Unemployment

HC Deb 24 June 1981 vol 7 cc252-340

Mr. Speaker

I have selected the amendment tabled by the official Opposition, in the name of the right hon. Member for Ebbw Vale (Mr. Foot).

A large number of right hon. and hon. Members will be seeking to catch my eye. I hope that that will be borne in mind.

Mr. Arthur Lewis (Newham, North-West)

On a point of order, Mr. Speaker. Your comment will be borne in mind. With the utmost respect, I ask that the Chair should also bear in mind the fact that Privy Councillors on both sides of the House might occasionally give way to Back Benchers.

Mr. Speaker

I am always nervous when an hon. Member with long experience begins by saying "With the utmost respect". So far my fears have been justified. The hon. Gentleman's comments will have been heard by some Privy Councillors who will seek to catch my eye.

3.41 pm

The Secretary of State for Employment (Mr. James Prior)

I beg to move, That this House, deeply concerned at the hardship resulting from high levels of unemployment, supports the measures already taken to provide special assistance for those worst affected; and believes that increasing prosperity and employment can only be achieved on a permanent basis by defecting inflation and creating conditions in which British enterprise competes successfully at home and abroad. The opportunity has been given to the House today to express its deep concern about the tragedy of high unemployment and to consider seriously the problems facing the country and how to tackle them. I wish to make it clear how the Government Benches approach the debate. It is a matter of extreme concern and anxiety. We acknowledge that special responsibility must of course rest with the Government of the day.

This is the right place to debate and express our views. The House is the forum of the nation. It is not the street pavement outside the Department of Employment. [HoN. MEMBERS: "Why not?"] Because the House is the place to debate the matter.

Mr. Bob Cryer (Keighley)

Will the Secretary of State give way?

Mr. Prior

No.

Mr. Cryer

Give way.

Mr. Speaker

Order. It is clear that the Minister is not giving way. He has only just begun.

Mr. Prior

We shall do ourselves no good in the House if we do not recognise certain inescapable facts. Under successive Governments of both parties the peak levels of unemployment have increased in each recession over the past 20 years. The underlying cause is that too many of our firms and industries were and are uncompetitive.

In the last 20 years we have become one of the poorer relations of the developed world. We do not, perhaps, find that shocking, because we have lived off capital invested in the earlier years. As that has aged, our poor performance has become more noticeable. Many of our public facilities, once the pride of our nation, bear grim testimony to that.

We are more vulnerable now to trade from many parts of the world, including the lesser developed countries, and more vulnerable to the downturns that have accompanied the oil price hike. We forget the effect of the doubling of oil prices in 1979 on our trade and our costs, following the 1973 rise in the price of oil. We have had higher inflation and lower productivity than our competitors.

We have devalued, allowing the pound to float down, but we never accepted the discipline that that meant for our prospects and our standards. Inflation continued to sap our strength, and output was stagnant. Even at the peak of the last economic cycle, in 1979, we had not got back to the manufacturing output levels of 1973.

Our unit labour costs priced us out of markets at home and overseas. When that happens one is priced out of jobs as well. Nobody can deny the facts. No one can dodge the fact that our unit labour costs between 1975 and 1980 rose by 88 per cent. when the unit labour costs in France rose by 45 per cent., in America by 36 per cent., in Germany by 17 per cent. and in Japan by zero. That is perhaps the crucial factor explaining why our unemployment is higher than that of any competitor nations.

Mr. Nigel Spearing (Newham, South)

There has been question and debate about the definition of unit labour costs as distinct from wages costs. Can the Secretary of State define unit labour costs so that we can be sure that he is comparing like with like?

Mr. Prior

I do not wish to go into a definition of that today. That is not the point. The point is that one is comparing on the same basis Britain's performance with that of America and other countries. The comparisons are on exactly the same basis. One can argue about that, but the facts stare one in the face. Tha facts are obvious. That was the problem for the last Government, for the Government before that, and for the Governments of the last 20 years. We cannot get away from that.

In the 15 years to 1979 the rate of return on capital employed in manufacturing industry fell by over two-thirds. While others invested in growth industries we simply failed to do so. It is inescapable that a combination of these factors led us to the serious position that we face today. There is no easy or painless remedy for our problems. Many more people realise that than Opposition Members sometimes admit.

I was talking to two steel workers last Saturday afternoon. [HON. MEMBERS: "Wait for it."] The men were from Llanwern. They had lost their jobs in the last 18 months. I was commiserating with them. At the same time I was praising the steel industry at Llanwern for the increase in productivity that has resulted.

I asked the men what had happened at Llanwern. They said "We could all see it coming. It was partly bad management—too many chiefs—and partly nationalisation". They said that the steelworks were never the same after nationalisation. The same applies to Ebbw Vale. The men went on to say that their attitudes were also part of the problem. I regard that as a fair assessment by working people who have lost their jobs. the two steel men were representing feelings in British industry as a whole.

Mr. Robert Kilroy-Silk (Ormskirk)

Whatever the various causes of unemployment, the Secretary of State should not deny that a large part of the responsibility for 20.2 per cent. of my constituents being unemployed lies at the feet of the Government and their economic policies. The Secretary of State voted for those policies. He sustains and supports them however much he pretends otherwise when he goes round the country and however many nods and winks he gives to pretend that he does not support them. When will he stop trying to trade both ways? When will he do the honourable thing and resign?

Mr. Prior

I am not certain where the constituency of the hon. Member for Ormskirk (Mr. Kilroy-Silk) starts or ends. I have in my constituency an extremely good firm—Birds Eye Foods Limited—with a marvellous work record. It could have expanded in my constituency or in that of the hon. Gentleman—or close to his constituency; I am not quite certain. The firm decided to expand in his area, because it could get a regional grant there. This happened about three or four years ago. My constituents asked me "Why should that firm expand somewhere else where there is a shocking industrial record, when we have a good record?" The company went ahead and expanded in the hon. Gentleman's area, but it has not had good industrial relations.

There are always any number of reasons for bad industrial relations—they are not always the fault of the work force—and I hope that the hon. Gentleman will not try to put all the blame on the Government for what happened in his constituency. He would be totally wrong to do so.

This is the situation that we are left with today. It goes a long way to explain why unemployment more than doubled between 1974 and 1979, and has doubled again since then. What has happened is no surprise when one realises that it was as long ago as 1976 that a group of economists reported to a Labour Party committee that by 1980 the number of jobless would reach 2,500,000. It was only in the Budget before that that the right hon. Member for Leeds, East (Mr. Healey) spoke in terms of a figure of 3 per cent.—700,000—by 1979. The Labour Government of the day knew perfectly well that the uncompetitive state of British industry was likely to lead to unemployment figures far higher than ever before.

Mr. Cryer

If all that was known and if the thesis of the Secretary of State is that the decline in the British economy was well understood by the Conservative Party, why did that party, with his consent and support, embark on a highly expensive poster campaign, led by Saatchi and Saatchi, with the slogan "Labour's not working"? Surely that implies that the Conservatives intended to do better, and put people to work? Yet in fact they have put over 1 million people on the dole.

Mr. Prior

It is true to say that Labour policies were not working. I hope to demonstrate during the course of my speech that they would not work next time round, either. Over the years people have witnessed Governments diverted from their course, only for the problems to end up far worse and far more intractable later.

None of what I have said detracts from our duty to help in every possible way those who are hardest hit by unemployment. The extra help that we seek to provide by special measures has to be weighed against the permanent jobs that could be created if the balance between public and private expenditure were better. I wish to tell the House about those special measures, and something about our plans, in the knowledge that no plans on this issue can remain static or fixed for long. We are helping, through a series of training and temporary work, and also by job support measures. The sum total is 900,000-odd people now.

Mr. Dennis Skinner (Bolsover)

They are not real jobs.

Mr. Prior

The hon. Member for Bolsover (Mr. Skinner) says that they are not real jobs. No, they are not real jobs. Nor were they when the hon. Gentleman was in office.

Mr. Skinner

Me in office?

Mr. Prior

The hon. Gentleman will never be in office unless the right hon. Member for Bristol, South-East (Mr. Benn) takes over the Labour Party. Then he may be in office.

Mr. Skinner

No.

Mr. Prior

If that prospect does not put everyone off, it ought to.

At the moment the youth opportunities programme supplies 450,000 places for young people—one-quarter more than last year and four times as many as in 1978–79. Last year we planned a figure of 250,000. It operated at about 330,000. This year it will operate at about 450,000. As my right hon. Friend the Prime Minister said yesterday, we have improved the undertakings and guarantees so that young people who leave school this summer will be offered a place in a scheme by Christmas. If they have been unemployed for three months, they will be offered another place within three months.

Mr. Derek Foster (Bishop Auckland)

rose—

Mr. Prior

I shall give way to the hon. Member for Bishop Auckland (Mr. Foster) when I come to the end of this passage in my speech.

That improvement in the undertakings that we have given will, I think, enable vast numbers of young people this summer to get jobs who otherwise would not receive any help. In May alone, this year, almost double the number of people were on a youth opportunities programme compared with May of last year. As my right hon. Friend made clear, if we need to increase expenditure to ensure that our undertakings are carried out, we shall do so.

Our long-term aim—I say this to many of my hon. Friends who have put forward helpful and constructive schemes for helping young people to get jobs at this difficult time—is to ensure that all 16 and 17-year-olds either remain at school or in further education, get a job in which they receive apprenticeship training or a unified vocational preparation scheme, or—if they become unemployed because there is no work—are offered a scheme along the lines of the youth opportunities programme, not necessarily fixed to that but offered to them at a suitable time when they leave school or further education. In that way, they would not have to go on the dole or become unemployed.

When we can move towards that that will be the right time to stop paying supplementary benefit to young people who at present have it because there is no job for them. The sooner we can move towards that, the better it will be for all young people. Moreover, it will be a step forward at a time of adversity to move towards far more comprehensive training schemes than this country has ever known. At present 40 per cent. of our young people leave school without any further training. That is a disgrace in a modern society, and it is something that we should put right through the youth opportunities programme at this particularly difficult time.

Mr. Skinner

When?

Mr. Prior

We cannot do it this year. We shall do it as soon as we possibly can, by finding the resources and also the places.

Mr. Foster

If the Secretary of State is to fulfil his guarantees he will have to make good a shortfall of 110,000 places in the YOP. Will he give a categorical assurance that the necessary money to expand the programme will be found? When does he intend that all 16 and 17-year-olds will get the vocational training that he promised in November last year?

Mr. Prior

I have been talking about that for the past quarter of an hour. I will not give such undertakings today, but I have already given the undertaking that in so far as it will be necessary to expand the programme in order to fulfil our undertakings we will, as my right hon. Friend the Prime Minister undertook yesterday, ensure the necessary expansion. If an extra 100,000 places are necessary in order to fulfil our undertaking we shall have to find the necessary resources.

One of the problems with young workers and growing unemployment among young people is that over the past few years young workers have started to price themselves out of jobs. There is no doubt about that. The hon. Member for Newcastle-under-Lyme (Mr. Golding) has mentioned the matter in the House on a number of occasions. Our rates of pay for young people, particularly young apprentices but also others, are far higher than in countries like Germany, where there is no problem about the training of young people.

I need to get home to the country the fact that if we are to get more young people into apprenticeships we must keep down the cost of those apprenticeships. In addition, if the YOP is to develop as we wish, with a far higher element of training, the payment should become more an allowance for training than a low payment for another job, as it has tended to become.

Mr. John Golding (Newcastle-under-Lyme)

I was quietly minding my own business when the right hon. Gentleman referred to me. Can he tell the House when I made the statement that he attributed to me?

I have not talked about apprentice rates, or compared British rates with those overseas. I have talked about the problems of unskilled young workers and changes in relativities. The Secretary of State does us both a disservice by making such statements.

Mr. Prior

I am sorry if I gave the impression that the hon. Gentleman had talked about apprenticeships. He has certainly talked about unskilled young people generally, and he has made valuable points. I accept the hon. Gentleman's explanation and I apologise if I stepped over the mark in saying that he was talking about apprenticeships as well.

I am conscious that although we have given youth unemployment top priority there are also problems among the older and the long-term unemployed. That is why we have expanded the community enterprise programme, developed the temporary short-time working compensation scheme on a large scale, and continued the job release scheme.

All those schemes will be a great aid in the next year or two in helping young people who would otherwise be unemployed to obtain jobs. If, at the same time, we can do more to help, through early retirement and job release schemes, those near the end of their active careers, we shall certainly try to do so.

Mr. John Townend (Bridlington)

Does my right hon. Friend agree that one of the major causes of excessive wage rates for young people are the wages councils, some of which stipulate wages of £59 a week for 19-year-old workers? Will the Government undertake to take some action in that area?

Mr. Prior

We have looked seriously at that matter. Our view is that we must keep wages councils, but the lowering of the age of majority to 18 has resulted in a considerable rise in the wages of young people, particularly in wages council industries.

Dr. Oonagh McDonald (Thurrock)

Will the right hon. Gentleman give way?

Mr. Prior

No. Let me get on for a bit. We have written to the chairmen of wages councils to tell them that we hope that they will have special regard to the problem of young people getting jobs and will therefore take account of the fact that wage rates for young people in the wages councils sector have risen in recent years.

Another part of our strategy consists of the positive employment measures that we have taken. We have given help to many companies to try to keep them going at a difficult time. Labour Members used to boast of the jobs that aid had saved in British Leyland and other organisations. They used to claim that the Labour Government's aid to BL alone had saved 500,000 jobs.

The problem that we face is of a different dimension. More money has to be spent and fewer jobs are being saved, but modernisation and restructuring are taking place. We are supporting industries through a period of change and adjustment. It should have been done before. Difficult decisions were too often shirked, particularly by the previous Government. Labour Members know that only too well. A number of great industries are a drain on our resources when they ought to be contributors to the national Exchequer.

At a time when our problems are a mixture of structure, history and recession, specific aid is likely to be more valuable than any attempt at an old-style general reflation. That is why we have concentrated on a series of specific employment measures, combined with increased aid for some industries in transition, including steel and British Leyland, and some technologically based industries, such as ICL and British Telecom. In addition, through the appointment of my hon. Friend the Member for St. Marylebone (Mr. Baker) as Minister for Industry and Information Technology, we have made certain that every secondary school has the opportunity to install a minicomputer.

Earlier today my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) introduced a Bill dealing with rates. I should just like to tell Labour Members—

Mr. David Winnick (Walsall, North)

Here comes another excuse.

Mr. Prior

If Labour Members really want to help over jobs and to keep unemployment down they will use their influence with Labour councils that are putting up rates and driving industries out of areas that badly need additional employment.

That is particularly true—

Mr. Skinner

Will the right hon. Gentleman give way?

Mr. Prior

No.

Mr. Skinner

Will the right hon. Gentleman give way?

Mr. Speaker

Order. The Minister must be allowed to proceed. He has made it clear that he is not giving way.

Mr. Prior

That is particularly true—

Mr. Skinner

Will the right hon. Gentleman give way now?

Mr. Speaker

Order. Hon. Members must not jump up immediately after I have made such a statement. If they do, coherent debate will be impossible.

Mr. Prior

I was saying that that is particularly true of small businesses. We have to rely more on those than perhaps anywhere else for the improvement in our employment position. Already, as my hon. Friend the Under-Secretary of State for Industry—the hon. Member for Norfolk, South (Mr. MacGregor)—has announced, we have introduced 50 different measures in the past two years designed to help new and small businesses. At the moment, there is an immense demand for small factory units. We are doing all that we can to meet that increased demand. That is another point at which we are doing all that we can, in difficult circumstances, to try to improve the unemployment situation.

Mr. Skinner

Will the Secretary of State admit that the problem of rate increases in recent years, especially in the past two years, has been a direct result of the amount of grants from central Government and that the second highest rate that was inflicted on any of the London boroughs in this financial year was on the Royal borough of Kensington and Chelsea, which is Tory controlled? Is it not a fact that in his speech the Secretary of State is no longer a wet, but just a dishcloth for the Prime Minister?

Mr. Prior

Having had the courtesy to give way to the hon. Gentleman, I should have learnt by now what a waste of time it would be.

The Government do not believe that any general reflation would have the desired effect on unemployment levels. When the Opposition put that forward, as I suspect they will this afternoon, I hope that they will remember what happened to them in the year before the last election. Even after the economy was reflated by £3½ billion in 1977–78 and 1978–79, unemployment fell by only 150,000. That compared with the Opposition's forecast figure of 700,000 by 1979. That shows that a general reflation of the economy in the old style will not work. That figure was at the top of the world economic cycle before the second increase in the price of oil and before the bills for public sector pay started to come in, as they did in the spring of 1979.

Mr. Robert C. Brown (Newcastle upon Tyne, West)

rose—

Mr. Prior

I shall not give way again. I have given way many times.

I hope that when the right hon. Member for Chesterfield (Mr. Varley) speaks he will tell us how, if his Party wins the election next time, things will be different from what they were last time. Unlike his radio performance on Tuesday morning, when he pleaded lack of time on being asked what he would do, this afternoon he will have plenty of time to display his case. If he sets out a massive array of measures that the Opposition would take and that will take him a long time to display, I hope he will bear in mind the wise words of his former Prime Minister. I have no compunction in reminding the House of them, because his words still do not seem to have registered with the Opposition. He said: We used to think that you could spend your way out of a recession. I tell you in all candour that that option no longer exists. The trouble was that in 1978 he forgot his own wise words, but that is another matter.

The right hon. Member for Heywood and Royton (Mr. Barnett) said in 1978: The major way one gets unemployment down—and regrettably it is not going to come down in the way we originally hoped—is…by a substantial improvement in our industrial performance as a nation". Although that was said in 1978, it is still true today. That is the message that we have to get across. It is the message that was ignored during the late 1970s, with catastrophic effects. The competitiveness of British industry declined by 50 per cent. between 1975 and 1980. The single most important underlying cause was the steep rise in unit labour costs. We trailed behind other countries on productivity, but we still kept on paying ourselves as though we were up with the best of them.

Any speech from the Opposition Benches, any speech from a trade union leader, or any speech from an industrialist that does not recognise that fact and go on to point out the inescapable consequence, that we must hold down pay settlements if we are to give ourselves a chance of beating unemployment, is refusing to face reality.

There was a good example of not facing reality yesterday both in the Transport and General Workers Union conference and in the performance of the Leader of the Opposition in front of it. It is not facing the facts of economic life on which all our future prospects of employment depend. Some hard lessons have been learnt already in the private sector. Many people have forgone a pay rise to keep their jobs but I do not yet believe that the message is clearly understood in the public sector. as we emerge from the recession—[HON. MEMBERS: "When?"] I hope that the Opposition will join with me in wishing that to be as soon as possible.

As we emerge from the recession, those responsible for negotiating on pay must ask themselves whether what they are claiming or what they are prepared to concede will secure jobs in their firms or industries. They must ask themselves what effect a certain pay rise will have on the price of their products. What will be the effect on costs and jobs in the industries that they supply? They must ask themselves what competitor nations are paying, and how they plan to compete against Germany, where settlements this year have been 5 per cent., or against Japan, where they are around 7½ per cent.

Therefore, when the Opposition ask when we will come out of the recession, I can answer that we shall come out of it a hell of a lot quicker if we keep down our pay settlements, and if they do all they can to see that that happens. If we are going to get to grips with unemployment, we have to pay ourselves what is justified by our performance. Unless we do so we shall continue to price ourselves out of markets both at home and abroad.

At the same time, there are a number of hopeful signs. The rate of increase in unemployment has slowed down considerably in the last few months. The placement of school leavers in schemes this summer is double that of a year ago. There is much more realism and understanding on the shop floor about the need to compete than there has been for many a year. Industrial relations problems are at a low point. Restrictive practices and demarcation have been thrown out in order to achieve better results. Management is able to concentrate much more on the product and less on dealing with shop floor problems.

Of course, no one likes standing at the Dispatch Box with the present level of unemployment. Deplorable and damaging the total certainly is. However, there is a great deal that we are doing, in direct aid of over £1 billion and indirect aid to industry of many times that amount. Those are not the acts of an uncaring or dogmatic Government; they are designed to keep a proper balance and perspective between short-term essential needs and long-term strategy.

As Secretary of State for Employment I feel a deep and special responsibility for representing the views of the unemployed. However, I must tell hon. Members that I have confidence that over the next two years we can begin to lift the gloom and despondency of high unemployment without sacrificing the long-term health and prosperity of our people.

That is the real challenge that the House must face—how we can do that without going back to the bad old ways all over again. That is what Governments have failed to do. That is what I suspect the Opposition are about to try to do this afternoon. That is why I ask for the support of my hon. Friends now.

4.20 pm

Mr. Eric G. Varley (Chesterfield)

I beg to move to leave out from "House" to the end of the Question, and to add instead thereof: condemns Her Majesty's Government for pursuing economic policies which have destroyed great sections of British industry and spread mass unemployed on a scale unprecedented in the last fifty years. The Secretary of State is right to say that we are debating the most serious subject that is afflicting the nation today. His speech convinced no one on this side of the House. I do not think that it necessarily convinced many hon. Members on the Conservative side of the House either. It obviously did not convince the right hon. Gentleman, because he was not convincing when he spoke. He had nothing new to say. It was part departmental brief, part pious platitude and part bluster.

The right hon. Gentleman blustered about the level of rates. He should have a word with his right hon. Friend the Secretary of State for the Environment, because 70 per cent. of the councils on his list are Conservative controlled. If the right hon. Gentleman hoped to make an impression on the House, he was disappointed. If he hoped to make an impression on the Prime Minister, I must tell him that I looked at her face when he was speaking and she appeared to disapprove of him as much then as she did when he rose to speak.

Of course, the Prime Minister does not have much to boast about either. When she made her notorious preemptive strike at the Confederation of British Industry dinner last week, she told her audience that she wanted to take stock of the position as we approached the mid-term of this Parliament. It is instructive to look back at that day in May 1979 when the Prime Minister entered No. 10 Downing Street, clutching the collected quotations of St. Francis.

Let us look back at an unbiased source—the Financial Statement and Budget Report 1979–80, issued to Parliament by the present Financial Secretary to the Treasury. It said: Unemployment fell slowly but steadily during the course of 1978. In December, United Kingdom unemployment (excluding school leavers under 18) was about 100,000 below the peak level of September 1977. Unemployment increased in the early months of 1979, but the rise seems to have been due to a combination of severe winter weather and industrial disruptions. By May, unemployment had fallen back to a level about 10,000 lower than in December. In the 12 months to December 1978, United Kingdom employment increased by around 190,000, a rise of just over ¾ per cent. On the question of investment, the right hon. Gentleman said: Total investment for use by manufacturing industry, including capital expenditure by non-manufacturing companies on assets for leasing to manufacturers, probably rose by about 9 per cent. last year. That was the Labour year. That was not a bad inheritance, but in two years the Government managed to wreck it all.

The Secretary of State did not give any figures in his speech. I shall do so. Manufacturing investment fell by a colossal 18 per cent. in the first full year of the Government. All investment, including manufacturing, local government, Government and nationalised industries, was down by 12 per cent. during the same period. Since the Government came to power industrial production is down by 13.2 per cent., and manufacturing industry production down by a massive 17 per cent.

Unemployment has now risen in 17 of the 25 months during which the Government have been in office. It has risen evey month since June last year. It has not fallen below 1½ million since April 1980, has not fallen below 2 million since August 1980, and has been above 2½ million since April of this year. It is now more than double the level that the Prime Minister inherited when she took office.

One worker in every nine is now out of a job. Every region has been hit. In the South-East, one in every 14 is out of work, in East Anglia one in every 12, in the South-West one in every 11, in the East Midlands one in 11, in Yorkshire and Humberside one in nine, in Scotland one in eight and the West Midlands one in eight.

It is an extraordinary achievement of the Government that they have managed to bring up unemployment in the once prosperous West Midlands to parity with Scotland. Yet the Secretary of State for Industry, during Question Time on Monday, said that he could not agree that in the West Midlands conditions were as negative as in some other regions. He knew the unemployment figures when he spoke from the Dispatch Box. They had not been revealed, but he knew them. Yet he deliberately chose to deceive the House.

Male unemployment in the West Midlands is even higher than in Scotland, with one in every seven unemployed. Although the West Midlands is suffering shamefully from the activities of the Government, that is not the end of the sorry catalogue. Unemployment in the North-West stands at one in eight. In Wales it is one in seven. In the Northern region overall it is one in seven, and one male in every six is in the dole queue.

Those grim figures exclude school leavers. Although the Government's treatment of the country region by region is disgraceful, although certain industries such as metal manufacture, textiles, clothing, footwear, mechanical engineering, vehicles, shipbuilding and construction are suffering great hardship, the cruellest impact of the Government's unemployment policies is felt by the youngsters. They are the most eager, but at the same time the most vulnerable, group.

The Manpower Services Commission has forecast that this autumn 50 per cent. of youngsters under 18 will be out of a job. That is a wonderful achievement about which the Prime Minister can boast when she next attends a Confederation of British Industry dinner. Nearly half of those under 18 will be out of work. The responsibility is the Prime Minister's. She is utterly determined to keep the Government on the course of economic disaster.

There is a growing problem of redundancies among apprentices. Last year, redundancies overall were nearly three times the average for the previous four years. Those jobs are lost altogether. Even those lucky enough to have a job cannot rely on full-time employment. By the end of last year short-time working was 10 times as common as a year earlier. Those are the achievements of the Government. Those are the achievements that the Prime Minister told the CBI dinner were the sharpest economic change for a generation.

What action are the Government taking to put matters right? They blather about what they intend to do for small businesses. It is true that under the Government there are a few additional small businesses. The trouble is that when the Government came to power they used to be large businesses. One achievement of the Government is the large number of bankruptcies and liquidations which are now running at double the rate at which they were running when the Government took office. The most ominous information came from the Secretary of State for Industry only this week when, in his inspiring and innocent way, he told the House that bankruptcy increases appeared to have peaked.

The Secretary of State for Industry has been talkative recently. Last week he paid an enterprising visit to Barnsley. It is safe to say that they had never seen anything like him before. He told the baffled citizens of Barnsley that money was running out of the ears of pension funds and insurance companies. He said that there had never been so much money available in Britain. The trouble is that the money is being used not to finance investment, but to finance unemployment.

The Secretary of State for Industry is making his contribution to the great debate about unemployment, but what is the Secretary of State for Employment doing? It is his job to promote employment. Before he took office he gave the impression—he tried to deny this—that dealing with unemployment would be easy. When he took office he gave an interview to a publication entitled Jobs Weekly. No doubt it has been renamed Unemployment Daily. He was asked the following question: Firstly, Mr. Prior, do you anticipate a reduction in the numbers of unemployed under the next Conservative government? The right hon. Gentleman replied: Well, I would hope so… We would certainly set out to bring about a reduction in the numbers of unemployed. The right hon. Gentleman sang a different tune this afternoon and a very different tune when he was interviewed on the radio yesterday. We heard him speak during yesterday's edition of the BBC's "PM" programme. We seem to be listening to each other on the radio. He said: We have always known that unemployment was going to continue to rise. The right hon. Gentleman has moved from We would certainly set out to bring about a reduction in the numbers of unemployed. to We have always known that unemployment was going to continue to rise. In two years we have seen a Rake's Progress. What incompetence, and what deceit!

Mr. Nigel Forman (Carshalton)

In the interests of fair comparisons, and so that both sides of the House may have a true idea of the Opposition's policies to rectify the serious problems before us, will the right hon. Gentleman tell us how many jobs would be lost if a future Labour Government were ever to come to power committed both to unilateral disarmament and to withdrawal from the EEC, which would damage jobs greatly in our defence-related industries and exporting industries?

Mr. Varley

I might have a few words to say about defence policy in a moment. The European Community has not been all that it was made out to be. The hon. Gentleman and many of his hon. Friends know that. I am directing my attention to the Secretary of State for Employment. He is the chap who is charged with the responsibility. He has the seals of office as Secretary of State for Employment.

The right hon. Gentleman seems to be helpless. He seems unable to do anything. He appears to have given up altogether. Under the previous Labour Government, the youth opportunities programme was regarded as a useful transition between school leaving and a permanent job. When it was introduced by my right hon. Friends the Leader of the Opposition, the Member for Barrow-in-Furness (Mr. Booth) and the Member for Doncaster (Mr. Walker), and my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), it was designed to assist only one in eight school leavers. Employment prospects for young people have become so catastrophic under this Government that the YOP will have to assist one in two youngsters.

The Opposition will continue to support the programme. It is the only chance that some young people will have of any work experience. However, this once useful programme is being used to distort and rig the unemployment figures. That is what will happen later this year. Yesterday, the right hon. Gentleman was predicting that there would be 3 million unemployed. If that does not come about—I hope it does not—it will be because of the implementation of the youth opportunities programme. The youngsters who can participate in it will be removed from the unemployment figures and will appear on the back of a Department of Employment press notice.

The only other action that the right hon. Gentleman can think of is more anti-trade union legislation. To be fair to him, he is probably not thinking of further legislation of that sort. I do not think that he wants it. I think that the Prime Minister is forcing it upon him. I understand that she is using the head of a No. 10 policy unit to stir up employers' associations against her own Secretary of State. She probably does not know about that, but she should make inquiries. If it is happening, she should put a stop to it. At some stage she should support her right hon. Friend.

The right hon. Lady was at it again yesterday. She was promising such legislation in the next Session. We thought that she made it an inflexible rule never to do anything that was done by the right hon. Member for Sidcup (Mr. Heath) when he was Prime Minister. There was evidence of last week when she paid up £550 million to set the seal on her humiliating capitulation to the National Union of Mineworkers. However, yet another bout of anti-trade union legislation will be to revisit the scene of her Conservative predecessor's crime.

The right hon. Lady's legislation will be equally ineffectual. Again, it will be an irrelevant diversion. It will succeed only in further alienating the trade unions when she should be seeking their co-operation. In the latter stages of his premiership the right hon. Member for Sidcup was positively seeking the co-operation of the trade union movement, but the right hon. Lady will not do that.

I am angered by the strident and bellicose way in which the right hon. Lady goes about the task of representing this nation at home and abroad. She ways that she is prepared to confront anybody. She is prepared to confront the Soviet Union and the trade unions. The trouble is that she cannot tell the difference between them.

Mr. Tim Renton (Mid-Sussex)

rose—

Mr. Varley

No, I will not give way now.

If the right hon. Lady wishes to intervene to tell us that she will not introduce further trade union legislation, I shall give way to her.

Mr. Prior

Does the right hon. Gentleman approve of the activities of the Sandwell district council in respect of the closed shop?

Mr. Varley

I take that as confirmation that we shall have anti-trade union legislation next Session. That is what will happen. However, the right hon. Gentleman has been saying for the past two years that it is necessary to proceed carefully and to win the support and consent of the trade union movement. He has now been bulldozed into taking anti-trade union action.

Such activity as we see from the Government either has nothing to do with reducing unemployment or is designed to increase unemployment. We need programmes that will provide Britain with much-needed assets and at the same time provide jobs where they do not now exist. Instead of the derisory announcement this week by the Secretary of State for Transport of a tentative programme for railway electrification, a programme which The Guardian described as a pathetic way to run a railroad", we need a major programme of modernisation for our deteriorating railway system. If the right hon. Gentleman and the right hon. Lady choose to bleat about where the money will come from, the commuters who daily travel to Liverpool Street, Waterloo and Victoria in squalid and overcrowded conditions would much prefer their taxes to be used to provide a decent and acceptable journey to work instead of to finance unemployment. Similarly, tens of thousands of jobs could be created by a major programme of council house building.

As the right hon. Member for Bridgwater (Mr. King), the Minister for Local Government and Environmental Services, knows, there are 1,200,000 on council house waiting lists. I have no doubt that they would prefer their taxes to be used to give them a chance of a decent home rather than to finance the highest ever recorded level of unemployment among construction workers. There are 300,000 construction and building workers out of a job. The trouble with the Government is that their overall economic policies are not only damaging but destroying jobs.

We are likely to be told tomorrow by the Secretary of State for Defence that billions of pounds will be preempted by the unnecessary and wasteful Trident project. That will result in the loss of thousands of jobs in naval shipyards in Southampton, Tyneside and the lower Clyde. The Secretary of State for Employment is muttering but he has a shipyard in his constituency. I wonder what his constituents are thinking. If the Labour Government had remained in power, his shipyard workers would be constructing hydrographic survey vessels in Lowestoft. We hear nothing of that from the Secretary of State.

We need specific projects to create jobs, and the Government must reverse the direction of their economic policy. They must desist from sacrificing the country's workers on the altar of the public sector borrowing requirement. It is an indicator, but by itself it is completely unreliable. That was discovered a few weeks ago when the Treasury noticed an error in the PSBR of £1 billion.

The Government are steering the British economy to disaster. We need a change of economic direction which will offer encouragement to investors. Instead, all we get from the Government is cut, cut and cut again. We need to increase Government spending to encourage specific economic activity. If Government supporters say that such an increase in public spending will be inflationary, our reply is that nothing can be more inflationary and more wasteful than the £15,000 million a year that the Government are spending to finance the increased unemployment that they have created since they came to office.

We can expect no promise of positive action from the Prime Minister when she winds up the debate. It was all very different before she came to office. As Leader of the Opposition in 1979 she said: we have to break through the prosperity barrier in manufacturing industry. She has not broken through the prosperity barrier, but she has certainly broken manufacturing industry. She had more to say: Perhaps the most debilitating and damaging aspect of the Government's policy to increase State power is that the supporters of the Government positively believe in taking a higher proportion of the national income away from the taxpayer".—[Official Report,28 March 1979; Vol 965, c. 467.] The ironic fact is that the Conservative Government are taking a higher proportion of the national income in taxation than was being taken when she made that vainglorious statement. That was acknowledged in the timid part of the right hon. Lady's speech to the Confederation of British Industry last week when she said: Income tax, when we came into office, was seriously damaging incentives and risk-taking. We have made a start at changing all that. She has made a start, but only for the very rich. Everyone else is paying more tax to finance unemployment.

The Prime Minister does not have the policies or the determination; she does not have the interest to conquer the inexorable rise in unemployment. She is anxious about the Secretary of State's attitude to victories. She arranges for the press to be briefed so assiduously that it seems that the only victory she wants is victorynot over mounting unemployment, but over the rest of her Cabinet.

Yesterday, the right hon. Lady repudiated the Secretary of State for Employment by rejecting the unemployment forecast just after the Secretary of State on the BBC "World at One" programme had forecast 3 million unemployed, and again just before he gave that forecast on the "PM" programme.

I must warn the Prime Minister that the Secretary of State for Employment is not alone. Other Ministers, too, defied her ruling. The Secretary of State for Industry said in the House: The level of unemployment will continue to increase while more people come on to the register because they are unemployed than there are people leaving the register."—[Official Report, 22 June 1981; Vol. 7, c. 15.] Then there was that famous Cabinet meeting last Wednesday which the Prime Minister pre-empted the previous night and which she tidied up afterwards. This is how the Sunday Telegraph described it: She gave strict instructions to Cabinet Ministers that there were to be no leaks on the outcome of the special meeting and she forebade discussions even with junior Ministers and Parliamentary Private Secretaries because she wanted to manage the presentation of it through Downing Street. That is a fairly stern warning. It was so intimidating that the Minister of Agriculture, Fisheries and Food found it safe to speak his mind only when he had put the 3,000 miles of the Atlantic Ocean between himself and the Prime Minister. Only then did he dare to defy the Prime Minister's edict. What the Minister of Agriculture dared to say only from the political asylum of the United States is being said on every shop floor and in every board room throughout Britain. If the Prime Minister does not know it already, it will be reported to her when her local bus driver returns from his mystery tour to Warrington with his deposit lost.

The British people have had enough of these policies and of the Conservative Government. They want a Government determined to fight unemployment, a Government ready to uphold human dignity, a Government who care about the despair that is felt by hundreds of thousands of young people to whom this incompetent Government can offer no constructive future, and to whom the Prime Minister says, "We can find no useful place in society for you now." If the Government refuse to produce the necessary policies they should make room for those of us who can.

4.46 pm

Mr. Norman St. John-Stevas (Chelmsford)

I hope that the right hon. Member for Chesterfield (Mr. Varley) will forgive me if I do not follow him on to the party political treadmill on which he was mounted, nor into the sphere of swapped broadcasting reminiscences, but perhaps I may make what I call a liturgical point on his reference to the prayer of St. Francis. That prayer, whoever wrote it, was not written by St. Francis. It first appeared, not in thirteenth century Italy but in nineteenth century France. It was first attributed in the twentieth century by Mowbrays, a good Anglican firm, to St. Francis in a burst of what I hope was ecumenical as well as commercial zeal. What underlines those lines is, however, relevant to our discussion today.

The opportunity to work, to contribute by the fruits of one's labour to the support of oneself and one's family, to seek to enrich the community by the exercise of one's God-given talents, is essential to the dignity of every human being. Every man and woman who is denied that opportunity is diminished and devalued. Today we know that 2,600,000 of our fellow citizens, through no fault or responsibility of their own, through circumstances which they cannot influence nor control, are unable to obtain work, some for long periods and some semi-permanently. That knowledge should stir the conscience of the nation, if we are worthy to be called a nation.

This House is representative of the nation, as my right hon. Friend the Secretary of State said. We speak here through the voice of party; that is true. That is our system with its attendant good and evil. But there are occasions when the House of Commons has to transcend party politics, to transcend party ties, when the challenge is so grave that we have to speak on behalf of the community and the nation which we as a body represent. I believe that this debate is one of those occasions.

Of course, I understand the depth and bitterness of feelings, particularly of hon. Members who represent constituencies where the unemployment rate is not 10 per cent. but is nearer 20 or 25 per cent. National averages do not always reflect local realities. They are abstractions. However, it is precisely because of the profundity of feeling, not only of people here but of those we represent, that we must seek to speak within the parameters of reason.

Let us first seek to establish what is common ground in the House—and establish a framework within which divergences and differences can certainly be deployed. I would select three points of convergence. First, we should recognise, as the Secretary of State pointed out, that unemployment is not a domestic problem confined to Britain. It is an affliction plaguing the whole of the industrialised world. In the EEC alone 8 million people are now unemployed.

I welcome the change of tone at the June meeting of the OECD, when it was made clear that priorities at that level are changing. We should seek solutions for an international problem at an international level—at the European summit; with our partners in the Western Alliance and, most important of all, at the congruence of rich and poor nations which is to take place in Mexico City in the autumn and at which I am delighted to say my right hon. Friend the Prime Minister is to represent our country.

The second point of accord is that no hon. Member and no party countenances for a moment the deliberate fostering of unemployment as an instrument of policy. That would he not only to deny the humanity that we share; it would he to court devastating and instant electoral punishment.

The third stretch of common ground which we stand upon is that, in part, unemployment figures mirror the long-term inefficiency and overmanning of British industry. The shake-out began under the Government of the right hon. Member for Cardiff, South-East (Mr. Callaghan), as he knows, and has continued under my right hon. Friend's Government. It is a matter for discussion what or who is responsible; whether weak management or restrictive trade unions bear the major share of responsiblility. The important consideration is how to advance from the point that we have reached.

Every hon. Member knows that there is no simple answer. No painless panacea can be produced.

Mr. Skinner

There is an answer.

Mr. St. John-Stevas

I agree with the hon. Gentleman up to a point.

Although there may be no simple answer, that is not to say that there are not ways forward, nor means by which the situation can be improved. I do not share what is becoming a fashionable kind of pessimism. Determinism may be a doctrine of philosophy; it is not a doctrine of parliamentary democracy. Our fate is largely in our own hands today, as it has always been.

My point of departure this afternoon is the recognition that the Government—any Government—have the duty to help create the conditions in which people have the opportunity to work. Of course, there should be a fair day's work for a fair day's pay, but there must be an occasion to earn the pay—actually to have the chance to work. The situation is now so grave that the reduction of unemployment must be given a higher priority in the Government's thinking over the whole economic sphere. The determining criterion in any further reductions in Government expenditure must be whether they hinder or help to reduce the jobless total.

Ministers must concentrate their minds on both short-term and long-term measures that provide more jobs. The whole discourse of the Government must adapt itself to that set of priorities. The time has come to concentrate on the second part of Government strategy—the invigoration and renewal of British industry, whether that industry be on the manufacturing or the service side.

May I take first the long-term problem to which all the resources of the Government should be devoted? It is how best we can make the transition to a society that is bound to be based more on service industries and less on manufacturing industries. It is a repetition in another form of the nineteenth century problem, when we had to move from an economy based on agriculture to one based on industry—and the problem faces all the older industrial countries of the world. We should also in the long term be considering whether it is desirable to have planned early retirement, and how we can move towards greater equality between men and women in that regard.

In the short term, of course, the battle against inflation must continue. Higher inflation means fewer jobs, because it means a loss of competitiveness. Above all, it must mean fewer jobs in a country as dependent on exports as we are. The Government have wrestled inflation down from the ascending curve where we found it when we took office two years ago.

I do not believe that there can be any question of a general reflation, such as is advocated by the Labour Party or the TUC, although I understand the reasoning behind it. It would bring back rising inflation, with hyper-inflation hovering in the wings. However, to say that is not to accept the free market view that reduction in the rate of inflation will itself automatically bring about a resurgence of economic growth. That is a theory; it is not a proved fact.

The hope that the savings ratio will go down as inflation comes down and so refuel the economy is unproven and, in fact, unprovable. There may well be a closer connection between rising unemployment and higher savings to those who are in work than between lower savings and lower inflation. Perhaps the fear of unemployment forces people to save. In any case, a higher proportion of savings today than ever before, is contractual, and is not subject, therefore, to variable economic indicators.

Our task, therefore, is not to test undemonstrable economic hypotheses, nor to follow reckless reflationary policies. It is to try to chart out a middle way of reason and common sense. "No", then, to general reflation, but "Yes" to controlled expansion with selective stimuli applied, especially for capital expenditure. We need greater demand in the economy if we are to create more jobs. It cannot come from the consumer after the last Budget; it is unlikely to come from increased exports on the Government's own forecasts, although exports have held up remarkably well. I believe that it can come only from selective expansion in the public and private sectors.

Let me give an example of what I mean. Private housing starts are at a level for which one has to go back to the 1920s to find a parallel. One way to stimulate private housing would be for local authorities to release a great deal more land to the private builder, so that the house building rate could be raised once again.

What we need, is increased investment. I do not believe that that will come from the reduction of interest rates alone, although that may help. My position is really the same as that of Lord Thorneycroft, who, in discussing the subject in the other place some weeks ago, described himself as "a constructive interventionist". In the situation that we face, monetarism alone is simply not enough.

I hope, too, that we shall seek an early reduction in taxation. If we do that, of course, some of the increased purchasing power will be sucked into imports. That has happened before, but never more than 50 per cent., even at the worst of past import booms. We should also move towards an early reduction in the national insurance surcharge, which is basically nothing more than a poll tax on jobs. I believe that our success in reducing inflation makes these changes more urgent, not less.

As in the economic, so in the industrial sphere, we need not a U-turn, but adaptations of policy such as those described by my right hon. Friend the Leader of the House in recent speeches. Above all, we need a clear conceptual framework within which to operate.

On gaining office two years ago, our industrial strategy was to disengage ourselves as much as we could from the industrial sphere. But it was never a practical proposition, whatever the theorists may have proclaimed, to stand aside from the nationalised industries—huge monopolies which take decisions affecting the lives of millions throughout the nation. The experience of the past two years has proved that beyond reasonable doubt.

There has been intervention after intervention in the nationalised industries. The external financing limits have proved to be a thin red line, constantly breached. That has been the story with British Steel, British Leyland, the National Coal Board and ICL. We have been getting the worst of all worlds because we have been intervening, not on a basis of principle, but on an ad hoc basis, and we have been given no credit, least of all by the Labour Party, for any of our interventions.

I believe that the time has also come to move away from the idea, which was never much more than a slogan, that all public expenditure is bad and only private investment is good. Wise investment—and it must be wise—and wise expenditure decisions in the public sphere have very often a directly beneficial effect on private industry. Public expenditure in spheres such as defence, roads and railways is crucial to the future of British industry. I speak from my own constituency experience where firms such as Marconi and English Electric are heavily dependent upon defence contracts for their survival.

We need from the Ministry of Defence—perhaps we shall get it tomorrow—a coherent public purchasing policy tailored to the needs of British industry. If that means buying British, so be it. Our industrial strategy, after all, should be to invest in success and not to prop up failure. Too much of our public capital has been going into industries of the past when it should go into industries of the future.

The potential for British information technology, for example, and for automated manufacturing systems, is immense, particularly as the English language is the international language of the communications world. We have made a start in this direction with programmes such as the microprocessor awareness programme and the microelectronic support programme, but we need to do much more. As the name of my right hon. Friend the Prime Minister is being invoked by Opposition Members, I should add that she is quite right to say that it is now the turn of the private sector. This would be one way of showing it. Far more needs to be spent on research and development.

Just as we need an industrial strategy, so we need a greater coherence in our approaches to wages and salaries. Perhaps the most significant figure to emerge in the past few days has been what I believe is the Chancellor's figure of a 16 per cent. increase in output over the last decade, but a 335 per cent. increase in pay.

The Prime Minister also has laid increasing emphasis on the relationship of wages and salaries to economic prosperity and to employment. The last three Governments all started by underestimating the importance of wage and salary rises and their relation to job losses. The question now is not whether we are to have restraint—the Secretary of State made it clear again today that we must follow that path—but whether we are getting it in the right way.

The present practice in the public sector really comes down to giving in to those who have industrial muscle and standing up to those who have not. I do not believe that that is just or equitable. Nor do I believe that in the long run it is tenable. It surely must be an invitation to those who so far have behaved well to go ahead and behave badly, following the example of those who have gained.

I make this further point. What is to happen when the economy begins to grow again? Are we to go back to the bad old days of excessive wage claims out of step with rises in productivity? As with general economic policy, so with wages and salaries, we need to stake out the central ground between the extremes.

The way forward was shown in a policy document approved by the then Shadow Cabinet—I know, because I was a member of it—called "The Right Approach to the Economy", and subtitled "Outline of an Economic Strategy for the Next Conservative Government". That document was published in the names of a star-studded quartet—the present Chancellor of the Exchequer, the Secretary of State for Industry, the Secretary of State for Energy and the Secretary of State for Employment. The authors made it clear in that document that a forum of all the major economic interests was desirable in order to establish common ground about the economy.

Has not the time now come to turn that idea into a reality? Could it not be the scene, not for an incomes policy, but for some kind of concordat—spoken or unspoken, written or unwritten—between the Government, unions and management, balancing wage restraint against positive measures to expand the economy and check the rise in unemployment?

My right hon. Friend the Secretary of State referred to the particular plight of the young unemployed. One can hardly think of a worse beginning to adult life than to find oneself standing in a dole queue. I congratulate my right hon. Friend on the measures that he has succeeded in getting through the Cabinet, and I congratulate the Government on what they have done to help young and other people who are unemployed. It is remarkable that nearly 1 million people have been helped in this way. But we must do more. It is no good training people at 16 and 17, who at 18 will have no job to go to. My right hon. Friend is right, however, to say that perhaps if job opportunities could be increased it would be right for young people to accept a lower level of pay.

We need to do much more for the 18 and 19-year-olds. I commend to the Secretary of State the idea put forward by my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) of a form of national service, although I do not agree that that service should be compulsory. It should be voluntary. I believe that some form of voluntary service, if it was worked out and thought through, would be welcomed by a great many people in this country.

I wish to conclude with two reflections. One is political. The other is moral.

When I first entered political life, after the war, I stood in the 1951 general election in the Conservative interest in Dagenham. For some unaccountable reason I was not elected, but I recall the lessons that I learnt during that compaign. The lesson that I learnt above all was the difficulty that every Tory candidate faced because of the connection that had formed in people's minds, as a result of the horrendous experience of the 1930s, between Conservatism and unemployment. It was as though people had a stain on their imagination. It would be a major political disaster if that stain were allowed to re-appear now.

Secondly, and perhaps more important, it is the duty of every Member of the Government and the House to recognise unemployment for what it is—a moral evil of the first order. We must be determined to remedy it in so far as it is within our power so to do. If it is left unchecked it will destroy not only the traditions of civility that are so important to public life, but our cohesion as one nation, and ultimately, it will undermine our free institutions themselves.

We should never forget that in Britain there is probably a larger moral constituency than in any other comparable democratic country in the world. It is made up of people who are interested in public life, not for what they can get out of it, but because they seek a better and fuller life for their fellow citizens. They do not see Britain as made up of warring factions. They see it as a family based on a broad sense of community, with shared needs and concerns and common aspirations.

It is no part of Government policy, nor should it be, to write off any part of this country, or to bypass any part of it, through callousness or electoral calculation. It is to that vision of society, based on shared interest and community, that we must respond, and we should do so sensitively, intelligently and determinedly.

5.12 pm

Mr. Jack Ashley (Stoke-on-Trent, South)

We have just listened to a striking speech. When the Prime Minister responds later tonight, we shall be listening for her reaction to the suggestions made by the right hon. Member for Chelmsford (Mr. St. John-Stevas).

The right hon. Gentleman spoke for a large number of hon. Members on both sides of the House when he suggested that the Prime Minister ought to give a higher priority to employment. That has been the great failure of the Government. They have failed to give top priority to employment.

It is some years since the right hon. Gentleman and I regularly crossed swords in the Cambridge Union. However, now as then, he speaks with elegance, wit, sensitivity and skill. His skill today was to condemn the Prime Minister and the Secretary of State while at the same time diplomatically praising them. That is the measure of the right hon. Gentleman's diplomacy, and I congratulate him on it.

However, I would not like his diplomacy to mask the urgent message that he gave the House, which was that the Government are failing to deal with the terrible problem of unemployment. If, as I believe, other Conservative Members feel the same as the right hon. Gentleman, the time is coming when the Government will be in grave trouble. Therefore, the Prime Minister would be well advised to listen carefully to the right hon. Gentleman's propositions.

It is not only Conservative Members like the right hon. Gentleman who feel deeply about unemployment. Like the right hon. Member for Chelmsford, the Secretary of State spoke with understanding about this House being a forum for debate. I agree. However, the Secretary of State must beware as moderate and reasonable people are now taking to the streets because they feel passionately, and are so bitter, about unemployment. Those of us who share those views, and who want this House to be a forum of debate, may well find that the people who take to the streets will take power out of the hands of Parliament if unemployment continues to rise. I do not like to give such a warning, but account must be taken of it. People are now feeling desperate, and as a result the Government must be careful.

The Secretary of State said that it was not the Government's fault, but he must recognise that the Government cannot abdicate their responsibility. They have a major role to play in guiding the destinies of the nation. Therefore, instead of suggesting that the fault lies elsewhere, the Secretary of State and the Prime Minister ought to consider whether the time has now come for a wholehearted change in policy.

It is remarkable that at a critical time of mass unemployment which is spreading like the plague, some Ministers—not the Secretary of State for Employment—are suggesting that it is merely a question of people flowing peacefully from one job to another within a matter of weeks. It is not like that at all, but that was what the Secretary of State for Industry said a few days ago. That is quite wrong and misleading. It may be true that some people move from one job to another, but it is not true of school leavers, older workers, the handicapped, people living in areas of high unemployment and people living in areas where unemployment is rising quickly.

Unemployment is defacing our society, scarring our people and damaging our economy. It is causing misery, poverty, wretchedness and fear throughout the land, and that is emphatically not what St. Francis of Assisi advocated. However, there is no sign whatever—there was certainly none today in the Secretary of State's speech—of any significant change in Government policy. That is what we clearly require, because it is undeniable that Government policies and priorities have pushed unemployment to its present frightening heights.

If the Government persist with their disastrous policies, they have an obligation to answer an important question about their attitude. I should now like to put that question to the Prime Minister, and I hope that she will answer it this evening, if she can. It was put by Professor Wynne Godley of Cambridge university some time ago, and I now invite the right hon. Lady to give a categoric answer. At what level of unemployment will the Government agree that something has gone seriously wrong and that a drastic change of policy is required? If it is not 2 million unemployed, is it 3 million? If not 3 million, is it 5 million? If not 5 million, what? That specific question requires a positive answer, and I hope that the right hon. Lady will respond to it.

I pose the question because sooner or later the Government will have to recognise what the unemployed, the country, Labour Members and even some Conservative Members have recognised—that there is a limit to the rate of unemployment. We believe that that limit has been reached in moral, social and economic terms.

Where does the Government's limit lie? Do they have to wait for the election run-up before they do something substantial—as distinct from the small measures outlined by the Secretary of State—about unemployment?

The Government see unemployment as the necessary price to be paid for reducing inflation. I recognise that inflation is a serious problem. I understand the difficulty. However, reduced inflation will be the only remaining jewel in a corroded crown at the next election. It will be a phoney gem bought at an exhorbitant price by a Government who have lost all sense of human values. The right hon. Member for Chelmsford spoke about the effect of mass unemployment on one's conscience. The Government mislead the country by implying that there is a once-and-for-all price and by implying that when inflation has been brought down they can tackle unemployment.

I challenge the Prime Minister. High unemployment is not a once-and-for-all price for tackling inflation. As soon as the Government, with their policies, attempt to expand the economy, the inflationary pressures will begin to reassert themselves. We shall be back to square one. The Prime Minister is cornered in a "Catch-22" situation. Given her excessive reliance on the market, mass unemployment is the perpetual price to be paid for reducing inflation. We badly need expansion. However, the Government are caught in a net of their own choosing. They cannot expand the economy without facing the fearful danger of stoking reflation. The Prime Minister might rightly ask us what the alternative is. She might say "Never mind anything else, what do you propose?" That would be a fair question. With all humility, I suggest that such dangers can be overcome by a method that is contrary to Conservative philosophy, but nevertheless necessary. That method is to develop an effective agreement on incomes and to limit the growth of imports to an acceptable level.

The right hon. Member for Chelmsford said that he was suggesting not an incomes policy but a concordat. With great respect, he is playing with words. A concordat is a form of incomes policy. However, let us not be too pedantic. We need an agreed policy on incomes. Unless the Government can secure that, they will get nowhere. The Prime Minister has prevented herself from taking steps towards such a concordat because, as a result of hard and hostile attitude to the trade unions, she has made it more difficult to reach a voluntary agreement on incomes. That is the right hon. Lady's attitude at present. However, like all pragmatic Conservatives the right hon. Lady will eventually have to come to terms with reality. Failure to do so will be as destructive of the Government as it will be of the country. That should be a powerful inducement to the Government to change their ways.

The control of imports is the ultimate answer to the problem of imports rushing in as we expand. Such imports simply provide jobs for foreigners and give us balance of payments problems. That is followed by the usual stop-go waltz of economic disaster. For far too long both this, and the previous Government have shirked import controls because of the fear of retaliation by our competitors. That fear is legitimate and we must face it if we are to advocate import controls. However, I am coming round to the view that objection to import controls is invalid.

Foreign countries have recognised that a strong and healthy Britain is in their interests as much as in ours. They do not want to cripple Britain, because they, in turn, would be damaged. Our foreign competitors—our foreign friends—would not object to import controls provided that they were applied sensibly and with due regard to the Third world's need for exports. Those exports should be regarded as important as our problems. Given that caveat, I am in favour of more stringent import controls.

I do not wish to speak for long, but I wish to turn to the issues that affect Stoke-on-Trent and North Staffordshire. I wish to do so not only because of a constituency interest, but because, perhaps more than any other area, Stoke-on-Trent and North Staffordshire illustrate the utter and absolute failure of the Government's policies. That illustration undermines every argument that the Prime Minister and her Ministers put forward about their policy. In the Potteries there is a skilled labour force whose members are paid reasonable wages. There are some modernised factories. In addition, the area has witnessed technological advance, a fine sales record, high exports, and excellent labour relations. What more could any Government want? What more could any economist want? What more could any free enterprise industrialist want? Presumably, a Government should encourage such an ideal centre. However, they are not doing so. Despite the outstanding and, in some ways rare combination of attractive economic features, Stoke-on-Trent and North Staffordshire are wilting under a series of grave body blows which threaten to knock the area out.

Again, the right hon. Member for Chelmsford needs to be answered. He said that we should try to encourage the good. Let us do so. I respect and admire that fine principle. However I have given a prime example of the good and the fine. I do not say that only because my constituency is involved. This is a marvellous, moderate and far-sighted industry that exports most of its products. There are no labour relations troubles, yet the Government are damaging the industry. That is inexcusable, wrong and short-sighted. I urge the Government to think again.

I deeply resent the figures that I shall give to the House. Should any hon. Member doubt them, they are on record. In May 1979, when the Conservative Party came to office, the rate of unemployment in North Staffordshire was a mere 4.1 per cent. Only 9,000 people were out of work. Today, after the Government's application of their policies, the number out of work has almost trebled, to 25,000. In two years of Conservative Government the figure has almost trebled. The percentage of those out of work has jumped from 4.1 per cent. to 11.9 per cent. Those are staggering figures. Short-time working affects 11,000 to 12,000 people. Yesterday, the mighty Michelin factory, which is one of the finest rubber factories in the world, announced that it was going on to a short-time working week. Is that not a shocking and disgraceful record for any Government to hold? The situation is not the fault of the workers or of management but, of the Government and their policies.

We can do without any mealy-mouthed euphemisms about shedding labour to be fitter for the industrial race. I am talking abut highly skilled and dedicated pottery workers—men and women who are being pushed out from the pottery industry through no fault of their own.

These people are suffering just as much, if not more, than any others, through the Government's misguided policies. These policies include high interest rates that cripple borrowing, high exchange rates that damage exports and high energy prices that inflate costs. The Government cannot accuse the workers of North Staffordshire of working themselves out of a job because of exorbitant wages, because the wages are not exorbitant. They cannot accuse them of striking themselves out of a job by too many disputes because there are no strides, nor can they accuse them of missing markets by failing to export, because most of their products are exported. The fault for the present malaise lies squarely on the Government's shoulders.

The Government should be warned that if, as in this case, they continue to cripple the golden goose they will be transforming the bird into a lame duck. They will be doing more than changing nature. They will be demonstrating their total incapacity to provide the incentive society that was the promise on which they were elected.

North Staffordshire is on the path to disaster. The figures for unemploymemt are bad enough, but the trend is catastrophic. If it continues at this rate, trebling in the next two years, there will be 60,000 people walking the streets of the Potteries. Given that trend the Potteries needs action. It needs Government assistance, intermediate status, cash for training and retraining, assistance on fuel prices and, above all, a revival of demand.

What North Staffordshire and the country need is assurance that problems of unemployment will be considered by the Government, that the slide will be stopped and will not be elbowed aside. I hope that the Government will recognise that the problems of mass unemployment in North Staffordshire are exposing the poverty of their policies. I ask the Prime Minister to consider what has been said on both sides, to think again and revise her policies before it is too late.

5.34 pm

Mr. Bob Dunn (Dartford)

I have the privilege of representing a constituency in the South-East. The unemployment figures for the South-East, which were reported yesterday, show an increase from 4.3 per cent. of the total working population in 1980 to 7.7 per cent. on 11 June 1981. The South-East region is now feeling the effects of the recession that the rest of the country has felt in recent months.

It is only fair to state the changes that have taken place in my constituency against the background of the unemployment figures for the country as a whole. The figure for the country now is 11.1 per cent. That compares with an unemployment rate in Belgium of 14.1 per cent., 8.9 per cent. in Denmark, 9.1 per cent. in France, only 5.2 per cent. in West Germany, 12.8 per cent. in Ireland, 8.2 per cent. in Holland, 2.2 per cent. in Japan, 7 per cent. in Canada and 7.6 per cent. in the United States.

Last year in the Western industrialised world, unemployment increased by 3 million. The good news in the latest set of figures is that, during 1981, 275,000 people per month have been finding new jobs after a period of unemployment. In The Daily Telegraph of Wednesday 24 June the City comment is: Hardly anybody commenting in public yesterday about the June unemployment figures remarked on the good news: the increase of 38,000, after making seasonal adjustments and ignoring for the moment school leavers, was the lowest for 13 months. Taken by itself, this is further proof that economic activity has stopped declining, although there are not yet any signs of recovery. Last autumn the monthly increase in unemployed was running at over 100,000 persons. The problem that faces the Government is the size and growth of the bureaucracy in our community. In 1955 the figure for local government workers, both full and part time, was 1,100,000. By 1980 that figure had increased to 2,600,000. We are constantly made aware in the Chamber of the enormous burdens that national and local taxation cause the local community. It is now clearly evidenced in places such as Lambeth that the local burden of taxation through rates is now working as a positive and vicious disincentive to the expansion of industry.

The behaviour of local government in going beyond the guidelines set down by this and other Governments has gone far too far. In Southwark only last week we were told that the direct works department responsible for highways and works last year overspent to the tune of £900,000. Clearly, an enormous rates revenue must be levied to recover that amount.

In the papers today, we have been told that the West Midlands county council is thinking of imposing a rates levy later in the year amounting to an increase of 31.7 per cent. That increase will militate against the employment prospects in the area.

I look forward to the efforts of my right hon. Friend the Secretary of State for Employment bearing fruit but I castigate those local authorities, whether Labour or Conservative, who will not take advantage—or have not so far—of the measures enacted by the Government which allow them to privatise their services or functions resulting in enormous savings to the local community. So far, I know of only one local authority that has taken advantage of the scheme. That is the borough of Southend, where there has been a large reduction of £500,000 in the cost of public cleansing. The result is that, in the last financial year, Southend was the only authority in the country which reduced the rates burden by 1p in the pound.

Mr. Teddy Taylor (Southend, East)

The figure was 1.17p.

Mr. Dunn

I am grateful to my hon. Friend. I cannot understand why more local authorities, especially if they are of a Conservative persuasion, do not examine the functions and services that they carry out. If it is shown that the local authority carries out those services in a straightforward and cost saving way, no complaint need be made. However, local authorities must be required to examine their functions and services to see whether there could not be a better return to the authority with an improvement of service or, at least, the maintenance of the same service to the benefit of the local business and domestic community.

We have heard today about the lack of investment in British industry in the past 30 years. There was a good article in The Daily Telegraph the other day by Roland Gribben on the approach by the National Panasonic company of Japan. That company is about to increase research and investment from $500 million a year to $1,000 million a year and by 1983 to improve on its research establishment of 6,000 research staff in 23 centres. A leading executive of that company is quoted as saying: The world has a population of 4,000 million out of which only 1,000 million have the electronic culture"— whatever that means.

Nonetheless it is clearly shown that that company is prepared to take advantage of the opportunities that lie abroad. The chief executive, Mr. Isomura, goes on to say: Last year 40 per cent. of its $13,689 million sales came from overseas operations through direct export of its 59 manufacturing outlets in 32 countries. Clearly an aggressive approach such as that might be copied by many companies in the United Kingdom.

I was concerned by the speeches from the Opposition about the lack of alternative, radical, appropriate, positive policies that might result in an improvement in our present circumstances. Clearly, there has been no shortage of speeches that have defined the present problem, but there has been a radical shortage of Opposition Members prepared to pose real and radical solutions. The Labour Party's suggestion of a massive increase in public spending will not solve the present unemployment problem.

Hon. Members have harked back and will hark back to the so-called success of President Roosevelt in the 1930s, and the great public expenditure investment programme that the American Government then followed. But it does not follow that because there are great increases in public expenditure, a definite improvement in the industrial base of this country will result. Far from it. In the 1930s in this country it was not public expenditure that brought about an improvement in employment prospects. It was the efforts of local entrepreneurs and business men who dragged themselves up by their bootstraps and created improved job opportunities for the people.

I am very concerned about the prospect of young people leaving school to go on to the dole. I welcomed the announcement in recent months by the Department of Education and Science of the policy of seeking to provide each secondary school with a computer and with computer aids so that young people can equip themselves with the necessary knowledge to work in word processing and microtechnolgy. I should also like to see an involvement by institutions of further education and higher education in our local schools, to enable them to train young people for the tasks ahead.

I suggest to my right hon. and learned Friend the Chancellor of the Exchequer that when firms buy cars for their car pools, tax relief should apply only if such firms buy British cars. I cannot see the logic of having tax relief when companies purchase foreign cars.

I hope that in the next month we shall hear an announcement about the role of trade unions and trade union legislation. Much remains to be done in legislation and I hope that the elimination of some of the restrictive practices will be considered by the Government in the months ahead. I hope that, in the winding-up speech, we shall hear from the Opposition an answer to the question posed to the right hon. Member for Chesterfield (Mr. Varley) in respect of Sandwell borough. I look forward to a satisfactory answer about the Opposition's attitude to the closed shop in that borough.

I congratulate my right hon. Friend the Secretary of State for Employment on the way he spoke today. Unemployment is, indeed, a great problem. My grandmother died in 1926 from malnutrition caused by the General Strike. My grandfather was unemployed for three years in the 1930s. My brother was made redundant before Christmas. The problem of unemployment affects everyone of us in every sphere of life. I know that the Government are intent on reducing the pernicious problems of unemployment, and in that they have my full support.

5.43 pm

Miss Joan Lestor (Eton and Slough)

I have always found it difficult to take at face value the statement that local authorities are overspending, and that if they would only cut back things would be very much improved. It is right that local authorities and Governments should from time to time review what is taking place and how money is being spent, be it the taxpayers' or the ratepayers' money. But when the call for cuts by local authorities bears no relation whatever to the needs of the community in an area, and when the cuts create more unemployment, we need a more satisfactory analysis of what is taking place in local authority areas. It is not sufficient simply to say that there must be more cuts because local authorities are overspending.

I do not know how my local authority can be accused of overspending when we have the gravest housing problem that we have had in the area in the 16 years that I have known it. I fail to understand how it can be accused of overspending when we have grave problems relating to the social services. They are partly due to the migration over the years of families seeking work in Slough, which has always been a magnet for labour. There is no point now in migrating to seek work in Slough.

When people make statements about overspending by local authorities and about cutting back, those statements should be related to the needs of the areas. Often the cuts, which reduce the services that are needed, create more unemployment in their turn, so that the saving is merely a bookkeeping transaction. There may be savings shown in local authority areas but more public expenditure is shown in the unemployment ledger. We should all, therefore, be a little more precise when we are talking in those terms.

Mr. Bob Dunn

Will the hon. Lady give way?

Miss Lestor

Not yet; I have only just risen.

The Secretary of State for Employment said that the prospect of unemployment had been envisaged for some time. He said that the Conservatives knew it when they were in Opposition, and that it was recognised that the prospect for this country was long-term unemployment. But that was not said by the Conservative Party during the general election. At a time when unemployment was very much lower than today, and when inflation was very much lower than it is today, the Conservative Party hired unemployed actors to depict in a poster the queues of unemployed because, as the party alleged, "Labour is not working". The inference was that a Conservative Government would be able to reduce unemployment. That was why many people voted Conservative. They believed that unemployment would be reduced, just as they believed many other things that the Conservative party promised them.

It is unfair of the right hon. Gentleman to say "We have never pretended otherwise, because we always knew that unemployment was a long-term feature". His party did not say that at the time of the general election; it said something different.

I do not want to go into great detail about my constituency. The hon. Member for Dartford (Mr. Dunn) said that the problems of the South-East were, perhaps for the first time in our history, becoming very grave. Slough has escaped the recessions of earlier years. Even during those recessions, Slough attracted people from the Welsh valleys, from Scotland and from many other parts of the world. It is not as badly off as other areas, and its unemployment figure does not approach the national average, but industries are closing down, and large numbers of industries are on short time. In the main, it is an area of small light engineering industries, and they are now realising that their hopes of assistance from the Government will never be realised.

Conservative Members, when speaking of the causes of unemployment, refer to the excessive wage claims, the restrictive practices, overmanning and so on. But none of those things is true of Slough. Over the years, Slough has had very good industrial relations. It has not had excessive wage claims. It has not had restrictive practices. Yet now, for almost the first time in our history—certainly in the living memory of my constituents—Slough is facing and feeling the results of the recession. When we are looking for the causes, we cannot simply make an overall statement that those are the causes.

When my colleagues in the textile areas say that the textile industry, which is now so drastically reduced and is in such terrible trouble, has never been a high-wage industry, Conservative Members reply that in the textile industry the problems are due to something else. Obviously, therefore, these bland statements do not help us very much.

Ever since the Conservative Government came to office, the Prime Minister and others have put all their eggs in one basket. They have argued consistently that we have got to reduce inflation, and that if we can reduce inflation unemployment will drop. Whether they believed it or not, or whether it was simply a theory that was held, the facts are to the contrary. Although inflation, which soared at the beginning of the Government's period of office, has come down and has fluctuated a little in the last few months, nobody makes any predictions other than that unemployment will continue to rise. There may be arguments about the rate at which it will rise. The theory that the reduction of inflation would cause unemployment to fall has been proved not to apply to the problem that confronts us.

The tragedy is that the Government go on acting in exactly the same way. Thousands of men and women—reluctant recruits into the army of the unemployed in the battle against inflation—now find that, in addition to the loss of jobs, the battle itself has been lost.. Many of them will never work again because they are past the age at which people will employ them.

I have asked previously whether the rise in unemployment is a deliberate act of the Government in order to reduce inflation or an accident. It must be one or the other. Have the Government decided that this is a period through which the country must go in order to deal with overmanning? One of the effects in my constituency of soaring unemployment is that the purchasing power of people is reduced. When people buy fewer goods, this becomes another factor in the spiral of unemployment. More people become unemployed as a result of lower demand. It is obvious that production will not increase if a growing number of people who were engaged in productive activities are no longer engaged in them. This is reflected in the South-East and constituencies such as mine. In the past, Slough has escaped and has been able to attract many people without jobs from different parts of the country. Not long ago, the Prime Minister herself was saying that people should move to areas where jobs were available. Unhappily, there are now no such places.

In a courageous speech, the right hon. Member for Chelmsford (Mr. St. John-Stevas) referred to the importance of housing. It must seem odd and a contradiction to anyone studying our society that we pay qualified construction workers not to build houses when hundreds of people are badly housed and crying our for accommodation. Instead of allowing local authorities to build and ensuring that they have the money to expand housing programmes, the Government argue that it is better that construction workers should be paid not to build houses. That is monstrous. The argument about saving public expenditure is seen to be a contradiction as the unemployment bill continues to soar. I wonder how much revenue from North Sea oil is now used to meet unemployment payments. That is public expenditure. The same argument applies to education and hospital facilities. There is a basic contradiction in the policy.

Mr. Bob Dunn

Does the hon. Lady agree that private enterprise should be allowed to undertake local authority services and functions if it can maintain the same level of service while saving money?

Miss Lestor

I am not sure what the hon. Gentleman aims to prove. My argument is that local authorities are not able to meet desperate social needs within their areas because the cuts have forced them to put people out of work. The question of carrying out work more cheaply or more expensively does not arise. The whole application of the cuts policy is an expensive operation. At the same time as people remain inadequately housed or homeless, those who could build the houses are paid not to build, which increases public expenditure.

I believe that many Conservative Members, like Opposition Members, are concerned about the tragedy of young people without jobs. A headline in The Daily Telegraph stated: 117,000 youngsters join the one-in-nine without work. The outlook for those young people is fearful. Everywhere that I look in my constituency and every journal that I read concerned with training makes a point that the Government should take on board. The Secretary of State spoke about young people staying longer at school and also about training courses. However, school courses applicable to the needs of the country in five or 10 years' time are being drastically cut. Training courses are also being drastically cut.

The principal of Slough college, together with some industrialists from my constituency, who came to see me about the cuts asked why the Government could not see that the skills needed in the future, if we get out of the recession, are being abandoned by industry, by colleges of technology and by the schools. It has to be recognised that the training and skills of the 1950s will not be applicable to the demands at the end of the 1980s and in the 1990s. We are removing the seed corn which will enable us to climb out of recession if a change occurs. It is a sad reflection on all of us that this should be happening.

I can give many examples of the attitude of local authorities towards grants for young people wishing to take training courses. A young woman at Plymouth college of art and design, described as the best applicant for her age at the college, has been refused a grant by the Berkshire authority for a course concerned with industrial training. That has happened presumably because the authority does not have the money to meet the grant. Hon. Members will take up such cases as they are brought to our notice. The case I have described, which could be multiplied many times, concerns a young person with the ability to take a course. The college needs her, and industry recognises the applicability of the course to the future. Yet she is denied the opportunity because the local authority does not have the money.

It has been argued that wages councils have created a false level of wages for young people who make demands that are unreal in relation to their contribution. I have checked, as quickly as possible, on the wages organised by wages councils. For adults working a 40-hour week, wages range between £35.50 and £57.60. For young people, the figures are lower. I do not believe the argument can be sustained that young people have priced themselves out of the market. One cannot have both ways the argument that the reduction of the age of majority has brought more people into the adult world demanding adult wages. If young people of 18 are regarded as adult and able to vote, to marry, to join the Armed Forces and to have a mortgage, it cannot be argued that they must live on wages that fail to accord with the national average, although that happens to be the case if their pay is governed by wages councils.

Mr. Raymond Whitney (Wycombe)

Is the hon. Lady aware that for every 10 per cent. that wages have been increased by wages councils, the number of people employed has decreased by 10 per cent?

Miss Lestor

I am dealing with the argument that young people have priced themselves out of the market. On the figures for wages councils available to me, the argument cannot be true. The wages for adults are not excessive. They are nothing like the national average wage. For young people, they amount to even less.

Two or three years ago the OECD produced a report dealing with trends in society and particularly the long-term effects of unemployment. Paul MacCracker, chairman of the committee, which made the report, said: The fact that high levels of unemployment have not caused more social and political unrest is a tribute to the efficiency of today's system of income maintenance and social services. But there can be no complacency about the consequences of prolonged unemployment on social, racial, religious and regional tensions and in time, on attitudes to work and to society in general". That is true. The forecast is beginning to be realised. Many young people will not feel that they owe anything to society. They are taught that society is not prepared to treat them as reasonable and responsible human beings. The direct result of unemployment can be seen on the faces of young people in many inner cities. Young people are beginning to question authority. It will not be long before they question parliamentary democracy. If we fail, the young people and they are unable to work they will lose confidence in the normal channels of parliamentary democracy. Then the country will have a serious problem.

I see the fear in the faces of young people who cannot get jobs. What is happening to them rubs off on the children in school. I believe that much of the talk about growing social unrest is exaggerated. However, we have seen examples of it in some cities recently. Deprivation as a result of expenditure cuts and hopelessness as a result of unemployment occurs. The Government must recognise that if there is a breakdown in confidence in authority and in attitudes to the police and parliamentary democracy we shall be held responsible for the tragedies that result.

Several Hon. Members

rose—

Mr. Speaker

I remind the House that speeches have been so long that it will be difficult to call all right hon. and hon. Members who wish to be called.

6 pm

Sir Hugh Fraser (Stafford and Stone)

I congratulate the hon. Member for Eton and Slough (Miss Lestor) on her last few words. The situation is serious. I welcome the presence of the Prime Minister, who is to answer this important debate. I hope to make my remarks in a reasonable time.

Alas, we are faced no longer with the cyclical problems of unemployment but with a profound and absolute change in job opportunities. That is what makes the debate so important. The symptoms began to become evident in the early 1970s. They are caused not only by inflation but by new world market forces, technical innovations, the historic and structural weaknesses of Britain with the oldest industrial economy and infrastructure—and a population which is larger than the optimum for our existing industrial and agricultural base. We must find answers to those problems.

If we take the theories proposed by the hon. Member for Eton and Slough, by my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) by any member of the Bennite group, or even by the Minister of Agriculture, Fisheries and Food speaking in the United States, and put them on the rack of an econometric model at any university the mincing machine will spit out at the end of the exercise high unemployment figures of around 3,000,000. That problem would face us whether the Labour, Conservative, Social Democratic or Liberal Party was in office. The problems are intractable but they must be faced and solutions must be found.

People engaged in Government or business know that a ruthless efficiency audit in the public and private sectors would throw up figures of overmanning in some industries and in large parts of the public sector.

The present industrial work force is capable, without further recruitment, of producing between 5 per cent. and 10 per cent. more goods. The number of apprenticeships is falling, partly because of the change in the industrial structure.

We must deal with the change. Change always strikes its own balance sheet of pluses and minuses. Changes must take place. Look around: they produce many pluses. They produce new industries, new money, new jobs and new skills. But as we restructure industry and outlook, employment becomes the void and the minus. We must ensure that that minus on the balance sheet is not written in blood and tears. In that respect I agree with my right hon. Friend the Member for Chelmsford and the hon. Member for Eton and Slough. Unless we find remedies, the structure of society will be in danger. That is why I welcome the presence of my right hon. Friend the Prime Minister.

One day these issues will be sorted out. Man's ingenuity and response to the problems will produce the result. However, that day might be a long way off. The market forces of the world must be tempered by Government action. A new look is needed.

Not only the economics of society but the structure of society could be in danger. That is why the Government are right to switch their mind to considering the future of our political structure. The future of that structure depends upon youth, its hope and aspirations. That is where the more tangible part of the problem lies.

The Government are right to give youth employment and training high priority. The question is whether what is proposed is enough, whether it is purposeful and positive, whether it will create an impetus of its own and whether it will realise and release the enormous potential energy in youth. Many of the schemes originally proposed by the Labour Government, such as the youth opportunities programme, used to result in real jobs. However, as unemployment grows three dangers emerge. First, there is the growing challenge of cheap, substitute labour; secondly, the interlude of training with no job as a result; and thirdly, the stigma of unwantedness. That involves a division in society not just between the haves and have-nots, between the ins and the outs, but between those with hope and those without it. As President Kennedy once said, one goes round the track only once. My fear is that some young people in Britain will not get on the track at all.

This afternoon the Minister spoke about various improved schemes, including the youth opportunities programme. Industry is doing a great deal. Some of our best firms such as GEC and Marks and Spencer, have programmes of great value. The Minister knows about the Marks and Spencer job creation and youth involvement scheme. About 40 qualified executives are helping various agencies and small businesses. Many voluntary agencies are doing splendid work. I refer to the community services volunteers and a host of others.

Admirable though all that is, it does not get over the fact that, as my right hon. Friend the Member for Chelmsford said the other day outside the House, unemployment is creating two nations. My fear is that many of the current activities by Government or voluntary agencies take on the character of either outdoor or indoor relief and continue to put a stigma on the unemployed person. What is more, I fear that the Minister's suggestion that young people should be driven into State schemes by denying them welfare payments will intensify feelings of dissatisfaction. That must be examined with great care.

That is why I believe that we should turn our attention to the idea of a national service scheme for youth which would involve equally boys from Brixton schools and boys from Eton college. The advocates of such a scheme are scarcely Fascist. They include Kingman Brewster, the ex-president of Yale university, and Professor Ralph Dahrendorf, the director of the London School of Economics. That is why 145 hon. Members signed early - day motion No. 377 entitled "National Community Service" which asks the Government to carry out urgently a feasibility study for introducing a scheme of under-compensated publicly useful service for young people before they embark on their life-time careers.

A feasibility study should take a broad look at the sort of society that Britain must secure. It should not flinch from the hard facts of our social and economic future. It must look at patterns of employment and seek an educational and training structure which will reflect them.

I urge the Government and the Opposition to take a joint approach on this most vital task. As one of my hon. Friends said this afternoon, this is a much bigger issue than any one political party; it involves the whole nation.

Mr. Nick Budgen (Wolverhampton, South-West)

Does my right hon. Friend agree that it would almost certainly be better if such a scheme were compulsory for all those who are eligible so that it had the same character as national service in being something that everyone did, not merely those who happened to be unemployed?

Sir Hugh Fraser

I entirely agree with my hon. Friend. That is my personal view, which I hold very intensely. Of course, there are those who disagree with me, but to be effective, I believe that eventually—perhaps not immediately—it would have to be compulsory.

I urge the Government and the Opposition to consider the matter. Let us agree that our present training structures are inadequate, let us face the reality of future unemployment, but let us not allow the scale of the problem to paralyse our ability to respond to it. Let us explore the possibility of introducing a period of compulsory service, a year of education for life, designed to look beyond the bounds of academic success or failure. Let us use that extra year to patch the holes in the basic education of the young, and to mature them to meet the real demands and challenges of adult life. If unemployment is to be a part of the experience of every young person, either his education or some supplementary scheme should be set up to deal with it.

However, the first—and, indeed, the last—thing that we must do is to fight the despair of young people. I am sure that many of us today saw the letter of the 16-year-old in the Daily Mirror, a poem showing the other side of the coin—the determination of young people to fight despair and depression, and, despite the odds, to find the first wrung in the ladder to the future. It is the hope of these kids that the Government must seek to harness. They must take the ideas and optimism of youth and use them to create the society which our conventional measures have so far signally failed to do. We have become too resigned to failure and mediocrity, and too narrow-minded in our approach to national problems. We have large numbers of unemployed young people. We have terrible gaps in the standard of service to the community. Let us bring them together. Our cities and parts of our countryside are caught in a spiral of decay—Northern Ireland, parts of the Midlands, and parts of the East and the North Coast. Let us use the energies of young people to fight against it.

Of course, that will not end unemployment. Nor is it a substitute for jobs. However, we must look for ways to protect our young people from the effects of recession and unemployment, and to keep the social fabric which endemic unemployment will eventually undermine. It is our duty to give young people a sense of community and continuity, and make them aware of new horizons, whatever their immediate problems. We shall ask young people to sacrifice their time and a measure of their personal freedom. In return we must offer them proper help. Above all, we must persuade them that they have a vital place in our national future.

6.14 pm

Mr. William Rodgers (Stockton)

The right hon. Member for Stafford and Stone (Sir H. Fraser) said in his opening remarks that this was a very serious debate. He was right. The quality and seriousness of the speeches, certainly after the two speeches from the Front Bench, reflect the extent to which, coming from different roots, we all agree with the right hon. Member for Chelmsford (Mr. St John-Stevas), who said in his moving speech that unemployment is now the highest priority of the Government.

I confess that that was not always my view. Like many others, I was euphoric through the 1950s and 1960s, and did not anticipate a return to the levels of unemployment that existed before the war, least of all to the human misery caused by them. However, the words in the amendment standing in the name of my hon. Friends and myself about the acute human distress and the high social and economic costs of unemployment reflects the feelings of the whole House.

I have referred to the Front Bench speeches not in any way to doubt the sincerity either of the Secretary of State for Employment, whose seriousness of purpose is plain, or that of the right hon. Member for Chesterfield (Mr. Varley). However, there were times in their speeches when the House did not reflect the seriousness of the occasion and was more concerned with the traditional dog-fight than with looking for solutions to these problems. We shall find solutions not by calling one another names but by debating the real problems which so far have proved intractable. No one knows how best to solve them, and it is right that we should admit that.

The right hon. Member for Chelmsford spoke about the moral evil of unemployment. That is how all of us should see it. I was born and brought up in Liverpool between the wars, and it was the ugliness, poverty, deprivation, squalor and intolerance of that great city that made me feel that there was a place for me in public life. All of us, in our different ways, have reached that conclusion. However much we are concerned about the other problems that face our nation, the problem of unemployment, with its personal, social, economic and national consequences, is a matter that must concern us all.

I agreed also with the right hon. Member for Chelmsford when he spoke about the desirability of finding common ground. He made two points that I want to emphasise, because I agree with them. He said, first, that the problem that we face, although there are ways in which this Government can deal with them, is not only a domestic affiction but one that afflicts the whole international community. Although inflation in this country is at present higher than it is in the OECD as a whole, and although unemployment in this country is also much higher than it is in many of our partner countries, there can be no solution to unemployment which does not take account of the international dimension. It is the obligation of every British Government to seek to find an international solution, as far as it extends. It would be madness, for example, for Britain to withdraw from the EEC, whatever it shortcomings, in view of the consequences for unemployment in this country.

Secondly, the right hon. Member for Chelmsford said that the problem of unemployment mirrors the shortcomings of British industry. Here the Secretary of State was wholy right. He referred, in perhaps a familiar liturgy, to the uncompetitiveness of British industry. He spoke of higher inflation and lower productivity. He referred also to higher unit costs, particularly the labour element. All of that is true. The problem of unemployment will not be solved, either in this country or internationally, unless Britain is a great deal more competitive than it is today.

We are suffering not from a minor illness, but from something that is much more debilitating. It was right that right hon. and hon. Gentlemen on both sides should draw attention to youth unemployment. It may be obvious to say that unemployment is an acute shock, whenever it comes. Although I am deeply concerned, as are right hon. and hon. Gentlemen, about those who leave school and cannot find jobs, I am also deeply concerned about those who lose their jobs in their late forties early fifties and have no prospect whatsoever of going back to work.

We talk about the desire for greater leisure, the wish for earlier retirement and how the effects of unemployment are cushioned. We must recognise that living standards are higher than they were 50 years ago, but the plain fact is that most people want to work. That should be the starting point for all our policies. We should not make any other assumption and we should seek to give them an opportunity to work.

The Secretary of State's comments on unemployment among young people were a little obscure. I take it that he will be bringing forward a firmer package. I hope that there will be no hindrance in public expenditure terms, although I am the first to admit that no Government can escape the need for priorities in public expenditure.

I should like to see four major developments in providing opportunities for 16-to-18-year-olds which, together, would guarantee every young person over 16 years either education or training up to the age of 18. First, I should like to see introduced educational maintenance allowances, related to family incomes, to encourage young people to stay at school. Some thought must be given to the content and quality of the courses that they undertake, but we should seek to move in that direction.

Secondly, I should like to see an increase in the number of apprenticeships available to school leavers. We must look at relevant skills, bearing in mind the new technologies, and the sensible period for an apprenticeship. We must not simply continue as we have done in the past.

Thirdly, we need better training for those who are fortunate enough to be in work. Successive Governments have talked about training, but I do not believe that we yet have a comprehensive and effective plan for training, not only at apprenticeship level, but for those in work.

Fourthly, under the heading of facilities and opportunities for 16-to-18-year-olds, I hope that there will be an extension of the YOP to enable young people to move from one opportunity to another, including some opportunity to be involved in community service.

Substantial progress can be made under those four headings, although I am more than ready to concede that in the short term such measures are mainly ameliorative. There is no way of ensuring a permanently low level of unemployment if we do not have economic growth and there is no way of achieving economic growth unless we produce goods and services that those at home and abroad want to buy and produce them at a price that they can afford. It is as simple as that.

That means that we must have a positive industrial policy. It was made clear from both sides of the House during the Budget debate that the main shortcoming of the Budget was that the Chancellor of the Exchequer did not place the regeneration of industry at its centre. Within an industrial policy that is relevant to employment, we must have responsible economic management. I concede that neither the Government, in what they have done, nor the Opposition, in what they have promised, have given any indication that they know how to manage our economy better than successive Governments have done over the past 20 years.

Damaging consequences have resulted from the Government's monetary policy, but I do not argue that concern for the money supply can be dropped from the tools of economic management that any Government need to use. It is a question not of "either-or", but of finding the right balance and using all the means at a Government's disposal to ensure at least a minimum of economic growth and to deal with the regulators that always need the finest tuning.

I said in the Budget debate that it was foolish to believe that: in the long run lower inflation and lower unemployment are conflicting objectives."—[Official Report, 12 March 1981; Vol. 1000, c. 1040.] If that is so, it is disturbing that there are signs that inflation is beginning to bottom out in double figures. According to the OECD, our inflation rate is 11.7 per cent. It seems unlikely that the Treasury's forecast of a rate of 8 per cent. by mid-1982 will be achieved. That seems too optimistic. I expect inflation to remain in double figures until the end of 1982. If the Prime Minister takes a different view, perhaps she will tell us when she replies to the debate.

The gravest danger is that the fall of the pound will result not in greater competitiveness but in a rise in costs, including wage costs. It is, therefore, right that we should look again at the whole question of an incomes policy. The right hon. Member for Chelmsford mentioned that when he referred to greater coherence in wages and salaries. I was delighted to hear the right hon. Member for Stoke-on-Trent, South (Mr Ashley) mention the need to look at the question again.

I greatly regret that Opposition spokesmen have not begun to talk seriously about the need for an incomes policy. The right hon. Member for Leeds, East (Mr. Healey) knows that such a policy is necessary and he should be saying so loudly, clearly and regularly. I have the greatest regard for the right hon. Member for Chesterfield (Mr. Varley), and I agree with much that he said. He should also be saying loudly and clearly that there is no way of managing the economy and getting unemployment down without an incomes policy of one sort or another

The hon. Member for Islington, Central (Mr. Grant), who is on the Opposition Front Bench, has written some excellent articles and first-class pamphlets making the case for an incomes policy. I hope that he will have an early opportunity to say in the House and elsewhere that it is central to economic strategy that we find a way of getting a planned increase in incomes. If we do not do that:, the best endeavours of all Governments will fail.

I am sorry that, if the reports in the press are correct, one of our greatest trade unions, the Transport and General Workers Union, has said that it does not favour an incomes policy. The way to change such views is to debate the issue in public and to stand up and be counted.

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

Will the right hon. Gentleman take into account in his advocacy of an incomes policy the fact that there is no possibility of such a policy succeeding unless it is closely allied to a prices and profits policy?

Mr. Rodgers

I agree with the right hon. Gentleman, particularly on a prices policy. We need to look closely at profits, because if they are not earned there will be a shortage of investment which will work its way into the: system and affect opportunities for employment. I certainly agree that the matter must be looked at as a. composite.

The only way that any Government will succeed in that sphere is not by cobbling up a hasty incomes policy in a moment of economic crisis but by working it out seriously in advance, advocating it in Opposition and, coming into Government with a mandate from the electorate for a prices and incomes policy, and perhaps a policy on profits, as part of a total economic package to set before the nation. That is a formula for success.

I should be gratefully warmed in my expectations of the outcome of the debate if from both the Opposition Front Bench and the right hon. Lady the Prime Minister we had a plain statement that a strategy for incomes has a part to play in the economic management which is crucial to a much lower level of unemployment than that from which we now suffer.

6.30 pm

Mr. Michael Morris (Northampton, South)

The right hon. Member for Stockton (Mr. Rodgers) will excuse me if I do not debate incomes policy.

It is not news that we face the highest level of unemployment for 50 years, nor is it news that it is forecast that there will be 3 million unemployed by the turn of the year, and some forecasters suggest 5 million by the 1990s. However, it would be news if any hon. Member were able to say that man's needs in this country, let alone the needs of the Third world, have now been fulfilled, and therefore, we can plan for greater leisure. Therefore, the House is right to ask why this great evil has now hit us. Do we also have to ask that soulful question "Where on earth are the jobs to come from?"

I believe that we can and should again plan for full employment. I believe that we can get full employment with genuine jobs. My right hon. Friend the Prime Minister, in her broad strategy over the past two years, has laid the foundations to achieve that. However, like any form of foundation, they are not attractive to look at, although they are fundamental to moving forward.

In the past two years my right hon. Friend has been trying to restore people's faith in money. She knows, as I know—and as I believe most hon. Members know—that it is the stability of money that is the basis of the Western world. Two-thirds of hon. Members know what they saw when they looked over the precipice of hyperinflation, as we did in 1975. There was not one hon. Member in the House at that time who liked what he saw.

My right hon. Friend has often referred to our international competitiveness; or, to put it more vividly, she does not accept—and I do not accept—that the United Kingdom's share of world trade will automatically continue to decline in the forthcoming years. There is no given law that says that our share of world trade must keep on declining. The obverse of the question is how one returns to increasing one's share of the trade. What can we do in the meantime? Many hon. Members this afternoon have referred to what we can do to ameliorate the problems which are associated with unemployment. As the right hon. Member for Stockton said, growth has to be one of the answers. However, that is too simplistic an answer, as he was the first to admit. The scale of the task is daunting. The Cambridge Economic Policy Group, in an article in the Lloyds Bank Review, suggested that it needed a 5 per cent. sustained growth to get unemployment down to an acceptable ¾ million by the mid-1980s. To use statistics to turn that round and to put it slightly more attractively, it would require a 1 per cent. rise in output above the gain in productivity.

There are those who have claimed in the past that North Sea oil would offer a panacea to take us through this difficult stage. I suggest that all of us in the House are now a little wiser. The contribution to the gross national product by North Sea oil is running at about ½ per cent. Therefore, it does not offer the total panacea. However, it removes one fundamental constraint which has been on the country since the war. It provides room for manoeuvre in terms of the balance of payments. Since the war, whenever this country has begun to get growth, we have had a balance of payments crisis and, therefore, we have had a stop-go policy. What North Sea oil is doing, and will continue to do for the rest of this decade, is to give us a degree of flexibility to go for growth.

I ask myself whether the Government's policies are moving us towards growth. I suggest that, casting aside one's own prejudices, the basic elements are being laid. When we look back on this period in about 10 years' time, we shall recognise that in the last two years my right hon. Friend the Prime Minister has restored the competitiveness of British industry in a way that no other Prime Minister has done this century. To that extent, the key determinant is there.

There are areas where we have to do more. We need not a compromise but urgently to recognise the changed basis of international trade. There must be many hon. Members who, like myself, have worked overseas for British companies—I hope that there are. When I worked overseas, it was a question of one company competing with another. In those days, one never had to involve one Government or another. However, those days are gone. Today, trading requires a fusion of interest between Government and big industry. I should like to see more support for the export effort of this country from my right hon. Friend and her Cabinet. I want to see more urgency put into that than we have seen heretofore.

Mr. D. N. Campbell-Savours (Workington)

In what form?

Mr. Morris

The British Overseas Trade Board could be given a complete shake up, for a start.

Perhaps more importantly, I believe that we need to look at import substitution. We have to ask ourselves some questions. Why do we have such a high import elasticity in this country? Why is it so much easier for foreign competitors to sell in the United Kingdom that it apparently is for our companies to sell elsewhere? Why do we accept, and have accepted, such an adverse balance of trade with the Japanese and with certain parts of Comecon? Why do we pay so little attention to import substitution?

If we could tackle the combined dimensions of increased exports and increased import substitution, we would begin to go some way towards getting the necessary element of growth. If we could manage to control Government borrowing—in particular, the borrowing of nationalised industries—the present healthy savings ratio, to which my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) referred, could be turned to financing British industry instead of financing the public sector.

Mr. Campbell-Savours

The hon. Gentleman has taken the debate into an interesting area. What sort of machinery would he wish to see constructed to help the import substitution effort?

Mr. Morris

I shall come to that point in a few moments. I hope that the hon. Gentleman will listen carefully.

If I have faith in the future, I also recognise the tragic circumstances of the present unemployment. If my optimism is to be well founded, what policies should we be carrying out now? The Government are, naturally, both a significant employer in their own right and in local government, and an indirect employer through the nationalised industries, the regional incentive schemes and a host of activities. It is a fact of life that, on the whole, that degree of activity is not the most efficient way to use labour, nor is it particularly accountable to the House. The longer that I serve on the Public Accounts Committee, the more convinced I become of that lack of accountability. My right hon. Friend the Secretary of State for Employment has already undertaken a number of initiatives for youngsters. His determination to improve the schemes should be welcomed.

What should we do about import substitution? We should look long and hard at energy conservation. In the North-East there is a small trial scheme for energy conservation in homes. There should be a country-wide scheme, and we should make resources available for it. We would get an almost immediate response, both in construction labour and in a saving on import bills. The private sector should be given tax incentives for energy conservation. We need a massive programme to ensure that private industry is given every incentive to save energy. We need to consider the way in which we tax motor vehicles. We talk about saving fuel and moving towards smaller cars. There should be a differential tax system that would encourage people to use fuel-efficient vehicles.

I am sure that hon. Members can think of other ways to save energy. I cannot for the life of me think why we do not give greater encouragement in recycling products. We could abolish VAT on recycled products, which would have a direct effect on imports.

During this transitional period I hope that the Government will be a little braver with some of their excellent initiatives, for example, the start-up scheme. When we have such a scheme, where the concept is right, we should be braver and say that it does not matter what sort of job it provides because any job is a good job. We should not differentiate between manufacturing jobs, distribution jobs and service jobs. I want the encouragement of "Young Employees Scheme" to be considered again. It has great merit.

I want to see some flexibility between the Treasury and the Department of Employment in getting the money at present paid out in unemployment benefits recycled into paying those who do a job. The vehicle for that may be local authorities. I hope that an embryonic scheme on which I have been working will make a small contribution in that area.

It is too easy to be pessimistic. Britain owes a debt of gratitude to the Government, especially the Cabinet, for creating a greater sense of realism about the need for Britain to be competitive. I want to see that degree of competitiveness put to good effect so that we can obtain the growth that we need, and get our people back to work.

6.44 pm

Mr. Cyril Smith (Rochdale)

I have attended most employment, or unemployment, debates in the House during the nine years that I have been a Member. I accept that such debates are part of the proper democratic function, and serve a purpose to that end. However, I have yet to see such a debate take one person off the dole queue. I suspect that today's debate will be no exception.

There have been some constructive speeches. I had expected more of the political football knockabout to which we are often subjected when debating unemployment. Perhaps, before the debate ends we shall have a little more of that. I suspect that it will happen when the Front Bench spokesmen reply to the debate. We heard a little of it in the opening speeches, and some more during the speech of the hon. Member for Northampton, South (Mr. Morris). Clearly his attitude was that, whatever his Government did, it was right, and it was his job as a Back Bencher to defend it.

During these debates we are always told by the Opposition that unemployment is the fault of the Conservative Government. We usually hear the Conservative reply—which I have not the slightest doubt we shall hear later—that the conquering of inflation is the first priority, and that, although we are all deeply concerned about unemployment, inflation must be tackled first, and until then we must be prepared to put up with a continuing rise in unemployment.

I say in all seriousness, and not in a spirit of sarcasm, that I appreciate the fact that the Prime Minister has taken the trouble to sit through the whole of the debate, listening to the speeches from both sides of the House. Her reply will be all better for that. I sincerely appreciate her presence.

The Government did not invent unemployment. During the time of the last Labour Government, when the present Leader of the Opposition had responsibility for employment matters, unemployment doubled. I hope that when the right hon. Gentleman replies to the debate he will say what he will do when next in Government that he was clearly unable to do last time he was in Government. Alternatively, perhaps he will say what he will do next time that he did not do last time—[Interruption.] If he intends to do the same as he did last time, why will it work next time when it clearly it did not work last time?—[Interruption] Opposition Members, from sedentary positions want to know what effect the Lib-Lab pact had on unemployment. I am talking about a time that did not include the period of the Lib-Lab pact. During the time about which I am speaking the Labour Government had a majority. They lost their majority because of by-elections that occurred after the level of unemployment had doubled. Opposition Members cannot argue that the doubling of unemployment had anything to do with the Lib-Lab pact. Whatever its causes, it happened. Today, we must hear about the Labour Party's new policies for solving the problem of unemployment.

Mr. Kilroy-Silk

The hon. Gentleman made great play about the political football knockabout that has not happened but which he suspects may happen. He immediately launched into a political knockabout. He chided my right hon. Friend the Leader of the Opposition about the doubling of unemployment during the period of office of the last Labour Government. It did double, but it did not reach anything like the 3 million level that it is today. It was decreasing, not increasing. The majority held by the last Labour Government was held for only nine months at most. Even then, it was a slender majority of one—

Mr. Speaker

The hon. Member for Ormskirk (Mr. Kilroy-Silk) has been trying to catch my eye. It seems that he is making his speech now.

Mr. Kilroy-Silk

I wanted to make the hon. Member for Rochdale (Mr. Smith)—

Mr. Speaker

The hon. Gentleman is making a speech now.

Mr. Smith

The essential feature was the doubling of unemployment rather than the then Government's majority. I was side-tracked by the many sedentary remarks about the Lib-Lab pact, which had nothing to do with the doubling of unemployment.

The Government have increased the number of unemployed by about 1 million since they took office. That is something with which we cannot be expected to live. The Government must take meaningful action to try to reduce the number of unemployed.

We cannot accept that one in two of school leavers will have no job. Equally, the Government must give their attention to those aged 50 years or more who are unemployed. That is a terrible age at which to become unemployed. Many of those who are in that position lose all hope. The wives of men in their fifties who are unemployed have wept to me about their husbands' unemployment and its effect on their households. I am in favour of doing all that we can to help school leavers, but we must not lose sight of those in their fifties who are becoming unemployed.

We have heard some hon. Members talk about the tragedy of the South-East. In one area there is 7.7 per cent. unemployment. I would settle for that percentage in my constituency. In the past two years unemployment in my constituency has increased from 5.9 per cent. to 16 per cent.

It is insulting to management to be told that it has been grossly inefficient over the years. It is implied that management has employed hundreds of thousands of people over and above that which it required to produce the goods that it could sell. I do not accept that industry has been overmanned to the extent that it is now necessary to shed 3 million people before it can achieve efficiency.

I understand the problems of the South-East and I sympathise with them. However, the problems of the North and the North-West are acute. My hon. Friend the Member for Colne Valley (Mr. Wainwright) informed me by way of a memo that unemployment in Oldham and Shaw increased by 133 per cent. in one year.

Mr. James Hamilton (Bothwell)

In the Strathclyde region of Scotland 20 per cent. of the insurable population is unemployed. In Lanarkshire, of which I represent part, there is 19.6 per cent. unemployment.

Mr. Smith

I am aware of those percentages. The hon. Gentleman's intervention strengthens my argument.

What should we be doing in the short term? Liberals would reflate the economy considerably. We believe that it is necessary to invest in industries that have a future. Therefore, we welcome the Government's move towards the electrification of the railways. That is a sensible measure. If we are to witness a great recovery and a time when everything will be well, there will be a need for an efficient communication system. Efficient transportation must be vital in that context. The electrification of the railways must be worth undertaking in terms of its futuristic possibilities and probabilities.

Mr. Campbell-Savours

rose—

Mr. Smith

Anyone who uses the railway system must be aware of the state of the rolling stock. That is part of a labour-intensive industry. Reference has already been made to energy conservation and road construction. There are many areas in which we could invest.

Investment in non-futuristic industries is unwise even if the demands that are made are based on the ability to clout and on muscle power. There is no sense in investing hundreds of millions of pounds in coal seams that will be worked out in two or three years. The money would be better invested in industries that have a long-term future rather than in short-term coal seams merely because certain sections of our community have more muscle than others.

Mr. Campbell-Savours

The hon. Gentleman says that he would like investment to take place in long-term product industries. In the last Parliament, why did all the Liberal Members vote against the proposition that assistance under section 8 of the Industry Act 1972 should be given to Thames Board Mills Ltd., a measure that was introduced by the Labour Government? Why did his colleagues oppose that industrial development project?

Mr. Smith

I have no idea. Without notice of the question I do not know. I should have to ascertain where the company was situated, how many jobs were involved and many other details.

Mr. Campbell-Savours

There were 150 jobs at stake.

Mr. Smith

We are talking of unemployment of 2,600,000. However, the hon. Gentleman asks me to answer a specific question about 150 being declared unemployed at a mill which, I presume, has something to do with his constituency, an issue that goes back many years.

Mr. Campbell-Savours

Does the hon. Gentleman realise that £82 million was involved?

Mr. Smith

I view with some apprehension the suggestions that have been made about reducing the wages of young people and apprentices.

Mr. John Wells (Maidstone)

rose—

Mr. Smith

My company employs apprentices. I am doubtful whether a reduction of their wages would make my company more competitive. That argument ignores many other factors that are relevant to the training of apprentices. These factors include the number of skilled men that one employs, the ability to train young people and apprentices, the ability to absorb the work that they produce, which is sometimes badly produced, and the ability to inspect it and to put it right. I have doubts about the wild suggestion that if we reduced the wages of apprentices in industry our companies would be more competitive and we would increase our ability to sell abroad.

The abolition of the national insurance surcharge would make a considerable contribution to increasing the efficiency of firms and employers. It is a 3½ per cent. direct tax on jobs and employment that was introduced by the Labour Government. That could be done by a one-clause Bill, and it would be a good piece of labour legislation for a Tory Government. The surcharge taxes exports, not imports; it hits smaller firms, because they are more labour-intensive; it hits all the major trades—tourism, building, shipping and manufacturing.

I understand that the Government perhaps could not abolish the surcharge in one go, but they could reduce it for the time being and abolish it later. The Government should at least consider abolishing it initially for all employees under the age of 21 to encourage more youth employment.

The Government could give more positive leads to companies on how to claim from the EEC funds. Small companies do not have knowledge of all the grants that are available from the EEC and how to get them. The grants should be channelled throughout the country rather than to particular parts. Earlier we spoke of the problems of the North, the North-West and Scotland as opposed to the South and the South-East. Of the money that the United Kingdom receives from, say, the agriculture fund, only 5 per cent. goes to the North-West region. That is perhaps explicable because it is not a highly agricultural area, but as agriculture accounts for such a large share of the EEC budget that distribution should be examined.

Reference has already been made to the need forconsiderable expansion of the training and retraining programmes. I am delighted that the Government, encouraged by the Prime Minister, saw fit to instal microcomputers into all secondary schools. But that equipment will be of no use unless the education authorities have the wherewithal to train teachers in the use of that equipment so that they in turn can teach the children. When I received the Prime Minister's circular, I got in touch with all the secondary schools in my constituency, and every headmaster said that he was delighted that the equipment would be made available but asked for some in-service training courses to enable the teachers to learn how to use it.

Mr. John Butcher (Coventry, South-West)

In the light of what the hon. Gentleman says, I hope that he will join other members of the parliamentary information technology committee in welcoming the decision made by the Secretary of State for Education to set up regional training centres and regional resource centres. I am sure that the whole House would welcome the hon. Gentleman's comments.

Mr. Smith

I am grateful to the hon. Gentleman. I hope that hon. Members always welcome my comments.

There is need for new industrial structures which recognise the necessity for capital and labour to be involved in decision making. Industrial participation is far too important a subject to enter into at great length today. I simply put it into the record.

I heard with great interest what was said about small factory units. I have been trying to persuade the Government to put at least one small factory unit in my constituency, which has a high level of unemployment. The Secretary of State for Industry wrote to me to say that the Government had no more money for this purpose but were trying to get private funding. I hope that the Government will spend their money on advance factories better than did the Labour Government. I have visited Ebbw Vale, the constituency of the Leader of the Opposition, where I was dismayed to see that half of the advance factories there have been idle ever since they were built. I hope that the Government will get advance factory units built in areas of high unemployment where the ability to use them is evident at the time of building.

It has been said that there is need to create a partnership between industry, Government and the trade unions to implement a prices and incomes strategy. I subscribe to that view. Will the Government try to find out the professional people who are being paid to be unemployed who could be used for the benefit of the nation. I cannot understand the logic, for example, of school teachers being on the dole when from the same money they could be paid to teach. I accept that there are few professions to which that argument can be applied, but the teaching profession is one.

I should like the Government to consider setting up a committee of inquiry across parties with representatives from inside and outside the House to consider employment in the long term. In this age of high technology, with the advent of the microchip, in the long term we shall have a surplus of labour.

The use of leisure time, the encouragement of the arts, training and educational programmes, shorter working weeks, earlier retirement for men, pay for sixth formers and job sharing are all matters which require attention. There are jobs which are now paid for but which in future must be done voluntarily to reduce public expenditure in one direction for use in another. A future Parliament will have to face all these changes.

The Government must have the political courage to say that they understand that unemployment is an evil and in the short term they will try to resolve it, but in the long term people must either work for fewer hours or be willing to share their jobs. The ability to use leisure is as important as the ability to use vocational training. Until we move towards that objective, I suspect that unemployment is a permanent with which we shall have to learn to live.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Ernest Armstrong)

I have to tell the House that the Front Bench speakers are hoping to catch my eye at 9 o'clock. As 21 Back Benchers wish to speak, I ask for some restraint.

7.8 pm

Mr. Alan Haselhurst (Saffron Walden)

In no debate on unemployment, whether in Opposition or Government time, have we heard from the Opposition any positive remedy for this problem. There is too much cat-calling from the Opposition Front Bench on this subject, when Labour's record is deplorable. In Opposition the Labour Party had time to study the subject in greater depth and with rather more objectivity with a view to reaching a sensible solution.

I am not asking the Government to relax their pressure for improving productivity within industry. Such pressure is long overdue and it is necessary for it to continue, but I do ask the Government to understand how essential it is to deal with the consequences of making industry more efficient.

In current circumstances, we are bound to face a large increase in unemployment.

I disagree with the hon. Member for Rochdale (Mr. Smith) when he says that industry did not unneccesarily employ labour in the past. I know of too many occasions when productivity has been allowed to get seriously out of line with that of firms in competitor countries. Something needed to be done. However, we must deal with the consequences of bringing about an improvement. It is clearly socially right to do so, and it is also economically right, because a trained workforce is necessary for a modernised industry. It is also politically right. I agree with the hon. Member for Eton and Slough (Miss Lestor) that there is a danger that many people will begin to reject the democratic processes and those that represent them if we do not come up with a socially acceptable answer.

The problem of unemployment will not be solved in three years. That is obvious now, even if it was not obvious a few months ago. The economic upturn that we all crave cannot come with sufficient speed and force seriously to dent present unemployment figures. In any case, it should not mean a return to employing 20 people to do a job that 10 can well do.

I do not believe that everything will be all right or all wrong. The upturn may solve our problems by absorbing back into useful employment the vast majority of the unemployed, but I doubt it; nor do I subscribe to the doomsday philosophy that says that it is impossible to bring people back to employment on a large scale.

It is remarkable that there is so much calm, despite high unemployment—although it is, perhaps, an uneasy calm. It might almost seem that the country has adapted to the present level of unemployment, with the temptation to conclude that the work ethic is weakening and that people are prepared to settle for a different lifestyle or, indeed, have even already found a way to sustain it. Such theories are not sensible. It is the calm before a serious political storm. The vast majority of the unemployed, young or old, want work. It is possible to find a sufficient number of jobs, albeit in the service sector, to fulfil the expectations of most of them. We are not looking for a great panacea, and I am not impressed by descriptions of the post-industrial society to which we are supposed to have moved. I am tempted to paraphrase what the Prime Minister said the other night: "Hell, no. We have only just got to being an industrial society". I hope that during my political life we shall make a success of that.

We need adjustments. We need them to bring the size of the labour force more in line with the number of jobs likely to be available. However, adjustments can be made in an attractive, useful and constructive package, which would also be politically saleable.

The consultative document "A New Training Initiative", is one of the most encouraging documents to come from the Government for some time. I compliment my right hon. Friends on warmly endorsing a document published under the imprimatur of the Manpower Services Commission, but I wonder whether it goes far enough. It suggests a possible period of training for all young people for as long as a year, but to get the measure of the problem the period would probably have to be two years. Training must be universal for young people between the ages of 16 and 18, and should be organised on an area basis, which is the preferred suggestion at paragraph 46.

Some may ask what the point is in training people for a year or two if there is still no prospect of employment at the end of that time. However, it cannot be argued that unemployment will be so awful that there will still be no prospect of jobs at the end of two years and at the same time that nothing should be done about it. People with the worst fears about unemployment should be especially interested in finding constructive and sensible occupations for young people. Putting young people between 16 and 18 into training schemes will also have an impact upon the hopes of regaining employment of older people out of work.

I prefer a system of that kind, with a strong industry relationship, to anything of a national service variety, although I respect the motives of those who talk of national community service. A period of national community service could be part of the two-year programme.

The second factor in a new training scheme concerns finding the money. There must be a better way of spending the money that we are presently pouring out in a variety of ways to help the unemployed. I hope that training will remain industry based, in which case there would not need to be a phenomenal increase in overheads to divert the money now spent on unemployment and social security benefits to training allowances or tax remissions. At paragraph 41 the consultative document mentions the concept of a training allowance. I hope that it will be seriously considered by industry, the unions and the Government.

I endorse what my hon. Friend the Member for Northampton South (Mr. Morris) said. Tax remission, as an element in the encouragement of "Young Employees Scheme" put forward by Colt International, could also be considered as an effective and not over-expensive way to help to get people into employment.

Let us recognise that training must be given to all kinds of people for all manner of reasons and for all sorts of activities. The French and Germans set a good example. We should learn from such an example to take constructive steps for our young people. Measures of the kind suggested in the new training initiative document would complete the picture in the modernisation of industry, to which the Government have set their hand, and ease the changes that will take place in its shape and pattern. More training is right and necessary. Let us get on with it quickly and boldly, and not be ashamed to take credit for a new initiative. We must consult, but there comes a time when an ounce of decision is worth 1,000 consultative documents.

7.17 pm

Mr. Julius Silverman (Birmingham, Erdington)

I estimate that in the past two years the various industrial undertakings in my constituency have had about 11,000 redundancies, so I am tempted to deal with unemployment generally, about which I have spoken previously. However, I shall concentrate in the time at my disposal on a specific matter, which I and other Birmingham Members discussed yesterday with the Minister of State, Department of Employment.

Seven hundred workers formerly employed by Ansell's brewery and formerly on strike, are today deprived of unemployment benefit, which is a serious matter. If the Department of Employment deems a worker to be on strike, the DHSS, in administering supplementary benefit, gives benefits only to the family and not to the striker. The net consequence is that 700 families, most of whom are on social security because they have no unemployment benefit, are living on very much less than the poverty rate at the present time. Perhaps I may therefore devote some time to the history of that case.

Ansell's brewery is a well-known landmark in the city of Birmingham. That brewery has now ceased to operate and will close altogether in a few months. Until January this year, its beer production was only 2 or 3 per cent. less than it had been in the past. Yet suddenly, in January, the company decided to introduce a four-day week, without any consultation with the workers in the brewery. It was told that the four-day week would not work, given the nature of brewing, if it was intended to produce the same quantity of beer in four days as had been produced in a full working week.

The four-day week did not work, and because of new practices that were introduced, the workers went on strike. Having gone on strike, they were eventually told that the four-day week proposal was being withdrawn. They were prepared to withdraw the strike action, but the brewery then said that they could come back only on an entirely different basis of working practice, which amounted in substance to a new contract of employment. As a result, the strike continued.

I am told by the trade unionists concerned that the differences in practice would have meant a substantial fall in their remuneration, amounting to about 30 per cent. I am not in a position to say whether that is in fact so, but that is what I was told.

Things then began to accelerate. On 29 January, only about two weeks after the strike, notices of dismissal were sent to all the workers in the factory. They were then offered terms of re-engagement on a new basis and a new contract. Those terms were not accepted, and on 3 February the company announced its decision to close the brewery. Lest anyone should think that this was merely a ploy in the negotiations, I should point out that it has since been made perfectly clear by Ansell's and also by Allied Breweries that that decision was irrevocable.

Birmingham Labour Members of Parliament went to see the company in Birmingham and Allied Breweries in London.

Mr. Arthur Lewis

Is that the same Allied Breweries which gives large funds to the Tory Party?

Mr. Silverman

It is, but I am not dealing with that aspect at the moment.

Both companies assured us that the decision was irrevocable. They said the same in letters to the Department of Employment. That was made quite clear.

In view of he history of the case, one cannot help thinking that the decision to close the brewery had far more to do with the commercial interests of the company than it had to do with the strike, for the following reasons. The brewery is now using spare capacity at Burton and using its depots in Birmingham to distribute beer manufactured at Burton instead of at Aston in Birmingham. The Aston brewery will therefore remain a gaunt and empty building, a memory and recollection of better times.

Eventually the strike was settled on 4 June. Some of the men were taken back into employment in the depots, but for 700 the dismissal has taken effect and they are still unemployed. When they go for unemployment benefit, they are told that they can have no unemployment benefit because the stoppage is still going on, because the factory is closed and that is a result or consequence of the strike. Whether it is a consequence of the strike is at any rate arguable.

We wanted to see the Secretary of State, but he was not available. I make no complaint about that. We therefore saw the Minister of State and his advisers about the denial of unemloyment benefit. We were told that it was the decision of the legal advisers of the Department that if a factory closed because of, or after, an industrial dispute, the workers there were not entitled to unemployment pay, for an indefinite period, until eventually they obtained fresh employment and qualified for it again.

I told the Minister of State that I regarded that as an outrageous decision, especially as in the present situation in Birmingham the prospect of obtaining employment for most of those people is nil. They are therefore still unemployed, but without unemployment pay. Because of the practice of the Health and Social Security Department they obtain only supplementary benefit or social security benefit on a much lower than poverty basis. That is outrageous.

If a person is dismissed for gross misconduct, he merely loses his unemployment pay for six weeks. Yet these people are told that their unemployment benefit is to be taken away indefinitely—perhaps for the rest of their lives, if they cannot obtain jobs—because they are said to be on strike. What is the Secretary of State's opinion of that, and what does he intend to do about it? It is a completely outrageous situation. I therefore considered it worth my time to bring this important issue before the House, although it is a restricted issue in a major debate.

On this basis, the workers would be deprived of benefit, incidentally, even if it were not a strike but an industrial dispute provoked by the employer. Indeed, my own view is that, after a few days, this case became a lock-out and not a strike. Nevertheless, the position would be the same even if the workers were not at fault at all. According to that decision, if the closure took place those people would be deprived of unemployment benefit.

That factory used to be in my constituency. It is now in that of my hon. Friend the Member for Birmingham, Handsworth (Miss Wright), who for various reasons is not available to take part in the debate. Nevertheless, many workers in my constituency were employed there, as were others in other Birmingham constituencies, so they are all interested in this case.

I believe that in a similar case, that of Birmetals, about seven months ago, the commissioner decided that the workers were entitled to unemployment pay from the date on which the factory was closed. I hope that it will still be possible to reach a similar decision in the Ansell case.

For the moment, I am concerned about the fact that these people have suffered enormous hardship for three weeks. I am sure that all hon. Members are concerned about that, and I demand that the Secretary of State gives his urgent attention to this problem.

Mr. Deputy Speaker

Rev. Ian Paisley.

Rev. Ian Paisley (Antrim, North)

rose—

Mr. Urwin

On a point of order, Mr. Deputy Speaker. I draw your attention to what I consider to be a grave anomaly arising from the responsibility of the Chair properly to observe the rights of minority parties in the House. My hon. Friend the Member for Birmingham, Erdington (Mr. Silverman) is only the fourth member of the official Opposition to have participated in the debate. However, we have had a speech lasting 24 minutes from the representative of the Liberal Party—which has only two handfuls of Members in the House—and another lasting 17 minutes from the right hon. Member for Stockton (Mr. Rodgers) representing the Social Democratic Party.

Mr. Kilroy-Silk

And neither is here now.

Mr. Urwin

Indeed. The hon. Member for Antrim, North (Rev. Ian Paisley) has just been called, and I have no doubt that, in line with your responsibilities, Mr. Deputy Speaker, you will be compelled to call a representative of the Scottish National Party, which has only two Members in the House. In my view, a gross injustice has been done to members of the official Opposition, because it appears that no speaking time is to be taken from the Conservative Party.

Mr. Gordon Wilson (Dundee, East)

Further to that point of order, Mr. Deputy Speaker. As my name has been invoked indirectly, it must be made clear that those of us who have spoken, or wish to speak, for the minority parties have been present for the whole of the debate, unlike the right hon. Member for Houghton-le-Spring (Mr. Urwin). Furthermore, at one stage only five members of the official Opposition were present, and that number was dwarfed by the number of Conservative Members in attendance.

Mr. Deputy Speaker

This is a continuing concern to the Chair. In nine minutes, the debate will have run for four hours, during which there will have been 12 speeches. Many more hon. Members still wish to speak. This matter is carefully considered, but it represents a difficult situation for the Chair.

7.32 pm

Rev. Ian Paisley

I wish to highlight the appalling unemployment situation that has developed in Northern Ireland. With the publishing of the recent figures, Northern Ireland unfortunately retains its place as the worst area of unemployment in the United Kingdom.

An hon. Member has deplored the fact that in his constituency unemployment now stands at more than 11 per cent. However, in Northern Ireland, there are areas where unemployment is 34, 35 and 36 per cent. I should be happy to settle for 11 per cent. unemployment, although I would regret even that.

We can all quote figures and forget that behind each statistic is a human being—a person whose hopes have been dashed, whose expectation has been cut off and whose home and family has been put under intense stress and strain. In some cases, that has resulted in dreadful tragedies.

The House would do well to take note of the Northern Ireland figures. Approximately 104,000 people are now unemployed—18 per cent. of the total working population. Male unemployment stands at 73,340, or 22.3 per cent. of the total. Female unemployment stands at 30,493, or 12.3 per cent. The percentages in certain areas of the Province are appalling. For example, in Strabane unemployment now stands at 34.8 per cent.; Cookstown, 32 per cent.; Dungannon, 31.1 per cent. The present total shows an increase of almost 31,000 compared on the same period last year—19,013 school leavers having joined the dole queue.

However, the real figure is much worse, because recent redundancies are not included in the latest figures. The list is depressing, including STC at Monkstown, the Courtaulds Campsie factory at Londonderry, Goodyear at Craigavon and Harland and Wolff.

I should like to bring two specific matters to the attention of the House relating to two sectors of industry that in the past have provided vast employment to the people of Northern Ireland. The first is our basic industry, agriculture. More people in Northern Ireland are employed in agriculture than in any other sector of employment. However, the House should note the startling figures. In 1978, the net income of farmers amounted to £64 million. In the following year, it dropped to £33 million and in 1980 it fell to £9 million. That reflects the terrible tragedy that has overtaken Northern Ireland agriculture. In real terms, the figures represent a fall of 60 per cent. in 1979 and a fall of 80 per cent. in 1980.

Textiles was another important sector that employed Northern Ireland people. In June 1977, the textile industry employed 32,000 people, but by March this year the figure had fallen to 20,900. The figures for the man-made fibres part of the industry are also depressing. In June 1977, it employed almost 9,000 people and today the number has fallen to 4,500. Therefore, Northern Ireland is the darkest and blackest spot in the United Kingdom in terms of unemployment.

This is an issue on which all the political interests in Northern Ireland are united. I am glad that the Prime Minister is present. The people of Northern Ireland will be happy to note that the right hon. Lady has taken time from her onerous duties to be in the House to listen to the debate. The Prime Minister and I have had many differences in the past, and will probably have many more, but I should like her to know that the people of Northern Ireland appreciate that she has taken time off to listen to the debate.

The EEC Parliament recently debated and passed a certain report which I ask the Prime Minister to study carefully. The fact that it was supported by the Leader of the SDLP, the representative of the Ulster Unionists and myself shows that there is consensus and agreement about Northern Ireland's economy.

I should also like to draw attention to the question of additionality of money coming from the EEC. The money that is allocated to Northern Ireland should be given in total to the Province. At present, Whitehall keeps up to 60 per cent. of it. That blockage should be unclogged, and the money should flow directly to the areas for which it has been allocated.

I promised to speak for 12 minutes. Although I do not think that I have preached for 12 minutes. I shall sit down now.

7.39 pm

Mr. Robert Kilroy-Silk (Ormskirk)

I listened intently to the speech made by the Secretary of State for Employment in the hope of some sign that he would make a contribution towards reducing the level of unemployment. Although the right hon. Gentleman lamented the increase that has almost been the daily pattern since the Conservative Party took office, and although he made his traditional noises about the intolerably high level of unemployment, he did not put forward one substantial, positive, constructive suggestion for dealing with the real problem of unemployment.

The right hon. Gentleman spoke only about creating new youth opportunities schemes and about creating false, unreal jobs. He offered ameliorative, palliative steps to deal with the situation. The right hon. Gentleman knows—just as hon. Members and the public know—that what is at stake is not an additional training project, youth opportunities programme or additional places for community industry—desirable and welcome though such provision may be—but the Government's economic policies. The point at stake is whether the Government will change them and stop the disastrous and cumulative economic decline that they have embarked upon.

Just as other hon. Members have, I shall draw attention to the level of unemployment in my area. Today, 118,000 people are unemployed on Merseyside. That is an unemployment rate of 17.2 per cent. A small town, Kirkby in my constituency, has 7,068 unemployed people. Some of the estates in that town have an unemployment rate of 40 per cent.

In an intervention, I cited a figure to the Secretary of State. I should point out that the Ormskirk travel-to-work area does not include Kirkby or the Birds Eye factory to which he referred. There is an unemployment figure there of 6,197. That is equivalent to 20.2 per cent. That unemployment has not been caused by the sort of factors that he referred to in his reply to my intervention. Those figures are serious and alarming to anyone deeply concerned about their social and human consequences. Nevertheless, they mask the individuals that lie behind them. For example, they mask the fact that there are 20,000 young unemployed people on Merseyside. I have cited that figure because considerable mention has been made of the plight of the young. More than 3,000 of those young people have been unemployed for more than 52 weeks.

In the relatively small town of Kirkby 1,277 young people are unemployed. More than 200 of them have been unemployed for over 52 weeks. The point is made not by the numbers or the consequences alone, but by the sheer desolation and lack of hope felt by many of those concerned. Let us turn to the numbers of those chasing jobs, compared with the number of vacancies available. If one looks at the standard industrial classification of 27 occupations one finds that only 11 of those 27 industrial classifications have vacancies in Kirkby. Indeed, the total of vacancies for the 27 industrial occupations comes to a mere 47. Therefore, 7,000 people are chasing 47 jobs.

The individual industrial classifications give the lie to the Prime Minister's suggestion that people are unwilling to work and that if they had the enterprise and energy—which the right hon. Lady presumably displays—to move elsewhere, they would find jobs waiting for them. In Ormskirk, there are 162 unemployed construction workers, yet there are no vacancies in Ormskirk. If those workers go down the road to the other part of my constituency, where the Birds Eye factory is situated—in accordance with the Prime Minister's suggestion that they should look for jobs—they will join a further 986 unemployed construction workers chasing three vacancies. If those construction workers go 10 or 15 miles further afield, to Liverpool or to the Wirral, they will—taking Merseyside as a whole—join 16,829 unemployed building workers. However, only 86 jobs are available.

Those facts are a terrifying indictment of the Government's economic policies and of the Prime Minister's easy, complacent suggestion that if only people looked for work, they would find it. Similar figures apply to the distribution industry. In Ormskirk 182 distribution workers are chasing nil vacancies. In Kirby, 560 workers are chasing five vacancies. Again, in the chemical industry, 85 people are unemployed in Ormskirk yet there are no vacancies there. In Kirby there are 127 unemployed chemical workers but no vacancies. On Merseyside there are 2,251 unemployed chemical industry workers, but only 36 vacancies.

Such figures clearly demonstrate the terrifying and horrendous waste of human skill, of resources, of abilities and aptitudes that is caused by such mass unemployment. Many hon. Members, not least Conservative Members, have pointed out that unmet needs exist both in Britain and abroad. It is intolerable and unacceptable that there should be about 16,000 unemployed construction workers on Merseyside when houses are unfit for human habitation, when hospitals are falling down, when new roads need to be built and when schools need to be replaced. In my area alone there is a clear need for construction work. However, the men and women who have the skill and ability to meet those needs are idle through no fault of their own.

No sensible nation should conduct its affairs in a way that wastes human resources on such a scale when there are unmet needs both at home and, in particular, in the Third world. Such a waste is unacceptable and incomprehensible. No sensible country would want to waste its human and natural resources in the way that they are so callously and criminally being wasted. No sensible country would wish to court the potential dangers to the social fabric and political institutions that have been alluded to by many hon. Members, not least by the right hon. Member for Chelmsford (Mr. St. John-Stevas).

For all the pious remarks made by the Secretary of State for Employment and his bedfellow the Minister of Agriculture, Fisheries and Food, the Government continue with their obsessive, almost callous disregard for the increasing number of men, women and young people who have involuntarily and unnecessarily become unemployed. It is no good the Secretary of State for unemployment—honest, decent and compassionate though I believe him to be—going round and telling individual hon. Members or journalists privately, with the occasional nod and wink, that he does not really believe in the Government's economic policies, that he disavows them and that everything would be all right if it were not for the stubborn, obstinate, dogmatic, recalcitrance of the Prime Minister. Ultimately, he cannot escape responsibility for the policies that he has voted for and that he is supporting and sustaining. As much as any other Minister or Conservative Member, the right hon. Gentleman is as culpable as the Prime Minister for what is happening. He cannot wash his guilty hands of that.

Mr. Urwin

rose—

Mr. Kilroy-Silk

I should like to give way but I am pressed for time and I know my hon. Friend also wishes to speak. If unemployment is a moral issue, as the right hon. Member for Chelmsford and his hon. Friends have said, the Secretary of State—who regards himself as honourable—should resign. He knows full well that although the Government's economic policies are not the only cause of unemployment—no hon. Member would be so stupid as to pretend otherwise—much of our unemployment is the direct result of the blind, dogmatic economic policies that the Government have pursued.

Courtaulds in Aintree—the Prime Minister admitted this on another occasion—closed not because the work force was inadequate, not because it produced an inferior product, not because of low productivity or an absence of investment, but because it was destroyed by the Government's economic policies. Many factories in my constituency have suffered similarly. The high exchange rate, the high interest rates and the policies that have led to a domestic downturn in the economy caused that closure. Those 1,500 men and women, now on the dole in Merseyside, were formerly in good productive long-term jobs at Courtaulds and are on the dole because of the Government's economic policies and they know it. That is important.

Many hon. Members keep referring to the 1930s and saying that things are different now because people have redundancy payments, a tolerable amount of unemployment pay or supplementary benefit. That is true but what is fundamentally different today is that in the 1930s most people did not know that there could be a different economic system. They believed, as Governments believed, that unemployment was a curse of the economy over which they had no control. People no longer believe that. They now know that there is an alternative and that it is not necessary for them to be idle, for their lives and those of their children to be wasted and to face a future of desolation and humiliation. They know that the Government have the power, if they choose to use that power, to put them usefully to work in building a constructive and positive community. Yet they know that the Government refuse to embark on those policies.

The Government will wreak terrible havoc on the community and on the people being used as pawns in the Government's economic policy. Whatever the Secretary of State might like to believe or pretend to say, they are being used as weapons in the economic armoury of the Government. I do not suggest that the Government necessarily say callously and enthusiastically that they want to make "X" thousand more unemployed. I am sure that it does not happen in that crude fashion, but the Government know that their policies will lead to an extra 10,000 here, an extra 100,000 there and an extra 1 million in the long run. They know that that is the consequence of the cuts in public expenditure, the tight control on the money supply, the cash limits in the public sector and they accept those consequences. In that sense, if in no other, the Government are using the people, especially the unemployed, as a weapon in their economic armoury.

Like other hon. Members, I am a deep and profound believer in our political institutions and in the way our society functions. I know from my experience of my constituency, which has the highest level of juvenile unemployment in the United Kingdom, that a deep sense of bitterness and resentment is being created and engendered in the young people. Immediately they leave school they are consigned to something called the scrap heap. They are shown a society that cares so little for them and their attitudes that it cannot find a useful place for them. They are treated, not necessarily deliberately but by implication—that does not matter, because the message is still the same—as unimportant. They feel that they do not count and that society and the Government do not care enough about them and their future to want to provide them with decent worthwhile employment. That will have terrifying consequences for the future of our social fabric and our political institutions.

It is crucially important that the Government change their economic policies. It is not sufficient for the Secretary of State to give us more well-intentioned but merely palliative solutions to the problem. He must get down to the root causes, which lie in the Government's economic policies. Unless and until the right hon. Gentleman and the Prime Minister are prepared to embark on a planned growth of public expenditure, which will improve the quality of life as well as provide worthwhile employment for our fellow citizens, we shall not solve the economic problem and the serious problem of unemployment.

If the Government are unwilling or unable to do that job, they should give way to a party and a Government that are capable of doing it.

7.54 pm

Mr. John Butcher (Coventry, South-West)

In his opening remarks the right hon. Member for Chesterfield (Mr. Varley) drew attention to the spectacular deterioration in employment which has occurred in the West Midlands. I hope that the House will forgive me if I detain colleagues and hon. Members for a few brief moments to consider the Coventry complexion within the pattern of unemployment in that region.

We have a number of messages to give and a number of lessons to learn. If I look down a checklist of household name companies to see what has happened to them in the past 15 months, I hope that the House will agree that there is much to be seen that points to future policy considerations.

British Leyland will have received £1 billion in Government assistance over two years. That surely is not the act of a Government who do not care for jobs and the maintenance of a viable motor industry. We also know that the Government wrote off £6 million in debts to the Triumph motor cycle company. That is not the act of a Government who do not care. Behind-the-scenes assistance from the Government assured Massey-Ferguson of, shall we say, a lessening of its commitment to pay $48 million in export credit guarantees.

Looking further afield, especially into the engineering industry, hon. Members will know that the Alfred Herbert machine tool company had a difficult period, was taken over by the National Enterprise Board and was subsequently divested by the NEB. It is now being supervised by a new management team in the form of Tooling Investments to the extent that the Herbert CNC lathe is now restored to its proper position as a market leader in that line of machine tool engineering.

The GEC company, especially GEC Telecommunications, will benefit from British Telecommunications orders to make System X telephone exchanges and will continue to benefit from Government contracts in the forefront of information technology.

In passing, I should draw the attention of the Secretary of State to an imaginative work-sharing scheme at GEC which involves a system of pairing two young people who share a working week between them at the place of work in GEC, taking advantage of existing work experience programme measures, sharing the overheads—most important of all, the cost—of the company which it would otherwise have had to meet, and meeting a number of objections that trade unionists have hitherto held that work-sharing schemes either involve a cheap labour element or would deprive other trade unionists of work. For all those reasons, I commend that scheme to my right hon. Friend. He is no doubt aware that information is already in his Department for his preliminary assessment.

Much comment has been made about the need to restructure our economy. At the risk of continuing my somewhat parochial comments, I want to refer to one small company to see what the term "restructuring" has meant for it. The company concerned is called the Reliance Sheet Metal Works Ltd. in Coventry. In 1973, it was in a vulnerable position. It was a traditional supplier of pressings to the motor industry. It had three major customers and those three customers accounted for approximately 85 per cent. of the company's turnover, which was about £90,000. It employed 24 manual employees and the wages paid were significantly below the national average for the industry. I repeat that this was a company which would have been vulnerable to the pressures of any downturn in demand, the pressures of being over-dependent on one particular industry—in other words, the pressures of the last two years.

It is interesting to consider what has happened since management made certain decisions in that company. Today, through diversification, the company now has 20—not three—major customers, and not one of those customers is taking more than 5 per cent. of the trade of the company. There has been massive investment. About £1 million has been used to purchase new heavy presses. I am delighted to report that they are British heavy presses—an article of equipment in which British manufacturers still excel. Productivity has vastly increased. Originally there were 24 employees; now there are 45. Their jobs are less vulnerable. Instead of having a turnover of £90,000 with 24 employees, the company has a turnover of £2 million with 45 employees.

That, surely, is what we mean by restructuring within a company, and it must be the firm hope of every hon. Member that this sort of trend can be encouraged within the economy as a whole on a macro level. In the engineering industry, it means moving up into higher value products. It means diversification, better marketing, and taking advantage of short term currency restrictions.

But it is the Government's role simply to set the background against which these management decisions can be made, and it is my view, having listened to many colleagues today, that the pre-conditions for economic growth are there, that inflation is falling, that the terms of trade may be moving in our favour, that costs are coming down, that productivity is increasing, and that there is a great deal of money sloshing around the economy, trying to find a home.

It is surely a function of this debate to assess the measures that we should undertake to ensure that the revival takes place, and I regret that from the Opposition Benches we have seen precious little by way of a positive contribution in that regard.

If my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) were present, I would say to him that I do not agree that there will necessarily be a shift from industry to services within our economy. That was the conventional wisdom five or six years ago but we can no longer make that cosy assumption. It is precisely because information technology now exists, and precisely because it is the service industries that have made the greatest use of it that the number of vacancies in service industries will not increase as was hitherto projected.

By the same token, any party which encourages a move away from industry—and from heavy industry at that, if need be—is risking the loss of the sector which is the major labour-intensive employer. There will always be a role for that kind of industry in our economy, but we may find that the trend will be reversed and that in our very British way we shall move back to doing those things that we are best at—small batch production among highly skilled small teams of workers.

I find myself a little puzzled by references in this Chamber to information technology. I have tried, as hon. Members will know, to establish my credentials in this regard in other debates, but I would commend to the House a report of the Advisory Council for Applied Research and Development—ACARD—which is now over a year old and on which precious little action has been taken. It is entitled "Research and Development—a Public Sector Purchasing Policy". It is right in line with Government strategy and argues that we should lift much of the in-house research and development within our public utilities out of those public utilities and put it into the private sector supplier companies, which would probably stand a better chance of manufacturing large volumes of goods suitable for the export market and not simply for the domestic requirements of our nationalised industries. In so doing, we inadvertently but consciously reduce the public sector borrowing requirement, so it might help in two respects.

The Government are massive purchasers of equipment. They should be—but regrettably are not—massive purchasers of the products of information technology. The business of Government is the collection, management and dissemination of information, yet Government Departments are probably tragically under-computerised. Surely a Government interested in reducing the payroll size in the public sector should look at this central question.

I waited for any proposals or alternative policies from the right hon. Member for Chesterfield. He mentioned railway modernisation. He did not mention, in the context of railway modernisation, what price he would extract for the large investment funds that he would channel in that direction for electrification, when we all know that British Rail has an appalling productivity record. I know that it has shed massive amounts of labour, but there are still some large abuses of labour practices in British Rail.

The right hon. Gentleman mentioned council house building. If I were looking for a major force for inertia within the British labour market, it would be the large numbers of our skilled and unskilled workers who are incarcerated in council housing estates, and who cannot get a transfer, because our feudal—albeit local government-based system of housing denies them freedom of movement.

The hon. Member for Eton and Slough (Miss Lestor) referred to a few factors in relation to the lack of employment opportunities for young people. If she had read the speech that my right hon. Friend made in Germany, in which he said that a third-year German apprentice gets 40 per cent. of his final wage, whereas in the United Kingdom that figure is more like 80 per vent., she would have been helping the young people of Slough.

The hon. Lady said that Conservatives had asserted that if inflation could be reduced, unemployment would go down. We did not say that. We said that reducing inflation was the precondition for reducing long-term unemployment. The hon. Lady did not think in the medium term or the long term. She thought, as ever, in the short term. She thought of the instant answer.

The right hon. Member for Huyton (Sir H. Wilson) once said that a week is a long time in politics. I suspect that that rather cynical view of decision making in this place has prevailed in many of the past decisions about employment.

My right hon. Friend mentioned a significant figure when he said that the previous Labour Administration spent £3½ billion in reducing unemployment by 150,000 people. What would the Opposition spend, to buy another short term advantage, if pro rata £7 billion is a good enough deal to buy 300,000 off the dole queues albeit only for the next 12 months or so?

Our problem as Members of Parliament is that it is very difficult for us to face the young person or the family man who has just been made redundant and says, "I lost my job yesterday, I need one tomorrow." It is difficult to say to that person, "Would you mind thinking in the medium term?" His need is immediate and it is great.

We all face that dilemma, and we all care. I hope that when we face it we shall have the honesty to say to the person who is demanding an instant solution that the correct solution, for the first time in our lives, is to think of the medium term, to rectify all the damage and put right all the papering over the cracks that has taken place over the last 20 years. If we were to do that, the young person or family man might have a future for his children.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Order. I am sorry to make yet another appeal for brevity, but as the House knows, many hon. Members wish to take part in the debate. With only 50 minutes remaining before the wind-up speeches, I therefore make another appeal for reasonably short speeches.

8.10 pm

Dr. Edmund Marshall (Goole)

Many hon. Members have quoted figures in their description of the problem of unemployment in their constituencies, regionally or nationally. I wish to focus attention on what I believe are shortcomings in the statistics available describing the evil problem of unemployment.

In the first place, the numbers included on the unemployment register—these are the figures most quoted—are not necessarily all the people who are seeking work and who are technically unemployed. The main group not included on the unemployment register consists of many married women who lose their jobs through redundancy or for other reasons, who still seek work, but who do not register as unemployed for the simple reason that they do not qualify for unemployment benefit because they have paid a reduced national insurance contribution. They cannot see why they should register as unemployed. Consequently, they are not included in the figures. I hope that greater effort will be made to try to persuade married women who are seeking work to register, so providing a better guage of the size of the unemployment problem nationally and in particular localities.

There appears to be some lack of clarity in statistics dealing with the problem of unemployed school leavers. I agree that if one delves deeply enough into all the figures available in relation to school leavers, one can gain some measure of the problem. One can ensure that the school leavers are included in the totals to which one refers. It is, however, difficult to see always to what extent the problem of unemployment among young people is included in the figures quoted globally. I hope that no attempt will be made to fudge the issue more generally in any new schemes to help young unemployed people. I applaud all the measures taken through youth opportunities and other schemes mentioned by the Secretary of State today. I hope, however, that they will not lead to the classification of people who are technically out of long-term employment on a different basis from the general unemployment totals.

The second main shortcoming relates to statistics of unemployment for particular localities. Although unemployed people are registered according to where they live, and although the figures for those unemployed are produced monthly for each employment office area, the figures of people in work are calculated on the basis not of where they live but where they work. Although totals of unemployed people are available for many employment office areas, these cannot be compared with the total work force actually living in the area, so that one cannot make a straightforward comparison to discover the proper percentage rate of unemployment in the area.

The Department of Employment tries to deal with this difficulty by including such employment office areas in wider travel-to-work areas. A travel-to-work area is, in general, a self-contained labour market in which the great majority of the working population lives and the great majority of the workers who live in the area also work there. In other words, people live and work within the same travel-to-work area.

The difficulty arises when pockets of severe unemployment occur in a particular part of a travel-to-work area. It is a real problem trying to measure the severity of unemployment in these pockets. It seems to me that greater attention has to be paid to these pockets. In these days of high petrol costs, one cannot expect people always to be able to travel a distance to find employment.

My attention has been drawn to this problem through consideration of areas within my constituency. Two parts of the Goole constituency are employment office areas included in wider travel-to-work areas. The Knottingley employment office, where this month there are 925 people registered as unemployed, is included in the wider Castleford travel-to-work area. The rate of unemployment in the Castleford travel-to-work area is 12 per cent. This gives no gauge of the severity of unemployment in Knottingley. It is a matter to which further attention must be given. The unemployment figures for Knottingley have increased from 351 in July 1979 to 925 at present, an increase of over 160 per cent. A severe problem exists to which I hope attention will be given.

At the other end of my constituency, the employment office area of Thorne is included in the wider Doncaster travel-to-work area. The problem again arises that I am unable to calculate with any degree of precision the severity of the unemployment problem at Thorne. On 11 June, there were 2,532 people registered as unemployed at Thorne, an increase of over 200 on the previous month. However, because the area is included in the wider Doncaster travel-to-work-area, one is not able to arrive at a particular percentage of the rate of unemployment at Thorne.

I have discussed the problem with Ministers. I had a meeting with the Prime Minister who gave her time and attention in listening to what I had to say. As a result of the meeting, I received a letter from the Minister for Industry and Information Technology in which he says yet again that it is not possible for the Department of Employment to quote the unemployment rate for areas smaller than travel-to-work areas. This means that the Department refuses to come to grips with the problem of trying to gauge how severe unemployment is in pockets where it is believed to be a serious problem.

In his letter to me the Minister says: In the case of Thorne 41% of the workers who live in the area travel to jobs outside it, and Thorne is thus far from qualifying as a TTWA on its own. It is not surprising that 41 per cent. of workers who live in Thorne have to travel outside the area, simply because they cannot find jobs nearer home. The use of travel-to-work areas as operative units for determining whether an area should be designated as assisted involves a circular argument. It fails to recognise that in the middle of small pockets of unemployment there must be a reasonable way of working out how serious the situation is there.

More work must be done by the Department of Employment so that it knows exactly where the working population lives. Perhaps there should be a census of employment annually so that we can work out how many employed people live in each employment office area. From that we shall be able to gauge how serious the unemployment problem is in each area.

8.19 pm

Mr. David Madel (Bedfordshire, South)

I shall not deal with the question of obtaining detailed information locally. However, I welcome the Secretary of State's statement that, although the Government are committed to 440,000 places in the youth opportunities programme this year, the figure will be exceeded by 100,000 and they will meet that in full. The fact that the numbers have swelled does not diminish the Government's concern. The lesson that we can draw from the French elections last week is that people in the West are now accustomed to high levels of unemployment. However, they will not put up with a Government who have run out of ideas and become indifferent. We have not become indifferent, nor have we run out of ideas.

I welcome in particular the commitment on the youth opportunities programme. One of our difficulties is that almost 1½ million jobs in the manufacturing sector of the economy disappeared between 1966 and 1976. New jobs in the public sector service industries did not keep pace. Most of the vanishing jobs were for men. However, fewer women were employed in those industries. In the last 15 years the country has been trying desperately to run up an escalator which has been going down. We have not been able to keep pace with the alteration in the economy.

In the 1960s we were obsessed with our declining share of world markets. In the 1970s we were obsessed with our declining share of our home market. I do not believe that that was because the goods that we produced and the prices that we charged were wrong or out of line with foreign competition. In the 1970s we suffered from industrial disputes, overmanning and the poor pay of production engineers. No single cause can be blamed. In the 1970s we found it difficult to fend off foreign competition. That made more difficult rational discussion between management and unions about future employment levels.

It is vital for employers to use the time of the recession to engage in constructive discussion with the unions on manning levels, wages and holidays. Above all, we must discuss time off for retraining. Employers must not use the opportunity to push the unions to the wall. If they do that, when the economy changes and improvements take place, we shall slide back into the difficulties that we experienced in the 1960s and early 1970s.

We should now examine two aspects of pay. We should examine the possibility of "synchropay" in the public sector so that we avoid leap-frogging. We should also re-examine the question of no-strike clauses in the public utilities. We should look at that rationally and reasonably.

I welcome in particular the two recent documents from the Manpower Services Commission on the new training initiative and the open tech. Many hon. Members have mentioned the increasing problem of adults who have lost their jobs. The training opportunity scheme courses are proving successful but they cannot meet the scale and range of requirements because they are restricted to unemployed people.

With our present technology, and since it will improve, we can now widen the opportunities for training to adults who are in work but who could be at risk if they are not retrained and therefore do not have an opportunity to change their jobs. The scheme must respond to the market place where key new skills are needed. Most in demand are skills in microelectronics and computers. The signs are that they will be growth industries.

The MSC must ensure that people now in work have the opportunity and the time off for retraining, in addition to ensuring that people who are out of work are retrained. The Government have a role as big employers. I hope that the Government will ensure that their employees can make use of the facilities, especially of the open tech when it gets going.

The open tech should consider three groups of adults if it is to get the new training right. First, it must supplement companies' training schemes which do not fully meet the need of the new skills. Secondly, the open tech must meet the needs of people in work who are willing and able to retrain outside working hours. Thirdly, it must meet the needs of the unemployed who missed skills during their working lives, and particularly, as the hon. Member for Goole (Dr. Marshall) said, married women who are retrained or want to go to jobs hitherto the preserve of men.

Thus, the open tech should be directed at adults who are about to suffer employment difficulties or who are actually out of work. It is crucial that employers should be reasonable and release people to learn the new skills and to retrain. There will be plenty of opportunity for recruitment of people into the open tech as teachers and learners. In other words, when employers release people, they are not only releasing people to learn new skills, bus: also to take part in teaching in the new tech.

I want to say a word about the other aspect of unemployment—school leavers and the youth opportunities programme. Last year, the Manpower Services Commission said on the subject of YOP that it hoped to increase the number of young people on a work experience scheme from the present 40 per cent. who got off-the-jobtraining and further education up to 100 per cent. What was being offered was not only work experience on employers' premises, but an opportunity of further education and off-the-job training. That will be difficult for the MSC, because each time it has a scheme it is overtaken by the increase in the number of people unemployed.

However, I hope that the MSC will be able to meet that 100 per cent. target, so that young people doing these work experience schemes may have in addition off-the-job training and further education. Inevitably, the MSC will look to local education authorities for help with further education opportunities. The local education authorities will have to look carefully at their teacher numbers, because the MSC will look to some of those teachers to help in this further education opportunity as part of the youth opportunities programme.

The problem of further education inevitably brings into focus the special problem of the school curriculum. We must improve the in-service training of teachers. Central Government will decide what they will do for technical education. Central Government must decide now—if they are to intervene in the school curriculum, particularly that of the 14 to 16-year-olds—whether the Secretary of State for Education and Science should have more power to intervene with the school curriculum, and whether the inspectorate should have some responsibility for doing something about the quality of the school curriculum for 14 to 16-year-olds.

In my opinion, the answer to both those questions is "Yes". The Secretary of State and the inspectorate should intervene if our young people are to take advantage of these courses and training when they leave school at 16. Therefore, we shall have to move towards central funding of in-service training, with specific grants earmarked for specific projects in certain areas.

We are faced with the need to improvise and innovate in this desperately difficult time of recession. If we get higher productivity, machines can work round the clock, and more people will have the opportunity of working on those machines. However, that will fall to the ground if, in so doing, we do not achieve higher productivity from the greater use of machines. We must make a more flexible use of the education system.

The Government are desperately trying to hold the line and keep a sense of balance and stability in our society, while grappling with the desperately difficult problem of unemployment. They must continue to do their level best to keep poverty out of unemployment. We must never shrink from helping financially those who are unemployed, while we are engaged in the desperate race to reorganise training and further opportunities for adults and, above all, in getting the curriculum right for the 14 to 16-year-olds.

Mr. Deputy Speaker

Mr. Tom McNally.

Mr. Gordon Wilson (Dundee, East)

On a point of order, Mr. Deputy Speaker. So that I may decide whether to remain in the Chamber, can you tell me whether the debate is only about unemployment in England or about unemployment in Scotland and Wales as well? So far, every speaker has been drawn from an English constituency.

Mr. Deputy Speaker

That is an ingenious point of order to which the hon. Gentleman already knows the answer. I do not think that I need to reply.

8.30 pm

Mr. Tom McNally (Stockport, South)

This is a debate about unemployment in the whole of the United Kingdom. The level of unemployment in the United Kingdom might be decidedly lower if the hon. Member for Dundee, East (Mr. Wilson) had voted differently two years ago when he had the opportunity to keep in power a Labour Government who were fighting for jobs in Scotland.

Mr. Gordon Wilson

You betrayed Scotland.

Mr. McNally

The hon. Gentleman betrayed Scotland by his vote.

Mr. Wilson

You betrayed Scotland.

Mr. Arthur Lewis

On a point of order, Mr. Speaker. Have you ever betrayed Scotland?

Mr. Speaker

I do not think that the hon. Member for Dundee, East (Mr. Wilson) was referring to me.

Mr. Wilson

On a point of order, Mr. Speaker. I apologise. My barrage was directed not at you, but at an hon. Member who deserved it.

Mr. McNally

We know, Mr. Speaker, when shafts go home.

In my maiden speech two years ago I referred to the doubts of my electorate about whether there were in the leafy groves of Cheadle and Bramhall entrepreneurs just waiting to be released to provide jobs to prove the truth of the Saatchi and Saatchi poster that said that Labour was not working.

The Secretary of State squirmed earlier, but he must face up to the fact that his party fought the election on the clear understanding that it would cut unemployment and create jobs. Those of us who argued that that was a bogus prospectus have been proved tragically right.

We knew that there were problems about creating jobs. The right hon. Gentleman referred to studies by the Labour Government in the mid-1970s. We knew then that getting greater productivity with existing plant would result in a loss of jobs. We knew that the technological revolution would cost jobs and we knew that the age structure of our population would bring more people onto the labour market. We knew that those problems would face any Government in the 1980s.

My right hon. Friend the Member for Ebbw Vale (Mr. Foot) and others in charge of employment matters at that time tried to face up to the problems. They did not pass them off, as did the Conservative Opposition, as a problem in our tax structure which could be solved by liberating vigorous entrepreneurs. On top of the structural and technical problems that are recognised by any reasonable person, we have had Government policies that have doubled unemployment.

One of the witticisms that cost the right hon. Member for Chelmsford (Mr. St. John-Stevas) his job was his naming the Prime Minister "Tina", an acronym for "There Is No Alternative". We were told time and again that there was no alternative. The name is no longer fashionable. Tina no longer rules so surely on the Government Benches. We are hearing hints that perhaps there is an alternative and a possibility of using the years of world recession to put people with ability and talent to work and to invest in the infrastructure to prepare for the upturn. That sensible approach has been urged by Labour Members for two years or more.

The past two years have been wasted. People have become unemployed and during the recession we should have been preparing our industry and infrastructure for the upturn. That is the real indictment of the Government. It is not an indictment of the Secretary of State for Employment. He is the wrong man for that. We know that we shall get a hot cup of tea, a cigarette and some sympathy from the right hon. Gentleman. That is why he is in the job. However, his right hon. Friends the Secretary of State for Industry, who boasts that he does not have an industrial strategy and that he does not have a regional strategy, and the Secretary of State for Trade, who surrounds himself with Manchester Liberals and allows various sectors of our industry to go down the plughole, are the guilty men.

It is no use the Government sending along the Secretary of State for Employment with his sweet sympathy and alibi that it is not really his fault. The Government's trade and industry policies are at the heart of the failure of their economic strategy, and they know it.

In regional policies, for example, we have seen the ridiculous sabotage and emasculation of the National Enterprise Board. How much better would the Government have been able to deal with the problem that has faced ICL, if, in a fit of ideological vindictiveness, they had not removed the NEB's involvement in ICL and in regional planning?

Over the last two years, we have had not so much an economic and industrial strategy as ideological tunnel vision. The Guardian of 19 June, looking at what has happened during the past two years of recession, but also of oil wealth, states: It is difficult to draw a general conclusion … except that a surprising amount of the wealth created by the North Sea is being spent at home (often on imported goods) and a significant proportion of what is left is finding its way abroad by one route or another. In the discussions which were prevalent in the 1970s, we thought about the problem of the technological changes which we would face, the need for greater productivity and the new people coming on to the employment market. The debate was about how we would use that once-for-all opportunity which the North Sea gave us. Much of the argument then was that we would use that wealth to re-equip our industry and to train and retrain our people in the industries of the 1980s and 1990s. However, we find that, two years on, it is going either to overseas investment or to buying imported goods. The Prime Minister prides herself on the title of the the Iron Lady. I believe that she would be better described as Tokyo Rose.

The two years when Britain could have begun to face the inevitable challenges of the 1980s and 1990s, have been frittered away by the Prime Minister and her henchmen in the Cabinet latching themselves on to a single, narrow ideological solution to Britain's problems. Two years on we hear from speaker after speaker on Conservative Benches that perhaps we should look at some investment in public enterprise, perhaps we should look at training and perhaps we should look at trying to restructure the British economy, using some of the examples of Japan, which has used Government procurement policy. However, it is two wasted years too late. That is why, on the Opposition Benches and throughout the country, there is no confidence in the Government who, after two years of waste and of ruining many lives, now come along with apologies.

8.39 pm

Mr. Gordon Wilson (Dundee, East)

It is significant that on such an occasion—when unemployment in Scotland has crashed through the 305,000 barrier—it has taken us until now to debate the position in Scotland. It is sad that there have been only two Scottish Labour Members of Parliament in the House this evening, despite the opportunity that hon. Members have had of putting the case regarding their country and their constituencies.

Scotland is an oil-producing country. In 1974 the unemployment level stood at 85,000. By 1975 it had almost doubled. Currently, 305,000 are unemployed. That is well above the 3 million barrier, in proportional terms, for the United Kingdom as a whole. In 1974 the Scottish National Party coined a slogan "Rich Scots, poor British". That was the choice for the Scottish people. It turned out to be true because the Scots have become very poor British indeed.

Mr. James Hamilton

I am a Scots Member of Parliament representing a Scottish constituency and I have been in the Chamber throughout the debate, as have other hon. Members representing Scottish constituencies. Is the hon. Gentleman prepared to say now that what he said in 1974 held true in 1979, when the SNP lost 11 seats in Scotland?

Mr. Wilson

The hon. Gentleman is exaggerating the number of seats that were lost. Undoubtedly, we did lose some seats at that time. Unfortunately, we did not use that slogan in 1979. The SNP would have been in a far stronger position if it had.

Employment fell faster in Scotland than in the United Kingdom as a whole in the year to June 1980. Scotland entered the present recession in a worse position. than England. Whereas in England there had been some revival in the economy between 1976 and 1979, in Scotland there was total stagnation of output levels. Low demand was a dominant constraint which resulted in output levels in Scotland in 1980 being at their lowest for a decade. The construction industry, an important source of employment in Scotland, was one of the worst hit areas. The position has become worse with falling house starts and reduced investment.

My constituency has an unemployment level of 15½ per cent., with 17.3 per cent. male unemployment. The Robb Caledon shipbuilding yard has been condemned to death by British Shipbuilders. I say quite plainly that it has been murdered by British Shipbuilders which has never given it the opportunity of orders that would allow it to compete. It is an example of man's inhumanity to man. When the Secretary of State for Scotland was approached about the matter he passed the buck to British Shipbuilders and refused to take responsibility, despite the fact that the Government could have taken action through public service orders or by giving cash aid, as they did for Harland and Wolff.

The outlook in Scotland is gloomy. The surveys by the Confederation of British Industry and the Scottish Council (Development and Industry) show depressed investment intentions for the remainder of the year. The Scottish Council Research Institute report estimates that investment will fall by 31 per cent. on last year, and that about 60,000 jobs will disappear during 1981.

I understand and appreciate that in some other parts of Britain those areas that have not yet felt the unfortunate effects of unemployment are now concerned about the present increase in unemployment. Scotland has suffered in another way. Much of our unemployment is caused not by short-time working, but by closures. As hon. Members are aware, once factory gates close it will be more difficult to recover that employment when the recession ends. There is little sign in Scotland of any upturn in the economy. The Government obdurately refuse to admit that their economic strategy for Scotland lies in ruins.

Unemployment figures in many other European countries put the Government's performance to shame. Statistics for April 1981 show that the current rate of unemployment in Switzerland is 0.3 per cent., in Norway 1.8 per cent. and in Austria 2.2 per cent. It appears that the smaller the country, the lower the unemployment. Perhaps small countries do best and large countries, especially those relics of a dying empire, suffer most. Norway is perhaps an excellent example. The United Kingdom and Norway share oil resources. In terms of population and resources Norway is far better off than we are.

Mr. Peter Fraser (South Angus)

Nonsense.

Mr. Wilson

If the hon. Gentleman says "Nonsense", it is clear that he knows nothing about Norway and nothing about Scotland.

Mr. Fraser

I appreciate that the hon. Gentleman is concerned about unemployment in Scotland. As he represents part of Dundee, will he make it clear to the people of Scotland where he stands over what happened on Monday, when my right hon. Friend the Secretary of State for Scotland opened possibly the most exciting innovative enterprise that Dundee has seen for many years? I refer to the 3-D camera undertaking that is being set up by American money and enterprise. The hon. Gentleman is well aware of the impact that the demonstration had on those who came from America to put their money where their mouths were. Will he make it clear what he thought of the demonstration that confronted those who were prepared to invest in Scotland?

Mr. Wilson

I was at the same occasion, which was a good one for Dundee. I think that the demonstration was inappropriate becaue it was directed against the Secretary of State and not against the development at Timex.

A staggering 17.7 per cent. of the recent increase in overall unemployment in Great Britain has been in Scotland and 13.1 per cent. of school leavers on the dole in Great Britain are Scottish. There are 27,400 school leavers unemployed in Scotland and there are virtually no vacancies.

What are the answers? The case that was put before the House by the Secretary of State for Employment was full of kind words and except in one respect it seemed to offer no hope for the future. I was marginally encouraged by his reference to the need for improved training. However, he was unwilling to give any dates. In other respects the solution that he envisaged appeared not to meet the gravity of the problem that we face.

About nine months ago the Scottish National Party produced a three-year plan to relieve unemployment. It stated that there should be an oil fund for Scotland and that the oil wealth should be used to initiate a programme of public works, including the building of hospitals, housing, modernisation of housing, sheltered housing, building, house insulation, railway electrification and a large-scale programme of apprenticeships. My party wants also to see an expansion of the role of the Scottish Development Agency.

The cost of unemployment in Scotland in 1980 was £964 million in direct benefits plus loss of output estimated at £723 million. Notwithstanding Scotland's oil resources, the calculations of the benefit of reflation and reinvestment are such that surely any Government would want to take action, especially if they are concerned about the social problems that long-term unemployment is causing. I ask that the Government consider proposals of that sort. If they do not, they will be slamming the door on the faces of those in Scotland, especially the younger people, who are desperately anxious either to keep their jobs or to have jobs in future.

I was saddened that the Secretary of State was not prepared to announce a scheme under which apprenticeships would be subsidised either for the first year or second year, or both years, to enable manufacturers, who are facing difficulties, to take on young people and give them essential training. Unless the Government are prepared to do that, there may be skill bottlenecks in the next two, three or four years, if and when unemployment recedes with the ending of the recession.

The youth opportunities scheme is useful in itself. However, it is regarded by many young people as a con. They feel that they are being used as cheap labour. The scheme provides them with a period of work experience, but sometimes that experience is frustrating and is not able sufficiently to excite them or to give them an appetite for work. The young people are taken on for a period, they learn nothing and then they are discarded. The youth opportunities scheme should be re-examined and replaced by the training and apprenticeship proposals I have suggested.

Unemployment in Scotland climbed from 85,000 to 164,000 under the Labour Government, which showed that a Labour Government gave no protection to Scotland. It has climbed to 305,000 under the Conservative Government, which shows that the Conservative Government are not interested in what is happening in Scotland and are prepared to allow this drastic increase to occur. It also shows that the Labour Party in Scotland has provided no protection as an opposition party and has been unable to get anything out of the Government.

With the record that Westminster has in demolishing the viability of the Scottish economy, for me and my party the independent solution is the only one which will give Scots, young and old, the opportunity to develop their own country and reach a reasonable state of prosperity.

8.50 pm

Mr. Michael Ancram (Edinburgh, South)

All who represent Scottish constituencies will share the dismay expressed by the hon. Member for Dundee, East (Mr. Wilson) about the 305,000 people who are unemployed in Scotland. We all appreciate the hardship and loss of self-respect that such unemployment entails. If we care about the unemployed, we can show that care not by sloganising, not by political attacks, but by coming forward with solutions.

I have listened throughout the debate to the speeches made by Opposition Members. I have found it increasingly depressing. At no stage in any Opposition speech did I hear any answers put forward to solve the problem of unemployment. We have had slogans and political mouthings, but we have had no answers that hold water. In many ways we have had the reverse. By turning the debate into a political slanging match, by drawing grim and gory pictures, Opposition Members are adding to the lack of confidence and hope without which a real solution to the problem will not be found. Their only achievement will be further to undermine the prospects of economic recovery upon which job recovery and restoration must depend.

In view of the Scottish unemployment figures, I have looked round the Chamber to see how many Scottish Labour Members of Parliament were trying to catch your eye, Mr. Speaker. Not one have I noticed. They speak in the streets, they attack the Government in the streets, but they do not seek to speak here because they have no answer to give.

Mr. John Home Robertson (Berwick and East Lothian)

rose—

Mr. Speaker

Order. It is clear that the hon. Gentleman is not giving way.

Mr. Ancram

We have heard over the past months descriptions of Scotland being an industrial wasteland. We have heard veiled threats of civil disorder. This does nothing to persuade or attract industry to Scotland. Talk of that sort can only work in the opposite direction and dissuade firms from doing so.

Ultimately the solution must lie—inasmuch as it is in the hands of Government or politicians—in creating an atmosphere of stability and confidence which will provide a sound investment base for new jobs and new industries. Too often we in Scotland have regarded ourselves as the poor relation, the thick end of the handout wedge. Too often we fail to sell our potential, and we fail without reason, because the potential exists. We have seen it in the way that we have responded to the challenge of oil. We have seen it in the growth of the microtechnological industries for which we are fast becoming the United Kingdom base. We are seeing it still at this time of recession.

Apart from last month's unemployment figures, for which there were special reasons such as Linwood, over the past months our rate of unemployment has been significantly less than that for the remainder of the United Kingdom. That may be cold comfort, but, if confidence is based on trends, this is an important trend in terms of that much needed restoration of confidence.

We are seeing it, too, in the success stories which we have in Scotland and which all of us on both sides of the House, if we care about Scotland, should be putting in our show window to demonstrate what we can do. There are success stories like Ballantynes in Bonnyrigg, which in 1978 expanded its facilities, expecting to create 85 new jobs, but, because of the success of its enterprise, 200 have already been created and more are expected. There are success stories like National Semiconductor (UK) Ltd., where the parent company invested £45 million in a five-year expansion programme. When complete, the new Greenock plant will be one of the most modern semiconductor manufacturing plants in Europe, and the work force, which started at 650, will rise to 2,000 by 1984.

There are also success stories in a different way, like John Brown Engineering Ltd. at Clydebank, which was recently in such trouble, but has now received £55 million worth of orders from Iraq, India and other countries. That firm, which was about to lay people off, has rescinded the redundancies. Significantly—and this bears out what the Secretary of State said—the company ascribed part of its success to a moderate single figure wages settlement by its work force. Perhaps the number of jobs are small, but each is an individual new job that did not exist before, and each is a real job with a future. From such small acorns great oak trees can grow.

Never have we needed more a combined drive by everyone who cares to create confidence in Scotland, which is in the interests of politicians, trade unionists, businesses and, most of all, the unemployed. It may not be good politics for Oppositions, but it would be far better news for the unemployed than anything we have heard so far today.

I hope that what I have said in no way detracts from the seriousness of the problem, particularly in Scotland, because we have our particular and special problems. We have a history of high unemployment. We are at a competitive disadvantage in many areas because of our distance from the markets of supply and demand. I hope that in the efforts and measures of direct assistance that the Secretary of State mentioned the Government will keep the special needs of Scotland in mind.

In conclusion, I support the motion because it faces facts. It accepts that in the long term unemployment cannot be purchased away, and, even if it could, we should only be sowing the seeds of its regeneration. The motion accepts that, by and large, jobs are created by industry and not by Governments, as other hon. Members have said. Indeed, the ability of Governments to create jobs is severely limited. The Government's task is to give industry the atmosphere within which jobs can be created, and the basis of that must be the control of inflation. I am confident that the Government will achieve that.

8.58 pm

Mr. Michael Foot (Ebbw Vale)

It would be churlish of me not to acknowledge at the beginning that the Government have conceded our frequent demand for them to provide time for a debate. I am glad that they did so. I am grateful to the right hon. Lady for attending almost the whole of the debate to listen to what we have to say. I give formal notice here and now that we shall, of course, require similar debates on all similar occasions. The next will be in July when we shall have to consider the figures again.

I have heard most of the debate, and I believe that everyone agrees that the House should debate the question frequently. It is not true that our debates have no effect. They have a good chance of focusing the country's mind on what is far and away the greatest domestic issue facing the nation. I believe that large numbers of Members, certainly Opposition Members, but I believe also Conservative Members, would have wished to take part in the debate had time been available. I therefore repeat the Opposition's view that unemployment figures of this scale and horror should be debated every month when they are published until we see a substantial reduction. So far, there has been no sign either from the Government or from any other source of any major reduction whatever.

Over the past two years, there has been a fall of about one-fifth in the manufacturing production and output of this country. That has been one major cause of the mass unemployment. The collapse of our manufacturing industry, on a scale never previously recorded by any figures relating to these matters, both in the older parts of the country, if one may so describe them and indeed those which were developing many of the new industries—both have been hit—with all the reverberations of that collapse, is the primary cause of the mass unemployment that we are now debating.

I wish to emphasise some features of that unemployment which should be constantly before us and before the nation in deciding how we must deal with it and how, tragically, we are failing to deal with it at present.

I turn first to the total figure of 2,600,000 and more unemployed. We shall no doubt hear later from the Prime Minister whether she now accepts the prophecy by the Secretary of State for Employment about the likelihood of that figure rising to 3 million, by the end of this year or the beginning of next year. The country has a right to hear from the Prime Minister whether she and the Government envisage the official figure rising to that total.

Within the total, of course, is a series of other figures which are almost equally appalling.

Mr. Tristan Garel-Jones (Watford)

rose—

Mr. Foot

I shall give way to the hon. Gentleman later.

First, there are the young unemployed. This figure involves not just school leavers or 18 and 19-year-olds, although heaven knows, that is tragic enough. The April figures, which are not the most recent, as at least part of the figure is calculated on a three-monthly basis, show 876,000 people aged under 25 registered unemployed. If one adds those in that age group provided for in youth employment and other schemes, that figure would already be 1 million. Indeed, even without them, it is now probably nearing a total of 1 million people under 25 registered unemployed.

According to the estimates of the Manpower Services Commission, those figures will become far more serious still. The Manpower Services Commission predicts that of this summer's 1 million school leavers only half will be able to find a job this year, and by 1982 only one in three will find work. Youth unemployment is therefore one serious strand, far more serious than anything ever known in this country, at any rate since the end of the Second World War.

There is then the new phenomenon of unemployment among women. Although we do not have the latest figures, it is clear that the number is moving towards the 1 million mark. The April figure showed that 700,000 women were unemployed in Britain. I entirely agree with the statement in a newspaper a few weeks ago that we are facing a new phenomenon—mass unemployment among women on a scale previously unknown.

As women are among those who are most unlikely to register in full numbers, it is probable that at present the total number of women unemployed is more than 1 million. As I have said, that is something that we have never faced before.

The right hon. Lady sometimes seems to make comparisons, and seeks to explain the unemployment figures by referring to other countries. But here again, our unemployment figures are much more serious than anything that we have faced in the post-war world. Over the past year, the total number of unemployed people in the great industrial nations of the world has increased by 3 million, and it has increased by 2 million in the EEC countries. Out of that increase of 2 million in the EEC, 1 million is represented by what has happened in Britain. The same applies to the 3 million figure for all the industrialised countries.

On those figures, our totals are extremely serious. I again underline the fact that they are more serious than anything we have had to contemplate this century. Certainly, when we take into account the figures for unemployed women and young people, the total is even more serious than anything we had to contemplate in the 1930s.

The right hon. Lady and the Government claim that figures on this scale must be tolerated. However, she has not yet said whether she thinks the totals will continue to rise to 3 million or beyond, although it is obvious that many of her Government colleagues believe that to be the case. Both the Prime Minister and the Government claim that this must be done so that we can defeat inflation. They argue that anything to deal with unemployment must be subordinate to that objective.

Of course, the right hon. Lady does not always tell us exactly what has happened to inflation. I know that this is the brightest jewel in the Government's crown, but it is a pretty smudgy one. Inflation now stands at 11.3 per cent. That is a large figure, and the rate has not yet gone down to the level inherited by the Prime Minister. Moreover, the basis on which the 11.3 per cent is arrived at is perhaps not the best way of calculating it. There are other ways in which inflation can be estimated, and I remind the House and the country that according to the Prime Minister this is the biggest problem of all.

There is another way of estimating the rate of inflation, and it must be considered. [HON. MEMBERS: "The TPI".] Yes, the TPI. We do not hear much about it these days. Indeed, I will give a prize to any of my hon. Friends who can recall a Minister who has referred to the TPI in the last three months.

As the battle against inflation is central to the Government's strategy, I should like to quote what was said by the Financial Secretary to the Treasury when the scheme was introduced. Let no one say that I am quoting anything that is irrelevant. I hope the House will be patient while I read this section from his speech, because it refers directly to the major claim made by the Government. The right hon. Gentleman said: There has been a great deal of talk about the relationship of this index"— that is, the new one— to the Government's approach to pay and inflation. The only cure for inflation is an appropriate monetary and fiscal policy, and these we are pursuing. He can say that again. He continued: As for pay, our approach is clear: wage bargains should reflect the productivity and competitive position of the individual organisations, their profitability and the constraints implied by the Government's monetary and fiscal policies. It follows that there is no case for using any index, whether the RPI or the TPI"— that is the new one— as a basis for wage bargaining. But I am a realist. I recognise that our habit of looking at indices, and at the RPI in particular, is too ingrained to be broken overnight and is unlikely to be changed straightaway by anything I say now. But what I do say and most firmly, is this: if you want a general guide to changes in the total costs facing taxpayers, look at the TPI, not at the RPI. It is a much truer guide. If the right hon. Gentleman were here I would ask him what the TPI stood at now. It is not a figure that comes readily to the lips of the right hon. Lady. Nevertheless, the TPI—the much better guide to the real rate, as reinforced by the Financial Secretary—stands at 15.7 per cent.

Mr. Garel-Jones

I am grateful to the right hon. Gentleman for having given way so early in his remarks. The House and the country will recognise that the Opposition have a duty to criticise the Government's policies. But does he intend, at any point in his remarks, to put forward his party's alternative policies?

Mr. Foot

I hope that the hon. Gentleman will show more patience in future. I do not know whether he listened to the earlier part of the debate. If he did so, he will have heard what was said on many of these matters. We will first examine the Government's policy. As I implied earlier, I am prepared to hold plenty of debates on this subject.

I shall turn to the second question that the country has the right to ask the Government. I underline my remarks about the scale of the problem that we face. It cannot be denied. Again, I underline the Government's failure to achieve even their own declared objective, which they say is a necessary cause of unemployment. Occasionally, the Government and the right hon. Lady have sought to escape the situation by saying that there will be an upturn in the economy. I hope that the right hon. Lady will tell us today when the upturn is expected. When will the recession end? The Secretary of State for Employment was wise enough not to make any prophecy, but the recession greatly affects Government policy.

Unfortunately, I do not see the Chancellor of the Exchequer in his place, but I shall put my remarks in the language that he understands. When will the "bottoming out" begin? That is a phrase of such felicity that I am sure that it must be the Chancellor's. No one else could have invented it. When will the bottoming out begin?

Although I do not see the Chancellor of the Exchequer, I am happy to see the Chief Secretary, who is a great authority on such matters. A few weeks ago he answered the point. He made a speech and used not his usual economic jargon, but highly technical language. He said that he knew what would happen. He said that he knew that Britain would get out of the slump. He gave a very good reason. He said that what came down must go up. I must take the liberty to reply to the right hon. Gentleman in equally technical language—"it ain't necessarily so". Things do not always work that way.

We could examine how Britain has got out of slumps before. The right hon. Member for Sidcup (Mr. Heath) knows a great deal about this, because whatever else he may have done, he helped to get us out of a slump. He may not have done things the right way. He may have gone about things the wrong way and suffered for it ever since. But it is the fact—I am sure that the right hon. Gentleman would be happy to acknowledge it—that the country has got out of these slumps on some occasions.

So far from exempting the anti-Keynesianism that is now orthodoxy among at least half the Cabinet, the only times when the country has got out of post-war recessions have been when Governments have taken action, using old-fashioned pragmatic methods, to overcome them. [Interruption.] I know that precautions have to be taken when that is done. There also has to be an expansion ordered by Government planning and deliberate action by the Government. It will not happen by accident. If anybody thinks that it will happen by accident, he has to fall back on the theories of the Chief Secretary and. I do not suppose that many people want to do that.

There is no great sign that we shall be able to escape from the recession unless the Government are prepared to move to very different actions from the ones they have been prepared to follow up to now.

That brings me to the important Cabinet meeting of last week. I have already asked many questions about it. I have referred to it as a crisis meeting. [HON. MEMBERS: "Were you there?"] I was not there, but I have here a good account of the meeting. If the right hon. Lady finds anything to dispute in the account, she will be able to correct me in due course. The account, which I greatly recommend to the House, is in The Times of Friday 19 June. It is by Mr. David Watt, a most eminent correspondent of The Times.[Interruption.] He is a pretty good chap altogether. Listen to what he says. he is describing not the Prime Minister and her associates but the others. I am glad to see that several of them are present tonight. They will be able to confirm the account.

Mr. David Watt does not like the term "wets". He calls them "the Cabinet doubters". That is a much more delicate phrase than "wets". He writes: Their instincts tell them that the Prime Minister and the Chancellor are inflicting great and possibly permanent damage on the British economy, and indeed on British policy as well. But they cannot face the hard-line argument that the alternative strategy, even if its long-term merits were conceded, could do little to improve the Government's immediate prospects and might put at risk the one tangible success the Government may be able to claim—a small reduction in the rate of inflation". I have dealt with that one.

I ask the House to mark the next passage very carefully, because it describes the mood among the Cabinet doubters and shows their plight. It also affects Conservative Back Benchers. It says: They are obliged therefore to console themselves more or less with the framework of present policy.". That is a terrible thing to say, but the right hon. Lady confirms it, for every time I have asked her she has said, "Oh yea, it will be the framework of present policy." It is a very gloomy thought for Conservative Members, especially for those with very marginal seats. Indeed, looking at them now, I recall that there was someone who put it even better than the correspondent of The Times. It was John Milton who said: The hungry sheep look up, and are not fed". The more marginal the seats, the hungrier they are and the less they are fed. It is a sorry condition. [Interruption] I do not know whether hon. Gentlemen would prefer to have John Milton or more of The Times.

I caught the eye of the Leader of the House and I knew that he would not like it if I left him out. He might think that I am prejudiced. The Times says: But it is already too late for that. Mr. Francis Pym, at the moment the man most likely to win a leadership election"— [Interruption.] I do not want to spoil it for the right hon. Gentleman. I know that hon. Gentlemen would like to hear this but they must be quiet to hear it. I do not want the full glory of it to be impaired in any way.

It goes on: the man most likely to win a leadership election, is delicately manoeuvring to distance himself from the Thatcher position"— Hon. Gentlemen can see that; they must not miss this, because it goes on: though not so far as to attract fatal accusations of disloyalty". So he keeps the Secretary of State for Employment between himself and the Prime Minister. I wondered what he was doing in the Cabinet all this time, but I see before me a useful function.

Of course these are serious questions.

Mr. Tony Marlow (Northampton, North)

On a point of order, Mr. Speaker. Two and two-thirds million of his fellow countrymen are unemployed and all the right hon. Gentleman can do is make jokes.

Mr. Speaker

Order. That is not a point of order at all.

Mr. Foot

The hon. Gentleman who interrupted me, and some of the others, were not here. I am seeking to answer the debate and I have been present.

The right hon. Member for Chelmsford (Mr. St. John-Stevas) made a most important contribution to the debate. He said that he was alarmed that the Conservative Party might once again attract to itself these policies if they are pursued. I am arguing that apparently the right hon. Lady is insisting that they are to be pursued. That is the relevance of what I have read.

The right hon. Member for Chelmsford is right. He said that if that happened, the Conservative Party once again would have to bear the stain of mass unemployment, having been the Government that created it. The right hon. Lady knows, of course, that a whole variety of policies could be initiated. She has had them urged upon her not only by the Opposition but by the TUC and the CBI, which had programmes of expansion but she has tossed most of them out of the window. A number of her right hon. Friends in the Cabinet have tried to do it. If they have not, they have failed in their duty. Have they been silent after all these leaks and not presented an alternative to the programme to which the right hon. Lady still owes her allegiance?

We have. The TUC put a policy to the right hon. Lady. The CBI put a policy to her. The policy was for expansion and reflating the economy and trying to ensure that such reflation is not overborne by a mass of imports. It is a policy for trying to ensure that this time we embark upon essential reflation, without which unemployment will continue to mount. It is no good the right hon. Lady suggesting that there may be some upturn at some unspecified date. I know that she has to shift the date back. To deal with unemployment, it is not sufficient to have an upturn. It is not sufficient to have a situation where the crushing decline in British manufactures, over a period, comes to an end, appears to come to an end, or, in the phrase that is used, bottoms out.

To stop unemployment increasing, one needs not merely an upturn. One needs an increase in production of about 3 per cent. One has to plan for it. One has to work for it. It will not happen by accident. If the right hon. Lady comes to the Dispatch Box today and says that all she intends to do is what she has stated previously, she will once again have missed the opportunity to try to change the policies that are causing such disruption. [HON. MEMBERS: "What is your policy?"] Hon. Members will have opportunities to debate this matter in the House and in the country. I understand how disagreeable my words must sound to Ministers. If they will not listen to me, they must listen to others. They should listen to the right hon. Member for Chelmsford. They should listen to the right hon. Member for Sidcup. Some of his silences are even more eloquent than his speeches. Every time he does not say what he thinks of the policies, we know what he thinks of them, particularly when the right hon. Lady says that the only way in which we worked and strove to escape from slumps that were not so severe as this was to have Government planning, Government direction and Government intervention. [Interruption.] I know that some Conservative Members, especially after dinner, do not want to hear the facts about unemployment. It is an old custom of the gentlemen of England. They will have to listen because the country will tell them.

I am sorry that the rest of the Conservative Party was not present to hear the right hon. Member for Chelmsford. Listening to his speech, I was reminded of the words of the person who talked of the great Conservative Party that destroyed everything. That was the comment made about a Conservative Party that, in past years, showed the same kind of rigid allegiance to the defeatist laissez faire policy adopted by the Prime Minister. That was the condemnation of Disraeli of one Conservative Government. It will also be the condemnation of this Government.

The right hon. Lady, in her first two years—it is too late according to these accounts for her to turn back—has once again destroyed the Conservative Party. The question that arises is how much destruction the country will have to suffer before that comes to an end.

9.29 pm

The Prime Minister (Mrs. Margaret Thatcher)

The right hon. Member for Ebbw Vale (Mr. Foot) wanted and secured a debate on unemployment. He has reduced it to a matter of farce. He dealt with the subject as he deals with every other subject in the only way that he knows—with his typical levity. I have never heard a more disgraceful speech on unemployment. Not one single aspect of policy did he put forward.

The right hon. Gentleman raised one or two points which I shall attempt to deal with at the outset. He referred to the present inflation rate of about 11 per cent. He said that it was slightly higher than the inflation rate that we inherited. Surely he does not take credit for his own Government for bringing the inflation rate down during their period of office. Has he forgotten that his Government did so badly that they had to call in the IMF. When they called in the IMF the rate of inflation had previously gone up to 27 per cent. It was a country ungovernable because inflation got to such a high level. Only after the IMF came in, after the Government pursued the IMF policies, did the inflation rate come right down and the economy get on a much better course.

The right hon. Gentlman referred again to the tax and prices index. I am the first to say that the tax and prices index is higher. I am the first to say that taxation is higher than we would wish because we increased expenditure, rightly, because of the recession. But at least we had the courage to honour the bills, not by printing money but by increasing taxation. That was a much better way to deal with the problem.

The right hon. Gentleman for Ebbw Vale asked me to make predictions about unemployment. I quote what he said when he was asked to do the same from this Dispatch Box in 1975. He said: No, I shall not make such a prediction. It would not be sensible. Indeed, I do not think that any Government have made predictions of the character suggested" .—[Official Report, 28 October 1975; Vol. 898, c. 1267.] I follow the right hon. Gentleman. I shall not make such a prediction.

The right hon. Member for Ebbw Vale also asked when the improvement in the recession and the upturn will come. I cannot give him a precise prediction about that either. I am, naturally, dissatisfied with the current level of unemployment. The figure is already much too high and the danger is that it will rise higher still for several months to come. Partly the trouble arises from the recession which has hit many countries besides our own. Our capacity to overcome the menace will depend on a combination of policies, not least immediately upon our success in curbing inflation."—[Official Report, 1 July 1975; Vol. 894, c. 1170.] That was the right hon. Member for Ebbw Vale.

Every speaker in the debate has expressed the deepest concern, which is shared by every Member of the Government, about the tragedy, the human tragedy, of unemployment. Unemployment, especially prolonged unemployment, is an evil and high levels of unemployment are a tragic waste of human and material resources.

These things, as my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) reminded us, are not in dispute. The argument is about the effective remedies to cure the evil. Finding that remedy is not easy. If it were, unemployment would not have doubled during the time that the right hon. Member for Ebbw Vale was in Government, nor would it have nearly trebled in his constituency.

Mr. Geoffrey Robinson (Coventry, North-West)

The Prime Minister mentioned the importance of the length of unemployment. Will she confirm that the length of unemployment, not just the numbers, has dramatically increased? Does she agree that that shows that the problem is increasing far faster than any remedy by the Government? Will she confirm that the problem has increased by about 30 per cent?

The Prime Minister

The length of time in which some people have been unemployed has indeed increased. If the hon. Gentleman wishes to put down a question asking for a statistical figure I will, of course, give it.

I was saying that the argument is not about whether unemployment is a tragedy—that is not in dispute—but how to find an effective remedy. We have heard none from the Opposition Benches. I was pointing out that, had the right hon. Gentleman been able to find an effective remedy, he would never have allowed unemployment to rise by 1 million during his own time in office, nor allowed unemployment in his own constituency to treble.

Fine speeches did not stop unemployment rising then. The good intentions of the then Government did not create more jobs. Today, Labour Members, still with the best intentions, have advocated the self-same remedies that failed before. If they were implemented, they would fail again. They are short-lived policies which would have, at most, a transitory effect. In the short run, Governments can determine prices, incomes and increase the number of jobs, but in the long run, economic considerations always exact their toll. Then the palliatives which were designed to avoid realities leave behind their own problems, and the solution becomes more difficult than before.

All the proposals put forward by Labour Members ignore the fact that resources are limited in relation to demand and that money spent to satisfy one need means forgoing another.

Mr. Neil Kinnock (Bedwellty)

It depends on one's priorities.

The Prime Minister

Labour Members do riot recognise that any budget is limited. Of course, every budget is limited, and money spent on satisfying one need means forgoing another need. If Labour Members do not understand that, they were never, never fit to be in Government. Such choices do have to be made, and to try to get round them by printing money is not only to debase the coinage but to debase the currency of politics.

The right hon. Member for Chesterfield (Mr. Varley) did not put up a single item of policy. His speech was almost totally devoid of any material about policy. He said that we bleat about where the money is to come from. Clearly, he would have printed the lot. However. if one spends money, it comes either from taxation or from borrowing. Certainly, we are spending a great deal. Indeed, if I may say so, we are spending rather too much. We are taxing very highly to finance things like the National Health Service, expenditure on which has increased by 2 per cent. What is the right hon. Gentleman's remedy for unemployment? He has none. His only so-called remedy is a remedy that has the name of reflation, which means creating inflation on top of inflation. That remedy, if such it could be called, has been tried before. If he creates inflation on top of inflation, the right hon. Gentleman knows that for a time it will create a few more jobs, until the increased inflation takes away jobs from a far larger number of people and unemployment rises again. Then what does he do? He adds another bit of inflation and another bit, until we have suitcase money of the kind that they had in Germany in the inter-war period.

Labour Members asked that the public sector borrowing requirement be increased. David Blake has given the figure of £4 billion; the TUC suggested £6 billion. David Blake says that the £4 billion would reduce unemployment by only 100,000. What it would do to inflation would take jobs away from our people far more than it would reduce unemployment. Then the whole problem would start again.

Time after time Labour Members have said "Reflate". Other hon. Members have admitted that we cannot put inflation in jeopardy and that we cannot risk increasing inflation. They have admitted that getting inflation down is the way to tackle unemployment. They have said "No, we do not want any more inflation. Taxes are already too high." Then comes the final trump card—"but we want a little controlled reflation now, a little bit of public sector expansion". That is precisely the same thing—the same reflation—which has failed before.

The hon. Member for Eton and Slough (Miss Lestor) and others said that spending the money paid in unemployment benefit on jobs would be a better way of spending it. But if we put everyone back in jobs it would cost a great deal more. The money would have to come from profitable industry and that would ultimately put far more people out of jobs.

My hon. Friend the Member for Dartford (Mr. Dunn), whose speech showed that he is more familiar with the 1930s than is the right hon. Member for Ebbw Vale, pointed out that more Government spending does not necessarily reduce unemployment. Of course, it does not. There is a good case to be argued that more Government spending reduces the resources available to the private sector where they could be used very much better.

The question is not whether there are cuts, but where the cuts fall. Reductions in expenditure either have to fall on Government policy or have to be financed by taxation, and fall on the family. More money being taken by the Government means a good deal less for the family to spend for its own purposes and frequently the family believes that it could spend it better. [Interruption.]

Mr. Speaker

Order. Throughout the day we have had a debate in which hon. Members have been allowed to speak.

Mr. Eric S. Heffer (Liverpool, Walton)

Why did you not get up when the Leader of the Opposition was being shouted down?

Mr. Speaker

Order. The hon. Member for Liverpool, Walton, (Mr. Heffer) should be quiet. Anyone who was present knows that the Leader of the Opposition was heard.

Hon. Members

No.

The Prime Minister

The argument has been put that we should have more public investment. Many of us would like to have more public investment, but two conditions have to be met. First, we must be sure that the money going into public investment brings a proper return to the community. Even Socialist economies insist on that.

We also have to find the resources. For years too much of such investment has produced hopelessly inadequate and often negative returns. If we look at steel, shipbuilding, coal or the railways we see that frequently that has produced negative returns. We have poured billions and billions of pounds into those industries. Where is the benefit to the community?

Most companies in the private sector would have used such resources better and would have produced profits for reinvestment and more jobs. Alternatively, they would have come under the discipline of bankruptcy, which does not apply to nationalised industries. That is why we are insisting, as with railway electrification, that new investment proposals are properly justified.

The second condition is that money for public investment has to come from somewhere. It is no good Labour Members telling the Government that civil servants, ambulancemen and every other public sector group that comes along should be given more, and telling us not to make manpower savings, if they want us to spend more on capital projects. It is no good their glibly saying that nationalised industries should just be allowed to borrow more. That must mean borrowing at the expense of the private sector or more printing of money.

We must find money from existing budgets and find projects that will give the sort of return that the public are entitled to expect from the use of their money.

Both sides of the House are united in wanting to see more jobs in the British economy. Both sides of the House agree that we have a special duty to the school leavers and to the young unemployed, a special duty to encourage training and retraining and a special duty to encourage short-time working instead of redundancies. I am proud of the fact that our programme of special employment and training measures covered about 947,000 people by the end of May.

My right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) gave an interesting speech demonstrating his concern for the young and putting forward his project for community work. A number of us feel that a compulsory project would not be right. Other opportunities are available to a considerable number of young people, which might suit them better. If we were to have a compulsory project, we could not provide good facilities for all those who took part in it. We are interested in seeing as many young people as possible using their time to engage in voluntary work. We have recently increased the amount which they can earn by engaging in voluntary work without losing their unemployment benefit.

We can provide productive jobs only when people produce the goods and services which other people will buy. That means, above all, competing successfully with other countries. The policies put forward by the Labour Party and the policies of this Administration have to be measured against this simple criterion: Will they make this country more competitive?

The Leader of the Opposition asked for reflation and higher prices throughout the economy. That will not help to make us competitive. That is why we say that keeping inflation under control has to come first. The right hon. Gentleman and hon. Members on the Opposition Benches want a larger public sector and more loss-making monopolies charging higher prices. That will not make us competitive. It will put an intolerable burden on the many industries that are already profitable and struggling to stay profitable. That is why we say that we wish to demonopolise many of those industries and to make resources available to the private sector so that the private sector may flourish.

Members of the Opposition argue for import controls and protection—I shall deal with that in a moment—so that our industry is insulated from market forces. That will not make us competitive. Of course not. That is why we believe in a market economy which is so much better a bargain for the consumer and which is the sector which delivers most of the export goods overseas.

I must refer to pay. We hear precious little these days from the Leader of the Opposition about that. In his social contract days, he used to give the impression that he thought it important. Not now. Instead, he addresses the Transport and General Workers Union on nuclear disarmament while it tells him that it would not be prepared to discuss pay with a future Labour Government. However, it cannot ignore the fact that pay is a crucial factor in competitiveness and that until we pay ourselves what we have earned, we will continue to lose jobs.

May we look at the figures for one moment? As my right hon. Friend the Secretary of State for Employment said, our competitiveness has deteriorated massively. Partly, that was due to the strength of sterling, but it was also due to earnings rising so much faster than those of our competitors. Since 1977, our living standards have gone up by 15 per cent., while production has fallen. [Interruption.] It is serious. That is why hon. Gentlemen cannot bear listening to it. It is sound and it is serious—they are only used to farce. It is sound and serious, it makes sense and it is serious policy, which will produce the solutions in the end. I sometimes feel that Labour Members would rather have more unemployment than put into operation sound policies. They are concerned only with making political capital out of unemployment, but we are concerned with solving it. We are concerned with solving it and laying a proper base of sound jobs in the longer run—a proper base which we have not had.

The Labour Government took office with 600,000 unemployed. They left office with 1.3 million unemployed. They increased unemployment by 1 million. We have increased unemployment by 1 million, but we are pursuing—and are determined to pursue—long-term policies that will reduce unemployment and give the youngsters of Britain the chance of a future —[Interruption.] The Opposition cannot bear to listen to the facts.

I wish to say a word about profits. One of the reasons for higher unemployment is that the proportion of profits has fallen to abysmally low levels. Too much was taken out in pay, and companies were drained of profits. They did not have the resources left for investment. Without profits businesses must contract, employees are laid off, and there is no money for new investment. No new investment jeopardises future productivity and gives the advantage to our competitors overseas. That is what has happened. Against the figures that I have mentioned, it does credit to the resilience of our industries that output and employment have not fallen even further.

Attitudes are changing. More people are beginning to understand that jobs are lost if people pay themselves too much. Settlements are averaging single figures, and that without either a compulsory or voluntary pay policy. There are no distortions to unwind. There has been some improvement in industry's competitiveness. The new sense of realism must continue. Pay settlements must continue to come down, and the drive for improved productivity must continue. Only then will there be a real prospect of recovery.

A number of right hon. and hon. members mentioned incomes policy, including my right hon. Friend the Member for Chelmsford, the hon. Member for Rochdale (Mr. Smith) and the right hon. Member for Stoke-on-Trent, South (Mr. Ashley). That is one issue on which I agree with Opposition Members. Incomes policies do not work. Characteristically, I do not think the Leader of the Opposition mentioned that topic in his speech. All the experience in Britain shows that, under Governments of both parties—however well-intentioned—neither statutory nor voluntary incomes policies have any lasting impact on wages or inflation. In the end they break down under their own weight, and in the process they create more and more distortion in the economy. Incomes policies, even those devised by the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), inevitably mean a further gulf between pay and productivity. Some people receive more than productivity justifies, and others less. Some feel that they are entitled to a pay rise as of right, regardless of performance. The result is that there are fewer jobs.

Except for their own employees, the Government cannot be responsible for determining pay in the private sector. It is for employers and employees to work out that between themselves. If they pay themselves realistically they benefit from greater job security—if not, they pay the penalty. Every time that we have tried an incomes policy it has not lasted for more than two years. The problems that have occurred during the unwinding of an incomes policy have more than cancelled out any benefits that accrued. Even the threat of an incomes policy sometimes means that the unions pre-empt with large wage increases. We cannot go that way again. It is a short-term palliative. We must take the long-term solution.

Many hon. Members suggested import controls. They are simply not possible over the generality of the economy. We could not possibly move to a siege economy unless we had only half our population. Import controls in general would shelter the inefficient, discourage modernisation and re-equipment, restrict consumer choice and result in rising prices and a falling standard of living. We have selective import controls to help particular industries through difficult times. Indeed, they have increased since 1970. Then they were effective only on certain cotton textiles. They now extend to a wide variety of textiles, shoes, coals and voluntary arrangements for cars.

Those who ask for import controls forget just how many jobs there are in Britain in exports and how much of our manufacturing output goes into exports. Millions of jobs depend on our maintaining access to and competitiveness in overseas markets. We export a greater proportion of our GDP than any of our major competitors—double the proportion of Japan and four times that of the United States. We must continue to keep up and, if possible, increase that share of world trade if we are to provide jobs for our own people in future.

The interesting thing is that those who often demand more aid for the developing countries are those who are the first to put up shutters against the goods coming in. Many of those countries wish to have more trade rather than more aid. We usually have a balance of trade with those developing countries. We have that balance through exporting to them engineering products and machinery. We cannot deny them the possibility of earning the money to pay for them by putting up the shutters on imports into this country.

Mr. Foot

As the right hon. Lady has apparently told the House and the country that in no single particular is she prepared to alter the policies that she is now pursuing, will she answer the question that she would not answer at the beginning of her speech and tell us whether in the light of those policies she thinks that the Secretary of State for Employment was right to mention the figure of 3 million unemployed? Does she accept that figure?

The Prime Minister

Unemployment will rise from where it is now. Of course it will because of the increasing number of school leavers and because there is a substantial increase in the numbers in the labour force. That is because fewer people are retiring and there are more school leavers. I regret that it will continue to rise, but the policies which we are pursuing are the policies which will get unemployment down in the longer run and which will create genuine jobs and give a sound basis for prosperity.

There are now clear signs that the worst of the recession is over. Manufacturing and industrial production in April was at the same level as last December. Consumption has been comparatively buoyant in the first quarter and retail sales have remained at a high level. The numbers coming on to the unemployment register have fallen compared with the numbers coming on in previous months. There are a number of signs from which we can take encouragement. We have had pay settlements averaging single figures compared with settlements of over 20 per cent, last year.

In inviting the House to support the Government's motion, I make it clear that I do not question the genuine concern of Opposition Members and I do not doubt then-compassion. Equally, let them not doubt ours. We are dealing with one of the most complex and sensitive problems of our time. Neither compassion nor rhetoric is enough. There is nothing inevitable about high unemployment. In the future as in the past we may be sure that there will be increasing demands for all kinds of goods and services to meet the continuing improvement in living standards. It is for us in this country to win our share of that growing trade at home and abroad by keeping our quality and costs competitive. There are good signs that British management and workers are beginning to do just that.

Hope—real hope—lies not in running from reality but in facing it. I ask the House to face that reality tonight.

Question put, That the amendment be made:—

The House divided: Ayes 249, Noes 311.

Dvision No. 227]	[10 pm
AYES
Abse, Leo	Dalyell, Tam
Adams, Allen	Davidson, Arthur
Allaun, Frank	Davies, Rt Hon Denzil (L'lli)
Alton, David	Davies, Ifor (Gower)
Anderson, Donald	Davis, Clinton (Hackney C)
Archer, Rt Hon Peter	Davis, T. (B'ham, Stechf'd)
Ashley, Rt Hon Jack	Deakins, Eric
Ashton, Joe	Dean, Joseph (Leeds West)
Atkinson, N.(H'gey,)	Dempsey, James
Bagier, Gordon A.T.	Dewar, Donald
Barnett, Guy (Greenwich)	Dixon, Donald
Barnett, Rt Hon Joel (H'wd)	Dobson, Frank
Beith, A. J.	Dormand, Jack
Bennett, Andrew(St'kp't N)	Douglas, Dick
Bidwell, Sydney	Douglas-Mann, Bruce
Booth, Rt Hon Albert	Dubs, Alfred
Boothroyd, Miss Betty	Duffy, A. E. P.
Bottomley, Rt Hon A.(M'b'ro)	Dunn, James A.
Bray, Dr Jeremy	Dunwoody, Hon Mrs G.
Brocklebank-Fowler, C.	Eadie, Alex
Brown, Hugh D. (Provan)	Eastham, Ken
Brown, R. C. (N'castle W)	Edwards, R. (W'hampt'n S E)
Brown, Ron (E'burgh, Leith)	Ellis, R. (NE D'bysh're)
Buchan, Norman	English, Michael
Callaghan, Rt Hon J.	Ennals, Rt Hon David
Callaghan, Jim (Midd't'n & P)	Evans, loan (Aberdare)
Campbell, Ian	Evans, John (Newton)
Campbell-Savours, Dale	Ewing, Harry
Canavan, Dennis	Faulds, Andrew
Cant, R. B.	Field, Frank
Carmichael, Neil	Fitch, Alan
Clark, Dr David (S Shields)	Flannery, Martin
Cocks, Rt Hon M. (B'stol S)	Fletcher, L. R. (Ilkeston)
Concannon, Rt Hon J. D.	Fletcher, Ted (Darlington)
Conlan, Bernard	Foot, Rt Hon Michael
Cook, Robin F.	Ford, Ben
Cowans, Harry	Forrester, John
Crowther, J. S.	Foster, Derek
Cryer, Bob	Foulkes, George
Cunliffe, Lawrence	Fraser, J. (Lamb'th, N'w'd)
Cunningham, G. (Islington S)	Freud, Clement
Cunningham, Dr J. (W'h'n)	Garrett, John (Norwich S)

Garrett, W. E. (Wallsend)	Oakes, Rt Hon Gordon
George, Bruce	Ogden, Eric
Gilbert, Rt Hon Dr John	O'Halloran, Michael
Ginsburg, David	O'Neill, Martin
Golding, John	Orme, Rt Hon Stanley
Graham, Ted	Paisley, Rev Ian
Grant, George (Morpeth)	Park, George
Grant, John (Islington C)	Parker, John
Harrison, Rt Hon Walter	Parry, Robert
Hart, Rt Hon Dame Judith	Pavitt, Laurie
Hattersley, Rt Hon Roy	Pendry, Tom
Haynes, Frank	Penhaligon, David
Healey, Rt Hon Denis	Powell, Raymond (Ogmore)
Heffer, Eric S.	Prescott, John
Hogg, N. (E Dunb't'nshire)	Price, C. (Lewisham W)
Holland, S. (L'b'th, Vauxh'll)	Race, Reg
Home Robertson, John	Radice, Giles
Homewood, William	Rees, Rt Hon M (Leeds S)
Hooley, Frank	Richardson, Jo
Howells, Geraint	Roberts, Albert (Normanton)
Huckfield, Les	Roberts, Allan (Bootle)
Hughes, Robert (Aberdeen N)	Roberts, Ernest (Hackney N)
Hughes, Roy (Newport)	Roberts, Gwilym (Cannock)
Janner, Hon Greville	Robertson, George
Jay, Rt Hon Douglas	Robinson, G. (Coventry NW)
John, Brynmor	Robinson, P. (Belfast E)
Johnson, James (Hull West)	Rodgers, Rt Hon William
Johnson, Walter (Derby S)	Rooker, J. W.
Johnston, Russell (Inverness)	Ross, Ernest (Dundee West)
Jones, Rt Hon Alec (Rh'dda)	Ross, Stephen (Isle of Wight)
Jones, Barry (East Flint)	Rowlands, Ted
Jones, Dan (Burnley)	Ryman, John
Kaufman, Rt Hon Gerald	Sandelson, Neville
Kerr, Russell	Sheldon, Rt Hon R.
Kilfedder, James A.	Shore, Rt Hon Peter
Kilroy-Silk, Robert	Short, Mrs Renée
Kinnock, Neil	Silkin, Rt Hon J. (Deptford)
Lamond, James	Silkin, Rt Hon S. C. (Dulwich)
Leighton, Ronald	Silverman, Julius
Lestor, Miss Joan	Skinner, Dennis
Lewis, Arthur (N'ham NW)	Smith, Cyril (Rochdale)
Lewis, Ron (Carlisle)	Smith, Rt Hon J. (N Lanark)
Litherland, Robert	Snape, Peter
Lofthouse, Geoffrey	Soley, Clive
Lyon, Alexander (York)	Spearing, Nigel
Lyons, Edward (Bradf'd W)	Spriggs, Leslie
McCartney, Hugh	Stallard, A. W.
McDonald, Dr Oonagh	Steel, Rt Hon David
McElhone, Frank	Stewart, Rt Hon D. (W Isles)
McGuire, Michael (Ince)	Stoddart, David
McKay, Allen (Penistone)	Stott, Roger
McKelvey, William	Strang, Gavin
Maclennan, Robert	Straw, Jack
McMahon, Andrew	Summerskill, Hon Dr Shirley
McNally, Thomas	Taylor, Mrs Ann (Bolton W)
McTaggart, Robert	Thomas, Dafydd (Merioneth)
McWilliam, John	Thomas, Jeffrey (Abertillery)
Magee, Bryan	Thomas, Mike (Newcastle E)
Marks, Kenneth	Thomas, Dr R.(Carmarthen)
Marshall, D(G'gow S'ton)	Thorne, Stan (Preston South)
Marshall, Dr Edmund (Goole)	Tilley, John
Marshall, Jim (Leicester S)	Tinn, James
Martin, M(G'gow S'burn)	Torney, Tom
Mason, Rt Hon Roy	Urwin, Rt Hon Tom
Maxton, John	Varley, Rt Hon Eric G.
Maynard, Miss Joan	Wainwright, R.(Colne V)
Meacher, Michael	Walker, Rt Hon H.(D'caster)
Mellish, Rt Hon Robert	Watkins, David
Mikardo, Ian	Weetch, Ken
Millen, Rt Hon Bruce	Welsh, Michael
Miller, Dr M. S. (E Kilbride)	White, Frank R.
Mitchell, Austin (Grimsby)	White, J. (G'gow Pollok)
Mitchell, R. C. (Soton ltchen)	Whitehead, Phillip
Morris, Rt Hon A. (W'shawe)	Whitlock, William
Morris, Rt Hon C. (O'shaw)	Wigley, Dafydd
Morris, Rt Hon J. (Aberavon)	Willey, Rt Hon Frederick
Morton, George	Williams, Rt Hon A.(S'sea W)
Moyle, Rt Hon Roland	Wilson, Gordon (Dundee E)
Mulley, Rt Hon Frederick	Wilson, Rt Hon Sir H.(H'ton)
Newens, Stanley	Wilson, William (C'try SE)

Winnick, David
Woodall, Alec	Tellers for the Ayes:
Woolmer, Kenneth	Mr. Donald Coleman and
Wrigglesworth, Ian	Mr. James Hamilton.
Young, David (Bolton E)

NOES
Adley, Robert	Dykes, Hugh
Aitken, Jonathan	Eden, Rt Hon Sir John
Alexander, Richard	Edwards, Rt Hon N. (P'broke)
Alison, Michael	Eggar, Tim
Amery, Rt Hon Julian	Elliott, Sir William
Ancram, Michael	Emery, Peter
Arnold, Tom	Eyre, Reginald
Atkins, Rt Hon H.(S'thorne)	Fairbairn, Nicholas
Atkins, Robert(Preston N)	Fairgrieve, Russell
Atkinson, David (B'm'th,E)	Faith, Mrs Sheila
Baker, Kenneth(St.M'bone)	Farr, John
Baker, Nicholas (N Dorset)	Fell, Anthony
Banks, Robert	Fenner, Mrs Peggy
Beaumont-Dark, Anthony	Finsberg, Geoffrey
Bendall, Vivian	Fisher, Sir Nigel
Bennett, Sir Frederic (T'bay)	Fletcher, A. (Ed'nb'gh N)
Benyon, Thomas (A'don)	Fletcher-Cooke, Sir Charles
Benyon, W. (Buckingham)	Fookes, Miss Janet
Best, Keith	Forman, Nigel
Bevan, David Gilroy	Fowler, Rt Hon Norman
Biffen, Rt Hon John	Fox, Marcus
Biggs-Davison, John	Fraser, Rt Hon Sir Hugh
Blackburn, John	Fraser, Peter (South Angus)
Blaker, Peter	Fry, Peter
Body, Richard	Galbraith, Hon T. G. D.
Bonsor, Sir Nicholas	Gardner, Edward (S Fylde)
Boscawen, Hon Robert	Garel-Jones, Tristan
Bottomley, Peter (W'wich W)	Gilmour, Rt Hon Sir Ian
Bowden, Andrew	Glyn, Dr Alan
Boyson, Dr Rhodes	Goodhart, Philip
Braine, Sir Bernard	Goodhew, Victor
Bright, Graham	Goodlad, Alastair
Brinton, Tim	Gow, Ian
Brittan, Leon	Gower, Sir Raymond
Brooke, Hon Peter	Gray, Hamish
Brotherton, Michael	Greenway, Harry
Brown, Michael(Brigg & Sc'n)	Grieve, Percy
Browne, John (Winchester)	Griffiths, E.(B'y St. Edm'ds)
Bruce-Gardyne, John	Griffiths, Peter Portsm'th N)
Bryan, Sir Paul	Grist, Ian
Buchanan-Smith, Alick	Grylls, Michael
Buck, Antony	Gummer, John Selwyn
Budgen, Nick	Hamilton, Hon A.
Bulmer, Esmond	Hamilton, Michael (Salisbury)
Burden, Sir Frederick	Hampson, Dr Keith
Butcher, John	Hannam, John
Cadbury, Jocelyn	Haselhurst, Alan
Carlisle, John (Luton West)	Hastings, Stephen
Carlisle, Kenneth (Lincoln)	Havers, Rt Hon Sir Michael
Carlisle, Rt Hon M. (R'c'n )	Hawkins, Paul
Chalker, Mrs. Lynda	Hawksley, Warren
Channon, Rt. Hon. Paul	Hayhoe, Barney
Chapman, Sydney	Heath, Rt Hon Edward
Churchill, W. S.	Heddle, John
Clark, Hon A. (Plym'th, S'n)	Henderson, Barry
Clark, Sir W. (Croydon S)	Heseltine, Rt Hon Michael
Clarke, Kenneth (Rushcliffe)	Hicks, Robert
Clegg, Sir Walter	Higgins, Rt Hon Terence L.
Cockeram, Eric	Hill, James
Colvin, Michael	Holland, Philip (Carlton)
Cope, John	Hooson, Tom
Cormack, Patrick	Hordern, Peter
Corrie, John	Howe, Rt Hon Sir Geoffrey
Costain, Sir Albert	Howell, Rt Hon D. (G'ldf'd)
Cranborne, Viscount	Howell, Ralph (N Norfolk)
Critchley, Julian	Hunt, David (Wirral)
Dean. Paul (North Somerset)	Hunt, John (Ravensbourne)
Dickens, Geoffrey	Hurd, Hon Douglas
Douglas-Hamilton, Lord J.	Irving, Charles (Cheltenham)
Dover, Denshore	Jenkin, Rt Hon Patrick
du Cann, Rt Hon Edward	Johnson Smith, Geoffrey
Dunn, Robert (Dartford)	Jopling, Rt Hon Michael
Durant, Tony	Kaberry, Sir Donald

Kershaw, Anthony	Porter, Barry
Kimball, Marcus	Powell, Rt Hon J.E. (S Down)
King, Rt Hon Tom	Prentice, Rt Hon Reg
Kitson, Sir Timothy	Price, Sir David (Eastleigh)
Knight, Mrs Jill	Prior, Rt Hon James
Knox, David	Proctor, K. Harvey
Lamont, Norman	Pym, Rt Hon Francis
Lang, Ian	Raison, Timothy
Langford-Holt, Sir John	Rathbone, Tim
Latham, Michael	Rees, Peter (Dover and Deal)
Lawrence, Ivan	Renton, Tim
Lawson, Rt Hon Nigel	Rhodes James, Robert
Lee, John	Rhys Williams, Sir Brandon
Lennox-Boyd, Hon Mark	Ridley, Hon Nicholas
Lester, Jim (Beeston)	Ridsdale, Sir Julian
Lewis, Kenneth (Rutland)	Rifkind, Malcolm
Lloyd, Peter (Fareham)	Rippon, Rt Hon Geoffrey
Loveridge, John	Roberts, M. (Cardiff NW)
Luce, Richard	Roberts, Wyn (Conway)
Lyell, Nicholas	Ross, Wm. (Londonderry)
McCrindle, Robert	Rossi, Hugh
Macfarlane, Neil	Royle, Sir Anthony
MacGregor, John	St. John-Stevas, Rt Hon N.
MacKay, John (Argyll)	Scott, Nicholas
Macmillan, Rt Hon M.	Shaw, Giles (Pudsey)
McNair-Wilson, M. (N'bury)	Shaw, Michael (Scarborough,
McNair-Wilson, P. (New F'st)	Shepherd, Colin (Hereford)
McQuarrie, Albert	Shepherd, Richard
Madel, David	Shersby, Michael
Major, John	Silvester, Fred
Marland, Paul	Sims, Roger
Marlow, Tony	Skeet, T. H. H.
Marshall, Michael (Arundel)	Speed, Keith
Marten, Neil (Banbury)	Speller, Tony
Mates, Michael	Spence, John
Mather, Carol	Spicer, Jim (West Dorset)
Mawby, Ray	Spicer, Michael (S Worcs)
Mawhinney, Dr Brian	Sproat, Iain
Maxwell-Hyslop, Robin	Squire, Robin
Mayhew, Patrick	Stanbrook, Ivor
Mellor, David	Stanley, John
Meyer, Sir Anthony	Steen, Anthony
Miller, Hal (B'grove)	Stevens, Martin
Mills, Iain (Meriden)	Stewart, Ian (Hitchin)
Mills, Peter (West Devon)	Stewart, A.(E Renfrewshire)
Miscampbell, Norman	Stokes, John
Mitchell, David (Basingstoke)	Stradling Thomas, J.
Moate, Roger	Tapsell, Peter
Molyneaux, James	Taylor, Teddy (S'end E)
Monro, Hector	Thatcher, Rt Hon Mrs M.
Montgomery, Fergus	Thomas, Rt Hon Peter
Moore, John	Thompson, Donald
Morgan, Geraint	Thorne, Neil (Ilford South)
Morris, M. (N'hampton S)	Thornton, Malcolm
Morrison, Hon C. (Devizes)	Townend, John (Bridlington)
Morrison, Hon P. (Chester)	Townsend, Cyril D, (B'heath)
Mudd, David	Trippier, David
Murphy, Christopher	Trotter, Neville
Myles, David	van Straubenzee, W. R.
Neale, Gerrard	Vaughan, Dr Gerard
Needham, Richard	Viggers, Peter
Nelson, Anthony	Waddington, David
Neubert, Michael	Wakeham, John
Newton, Tony	Waldegrave, Hon William
Nott, Rt Hon John	Walker, B. (Perth )
Onslow, Cranley	Walker-Smith, Rt Hon Sir D.
Oppenheim, Rt Hon Mrs S.	Wall, Patrick
Page, John (Harrow, West)	Waller, Gary
Page, Rt Hon Sir G. (Crosby)	Walters, Dennis
Page, Richard (SW Herts)	Ward, John
Parkinson, Cecil	Warren, Kenneth
Parris, Matthew	Watson, John
Patten, Christopher (Bath)	Wells, John (Maidstone)
Patten, John (Oxford)	Wells, Bowen
Pattie, Geoffrey	Wheeler, John
Pawsey, James	Whitelaw, Rt Hon William
Percival, Sir Ian	Whitney, Raymond
Peyton, Rt Hon John	Wickenden, Keith
Pink, R. Bonner	Wiggin, Jerry
Pollock, Alexander	Wilkinson, John

Williams, D.(Montgomery)
Winterton, Nicholas	Tellers for the Noes:
Wolfson, Mark	Mr. Spencer Le Marchant and
Young, Sir George (Acton)	Mr. Anthony Berry.
Younger, Rt Hon George

Question accordingly negatived.

Main Question put:—

The House divided: Ayes 306, Noes 248.

Division No. 228]	[10.15 pm
AYES
Adley, Robert	du Cann, Rt Hon Edward
Aitken, Jonathan	Dunn, Robert (Dartford)
Alexander, Richard	Durant, Tony
Alison, Michael	Dykes, Hugh
Amery, Rt Hon Julian	Eden, Rt Hon Sir John
Ancram, Michael	Edwards, Rt Hon N. (P'broke)
Arnold, Tom	Eggar, Tim
Atkins, Rt Hon H.(S'thorne)	Elliott, Sir William
Atkins, Robert(Preston N)	Emery, Peter
Atkinson, David (B'm'th,E)	Eyre, Reginald
Baker, Kenneth(St.M'bone)	Fairbairn, Nicholas
Baker, Nicholas (N Dorset)	Fairgrieve, Russell
Banks, Robert	Faith, Mrs Sheila
Beaumont-Dark, Anthony	Farr, John
Bendall, Vivian	Fell, Anthony
Bennett, Sir Frederic (T'bay)	Fenner, Mrs Peggy
Benyon, Thomas (A'don)	Finsberg, Geoffrey
Benyon, W. (Buckingham)	Fisher, Sir Nigel
Best, Keith	Fletcher, A. (Ed'nb'gh N)
Bevan, David Gilroy	Fletcher-Cooke, Sir Charles
Biffen, Rt Hon John	Fookes, Miss Janet
Biggs-Davison, John	Forman, Nigel
Blackburn, John	Fowler, Rt Hon Norman
Blaker, Peter	Fox, Marcus
Body, Richard	Fraser, Rt Hon Sir Hugh
Bonsor, Sir Nicholas	Fraser, Peter (South Angus)
Boscawen, Hon Robert	Fry, Peter
Bottomley, Peter (W'wich W)	Galbraith, Hon T. G. D.
Bowden, Andrew	Gardner, Edward (S Fylde)
Boyson, Dr Rhodes	Garel-Jones, Tristan
Braine, Sir Bernard	Gilmour, Rt Hon Sir Ian
Bright, Graham	Glyn, Dr Alan
Brinton, Tim	Goodhart, Philip
Brittan, Leon	Goodlad, Alastair
Brooke, Hon Peter	Gow, Ian
Brotherton, Michael	Gower, Sir Raymond
Brown, Michael(Brigg & Sc'n)	Gray, Hamish
Browne, John (Winchester)	Greenway, Harry
Bruce-Gardyne, John	Grieve, Percy
Bryan, Sir Paul	Griffiths, E.(B'y St. Edm'ds)
Buchanan-Smith, Alick	Griffiths, Peter (Portsm'th N)
Buck, Antony	Grist, Ian
Budgen, Nick	Grylls, Michael
Bulmer, Esmond	Gummer, John Selwyn
Burden, Sir Frederick	Hamilton, Hon A.
Butcher, John	Hamilton, Michael (Salisbury)
Cadbury, Jocelyn	Hampson, Dr Keith
Carlisle, John (Luton West)	Hannam, John
Carlisle, Kenneth (Lincoln)	Haselhurst, Alan
Carlisle, Rt Hon M. (R'c'n )	Hastings, Stephen
Chalker, Mrs. Lynda	Havers, Rt Hon Sir Michael
Channon, Rt. Hon. Paul	Hawkins, Paul
Chapman, Sydney	Hawksley, Warren
Clark, Hon A. (Plym'th, S'n)	Hayhoe, Barney
Clark, Sir W. (Croydon S)	Heath, Rt Hon Edward
Clarke, Kenneth (Rushcliffe)	Heddle, John
Clegg, Sir Walter	Henderson, Barry
Cockeram, Eric	Heseltine, Rt Hon Michael
Colvin, Michael	Hicks, Robert
Cope, John	Higgins, Rt Hon Terence L.
Cormack, Patrick	Hill, James
Corrie, John	Holland, Philip (Carlton)
Costain, Sir Albert	Hooson, Tom
Critchley, Julian	Hordern, Peter
Dean, Paul (North Somerset)	Howe, Rt Hon Sir Geoffrey
Dickens, Geoffrey	Howell, Rt Hon D. (G'ldf'd)
Douglas-Hamilton, Lord J.	Howell, Ralph (N Norfolk)
Dover, Denshore	Hunt, David (Wirral)

Hunt, John (Ravensbourne)	Pattie, Geoffrey
Hurd, Hon Douglas	Pawsey, James
Irving, Charles (Cheltenham)	Percival, Sir Ian
Jenkin, Rt Hon Patrick	Peyton, Rt Hon John
Johnson Smith, Geoffrey	Pink, R. Bonner
Jopling, Rt Hon Michael	Pollock, Alexander
Kaberry, Sir Donald	Porter, Barry
Kershaw, Anthony	Prentice, Rt Hon Reg
Kimball, Marcus	Price, Sir David (Eastleigh)
King, Rt Hon Tom	Prior, Rt Hon James
Kitson, Sir Timothy	Proctor, K. Harvey
Knight, Mrs Jill	Pym, Rt Hon Francis
Knox, David	Raison, Timothy
Lamont, Norman	Rathbone, Tim
Lang, Ian	Rees, Peter (Dover and Deal)
Langford-Holt, Sir John	Rees-Davies, W. R.
Latham, Michael	Renton, Tim
Lawrence, Ivan	Rhodes James, Robert
Lawson, Rt Hon Nigel	Rhys Williams, Sir Brandon
Lee, John	Ridley, Hon Nicholas
Lennox-Boyd, Hon Mark	Ridsdale, Sir Julian
Lester, Jim (Beeston)	Rifkind, Malcolm
Lewis, Kenneth (Rutland)	Rippon, Rt Hon Geoffrey
Lloyd, Peter (Fareham)	Roberts, M. (Cardiff NW)
Loveridge, John	Roberts, Wyn (Conway)
Luce, Richard	Rossi, Hugh
Lyell, Nicholas	Royle, Sir Anthony
McCrindle, Robert	St. John-Stevas, Rt Hon N.
Macfarlane, Neil	Scott, Nicholas
MacGregor, John	Shaw, Giles (Pudsey)
MacKay, John (Argyll)	Shaw, Michael (Scarborough)
Macmillan, Rt Hon M.	Shepherd, Colin (Hereford)
McNair-Wilson, M. (N'bury)	Shepherd, Richard
McNair-Wilson, P. (New F'st)	Shersby, Michael
McQuarrie, Albert	Silvester, Fred
Madel, David	Sims, Roger
Major, John	Skeet, T. H. H.
Marland, Paul	Speed, Keith
Marlow, Tony	Speller, Tony
Marshall, Michael (Arundel)	Spence, John
Marten, Neil (Banbury)	Spicer, Jim (West Dorset)
Mates, Michael	Spicer, Michael (S Worcs)
Mather, Carol	Sproat, Iain
Mawby, Ray	Squire, Robin
Mawhinney, Dr Brian	Stanbrook, Ivor
Maxwell-Hyslop, Robin	Stanley, John
Mayhew, Patrick	Steen, Anthony
Mellor, David	Stevens, Martin
Meyer, Sir Anthony	Stewart, Ian (Hitchin)
Miller, Hal (B'grove)	Stewart, A.(E Renfrewshire)
Mills, Iain (Meriden)	Stokes, John
Mills, Peter (West Devon)	Stradling Thomas, J.
Miscampbell, Norman	Tapsell, Peter
Mitchell, David (Basingstoke)	Taylor, Teddy (S'end E)
Moate, Roger	Thatcher, Rt Hon Mrs M.
Monro, Hector	Thomas, Rt Hon Peter
Montgomery, Fergus	Thompson, Donald
Moore, John	Thorne, Neil (Ilford South)
Morgan, Geraint	Thornton, Malcolm
Morris, M. (N'hampton S)	Townend, John (Bridlington)
Morrison, Hon C. (Devizes)	Townsend, Cyril D, (B'heath)
Morrison, Hon P. (Chester)	Trippier, David
Mudd, David	Trotter, Neville
Murphy, Christopher	van Straubenzee, W. R.
Myles, David	Vaughan, Dr Gerard
Neale, Gerrard	Viggers, Peter
Needham, Richard	Waddington, David
Nelson, Anthony	Wakeham, John
Neubert, Michael	Waldegrave, Hon William
Newton, Tony	Walker, B. (Perth )
Nott, Rt Hon John	Walker-Smith, Rt Hon Sir D.
Onslow, Cranley	Wall, Patrick
Oppenheim, Rt Hon Mrs S.	Waller, Gary
Page, John (Harrow, West)	Walters, Dennis
Page, Rt Hon Sir G. (Crosby)	Ward, John
Page, Richard (SW Herts)	Warren, Kenneth
Parkinson, Cecil	Watson, John
Parris, Matthew	Wells, John (Maidstone)
Patten, Christopher (Bath)	Wells, Bowen
Patten, John (Oxford)	Wheeler, John

Whitelaw, Rt Hon William	Wolfson, Mark
Whitney, Raymond	Young, Sir George (Acton)
Wickenden, Keith	Younger, Rt Hon George
Wiggin, Jerry
Wilkinson, John	Tellers for the Ayes:
Williams, D.(Montgomery)	Mr. Spencer Le Marchant and
Winterton, Nicholas	Mr. Anthony Berry.

NOES
Abse, Leo	Ellis, R. (NE D'bysh're)
Adams, Allen	English, Michael
Allaun, Frank	Ennals, Rt Hon David
Alton, David	Evans, loan (Aberdare)
Anderson, Donald	Evans, John (Newton)
Archer, Rt Hon Peter	Ewing, Harry
Ashley, Rt Hon Jack	Faulds, Andrew
Ashton, Joe	Field, Frank
Atkinson, N.(H'gey)	Fitch, Alan
Bagier, Gordon A.T.	Flannery, Martin
Barnett, Guy (Greenwich)	Fletcher, Raymond (Ilkeston)
Barnett, Rt Hon Joel (H'wd)	Fletcher, Ted (Darlington)
Beith, A. J.	Foot, Rt Hon Michael
Bennett, Andrew(St'kp't N)	Ford, Ben
Bidwell, Sydney	Forrester, John
Booth, Rt Hon Albert	Foster, Derek
Boothroyd, Miss Betty	Foulkes, George
Bottomley, Rt Hon A.(M'b'ro)	Fraser, J. (Lamb'th, N'w'd)
Bray, Dr Jeremy	Freud, Clement
Brocklebank-Fowler, C.	Garrett, John (Norwich S)
Brown, Hugh D. (Provan)	Garrett, W. E. (Wallsend)
Brown, R. C. (N'castle W)	George, Bruce
Brown, Ron (E'burgh, Leith)	Gilbert, Rt Hon Dr John
Buchan, Norman	Ginsburg, David
Callaghan, Rt Hon J.	Golding, John
Callaghan, Jim (Midd't'n & P)	Graham, Ted
Campbell, Ian	Grant, George (Morpeth)
Campbell-Savours, Dale	Grant, John (Islington C)
Canavan, Dennis	Harrison, Rt Hon Walter
Cant, R. B.	Hart, Rt Hon Dame Judith
Carmichael, Neil	Hattersley, Rt Hon Roy
Clark, Dr David (S Shields)	Haynes, Frank
Cocks, Rt Hon M. (B'stol S)	Healey, Rt Hon Denis
Concannon, Rt Hon J. D.	Heffer, Eric S.
Conlan, Bernard	Hogg, N. (E Dunb't'nshire)
Cook, Robin F.	Holland, S. (L'b'th, Vauxh'll)
Cowans, Harry	Home Robertson, John
Crowther, J. S.	Homewood, William
Cryer, Bob	Hooley, Frank
Cunliffe, Lawrence	Howells, Geraint
Cunningham, G. (Islington S)	Huckfield, Les
Cunningham, Dr J. (W'h'n)	Hughes, Robert (Aberdeen N)
Dalyell, Tam	Hughes, Roy (Newport)
Davidson, Arthur	Janner, Hon Greville
Davies, Rt Hon Denzil (L'lli)	Jay, Rt Hon Douglas
Davies, Ifor (Gower)	John, Brynmor
Davis, Clinton (Hackney C)	Johnson, James (Hull West)
Davis, T. (B'ham, Stechf'd)	Johnson, Walter (Derby S)
Deakins, Eric	Johnston, Russell (Inverness)
Dean, Joseph (Leeds West)	Jones, Rt Hon Alec (Rh'dda)
Dempsey, James	Jones, Barry (East Flint)
Dewar, Donald	Jones, Dan (Burnley)
Dixon, Donald	Kaufman, Rt Hon Gerald
Dobson, Frank	Kerr, Russell
Dormand, Jack	Kilfedder, James A.
Douglas, Dick	Kilroy-Silk, Robert
Douglas-Mann, Bruce	Kinnock, Neil
Dubs, Alfred	Lamond, James
Duffy, A. E. P.	Leighton, Ronald
Dunn, James A.	Lestor, Miss Joan
Dunwoody, Hon Mrs G.	Lewis, Arthur (N'ham NW)
Eadie, Alex	Lewis, Ron (Carlisle)
Eastham, Ken	Litherland, Robert
Edwards, R. (W'hampt'n S E)	Lofthouse, Geoffrey

Lyon, Alexander (York)	Rodgers, Rt Hon William
Lyons, Edward (Bradf'd W)	Rooker, J. W.
McCartney, Hugh	Ross, Ernest (Dundee West)
McDonald, Dr Oonagh	Ross, Stephen (Isle of Wight)
McElhone, Frank	Rowlands, Ted
McGuire, Michael (Ince)	Ryman, John
McKay, Allen (Penistone)	Sheldon, Rt Hon R.
McKelvey, William	Shore, Rt Hon Peter
Maclennan, Robert	Short, Mrs Renée
McMahon, Andrew	Silkin, Rt Hon J. (Deptford)
McNally, Thomas	Silkin, Rt Hon S. C. (Dulwich)
McTaggart, Robert	Silverman, Julius
McWilliam, John	Skinner, Dennis
Magee, Bryan	Smith, Cyril (Rochdale)
Marks, Kenneth	Smith, Rt Hon J. (N Lanark)
Marshall, D(G'gow S'ton)	Snape, Peter
Marshall, Dr Edmund (Goole)	Soley, Clive
Marshall, Jim (Leicester S)	Spearing, Nigel
Martin, M(G'gow S'burn)	Spriggs, Leslie
Mason, Rt Hon Roy	Stallard, A. W.
Maxton, John	Steel, Rt Hon David
Maynard, Miss Joan	Stewart, Rt Hon D. (W Isles)
Meacher, Michael	Stoddart, David
Mellish, Rt Hon Robert	Stott, Roger
Mikardo, Ian	Strang, Gavin
Millan, Rt Hon Bruce	Straw, Jack
Miller, Dr M. S. (E Kilbride)	Summerskill, Hon Dr Shirley
Mitchell, Austin (Grimsby)	Taylor, Mrs Ann (Bolton W)
Mitchell, R. C. (Soton Itchen)	Thomas, Dafydd (Merioneth)
Morris, Rt Hon A. (W'shawe)	Thomas, Jeffrey (Abettillery)
Morris, Rt Hon C. (O'shaw)	Thomas, Mike (Newcastle E)
Morris, Rt Hon J. (Aberavon)	Thomas, Dr R.(Carmarthen)
Morton, George	Thorne, Stan (Preston South)
Moyle, Rt Hon Roland	Tilley, John
Mulley, Rt Hon Frederick	Tinn, James
Newens, Stanley	Torney, Tom
Oakes, Rt Hon Gordon	Urwin, Rt Hon Tom
Ogden, Eric	Varley, Rt Hon Eric G.
O'Halloran, Michael	Wainwright, R.(Colne V)
O'Neill, Martin	Walker, Rt Hon H.(D'caster)
Orme, Rt Hon Stanley	Watkins, David
Paisley, Rev Ian	Weetch, Ken
Park, George	Welsh, Michael
Parker, John	White, Frank R.
Parry, Robert	White, J. (G'gow Pollok)
Pavitt, Laurie	Whitehead, Phillip
Pendry, Tom	Whitlock, William
Penhaligon, David	Wigley, Dafydd
Powell, Raymond (Ogmore)	Willey, Rt Hon Frederick
Prescott, John	Williams, Rt Hon A.(S'sea W)
Price, C. (Lewisham W)	Wilson, Gordon (Dundee E)
Race, Reg	Wilson, Rt Hon Sir H.(H'ton)
Radice, Giles	Wilson, William (C'try SE)
Rees, Rt Hon M (Leeds S)	Winnick, David
Richardson, Jo	Woodall, Alec
Roberts, Albert (Normanton)	Woolmer, Kenneth
Roberts, Allan (Bootle)	Wrigglesworth, Ian
Roberts, Ernest (Hackney N)	Young, David (Bolton E)
Roberts, Gwilym (Cannock)
Robertson, George	Tellers for the Noes:
Robinson, G. (Coventry NW)	Mr. Donald Coleman and
Robinson, P. (Belfast E)	Mr. James Hamilton.

Question accordingly agreed to.

Resolved, That this House, deeply concerned at the hardship resulting from high levels of unemployment, supports the measures already taken to provide special assistance for those worst affected; and believes that increasing prosperity and employment can only be achieved on a permanent basis by defeating inflation and creating conditions in which British enterprise competes successfully at home and abroad.