costing well over £1,000 million a year more than at the time of the last Conservative Government. It is paid to people who ought to be working, either because they want to work or because they ought to. It is unproductive expenditure. It would be better to spend a good proportion of that money on public capital expenditure in so far as that creates a real national asset and contributes to a real increase in productivity and wealth. For example, it would be proper to spend a little more on building an airport. The Government might start by improving the Newcastle airport at Woolsington. What is more, if the Department of Trade were not so slothful and unhelpful in the matter, we could get sonic money from the Community to help.

One of the main reasons why unemployment has doubled in the northern region is that by their policies and objectives the Government have demoralised the construction industries, which they now foolishly threaten with nationalisation. I was particularly concerned to see the figures for unemployed craftsmen in the northern region, which are nearly 20 per cent. up on the same period last year. It is no wonder that the northern counties region of the National Federation of Building Trades Employers has expressed "keen disappointment" that nothing was done in the Budget to improve existing capital allowances for industrial building or to introduce capital allowances for other commercial buildings. The Minister says that the Government are making some progress in this direction. That is the right thrust of public expenditure.

Rather than spend vast sums of public money on subsidies, grants and unem- ployment benefit, the Government might well do better to increase investment, particularly in new building. In so far as I have some experience in these matters, I have found that the construction industry is a very good indicator of the economy but a very bad regulator.

The housing programme has declined under a Government who in February 1974 pledged themselves, if elected: to reverse the serious fall in the housing programme under the Government"— the Tory Government. In fact, the housing statistics show that housing starts were down by 60,000 in 1977 compared with 1973, and over the whole period the average starts are down by about 40,000 a year.

Too little is being spent on new building work, whether housing, hospitals or schools. For example, the Department of Education and Science has confirmed that no increase in the school building programme will result from the extra £40 million which has been made available this year for education. In other words, the public expenditure is going on extra administration rather than extra construction, productivity and employment. Therefore, by their mismanagement of domestic policies the Government have gravely aggravated the problem of widespread and growing unemployment.

There remains the valid argument on which the Minister relied heavily this afternoon, that only international cooperation on a broad basis can cure the current world depression, which undoubtedly affects us all. Here the Prime Minister has recently been expressing the pious hope that the recent meetings of Heads of State and Government in Bremen and Bonn will have a favourable influence. The Minister said today that world trade expansion was the Government's aim. He also referred to the summit conferences. There are two features of the Bremen communiqué in particular which we can certainly take to heart. I am sure that some Labour Members will note them particularly.

First, there was the denunciation of protectionist policies. I am sure that in the context of curing unemployment the Prime Minister was right to declare it as a benefit of the summit meetings—though he called it "a negative benefit"—that we had not gone further down the road to protection. Secondly, we should welcome the conclusion of the Bremen conference that preserving and improving the competitiveness of industry and increasing its innovativeness are important requirements for a higher level of economic growth and the creation of new jobs. There is no other way in which to deal with the economic and employment problems of this country.

Mr. Alan Clark

I was rather surprised to hear my right hon. and learned Friend dismiss protectionism in the same manner as the Prime Minister did, as something so universally agreed to be bad that it should be rejected without further inquiry. Is it not an accepted fact that protectionism harms surplus countries and is of benefit to deficit countries such as our own?

Mr. Rippon

I take the Prime Minister's view. I think that the right hon. Gentleman is right about that matter. I think that the Bremen conference was right in stressing the importance to a trading country such as Britain of a generally liberal trading policy. There are people who dissent, but that is my view.

For the rest, I think that the outcome of the Bremen meeting would have been more comforting if the Government had reacted more positively and constructively to the proposals for a zone of monetary stability. However, it appears that—no doubt this can be confirmed—having tried for a whole day to prevent the publication of the annex to the Bremen declaration, which covers this point and deals with the creation of a European currency unit and the establishment of a European montary fund, the Prime Minister finally gave his agreement in principle—and that despite pressures from certain London circles, notably the Treasury. Indeed, according to reports, it seems that at one point the to-ing and fro-ing between London and Bremen was so great that there was a communications breakdown.

The truth is that even those who are frightened about the idea of monetary union—which the creation of a European parallel currency does not entail—must recognise that we need in Europe a common monetary policy at the very least in the sense of accepted monetary disciplines. Therefore, I hope that the Labour Party will back the Prime Minister in his general welcome to this. It is a pity the Government were hot-footed over it, but in the end the Prime Minister seems to have taken the right general course.

These matters cannot be decided even in a European context. One must have a broader view. We need in Europe a strategy on a historic scale which will make a decisive impact on world trade expansion, to which the Minister referred, and three inter-related problems: first, the decline in industrial production and the consequently high level of unemployment; secondly, the commercial uncertainties which result in particular in the present instability in exchange rates; thirdly—and this is of fundamental pyschological importance—the general lack of faith in future economic development on the part of both Government and business.

Those problems cannot be solved in isolation. That is why I and my colleagues in the European Parliament have been arguing for many months for a European economic recovery plan on the scale of the Marshall Plan, carried out in conjunction with the elaboration of a European monetary co-operation built on a European exchange area, anchored to a European parallel currency. That involves co-operation with the other industrialised countries and the IMF, and therein lay the significance of the Bonn summit.

The communique is a bit depressing. If it had appeared in Punch it would have looked like a parody of all its predecessors. It is marvellous that the Japanese Prime Minister said that he would "strive" to increase imports. He does not have to "strive" too hard—he just has to allow them. However that may be, Bonn at least recognised the nature of the problems that we have to meet, including the almost unending consumer demand of the developing world.

It is only by taking a major international initiative based on our membership of the EEC that we can unblock both the GATT negotiations in Geneva and the North-South dialogue in Paris and so make a genuine move towards general economic recovery. That is what is entailed in the world trade expansion that the Minister so casually referred to as the answer.

There are timorous spirits who say that such a recovery plan would create added competition at a time of under-used capacity. The nature of the argument put forward by the protectionists is that we must put up the tariff barriers to protect our own industry. But that way failed disastrously in the 1930s and it would fail again. Indeed, the same fears were expressed by firms and industries in the United States at the time of the Marshall Plan and proved completely unfounded. In the event, the general economic growth and the added consumption which resulted created new markets and generated new exports.

That is what we should be thinking about in Europe today, particularly in the context of enlargement of the Community. If we raised the consumption of the countries which now seek to join the European family, we would find in the end that the act of generosity would benefit us as much as it did the developing countries of the world and the new applicants for entry into the EEC.

What I most regret about the Bonn summit is that it gave little sign of the surplus countries deploying their surpluses as part of the process of removing the imbalances of the deficit countries. There is no sign of our turning our eyes to the needs of the poorer countries so as to ensure their development and political stability, so creating new markets and new employment for ourselves. There is still no definite sign of a new monetary and economic security comparable to that enjoyed after the war under the Bretton Woods agreement.

The Minister of State referred to the present Chancellor of the Duchy of Lancaster, my distinguished successor in that office, and the contribution that he has made to small businesses. I wish that the Minister would look at what the Chancellor of the Duchy said in the debate on trade and industry on 26th June. The Chancellor of the Duchy—and this is rather anomalous—speaks like a Conservative while still voting as a Socialist—but he does make sensible remarks. For example, in that debate he said: Bretton Woods went out of date, but it is miles in advance of the near-anarchy that marks the system now prevailing in the world. The right hon. Gentleman ought to have a word with the Chancellor of the Exchequer and the Treasury about that be- cause their dismal reaction to the Bremen initiative was enough to strike terror into the bravest hearts and could have given comfort only to the Kremlin.

Above all, we do not have from this Government in their initiatives any sign of what the Chancellor of the Duchy called the vision and generosity that characterised the Marshall Plan. He went on to say in that debate: The great lesson of that plan is that though it was the most imaginative and generous act of enlightened self-interest in world economic history…there is not one citizen of the United States who is worse off economically or politically by that remarkable act of vision and generosity. Looking forward to the meeting at Bonn, the right hon. Gentleman added: The great lesson for the Summit is that vision and generosity between trading partners and allies pays in the modern world. It does not cost one money. It is that vision and generosity that I hope to see greatly in evidence as a result of the Summit deliberations".—[Official Report, 26th June 1978; Vol. 952, c. 1178.] By that test, I believe that the summit has failed.

Mr. Frank Hooley (Sheffield, Heeley)

The right hon. and learned Gentleman is pursuing an interesting argument, but is he aware that the major proponents of this European finance zone, the Germans, are precisely the people who have been most lacking in the vision and generosity that he is talking about? They are the people who built up these gigantic surpluses and their record on overseas aid is certainly inferior to ours and inferior to that of many other European countries.

Mr. Rippon

I wish that the British Government were in a better position to put that argument. If our own record were better we would be more effective. I and my colleagues in the European Parliament have said just that. That is why I am saying now that the Bonn summit does not go far enough, not that it goes too far. The truth is that the British Government have let us wallow in the shallows in Europe and elsewhere for far too long. We should have some sense of pride, purpose, vision and generosity ourselves that would enable us to make to the Germans and others the very criticism that the hon. Gentleman now makes.

Thank heaven, there will soon be a Conservative Government who will be able to show the vision and the generosity and the sense of purpose that alone will enable us to do what the Minister says—play Britain's effective role in an expansion of world trade and so, by contributing to the general growth of the world economy, solve many of our own employment problems.

5.27 p.m.

Mr. R. C. Mitchell (Southampton, Itchen)

I am pleased to follow the right hon. and learned Member for Hexham (Mr. Rippon) because he stressed the international and European aspects of the unemployment problem. I represent an area which depends for its prosperity or otherwise noon the level of international trade. We are particularly susceptible to world economic recessions. It is an area where throughout the 1950s and 1960s the unemployment figures were well below the national average. During the 1970s, however, they have grown steadily. Now they are above the national average.

I accept entirely that the figures are nowhere near as bad as those in the constituency of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), on Merseyside, and in other parts of the country. Yet the figures are quite traumatic because many people now unemployed in my area have never known before what unemployment is until the last five or six years. It is a traumatic experience for them.

The figures would be a great deal worse but for the fact that in the area are a great number of firms with considerable export orders. One of the largest employers is Vosper Thornycroft, three-quarters of whose work is for export. We export naval ships. I know that occasionally some of my hon. Friends do not like us doing it to dreadful places like Argentina and Brazil and we get resolutions about it, but three-quarters of Vosper Thornycroft work force is employed on export work and the other quarter on work for the Royal Navy. One of the reasons why I have never joined those in this House who have called for drastic reductions in arms expenditure is that it means jobs.

Because my area is so dependent on exports and is doing very well in exports, I reject the alternative strategy, so called, put forward by a number of people, par- ticularly on this side of the House. I do not believe in import controls in the form in which they are put forward because I believe that there would be considerable, indeed massive, retaliation which would have an effect on our exports. That would not improve the employment situation but would merely transfer the problem from one firm to another or from one part of the country to another.

I put other point which I hope will appeal to my Socialist colleagues in the House. It concerns the effects of import restrictions. A year or so ago we placed a restriction on the import of shirts from Portugal. Understandably, a large number of hon. Members, particularly those representing textile areas, said "Hear, hear". I was in Portugal recently and had an opportunity to talk to its Socialist Prime Minister and several other Ministers. I was asked "Do you realise what was the effect in Portugal of that action by your Government?" I was told that almost overnight it put out of work a considerable number of Portuguese workers.

We have to remember that Portugal is a country with much greater economic problems than we have here. It is a much poorer country. All we achieve by import restrictions and restrictions of trade is either to transfer unemployment from one country to another or from one part of our own country to another, or from one firm to another. I do not think that any benefit at all can come from that sort of policy. That is why I reject out of hand the protectionist argument which has been put forward by so many people at one time or another.

Mr. Doug Hoyle (Nelson and Colne)

Representing a textile constituency, I have a very keen interest in the textile industry For many years, too many people have been prepared to see unemployment in the textile industry in this country, without doing anything about it. For far too long we have been subject to cheap imports, and in many instances the people who have benefited have been the multinational companies, and not the workers employed in the developing countries.

Mr. Mitchell

I recognise the strong fight that my hon. Friend, ever since I have known him in this Parliament, has put up for the textile industry. The point I was making was that the effect of what we did was to transfer unemployment from here to Portugal, which is a poor country. That had an even more serious effect than a similar action taken by some other country would have had here.

At least some of my hon. Friends have put forward an alternative economic strategy, but I heard no alternative policy whatsoever put forward by the hon. Member for Brentford and Isleworth (Mr. Hayhoe) from the Conservative Front Bench today. There were some interesting suggestions made by the right hon. and learned Member for Hexham. Perhaps it is significant that he speaks from the Back Benches.

Mr. Lawrence

It will not be for long.

Mr. Mitchell

I would rather see the right hon. and learned Member for Hex-ham on the Conservative Front Bench than many of the people who speak from it at the moment. The right hon. and learned Gentleman made a very interesting suggestion. He talked in a Keynesian sense about public works. He knows as well as I do what has happened in Luxembourg, which is only a small country. The Minister to whom we were speaking there the other day was boasting that only seven people in the whole of his country had been out of work for over a year. Luxembourg has suffered the same sort of recession that we have had in the steel industry, and Luxembourg is very dependent upon that industry. Instead of putting the steel workers on unemployment benefit, the Government have negotiated an agreement with the unions in the steel industry, as a result of which the many steel workers who would otherwise be redundant have been placed in public works jobs throughout the country. A substantial programme of public works—roads, bridges and so on—is being carried out at the moment. The difference in the wage rates paid to these workers has been made up, I understand, by the steel industry.

I do not know whether it would be possible in this country, with the division of responsibilities and labour that we have, to employ our steel workers in that sort of way when they are not required in the steel mills. But it is interesting to consider that example of what a small country has done in tackling unemployment.

We have been told about the figure of one and a half million unemployed in this country. I do not want to be misinterpreted in what I now say, but it is quite interesting that in several areas in which there is a considerable level of unemployment there are also a considerable number of unfilled vacancies. In my area there is a shortage of skilled men in several of the export industries. I am referring not only to skilled men but also to unskilled men.

There are several areas in which it is impossible to get men to do certain types of jobs. The reason is fairly simple. We tend to have in this country a low-wage economy. We tend lo have a large number of people employed at very low wages. As a result, the difference between what a man receives on unemployment benefit—particularly in the early period, when there is earnings-related benefit—and what he receives when he is at work can be very small indeed. There was an article on this topic in The Sunday Times only this week. It deal with unemployment in the Merseyside area.

There are people who say "What is the point of working when my social benefit is £40 a week and my maximum take-home pay is only £45 for a full week's work?" That does not mean that unemployment benefit is too high. It is not. It is related to a basic living standard. What it means is that the wages of many people in this country are far too low.

The hon. Member for Brentford and Isleworth talked about reducing taxation as one of the means to increase employment. I should have had some sympathy with him if he and his party had moved in this House for further reductions in taxation at the lower end of the scale, instead of wanting to reduce taxation at the higher levels. If he had moved to increase the figure from £750 to £1,000 or £1,250 for the lower rate of tax, I should probably have gone into the Lobby with him. But the Conservative Party did not do that. All the Conservative Party's tax changes were to help the better-off, not to help those at the lower end of the scale.

Mr. Rippon

Will the hon. Gentleman accept that one of the difficulties with the Budget proposals is that one cannot propose increases in taxation, and that to have the effect that he wants of reducing the lower rates of tax would have meant raising the levels of value added tax?

Mr. Mitchell

The Government proposed that the first £750 of taxable income should be at 25 per cent. I should have had great respect for the Conservative Party if it had sought to raise that figure to £1,000. That would have helped the very people that we are talking about. It would have increased the incentive to work by increasing the difference between what a man receives when unemployed and his net take-home pay when working. I should like to know whether the Minister has done any investigation to find out what percentage of people are not seriously seeking work because of the fact that they would be either worse off or very little better off in work.

I should like now to look into the future. I believe that we shall be faced with the continual slow decline, because of international competition, of many of our traditional labour-intensive industries. There is not only the competition that we are meeting from Japan but also the competition from countries such as Brazil and Korea and some of the other emerging countries. This applies to the steel industry and to the textile industry, both of which are labour-intensive. I think that this trend will continue, because there is no easy way to reverse it. New technologies will be introduced and, on the whole, these are capital-intensive.

I do not think that there is much scope in manufacturing industry for a major improvement in employment. I accept the point that our problem in this country is now productivity. Whether it is the fault of labour or of management is not for me to say, but undoubtedly it is a major problem. But when I hear of two factories, one in this country and one in Germany, producing the same product, and built at the same time with the same capital equipment, and that the factory in Germany is producing 1.9 cars per man for every 1.1 produced in Britain, I have to recognise that there is something wrong.

One of the major efforts that the Government must make is to improve productivity in British industry. That would, of course, be liable in the short term to worsen unemployment. It would have long-term benefits but in the short term it would make the situation worse. I do not believe that we shall get a great improvement in the unemployment situation over the next three or four years by any of the methods which have so far been suggested. Frankly, that leaves us with one thing. In my view the only hope of improving substantially the unemployment situation in the next few years is through the public service industries, and that means public expenditure.

It is a ridiculous situation to have unemployed teachers at the present time. All my life I have argued in support of cutting down the size of classes, and so on. Teachers who are at present unemployed could be used in the education service in all sorts of ways. It is ridiculous that there are large numbers of construction workers unemployed at a time when we urgently need more houses and more building construction. This has nothing to do with the Conservative Party or the Labour Party. There is something wrong with the organisation of society. I believe that it is in the public service areas that we shall have to look for an improvement in the unemployment figures.

If that is so, then it means that we shall have to maintain a relatively high level of public expenditure over the next few years. That is why the policy of the Conservative Party, as enunciated time and time again by its Front-Bench spokesmen—that of cutting public expenditure—will make the situation far worse than it is as present.

5.42 p.m.

Mr. Anthony Grant (Harrow, Central)

The hon. Member for Southampton, Itchen (Mr. Mitchell), with his own practical experience of industry and unemployment in his area—perhaps one might note that it is in the south of England—brought a much greater degree of reality to the debate than did the wholly deplorable performance of the Minister of State. The Minister is a very nice man indeed, but I can understand his shame and embarrassment after the devastating attack of my hon. Friend the Member for Brentford and Isleworth (Mr. Hayhoe), who made an admirable speech. When I was in office, the Minister led a deputation to me about unemployment in Doncaster, and there were tears in his eyes. Today the unemployment figures there are twice what they were in those days, and he is laughing. I can well understand the difficulty in which he find himself, because by any standards the present state of unemployment is absolutely disgraceful and a scandal.

Nowadays it is fashionable in some circles to say that because inflation is our major problem, and because unemployment pay is high and, indeed, often abused, the basic problem of unemployment can be relegated to the back seat in economic and social thinking. That is very dangerously wrong. Indeed, history has shown that much of our troubles—politically, socially and philosophically—are attributable to the insensitivity shown on this subject in the last century, and certainly between the wars. I believe that the present Government, although not only the present Government, have in recent times tended to pay lip service to this question because of the social services benefits which are now, quite rightly, available.

But we do this at our peril. Unemployment can mean different things to different people. To some it is regarded only as a means of conquering inflation. Things are not as black and white as that. To others it means a lot of idle people who will not work even if given the opportunity. I do not accept that. To some it is merely an interesting exercise in computerised statistics to be mulled over around dinner at high table at universities. Of course, to the oddballs who sit below the Gangway on the Labour Benches, it is regarded as a justification for the totalitarian Socialist State which they require. But to the person who cannot find work it means a degradation of the human spirit. To young people it is regarded as an excuse to turn their backs on a society that offers them no hope.

I am not so surprised at the unfortunate episodes of football hooliganism, and even vandalism, when one reflects how hopeless seems the future for some of these people. Of course, inflation is the root cause of long-term unemployment. Of course it is dangerous to reflate in a panic in order to overcome it. Of course—I know that there is a difference of view on both sides of the House—the imposition of import controls may be regarded as the easiest solution. However, I believe, as I am happy to note do the Government, that that would be lunacy in view of our dependence on world trade as a whole.

It is true that in a free society market forces will always prevail. It is also true to say that the present unacceptably high figures of unemployment are a direct result of the Government's failure to act sooner than they did. Having said all that, I believe that my hon. Friend the Member for Reigate (Mr. Gardiner) was right to warn recently that there is no painless solution to this problem, although there is a duty upon Government to mitigate its appalling effects.

I want to direct my remarks to one aspect for which I had some responsibility—the question of unemployment being a regional problem. When unemployment rises, certain areas always suffer most. When it falls, inflationary pressures inevitably build up in the prosperous parts. The regional nature of unemployment has some very weird effects. For example, the level of unemployment in greater London today, at over 5 per cent., is as high as it was in the development areas three years ago. Yet week after week in my local newspaper there is page after page of advertisements for a wide range of jobs. What is even more odd is that there are similar advertisements in newspapers circulating in areas of high unemployment such as the north-east.

But these advertisements are largely for skills. Therefore, in my judgment a much greater effort must be made in relation to retraining as well as a much greater disincentive to those who refuse to undertake it. I do not believe that by any manner of means are retraining opportunities taken up as they should be. This must be given a much higher priority, and it requires a more imaginative approach than the Government are at present showing.

My hon. Friend the Member for Brent-ford and Isleworth was absolutely right when he said that there must be a greater degree of mobility of labour. The appalling immobility of labour, which is so damaging to our productive performance, is largely due to many years of absolutely crazy housing legislation which, as my hon. Friend said, rooted people, fixed and immovable, in places when they could find work elsewhere. To a lesser extent, I believe that our over-rigid education system prevents the mobility of labour. Therefore, it is high time that we reviewed the whole question of regional policy.

I merely make these suggestions for Ministers to consider when they are thinking about this subject, if indeed they do think about it. The time has come to rethink the whole question of bringing jobs to people rather than people to jobs. We must rethink the assisted area boundaries. For example, some of the latest figures show that the rise in unemployment in areas such as the Midlands and East Anglia is faster than in the development areas. It is also crazy to provide the same blanket benefits to the prosperous North Sea oil areas of Scotland, or for that matter for the sheep in the Highlands, as it is to west central Scotland. The present system of regional policy lends itself to a disease which I call "creeping regionalisation", which simply results in the jam—what there is of it—being spread far too thinly.

Therefore, much greater flexibility is required, provided that it is consistent with the need to give industry some degree of certainty for the future. We must remember that industry has to plan a long way ahead and that it cannot stand too much disturbance.

Again, should we continue to rely on straight cash incentives to get industry to locate in certain areas, or would really imaginative new tax incentives for both companies and individuals be more likely to encourage new growth? In this sense, I welcome the contribution to thought on this subject from my right hon. and learned Friend the Member for Hexham (Mr. Rippon). Remarkably little comes from Government supporters. However, my right hon. and learned Friend's ideas contributed some valuable suggestions.

Can we really go on with the present policy of IDCs as they are now? They have a function to fulfil at a certain level, but I believe that they have got completely out of tune with reality, certainly in London and the south-east. Can we really go on with office permits development and all this panoply which has been the thinking in regional policy for so many years and which I accept the previous Government used as well? I believe that largely they are very much out of date.

There is an even more fundamental long-term problem concerned with unemployment to which I wish to refer briefly. It is, of course, structural unemployment. We are idle if we pretend that it does not exist. Everyone says that we want investment. The Government say that they need investment, and that to get out of our difficulties we need investment. But investment of the sort necessary, which is technological investment, inevitably means more unemployment. It happens automatically. There is no hope for us in the modern world if we do not instal the machines which are used in modem industry. There is no hope for us if industry instals machines which can do the work of six men and which keeps those six men ostensibly minding a machine but in reality playing cards. In some ways it would be more honest and realistic for the State to pay them to play cards if we could afford it, which of course we cannot.

The real world has moved far beyond the thinking of this Government in this and many other respects. We delude ourselves if we imagine that in Britain we can go on creating jobs which can be done and are being done more cheaply and more speedily in other parts of the globe.

We shall have to live with unemployment for a very long time. I believe that considerable impact can be made on it, undoubtedly, by small firms. I have practical experience, and I can tell hon. Members that firms which I know and with which I am concerned would take on more employment of a modest nature but make a contribution to the problem of unemployment if some of the shackles of Government and legislation were removed from their shoulders.

But this will still leave us with a very substantial unemployment level for the future. Therefore, I do not want to resume my seat with anyone having the impression that the problem will be solved overnight. Undoubtedly a Tory Government are coming in, but it would be quite wrong to suppose that the problem will be solved overnight. It is that sort of cynicism which has created so much damage to the body politic and made people so sour in their views of Government.

In this respect, I cite a particularly disgraceful example. Of all the guilty men, the most guilty is the Leader of the House. In a debate in 1971, he spoke from the then Opposition Front Bench. At the time, we had an unemployment level of 600,000. The right hon. Gentleman said: We on these benches are determined to speak loud on this question of unemployment, day after day, week after week, month after month, until the policy is changed. Many of us were not satisfied with the policy followed during the previous six years. Many of us expressed our dissatisfaction with an unemployment total of 600,000. Many of us fought it, and we shall continue to fight it. Reshaped policies will be needed to reduce it.—[Official Report, 5th May 1971; Vol. 816, c. 1492.] How things have changed with the course of events. Now the right hon. Gentleman has the reins of power in his hands, and he has had them for four years. He has had four years in which to reshape policies. Far from being reduced unemployment has more than doubled. Where is that loud voice now? All that we hear is a puny whine and the sound of wringing of hands blaming everyone else except himself, now that he has his feet under the table and his fingers in the gravy.

It is because of this cynicism that I believe that much of our political affairs have been soured in the eyes of people. It has clone a great disservice. So I beg that none of my right hon. and hon. Friends will give the impression that this problem can be solved overnight. It is because of the cynicism of the Government over a major fundamental problem that I believe they will be rejected, for this reason among many others, by the people who hitherto have been their traditional supporters. It is for that reason that I propose to vote against this Government tonight.

5.55 p.m.

Mr. Jim Craigen (Glasgow, Maryhill)

I am interested that the hon. Member for Harrow, Central (Mr. Grant) offered no instant solution to the problem. We did not get any satisfactory outline about how we were to reduce unemployment if a Conservative Government came to power. However, I thought that the hon. Member for Brentford and Isleworth (Mr. Hay-hoe) was correct when he suggested that there would be an opting out of the democratic process unless we were trying seriously to reduce the incidence of unemployment.

I do not think the Punch and Judy debates we tend to have in this House on unemployment really address themselves to the complex problems of organising the labour market in the 1970s and for the 1980s. Regardless of one's political persuasion, there are certain obstinate population facts which will have a major impact on our employment policies in the foreseeable future. We know of the growing number of youngsters coming on to the labour market, that for the next five years or so there will be a levelling out of the number of people due to retire and that, therefore, the employment market will grow.

It is significant that in the White Paper which we are to discuss tomorrow one of the major pointers is the problem of productivity in Britain. I think it is true to say that if we are to increase our productivity, as we must, we shall have as a corollary some shedding of labour. It seems to me that this will be the inevitable result immediately, though not necessarily in the long term if we can create other job opportunities.

One of the problems which we do not always look at as seriously as we might is the way in which industry is prepared to spend a lot of money employing professional advisers and work study officers to look at means of economising on the labour content. All this has some impact on the availability of jobs in the years to come.

The hon. Member for Brentford and Isleworth mentioned the importance of the micro-processing revolution, and I think that he was right to do so. Unfortunately, I am not a scientist. Nor are the majority of hon. Members. Therefore, perhaps we do not keep abreast of these major developments which will have untold effects for our labour market.

I was pleased that my right hon. Friend the Prime Minister indicated recently that the Think Tank was to look at this problem area. I say that not so much because of any implicit faith in the Think Tank but simply because the problem is to be looked at.

One means of making more employment opportunities available is a reduction in the working week. I feel that it is logical that we should be thinking along these lines. However, like the hon. Member for Brentford and Isleworth, I, too, started off on the shop floor. I can remember how in the printing industry, when the 40-hour week was introduced, instead of getting the benefit of the four hours reduction many journeymen at the time simply worked more overtime.

Industry has not changed all that much over the years. We have 1.5 million unemployed, but the amount of overtime working in British industry has been increasing. Some plain speaking will have to be engaged in by trade union leaders if we are to ensure that there is a reduction in the amount of overtime that is worked and a consequent increase in the number of people employed.

I mentioned the White Paper containing the Government's policy on "Winning the Battle Against Inflation". In a way today's debate will dovetail with tomorrow's debate. We cannot separate the problems of employment from those of payment and pay policy. One of the basic problems in industry is boredom. We tend to measure discontent in industry by means of statistics on the number of days lost through strikes. We have no yardstick by which we can measure the level of industrial contentment in our society. I suggest that absenteeism in industry, especially in certain industries, is an index of the extent to which working men and women are often discontented with their jobs.

Trade union officials will say privately —especially the older officials who have themselves experienced the bitterness of unemployment—how hurting it is that they are spending a good deal of their time as little more than redundancy brokers. Unfortunately, they are fending off men who are prepared to sell their jobs to get larger redundancy payments. We must find answers to those problems if we are serious about employment policy.

The White Paper that was introduced last Friday seems to suggest that if we are to move towards a shorter working week that will have to be done on a firm by firm basis so that the cost may all come out of the kitty. That almost argues for the extension of industrial democracy. That is not something that the Opposition are keen to see. If the move towards a shorter working week is to proceed company by company, it will have to be undertaken by those who know what is going on in their industry or company.

It is unfortunate that another aspect of our industrial relations is the extent to which we still operate on the upstairs and downstairs basis. We still have people working on the shop floor who feel that they have nothing in common with management in the administration block. That is another factor that bedevils our employment and growth policies.

I was interested in what the hon. Member for Brantford and Isleworth said about the proportion of unskilled workers, representing about 40 to 46 per cent. of the unemployed. I tried to obtain some figures on the proportion of unskilled workers in different parts of the country. I was told that obtaining that information would be far too costly. I winkled out sonic information on the Clydeside area, where the proportion is higher than 50 per cent. I was trying to put the case that the areas with the greatest employment difficulties tend to be the areas with the highest proportion of unskilled workers.

I am glad to see that the Minister of State, Scottish Office, is on the Front Bench. I saw my hon. Friend to argue the case for an additional skillcentre for the Glasgow area. I hope that he is keeping in mind my argument about the Cowlairs estate. If we are to achieve a breakthrough in reducing the number of unskilled workers and increasing the availability of skilled workers, it is obvious that skillcentres are one means of so doing. Also important are the courses, training opportunities programme and in-plant training that some of the more progressive companies make available.

I have asked the Department of Education and Science what calculations it is making about the future schooling of our youngsters and the proportion of young people who in the 1970s and 1980s will be entering jobs that do not require a formal training. I reckon that the numbers may amount to about 40 per cent. In the light of industrial development nowadays, that would be far too high a percentage.

Earlier retirement is often argued as a means of reducing the numbers on the dole. I should like to see parity of retirement age between men and women, but I am bound to say that some firms argue that many of their most skilled and reliable men are often aged between 60 years and 65 years. That is a fact of life that has to be borne in mind.

I see no reason for not adopting more flexible practices in industry and allowing more part-time employment for the semiretired. I have in mind men in the 6065 year bracket. That is one means of trying to get the best of both worlds. It would allow job opportunities for youngsters and at the same time retain some of the lifetime experience that many older men have acquired.

Britain is not particularly good at matching supply and demand in its labour market. We tend to follow ideas from other countries—they are not always the best ideas—in the operation of our industrial training and employment policies. I still feel that there is a need for some form of commission of inquiry simultaneously to investigate the changes taking place in our education system, our labour markets and in the future job opportunities that will be available to our population, perhaps including the growing problem of relativities or differentials in industry.

The problem of relativities or differentials is hardly new. It appears in the parable of the vineyard. There is a need to re-examine relativities within British industry.

If as a nation we still believe in the work ethic, I fear that we shall be swimming against the tide if we imagine that we are to create as many new jobs in what is left of the 1970s and what we have to face in the 1980s while at the same time we have an expanding working population. We have technological changes. The white heat of the technological revolution has long since descended on us. We have a changed labour market.

We have their lordships in the House next door—I shall be careful what I say —where there is a hereditary element. I do not want to see a situation in which more and more households throughout the country have a hereditary element of unemployment. That is not something that we can afford to allow to develop, but I very much fear that there is increasing evidence that that is happening.

6.10 p.m.

Mr. Graham Page (Crosby)

The hon. Member for Glasgow, Maryhill (Mr. Craigen) has made some constructive points. I particularly want to return to some of the points that he made about training.

There have been constructive speeches by Opposition Members. Even the Minister of State acknowledged that my hon. Friend the Member for Brentford and Isleworth (Mr. Hayhoe) made half a constructive speech. I think that he made a wholly constructive speech, as did my right hon and learned Friend the Member for Hexham (Mr. Rippon).

I cannot pay the same compliment to the Minister of State. The speech that he read was not very constructive. However, I acknowledge at once that his right hon. Friend the Secretary of State for Employment has endeavoured, perhaps desperately, to be constructive over the national problem of unemployment.

But the right hon. Gentleman finds himself in a dual political personality—a Jekyll and Hyde, as it were.

As Dr. Jekyll, he administers for unemployment a number of palliatives—temporary employment subsidies, small firms subsidies, job release schemes, job creation programmes, training and work preparation programmes, job opportunity schemes and the rest—all calculated to help the country to digest unemployment. As Mr. Hyde, the right hon. Gentleman is responsible for the operation of that misnamed measure, the Employment Protection Act, he supports the £1,500 million increase in the payroll tax, he concurs in the loss of contracts by the pay policy blacklisting, he approves the corset control of the banks in their lending to private sector industry. In short, he is a member of a Government who, in four years, have succeeded in doubling unemployment.

It must be so frustrating—indeed, even heartbreaking—for the Secretary of State that the more subsidies he pours into industry and the more bright ideas that he has about job creation schemes, the higher the unemployment figure has risen.

However, the Secretary of State can congratulate himself that his subsidies and bright ideas have kept more than 300,000 people in some kind of work. I shall want to come to that point later. He can also congratulate himself that, by means of his subsidies and bright ideas, he has kept down unemployment by a quarter of a million. But what consolation is that when, even relieved of that quarter of a million, the figure is still 1½ million?

Both the Secretary of State and the Minister of State know that there is no credibility in trotting out the Labour Party propaganda that unemployment is due to world recession, not enough nationalisation and all those excuses that we have heard lately. I think that ringing in the Government's ears must be the quotation made by my right hon. and learned Friend the Member for Hexham of what the Chancellor of the Exchequer said at Preston in October 1974—that a party which contemplates unemployment on the scale of 1½ million out of work is not a party fit to govern and unite Britain.

When talking about these fantastically large figures—1½ million unemployed—it is difficult to realise the human tragedies that they create in any particular area or, indeed, in the 1½ million families affected. It brings a little more reality into the figures to think of them on an area basis.

On Merseyside, for example, where my constituency is located, the 95,107 unemployed means that one in eight of employable persons is out of work. That is what is meant by 12.6 per cent. unemployment on Merseyside. "Ah", say Government spokesmen, "but look at the trend: from 9.3 per cent. in 1975, a jump up of 2 per cent. to 11.5 per cent. in 1976 became a jump up of only 1 per cent. to 12.4 per cent. in 1977 and a jump up of only 0.2 per cent. to 12.6 per cent. this year." It is marvellous, is it not? If one states the figures quickly enough, they sound quite good. But those figures still mean that Merseyside now has one worker in eight out of work when three years ago it was one worker in 11.

And that one will be joined by many others within the next two or three months, when Merseyside will have 1,000 more school leavers and with many redundancies which are in the pipeline: English Electric 600; Courtaulds 300; Triumph 3,000; Plessey 600; Lucas 1,450 over two years; Birds Eye 450; Western Shiprepairers 625; Meccano 350; Otis 300. Those are firms on Merseyside with all those redundancies in the pipeline and heaven knows how many more from Tate and Lyle eventually. Merseyside will certainly have up to 100,000 unemployed within a couple of months.

There is an anomaly about all these figures which puzzles the public. That anomaly has been mentioned by more than one speaker in the debate. With 11 million unemployed, the profitable postal service cannot find enough postmen to make Sunday collections. Trains and buses are frequently taken off—notice being put on the stations that it is because of shortage of staff. Our hospitals have waiting lists of 600,000 because of lack of nursing and ancillary staff. No one appears to be available to deal with derelict land, boarded-up shops, vandalised warehouses, potholed pavements and to build the millions of homes that we need.

We could be almost self-sufficient in food if we had sufficient farm workers. We could bring the Armed Forces up to strength if we had sufficient recruits. We could stop the phenomenal increase in crimes of violence if police forces were brought up to establishment. With all that, we have 1½ million unemployed.

Mr. Heffer

In a few seconds the right hon. Gentleman has outlined a tremendous extension of public expenditure. Yet he and his right hon. and hon. Friends voted for cuts in public expenditure and have been pressing my right hon. Friends to cut public expenditure even more. Why are the Opposition so hypocritical about this matter? Why demand the extension of public expenditure and at the same time vote against public expenditure?

Mr. Page

I am sorry that the hon. Gentleman was not listening with his usual attention. I mentioned the profit made by the Post Office and suggested that it could be spent on bettering the service. The Opposition have never suggested that we should cut the National Health Service. I mentioned the Armed Forces. We have always said that they should be brought up to strength with new recruits. I mentioned the police. We have always said that there should be extra expenditure on the police. Indeed, the Government now agree with us. On the last point about the police, I am sure that the hon. Member for Liverpool, Walton (Mr. Heller) will agree that certainly on Merseyside people notice that the increase in the figures for crimes of violence marches hand in hand with the increase in the figures for unemployment.

Mr. Hoyle

Will the hon. Gentleman give way?

Mr. Page

Perhaps I may finish this point. I shall forget it if I do not finish it now. Two centuries ago Isaac Watts wrote those rather silly little verses about How doth the little busy bee". But one was not so silly, and it ran: In works of labour, or of skill, I would be busy too; For Satan finds some mischief still For idle hands to do.

Mr. Hoyle

The right hon. Member for Crosby (Mr. Page) is usually methodical and logical. He has mentioned expenditure on the police, increased rail services, more postmen and a better health service. He must have costed his programme. What is the cost?

Mr. Page

I cannot give that during a debate in which I have been asked to keep my speech short.

I was talking about the relationship between the figures for unemployment and crime. They produce, in some extreme political minds, a cry for bringing back conscription. Those who would like to see conscription reintroduced in order to reduce unemployment say that we should thereby take the young people off the dole, and teach them discipline and a trade. They say that it would prevent many people from being idle for so long that they lose the will to work, eventually lose the capacity to work and, after two or three years of idleness, become unemployable.

I appreciate that that is what the Secretary of State hopes to tackle with his various job schemes. But the schemes are failing in an important respect. There are not enough worthwhile jobs to which the schemes are applied. The jobs involved are not permanent. More important, the jobs do not involve the teaching of skilled trades. If all those jobs involved apprenticeships, if all the young people for whom job opportunities were found were learning a trade, and if about three times the number of jobs were available, we would be getting somewhere now and for the future—somewhere towards building up productive capacity for industry and commerce.

About £530 million is spent each year on job schemes. If in addition, some of the £1,500 million which is to be raised by increasing the payroll tax were also spent on such schemes I am sure that we could afford to subsidise a large number of apprenticeships. In that way the system could be made compulsory, both upon the employer to take apprentices and upon the employee to become an apprentice.

I know that that sounds a little like direction of labour and I know that many trade unions would object because it would increase the number of apprentices in a trade. But there can be nothing outrageous about compulsion to employ and train, or in compulsion to be employed and trained.

There is the mandatory number of disabled people an employer has to employ. There is the compulsory industrial levy. There is the cessation of dole for a person who refuses to take a suitable job. The school leaver would have time to choose a career or trade, if one made apprenticeships compulsory.

Something drastic must be done to close the floodgates of unemployment. Why can we not introduce a system of conscription for apprenticeship as some solution to our rising unemployment problem?

6.24 p.m.

Mr. Doug Hoyle (Nelson and Colne)

Opposition Members have talked about cynicism and have said that people are fed up with party-political debates in the House. And yet Opposition speakers, including the right hon. Member for Crosby (Mr. Page), have advocated increasing rather than cutting public expenditure. The right hon. and learned Member for Hexham (Mr. Rippon) called for new airport facilities at Newcastle. This is what debases politics. One of the difficulties is that it is taking place near to the time when the Opposition believe that there will be a General Election. That makes it difficult to examine the unemployment figures.

We should be talking about unemployment not in this country alone but as a global problem. I listened with interest to the hon. Member for Brentford and Isleworth (Mr. Hayhoe) and I looked for solutions from him, but I did not hear any solutions. All I heard was a description of a toytown economy. He said that the solution lay with those companies employing fewer than 50 people. There might be some scope there, but it will not solve the problem.

The Shadow Front Bench spokesmen speak with different voices. Not long ago the right hon. Member for Leeds, North-East (Sir K. Joseph) told us that all grants and subsidies did great harm. The truth is that if we cut grants and subsidies, unemployment will increase, almost overnight, by between 500,000 and 750,000. The type of speech that the right hon. Gentleman makes brings no comfort to the textile workers in my constituency. The problems go deeper than many Opposition Members seem to think. Many of their ideas are short-term solutions to a long-term problem.

Unemployment in the EEC stands at 6 million. About 40 per cent. of the unemployed are young people. In the OECD area—I do not include Portugal and Turkey-16.3 million people are unemployed. That is the scale of the problem. We should turn our attention to it.

So far no one has suggested that we shall solve the problem overnight or by a cross on a ballot paper. If anyone said that he would be misleading the people. More people are in work now than in 1972, when the Conservatives were in power. The labour force between 1977 and 1986 will rise by 6.6 per cent. Most of that extension will be made up of young people and women who will be looking for jobs. Shall we be able to find jobs for those people? I do not think that we shall, if we follow the orthodox policies that are being followed throughout the Western world.

It is estimated that if there is no change in the policies in this country and in West Germany there will be 5 million unemployed here and 5 million unemployed in West Germany by 1980.

Mr. George Rodgers (Chorley)

Capitalism.

Mr. Hoyle

My hon. Friend the Member for Chorley (Mr. Rodgers) is right. Capitalism can never come up with the answers to this problem. The problem will be intensified by the technological revolution involving the silicon chip and micro-processing. This is a second industrial revolution. We face a revolution in information technology. It will create immense problems. Yet so far in the debate no one has turned his attention to the problem that will face us, or to a possible solution. The solution cannot be achieved by this country alone. It will be arrived at only in co-operation with other industrialised nations.

We are in the era of the automated factory and the automated office. It has been possible for a long time for the large-scale mass production of cars to be carried out in an automated factory. However, the silicon chip now makes it possible to apply automation to small batch production. In Japan small factories which previously employed 700 people are now being controlled by only 10. But as this new era approaches the Opposition seek to debate unemployment for party-political purposes. That is no way to look at the future.

The president of the Telecommunication Engineering and Manufacturing Association said in March, that the change by the Post Office from electromechanical switchgear to system X would reduce the labour force in the manufacturing industry by 60 per cent. That will have dire effects for Merseyside.

Comparatively recently a system was developed by IBM known as the robot system, which is used for mechanical assembly. Computer Weekly said in February this year that it would throw out of work one in five of the people who work on the assembly of pumps, valves, compressors, radios, televisions, hi-fi, office equipment and telephone equipment in the United Kingdom.

It has been said many times that this new era will lead to the creation of white-collar jobs, but this advanced technology goes into the offices and the service industries as well as into the factories. With the development of optical fibre cables we are now, as my hon. Friend the Under-Secretary of State for Employment —the hon. Member for Newcastle-under-Lyme (Mr. Golding)—with his expertise will know far better than I, moving into the era of electronic mail. The Post Office's viewdata system could be developed in this way. One hon. Member was speaking about the shortage of postmen. He will not need to worry in the future, because this new system will put postmen out of work. The letter will be a thing of the past. In future, messages will be flashed up on to a screen, and that will eat into the 800,000 jobs of secretaries and clerks in offices.

Micro-processing systems will therefore have a dramatic and drastic effect on both white-collar and manual jobs. It is already happening in banking with the introduction of the electronic banking system. In the supermarket the girl taps up the bill on a register which at the same time operates the stock control system, so that stocks are automatically adjusted.

These are the sort of developments that we face, and to talk in that context in terms of short-term measures is to talk of the obsolete. Such an approach is as dead as the dinosaur. In the debate so far we have been scratching at the soil with a penknife, when to solve the problem we need a team of excavators.

The question we must answer is how to begin to solve the problems that arise in this new world. The trouble lies throughout the developed world, and if we are not careful there will be added to the unemployment in the developed world more starving millions in the developing world. Those unfortunate people will be completely forgotten.

These developments represent a paradise for the large multinational companies. They will not suffer; they will benefit, because they will substantially reduce their labour forces unless action is taken to prevent them, and that action must be taken throughout the world.

Mr. Anthony Grant

The hon. Member spoke earlier about the need for international co-operation in order to solve structural unemployment. I do not dissent from that. However, when he is considering the problems of the millions of less fortunate people in the developing countries, how does he square with their plight his apparent desire to impose import controls, which are a method of protectionism that would hit those people much harder than anyone else?

Mr. Hoyle

I am not sure that the hon. Member is correct. Often the developing countries are exploited by the large multinational companies. When those companies find a cheaper source of labour they move on and leave behind them economic deserts. Many of the electronic companies in Japan are moving to Taiwan and Korea, because the multinational company will always go where labour is cheapest. We need international co-operation among trade unions, and the introduction of trade unions to the developing countries. It is up to British trade unions to see that that is done.

There has been reference to the shortage of skilled labour, and I agree that such a shortage exists. There is also a shortage of people with expertise about unemployment. Many people know nothing about the subject, and are unlikely ever to know anything about it. The shortage of skilled people, however, will disappear with the new revolution, because even the skilled workers will be hit as they are thrown out of work by these new developments.

Mr. Hooley

My hon. Friend has quite fairly set out some of the problems that advanced technology will bring. He should not forget, however, that advanced technology creates industries as well as destroys them. One example is North Sea oil, where highly advanced technology is exploiting the oil and has created 100.000 extra jobs.

Mr. Hoyle

I am indebted to my hon. Friend for his comments. He is right. One has only to look at what has resulted from North Sea oil. There are large chemical complexes in the north-east which cost vast amounts of money but provide very few jobs. Particularly with the microprocessor coming in, very few people will be needed.

What are the solutions to the new industrial revolution? It is revolutionary to say so, but we may have to employ people who do not have the work ethic. As a Socialist, I used to condemn the leisured classes, but we may have to educate a new class of people to enjoy leisure. Those employed in industry will be more skilled and professional and we may have to educate everyone until after the age of 20.

The shorter working week, for which the trade unions are pressing, must come. A sabbatical of six or 12 months twice in a working lifetime should also become standard to allow people to study new skills in other countries. There will have to be voluntary early retirement. I say "voluntary" because it will apply differently in different industries.

Mr. Hayhoe

The hon. Member would be a good candidate.

Mr. Hoyle

Perhaps so, but it is for the people of Nelson and Colne and not for the hon. Member to decide.

If these new developments are used rightly, they will enrich the lives of everyone in the world, but if used wrongly they will bring chaos and even another world war which could destroy mankind. That is why we must educate people not only to enjoy leisure but to take up socially useful projects.

I do not see why the opportunities once enjoyed only by a small leisured class cannot be extended to the whole working class so that they can enjoy the fruits of society. I never thought that man came on this earth to go down a coal mine or to work all his life in a factory or an office. We can now begin to get rid of that kind of life, but only with world co-operation. I should like the Government—and perhaps the TUC; I say this as president of a union—to take the lead in organising first a European conference and then a world conference to discuss the quality of life and the problems of the silicon chip revolution.

Time is short, and this kind of partisan debate and the party-political points made by Conservative Members do not help. We must tackle the problems of the new industrial revolution. Time is not on our side.

6.44 p.m.

Mr. David Penhaligon (Truro)

I certainly enjoyed the speech of the hon. Member for Nelson and Colne (Mr. Hoyle), even if I cannot agree with much that he said. The crunch question at all the world conferences that he mentioned is whether the electors of Nelson and Colne would like the average standard of living that the world can provide for its population. I am sure that if they had the choice they would reject it out of hand. That is the difficulty of the new world competing with the old rich world. Many of those—including myself—who argue for overseas aid often will not face the nasty conclusion that has to be drawn.

I thought of saying only that I referred the House to the speech that I made on 4th July, giving the column reference and sitting down again.

Mr. Deputy Speaker (Sir Myer Galpern)

In view of the large number of hon. Members who wish to speak, that would help the Chair.

Mr. Penhaligon

I can assure the House that what I have to say is not much short of precisely that.

On 4th July I argued that we have to make better use of land to provide employment. It is crazy that in rural areas like mine it now takes 200 acres of land to provide one job. That great natural resource, for which we do not have to compete with the rest of the world, should be used to provide many more jobs.

I also argued for regional development —not because it increased the GNP but on the basis of fair play. I see no logical reason why the people of Merseyside or Cornwall should not have a fair slice of the cake. That must be the justification for regional aid—not the belief that it necessarily increases wealth.

This is the second unemployment debate in which I have taken part in which no one has mentioned selling anything. If one sells things, there are no difficulties about making them. We need better promotion of our products. What we have is all we have. The idea that we can suddenly invest enormous sums which we do not have in producing something else to sell is nonsense. We must make better use of what we have. Our attitude to marketing is amazingly pathetic.

The great micro-circuit technology will come. I do not know why the House treats it like a great dragon which will eat us all and must be stopped at our borders. This country will be left out of the technological revolution if we do not accept it as a fact of life. I welcome the Government's initiative of the last 12 months in recognising that this country is being left dangerously far behind and must make an effort to catch up. If we do not start making the effort soon, we shall be so far behind that it will be impossible.

The great new solution for unemployment offered by the Conservatives is better use of small firms. They could and should be able to make a useful contribution, but the pretence that they can solve the problem is extraordinary. The vast bulk of small firms is in retailing. In my part of the country, they sell holidays and do very well, at least at this time of the year. That might be increased a little. But the rest are barbers, or sell chocolates and ice cream. Will we compel people to have a haircut more often or to buy more ice cream?

If one leaves out that enormous spectrum and argues that the rest will solve the unemployment problem, we should then be talking about those firms quadrupling the number of their employees, not just taking on one or two extra people. Anybody who thinks about the problem knows that it is not so.

Having said that, none the less I ask the Government why, in giving incentives to small industry, which can provide more jobs, they draw the distinctions that they do. In my constituency there are many garages, as there are in every constituency, that carry out substantial repair work to motor cars. The concept of repairing motor cars has tended to go out of fashion. One does not repair a motor car; one replaces it. What is labour-intensive about motor cars is repairing them, yet the grants made in relation to motor cars are devoted to encouraging people to manufacture cars rather than to repair them. I believe that many extra jobs could be provided if we encouraged the concept of repairing motor cars, washing machines, and much of the other equipment that is now part of ordinary household life.

I cannot see any justification whatever for a small firm in my constituency which does extensive body repair work being refused a grant under the small firm employment subsidy, whereas, presumably, if the firm were working as a subcontractor, making carburettor parts for British Leyland, and if it employed fewer than 50 people, it would receive a grant. I fail to see the distinction. In either case, the firm is either saving the country money or producing money for the country.

However, the problem about my underlying proposition is that there is a great dearth of skill, and it is very difficult to find anybody who knows how to repair a gearbox, a back axle, or a differential. Part of the reason why the manufacturers of such car parts no longer offer spares so that the components can be repaired is that they know that there are not the people available with the necessary skills to repair them.

I want to enter a plea for a particular group of my constituents, but I know that the problem involved is widespread throughout nearly all constituencies. I have met a number of small farmers, small shopkeepers, small self-employed tradesmen, who have sensibly decided to sell up their business and pursue ordinary employment.

It is quite a business to get rid of a farm. One cannot do that in an afternoon. It is not like giving up employment at the company that I used to work for, where an employee could tell the boss at 3 pm what to do with his job and at 5 pm that employee would be out of employment. It is not such a simple operation when one wants to get rid of a farm, yet people have gone through that operation and at the age of 62 or 63 have been left with a small sum—perhaps no more than £10,000 or £12,000—in the bank as their lifetime savings. They have qualified for not one halfpenny of benefit. They have not qualified for unemployment benefit and their capital sum has disentit1ed them to supplementary benefit.

Clearly, such people are being cheated of the fruits of their life's work. They reach the age of 65 having spent their nest-egg on living in the meantime, because it is impossible to find employment at the age of 62 or 63.

I see no reason why unemployment pay should not be paid to the self-employed on satisfactory conditions—for example, if they register for work for three months and for the next three months they fail to find suitable alternative employment. Similar regulations are already applied to employees who voluntarily relinquish employment before retirement age. If my suggestion were followed, much of the agony and personal misery that arises for this reason would be alleviated.

I shall bow to your injunction, Mr. Deputy Speaker. I have covered most of the points that I wished to make, either in this debate or in the previous one. If the House, in the hours during which we have spent discussing this problem had succeeded in producing two good ideas an hour, we might have been somewhere near making progress. I have listened to the expression of more hopes and aspirations and benevolent thoughts for constituents than to hard reality.

If there is to be an election in October, as clearly as there is to be—[HON. MEMBERS: "Oh."]—Clearly we are going to have an election in October. If so, let us at least be honest with the British public about unemployment. Even if we tell fibs about every other subject, for goodness sake let us be honest about unemployment and admit that there will be more than I million unemployed for at least the duration of the next Parliament, for that is the reality.

6.55 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

The hon. Member for Truro (Mr. Penhaligon) ended on a constructive note when he said that in regard to mass unemployment, particularly unskilled unemployment, it is time to stop pretending that anybody will be able to bring the number of unemployed down rapidly. I make no such pretence, and I do not believe that my party does.

It is realistic to aim at a much more modest target. As the debate has proceeded, the modesty has increased. The question is: what can make a useful contribution—to use the words of the hon. Member for Truro—to reducing the vast figure of unemployed? That is the most that any hon. Member can hope to do.

I do not altogether agree with the hon. Member for Nelson and Colne (Mr. Hoyle), although I do not know as much about it as he does—about the real hopelessness of the task. I do not understand, as he does, the silicon chip or the microcircuit, but I think I am right in saying that although the prospect for the middle distance and the twenty-first century is quite alarming, what we must do now is to see for the next five years what can be done for the most important element in the figure of 1½ million—that is, the skilled labour element.

In no previous period of mass unemployment has there been this extraordin- ary paradox where, within the framework of mass unemployment, there has still been a tremendous demand for skilled labour. It is growing. We all encounter it in our constituencies. We read alarming reports about events in other people's constituencies. The ICI installation on Teesside was closed for lack of skilled labour. British Rail cannot find the men it requires to repair the permanent way, even though it would be within the limits of its budget. This great paradox arises within the enormous global figure of unemployed.

I recently went over the local branch of the North-Western Area Electricity Board's office, in my constituency. That board is crying out for tradesmen, but it cannot get them, or, if it gets them, they do not stay. This one small example is multiplied 10 if not 100 times throughout the country. It is a problem about which we heard little from the Government today. It is a feature on which I hope the Secretary of State will dwell, because there have now been about three years of crash training and retraining courses, and a great deal of money has been spent, or so we are told. It all seems to have had but a minimal effect on the problem, first, of making the unskilled semi-skilled, next, making the semi-skilled skilled, and, finally, making those whose skills are no longer required acquire other skills.

What has been done for the expenditure of effort and money in that direction? If that programme were to succeed, we could achieve a vital contribution towards solving the problem, but we hear virtually nothing about it. I believe that there is a great hidden failure on the Government's Dart in this matter, a great hidden failure to produce the training and retraining which industry requires and is crying out for but which cannot be found in the great ocean of unemployment—or so it seems.

Will the Secretary of State frankly and openly tell the House what the obstacles are? Are restrictions being applied by the trade unions? I do not believe that they are, but are restrictions somehow being placed on the training of people, both young and even middle-aged, to acquire skills or new skills? Why is this not going forward?

Perhaps that is not the obstacle; perhaps the real obstacle is the lack of inducement to those concerned. Perhaps no obstacle is being applied by people who want to preserve restrictive practices or preserve old skills where new skills are required, and the answer is simply that there is not enough inducement to acquire skills. People realise that the difference between what they can earn skilled and what they can earn unskilled or semi-skilled is so little that it is not worth the effort.

What does the Secretary of State say about that? We hear about it a good deal. Employers say "He came for a fortnight or three weeks and then he told me it was not worth coming again. He had a heavy bus fare, the bus service was bad, and he worked things out. He was quite anxious to work, but he found in the end that it was just not worth his while." We hear that story again and again. If it is true, it is a recipe for national suicide. It is suicide in the competitive world in which we live to put any obstacles in the way of people's desire to better themselves. To create economic circumstances that make it not worth people's while either to acquire skills or to utilise them once acquired is national suicide in the quite short run.

Will the Secretary of State please give me an answer to that question, so far as he can, tonight? The fruits of the present programme are enormously disappointing. The demand for such retrained labour and skilled labour is growing, yet the number of unemployed is growing. It is a scandalous paradox, and it calls for an immediate explanation.

7.3 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

First, I take up the last point made by the hon. and learned Member for Darwen (Mr. Fletcher-Cooke). There is a lack of skilled workers in certain parts of the country, but the hon. and learned Gentleman should understand that in other parts there are still many skilled workers unemployed. The problem is to get the skilled workers who are unemployed in the places where they are needed. There is a practical question here for any Government. The Government must concern themselves with giving more assistance, making homes more readily available, and so on, for workers who, quite rightly, can be moved from one part of the country to another where they are required.

For example, although there is a serious crisis in the construction industry at present there are parts of the country which require skilled construction workers and cannot get them. Yet elsewhere, in such areas as mine and that of the hon. and learned Gentleman himself, and in Northern Ireland, and so on, there are skilled construction workers who are unemployed and have been unemployed for a considerable time. It is not easy for workers with families in such places to move away. That is the practical question that must be solved.

I ask the House to dwell for a moment on the central issue before us. Why do we have unemployment? It seems to me that we are skirting round that question. Unemployment does not descend from heaven. God does not create unemployment. Unemployment is the result of society's failure to organise itself in an intelligent way. If we organised our resources—our worker resources and our raw materials—and if we developed our industry and our investment in a planned intelligent fashion, we should not have unemployment.

I listened carefully to the opening speech of the hon. Member for Brentford and Isleworth (Mr. Hayhoe). All that he offered us was what we have heard so often from his Front Bench—"Leave it to the market forces; market forces will solve everything". We have had experience of the market forces. They do not solve anything. They certainly do not solve the unemployment problem. A classic illustration of what happens under market forces is to be found in what is happening in Chile today. I am talking not about the fact that a democratic Government were overthrown but about the way in which the present Government, together with their local Friedmanites, imported the concept of total market forces. That concept and the Friedmanite philosophy have proved an utter failure. Unemployment has risen as never before in that country.

If we had left matters entirely to market forces in our own country, what would have happened? We should have been talking not about 1½ million unemployed but about 2 million, 3 million or 4 million unemployed. That is the reality of the matter. We cannot go hack to the idea of Government non-intervention in economic affairs. That is an old, outmoded concept. It went out with Roosevelt in the United States, and from that point onwards all Governments in democratic societies have been forced, because of circumstances and the realities of our economies, to intervene in economic affairs.

But all the Opposition have offered us today is "Leave it to us. Get back to the market forces. Hope for the best, and then we shall solve the unemployment problem." It is utterly unrealistic and plainly untrue. That is not the answer to our problem.

Another part of the Opposition's argument is that we should cut public expenditure further, because, if we do that, in the long run more jobs will be created and the solution to the problem will be helped in that way. It is interesting to note the attitude of Opposition Members when they think of their own constituencies and problems in their own areas. The right hon. and learned Member for Hex-ham (Mr. Rippon) wants a new airport. He wants further public expenditure. The same is true of all his right hon. and hon. Friends when we come down to it. They want public expenditure in their own areas. For example, we heard from the right hon. Member for Crosby (Mr. Page). It is pleasant to find a sinner on the road to Damascus, accepting what some of us have argued for a long time.

Incidentally, it was some of us on the Government Benches who opposed the cuts in public expenditure. Right hon. and hon. Members on the Opposition Benches supported the cuts and told the Government that they had not gone far enough. We were the ones who pointed out that cuts in public expenditure would mean higher levels of unemployment in the construction industry, for example, and would mean that there would not be the proper services that we required in health, in education, in home help provision, and so on. We are the ones who pointed that out. I am delighted that Opposition Members have now come around to accepting our point of view. Perhaps I can ask the right hon. Member for Crosby to join the Tribune Group, together with the right hon. and learned Member for Hexham. From the way that they are going on, we should welcome them, because they have joined us in our basic argument.

Mr. Graham Page

I am much obliged to the hon. Member, not only for letting me intervene but for the invitation that he has given me—which I do not propose to accept. I was not aware that I was advocating further public expenditure, What I was advocating was that the £530 million that is now being spent on job creation schemes is not being spent correctly. I was saying that it should be spent on apprenticeships.

Mr. Heffer

It is amazing how hon. Members never recognise that they are arguing for further public expenditure when one points out that that is precisely what they are doing. Nevertheless, if the right hon. Member says that that is what he was not doing, I shall accept his word, although it sounded very much like that to my hon. Friends and myself. The right hon. Member is still a sinner. That is too bad for him. Sooner or later he may come around to our point of view.

I want to make one point about public expenditure because it is tied up with the whole question of the use of the North Sea oil revenues. We have two jobs to do in relation to the use of those oil revenues. This matter is very important. We cannot discuss the future of our country without discussing what we are to do with these revenues. The first thing that we have to do, obviously, is to regenerate British industry, but we have heard sufficient this afternoon to make it clear—my hon. Friend the Member for Nelson and Colne (Mr. Hoyle) and other hon. Members have made it clear—that with modern developments in technology, investment in itself does not necessarily lead to further new jobs being created. On the contrary, we can give example after example of jobs being lost as a result of new investment.

Pilkingtons is a classic example. It employs 950 workers on an existing process, but once the new factory in which it is investing £32 million is finally put into operation, it will produce more with half the present work force.

Therefore, in the context of regenerating British industry, we must think in terms of creating new jobs and new industries and of developing all sorts of new companies. That is why the National Enterprise Board needs financial backing. Many of us have argued for a long time, as has the TUC, that at least £1 billion should be available for the NEB to involve itself in further activities towards the creation of new jobs and new industries, particularly in areas such as the north-west and the north-east. That is even more important when one considers that Scotland and Wales now have their development agencies. It is vital that the NEB should involve itself in that way in developing and creating new jobs.

There is also something else that we need to do. I have read the White Paper on pay very carefully. The Government have a point when they say that if one reduces working hours and keeps pay the same, obviously one raises unit costs. No one will argue that that does not happen. But we heard this argument in the past when we reduced the number of working hours to 40 a week. When I first went into industry, I worked for 46 hours a week. As that number was slowly being reduced to 40, we were told that the country could not afford it. It was the same when we were told that the country could not afford the first old-age pension of 5s. a week, and when we were told that the country could not afford not to have children working in the coal mines because the economy would collapse.

I say that we cannot afford not to bring down working hours to 35 a week. We shall then have to develop, with modern technology, ways and means of overcoming the problem of unit costs by increased productivity. That is the answer. We must also have a definite policy of allowing people to retire from industry earlier, on a voluntary basis. I say to trade unionists that the unions will have to control overtime much more than they control it at present. It is a scandal that overtime is worked to the present degree when other workers are unemployed, because those other workers could be assisted in getting employment if the amount of overtime working was controlled.

I accept entirely that we need new attitudes towards training. We should look at the Swedish system and gain a great deal of expertise and understanding from Sweden and apply it in this country. Luxembourg was mentioned earlier, but that is only a very small place. Sweden has proved that we could carry out retraining policies, which are very important.

I conclude by mentioning my own locality. The problems of Merseyside have been mentioned today. Like other hon. Members, I have experienced unemployment. It is not a very pleasant experience. If one has been out of work for six months or a year, or two years— although unemployment does not mean the same as it meant in the 1930s, because Labour Governments, in particular, have introduced legislation to make certain that it is not the same as it was in the 1930s —it is demoralising, and unemployed people are living at a level at which they ought not to have to live, particularly if they were able to get decent employment. The human suffering, in the mental sense and other senses, is very bad when one has been unemployed for some time.

However, we have done a great deal for Merseyside. The present Government made it a special development area in the first phase. Had we not done that, it would probably have been worse than it is at present. We have had the temporary employment subsidies and all of the other items on the long list of activities for which the Secretary of Slate has been responsible. They are very good indeed. I am all for them. What has been done has been excellent. I commend my right hon. Friend for his activities in this direction. We have had support for the inner city. We have had more housing support than ever in the history of our city. All these things have been done, because, I would argue, incidentally, of pressure primarily from Labour Members, who have never stopped talking about the problems of unemployment on Merseyside.

Despite all that, however, we have a long way to go. Obviously we must offer the workers on Merseyside something much more positive than they have been offered in the past. The truth is that the capitalist private enterprise companies are basically those which have failed the area. They have drawn large sums in subsidies from the Government, yet they have still failed. There are all sorts of reasons for that. That is why we must bring in the NEB and we must create new jobs and industries along the lines I have suggested.

Whatever we do, I hope that we do not accept the ideas of the right hon. and learned Member for Surrey, East (Sir G. Howe), who has said "Let us have a sort of free zone, let us not have the Employment Protection Act in operation, and let us have only the basic minimum when it comes to health and safety. Let us have a situation in which all the building regulations, and so on, are eliminated." That is a recipe for disaster. Once there was a small pocket like that in any part of the country there would be a demand that it should increase until it engulfed the entire country.

Mr. Alan Clark

Exactly—and the demand would come from trade unionists.

Mr. Heffer

The hon. Gentleman gives the game away. The position would be like that in California, with the so-called revolt of those paying taxes, then further cuts in public expenditure and a crisis in which all public services are eliminated. Is that Conservative Party policy? It is no solution. The answer is to be found along the lines that my hon. Friends and I have been arguing for a long time.

Despite the present unemployment levels, there are now more than 500,000 more jobs than there were in 1972, despite the fact that the population has risen by only 80,000, so we find an increase of employment of about one in 100.

We are in a crisis—part of the world capitalist crisis. It is not the Labour Government's responsibility. It would have been worse but for a Labour Government. I have been a critic of this Government and I shall continue to be a critic when they carry out Conservative policies. When they do not, we can get to grips with the problem. I trust that the next Labour Government will listen far more to us on the Labour Benches than this Government have listened to Conservative Members.

7.22 p.m.

Mr. Robert J. Bradford (Belfast, South)

In the interests of brevity, I shall not rehearse some of the arguments that have been advanced about trying to view the problem of employment and unemployment in a national context. I wish to make some remarks particularly about Northern Ireland.

Three matters require to be ventilated this evening. First, we must recognise the peculiar employment and unemploy- ment problems of the Province. Next, we must look at the Province's assets, which undoubtedly exist, and then at what it requires if the drastic unemployment problem there is to be tackled realistically. There can be no realistic debate on employment in Northern Ireland if we do not consider the problems of communication, the cost of energy, and the effect, albeit temporary, of terrorism.

The first problem of communication as it is related to the infrastructure is a very important matter for the Province. Many of my right hon. and hon. Friends who were here for the debate about membership of the Community stressed that Northern Ireland was a periphery of a periphery in the EEC. Whether or not that argument is accented, it is clear that Northern Ireland is a periphery of the United Kingdom. There is added difficulty because of the stretch of water, the most costly waterway in the whole United Kingdom. No debate about employment can be carried on unless that problem is understood and tackled.

In addition to the expensive stretch of water, we have the difficulty of siting industry in those places where unemployment is highest. They are also the kind of places that will incur many added transportation costs. We have a vicious circle, to which there is no slick, easy answer.

Strabane needs jobs. The unemployment rate there exceeds 25 per cent. of the male population, yet no industry will go there because of the added transportation costs, in respect not only of the stretch of water to which I have referred but of road and rail. The infrastructure is a primary consideration in Northern Ireland.

There are also the questions of the ferry links and of the necessary provision for an air service which will induce executives to site their industry knowing that they will have access to the Province when they wish. Communication in terms of personnel and shipping of the finished products is also a very important matter.

Secondly, there is the question of the cost of energy. Although it has been said again and again in the House it needs to be repeated; gas and electricity costs are three times those in any other part of the United Kingdom. The Government are rightly asked by industrialists "Why should we go to Northern Ireland when our capital and production costs will be far greater than if we settled for, say, an area in the Midlands?" Why would a company site its industry in Northern Ireland when it must pay three times the energy costs of those in any other part of the United Kingdom? This peculiar problem of the Province must also be ventilated.

I am delighted to see that the Minister of State, Northern Ireland Office, has joined us, because I know that he is aware of the problem. I seek from him a commitment to provide Northern Ireland with a direct link to the national grid for gas and possibly even electricity. If the answer tonight is "No", I shall have no alternative but to ask my colleagues to vote against the Government. If the Government give us a sympathetic hearing on this matter, which is one of the most vital considerations, we shall be disposed to listen to what they say.

In passing I want to mention the effect of terrorism. The Government produced a most shoddy document in 1974, showing the cost of Northern Ireland to the national Exchequer. What the document did not take into account was the effect of terrorism. It also left out the returns made by subsidiaries and branch operations of national industry, because tax returns, and so on, are often made as central returns. The effect of terrorism was not revealed in that document, and we felt that that was a very shoddy thing.

I turn to the assets that the Province has to offer. First, there is the trained work force. As part of the Short Brothers and Harland operation we have one of the most impressive apprenticeship schools in the whole United Kingdom, not only for the aerospace industry but for related industries.

Secondly, there are the productivity rates in the Province. Compared with the productivity rates of any other part of the United Kingdom, they make impressive reading. That is a very important consideration for industrialists.

There is also the vexed question of industrial relations. Northern Ireland can boast of perhaps the best industrial relations in the whole of the United Kingdom. It is not difficult to appreciate why. There is an existentialism in Northern Ireland—a facing of the dire facts of life, a knowledge that either one works and gives a good day's work for a fair day's wage or one goes by the board. That has pushed us into producing a productivity rate and industrial relations which I believe are the envy of the rest of the kingdom.

The return to the workers of Northern Ireland has not been all that it should have been. Our wage level stands at about 75 per cent. of the national wage level. Although we have such a high productivity rate and such a good industrial relations situation, there has been no recompense in terms of a fair wage. That applies not only to private industry but to the public sector. Our assets, therefore, include a trained work force and Government training schools—we give the Government credit for bringing them into being—which have given us a pool of workers who would be able to be slotted into industries obtained for the Province.

What I have to say now is not in personal castigation of the Minister of State, Northern Ireland Office. He knows how I feel about his assiduous efforts to bring industry to Northern Ireland. In rightly castigating the Government, I want to ensure that he does not take my comment in a personal way. I am doing my best to bathe my sword in heaven, but if one consults the statistics in the Library one sees that whereas in December 1974 the level of unemployment in Northern Ireland was 6.2 per cent., it is now in excess of 13 per cent. In such circumstances, one can say with justification that the present Government have presided over the virtual death of manufacturing industry in Northern Ireland. It does not make impressive reading.

One may like to say that if we had had a totally planned economy, such a situation would not have happened, but that argument cannot be advanced in Northern Ireland, because there we have Government sponsorship to a very high degree. There may be other reasons, but I think that there are three main reasons for the dreadful death of manufacturing industry in Northern Ireland.

First, in 1974–76 there was the abject failure of the Government to underwrite confidence in the Northern Ireland economy. During those years, thousands of jobs were lost in the manufacturing sector. The former Conservative Government are not without their problems in this respect. Since the inception of direct rule in 1972, a total of 24,000 jobs have been lost in the manufacturing sector in Northern Ireland, so all the blame cannot be laid at the door of the present Government. Neither the Conservative nor the Labour Government really underscored confidence in the Northern Ireland economy.

The most depressing stab in the back delivered to the Province was the unnecessary removal of the defence establishments to other parts of the United Kingdom which did not have the work force to take advantage of the jobs thus removed—to places such as St. Albans. Indeed, the Government were even trying to encourage Northern Ireland workers to resettle on the mainland. If that was not a stab in the back for Northern Ireland, I do not know what was.

One can catalogue the closure of IEL and of Rolls-Royce in Northern Ireland. That was a profitable branch of Rolls-Royce, unlike some branches in England, but it was closed. No attempt was made by the Government to keep it open. There was a real failure to underscore confidence in the Northern Ireland economy when it mattered most.

Secondly, there was the improper use of Government resources in those early days. Here a word must be said in gratitude to the Minister of State for the way he has tidied up at least this part of the problem. We now have the Northern Ireland Development Agency. whic his cautiously advancing and is circumspectly looking at job possibilities. But previously the Northern Ireland Finance Corporation and LEDU threw their money around as if it was going out of style, wasting it on the most atrocious projects. One hesitates to digress in suggesting that these projects were adopted because of their political significance, but the fact is that £20 million-plus was wasted in the Province which, if judiciously applied, would have created many jobs which would have gone some way to obviating the loss of 24,000 jobs in the manufacturing sector.

Thirdly, there was the failure to encourage local investment. Believe it or not, in Northern Ireland there are still one or two millionaires; there are still people who have money to invest. Not only is there money to invest in the Province, there are those who have produced very exciting projects which, if they had been adopted by the Government, could have produced many hundreds of jobs.

This House has changed the building regulations to take cognisance of the need for heating regulations and thermal regulations. In that area alone, a couple of projects have been suggested by Northern Ireland people for which the manufacture could be done in Northern Ireland, thus producing jobs. In some cases, the possibilities were allowed to drift out of the Province. One has been taken up. But it is true to say that one of them was treated rather shabbily by the Government Department concerned. I have referred to it before and I shall not hark back to it now, but, for example, there was the little portable heart machine which could have been manufactured in the Province. It, too, was allowed to slip.

In summary, there were these three main requirements—the need for the Government to underwrite the economy, the need to use the resources of the Northern Ireland Development Agency and LEDU, and the need to encourage the investment of local money. I ask the Government how, if they reject those three suggestions, they hope to meet the target that was projected in the Quigley report, of about 25,000 jobs by 1980? If we are to get within striking distance of the national average of unemployment, we have to find 25,000 jobs by 1980—at least that. I am afraid that the figures are going the other way; they are at 13.4 per cent. when they really ought to be moving towards 3.4 per cent. How will those 25,000 jobs be provided?

I end on a note which to some extern echoes the comment made by the hon. Member for Nelson and Colne (Mr. Hoyle). He apologised for taking us almost to realms of the year 2001, the space age, and so on, when he talked about electronic devices in offices which would render office staff unemployed. I want to make a point about future employment as it relates to the space age. Whatever we think about employment opportunities or possibilities in the future, we cannot but accept that there will be a fundamental change in life style —mainly in transportation—and we already know how costly and important the space age is.

If this country is to be in a position to fulfil a role in the space age, with all the possibilities of unemployment that that exhibits, we neglect Africa at our cost. Africa has within it all the minerals that are absolutely necessary for the space age, in terms not just of missiles and weaponry but of future travel. It has cobalt, titanium and bauxite, and the presence in Africa of the Russians and the Chinese has nothing to do with the liberation of national groups in Africa. It has everything to do with cobalt, it has everything to do with titanium, and it has everything to do with bauxite.

If we allow those resources to slip from our hands, or if we fail to have access to them, unemployment in the space age, which is not very far away, will be such as totally to destroy the greatness of this nation.

Several Hon. Membersrose—

Mr. Deputy Speaker (Sir Myer Galpern)

Order. I know of only one way whereby I could accommodate the 11 hon. Members who are still anxious to take part in the 90 remaining minutes before the winding-up speeches, namely, to ask for speeches of no longer than eight minutes. If any hon. Members can suggest some other method of accommodating all those who wish to speak, I shall listen to their proposals gratefully.

7.41 p.m.

Mr. Frank Hooley (Sheffield, Heeley)

In discussing the question of employment and unemployment, we have to face three curious paradoxes. First, we have high employment as well as high unemployment in this country at the moment. On the last count, there were 24,935,000 people in work, which is a higher figure than in any year for the past 10 years, except two. Over the past 10 years, the number of women in employment has gone up by 1 million from 8.7 million to 9.7 million. The number of men employed has fallen.

In 1971, the Department of Employment estimated that the working population would grow by 75,000 over five years. In fact, it grew by 850,000. Between 1973 and 1977, 99,000 jobs disappeared, but the actual labour supply grew by 1,200,000. Looking to the future, we have an estimate that the work force will increase by 1,750,000. It is something of an ironic commentary on our society that this is regarded as a social and economic problem instead of a great opportunity.

The second paradox is that we have high unemployment but a shortage of skilled workers. In Sheffield, there are now 16,000 people unemployed, hut there are estimated to be about 8,000 vacancies in manufacturfing industry in that city—one of the great industrial cities of Europe—and many of those vacancies are for skilled people.

A lot of valuable work has been done by the Engineering Industry Training Board, and I want to quote from something written by the regional training officer of that board for Northern England, which appeared in the Yorkshire and Humberside Development Digest. He wrote: It is quite clear that the time has arrived to question, review and no doubt revise the whole approach to craft and technician training in particular, and the EITB intends to undertake major review as part of its forward strategy. That is very promising comment, but it clearly is important that we grapple with this problem of the shortage of skilled men at a time when we have 1,500,000 unemployed overall.

The third paradox is the shortage of skilled workers with, at the same time, a 25 per cent. rate of vacancy in the Government skillcentres which are designed to train skilled people. According to the figures given to me by the Department of Employment, at the end of March this year there were 4,704 vacancies in skillcentres—a 25 per cent. under-use. This does not relate simply to trades such as construction and building, where there is a general depression. In engineering production there were 1,600 vacant places—an under-use of 31 per cent. In the electrical and electronic field, there were over 1,000 vacant places—a vacancy rate of 38 per cent.

In the light of these figures, there clearly is something adrift in terms of recruitment or financing of men for these trades to go to these skillcentres. I also believe that there is something adrift with the recruitment of instructors. They are dissatisfied with their rate of pay. They compare it unfavourably with the pay of people giving somewhat similar courses in further education colleges. This is a matter which needs to be looked at.

Apart from the three basic contradictions in the system, there are some important trends which we ought to examine in looking for solutions. First, there is the general swing from manufacturing to services, which I believe has been touched on earlier in the debate. In Sheffield, in the period from 1971 to 1976, the number of people employed in manufacturing fell by 18,600. That is a decline of 5.7 per cent. But in the same period the number of peeple employed in services—including such things as communications, insurance, banking, professional services, scientific employment and administration —went up by 13,600, which was an increase of about 4 per cent. As far as I know, this trend is fairly general throughout our economy, and clearly it is something that we have to take into account in building up some sort of strategy to cope with the unemployment problem.

The second point, on which a great many speakers have already touched, is the impact on the disadvantaged and the young population of our country of a high level of unemployment. In the period from 1973 to 1977, the number of immigrant young people unemployed increased threefold. It is estimated that the inner city areas contain about 7 per cent. of the total population of the country. They contain 12½ per cent. of the unemployed. It is depressing to see that the Manpower Services Commission recently forecast that there will be between 200,000 and 350,000 youth unemployed by 1981. Clearly, again, there are certain areas and certain groups on which we have to concentrate our minds in seeking to solve this problem.

There is one area on which I think that we need not waste too much time, although much has been made of it by some parts of industry and by some Opposition Members. That is in relation to the Employment Protection Act 1975. The Policy Studies Institute findings have already been mentioned earlier in the debate, but I think that they are worth quoting in certain respects, because they are very significant. I quote from its report: The chief advantages reported were that the EPA required management to be more systematic, explicit, precise and consistent in its methods of operation. This applied particularly to procedures for discipline, dismissal, selection, appraisal and appointments. It had also encouraged unions to accept and comply with procedural agreements where proviously some had been happier to exploit unclear situations. Management had been required to think more about the human side of its business. Workers felt more secure having the backing of the EPA and the clear guidelines it laid down or which had been developed from it. Workforces had become more stable. 'Excesses of personal eccentricity' had been constrained. And last, but perhaps not least, managers themselves had gained protection for the first time. This is the considered judgment of a very careful study. Although the study has been criticised on the ground that it did not take in the smallest companies, it nevertheless covered a range of companies employing between 50 and 5,000 people in manufacturing industry, which I would have thought was a pretty representative selection. On any judgment, that study indicates that the Employment Protection Act certainly cannot be blamed to the extent that it has been blamed by some people and made a scapegoat for unemployment.

The various remedies which have been applied so far to the present situation are, of course, fairly well known at national level—the temporary employment subsidy, the small firms employment subsidy, the job release scheme, the youth employment subsidy, the job introduction scheme, the youth opportunities programme, community industry, the special temporary employment programme, the job creation scheme, and the promotion and subsidy of training places in industry. They provide in all for about 310,000 people. These were and are valuable, and clearly must be built upon.

In Sheffield, fairly vigorous action, I am glad to say, is being taken by local authorities. They have introduced a special grant to sixth-formers to encourage them to stay on at school beyond the school-leaving age. A community industry scheme has been produced to provide 100 jobs. Twenty extra lecturers in further education colleges are to be appointed to provide 400 extra places there. Twenty extra staff have been appointed at schools and colleges to deal with youth employment problems. A training workshop for unemployed young people is being set up, and an environmental project is in hand which will create another 40 jobs. Work is being done to deal with the improvement in housing. The area health authority reckons to create 1,000 new jobs in the next 12 months, mainly for the elderly and community services.

Last but not least, the shop stewards committees in the engineering firms, under pressure and strong direction from the local district committee of the AEU, have exerted considerable pressure on firms to take on trainees and perhaps to train more people than they would do in the normal course of events.

All these things are valuable and should show that a great deal can be done locally as well as nationally to tackle the unemployment problem. But the longer-term issue is what must concern this House tonight. It is my belief that full employment is possible at any level of the economy, barring a total catastrophe. It is possible, given the political will, to provide full employment in a modern industrial society, by which I mean an accepted level of unemployment of about 2 per cent. of the total population. But the political will and the economic policy must be there. I am sorry to say that I believe that the policy of the Chancellor at the moment is to keep unemployment at the 1 million or so level for the next three or four years. That is a policy which I reject and find unacceptable.

I believe that it is perfectly feasible to expand the economy, primarily by using the public sector. If the private sector will not expand, we can use the public sector. We have great public corporations. Through those corporations it would be possible to expand industrial investment. For example, the electrification of the railways would be an immense and valuable project which would create a spin-off of a great number of jobs. The modernisation of our telecommunications system would, again, provide contracts for equipment which is much needed and could be installed.

There are also the problems of housing in the inner cities, where a large improvement programme could create an enormous number of jobs with virtually little or no impact on the balance of payments problem. The problems of education and training, especially in the 16-to19-year- old age group, could be tackled by providing increased staff in our colleges, and perhaps using some of the teacher-training colleges for offering new opportunities to our young people. There are immense opportunities in preventive and social services for creating jobs for people to look after the very young and the very old.

Some hon. Members have referred to the international dimension. In concert with other countries we need to increase the flow of resources to the third world in order to create there the opportunities which would spin off in jobs not only for them—and they have unemployment problems vastly more formidable than ours—but also to create jobs for people in this country who can supply them with the machinery, equipment and technology which they need to develop their own countries.

But there must be the political will. We must absolutely declare in our policies and in our economic arguments that unemployment is unacceptable and that a modern industrial society will not tolerate 1½ million unemployed. Our economic policies must be directed to the elimination of this social curse.

7.54 p.m.

Mr. Douglas Crawford (Perth and East Perthshire)

The Back-Bench speeches have been much less polemical and much more moderate than the opening speeches from the Front Benches, but doubtless we shall revert to the needless polemicism when Cathcart takes on Craigton and Craigton takes on Cathcart.

I have very little time for the Tory electioneering which we heard from the hon. Member for Brentford and Isleworth (Mr. Hayhoe). The Conservative calls for public expenditure cuts will not help unemployment. I would remind the hon. Member for Liverpool, Walton (Mr. Heifer), who I am sorry is not now present, that my right hon. and hon. Friends also voted against any public expenditure cuts. The Conservatives would appear to be against public expenditure cuts in particular but for them in general. Their vote against giving succour to Chrysler and the vote against the Scottish Development Agency would have done no good in Scotland.

At the same time I have very little time for the Government's complacency. As the Secretary of State will know, there are over 190,000 unemployed in Scotland. Perhaps I can quote the Labour Party's October 1974 manifesto, which said: Labour will do whatever is necessary to bring full employment to Scotland. We shall not rest until everyone in Scotland has the opportunity of a decent, well-paid job. We also know what the right hon. Member for Kilmarnock (Mr. Ross) said when, as Shadow Secretary of State, unemployment under the previous Conservative Government reached 100,000. At the same time I would suggest that unemployment in Scotland is not wholly the fault of the Government per se. It is the fault of the system. I think that it was Lord Godolphin who, after the union of Parliament in the eighteenth century, said: We have catched Scotland and we shall not let her go. To a great extent the 190,000 unemployed in Scotland is a direct result of the fact that Scotland is bound hand and foot, fiscally and financially, to London and to a centralised system of economic management at the very time when her resources are far greater than those of England and when her industries collectively, and her workers individually, are more productive than are their counterparts in England. Time prevents me from going into the actual facts, but I hope that neither the hon. Member for Glasgow, Cathcart (Mr. Taylor) nor the Secretary of State will dispute this, because I have the Government figures to show how productivity in Scotland is greater than it is in England.

Mr. Teddy Taylor (Glasgow, Cathcart) rose—

Mr. Crawford

I am sorry. I have given an undertaking that I shall be brief. I am appalled at the complacency of Labour Ministers in Scotland who on the one hand say that the SNP is chasing away investment and in the next breath preen themselves when new factories come to Scotland. I am equally appalled by the Conservatives, and their friends in the "Scotland is British" campaign who say that financial institutions will go away at the very time when we have had an unprecedented number of foreign banks actually coming into Scotland. I quote from an advertisement in Time magazine. In advertising the fact that the Swiss banking corporation had opened an office in Edinburgh, the corporation is reported as saying: We are banking on Scotland's financial future with our new representative office". This is at a time when the SNP is going from strength to strength.

The truth is that investment in Scotland, where it has happened, has largely been as a result of indigenous Scottish efforts. We need more political autonomy to increase this. The United Kingdom used to look down its nose at the Republic of Ireland. But according to EEC statistics, the Republic of Ireland is the fastest-growing economy in the EEC. It is no secret that the Republic of Ireland is now actively considering floating her pound away from the pound sterling and revaluing it.

Unemployment has been treated as a political football, largely and especially by the two Front Benches. That is wrong, because as many Back Benchers have said, it is not jobs alone but dignity which is at stake. I should like to offer one or two constructive suggestions. I suggest that the days of footloose industry are over and that the heydays of the 1950s and 1960s are past, when in to Scotland we had the IBMs, the Honey-wells, the General Motors, the Burroughs and the NCRs. I hope that the Secretary of State will be able to benefit from this observation. There is one notable exception to my thesis. That is Ford going to South Wales. I believe that the Prime Minister had a lot to do with that. I look forward to the day when a Scottish Prime Minister can exercise the same influence over footloose industry as the United Kingdom Prime Minister exercised in helping Ford to go to South Wales.

But by and large the welcome invaders, as the Scottish Council called them, have ceased, and footloose companies no longer exist. Therefore, the future growth in employment—this will apply to England as well as Scotland—rests with companies already established in Scotland, be they indigenous or be they attracted over the past few years.

But we need a more flexible system of grants for the existing companies, as well as a closer monitoring of the grants. I do not blame the Scottish Development Agency for the mistakes that it has made. The SDA must take risks. I would not have invested in some of the companies in which it has invested. and doubtless it would not invest in some in which I should like to see it invest. But I suggest that it should have closer monitoring of its investments. There should be a greater internationalisation of the Scottish Development Agency. There should be better infrastructure. Our roads should be improved. We need more direct nonstop flights from Scotland to continental Europe.

Earlier, the hon. Member for Belfast, South (Mr. Bradford) said that the Irish Sea was the most expensive sea route in the United Kingdom. It is not. The Minch is, and the constituency of my right hon. Friend the Member for Western Isles (Mr. Stewart) suffers especially from that.

To help the growth of industry in the more outlying areas of Scotland and in the islands, we should like to see the developing of a pricing system which treated the sea crossing as a bridge so that the cost for freight and for people was the same as if they were crossing a bridge from one island to the mainland.

Another matter which concerns existing companies is that we must ensure that service industries come under the ambit of the general system of grants and incentives. My hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) made a telling point about that in the Scottish Grand Committee two or three weeks ago.

But it is not just tourism and invisible earnings, of which Scotland has plenty, which are service industries. Software is a service industry. Electronics was the great Scottish white hope of the 1950s and 1960s, but it is no longer. The potential has not been realised fully. Silicon chips and micro-processors are the new "in" thing, and we can now put into a container the size of a microphone the logic that would have required the whole of this Chamber in the 1950s. This marks a new revolufion.

I suggest that all this talk about silicon chips and micro-processors may not be quite right. It may be that the hon. Member for Nelson and Colne (Mr. Hoyle) has not read it, but he was rehashing what Sir Leon Bagritt said in the 1964 Reith lectures. In "The Age of Automation", he said that automation would in time lead to a decline in manu- facturing jobs. I suggest that all the concentration on silicon chips and microprocessors may already be a little out of date and that we should be concentrating on telecommunications software and brainware which can overleap the silicon chip revolution into the 1990s and the next century.

Another source of employment is new companies. What are the springs of innovation? No one can answer that, but I suggest that there is a need for a Government-sponsored venture capital company. If we had private financial institutions joining it, so much the better. But I point to what American research and devlopment did with Digital Equipment Corporation in the early 1960s and what European development enterprises did with Membrane in the late 1960s and early 1970s. This Government-sponsored venture capital company would, like the SDA, lose money on some ventures, it might break even on others, but it might make a very great deal of money on even more.

There is an argument that a Government-sponsored venture capital company should divest itself of the shares in a company in which it invested when those shares reached a certain level. Against that, it could be argued that the taxpayer should have the benefit of dividends accruing from a successful investment. For it, the case is that the State should benefit from reinvestment from one company into other companies, so that the system of setting up new companies should be self-generating.

I make these suggestions largely in the Scottish context. Scotland is smaller and more manageable than England, but I suggest that they could be put into practice in England as well. If work along these lines is carried out, a start can be made towards the creation of real employment. Temporary employment subsidy and other palliatives are temporary. They are rather like applying Elastoplast to a gaping wound. But they are also a system of featherbedding, and they are, I suggest, a factor to be avoided in the long term. Of course, there are companies, areas and industries where local criteria must prevail over straight, hard capitalist criteria. But in the medium and the long term, they must be to create real and self-generating employment.

I realise that once we get back to the respective Front Bench spokesmen, this debate will revert to a political dingdong. But I hope that a brief outline of policies from the SNP Bench will give some food for thought and that the House will look at them in the constructive spirit in which they have been put forward.

Tonight, my party will vote against the Goverment, though not with the Conservatives. If ever there was a case for a third Lobby in this House so that the SNP could say "A plague on both your parties", that case is tonight's vote.

8.4 p.m.

Mr. Eddie Loyden (Liverpool, Garston)

I do not intend to take up any of the views put forward by the hon. Member for Perth and East Perthshire (Mr. Crawford) and, Mr. Deputy Speaker, in response to your request I intend to keep my comments extremely brief.

One aspect omitted from the speeches to which we have listened so far has been any suggested solution to our difficulties. From all sides of the House, a great deal of sympathy has been expressed about the high level of unemployment. All those right hon. and hon. Members who have spoken have voiced their abhorrence of it. However, the subject has been dealt with as it has been in the past. Right hon. and hon. Members have attempted to analyse in detail the figures of unemployment and the alleged reason for the unemployment, but they have not suggested a positive and long-term solution. I understand readily the hesitancy that there is about seeking the answer. In that sense, we have to be quite political when we are dealing with the subject of unemployment, despite what the hon. Member for Perth and East Perthshire said.

I do not believe that anyone who is included in the 1½ million unemployed will be very interested in the analysis that has been going on in this Chamber today. Those who are unemployed are not greatly interested in the figures, the distribution and the percentages of unemployment in the United Kingdom. They will be interested to hear what we have to say about possible solutions. In that sense, many Government supporters have raised the question in the way that it ought to be raised. They have raised it in a political fashion and pointed out that in the end the solution will be a political one.

Unemployment ought not to be seen merely as a figure that we constantly bandy round this Chamber. We should be thinking in terms of the human degradation and the problems that emerge in society as a result of unemployment. When we consider, for instance, our unemployed youth, we remember that the old argument always was that the world did not owe us a living. I oppose that argument. Young people who have left school and who in normal circumstances would be looking for opportunities to work in industry today find it almost impossible. Those same people have to pass shops unable to buy what they want and have to pass theatres unable to enjoy what they have to offer. They are deprived of the social pleasures of life that are necessary in any society in order that they may achieve some sort of fulfilment in their lives and begin to relate to society. How can we expect those young people who have left school and have in many cases been for two or three years without a job to look at society with any sort of acceptance and regard it as providing them with some sort of fulfilment in life?

Following from that, there is a rejection by many of our young people of the society in which we live. The results of that manifest themselves on any council estate or in any major city in terms of crime and vandalism, and all those features which are becoming part of the scene in the 1970s for young working people. That is the real tragedy of unemployment.

It is true that the situation is not the same as it was in the 1920s. Men are no longer hanging about on street corners, with their heads dropping further on to their chests day by day. There is not the poverty. A great deal of buffering against that poverty has come about as a result of progressive social legislation.

But there is something much more problematic. The street corners may no longer be occupied, but we have offered no alternative to those who find themselves out of work. It has been said from these Government Benches that being idle in that sense cannot be said to apply to every level of our society. There are people who never work but who still enjoy a full life. However, when people have been involved all their lives in work and are suddenly deprived of work, especially when they are middle-aged, they begin to feel useless to society and rejected by society. They have no way of fulfilling their lives, because we have failed to educate them to enjoy life without work.

When we are considering the problem of unemployment we have to think of what constitutes the answers. There is no doubt that the technological revolution has created new problems. The problems will continue and become more sophisticated. That means that there will be a continuance of high levels of unemployment. If that is so, what is the answer? What do we do in a society that is moving at the rate that has been set by modern industrial societies? How do we resolve the problem that is faced by those who previously were participating in industry to produce the goods that were required when they are no longer required to carry out that work, and when the goods are still being produced?

We are not facing a problem of production. That is a problem that has been overcome. That has been admitted throughout the House. The present situation offers tremendous opportunity to society. One-third of the world is still living at poverty level. There is still starvation and deprivation throughout the world. The opportunities that science and technology have given us should be used for the benefit of man and should not bring about the situation that we face in the advanced industrial countries of the western world.

It is clear that we must have a planned society. Socialists must make clear what they mean by that term. That is necessary because societies have been planned in the past. The corporate State was planned by Mussolini. We are not talking about that sort of society; we are talking about a Socialist planned society. By no stretch of the imagination can we achieve the society that my colleagues and I speak about without taking the economy under control.

We cannot plan what we do not own. We are unable to control the private sector, yet we see it falling apart. That is happening on Merseyside. There has been closure after closure of Merseyside factories. Even today we heard the latest addition to the long-running problem. The steel press has today reported a further Merseyside closure.

Let it not be thought for one moment that the people of Merseyside are looking to the private sector to cure the problems of unemployment. They know that private enterprise has brought the present problems in their area. There is no way in which private enterprise can take the next step forward without increasing unemployment and the various associated problems.

In offering answers to the problems my hon. Friends and I are talking about the next Labour Government. I accept that many attempts have been made to alleviate the problem of unemployment, but the resources that the Government have sent into the areas suffering the greatest difficulty have not been used correctly. I understand that £520 million has been used to train young people for jobs. However, that is of no consequence if there are no jobs for them to take up at the end of the road. The money has been used to occupy young people but it has not provided long-term jobs. We should ensure that there are industries to train young people and to provide them with jobs. At present that is not happening.

The resources that have been used to occupy our young people in the short term could have been used in direct intervention to create manufacturing industries in areas of high unemployment. That would have been a positive Socialist step to find a solution to our problem. Unless we grasp the nettle there will not be a solution to the problem in the next 10 years or 15 years. It is the Government's responsibility to seek new ideas along with the political philosophies that the Labour movement has created to put into practice and to build a better world. That applies not only to the material things of life; it means bringing about a fuller life all round. That is possible. That can now be achieved, but only if we take the correct political steps.

8.15 p.m.

Mr. Michael Roberts (Cardiff, North-West)

I offer the hon. Member for Liverpool, Garston (Mr. Loyden) the nicest compliment that I can pay him. The hon. Gentleman clearly shares many of the mythologies that we love so much in Wales. We cherish and enjoy our mythology. One mythology has today been shattered. That is not the mythology that God creates unemployment—the hon. Member for Liverpool, Walton (Mr. Helfer) said that he no longer believes that to be so—but that the Tories cause unemployment. That used to be believed, but the belief was tested when there was a Labour Government from 1964 to 1966 and unemployment increased from 2.5 per cent. to 4.1 per cent. Nevertheless, we went on believing the old story. That has now been destroyed by a Labour Government.

The Labour Government of 1974.78 took office when there were 38,000 unemployed in the Principality. The figure now stands at 98,000. That is a disgraceful betrayal of all that the Welsh people hoped for when the Labour Government were elected. August is usually a bad month for unemployment while June is a rather good month. As there are more school leavers to come on the unemployment list, it is confidently expected that there will be 100,000 out of work in the Principality by August. There is no doubt that in September there will be various schemes temporarily to take people off the unemployment list until after the General Election.

When considering the areas most badly hit by unemployment, we have only to bear in mind the area represented by the Lord President. In Ebbw Vale and Tredegar 11.3 per cent. of the working population is unemployed. In June male unemployment in Cardiff reached 10.9 per cent. Male unemployment is the great growth feature of the Cardiff area.

We are fortunate that the effect of unemployment in that area is temporarily concealed. That is because the East Moors steel workers received redundancy and additional compensation. Not all the East Moors workers received that treatment. There were 900 who did not. In June 1977 they were persuaded by the trade unions and the corporation to take their redundancy payments to make the works more viable and so that there could be a steady flow on to the unemployment market and not a flood. They were soon joined by a further 3,200 workers. When the money starts to run out, as undoubtedly it will, Cardiff, too, will feel the pinch.

How things have changed over the past four years. Four years ago I remember so well the Prime Minister walking from East Moors with the Lord Mayor and others, myself included, when the great march took place to keep open the East Moors works. At that time the Prime Minister was in Opposition. In 1974 we were invited to vote Labour to keep the works open. That is a promise that Cardiff people will not forget. It is now universally accepted that if East Moors had not been nationalised it would be open today and supplying the natural market of GKN across the road.

Whatever nationalisation has done for other areas, it has done nothing for Cardiff. It has been a total disaster. I am sure that the hon. Member for Gars-ton, an ex-president of the Liverpool trades council, will be interested to know the view of the Cardiff Trades Council, The hon. Gentleman has said that in view of what has happened to the private sector we must look to the public sector. I must tell him that in Cardiff we do not take that view, especially after a segment of the public sector has closed down and put about 4,200 people on the scrap heap. The only hope for the people of Cardiff is in small businesses, which will create the necessary employment.

The Cardiff trades council takes a much grimmer view than I do of the prospects for employment. Recently, in a memorandum to the Prime Minister, which was quoted in the South Wales Echo, it said that unemployment would increase from 10,000, where it now stands, to 20,000. I think that is an over-gloomy picture. I hope that it is wrong, but it says what it says, if not accurately, at least with sincerity.

On youth unemployment, the Cardiff Trades Council said that it would like to see permanent jobs at proper trade union rates of pay instead of temporary employment schemes. I think that most people, however much they welcome any temporary relief, want permanent jobs.

A new mythology is being created in Wales. It is the new mythology of the Left and of Plaid Cymru. It is to take a meaningless and foolish equation: "We have 99,000 people unemployed in Wales. We pay out a vast amount of money in social benefits to keep them unemployed and there are 600 miles of roads which need to be constructed. Therefore "—this is the new mythology of the Left—"all we have to do is to solve this equation. It is an administrative matter of organising the resources."

There is absolutely no way in which the unemployed of the city of Cardiff will be employed on building roads throughout the Principality. Anyone who looks at the problem knows that is true. The people of Wales are being deceived by this silly talk of just organising the resources to solve the problem of unemployment. The people who say that are afraid to recognise the truth—that this Government have failed completely.

Perhaps that accounts for the fact that only one Welsh Labour Member of Parliament has come into the Chamber for this debate. But imagine how many would have come in if the reverse had been the case! What would have happened if it were a Conservative Government with 1,500,000 unemployed throughout the country, nearly 100,000 of them in the Principality? I do not want the House to stretch its imagination too far. I could take a quotation from practically every Welsh Labour Member of Parliament. Instead, I shall take one from the hon. Member for Bedwellty (Mr. Kinnock). In 1972, he said: Ever since the day of John Maynard Keynes, any Government allowing unemployment rates to rise not even as high as this rate have been guilty if not of a criminal act, certainly of criminal negligence."—[Official Report, 24th January 1972; Vol. 829, c. 1089.] Where are they now to decide whether this Government are guilty of negligence or of a criminal act?

The only future for employment in the Principality is through small businesses. They are the backbone of the Welsh economy. Small business men—the backbone of the Welsh economy—demand, among other things, three important matters. They demand that the achievement of young people entering industry should be greater. Recently the National Coal Board pointed out that it had to reject 15 per cent. of young applicants for jobs in the coal industry in South Wales because they were unemployable in terms of literacy and numeracy. That is something that the schools in the Principality must take into consideration. We must improve our standards. That is precisely what the Conservative Party has been saying for the last four years, and some Labour Members have begun to realise its significance.

We must also look at the shortage of skills caused by the breakdown in differentials. In every constituency—certainly in mine—there are examples of toolmakers giving up their jobs and taking other positions, often outside industry. Once they are lost to industry in that way, they are lost for ever. A toolmaker is a skilled man who, through enterprise and skill, can give employment to between 12 and 20 people. In a small enterprise everything is often dependent on him.

There is no doubt that many small employers believe that the Employment Protection Act prevents them from freely taking on the young labour that they would like to test and have working for them. Large numbers of small employers believe that is true. The Labour Party and Government ignore their arguments and show their indifference to the young people of the Principality who seek, but are denied, jobs because the Employment Protection Act does not protect, but prevents them from taking jobs.

Small business men in the Principality anyway, where there are so many, given the right encouragement by the Government, could dramatically alter unemployment in Wales. There is no alternative in the Principality. It will be the means to which the next Conservative Government will turn to meet the great challenge of our time.

8.25 p.m.

Mr. George Rodgers (Chorley)

It is apparent that the Conservative Opposition have chosen the theme of unemployment for today's debate for electoral considerations. I have no objection to that. I recognise that it is an issue of major concern throughout the country. However, I think that the selection of this subject is a further demonstartion of the remoteness of the Tory leadership's thinking. Certainly ordinary people in the community are in dread that a Tory Government should take office at a period of high unemployment. Indeed, the prospect frightens them half to death.

The Conservative Party, throughout its history, has lacked compassion and sympathy for those who are the victims of harsh circumstances. Its appeal has always been to the thrusting, the ambitious and the prosperous, with much less regard for those who are deprived and disadvantaged.

Yet it must surely be recognised that, however energetic and enterprising the individual, there is usually a recognition that personal industry can prove unrewarding—that ill-health and old age can frustrate ambition. It is against that background that the majority of people prefer to face the future with a Government who at least flavour their policies with the ingredient of humanity.

It is absolute nonsense to pretend that the high level of unemployment is a consequence of a Labour Government practising Solialist principles. Any serious examination of the charge would lead to a quick acquittal. My right hon. and hon. Friends in the Department of Employment have buffered the situation. But the fact remains that we are operating from not a Socialist base but a capitalist economic base.

Like every other capitalist State in the western world, we are suffering from heavy unemployment. If the Conservative Party wishes to lay the blame for the number of people without jobs on the existence of a Labour Government, it should endeavour to explain why the level of unemployment is so desperately high in the United States and in all industrial nations in Europe, the majority of which have Right-wing Governments.

There must be drastic change in the basic economic structure of our society if we are to resolve the unemployment problem. That solution will not be found in the creation of an enormous number of new jobs in manufacturing industry, although that appears to be the formula that unites both sides of the political divide in the House. Not long ago it was advocated—and this was implemented—that we should decant workers in large numbers from the public sector so that they could take part in the surge forward that was to take place in manufacturing industry.

That idea ignored that manufacturing industry was at that time working well below its capacity, that there were hundreds of thousands of workers with experience in industry who were unemployed, and that there was no great demand for nurses, hospital porters, social services workers or home helps in manufacturing industry.

There is overwhelming evidence that we shall not cure the unemployment problem by investment in industry. Of course, investment in industry is important and it has been neglected for too long. The failure of private enterprise to invest in home industry is unbelievable and unforgiveable. Only now, with a Labour Government in office offering untold millions of public money to reluctant entrepreneurs, is there any evidence of industrial investment. It is incredibly ironic that a Labour Government should be engaged in the task of giving the kiss of life to the corpse of capitalism.

I appreciate the necessity for investment in industry on a grand scale but I resent the avenue by which funds are made available. The process, however desirable, will not remedy the unemployment problem. That is an entirely separate issue from industrial investment. The purpose of industrial investment is to generate wealth, not employment. At one time the two went side by side. But that is no longer so. It is folly to pretend that by curing one outstanding national problem we shall automatically and conveniently solve another.

Some people still embrace the pathetic fallacy that investment in industry means jobs in industry. In the 13 years between 1963 and 1976, production in engineering and allied industries increased by 27 per cent. During the same period the labour force in those industries declined by 316,000. The textile industry improved production in the same period by 23 per cent. but the work force declined by 242,000.

During the same period, production in the gas, electricity and water industries increased by 73.4 per cent. and the number of workers declined by 65,000. Most spectacular of all, in the same period production in coal, petroleum products, chemical and allied industries rose by 96.2 per cent. and the work force diminished by 19,000.

There is now 60 per cent. more plant and machinery in manufacturing industry than there was in 1963. Manufacturing industry produces 30 per cent. more than it did in 1963. In 1976 we exported 41 per cent. more manufactured goods than we did in 1970. Between 1970 and September 1976 nearly £13 billion was invested in industry at 1970 prices. But every industry now employs fewer people. Now there are over 1 million fewer people working in manufacturing industry than there were in 1963.

High employment is not the result only of the recession. The problems that beset the United Kingdom also affect all the other western industrialised nations. Industry does not require more people. It needs more investment, greater output, a higher level of exports. It does not need more people.

Technology is advancing. Industries are becoming more capital-intensive. Another factor is superimposed upon the problem of technological advance. It is often overlooked but it is important if we are to face the problem openly and honestly. It is that the size of our labour force is increasing year by year. Each year 150,000 additional people seek employment. It is estimated that between 1977 and 1991 the labour force in Great Britain will comprise an additional 2.2 million people. That is a frightening estimate.

When one considers the enormity of the problem, the petty and carping criticisms that have been made during the debate recede into insignificance. In spite of the enormity of the problem I believe that there is good reason for optimism. We must recognise that there are possibilities for a better life for all our people if we have the courage and capacity to grasp the opportunities.

Many options and many opportunities will become available. I think that we can create the abundant life that Socialism is all about, and if we can do that with less sweat, tears and drudgery, what is so terrible about that? We should see expanding public service and expanding public facilities as a sign of a civilised society. It is lunatic to get rid of people from the public sector on the pretext that industry needs them, when it plainly does not. We could introduce earlier retirement, a programme that would not be nearly as expensive as is sometimes claimed because one-third of the money paid in redundancy payments already goes to those between the ages of 60 and 64, as does 40 per cent. of unemployment benefit and 23 per cent. of sickness benefit.

We could set about introducing a shorter working week. There would he the usual objections from employers, but, oddly enough, British industry seems to respond reasonably well to a shock or stimulus of this nature. We are always being told by Conservative Members how we thrived and prospered during the period of the three-day working week, so it should be a cakewalk to reduce the working week to 35 hours.

It might be better if the reduced working week were introduced in harmony with our industrial competitors, but if need be we can go it alone because I can recall, as others can, that when the 40-hour week was introduced there was great resentment and we were told that the nation was unlikely to survive, but we did. I recall even further back in the 1930s when the Socialist Government in France introduced a 40-hour week. They did it in isolation and were told that the country would not be able to continue as a prime industrial nation against that background, but obviously that was not so.

People who are employed in advertising, insurance and a whole host of similar enterprises seem to manage well enough on a week of 30 hours or so. Why should not those who work in factories, foundries and engineering on the production line have an equal entitlement to leisure? The arrangement would create hundreds of thousands of additional job opportunities. And why not sabbatical years for working people, and why not extended opportunities for education and travel? Perhaps we should abandon our somewhat puritanical attitude towards work itself, an attitude which I assure the House is not entirely shared by many who are in possession of abundant private wealth though I concede that they are frequently found of urging others to toil and spin with even greater ferocity than they do currently.

It would be churlish if I did not take this opportunity of paying tribute to the Department of Employment which has shown great vision in introducing schemes to provide employment and occupation, particularly for young people. It has done that by way of the temporary employment subsidy, the job release scheme, the job creation scheme, the youth opportunities programme, the youth employment subsidy and the small firms subsidy. All those schemes show imagination, and all have been successful.

The Department of Industry, too, has contributed towards the creation or preservation of employment, though I believe that we should utilise the National Enterprise Board to a greater extent than we do and provide it with greater funds.

It is estimated that more than 1 million workers have benefited from the special measures to provide employment, and the main Opposition party, with its incessant emphasis on profit as the only genuine incentive to providing work, would, in my view, place a great number of people, perhaps most of those who have acquired these freshly minted jobs, at risk by applying their policy of cutbacks in public spending. Let us make no mistake about it. These jobs have been established by public spending on a quite lavish scale.

I believe that there is much for which we can be thankful. We have natural gas in both the Irish and North Seas. We have North Sea oil, and we have vast reserves of coal. We have the beginnings of a large-scale training programme. We still have probably the best skilled workers in the world, especially our engineers, who will always be in demand, particularly as we move into this technological revolution.

We have in this country the finest places of learning in the world. We have a rising generation that will have the capacity to meet and solve the problems that our generation has helped to create. I am confident that the future will bring prosperity, not just to a small elite selfish section of the population but to the wider community who have hopes and entitlements which can be realised only in a democratic Socialist society.

Several hon. Membersrose—

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. May I suggest speeches of under 10 minutes for the sake of all?

8.41 p.m.

Mr. James Kilfedder (Down, North)

The hon. Member for Chorley (Mr. Rodgers) should realise that unemployment is not made acceptable for the work- ing people of this country merely because it has been created by a Labour Government. They find it unacceptable whichever Government create it.

In Northern Ireland unemployment is greater than in any other part of the Kingdom. The stark dramatic fact is that it is higher than at any time since 1938, and that is going back to bad old days that we do not want to see repeated. With 73,000 people unemployed in Northern Ireland, 13 per cent. of the working population is facing the future without hope or the prospect of work and feeling desperately frustrated. If the Northern Ireland unemployment figures for this month are were translated to Great Britain, 2.9 million people would be on the dole.

At present in Northern Ireland one in every two school leavers is out of a job, and I cannot allow that agonising situation to continue without protesting vehemently. At its most optimistic level the youth opportunities programme and the job creation scheme will not provide more than 4,000 job opportunities in work experience and at training centres, and most of those are for less than 16 weeks. With the widespread knowledge that there are no permanent jobs for them, job experience may lead only to a greater feeling of frustration and discontent among young people.

Clearly there is a need for large industrial enterprises, but I believe that insufficient attention is devoted to small firms. There are nearly 75,000 self-employed people in Northern Ireland, and more than 30,000 of them employ a total of 200,000 others. Most of the 490,000 employees in Northern Ireland work in shops, offices, factories and farms with fewer than 200 employees.

There are other regions in the United Kingdom like Northern Ireland with a similar percentage of unemployed persons, where large-scale industry, while important, is not the principal employer. Therefore greater priority should be given to the small firms and their problems. The TUC and the CBI concentrate too much, as the Government do, on the large scale, and not enough on the small scale. Some recent legislation, while excellent in intention, has had a restrictive effect on the growth potential of small firms. Indeed in many cases, it has put them into financial difficulties, and some even into liquidation. The temporary employment subsidy and the small firms employment subsidy seem to do no more than offset the consequences of the taxation system.

The Employment Protection Act not only protects the employment of those who are lucky enough to have jobs, but militates against small firms taking the costly step of employing extra people—

Mr. Ivor Clemitson (Luton, East)

Nonsense.

Mr. Kilfedder

I am describing what is happening in the country.

Mr. Clemitsonrose—

Mr. Kilfedder

I am not giving way to the hon. Member.

Mr. Clemitson

Ah!

Mr. Kilfedder

I want to restrict my speech to eight minutes so that another hon. Member may speak.

It is commercially safer for a small firm with a full order book to arrange overtime for its existing work force than to engage more people, including young persons.

Small firms in inner Belfast have to face the facts of city centre decay—high rents, spiralling rates and skilled workers who have moved out to the new suburbs or the small towns which ring the city. Large-scale public investment would lead the way to large-scale private investment in the inner city areas. I welcome the belated change in the Government's policy, but far more resources must be devoted to the revitalisation of the inner areas of cities throughout the United Kingdom.

I doubt that work sharing, in the sense of reducing overtime and spreading the available employment, would make much difference in Northern Ireland to the actual number of unemployed compared with, say, the Midlands. However, there is a feeling that the level of efficiency decreases with overtime and that in the small firm particularly, overtime working reduces buoyancy and flexibility.

Certain boredom at work presents a real problem for the worker. This matter has not been mentioned by Labour Members. Not enough attention has yet been paid to the subject of boredom, but when workers are bored they are bound to get into squabbles with management, with all the resultant difficult problems.

The fundamental requirement is the restoration of real incentives both to firms and to employees. I am convinced that one reason for the slow recovery of the United Kingdom, compared with Germany and France, is the taxation system. I should like to see a thorough examination of the effects of the system on productive effort, the level of investment and the modernisation of equipment.

I am also worried about the effect on the number of unemployed of cheap imports from Poland, Taiwan and elsewhere. In 10 years Ulster's mechanical and electrical engineering industries have lost 6,500 jobs, textiles have lost 11,000, clothing and footwear 8,000 and the distributive trades about 8,000—a total of over 33,000 jobs lost through what amounts to dumping. Some of the jobs may have been lost because of technical changes, but most seem to have been lost because of cheap imports. It is high time that something was done to stop that.

Mr. John Ryman (Blyth)

What?

Mr. Kilfedder

Some of the hon. Gentleman's hon. Friends could give him the answer—that is, to make sure that those items are not dumped, thereby throwing people on the dole.

The big firms in Northern Ireland need an investment of £100,000 to create every new job. The small firms can create 10 jobs for the same investment. Thus, in Northern Ireland at any rate, it makes sense to give the small firms high priority. It is easier for the small firms to cope with modernisation, and to create worthwhile employee incentives and to improve the productivity rate. But the small firms need the full-blooded co-operation of the Secretary of State for Northern Ireland. They need loans at low interest rates and a change in the taxation system.

There are areas in Northern Ireland with 40 per cent. unemployed. Whole towns, such as Newry and Strabane, have 25 per cent. to 30 per cent. unemployed. Bad as it is for anyone to lose his job, it is devastating for a young person, fresh out of school and full of hope and expectation of a new life, to be faced with the certain prospect of no job and no work as far ahead as he can see.

In the name of those young people throughout the Province and the 73,000 unemployed in Northern Ireland, I shall vote at the end of the debate against the Government who have allowed the crisis to worsen since 1974. In saying that, I say to the Conservatives who hope that there will be an election and that they will form the next Government that they must also give assurances that they will improve that situation and dramatically reduce the number of unemployed in Northern Ireland.

8.49 p.m.

Mr. Ivan Lawrence (Burton)

I am sorry that the Minister of State, Department of Employment could not stay, because I wanted to compliment him on the professionalism of his speech and to express my admiration of its sheer, brazen effrontery.

If I were a Minister responsible for employment in this Government I should have jumped off a cliff a long time ago or at least resigned; but not that redoubtable performer the Minister of State. Like the burlesque performer of old, the show had to go on; the world was falling about his ears; everything he had lived his political life for was in pieces, and there he was hamming it up at the Dispatch Box.

A visitor from Mars hearing the Minister of State might have thought that the Government had actually put Britain "Back to work with Labour", instead of doubling the number of unemployed. He might well have thought that all the other comparable nations in the world had done far worse than we had instead of having done almost invariably better and put us nearly bottom of the league. Such a visitor might have thought that we had all the elements against us, instead of having the bonanza of North Sea oil and gas.

Listening to that Archie Rice character the Martian might have thought that all the Government's forecasts of the past had been right instead of all wrong; that Labour had been good to small businesses; that the Employment Protection Act had actually created jobs; that the Government had fought for the cuts in public expenditure rather than having had them forced upon them by the IMF; and that the result of all that will be that a grate- ful nation will return Labour to office at the next election.

That speech might have amused a Martian, but it will not have amused the nation, still less will it have amused the 1,585,800 people most of whom have this Labour Government to thank for being out of work. This Government's record on unemployment has been a humiliation even for their own supporters.

In Burton-on-Trent today there are 1,871 people out of work compared, with only 672 when we left office—and that latter number included students, who do not figure in today's total. What a record to be proud of! The Labour Government have brought about a threefold increase in the number of jobless when they promised a decrease in the numbers out of work. That must be an utter disgrace.

When we consider whether there is any prospect of an improvement if this Government stay in power, what is the situation? My right hon. Friend the Member for Crosby (Mr. Page) pointed to the horrifying future facing Liverpool and Merseyside which the Select Committee of which I am a member visited. Unemployment there stands at 11 per cent. now, I think, and will probably rise to 14 per cent. in the next few months. The same sort of thing applies in Wales, where the level of unemployment is between 11 per cent. and 12 per cent., and it applies in the southwest and in other regions all over the country.

Yet we have Labour Members advancing Socialist solutions—more nationalisation, as though nationalisation had ever created more jobs; a reduction in the working week, which would be likely to increase unit costs and price us out of world markets; protectionism, which would stop other countries from buying from us; and more cuts in defence, which have already cost about 200,000 jobs that people would have had but for Socialism.

What else Labour Members would do has not been made very clear, since most of the speeches today have been taken up with an attack upon Conservative policies, an attack which is always made when the Labour case is a bad one, and an attack which is as ill-founded as it is misleading. What is certainly clear—nobody can argue against this point—is that the policy of the Labour Government has so far been a total failure. If they are going to break away from that policy they are leaving it a little late to tell us about it, as it is just about 11 weeks away from the next election.

The Labour Government's remarkable performance over the unemployment forecasts does not help to convey confidence. As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) showed, every optimistic forecast of reduced unemployment has been wrong. One can understand why the Chancellor would not let the Select Committee and the Manpower Services Commission have his mid-term forecast for the next 12 months, because if it has been wrong when the mid-term forecast has been promising what on earth can we expect when the forecast is bad? Bad it must be. And to pretend that the 1.7 million was not a forecast is to play with words—and for what other purpose than to mislead everybody?

It may be that there can be no reliability about such forecasts, but it is absurd to pretend that there is some important difference between an informed assumption about future unemployment trends and a forecast of future unemployment trends. Further, it is sheer idiocy and grossly misleading to pretend to optimism that unemployment will fall when the Government and Trades Union Congress both agree that it would require a growth rate of about 3½ per cent. a year merely to keep unemployment at the present level and when our growth rate is now under 2 per cent. So let us have no more of it. Let the Government come clean for a change. Let us have some truthful open government, as they promised us.

What about Conservative policy on unemployment? I cannot stand here and catalogue it. That has been done almost ad taedium. Although hon. Members on the Government Benches never stop baying. "What is your policy?" because they cannot think of anything else to say, the truth is that anyone who has attended our debates or read Hansard will know that it has been detailed often, loud and clear, from the Conservative Benches.

The silliness of the criticism that we do not have a policy has, I believe, filtered through to the hon. Member for Liver- pool, Walton (Mr. Heffer), whose criticism was not that we did not have a policy but that our policy was wrong. He is aware that we have a policy. But there has come from the hon. Gentleman the persistent myth—

Mr. Heffer rose—

Mr. Lawrence

No. The hon. Gentleman has had his turn, and other hon. Members want to speak. We have had from the hon. Gentleman the persistence of the myth that we want more public expenditure, the implication being that we want more overall public expenditure. We do not want an increase in overall public expenditure. We want a decrease in overall public expenditure, but we are prepared to have some increase in some sectors of public expenditure.

For example, we can cut back on overall public expenditure by reducing some of the wasteful schemes proposed for nationalisation and continuing housing subsidies. If we want to spend more money on the police, that is in order to reduce crime, which is an extraordinary expense for the nation. If we want to spend more money on defence, we shall spend less on social security and unemployment benefits for those who will have jobs. So let hon. Members not continue to be so obtuse about it.

Then there is the preoccupation among hon. Members on the Government Benches with the myth that cuts in public expenditure do not help employment. They do. My right hon. Friends have explained time and again how allowing for tax cuts generates enterprise, investment and jobs. Let me give the hon. Member for Walton and his hon. Friends an example of how it has worked here in Britain and recently. In his opening speech today, the Minister said proudly that the Government had reversed the trend of increasing joblessness over the past several months. How did that happen? It did not happen as a result of more subsidies, more defence cuts, or more Socialism. It happened because the International Monetary Fund forced public expenditure cuts on the Government, which enabled the Government to ease off on some of their borrowing. The pound therefore became steadier, the rate of inflation came down, and growth rose slightly. That is what has happened. It has helped to redress some of the appalling imbalance of unemployment in this country, and the cuts have not had anything like the damaging effect on jobs which hon. Members opposite have been forecasting.

We have had a repeat appearance of the myth that to increase productivity necessarily means a loss of jobs. Again, I shall not repeat the arguments, which have been put daily from the Opposition Benches, showing that increased productivity is the only way to revitalise industry, but I draw attention to a study reported in the May 1978 issue of the Department of Employment Gazette, which shows that the 10 industries experiencing the highest growth in productivity over the past 30 years have all provided extra jobs. Moreover, the CBI has shown in its studies that times of increasing growth in the domestic product have also been times of increasing jobs.

We all want to improve the situation. A good deal of discussion of an ecumenical nature, on which both sides of the House can agree, has taken place in the debate today. All of us understand the tragedy of unemployment and the effect that it has on the social fabric and on the crime wave, in particular. But to repeat ad nauseam the myths invented about Conservative policy will not reduce the level of unemployment. Returning to office a Government who have totally failed to provide jobs and who promise only more Socialism will not reduce the level of unemployment. Surely, it must be clear to everyone that only with the resurgence of confidence which will come with the return of a Conservative Government will this nation stand even a chance of getting Britain back to work.

8.59 p.m.

Mr. John Ryman (Blyth)

I regret the partisan note that has been injected into the debate. I should like simply to make one or two points which seem to me to be very important indeed in the light of this debate.

In my constituency of Blyth, the rate of unemployment, for both men and women, is higher than the rate anywhere in the country with the exception of western Scotland and some parts of Merseyside and Wales. In Blyth, Cramlington and Bedlington, and some of the out- lying areas of my constituency, the present unemployment rate is terrifyingly high compared with the rate in the rest of the country.

In the short time available to me, I want to deal with only two points, which I respectfully suggest the Government could deal with immediately and which would bring about an improvement in the terrible situation in the north-east. I give credit to the Goverment for having introduced, in the words of the Holland Report, some 39 schemes since February 1974, some of which have been helpful, some of which have worked, and sonic of which have not worked at all. The job release schemes, job creation schemes, community industry and the rest of them have played a small part in dealing with the terrible unemployment problems in the north-east.

Where the Government have totally failed, and must admit they have failed, is that in seeking to attract new industry to the north-east and providing development grants and loans of various kinds, they have applied insufficient monitoring of those schemes. The result has been that firms have come to the north on the pretext of creating jobs by setting up factories, and so on, have absorbed the grants and loans, and some of them have, within a relatively short time, closed their factories, thrown many people out of work, and disappeared from the northern areas, having derived the benefit of very generous Government grants and loans.

This is a state of affairs which is continuing daily. This afternoon I was at the Department of Industry with a Minister of State. I was pointing out the fact that a wholly-owned subsidiary of Courtauld, Exquisite Knitwear, was about to close a factory on the borders of my constituency, throwing out of work 149 men and women, that same company having done exactly the same thing in Cramlington two years ago and having received millions of pounds in Government grants and loans.

I respectfully suggest that Courtauld is a company without a social conscience. What that company does, time and again, is to take Government money whenever it can get it, in the form of grants or loans, go through the motions of creating employment in the north, and, when it suits that company for internal financial manipulation of its own kind, close a factory, causing untold misery by throwing people out of work.

Courtaulds had the impertinence to close a factory in Cramlington two years ago—Exquisite Knitwear—and the following day apply to the Department of Industry in a bid to take over the old Brentford Nylons factory, which Lonrho eventually bought with Government aid of £5 million.

At that time, representations were made to the Department of Industry and the Department of Employment, and the reply that one got from Ministers and their civil servants was "What do you want us to do about it? Can you conceive of circumstances in which we can stop companies such as Courtaulds taking money out of the north and using that money for their own operations outside development areas?"

There is a specific example where my right hon. Friend and his colleagues in the Government can do something at least to alleviate the problem of unemployment in the north. They can strictly monitor grants and loans to companies such as Courtaulds and exert pressure on such companies not to close their factories in the north, because if they are minded to do so they should be struck off the lists of those entitled to Government aid of any kind.

Here we have a company that grabs public money for its own purposes, buys expensive machinery for development area use, and then ships that machinery out of the development area, to the southeast of England or elsewhere, having obtained that money by quite fraudulent means in the first place, and leaving behind a wake of people rendered unemployed after being given a short period of employment.

That is a specific topic that the Minister might like to consider. It could easily be achieved through officials efficiently monitoring the grants and loans made to companies in the north-east.

The temporary employment subsidy payments, which are substantial, should not be made to companies that are obviously going through the motions of, and laying the foundations for, future redundancies. One of the awful things about our being in the EEC is that we have had to ask permission from Brussels to extend our temporary employment sub- sidy schemes. They have been recast in a different form. When the payments are made, if the receiving company puts men and women on short time it now has to apply to the Government for an additional short-time working loan in addition to the temporary employment subsidy.

That is another example of the Government's pouring taxpayers' money into the pockets of companies such as Courtauld which take the money and then make men and women unemployed in the north. It is the continuing scandal of the rape of the north-east, where there are such companies grabbing public money and leaving a trail of unemployment in their wake.

At the end of the day, the only way in which the Government will get an increase in investment is to make it financially worthwhile for companies to go to the north. Industrialists have asked me time and time again "Why should we come to the north-east when we can set up factories in Germany, Belgium and elsewhere within the Community and do better out of it? What incentive have we to come to the north-east?" It is a question of fiscal and taxation policy. That is why I have grave misgivings about the Government's intention to restrict dividends again this week, as forecast, because it is a positive discouragement to investment and therefore to the creation of jobs in the north.

Mr. Alan Clarkrose—

Mr. Ryman

I am sorry, but I cannot give way. Time is short. I was told to be brief, and I have promised to be. I am trying to inject a sensible note into the debate, having listened to one or two inflammatory speeches from the Opposition Benches.

Looking at the matter on its merits, without electoral bias of any kind, the Government should now take such steps as can be taken to encourage investment in manufacturing industries in the north of England. The only encouragement they can give industrialists is to make it worthwhile for them to go north and to stay there. The only way to do that is to provide financial incentives, and not camouflage unemployment.

In my constituency the unemployment rate is now 15½ per cent. to 16 per cent. We have just had the tragedy, as have many constituencies, of the vast majority of school leavers having nothing to look forward to except the dole. Of about 900 school leavers in my constituency this summer, about 100 will be found employment or training of some kind in the immediate future. That means that about 800 children are leaving school, or have left within the past few weeks, with no prospects of employment or training.

That is disgraceful. The Government have nothing to be proud of. [HoN. MEMBERS: "Hear, hear."] It ill becomes Conservative Members to sneer in that supercilious, forensic manner, because it would be a thousand times worse if they ever had the management of our affairs in their power.

However, the Government should not be complacent. I speak for the people in the north-east, where the effect of unemployment today is more terrible than it has been since the 1930s. The Government have nothing to be proud about, but the Opposition have not one sensible idea. They have never put forward one, sensible, constructive measure to deal with these problems.

At the end of the day the Government should recognise that of the 39 schemes or so that have been introduced since 1974, which the Holland report recited, some have been sensible and constructive and of credit to the Government's efforts but many have failed and certain specific measures have been counter-productive. An example of that was the abolition in December 1976 of the regional employment premium to save £150 million in public expenditure. It has had a disastrous effect on the north-east, where it contributed directly to a cutback in industrial training and to an increase in unemployment.

The Government should now put the fight against unemployment right at the top of their list of priorities. A Labour Government should say that their prime target for action is unemployment. That is why, despite the shortcomings of the Government, I infinitely prefer a Labour Government's policies to those of the Conservative Party. But there is no getting away from the fact—and the Government must recognise this if they are honest about it—that their efforts to alleviate unemployment have so far been an abysmal failure.

9.11 p.m.

Mr. Teddy Taylor (Glasgow, Cathcart)

The hon. Member for Blyth (Mr. Ryman) made a telling speech about the serious unemployment in his constituency, but some of us would have appreciated it more if, instead of popping in at the end of the debate to discuss this serious matter, he had been here earlier and thereby avoided keeping out those such as my hon. Friends the Member for Plymouth Sutton (Mr. Clark) and for Manchester, Withington (Mr. Silvester), who have sat here throughout in the hope of making a contribution about their constituencies.

Many views have been expressed in the debate, but at least there has been agreement on two things. The first is the desperate seriousness of the unemployment situation. The Minister of State made rather a silly attempt to add the temporarily-stopped figures of 1972 on a particular day when there were major industrial stoppages, in an effort to explain that the present figures were not so bad. But there is general agreement that the situation is desperately serious and has got a great deal worse in the last four years.

As my hon. Friend the Member for Cardiff, North-West (Mr. Roberts) rightly pointed out, in Wales the figure has gone up from 33,000 to over 90,000; the hon. Member for Belfast, South (Mr. Bradford) pointed out that in Northern Ireland the percentage figure has gone up from 6 per cent. to 13 per cent.; in Scotland, unemployment has risen from 77,000 to about 190,000 in the past four years—four years of a Government who went into the election on the basis of "Back to Work with Labour".

The second point on which there has been general agreement is that if, by chance, a Tory Government rather than a Labour Government had presided over these terrifying figures we would have had not a reasoned debate but an unseemly not. Before he took office the Leader of the House used always to be here for employment debates. As has been pointed out, when the unemployment figure was 600,000 in 1971, the right hon. Gentleman said that Labour would return to the question of unemployment day after day, week after week, month after month until the policies were changed. Now unemployment has reached 1½ million, but the right hon. Gentleman is not here. When he was Secretary of State for Employment, shortly after the Labour Government came to power, he said that he would not remain as Employment Minister and preside over mass unemployment. He did not do that. He changed offices and is now looking after devolution.

We have a desperately serious unemployment problem. It is frightening that, at the height of summer, the situation should be so catastrophic that in Scotland, despite the boost from North Sea oil and the seasonal gain from tourism, we have almost 200,000 people out of work. Unemployment has been the greatest failure in the Government's policy, and is totally at variance with the pledges that they gave to the people.

The Labour Party has always said that it has a kind of special respect for and special relationship with working people. But 600 working people have joined the dole queue every day since the Government took office. Seasonally adjusted, the increase is approaching 750,000 and in some areas the situation is appalling. There are some indications that things will get worse with the increase in national insurance charges and the special problems in international trade.

The figures have not been denied in the debate but we have had several alibis and excuses. We heard from the Minister of State and others, and particularly the hon. Members for Liverpool, Walton (Mr. Heifer) and for Chorley (Mr. Rodgers), who said that this was not a Labour Party problem and that it was not created by a Labour Government. The Minister of State said that it was all because of the international recession, and the hon. Member for Walton said that it was a crisis of capitalism.

Nobody would deny that there have been problems in world trade and that there has been a serious economic recession throughout the world. The facts are there. We condemn the Government, for the reason that when they came to power Britain was in a better state, in terms of jobs, than almost all our OECD competitors. Our unemployment was 2.8 per cent. and the OECD average figure was about 3 per cent. In other words, the Government started off, when they came to power, just a little better off than most of our competitors in that respect.

What has happened over the four years? We have the latest figures for the first quarter of 1978. They were provided in a Written Answer recently. Unemployment in the United Kingdom stands at 7.2 per cent. In the United States, the figure is 6.2 per cent.; in France it is 5.1 per cent.; in West Germany, it is 3.5 per cent.; in Italy, it is 3.5 per cent.; in Japan, it is 2.1 per cent.; in Sweden, it is 2.1 per cent., and so on. I ask the hon. Member for Walton and those who say that this is a capitalist problem and not a Labour Government problem, to explain why our country has performed so badly by comparison with the others which have been facing the same international problems.

The second argument put forward by some hon. Members, including the hon. Member for Liverpool, Garston (Mr. Loyden), is that we cannot blame the Government, because they have spent a great deal of mony. No one would deny that they have spent a great deal of taxpayers' money, pouring it into industrial investments, some sound and some very unsound.

The Secretary of State for Scotland always answers these debates in the same way. He starts by saying that unemployment in Scotland is 190,000; that the Government have put a great deal of taxpayers' money into the equivalent of 30,000 jobs; and that therefore, if it were not for the Labour Government, unemployment would be 220,000. He must know that that is bogus. I wonder whether he even recalls what he said in 1972, the worst Tory year for unemployment, but nothing like as bad as the present. He said: It is not much to the Government's credit that they should now be able to say that they are spending more on regional incentives, when it is they who have produced easily the worst post-war employment figures on record."—[Official Report, 27th July 1972; Vol. 841, c. 208 2.] The record that the Secretary of State now has is much worse than that which he condemned.

The Government must also remember that every penny which goes on aids to industry, whether they are sound or unsound, comes from the taxes and from firms which might otherwise have been able to provide more permanent jobs if they had been allowed to continue. I think that the Financial Times got it quite right when it said that: There is something ludicrous in the spectacle of a Government which subsidises employment in un-competitive industries by imposing a tax on jobs in productive ones. We have to remember that the money does not come out of trees and it does not come out of the printing press. In fact, Government spending in aids to industry has positively destroyed jobs in other fields, as we have seen from some of the investment of the SDA and other State organisations.

The third argument which is constantly advanced by the Government to explain the catastophic results of their policies is that things are getting better. I think that my right hon. and learned Friend the Member for Hexham (Mr. Rippon) was quite right in pointing out that almost every month since the Government came to power they have said that things are getting better. They say this particularly before by-elections or before local government elections.

Quite frankly, Mr. Speaker, the fact is that if the Trade Descriptions Act were to apply to the Chancellor of the Exchequer and the predictions that he has made, he could very well find himself in prison, and deserve to be there. In September 1974, he said: I am quite certain we can get through the whole of next year without 1 million unemployed. He did not say that he thought. He did not, like the Minister of State, say that he was making a wild guess. He said that he was certain, and, of course, he was wrong.

The Chancellor told us in April 1976: By the end of next year we shall be well on our way to the economic miracle. The only miracle has been to have the highest level of unemployment since the 1930s.

In May 1976 he said: We shall get unemployment down faster than any other country. The fact is that it has been slower than every country except Canada. Of course, just before the Garscadden by-election he told us about the 1 million jobs that were coming.

It is not enough just to complain about figures; we must ask ourselves to what extent the Government have been responsible for the situation. First, they have certainly been responsible because of their wildly irresponsible financial conduct when they came to power in 1974. We had the spending spree which brought this nation to bankruptcy, destroyed confidence and forced us to go to the IMF for a massive loan. Secondly, we condemn them because their high tax policies have destroyed initiative and enterprise, and this has cost jobs. Thirdly, we condemn them for what they have done to the small business sector. New ventures such as capital transfer tax have destroyed prosperity for family firms, as the hon. Member for Down, North (Mr. Kilfedder) rightly said. Fourthly, we cannot ignore the effect that the Government's policies on public ownership and nationalisation have had on business and industrial confidence.

Some people say that we are making a song and dance about this and that there is not a great deal in it, but those contemplating investment in this country look not just at what the Prime Minister says at banquets in the City but also at what is said by the Labour Party officially and by leading members of the Government. I was just thinking of what was said in a party political broadcast, not two or three years ago but on 15th June this year. In that broadcast there was talk about unemployment. Who was to blame? The answer was: The real blame lies with the industrialists who in their drive for profits have cynically closed firms and thrown millions on the dole. The Labour Party's aim is the common ownership of the means of production so that control of these firms can be taken out of the hands of the profiteers and the tycoons". Quite honestly, how can any industrialist, particularly one from abroad, contemplate investing in a country where wild things such as that are said on a party political broadcast? But, as my hon. Friend the Member for Ross and Cromarty (Mr. Gray) will know, like all things to do with the Labour Party, it is worse in Scotland. In Scotland we recently had a Labour Party conference at which a resolution was passed, almost unanimously, calling for the take-over of the hub of the economy. As well as 220 big manufacturing firms, the Labour Party in Scotland wants the nationalisation of banks and insurance institutions. That is fair enough, because the Labour Party agrees with that. But the conference also said that that nationalisation should be without compensation, except in cases of proven need". If you were to go out to America to try to persuade firms to come to Britain, Mr. Speaker. how could you do so when you have a Government in control whose party conferences talk about nationalisation without compensation as well as taking over all the means of production and doing away with the entrepreneurs?

Mr. Crawford

I am grateful to the Shadow Secretary of State. Like me, and unlike the Government, he wishes that unemployment could be brought down in Scotland. I suggest that one of the ways is by the establishment of a Scottish oil fund. Why did he vote against that?

Mr. Taylor

I can assure the hon. Gentleman that a Conservative Government will create the conditions in which jobs will prosper in Scotland and in England. The one thing on which we are all agreed is that, despite what the hon. Gentleman has said about his policies, there is not one single major Scottish industrialist or trade union which thinks that the problem of jobs in Scotland would be made better if the nationalists had their way. In fact, I could quote many firms which have said that not only would they cut down on jobs but they might contemplate going south. There is Scottish and Newcastle Breweries, the Weir group, Christian Salvesen, Collins the publishers and the insurance companies. If the hon. Gentleman doubts that, what about firms such as the steel industry, Babcock and Wilcox and others which depend enormously on Government contracts?

Mr. Crawfordrose—

Mr. Taylor

The hon. Gentleman made a long speech and refused to give way to me, as I have done to him. The one thing about which we can be quite sure is that nationalist policies would mean a massive job loss in Scotland. Of that there is no doubt whatever.

In addition, the Government have imposed employment taxes. What has this cost us in jobs? In June 1976 an extra 2 per cent. was imposed on employment taxes. The Chancellor said that this might cost an extra 60,000 jobs. The Secretary of State for Employment said about 100,000 jobs, and in its evidence to the Expenditure Committee the Treasury said 150,000 jobs. Irrespective of whether the Chancellor or the Treasury was right, we know that it cost us a great number of jobs. In all of these things the Government's policies have made things worse. It is for this that we blame them.

In addition to that, as I mentioned, the nationalist policies certainly would make matters worse. I hope that the Secretary of State will comment on the special situation in Scotland. We should like to hear from him, for example, about the future of the steel industry, with special reference to Hunterston. The Government must remember that they were elected on a manifesto which said that they had ended the delay and dithering in Hunterston. Let me tell the House how they have done it. The plans for an integrated steel works apparently are out. The direct reduction plant apparently is to be mothballed and, of course, the plans for constructing oil platforms have never started. Therefore, I ask the Secretary of State what precisely are the plans for Hunterston? Then we were told that 7,000 Civil Service jobs were coming. There have been many delays. What is happening now?

What about shipbuilding? We read in The Economist and other papers this week that a further additional fund for the shipbuilding industry will depend on the Government putting forward proposals to run down the industry. Are these plans being delayed until after a General Election?

There have been many similar negative comments. But what should be done? Basically, the Opposition say that the answer is to embrace economic policies which will encourage the free enterprise system and encourage firms to expand. If people say that this is woolly, we point out that the track record is there for all to see. Although the hon. Member for Garston and others of his hon. Friends think that the answer is in public enterprise, the fact is that in the eight years of Labour Government from 1964 to 1970 and from 1974 to 1976 about 1½ million jobs disappeared from the private sector. They went for good, and contributed to unemployment. In the 8½ years of Conservative rule from 1959 to 1964 and from 1970 to 1974, the fact is that an additional 1.2 million jobs were created. That is the difference. Frankly, if the hon. Member for Walton and others are looking to nationalisation and public enterprise to resolve our unemployment problem, the facts speak against them. The only real growth and answer to employment can cone from encouraging private industry.

Mr. Heffer

Surely the hon. Member is aware that today there would be practically no shipbuilding industry if it had not been taken over by the Government. British Leyland would have collapsed. All these are private enterprise firms. Rolls-Royce, Alfred Herbert and a whole list of other companies collapsed and had to be taken over by the Government in order to save those industries and the jobs in them. If that is private enterprise, what sort of track record is that?

Mr. Taylor

The answer is that when the Conservatives have been in power, we have created real jobs. We have created 12 million sound and prosperous jobs—not insecure jobs propped up by Government aid. There is no security in working for a firm which is propped up by massive Government aid. Let us also remember the simple fact that we do not help the economy by taking away money from successful firms which can provide growth and giving it to those who cannot.

What is called for is a change of direction. First, we want a major reduction in direct taxation. Without incentive and a real reward for enterprise, we shall never solve the basic employment problem.

Secondly, we want to remove the burdens on enterprise. That means a complete overhaul of capital transfer tax which has done so much damage to small family firms and prevented the growth of jobs. We also want a full review of the Employment Protection Act which, despite what the Government said, undoubtedly resulted in small firms not taking on new labour.

Thirdly, we want to stop sudden changes in policy which affect industry. We should like to hear from the Secretary of State how many jobs in Scotland were lost because of the sudden abolition of regional employment premium.

Fourthly, nothing would help confidence in industry more than if the Government were to announce the abandonment of further plans for State control, which has not helped to create jobs, which has not helped the consumer, which has not helped the taxpayer and which most certainly has not helped those employed in industry. We want to encourage more industrial and physical mobility. That means the mobility of people. It means expanding owner-occupation as well as the expansion of mobility of skills. We do not want to add to the complexity of government. Perhaps the Secretary of State will comment on the survey by the Scottish CBI pointing out that 82 per cent. of all the firms believe that the Government's Assembly plans will undermine industrial prospects in Scotland. We want a Government committed to free enterprise.

There is a clear need for a change in direction. We condemn the Government for their failures on employment. We condemn them for adding 900,000 to the totai of unemployed. We condemn them especially because the Labour Party has consistently used unemployment shamelessly and callously to win votes and power.

In February 1974, when there were half a million unemployed, the Labour Party ran a campaign to suggest that that was the result of the callous Conservatives. In July 1974 the then Secretary of State for Employment said that he would never preside over mass unemployment. In October 1974 the right hon. Member for Huyton (Sir H. Wilson), speaking frankly and with commendable modesty, said that unemployment represented the difference between our parties. At that time the right hon. Gentleman was uncharacteristically right. However, he was adding to the Socialist myth that in some mysterious way Conservatives create unemployment while the Labour Party is the party of the working people and fights for their aims.

It is now clear beyond a shadow of doubt that the Government were elected on a totally bogus prospectus. The Labour Party will never again be able to mislead the people that on jobs it is the party that can deliver the goods. Despite all that the Government have said, despite all the shameful and shameless propaganda, the fact is that after four years of Labour Government unemployment had doubled. The Government stand condemned by their record.

9.31 p.m.

The Secretary of State for Scotland (Mr. Bruce Millan)

The hon. Member for Glasgow, Cathcart (Mr. Taylor), in answering the intervention of the hon. Member for Perth and East Perthshire (Mr. Crawford), said that the advent of an SNP Government in Scotland would lead to massive job losses. I agree with him about that, but I say that the advent of a Conservative Government would lead to massive job losses.

Mr. Rippon

Look at the record.

Mr. Millan

I intend to do that. I want to examine the voting record of the Opposition over the past four years of Labour Government.

The hon. Member for Cathcart said that some of the recommendations and proposals that he was making might be regarded as rather woolly. Certainly they are woolly. They are more than woolly, they are dishonest, misleading and hypocritical. It is an impertinence for the hon. Gentleman to ask about the shipbuilding industry and the Government's action. Without the intervention of the Labour Government, without the nationalisation of the industry and without the action that we have taken through the intervention fund, with the further action that we are now taking for the extension of the fund, the industry would be in a state of total collapse.

Opposition Members voted against the nationalisation of the shipbuilding industry. They have voted against giving help to the industry as they have voted against giving help to other parts of British and Scottish industry.

The hon. Member for Cathcart, like the right hon. Member for Leeds, North-East (Sir K. Joseph) in the speech that he made during the employment debate on 4th July, poured scorn on the subsidies that the Government have paid to private industry. I agree that subsidies by themselves are not especially desirable or undesirable. However, I should be happy if we had a private enterprise sector that could do without subsidies. Without the massive help that the Government have given to private industry over the past four years, whether it be British Leyland, Chrysler or any of the many other examples, we would have had massively increased unemployment and seen our important industries that are basic to the success of our industrial prosperity picked off one by one.

In all these cases, the hon. Gentleman and his right hon. and hon. Friends, far from supporting the Government in the assistance that they have given to industry in this way, have taken every possible opportunity to vote against such assistance. Their actions, if the Government had followed them, would have led to a substantial increase in unemployment.

Mr. Robert Adley (Christchurch and Lymington)rose—

Mr. Millan

I imagine.—

Mr. Adley

Will the right hon. Gentleman give way?

Mr. Millan

I shall not give way to the hon. Gentleman at this time. I imagine that the reason why the Opposition chose this subject for debate today—we have no objection to discussing unemployment, because it is a serious problem—was that they hoped to make immediate and possibly electoral capital out of the figures of unemployment assumptions that the Chancellor of the Exchequer—

Mr. Hayhoe

I did not mention them.

Mr. Millan

The hon. Member for Brentford and Isleworth (Mr. Hayhoe) said that he did not mention them. In fact, he mentioned them in his opening speech. They have been very little mentioned since because the points that he made were devastatingly answered by my hon. Friend the Minister of State in his opening speech.

I should like in a sentence to repudiate the assertion that this Government were acting on working assumptions for unemployment which showed an increase over the next few years. That is absolutely untrue. Indeed, the latest assumptions on which we are working show a decrease over the next few years. It is not just a question of looking at the assumptions that we are making over that period. We can also look at the record over the last year.

Mr. Lawrence

Will the right hon. Gentleman give way?

Mr. Millan

I shall give way in a moment. Again, looking at the figures of total unemployment or seasonally adjusted unemployment over the last year, with the exception of last month, the figures have been reducing—admittedly gradually, but reducing—in each of the last nine or 10 months. Therefore, the figures at present are in fact lower than they were a year ago. That is true for the United Kingdom as a whole. It is true for the total unemployed figure, it is true for the seasonally adjusted figure and it is also true, I say to the hon. Member for Cathcart, for the Scottish figure.

Mr. Adley

Will the right hon. Gentleman give way now?

Mr. Millan

Yes.

Mr. Adley

The right hon. Gentleman said that he wanted to see a healthy and thriving private enterprise system. Is that likely to be in the Labour Party's manifesto at the next election? Will it also be in the manifesto of the Labour candidate at Dundee, East?

Mr. Millan

I was going on to say that, apart from the fact that unemployment figures have actually come down over the last year, the important point made by my hon. Friend the Minister of State, but also picked up by a number of hon. Members on both sides of the House, is that the total numbers actually in employment now compared with five years ago show an increase of about half a million.

Mr. Fred Silvester (Manchester, Withington)

Will the right hon. Gentleman give way?

Mr. Millan

No. The hon. Gentleman has not been here today.

Mr. Silvester rose—

Mr. Speaker

Order. The Minister is not giving way.

Mr. Millan

The point that I was making—

Mr. Reginald Eyre (Birmingham, Hall Green)

On a point of order, Mr. Speaker. Is it fair for the right hon. Gentleman to assert that my hon. Friend the Member for Manchester, Withington (Mr. Silvester) has not been here all day when in fact he has been here throughout the debate? Would it not be reasonable for the Minisster to withdraw that remark?

Mr. Speaker

Order. It might help if I say that the hon. Member for Manchester, Withington (Mr. Silvester) has been in the Chamber throughout the debate.

Mr. Millan

If the hon. Member for Manchester, Withington (Mr. Silvester) has been here, he has been inconspicuous. Of course I apologise to him. However, I shall still not give way to him.

I was saying that the total number in employment in the last five years has risen by no less than 500,000. I say that because there is an assumption—

Mr. Silvester

Give way.

Mr. Speaker

Order. It is clear that the Minister is not giving way to the hon. Member.

Mr. Millan

There has been an assumption in a number of speeches from both sides of the House that the total numbers in employment are bound to be reduced because of advancing technology in manufacturing industry. I do not accept that. I use the experience of what has happened over the last five years.

That does not mean that in many parts of the country there are not many intractable unemployment problems. The hon. Member for Belfast, South (Mr. Bradford) mentioned the particular problems in Northern Ireland. That is an area of particular difficulty. The hon. Member mentioned electricity prices. Because of the direct Government subsidy in Northern Ireland, electricity prices to industry are now, on average, the same as for the rest of the United Kingdom. There is a particular problem about gas prices. The Minister of State at the Northern Ireland Office is about to put to the Secretary of State for Northern Ireland recommendations for gas which arise from discussions with the British Gas Corporation and others. There has been a thorough inquiry into the problem. Certain options are available and we are considering them.

I return to the more general question of the background against which we must consider the present unemployment problem. The hon. Member for Cathcart acknowledged that we are considering the problem against the background of what is still an extremely disturbing and unhealthy world situation. The effects of the rise in oil prices since 1973 have not yet been overcome by co-operation between the developed nations.

I was interested in what the right hon. and learned Member for Hexham (Mr. Rippon) said but I did not agree with his conclusions. However, I agree with him that we must take into account the world problem. Inflation will be the subject of more detailed debate tomorrow when we discuss the White Paper. The only way in which the country can successfully compete with the rest of the world and, therefore, the only way in which we can keep the rate of unemployment down, is to improve our inflation record. We have done that to a considerable extent in the last year.

An indispensable part of the Government's policy is to keep on working at the reduction of the inflation rate. All our policies are based on achieving that objective. Without it we cannot have a competitive industry. Without a competitive industry, I do not believe that we shall make a significant impact on the unemployment figures.

That does not mean that we should not use every possible opportunity, by the temporary measures that we have introduced, and by others that we are considering, to reduce the crude unemployment figures as much as we possibly can. As my hon. Friend the Minister of State said in opening the debate for the Government this afternoon, the various special employment and training measures introduced by the Government, and which are operating now, cover about 300,000 people, and therefore have had a significant effect on the total number unemployed.

When we introduced these various special measures, many of them were criticised in a disparaging way by Conservative Members as making no significant contribution to the solution of our unemployment problem. The interesting thing now is that virtually everyone in the House believes that these special measures, temporary as some of them are, have a significant role to play. Indeed, the pressure now is not to remove these measures but to extend them both in time and in scope, and I am glad to say that over recent months we have done a number of things in that direction. As my hon. Friend said, we have a short-time working scheme under consideration with industry.

Nor have we neglected the question of training and retraining, a matter which a number of hon. Members raised. There is now a higher level of training and retraining than ever before. The problem of the shortage of skills—a matter that was raised by a number of my hon. Friends and by one Conservative Member—is under active consideration, and I draw to the attention of those who raised this matter the publication by the Manpower Services Commission entitled "Training for Skills: A Programme for Action", which was issued in December 1977. That is now under active consideration, and we shall have substantive discussions on this matter with the MSC in the autumn. The Government have welcomed the general approach of that document, they have agreed to provide financial backing, and these proposals are likely to come into effect in the autumn of 1979.

The business of attracting back into industry skilled people who have left it for a variety of reasons is extremely difficult. We know too little about why people leave. In particular, we know too little about why, in certain areas despite the fact that there are vacancies, with high wages, it is almost impossible to bring them back. I think that it is possible to exaggerate this problem in a number of ways. Nevertheless, the problem is real, and in particular areas, and with particular skills, especially in engineering, there are considerable difficulties

A considerable restraint on expanding firms is that they are unable to find the skilled workers that they need. More effort than ever before is being put into trying to deal with this problem, by the MSC and by others, and I believe that some of these efforts will bear fruit.

Mr. Neil Marten (Banbury)

During the Secretary of State's speech I have from time to time been glancing at Hansard. Will the right hon. Gentleman explain why the temporary employment subsidy was paid to a football club to employ 27 footballers at £20 a week each?

Mr. Millan

I am not sure that that story is completely accurate—

Mr. Marten

It is true.

Mr. Millan

—as the hon. Gentleman has described it. But if a football club is a commercial organisation it might come within the category of a small firm, which is what Conservative Members get so excited about. It is entitled to temporary employment subsidy just like any other organisation.

The essence of the Government's approach to reducing unemployment is that we should push ahead as rapidly as we can, with the utmost co-operation from both sides of industry, with the industrial strategy. Although manufacturing industry is unlikely to provide in the United Kingdom the number of jobs it has traditionally offered, the whole basis of our success in this country still depends on a thriving manufacturing industry. Without it I do not believe we can get the other jobs even in the service industries, much less the kind of services we require.

The strategy is operated with the cooperation of the trade unions, the CBI, and the individual sectors of industry. Despite criticism of it by Tory Members, it is well regarded and has been well received by industrial management, and that is where it matters.

The right hon. Member for Leeds, North-East recently, in opening the last unemployment debate—and the hon. Member for Cathcart did the same again this evening—was critical of the Government spending money on building up private industry with subsidy. I could quote many examples in Scotland, which could be matched with others from the United Kingdom as a whole, where substantial expansion of private industry has taken place because Government financial assistance was available. Such companies in Scotland are Digital at Ayr, IBM at Greenock, Beechams at Irvine and the Cummins engine plant at Shotts. The subsidies have been paid under the Industry Act. The right hon. Member for Leeds, North-East said that they were nonsensical and that they caused the loss of more jobs than they protected. That is an absurd statement. If the Tory Party were to go back to that policy it would be going back to the pre-1972 days and to repudiation of the 1972 Act, which has had a considerable effect in protecting employment.

Mr. Teddy Taylorrose—

Mr. Millan

I do not believe that we can solve this problem—

Hon. Members

Give way.

Mr. Taylor

Will the Secretary of State give way?

Mr. Speaker

Order. The hon. Member for Glasgow, Cathcart (Mr. Taylor) was heard in reasonable silence. Hon. Members ought to listen to the Minister in the same way. There are only five minutes left.

Mr. Millan

I do not believe that we can do the whole job that has to be done simply by using the 1972 Act. That is why we have established the National Enterprise Board, the Scottish Development Agency and the Welsh Development Agency. The SDA has now invested nearly £20 million in Scottish industry and it is providing jobs for about 8,000 people in 30 companies. The Welsh Development Agency has invested £8½ million and is at the minute supporting 2,000 jobs.

The Conservatives are in favour of castrating those agencies by taking away their industrial investment powers, just as they are on record, I understand, as favouring the abolition of the National Enterprise Board, which in the last year alone invested £200 million in about 20 companies. At the end of last year, employment in the subsidiaries of the NEB was nearly 300,000. It would be an act of industrial vandalism and irresponsibility for the Tories to abolish the NEB.

I am glad to say that, as well as its general contribution to employment, the NEB is making a particular effort in the north-west and the north-east. The work of the NEB, the SDA and the WDA is one of the most hopeful features of the present industrial scene. That work is being done not simply with the older industries which are suffering from the problems of the second industrial revolution but also in the newest industries and technologies.

In the micro-electronics industry, not only is there a Government scheme of assistance for the industry as a whole—£15 million has been allocated as an interim measure to encourage United Kingdom industry to apply the techniques of a wide range of its products—but the NEB is at present establishing under its direct financial guidance and encouragement and with direct NEB money a publicly-owned company to go into the micro-electronic industry which private enterprise has so far signally failed to do anything about.

What has happened to micro-electronics in this country is a significant illustration of the extent to which private industry, left to its own devices, does not meet the new needs of developing technology. The various sector working parties and the assistance that they make available are making a significant contribution to the new as well as the older industries.

[Interruption.] Despite the bellowing of hon. Members opposite, neither the hon. Member for Brentford and Isleworth nor the hon. Member for Cathcart made one constructive suggestion for dealing with the admittedly serious unemployment problems—

Mr. Humphrey Atkins (Spelthorne) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That this House do now adjourn: —

The House divided: Ayes 283, Noes 299.

Division No. 307]	AYES	[10.00 p.m.
Adley, Robert	du Cann, Rt Hon Edward	Hodgson, Robin
Aitken, Jonathan	Durant, Tony	Holland, Philip
Alison, Michael	Dykes, Hugh	Hordern, Peter
Amery, Rt Hon Julian	Eden, Rt Hon Sir John	Howe, Rt Hon Sir Geoffrey
Arnold, Tom	Edwards, Nicholas (Pembroke)	Howell, David (Guildford)
Atkinson, David (B'mouth, East)	Elliott, Sir William	Howell, Ralph (North Norfolk)
Awdry, Daniel	Emery, Peter	Hunt, David (Wirral)
Bain, Mrs Margaret	Ewing, Mrs Winifred (Moray)	Hunt, John (Ravensbourne)
Baker, Kenneth	Eyre, Reginald	Hurd, Douglas
Banks, Robert	Fairgrieve, Russell	Hutchison, Michael Clark
Bell, Ronald	Farr, John	Irving, Charles (Cheltenham)
Bendall, Vivian	Fell, Anthony	James, David
Bennett, Dr Reginald (Fareham)	Finsberg, Geoffrey	Jenkin, Rt Hon P. (Wanst'd&W'df'd)
Benyon, W.	Fisher, Sir Nigel	Jessel, Toby
Berry, Hon Anthony	Fletcher, Alex (Edinburgh N)	Johnson Smith, G (E Grinstead)
Biffen, John	Fletcher-Cooke, Charles	Jones, Arthur (Daventry)
Biggs-Davison, John	Fookes, Miss Janet	Jopling, Michael
Blaker, Peter	Forman, Nigel	Joseph, Rt Hon Sir Keith
Body, Richard	Fowler, Norman (Sutton C'f'd)	Kaberry, Sir Donald
Boscawen, Hon Robert	Fox, Marcus	Kellett-Bowman, Mrs Elaine
Bottomley, Peter	Fraser, Rt Hon H. (Stafford & St)	Kershaw, Anthony
Bowden, A. (Brighton, Kemptown)	Fry, Peter	Kilfedder James
Boyson, Dr Rhodes (Brent)	Galbraith, Hon T. G. D.	Kimball, Marcus
Braine, Sir Bernard	Gardiner, George (Reigate)	King, Evelyn (South Dorset)
Brittan, Leon	Gardner, Edward (S Fylde)	King, Tom (Bridgwater)
Brocklebank-Fowler, C.	Gilmour, Rt Hon Sir Ian (Chesham)	Kitson, Sir Timothy
Brooke, Hon Peter	Gilmour, Sir John (East Fife)	Knight, Mrs. Jill
Brotherton, Michael	Glyn, Dr Alan	Knox, David
Brown, Sir Edward (Bath)	Godber, Rt Hon Joseph
Bryan, Sir Paul	Goodhart, Philip	Lamont, Norman
Buchanan-Smith, Alick	Goodhew, Victor	Langford-Holt, Sir John
Buck, Antony	Goodlad, Alastair	Latham, Michael (Melton)
Budgen, Nick	Gorst, John	Lawrence, Ivan
Bulmer, Esmond	Gow, Ian (Eastbourne)	Lawson, Nigel
Butler, Adam (Bosworth)	Gower, Sir Raymond (Barry)	Lester, Jim (Beeston)
Carlisle, Mark	Grant, Anthony (Harrow C)	Lewis, Kenneth (Rutland)
Chalker, Mrs Lynda	Gray, Hamish	Lloyd, Ian
Channon, Paul	Grieve, Percy	Loveridge, John
Churchill, W. S.	Griffiths, Eldon	Luce, Richard
Clark, Alan (Plymouth, Sutton)	Grist, Ian	MacCormick, Iain
Clark, William (Croydon S)	Grylls, Michael	McCrindle, Robert
Clarke, Kenneth (Rushcliffe)	Hall-Davis, A. G. F.	Macfarlane, Nell
Clegg, Walter	Hamilton, Archibald (Epsom & Ewell)	MacGregor, John
Cockcroft, John	Hamilton, Michael (Salisbury)	MacKay, Andrew (Stechford)
Cooke, Robert (Bristol W)	Hampson, Dr Keith	Macmillan, Rt Hon M. (Farnham)
Cope, John	Hannam, John	McNair-Wilson, M. (Newbury)
Cormack, Patrick	Harvie Anderson, Rt Hon Miss	McNair-Wilson, P. (New Forest)
Costain, A. P.	Haselhurst, Alan	Madel, David
Crawford, Douglas	Hastings, Stephen	Marshall, Michael (Arundel)
Critchley, Julian	Havers, Rt Hon Sir Michael	Marten, Neil
Crouch, David	Hawkins, Paul	Mates, Michael
Crowder, F. P.	Hayhoe, Barney	Maude, Angus
Davies, Rt Hon J. (Knutsford)	Heath, Rt Hon Edward	Maudling, Rt Hon Reginald
Dean, Paul (N Somerset)	Henderson, Douglas	Mawby, Ray
Dodsworlh, Geoffrey	Heseltine, Michael	Maxwell-Hyslop, Robin
Douglas-Hamilton, Lord James	Hicks, Robert	Mayhew, Patrick
Drayson, Burnaby	Higgins, Terence L.	Meyer, Sir Anthony
Miller, Hal (Bromsgrove)	Rees-Davies, W. R.	Stewart, Rt Hon Donald
Mills, Peter	Raid, George	Stewart, Ian (Hitchin)
Miscampbell, Norman	Renton, Rt Hon Sir D. (Hunts)	Stokes, John
Mitchell, David (Basingstoke)	Renton, Tim (Mid-Sussex)	Tapsell, Peter
Moate, Roger	Rhodes James, R.	Taylor, R. (Croydon NW)
Monro, Hector	Rhys Williams, Sir Brandon	Taylor, Teddy (Carthcart)
Montgomery, Fergus	Ridley, Hon Nicholas	Tebbit, Norman
Moore, John (Croydon C)	Ridsdale, Julian	Temple-Morris, Peter
More, Jasper (Ludlow)	Rifkind, Malcolm	Thatcher, Rt Hon Margaret
Morgan, Geraint	Rippon, Rt Hon Geoffrey	Thomas, Dafydd (Merioneth)
Morgan-Giles, Rear-Admiral	Roberts, Wyn (Conway)	Thomas, Rt Hon P. (Hendon S)
Morris, Michael (Northampton S)	Rodgers, Sir John (Sevenoaks)	Thompson, George
Morrison, Charles (Devizes)	Rossi, Hugh (Hornsey)	Townsend, Cyril D.
Mudd, David	Rost, Peter (SE Derbyshire)	Trotter, Neville
Neave, Airey	Royle, Sir Anthony	van Straubenzee, W. R.
Nelson, Anthony	Sainsbury, Tim	Vaughan, Dr Gerard
Neubert, Michael	St. John-Stevas, Norman	Viggers, Peter
Newton, Tony	Scott, Nicholas	Wakeham, John
Normanton, Tom	Scott-Hopkins, James	Walder, David (Clitheroe)
Nott, John	Shaw, Giles (Pudsey)	Walker, Rt Hon P. (Worcester)
Onslow, Cranley	Shaw, Michael (Scarborough)	Walker-Smith, Rt Hon Sir Derek
Oppenheim, Mrs Sally	Shelton, William (Streatham)	Walters, Dennis
Osborn, John	Shepherd, Colin	Warren, Kenneth
Page, John (Harrow West)	Shersby, Michael	Weatherill, Bernard
Page, Rt Hon R. Graham (Crosby)	Silvester, Fred	Wells, John
Page, Richard (Wokington)	Sims, Roger	Welsh, Andrew
Paisley, Rev Ian	Sinclair, Sir George	Whitelaw, Rt Hon William
Parkinson, Cecil	Skeet, T. H. H.	Whitney, Raymond
Pattie, Geoffrey	Smith, Dudley (Warwick)	Wiggins, Jerry
Percival, Ian	Smith, Timothy John (Ashfield)	Wigley, Dafydd
Peyton, Rt Hon John	Speed, Keith	Wilson, Gordon (Dundee E)
Pink, R. Bonner	Spence, John	Winterton, Nicholas
Prentice, Rt Hon Reg	Spicer, Jim (W Dorset)	Wood, Rt Hon Richard
Price, David (Eastleigh)	Spicer, Michael (S Worcester)	Young, Sir G. (Ealing, Acton)
Prior, Rt Hon James	Sproat, Iain	Younger, Hon George
Pym, Rt Hon Francis	Stainton, Keith
Raison, Timothy	Stanbrook, Ivor	TELLERS FOR THE AYES:
Rathbone, Tim	Stanley, John	Mr. Spencer Le Marchant and
Rees, Peter (Dover & Deal)	Steen, Anthony (Wavertree)	Mr. Michael Roberts.
NOES
Abse, Leo	Clemitson, Ivor	Ewing, Harry (Stirling)
Allaun, Frank	Cocks, Rt Hon Michael (Bristol S)	Fernyhough, Rt Hon E.
Anderson, Donald	Cohen, Stanley	Fitch, Alan (Wigan)
Archer, Rt Hon Peter	Coleman, Donald	Flannery, Martin
Armstrong, Ernest	Colquhoun, Ms Maureen	Fletcher, Ted (Darlington)
Ashley, Jack	Concannon, Rt Hon John	Foot, Rt Hon Michael
Ashton, Joe	Conlan, Bernard	Ford, Ben
Atkins, Ronald (Preston N)	Cook, Robin F. (Edin C)	Forrester, John
Atkinson, Norman (H'gey, Tott'ham)	Corbett, Robin	Fowler, Gerald (The Wrekin)
Bagier, Gordon A. T.	Cowans, Harry	Fraser, John (Lambeth, N'w'd)
Barnett, Guy (Greenwich)	Craigen, Jim (Maryhill)	Freeson, Rt Hon Reginald
Barnett, Rt Hon Joel (Heywood)	Crawshaw, Richard	Freud, Clement
Bates, Alf	Cronin, John	Garrett, John (Norwich S)
Bean, R. E.	Crowther, Stan (Rotherham)	Garrett, W. E. (Wallsend)
Beith, A. J.	Cryer, Bob	George, Bruce
Benn, Rt Hon Anthony Wedgwood	Cunningham, G. (Islington S)	Gilbert, Rt Hon Dr John
Bennett, Andrew (Stockport N)	Cunningham, Dr J. (Whiteh)	Ginsburg, David
Bidwell, Sydney	Dalyell, Tarn	Golding, John
Bishop, Rt Hon Edward	Davidson, Arthur	Gould, Bryan
Blenkinsop, Arthur	Davies, Bryan (Enfield N)	Gourlay, Harry
Boardman, H.	Davies, Rt Hon Denzil	Grant, John (Islington C)
Booth, Rt Hon Albert	Davies, Ifor (Gower)	Grocott, Bruce
Boothroyd, Miss Betty	Davis, Clinton (Hackney C)	Hamilton, James (Bothwell)
Bottomley, Rt Hon Arthur	Deakins, Eric	Hamilton, W. W. (Central Fife)
Boyden, James (Bish Auck)	de Freitas, Rt Hon Sir Geoffrey	Hardy, Peter
Bradley, Tom	Dell, Rt Hon Edmund	Harrison, Rt Hon Walter
Bray, Dr Jeremy	Dempsey, James	Hart, Rt Hon Judith
Broirghton, Sir Alfred	Dewar, Donald	Hattersley, Rt Hon Roy
Brown, Robert C. (Newcastle W)	Doig, Peter	Hayman, Mrs Helene
Brown, Ronald (Hackney S)	Dormant, J. D.	Healey, Rt Hon Denis
Buchan, Norman	Douglas-Mann, Bruce	Heffer, Eric S.
Buchanan, Richard	Duffy, A. E. P.	Hooley, Frank
Butler, Mrs Joyce (Wood Green)	Dunnett, Jack	Hooson, Emlyn
Callaghan, Rt Hon J. (Cardiff SE)	Dunwoody, Mrs Gwyneth	Horam, John
Callaghan, Jim (Middleton & P)	Eadie, Alex	Howell, Rt Hon Denis (B'ham, Sm H)
Campbell, Ian	Edge, Geoff	Howells, Geraint (Cardigan)
Canavan, Dennis	Edwards, Robert (Wolv SE)	Hoyle, Doug (Nelson)
Cant, R. B.	Ellis, John (Brigg & Scun)	Huckfield, Les
Carmichael, Neil	Ellis, Tom (Wrexham)	Hughes, Rt Hon C. (Anglesey)
Carter, Ray	English, Michael	Hughes, Robert (Aberdeen N)
Carter-Jones, Lewis	Evans, Fred (Caerphilly)	Hughes, Roy (Newport)
Cartwright, John	Evans, Ioan (Aberdare)	Hunter, Adam
Castle, Rt Hon Barbara	Evans, John (Newton)	Irvine, Rt Hon Sir A. (Edge Hill)

Irving, Hi Hon S. (Dartford)	Moonman, Eric	Skinner, Dennis
Jackson, Colin (Brighouse)	Morris, Alfred (Wythenshawe)	Smith, Cyril (Rochdale)
Jackson, Miss Margaret (Lincoln)	Morris, Rt Hon Charles R.	Smith, Rt Hon (N Lanarkshire)
Janner, Greville	Morris, Rt Hon J. (Aberavon)	Snape, Peter
Jay, Rt Hon Douglas	Morton, George	Spearing, Nigel
Jeger, Mrs Lena	Moyle, Rt Hon Roland	Spriggs, Leslie
Jenkins, Hugh (Putney)	Mulley, Rt Hon Frederick	Stallard, A. W.
John, Brynmor	Murray, Rt Hon Ronald King	Steel, Rt Hon David
Johnson, James (Hull West)	Newens, Stanley	Stewart, Rt Hon M. (Fulham)
Johnson, Walter (Derby S)	Noble, Mike	Stoddart, David
Johnston, Russell (Inverness)	Oakes, Gordon	Stott, Roger
Jones, Alec (Rhondda)	Ogden, Eric	Strang, Gavin
Jones, Barry (East Flint)	O'Halloran, Michael	Strauss, Rt Hon R. G.
Jones, Dan (Burnley)	Orbach, Maurice	Summerskill, Hon Dr Shirley
Judd, Frank	Orme, Rt Hon Stanley	Swain, Thomas
Kaufman, Rt Hon Gerald	Ovenden, John	Taylor, Mrs Ann (Bolton W)
Kelley, Richard	Owen, Rt Hon Dr David	Thomas, Jeffrey (Abertillery)
Kerr, Russell	Padley, Walter	Thomas, Mike (Newcastle E)
Kilroy-Silk, Robert	Palmer, Arthur	Thomas, Ron (Bristol NW)
Kinnock, Neil	Pardoe, John	Thorne, Stan (Preston South)
Lambie, David	Park, George	Thorpe, Rt Hon Jeremy (N Deuon)
Lamborn, Harry	Parker, John	Tierney, Sydney
Lamond, James	Parry, Robert	Tilley, John
Latham, Arthur (Paddington)	Pavitt, Laurie	Tinn, James
Leadbitter, Ted	Pendry, Ton.	Tomlinson, John
Lee, John	Penhallgon, David	Tomney, Frank
Lestor, Miss Joan (Elton & Slough)	Perry, Ernest	Torney, Tom
Lever, Rt Hon Harold	Phipps, Dr Colin	Tuck, Raphael
Lewis, Arthur (Newham N)	Prescott, John	Unwin, T. W.
Lewis, Ron (Carlisle)	Price, C. (Lewisham W)	Varley, Rt Hon Eric G.
Litterick, Tom	Price, William (Rugby)	Wainwright, Edwin (Dearne V)
Loyden, Eddie	Radice, Giles	Walker, Harold (Doncaster)
Luard, Evan	Rees, Rt Hon Merlyn (Leeds S)	Walker, Terry (Kingswood)
Lyon, Alexander (York)	Richardson, Miss Jo	Ward, Michael
Lyons, Edward (Bradford W)	Roberts, Albert (Normanton)	Watkins, David
McCartney, Hugh	Roberts, Gwilym (Cannock)	Watkinson, John
McDonald, Dr Oonagh	Robertson, George (Hamilton)	Weetch, Ken
McElhone, Frank	Robinson, Geoffrey	Weitzman, David
McKay, Allen (Penistone)	Roderick, Caerwyn	Wellbeloved, James
MacFarquhar, Roderick	Rodgers, George (Chorley)	White, Frank R. (Bury)
McGuire, Michael (Ince)	Rodgers, Rt Hon William (Stockton)	White, James (Pollok)
MacKenzie, Rt Hon Gregor	Rooker, J. W.	Whitehead, Phillip
Maclennan, Robert	Roper, John	Whitlock, William
McMillan, Tom (Glasgow C)	Ross, Stephen (Isle of Wight)	Willey, Rt Hon Frederick
Madden, Max	Ross, Rt Hon W. (Kilmarnock)	Williams, Rt Hon Alan (Swansea W)
Magee, Bryan	Rowlands, Ted	Williams, Alan Lee (Hornch'ch)
Mallalieu, J. P. W.	Ryman, John	Williams, Sir Thomas (Warrington)
Marks, Kenneth	Sandelson, Neville	Wilson, Rt Hon Sir Harold (Huyton)
Marshall, Dr Edmund (Goole)	Sedgemore, Brian	Willson, William (Coventry SE)
Marshall, Jim (Leicester S)	Selby, Harry	Wise, Mrs Audrey
Maynard, Miss Joan	Sever, John	Woodall, Alec
Meacher, Michael	Shaw, Arnold (Ilford South)	Woof, Robert
Mellish, Rt Hon Robert	Sheldon, Rt Hon Robert	Wrigglesworth, Ian
Mikardo, Ian	Shore, Rt Hon Peter	Young, David (Bolton E)
Millan, Rt Hon Bruce	Short, Mrs Renée (Wolv NE)
Miller, Dr M. S. (E Kilbride)	Silkin, Rt Hon S. C. (Dulwich)	TELLERS FOR THE NOES:
Mitchell, Ausitn (Grimsby)	Sillars, James	Mr, Joseph Dean and
Mitchell, R. C. (Soton, lichen)	Silverman, Juliu	Mr. Ted Graham.
Molloy, William

Question accordingly negatived.

It being after Ten o'clock Mr. SPEAKER proceeded, pursuant to Standing Order No. 18 (Business of Supply), to put forthwith the Questions on the total amounts of the Votes outstanding for the year 1978–79 to be granted out of the Consolidated Fund for the services defined in those Votes.