HC Deb 01 July 1980 vol 987 cc1483-96

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

12.20 am
Dr. David Clark (South Shields)

In the early 1960s, when Geoffrey Moorhouse was collecting information for his book "The Other Britain", he found that the North-East of England had been eager to meet the challenges of the day. Last Thursday on Radio 4 he gave a revealing account of a return visit to the region. He recounted an episode that occurred in South Shields. As he stood overlooking the shipyards of the town he had a moving encounter with a gentleman standing next to him. He was a 52-year-old former shipyard worker who had lost his job several months previously. In their conversation the gentleman said that it was rather strange that his father had been in the same predicament in the 1930s. He said that it was only because of the war that his father found full employment. The first time that he had seen an adult cry was when he burst into his house and found his father in tears over his predicament. He said "Only last week I found myself in the same position when my son burst into my house. It was only by biting my bottom lip that I did not repeat that previous episode."

I recount that tale for two reasons. First, it is always useful, when talking about employment statistics, to remind ourselves that each one of those statistics represents a living human being undergoing a most humiliating experience. Secondly, there are lessons to be learnt from the fact that that man's father had found work only at the outset of the war.

I wish to give some bare statistics about unemployment in South Shields. In doing so, I am aware that we live in a time of world recession when we are seeing rocketing unemployment nationally and, even more so, regionally South Shields is not a small town. It consists of about 100,000 people. It has known the problems of unemployment, like most towns in the North of England. But I doubt whether many people in the South of England realise the extent of unemployment in South Shields. The Minister knows that, at the last count, there were 6,269 people without jobs, representing 16.2 per cent. of the employed population. The figures for men are much worse. On 12 June 19.4 per cent. of the men in South Shields were without work—one in five of the men had no jobs, and the figure is rising. When does the Minister expect it to be one in four? More than half of those people have been out of work for more than six months, and the prospects are bleak. Since the Government came to power the position has become worse, with a 26 per cent. increase in the past 12 months. In other words, for every three people in South Shields without jobs in May last year there are now four. I accuse the Government of wilfully increasing unemployment, not only in South Shields but in Britain, and of failing in their duty to tackle the problem. By their fanatical adherence to the theoretical policy of monetarism, with its high interest rates, they are making it virtually impossible for business men to borrow at 20 per cent. in order to invest. Because of that stupid policy we have high exchange rates, which mean that the export potential is lost. We are losing orders and we are losing jobs. What can the Minister do? I return to my anecdote about the war. Obviously, we cannot have another war, but we should look at the circumstances that surrounded the war and ask what were the factors that led to full employment. They were the co-ordination of resources and an increase in public spending. We can do that today without a war, and I believe that we should do so.

I want to suggest four or five examples of what the Government could do to help unemployment in South Shields. Let us have some dispersal of Civil Service jobs. As I walk down the streets of Westminster, I find the Civil Service looking for people, yet the North of England is looking for jobs. Why not transfer some of the jobs? I know that the Government have cancelled some moves to Cumbria and to other parts of the North of England. Why not do a U-turn?

Secondly, I understand that it costs the Exchequer more than £4,000 a year for the average unemployed family man. Instead of cutting back on STEP, instead of cutting the financial provision of the Manpower Services Commission, would not it be better to save some of that £4,000 and gainfully employ those men? For example, the town of South Shields has one of the most attractive beaches in the whole of England. I can say that without fear of contradiction. It is a very poor town, being the smallest metropolitan borough. We have great problems of deprivation. We have people who are willing to work. Why could not extra aid be given to the authority to take on extra workers and teachers? Instead, the Government are trying to force the local authority to make more people redundant.

The Government may say that it is a question of finance, but I have heard the Prime Minister for ever bragging about the marvellous deal she got out of the EEC. Let us put some of that money into the regional fund, and let us have some of it put into areas such as South Shields.

There is also the question of British Shipbuilders, one of the major employers in my constituency. The Government promised British Shipbuilders public sector orders. British Shipbuilders has had a marvellous record of achieving other orders. It set a target of 45 ships. Many people said that it was impossible, but has achieved that.

Mr. Don Dixon (Jarrow)

Ahead of schedule.

Dr. Clark

Ahead of schedule, as my hon. Friend the Member for Jarrow (Mr. Dixon) says. But it has been let down by the Government. As a result, many shipyard workers in my constituency are on short time directly because the Government will not advance public sector orders. It is about time the Government faced up to that fact.

I turn to the other problem of apprentices. The level of skill for the future in any town depends upon training the apprentices of today. Yet in an area such as mine, we find that apprentices are being made redundant, as a result of which they lose their skill, trade and ticket for ever. More than that, we are finding a drastic fall in the number of apprentices being taken on by companies in the constituency. Private industry has patently failed to provide the training for industry. The Government recognise that in Northern Ireland. I had a letter from the Minister only today in which he explains the difference. He says that in Great Britain responsibility for apprentice training is that of industry, but that in Northern Ireland the achievement of the target with regard to apprentices: was a matter of community development rather than the responsibility of industry". I suggest that that applies equally to areas such as South Tyneside and South Shields. I know of the terrible unemployment rate in Northern Ireland, but the figure in South Shields is no less and the problem of training our skilled people of tomorrow is just as much a community development as an industrial responsibility. I plead with the Minister to try a pilot scheme in areas such as ours, where the Government will take on some of the responsibility for training some of the apprentices. They represent the only thing that we have in the community—our skill for tomorrow. I remind the Minister that only 14 per cent. of young people in South Shields stay on at school after 16. Through economic forces they have to leave school.

The previous Government were just about to embark on an imaginative pilot scheme to pay young people to stay on at school. I urge the Minister to consult his colleagues about reintroducing the scheme. Surely it makes sense to pay young people to stay on at school or at college to obtain higher skills and a higher education rather than to turn them out on the dole, which is the only alternative for many people when we have unemployment figures and unemployment rates at the level that we are talking about.

I could go on to make practical suggestions which could be applied if the Government had the will and really wanted to tackle the unemployment problem. It is being said throughout the North of England—my hon. Friends who are present will confirm—that the Government do not care one iota for what happens there. That is common folklore. It has often been put about that in any case the people in the North of England do not want to work. I refer to an article in the The Times last Wednesday by Louis Heren. When talking of the people of South Shields, he wrote: Most people I know would refuse to work under such conditions, but they worked with a will and apparently without supervision. Those people in the South who believe that the British have become work-shy should visit South Shields. Louis Heren hit the nail right on the head, and there I rest my case.

12.31 am
Mr. Don Dixon (Jarrow)

I speak in support of my hon. Friend the Member for South Shields (Dr. Clark), who has so effectively dealt with the alarming unemployment prevailing in our area of South Tyneside, which covers his constituency of South Shields and my constituency of Jarrow. He has put some sensible and constructive suggestions to the Minister.

As possibly one of the few hon. Members of this House who have been unemployed in recent years, I can speak with a certain amount of experience of the humiliation of standing in the dole queue. I have sometimes been unemployed for days, sometimes for weeks, and on one occasion for many months.

My main concern is for that ever-increasing army of long-term unemployed. In my constituency of Jarrow, in April of this year, out of 3,180 people over 18 registered as unemployed, almost half, 1,500, had been registered for six months or more. Of those, almost 1,200 were males. Long-term unemployment in areas of high unemployment is worse than a prison sentence. At least when a judge or a magistrate sends a person to jail, he is given the date of his release. In areas such as the North-East, when men in their late 40s and early 50s are put on the dole, there is no sign at all of any release.

As most of the unemployed are from the shipbuilding industry, as my hon. Friend has said, I shall mention some of the prospects, mentioned in the national newspapers, of those men trying to find work at their trade or their skill. A steel worker, for example, or a man in one of the boilermaking trades, has a 70 to 1 chance of gaining work. A plumber, painter, joiner or electrician has a 45 to 1 chance of getting another job. An unskilled person from the shipyards has a 370 to 1 chance of finding another job. It costs £5,000 more to put a shipyard worker on the streets than it does to keep him in work.

Because of the high unemployment in our area, the young and active are leaving to find employment elsewhere. This is leaving an increasing burden on the public and the social services in our district. The biggest employer of labour in South Tyneside is the local authority, and we all know that 70 per cent. of local authority expenditure goes in wages and salaries. The present policy of the Government in cutting back public expenditure is hitting particularly hard at areas such as South Tyneside.

I accept that the previous Government made South Tyneside a programme area, and during the Adjournment debate last week it was pointed out that about £2½ million of the urban aid programme assistance had been approved this year. However, I suggest to the Minister that he should put it to his colleagues in the Government that because of the serious unemployment situation in the area, as has been explained by my hon. Friend the Member for South Shields and me, South Tyneside should be classified as a partnership area instead of being a programme area. That would put more Government assistance where it is urgently needed—in our district.

12.35 a.m.

The Under-Secretary of State for Employment (Mr. Jim Lester)

I congratulate the hon. Member for South Shields (Dr. Clark) on having the persistence to secure this Adjournment debate and I welcome the opportunity to reply to some of the points that he has made and also to those made by the hon. Member for Jarrow (Mr. Dixon). He has a record of exerting consistent pressure in looking after the interests of his area.

The hon. Member for South Shields knows that I share his considerable anxiety at the level of unemployment in his constituency. An unemployment rate of 12.9 per cent. for South Tyne is appalling. It is not for me to underestimate the effect of unemployment on the individuals concerned and on their families, and the story that the hon. Member told is a real and moving one.

Over the past year I have visited the Northern region on at least seven occasions. I returned only last night from a visit to Darlington, where I was tackled on television by five teenagers who were rightly concerned and determined to have a go at me on the subject of unemployment. I have also met a number of representatives from the region at meetings in London and I am, therefore, fully aware of the seriousness of the situation. Regrettably, I have not paid a recent visit to South Shields itself, but I would welcome the opportunity to discuss the problems facing the area at first hand.

The Government have never sought to disguise the severity of the present unemployment problem, nor have we made any secret of the fact that we believe that unemployment is likely to get worse before it gets better, but it is important to keep this in perspective. High unemployment is not a new phenomenon created by this Government. Unemployment in South Shields has not just started to rise. As the hon. Gentleman knows, between March 1974 and May 1979 unemployment in South Shields rose by 53 per cent. Of course that is no comfort to the people in South Shields who are unemployed now, but what is absolutely clear is that had it not been for some of the measures that we are taking, unemployment in South Shields and elsewhere would have been a good deal worse.

One of our first tasks on coming to office was to concentrate regional assistance on areas of the greatest need, such as South Shields. The reduction in the coverage of the assisted area status announced by my right hon. Friend the Secretary of State for Industry in July 1979, and the increased differential between the benefit of special development area status and the other gradings of the assisted areas, will increase the relative attractiveness of those areas in Britain, such as South Shields, which are suffering the worst problem.

South Shields will remain an SDA and will continue to be eligible for the full range of regional incentives at the highest levels available in Great Britain. The Government's aim is to encourage firms to invest there, to create new jobs to replace those that are being lost in the area's traditional industries, and to expand still further the area's industrial base.

The picture in South Shields is not all gloom. Expansions are taking place, new projects are being set up, new jobs are being created—though not at as fast a rate as probably the hon. Gentleman or I would have liked. Since May 1979 Government financial assistance worth £6 million has been offered under section 7 of the Industry Act for 22 projects in the South Tyne travel-to-work area, involving a total estimated investment of nearly £56 million.

Dr. David Clark

The figures are slightly misleading. South Tyne is a big area, stretching from Prudhoe, which is near Hexham and relatively prosperous, in the west, to Chester-le-Street in the south. I ask the Minister to confine his remarks to the employment exchange areas in South Tyneside.

Mr. Lester

I realise that. The figures are collected on this basis, and therefore they are helpful. The estimated number of jobs associated with those projects was 1,490. During the same period, £677,000 was offered under section 8 of the Industry Act for 76 projects involving a total estimated investment of about £3.4 million.

Ten Government advance factories have been completed and are available for occupation by incoming firms in the South Tyne TTWA. Eight of the completed factories are in South Shields. A further five factories are under construction.

Furthermore, I understand that the English Industrial Estates Corporation has been authorised by the Department of Industry to build a number of small workshops, the size of double garages, on Tyneside and Wearside in an experiment to stimulate the creation of more small businesses. Twenty of these, some of which have already been completed, will be in South Shields. Arrangements are also in hand to construct industrial buildings with funds provided by the private sector, including a £5 million Legal and General Assurance Society scheme which involves 16,000 square metres of factory and warehousing in the South Tyne travel-to-work area.

Ultimately, however, the health of the economy in areas such as South Shields depends primarily not on the amount of regional assistance they receive, but on the vitality and competitiveness of the industry and commerce there and the degree of co-operation between managements and work forces.

The crucial need is to tackle the root causes of rising unemployment. The main one—the onset of a world recession partly due to the renewed upward surge in oil prices—is, of course, wholly outside this country's control. There is also the legacy that we inherited from our predecessors. Not only was public expenditure expanding ruinously, but crucial decisions on the economy and on industries in trouble had been dodged or postponed. We are getting to grips with these problems. But the Government can play only a part. It is up to both sides of industry and commerce to co-operate in raising production and in bargaining responsibly so that they increase their firms' ability to compete both in this country and overseas. The only prescription for a successful firm and a successful Britain is to produce and market competitive products with a design, quality, price, delivery date and backing service that customers demand.

Dr. David Clark

Will the Minister give way?

Mr. Lester

I have given way an awful lot. The hon. Gentleman has had most of the time available. I do not know whether he wants some of the answers.

Dr. Clark

Is the Minister saying that he agrees with his right hon. Friend the Secretary of State for Industry that workers in areas such as mine should take less in wages to become more competitive?

Mr. Lester

It is a question of workers in every area bargaining responsibly—not taking less wages than they are currently getting—so that they stay competitive. In the end that is the only way to maintain real jobs.

The Government cannot create real jobs in South Shields or anywhere else, as Labour Ministers seemed to think. What they can do, and what we are seeking to do, is to create the conditions which will enable United Kingdom firms, and firms in South Shields, to compete successfully in world markets, and so create a genuine demand for labour. This is the only way to reduce unemployment, and that is why there is no alternative and no easy way out.

Faster growth and improved industrial performance providing jobs are the way to a lasting solution of the unemployment problem. But it will not be achieved overnight. In the meantime our special employment measures can make a contribution by providing jobs or training opportunities for those who would otherwise be unemployed. The programme of special employment measures for 1980–81 makes an important contribution towards reducing unemployment and supporting what the hon. Gentleman mentioned. This is a question of training and helping youngsters over this difficult time. We have tried to concentrate the help where it is most needed.

Most of those youngsters in South Shields who leave school this summer will find jobs, despite the serious unemployment situation in the area. A minority of them, however, will need special help if they are not to remain unemployed for long periods and lose faith in the ability of the employment and social services to give them a helping hand. The youth opportunities programme provides that special help. The Government have not only continued YOP, but have expanded it.

Now the Government have agreed to the MSC's proposal to expand YOP nationally by a further 25 per cent. in 1980–81. In South Shields, 1,860 unemployed youngsters participated in YOP schemes in the year ending 31 March 1980 and it is planned to increase this number in 1980–81. YOP has gained great success by being aimed at those youngsters most in need of help and through being designed specifically to improve their prospects of obtaining satisfactory permanent jobs at the earliest possible moment. It is because the programme offers help only where it is needed and because it is highly relevant to the world of work that it has proved so popular both with young people and with employers. About 70 per cent. of former work experience trainees under YOP find a job after their period of training has ended.

The Government's special employment measures are not, of course, limited to young people. In addition to those benefiting in South Shields under the youth opportunities programme, 268 jobs are currently being maintained through the temporary short time working compensation scheme, 61 people are currently being assisted by the small firms employment subsidy, 57 by the job release scheme and 177 by community industry. In addition, 380 people were assisted under the special temporary employment programme. That is the type of scheme that local government can, and should use to do work on that delightful beach in South Shields. That is the purpose of the STEP scheme, and the reason why we have increased the number of places in areas such as South Shields.

But special measures such as those can never be the final answer to the present high levels of unemployment in South Shields. In the longer term the measures that we are taking to stimulate the economy offer the best hope of improving the employment prospects for everyone.

The hon. Gentleman raised five points. I have dealt with the extra aid that we provide through the STEP scheme, in order to do some of the work in relation to the infrastructure. The dispersal of Civil Service jobs has been examined and re-examined. It has been found that it is difficult to get the Civil Service to move. However, it is always a possibility. The matter of advance orders for British Shipbuilders has been raised before, and I have taken it up directly with the Department of Industry, to establish whether there is any delay. If there is any delay, I wish to ensure that it will be dealt with, in order to maintain employment in those areas.

The hon. Gentleman asked about apprentices and Northern Ireland. He obviously feels strongly about that. However, as I tried to explain in my letter, the apprentice system in Great Britain is very much bound up with the engineering industry training board. We work with that board and with the industry, including the trade unions. He suggested that the Government should give more help. However, we give £51,000,000 a year through the training for skills scheme, which is designed to do what the hon. Gentleman has suggested in South Shields, namely to provide additional apprenticeships above the industrial quota. As a result of the recession and of difficult times, industry cannot make up the numbers that it will need in the long term. I think that I have covered the hon. Gentleman's points. If any remain, I shall write to him.

The hon. Member for Jarrow sought to have his area classified on a different basis. That is not for my Department to consider, but I shall draw it to the attention of the relevant Department. As I said, special measures or regional aid will not provide the final answer for South Shields. The final answer is to get the British economy functioning as well and as efficiently as our competitors overseas. Only when our central economy is right will areas such as South Shields benefit.

Dr. David Clark

I have some figures about apprentices. Baker Perkins has reduced its apprentices from 19 to 12, the National Coal Board has reduced its numbers from 32 to 18, Northern Gas has reduced its apprentices from 66 to 52, Peter Johnston & Co. Ltd. has reduced its numbers from 14 to nil, NEI Reyrolle Ltd. has reduced the figure from 23 to nil and so on. It is not working.

Mr. Lester

As I have suggested, the numbers that industry directly finances have decreased. The training for skills programme means that Government support will top up the numbers. I shall write to the hon. Gentleman and point out where, and how, the scheme is working.

Question put and agreed to.

Adjourned accordingly at twelve minutes to One o'clock.