Employment and Industrial Relations

HC Deb 09 November 1981 vol 12 cc310-95 3.35 pm

The Secretary of State for Employment (Mr. Norman Tebbit)

It is, of course, entirely proper that during the debate on the motion we should discuss not only the problems of unemployment but those of training and industrial relations. However, to avoid any possible disappointment, I say at once that I shall not be able to convey to the House today my proposals that wilt be embodied in a Bill later in the Session. I hope that it will not be long before I am able to do so.

I deal first with the matter that is perhaps the dominant question of the day—unemployment. I believe that it would help in all our discussions, and perhaps in finding solutions to the problems, if at least the Opposition could admit that high unemployment is not a uniquely British phenomenon. World recession has meant that other industrialised nations are suffering, too. Unemployment in Germany rose by 100,000 last month. In France, the total recently passed 2 million. The rates of increase in those and many other countries exceed ours. Although the trend of unemployment is still rising in this country, at least it is now doing so far less rapidly than it was last winter.

Other aspects give us cause for some small hope. The trend of vacancies that had been uncertain for some months now seems to have hardened into an increasing trend. The number of declared redundancies is substantially down from last winter—from about 50,000 a month to about 35,000 a month—and there is some comfort to be drawn from the fact that industrial production is up. Short-time working has fallen sharply and more overtime is being worked.

There is no point in raising false hopes, and although the number of people without work fell for the first time in many months in October—we welcome that—we recognise that there is still no room for complacency and that there is a long way to go before any of us can be happy about the trends in unemployment. We shall not see a sustained fall in unemployment until economic recovery is firmly established, until we are winning back customers that we have lost to other countries. That is why the fight to conquer inflation and get the economy right must continue for the sake of the unemployed as well as those still in work, retired people and those who are not yet at work. As I have said, unemployment is still rising, but people are finding jobs as well as losing them. There is a constant dynamic turnover of jobs.

Mr. Dennis Canavan (West Stirlingshire)

Oh really.

Mr. Tebbit

The hon. Member for West Stirlingshire (Mr. Canavan) purports to find something comical in that. I think that at times he would prefer it is people were not finding jobs because it would fall in with his view of the economy.

Every week well over 100,000 people find new jobs. Of course, we all agree that far too many have been unemployed for too long, but the market can recover and it can generate new jobs if we give it the chance and the right conditions for growth.

The key to the right conditions for growth is to restore our competitiveness, and there are signs that we are having some success. After the massive loss of competitiveness in the decade from 1970 to 1980, when—I repeat the figures because Opposition Members do not seem to have understood them—money incomes rose by 335 per cent. while output rose by 16 per cent., labour costs have now stabilised.They remained virtually unchanged since the beginning of the year. That, together with the fact that we are now in the middle of the inflation league table, offers hope that we can make real progress towards our aim of a sound and stable economy. The settlement at British Leyland and the agreement in other firms to freeze or even to cut pay have shown that there is a growing understanding of the facts of economic life — no customers, no cash and no cash, no jobs. There can be no argument about those economic facts of life.

Even so, we have a long way to go. The dramatic figures on productivity, using similar equipment to produce similar products, provided by Ford illustrate the point. Can anyone doubt that, while it takes 40 man-hours to build a Ford Escort at Dagenham but only 21 at Saarlouis using identical equipment, unemployment will be lower and wages higher in Germany than in Britain? Can any hon. Member dispute that? From the lack of response, I think that the House has found common ground. I hope that we can build on that and that Opposition Members will praise those who are trying to reduce the gap.

There is little doubt that in some industries—[Interruption.] Does the hon. Member for Feltham and Heston (Mr. Kerr) wish to ask a question?

Mr. Russell Kerr (Feltham and Heston)

I was suggesting that the Minister should get rid of the Chancellor of the Exchequer.

Mr. Tebbit

I only half heard the hon. Gentleman's sedentary remark. I thought he said "I will tell you how …". No such luck. The hon. Gentleman does not have an idea in his head, and that is his problem.

There is little doubt that in some industries—for example, the motor industry—even if we reclaim the market share new technologies may mean a loss of jobs in the short run. However, new opportunities are constantly arising elsewhere as new technologies are applied. We cannot afford to ignore the opportunities that they provide to modernise our industry and expand our markets. Our competitors will not wait for us. They are moving now, and are accelerating faster than us.

Of course, there are fears about the effect on jobs of introducing new technology, especially among those who think that their skills will be less and less in demand, or even those who think that the numbers of members in their unions will fall. That is nothing new, and new jobs inevitably emerge to replace the old. The railways destroyed the jobs of ostlers and stagecoach builders, but a new industry was created and both trade and industry were stimulated into new growth in wealth and jobs.

The opposition to new technology is not openly Luddite. It is a reasoned Luddism—an attempt to hide behind a cloak of apparent reasonableness. The argument is "Oh yes, we will accept the railways provided all the ostlers and stagecoach builders continue in their old jobs and that the profits of the railways are used to dig canals to subsidise horse-drawn traffic." That is the farcical argument taking place in British industry today, while British jobs—not British goods—are exported.

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

The Minister appears to be saying that only old industries are disappearing. In many constituencies new factories producing brand new products with high technology have fallen because of the Government's policies. Will the right hon. Gentleman address himself to those factories, and not to the mythical old industries that he believes dominate our constituencies?

Mr. Tebbit

The hon. Gentleman should ask himself why companies which he intimated are successful are not beating their competitors overseas and winning markets. Both interest rates and energy prices make a minute contribution to total overall costs compared with wages. In recent months energy costs in Britain have been falling relative to those of our competitors overseas. I hope that the hon. Gentleman will greet that fact with good cheer and will admit that the problem is less serious now than it was a year ago.

Dr. Oonagh McDonald (Thurrock)

The Minister said that energy costs were a small proportion of overall costs. That depends on the industry. For example, the paper and board industry, which is attempting to keep going in my constituency, is finding that energy costs are rising more than labour costs. Firms have suffered high energy costs while their competitors have received subsidies. The Minister is talking nonsense.

Mr. Tebbit

I am grateful for the hon. Lady's support. I shall do a deal with her. If she can persuade the National Union of Mineworkers to dig coal rather more cheaply, it may be possible to reduce the price of electricity because its price is determined primarily by the price of coal. I shall go a step further. I shall do even more to persuade my colleagues to find ways to reduce the price of energy to the mills in the hon. Lady's constituency if she can satisfy me that their unit labour costs are lower than those of their overseas competitors. The hon. Lady should suggest to the unions that they govern their costs first before we do more in other areas.

Mr. Joel Barnett (Heywood and Royton)

rose——

Mr. Tebbit

I shall not give way.

Mr. Barnett

Surely the Minister will give way to me.

Mr. Speaker

It is clear that the Minister is not giving way.

Mr. Tebbit

The right hon. Member for Heywood and Royton (Mr. Barnett) is right; I can never resist giving way to him.

Mr. Barnett

Does the Minister agree that it is Government policy to increase energy prices to reduce the borrowing requirement?

Mr. Tebbit

It is Government policy to ensure that energy producers make a sensible rate of return on the public investment in them.

If the British labour force is to respond to changes, we need a better training system. For years we have struggled with inadequate arrangements, far inferior to those of our competitors. We have perpetuated systems that have encouraged rather than helped to reduce rigidities and barriers in the labour market—[Interruption.] I am being goaded too far today.

Mr. Russell Kerr

rose——

Mr. Tebbit

I shall not give way to the hon. Gentleman again because he would have even less to say this time than he said just now.

Entry to certain occupations has been limited to those who have served their time in traditional apprenticeships, and, despite skill shortages, little or no use has been made of adult trainees. Better arrangements for skill training at all levels is the first objective of the new training initiative. My hon. Friend the Under-Secretary will deal with training questions in greater detail if he catches your eye, Mr. Speaker, at about 9.30 pm.

I shall confine myself to reminding the House that the consultative period for that document has ended. There has been broad agreement on the need for better arrangements for skill training and also on the other two objectives of improving the vocational education and training of all youngsters and the creation of more opportunities for adults to train. We attach the greatest importance to all three objectives. As my right hon. Friend the Prime Minister has indicated, I hope by the turn of the year to bring forward proposals for achieving these objectives, in particular through a comprehensive training system for the young unemployed. At present many young people have no opportunity to acquire the foundation of everyday working skills upon which specialist skills can be built. It is our intention to ensure that in future they all have that opportunity.

Mr. Robin Maxwell-Hyslop (Tiverton)

When my right hon. Friend reviews this very important subject, will he try to ensure that the rates of pay received, for example, by engineering apprentices are not so much less than they could get under the youth opportunities programme that economic incentive channels them out of the apprenticeships that this country desperately needs and will need?

Mr. Tebbit

I was about to refer to that point.

We are all agreed that we have very much to learn from other countries' systems of vocational training—in particular, that of Germany. I hope that that agreement will include following the example of Germany in the pay of young trainees relative to adult workers. That would in general help to ease the problem which my hon. Friend has raised and, indeed, would ease the problem which is common in industry—that young apprentices are so expensive to take on that employers find that they simply cannot afford to do so. It can be very expensive to employ a young man in his first year as an apprentice, bearing in mind the amount of productive work and the amount of help that he can give.

The House will recall that last November my predecessor, the present Secretary of State for Northern Ireland, stated the Government's aim to move towards greater reliance on voluntary arrangements for training and asked the Manpower Services Commission to conduct a review of training arrangements in each sector. The commission submitted to my right hon. Friend and published the outcome of that review, entitled "Framework for the Future", at the end of July.

Since then there has been a further period of consultation, and this has nearly been completed. My right hon. Friend said last July that he hoped to be in a position to announce decisions early in the new Session so as to put an end to the uncertainty. That is very much my own view, and I expect to be able to make a statement soon. I shall listen carefully to what is said in the debate today, as I will to what the TUC representatives say to me when I meet them later this afternoon. If the House will excuse me, I shall be absent from the debate for an hour or so in order to attend that meeting.

As I have said many times, I welcome such meetings with the TUC on matters of common interest. As observed in a speech to Conservative trade unionists on Saturday, I believe that unions would speak with greater credibility if the procedures for electing officers and for ascertaining members' views clung more closely to the principle of one man, one secret vote than is the practice in some cases.

I repeat that I am not anxious to rewrite completely union rule books, but I beg unions to understand that their standing and authority has not been enhanced or assured by the scenes in the casting of votes in the election for the deputy leader of the Labour Party; nor has their standing been enhanced by the way in which some trade unions have handled some industrial disputes of late.

There is pressure from the public—and the trade unionists in many cases—for reform. I stand ready to assist and to offer the assistance of my Department if they wish to have that assistance in reforming those affairs. [Interruption.] If they do not wish it, I make no threat, but I believe that there is a general feeling that the unions ought to be given back to their members, not held in the hands of militant minorities, and the only democratic way of doing that is by having free and fair elections.

In discussing the affairs of trade unions, it is perhaps natural that we should turn to the strike record. That is something about which we used to hear a great deal, particularly as Labour Members have always been ready to claim that they are the only people who understand trade unions, and to pose as the party of industrial peace and harmony. Their memories are not only selective; they are short. They cannot remember the winter of discontent. I remind them that the record of strikes and days lost from strikes shows the true picture.

The total number of stoppages due to industrial disputes in 1980 was the lowest for 39 years, and it was less than half the annual average for the previous 10 years. [Interruption.] I hope that Labour Members are not suggesting that the only way to reduce the number of strikes is to increase unemployment. If that is their conclusion, they are treading on very dangerous ground. During the last six months of 1980 the number of days lost was the lowest since 1966, and by any comparison our recent strike record in British industry has been outstanding.

I accept that this improvement does not necessarily mean that there has been a great change of heart or that the underlying causes of industrial conflict have disappeared, but I believe that it shows that there are now the beginnings of a much greater realism in pay negotiations and a much greater awareness that increases in pay have to be earned and that any improvement in real earnings can come only from a improvement in productivity, leading to an improvement in profitability. I hope that that is common ground among hon. Members. I am glad that there seems to be consent to that proposition, so we are indeed making progress. [Interruption.] Does the right hon. Member for Ebbw Vale (Mr. Foot) want to say something? I am always ready to extend the utmost courtesy to him and I hope that he will always do the same to me. I hope it can also be agreed that strikes destroy jobs, and that the reckless pursuit of inflationary wage demands destroys jobs. The tragedy is that it has taken so long for those truths to be learnt, and even now there are powerful voices which still deny them—and some weekly voices, too.

The priority now must be to make sure that these lessons are not forgotten. If recovery is to be real and lasting, the new spirit of realism has to carry through to the stage when people are less afraid of losing their jobs through the immediate closure of the firms which employ them. It has to be based on a better understanding of these basic economic facts of life.

We need a concerted, long-term effort by management to persuade its employees, and by trade unions to persuade their members, that the lessons we have learnt in the period of world recession will be every bit as vital in the period of recovery. We must hold on to the very real gains that have been made in productivity and not allow them to be lost as the pressures ease. We must preserve the spirit of realism in pay negotiations and ensure that our strike record does not again destroy our ability to compete in international markets. That is the task not only of Government but of management and of trade union leaders.

Mr. David Winnick (Walsall, North)

Will the right hon. Gentleman give way?

Mr. Tebbit

This will have to be the last time.

Mr. Winnick

Would it not be useful to bear in mind, especially when the right hon. Gentleman sees the TUC leaders later today, that much of what he is now saying was said 10 years ago during the passage of the Industrial Relations Bill? Did not the facts then show that that measure would not work? Does he not appreciate that in the end no anti-union legislation will work? Why does not the right hon. Gentleman drop the prejudice which undoubtedly he and his colleagues have against the trade unions and seek their co-operation instead?

Mr. Tebbit

The legislation which I shall propose will not be anti-union legislation. It will be legislation to restore to people the rights which they had before some of them were removed by other trade union legislation.

I should like to say how much I admire the courage and the judgment of some leading trade unionists who have not been afraid to lead in the true interests not just of hard core militant, politically motivated activists but of their ordinary members and, indeed, of the nation. At a time when unions come under a great deal of criticism, it gave me considerable pleasure to read in The Guardian this morning of the measures that had been taken to save some British Airways routes in Scotland and the words of Mr. Colin Varndell, a member of the Transport and General Workers Union and chairman of the British Airways Trades Union Council, who said: We've done it and we intend to make it work. We must not forget that we are a nationalised industry, set up for the benefit of the people. Mr. Varndell had proposed savings of staff and more efficient ways of working in order that the airline should survive. That is the business of a trade union leader. Would that more people followed Mr. Varndell's example.

The task of such people would be made easier if the Opposition could bring themselves to give some public support and to welcome the improvement in our strike record and to acknowledge the importance of improving productivity and of moderation in wage demands. That would help greatly moderates in the trade unions who are looking after their members' true interests. The hon. Member for Walsall, North (Mr. Winnick) is worried again—

Mr. Winnick

I was referring to the right hon. Gentleman as being a moderate.

Mr. Tebbit

Of course. The House will not expect me to anticipate the announcement of our proposals for further legislation. I shall, however, say this today. Our proposals will fall into two main categories—those concerned with improving the operation of the labour market, and those concerned with personal liberty, particularly the closed shop.

I know that opposition Members think that my right hon. Friend the Secretary of State for Northern Ireland went too far in protecting the victims of the closed shop. They always did. The other day I came across a copy of a leader in The Times dated 2 December 1975 which for some reason I had decided to keep. The leader had the heading "Is Mr. Foot a Fascist?" It concerned the case of the Ferrybridge Six. It will do no harm to remind ourselves of the circumstances of that case. I shall give them briefly.

Six men were dismissed by the Central Electricity Generating Board for refusing to join one of the four trade unions that had concluded a closed shop agreement with the board. The six were members of a union, the Electricity Supply Union, which was not recognised by the board. They complained to a tribunal that they had been unfairly dismissed. The tribunal upheld the complaint on the grounds that the CEGB had not required all its employees to belong to one of the four unions and so, under the definition in the 1974 Act—the right hon. Gentleman's Act—there was no union membership agreement in force. But sacked they remained. What was the response of the then Secretary of State for Employment, now the Leader—yes, the Leader—of the Opposition? It was to introduce legislation which swept away the safeguards that had been inserted against his will in the 1974 Act.

Thereafter there was no hope of a remedy for anyone sacked for refusing to join a union except on the very narrow grounds of religious conviction, conceded in the 1976 Act. As everyone knows, the subsequent dismissal of three British Rail men under that legislation—now happily repealed—was found to be in violation of the European Convention on Human Rights. Perhaps later in the debate the Opposition will break their silence on that judgment and will give us the benefit of their reflections on it.

Recent events at Sandwell and Walsall have shown the same intolerance, the same mean-minded pursuit of regimentation and conformity. That is why we believe that further legislation on the closed shop is necessary.

Mr. John Evans (Newton)

Will the right hon. Gentleman give way?

Mr. Tebbit

No. I must get on with my speech. I know that what I say will be opposed by the corporatists and the authoritarians of the old Labour Party—perhaps, by the look of things recently, it should be the senile Labour Party. But what about the members of the new Labour Party, the SDP. They voted in 1976——

Mr. Evans

rose—

Mr. Tebbit

I shall not give way. They voted to sweep away the safeguards for individuals victimised by the closed shop. Do they stand by their votes now or do they support the measures in the 1980 Act?

Mr. Evans

rose—

Mr. Speaker

Order. I must make it clear that the Minister is not giving way and must therefore be allowed to continue.

Mr. Tebbit

I normally give way, but I do not wish unduly to extend my speech.

I hope that the SDP Members will make plain their intentions today. [HON. MEMBERS: "Where are they?"] The size of their attendance shows the extent of their interest. What about the SDP candidate for Crosby? She was prepared to join the picket line at Grunwick and to lend her name to a campaign that sought to drive a company out of business by preventing its employees from going to work. All hon. Members remember the disgraceful scenes of violence and disorder in which that campaign culminated.

As a result of the 1980 Act, the Act of my right hon. Friend, it is no longer lawful for someone, not even a politician, to picket employees at a place of work which is not his own to persuade people to strike. I hope that the SDP candidate at Crosby will make plain whether she is content to leave the law as it is or whether she would seek to change it so that she could get back to the picket line without fear of being prosecuted. That is perhaps sufficient controversy for a while.

Mr. Evans

Will the right hon. Gentleman give way?

Mr. Speaker

Order.

Mr. Tebbit

I shall make it easy, Mr. Speaker, but interventions only extend my speech.

Mr. Evans

I am grateful to the Secretary of State. He has referred at length to the 15 people he can record since 1975 who have lost their jobs under closed shop provisions. Undoubtedly he proposes in his new legislation to increase substantially the compensation that they will receive. Will he in the same Bill increase substantially the compensation for many thousands of workers who have lost their jobs in the same period through unfair dismissal practices by their employers?

Mr. Tebbit

I suggest that the hon. Gentleman waits until the Bill is published.

I return to the common ground. We are all agreed that the level of unemployment and its cost in every sense are appallingly high. I hope that even if stated briefly it will not be thought that it comes less from the heart when I say that if I believed there was a better or quicker way to end or lessen the hardship, the indignity and the pain of those who want to work and who are denied the opportunity to do so, I would take it.

Mr. Winnick

On your bike.

Mr. Tebbit

Many people do just that; or they walk, or take a bus. They seek work as they did in my father's generation. Each week 100,000 or more of them find work.

Mr. Winnick

Whereabouts?

Mr. Tebbit

All over the country.

I do not believe that any hon. Member would fail to follow it if there was a better way. Our difference lies not in what we want; we all agree about that. Our difference is one of judgment on how to achieve it. We are also agreed on the need for measures to ease the pain of those afflicted by unemployment. This is not the time to list the programme of special measures. It is sufficient to say that its cost of £1 billion this year and over £1.5 billion in 1982–83 will help 700,000 people a year, and, with the introduction of my vocational training scheme, even more in later years.

We have had to decide our priorities in the programme. Our first priority is centred on the young where the problem is at its worst. It is generally accepted that the worst unemployment is among the young, particularly the unskilled and poorly qualified young. Unemployment rates have also been rising faster among ethnic minorities than for the labour force generally. Clearly the worst affected are those in whom all the disadvantages are concentrated. If one is a young school leaver with poor academic qualifications, no vocational qualifications and living in an area of high unemployment, then being black and perhaps having a poor command of English are the last extra attributes one needs to find a job. Just as these groups are disproportionately affected, so the Government's special employment measures are helping such groups disproportionately. That is not discriminatory; it is a response to need.

It might be wise to question why unemployment rates among the ethnic minorites are disproportionately high. I have no intention of entering the debate on what part of the disadvantages of ethnic minority groups arises from unchangeable heredity and what part from changeable environment. I know not whether it is inevitable that the Jewish minority will continue to provide more than its statistical share of musicians, scientists and other talented people. I am just glad that we enjoy the advantage of their presence. I know not whether it is a matter of heredity that causes Asian shopkeepers to open their shops earlier and to close them later than many others. I am glad that there are more shops open for longer hours than there used to be, and I hope that no one suggests that the Asian community should be re-educated out of their habits. Nor do I know whether it is heredity or environment that produces more black fast bowlers than white ones.

What I know is that ethnic minorities suffer disadvantages in finding employment. Some of those disadvantages stem from the problems of communication and cultural unfamiliarity which beset any immigrant communities and worsen their chances of employment. But if that were all the problem, time would help to overcome it.

Apart from any basic cultural or other differences which will simply not go away, there is another aspect. I have no doubt that there is an element, though hard to quantify, of discrimination, not on fair and proper grounds of talent, suitability and qualification but on the unfair ground of mere prejudice. In Britain we have no need to torture ourselves in the belief that ours is a uniquely discriminatory society. We of European stock have no need to torture ourselves with guilt in the belief that it is only white people who are prejudiced or who discriminate on grounds of race, whichever way one likes to put it. [Interruption.] The hon. Member for Workington (Mr. Campbell-Savours) has a problem. This matter concerns the problems of high unemployment amongst ethnic minorities. I know that he wants to take advantage of the troubles that spring from it, but I want to do something to help to avoid such problems.

Our society is not free from prejudice and discrimination, but there are very few others with any right to criticise us for our ways without dealing with their own failures first. But our failings show up in employment, as in other aspects of society. We must ensure that there are no bars to the development of the talents of all citizens and that we discriminate only in favour of merit, ability, hard work and skill. I suspect that employers may find it helpful to have some broad guidance on what is expected of them to become what the Americans call "equal opportunity" employers, but I am certain that it would not help to adopt a bossy, bureaucratic system in an attempt to induce a sense of guilt unless some quota or norm of black, brown, white or yellow faces can be counted in the firm. That could all too easily do more harm than good. It could do nothing more, perhaps, than highlight and intensify resentments and create a backlash rather than to relieve them, and deepen divisions rather than bridge them. The aim must be to encourage not racial consciousness but colour blindness in employment.

Mr. John Grant (Islington, Central)

Will the Minister give way?

Mr. Tebbit

No. I hope that the hon. Gentleman will excuse me.

I return to the main thrust of our debate today and those that have gone before. The debate on the recent censure motion and the earlier stages of the debate on the Gracious Speech have given ample opportunity to the official Opposition—and, to be fair, they have taken it—to demonstrate that they have learnt nothing from their time in office, nothing from the winter of discontent, and nothing from their defeat, and that they have nothing new to say and no credible alternative to the Government's strategy.

Perhaps that is not quite fair. The Leader of the Opposition, when in Government, favoured the modernisation of Polaris, but he is now a unilateral disarmer again. But that is about all that he has learnt. That, and prejudiced hostility, apart, all that he and his colleagues have had to say has amounted to backsliding from what needs to be done to match and beat our competitors in winning customers, customers who are the only true sources of jobs. The Opposition, like everyone else, know that we have been losing ground against our competitors for years.

Mr. Winnick

That is because of you lot.

Mr. Tebbit

That has been so whilst we have been in office, as well as whilst office has been held by another party. The Opposition know that both inflation and unemployment have been on a rising trend for years. They know that our industrial relations law and practice needed fundamental reform. They knew it when they destroyed Barbara Castle's proposals in "In Place of Strife", and they paid for that in the strife of the winter of discontent.

If the Opposition want to destroy their party in continued unreasoning and unreasoned opposition to the reform of the law, that is their affair; but I see no reason why they should destroy the prospects of economic recovery as they do so.

The right hon. Member for Chesterfield (Mr. Varley) has today his chance to offer constructive suggestions and to tell us how he would hold back wages to what the economy can afford. He had better not exhume poor old Solomon Binding again. The right hon. Gentleman has the chance to say how he would create new jobs before reducing our labour costs relative to those of our competitors. He has the chance to offer something more than the mere windbaggery of non-inflationary expenditure that can be incurred without taxation or borrowing that can be accomplished without paying interest. If his only message is the same old Walt Disney refrain that we have heard before—"wishing will make it so"—he will have established yet again that there is no credible alternative to the Government's policies.

4.15 pm

Mr. Eric G. Varley (Chesterfield)

The new Secretary of State for Employment has managed effortlessly to give the same pleasing impression to the House today that he has given for the last 11 years. Having been given one of the most important responsibilities of the present Government—the assignment of dealing with probably the most difficult and intractable problem facing the British nation—he seems to be capable only of behaving, as we expected, like a street corner thug. His appointment is an insult to the unemployed. It is like appointing Dracula to treat a patient suffering from acute anaemia.

The right hon. Gentleman spoke for about 35 minutes, during which time we heard nothing of what he will do to help the unemployed. His only positive suggestion seems to be the one that he made in that notorious speech at Blackpool, when he started the tour of Britain cycle race. The debate on this Queen's Speech should be an occasion when he of all people and Tories in general ought to be at their most self-conscious about unemployment and the record of unemployment which has been created under the present Government.

Just before the Queen's Speech Of May 1979, the country was littered with hypocritical posters showing queues of young Conservatives pretending to be unemployed. The right hon. Gentleman and his right hon. and hon. Friends gave the impression, before the May 1979 general election, that unemployment under the Labour Government was intolerable and that the Conservatives would put it right. I agree that unemployment when the Labour Government were in power was at an unacceptable level, even though in May 1979 the figure was the lowest for three years. During the 12 months before May 1979, unemployment fell in every month. At the time of the first Queen's Speech under this Government, unemployment stood at 1,299,000 or 5.4 per cent. By the time of the second Queen's Speech, in November last year, unemployment had risen by nearly 900,000 to 2,163,000, or 8.9 per cent. The latest figure, for October this year, of 2,989,000—12.4 per cent—represents an increase of 826,000 over the figure at the time of last year's Queen's Speech, and nearly 1,600,000 more than when the present Government came into office.

We all know that last month's figure would have gone over the 3 million mark but for the record number of people who joined the youth opportunities programme—the programme that the Prime Minister, when in Opposition, used to talk about in such disparaging terms when she said that the jobs were not proper jobs.

Parallel with the rise in unemployment has been the fall in total employment. When the Labour Party left office in May 1979, the number of unemployed was unacceptable. Even so, more people were in work than when we took office five years earlier.

A rise in unemployment is not necessarily accompanied by a fall in the number of those employed, although under the Conservative Government it is. In Britain employment has fallen by 1.7 million in the two years to June 1981. In the first half of 1981 the fall has been 583,000. In manufacturing industry, which has borne the brunt of unemployment, employment has fallen by nearly 1,200,000 in the two years to June 1981. That is a catastrophic reduction of 16.5 per cent. In the textile industry the fall has been 23 per cent., and in the metal industry, 29 per cent.

Although all parts of Britain have suffered, the unique achievement of the Government is that the worst blows have been inflicted on the region that used to be the most prosperous—the West Midlands. In the first two years of this Government, employment in that region fell by 10.5 per cent.

The starting date of June 1979 is no accident. That was the date of the Government's first blundering Budget, which forced interest rates up to the then record level of 17 per cent. —a figure that the Government tried to disguise by abolishing the minimum lending rate. That seems to be the approach today. If they cannot solve the problem, they fiddle the statistics or abolish the indicators. The intolerable increase in unemployment and the devastating reduction in employment are the human manifestations of the Government's uniquely unsuccessful economic and industrial policies.

The Secretary of State mentioned British Leyland. Of course, if British Leyland had gone under, many more jobs would have been lost in the West Midlands, as well as in many other parts of hard-hit Britain. The Prime Minister recognised that fact when she opened the debate last Wednesday. She referred with satisfaction to the fact that British Leyland was back at work. She commented on what she called the solid progress that had been made at BL in recent years and pointed out that 200,000 jobs were at stake in BL and connected companies.

If the Secretary of State had his way, that solid progress would not have been made, because those jobs would have disappeared long ago. When the previous Government asked the House in 1975 for authority for financial assistance to save British Leyland, the right hon. Gentleman was one of a number of Conservative Back Benchers who defied his Whips and voted against assistance. He also made a characteristically unpleasant intervention in the debate when he argued that his constituents' money should not be put into British Leyland. If he had had his way, there would be no BL now for the Prime Minister to praise.

Sir Frederick Burden (Gillingham)

As the Labour Government appointed Mr. Edwardes, as he then was, do the Opposition support him in the views that he expressed recently?

Mr. Varley

Mr. Michael Edwardes, as he then was, was appointed—to the delight of the Government and Government services—by my right hon. Friend the Member for Bristol, South-East (Mr. Benn) to the National Enterprise Board.

Sir Frederick Burden

Answer the question.

Mr. Varley

I am coming to it, if the hon. Gentleman will be patient.

Mr. Michael Edwardes was a member of the National Enterprise Board, and he was appointed by the board as chairman of BL. He had the complete support of the board, and my right hon. Friend the then Prime Minister and I gladly endorsed the appointment. I am delighted at the progress that has been made. But the hon. Gentleman should bear in mind that there would be no BL to praise if the Secretary of State had had his way.

Mr. Tebbit

If the right hon. Gentleman were a little more open about the matter, he would admit that the objection was not to aiding BL. The objection was that the plan that the Government were attempting to implement was incapable of saving BL. The current plan is capable of saving BL.

While the right hon. Gentleman is speaking about the motor industry, perhaps he would tell us, just for luck, whether he believes that overmanning—it requires twice as many men to make a car in Britain as it does in Germany—has anything to do with unemployment in Britain.

Mr. Varley

The Secretary of State is wriggling his way out of the question. If he had had his way, there would be no indigenous motor car company today. He would have abolished it. No lame explanation from the Dispatch Box can hide that fact.

When my right hon. Friend the Leader of the Opposition suggested that we should deal with unemployment by increasing investment and output, he was criticised for allegedly being unrealistic, yet the sums that we suggested to help to solve the problem are as nothing compared with the financial loss caused by the Government's policies.

The loss of output in 1981 is equivalent to £25,000 million, which is no less than 10 per cent. of the national income. That is what the inflexibility of the Government has cost Britain this year alone. It is wealth that can never be retrieved, but it would have made the nation rich, even if we did not possess a drop of North Sea oil. Output in manufacturing has fallen by 17.5 per cent. since 1979. The Government, who promised to cut expenditure and taxation, are instead increasing expenditure and taxation to pay for mass unemployment, which is the direct outcome of their policies.

Mr. Raymond Whitney (Wycombe)

It is encouraging to hear a figure from the Opposition. The right hon. Gentleman quoted £25 billion as output lost. Where would that output be sold? Does he accept that we must buy our way into jobs and that it is no good producing £25 billion worth of goods if we cannot find people to buy them?

Mr. Varley

If we trace the history of the Government, we find that nearly every economic and industrial decision that they have taken since May 1979 has been an attack on jobs, markets and investment. All the figures now point to that fact. The dole queues, the fall in output, the rise in taxation and central Government expenditure, the attack on living standards and the increasing squalor of our social services are the sacrifices heaped on the altar of what the Government insist is the principal and paramount objective—the fight against inflation. However, two and a half years after the Government came to office, inflation is still higher than it was when the right hon. Lady walked into Downing Street.

I am sorry that the Prime Minister is not here today. I wished to ask her when inflation will come down to the figure that she inherited on 4 May 1979. If the right hon. Gentleman wishes to answer that question, I shall give way to him now. It will be a long time before that happens.

It is no good blaming inflation on pay rises, as the right hon. Gentleman did. No one bears a greater responsibility than hon. Members on the Government Benches for sabotaging the attempt of the previous Labour Government to achieve a rational approach to pay. The pay arrangements across the economy have never been more diverse or chaotic.

The Government have three pay policies. First, in private manufacturing some managements believe that they have the upper hand. In the main, if workers have had to choose between pay increases and losing their jobs, they have so far voted to work. Secondly, in the public service sector the Government have set an arbitrary percentage norm and they are prepared to face considerable disruption in their day-to-day administrative functions and tax-gathering arrangements and to politicise the Civil Service. The third policy is in the public trading sector-electricity supply, water, coal and gas. There the Government adopt the cynical stance of paying what is necessary to avoid trouble. Their pay policy consists of fear, diktat and cynicism-and mass unemployment. That is not a sensible pay policy. It is no way to run pay negotiations or to manage our complex economy.

The Financial Weekly, owned by Trafalgar House, broadly supports the Government. In an article the other day headed "The Thatcher disaster" it stated: Mrs. Thatcher was not elected to create prosperity (if it comes) … through the whip of unemployment … She and her Chancellor have miserably failed. And to blame that failure on the world recession is a cruel untruth … What a price we have paid. An industrial machine slowly rusting away. The Secretary of State has not told us how he is tackling the problems that the nation faces, but he is to launch an irrelevant diversion against the trade unions. The Government believe that, because of record unemployment, they can disregard the views of the trade union movement. If the Secretary of State hopes to achieve the tiniest success, he should know one thing. The day will come when he will need the co-operation of the organised trade union movement, just as much as any previous Government, Conservative or Labour. He will look for it in vain if he insists on kicking the trade unions in the teeth.

Mr. Tebbit

How did the right hon. Gentleman achieve that co-operation in the winter of 1978–79 when he needed it?

Mr. Varley

Although the right hon. Gentleman did not like it and tried to undermine it, for most of the time there was co-operation. At the end of the period of cooperation with the trade union movement, inflation was in single figures, productivity and investment were rising and we had growth in the economy. Nothing like that will happen under this Government. The right hon. Gentleman, who is abrasive and wishes to kick the trade unions in the teeth, would do better to listen to the right hon. and learned Member for Hexham (Mr. Rippon) who stated: Any Prime Minister who seeks to act as the leader of the nation rather than of a party must always try to seek the widest possible consensus of opinion. That was why Sir Winston Churchill in 1951–1955 had a great final period of office. He always sought to win the support of trade union leaders on the broad issues of national importance."—[Official Report, 4 November 1981; Vol. 12, c. 43.] The legislation on which Parliament will be asked to spend so much time will not create one extra job, although it may provide extra work for the lawyers. As I said during the passage of the legislation in the previous Session, when a Conservative Government introduce industrial relations legislation, whoever else loses out, the lawyers always win. From the leaks that we have had from the Department, it appears that the legislation will not solve one industrial dispute. Not one dispute in the past few years would have been made easier by the proposals.

Before the right hon. Gentleman commits himself to the legislation, he should study the results of the Tory Industrial Relations Act 1971. Far from improving industrial relations, it made them worse. It provoked strikes. Its only achievement was to bring overnight celebrity to that obscure functionary, the Official Solicitor. The architect of that folly, the then Solicitor-General, is now Chancellor of the Exchequer. There is no future in the right hon. Gentleman visiting the scene of his right hon. and learned Friend's crime. The futility of the legislation already carried by the Government was shown in the BL dispute last week. The picketing provisions were a complete failure.

By provoking the trade unions with the proposed legislation, the Secretary of State will drive them on to the streets when he should invite them into the conference room—not just when they request it, as this afternoon, but again and again—to talk about the problem of unemployment.

Mr. Tim Renton (Mid-Sussex)

Does the right hon. Gentleman believe that there should be no change in the law regarding trade unions? As the picketing legislation was not a success last week and flying pickets were present from the Socialist Workers Party, should we not reconsider the law on picketing? The shop stewards voted massively to stop BL returning to work, but the men showed next day that they wanted to go back to work. Is that not also a basis to reconsider the law?

Mr.Varley

I do not know what practical experience the hon. Gentleman has of picket lines. My message is that if the Secretary of State wishes to introduce Draconian anti-trade union legislation, with their majority, the Government can do so, but it will break in the right hon. Gentleman's hand, just as the previous legislation did. Dockers were gaoled and then released. The right hon. Gentleman should instead invite the trade unions into the conference room.

That is not only our view, although the right hon. Gentleman suggests that our caution is unique. The CBI expressed concern at its conference. Mr. Roland Long, industrial relations manager for International Harvester and a regional CBI council member in the North stated on the radio last week that there should not be further legislation on the closed shop. He said: In the vast majority of companies where the closed shop does exist, it exists without the slightest bit of aggravation. And certainly most companies have built into closed shop agreements, very adequate safeguards for those who have reservations about trade union membership". That is not what the Opposition say. Those are the words of a very experienced industrial relations director of a large company.

However, it is not only trade union reform or anti-trade union legislation on which the Secretary of State should be inviting the trade union's views. He should also be inviting the trade unions into the conference room to discuss the catastrophic decline in the level and quality of industrial training.

On Wednesday, the Prime Minister said: we see British industry slowly but inexorably improving".—[Official Report, 4 November 1981; Vol. 12, c. 22.] I wish that were so, in view of the statistics that I have given.

Two main factors will contribute to a permanent improvement in Britain's industrial competitiveness—first, an increase in manufacturing investment, the quality of that investment and what is obtained from it, and secondly, having a highly trained and skilled work force. On both those counts the Government have lamentably failed. Investment in United Kingdom manufacturing industry has dropped by an astonishing 18½ per cent. since the end of 1979 after a steady increase in the three previous years. We now have the most terrifying evidence that the number of apprenticeships is beginning to decline.

In the engineering industry, where we have experienced the most severe skills shortages at the end of every other recession—none of which has been as bad or as deep as the present slump—craft and technical recruits are at the lowest level ever recorded. Companies have recruited fewer than 12,000 apprentices. Although an additional 4,000 places have been funded by the Engineering Industry Training Board, it is estimated that there should have been at least 20,000 new apprentices this year to meet the engineering industry's future manpower needs. It is the same sorry story in other key sectors of the economy.

The number of apprentices recruited in road transport in 1980–81 was 60,359—only half the 1979–80 total. The road transport industry has estimated that the decline will go even further next year. I have a letter, which was sent to my hon. Friend the Member for West Lothian (Mr. Dalyell) by the staff at the Road Transport Industry Training Board in Livingston. That letter refers to low morale, pleads that experience and equipment in Livingston should not be abandoned and dispersed and says that everybody should pay tribute to what the training boards are doing. I do not know what the Secretary of State for Employment intends to do about that. I do not think that he can afford to abolish training organisations such as that in my hon. Friend's constituency.

The decline is apparent not only in engineering and road transport, but in the construction and printing industries. I have received the most pitiful letters from constituents whose children cannot get apprenticeship training. I expect that many hon. Members have received similar letters.

The Prime Minister made a great deal about the recent increase in the number of young people who have joined the youth opportunities programme. I shall continue to support that scheme, because there is at present no alternative.

Are the Prime Minister and the Secretary of Slate for Employment aware of the deep disillusionment now felt by young people about the youth opportunities scheme? First, the allowance has been frozen at £23.50 since the scheme's inception. An increase to restore the scheme to its original purchasing power is urgent. Secondly, when the programme was first introduced by a Labour Government, 70 per cent. of the participants obtained permanent jobs. However, the figure is now about 30 per cent. That figure and the placings will deteriorate further.

It is well to remember that a quarter of a million school leavers are without jobs, youth opportunities or work experience places and that they are still in the dole queue.

It is against that background of a falling number of apprentices, future skills shortages and the demoralisation of the young that the Government have plunged the industrial training boards into great uncertainty.

Mr. Nicholas Lyell (Hemel Hempstead)

rose——

Mr. Varley

I shall not give way. I apologise to the hon. and learned Gentleman.

In the last Session, the Government took powers which caused great confusion and chaos in our training arrangements. The Secretary of State for Employment can now unilaterally abolish the industrial training hoards, override any recommendations of the Manpower Services Commission, change the rules governing the boards and place more power in employer's hands. That has been done in the name of voluntarism, and it could not have been done at a worse time in our history. It means returning to a largely voluntary arrangement—a system which, incidentally, failed for 20 years after the war until training was put on a statutory basis by a Tory Government.

There are enormous manpower implications if we are to accomplish the economic reconstruction that the nation requires and to harness technical change. Our nation and the structure of our training arrangements are being put at risk by Tory dogma.

The industrial training boards have represented an assurance of sound training for millions of workers. The threat hanging over such boards has caused skilled instructors to leave schemes and confidence to ebb away. The Opposition's views on industrial training boards have always been consistent. We believe in a strong and adequately financed statutory training system. If the boards do not match up to the changes in industrial techniques or practices, then certainly we should restructure them; but to abolish them and to leave everything to volunteers is crazy and flies in the face of all the international evidence.

We condemn the Government on all those issues. Every economic commentator predicts that unemployment will continue to rise to 3 or 4 million. In other words, 3 or 4 million of our fellow citizens will continue to suffer the indignity, misery and degradation of being without proper jobs.

The Government's proposed anti-trade union laws will damage industrial relations and undermine the authority of sensible trade union leaders. At a time of unparalleled technological change, our training provisions have been plunged into doubt and despair.

The Secretary of State for Employment has been given a great opportunity. It is for him to decide what mark he wishes to leave on his Department. Will he continue, as he began, with that repulsive speech at Blackpool, when he insulted 3 million unemployed? Will he behave like a bovver boy, determined to go down the blind alley and impose irrelevant and provocative legislation on trade unions? Is his symbol of office to be the knuckle duster of the political mugger? The Opposition expect nothing more from him. He will not surprise us if he does that.

However, the Secretary of State holds the high office which was previously occupied by Tory conciliators such as Sir Walter Monckton and lain Macleod. By seeking to bring conciliation and consensus to industrial relations and by devoting time to providing work for the unemployed and training for those who need it—especially school leavers who are in desperate despair—the right hon. Gentleman would be fulfilling our needs. He will be judged not only by the House, but by the country.

4.48 pm

Sir Ian Gilmour (Chesham and Amersham)

The right hon. Member for Chesterfield (Mr. Varley) has given a display of indignation, no doubt genuine, which would have been a good deal more telling if his own Labour Government had been more successful in the field either of unemployment or of trade union legislation.

It is nice to have the hon. Member for Erith and Crayford (Mr. Wellbeloved) with us. However, it is surely a matter of some surprise that when we are debating what my right hon. Friend the Secretary of State rightly called the "dominant question of politics today" he should be the only representative of the Social Democratic Party and that the Liberal Party should be entirely absent.

The entire House deplores the present level of unemployment and, therefore, I will take that as read. I take the admirable remark of my right hon. Friend the Prime Minister in the censure debate a fortnight ago as the basis of what I have to say. The Prime Minister said that she thought that the Government were right to be flexible within the limits of prudence. We can all welcome that. But we would all agree that it is important to be flexible and prudent out of a conscious choice and deliberate strategy. However, for policy objectives to be brushed aside by the force of events and then to label the difference between what was meant to happen and what actually did happen as "flexibility" might be politically astute but it is not economically prudent.

The results of the Government's policy so far are not in dispute. We know that unemployment has reached 2¾ million. Recently the rate of increase has shown some signs of increased acceleration. Output has fallen more than at any time since the 1930s, the number of bankruptcies and closures is unprecedentedly high, and price inflation is still higher than at the time of the general election.

In view of those dire results and everybody's revulsion from unemployment, the prudent and flexible thing to do, unless there are overwhelming arguments to the contrary, would be to make the present policy less contractionary in order to help employment and other things too.

What are the arguments against a less contractionary or more expansionary policy? There are four and I should like to examine each in turn. If they are valid, prudence dictates that the present policies should continue. If not, prudence demands that they should be changed.

The first argument was deployed by my right hon. Friend the Secretary of State when he pointed out that unemployment and the recession are not confined to this country. Of course that is true. It is happening all over the world, but that does not explain or justify why the recession here is so much worse than it is in most places abroad. The fact that we are self-sufficient in oil ought to make our position relatively better, not worse.

The second argument is the claim that there is no deficiency of aggregate demand. It is pointed out that national income in money terms rose by 15 per cent. In the Government's first year of office and has probably risen by about 10 per cent. a year since then. In what sense therefore, it is asked, can fiscal policy be said to be disinflationary? The answer is simple. The rise in prices has been substantially faster than the rise in money national income. Therefore, in real terms, income and output have fallen.

The private sector is not responsible for that. It is clear that the Government's fiscal and monetary policies have themselves helped prices to rise so fast. In the year ending May 1981 the retail price index rose by 11¾ per cent. Prices charged by the private sector rose by less than 8 per cent., prices charged by nationalised industries rose by 22 per cent., rates rose by 41 per cent. and rents by no less than 43 per cent.

It is the Government who, in their desperate attempt to keep down public sector borrowing, have caused prices to rise so much faster than incomes. In doing so, they have caused real expenditure and output to fall and, far from causing inflation to diminish, they have persistently counteracted the reductions in inflation that have been painfully bought from the private sector. In other words, the benefits of lower wage settlements have been partly offset by the Government's allegedly counter-inflationary strategy.

The third argument against a change in the present policies is against reflation in general. Any mention of reflation is met in some quarters with the Orwellian incantation "Harsh policies good, reflation bad." Reflation is held to mean a burst of inflation.

That needs a little examination. To begin with, as I have shown, the present policies have not been notably successful in dealing with inflation. Despite that, any proposal for expansion or a measure of reflation is still met with the contention that is has all been tried before, it has never worked, and all previous policies were disastrous.

That response involves a rewriting of history on a positively Stalinist scale. The myths about the full employment era are legion and I do not have time to refute them today, but it is worth remembering that by most criteria the performance of the British economy in the past two years has been either much worse or not much better than in the rest of the post-war period. Even on the Government's overriding objective—the control of inflation—the performance has hardly been better than it was during that much-derided decade of 1969 to 1979.

In any case, to treat any form of expansion or reflation by Government action as inherently wrong and inflationary is surely unreasonable. Certainly the confetti programme of public spending put forward by the Leader of the Opposition would lead to an explosion of inflation and it is hard to believe that he really takes it seriously. But he must not be allowed to discredit all sensible programmes for reflation, merely because he offers us one which is grotesque.

We must try to distinguish. What matters crucially is what sort of reflation is proposed, how much, its effect on costs and on the supply side of the economy, whether it would come up against bottlenecks and so on. A blanket opposition to the use of fiscal policy and public spending to promote selective and moderate expansion does not make sense.

After all, the present level of deflation is not exactly god-given—far from it. It is Treasury-given and some of it, I suspect, given by mistake. We have been landed with it because of the Treasury's fixation with textbook intermediate targets such as the PSBR and M3. We should have been concentrating on the real objectives of economic policy, the things that matter to the people of this country—jobs, growth and prices.

To opt for continued deflation rather than reflation will not help to secure any of those proper economic objectives. It will merely make it more difficult to help the real economy.

Sir Frederick Burden

I am interested to know how we can get continuing growth unless we produce goods that can be sold in the world market at world prices.

Sir Ian Gilmour

Everybody agrees with that. We are all in favour of it, but my hon. Friend will be aware that British exporters have faced certain difficulties in world markets in the past year or so.

The final argument deployed against a change of policy is that everything will come right under the present policy. At least, I think that that is the Government's argument. I am not sure. If the Treasury knows how real recovery is to be achieved it has kept very quiet about it. Indeed, to judge by the interesting speech of my right hon. Friend the Secretary of State, the Treasury has not told him.

Therefore, I agree strongly with my right hon. Friend the Member for Worthing (Mr. Higgins) who stressed in the recent censure debate that it was extremely important that my right hon. and learned Friend the Chancellor of the Exchequer should give us a clear explanation of why the Government believe that economic recovery will take place and when it will occur.

Any claim that existing policies are superior to alternatives must be based on the belief that things will get substantially better. It would be extremely helpful if the Chancellor would let us know by what agency, at what time and on what scale the recovery is supposed to occur.

Regrettably, there is no comfort to be gained from surveys of business opinion, whether by the Financial Times or the CBI. As the right hon. Member for Chesterfield said, nearly all the professional forecasters have also been full of gloom. It is simply not good enough for the Government just to ignore all that or to assert that the process of forecasting is inherently wrong-headed. Since there must be a rationale behind what the Government are doing, they must believe that some things, rather than others, will happen.

Some Ministers have been forecasting for almost a year that recovery is just round the corner. We all hope that they are right now, even though they were not right before, but until we are told just what that optimism was, and is, based on we are bound to remain a little sceptical. Indeed, I can find no reason to suppose that more of the same policies will not produce more of the same results, although I am happy to accept that the rate of decline characteristic of the first stage of recessions will not be repeated.

Mr. Tebbit

I appreciate that my right hon. Friend, like myself, is a practical man, with great experience of being close to the place where what actually affects the economy is carried on, and not just in these rarefied areas. I appreciate, too, that we can differ about whether a budget which spends £10 billion more than it takes in tax is inflationary or deflationary. These are subtle matters. However, I wonder whether he can tell me what makes him believe that a further expansion of demand at a time when, for example, a Ford car costs 15 per cent. more to produce here than in Germany, would do more good for British workers than for German workers.

Sir Ian Gilmour

If my right hon. Friend thinks that the only way we can run the economy is with 3 million unemployed—and rising—all I can say is that I do not agree. That seems to be what he is saying. Of course, we all want to improve productivity. We all agree, too, that productivity is deplorably low in many parts of British industry, but it is surely to approach the matter with a very blunt instrument, to wipe out large parts of industry and have 3 million unemployed.

It seems clear to me that, far from the arguments against a change of course being overwhelming, none of them stands up. Prudence, therefore, dictates that the present policies should be modified.

In a speech that I made in Blackpool I outlined a moderate programme to aid employment and industry without worsening inflation. Since then, I have obtained the results of a simulation on the Treasury model, which approximately quantify the consequences of such a package.

Briefly, my proposed package was the abolition of the national insurance surcharge in two stages, now and in the next Budget. The second proposal was the adoption of the special measures suggested by Professor Layard for reducing unemployment. These are that employers should receive a £70 a week subsidy for employing anyone who has been unemployed for more than six months and that any worker who has been unemployed for more that that time should have the right to be employed on a publicly supported project at a wage 20 per cent. higher than his benefit entitlement. That is estimated to produce about 500,000 jobs at a cost of about £1 billion. The third proposal relates to capital spending of at least £500 million. The fourth is the reduction of interest rates, and the fifth is joining the EMS. The gross cost of this package would be just over £5 billion, or about 2 per cent of the GDP.

For various technical reasons, it is not possible to simulate Professor Layard's proposals on the Treasury model, but it is possible to incorporate the consequences.

I am glad to say that the result proved extremely encouraging. Unemployment is reduced progressively by up to 650,000, output is raised, and retail prices are, if anything, lower not higher than they would otherwise be. The fact that the PSBR is slightly increased serves only to show what an irrelevant totem pole it is.

Incidentally, it is worthy of note that a much larger package than the one that I put forward, namely to take another £5 billion off industrial costs by reducing the employers' national insurance contributions by that amount has also been put through the Treasury model, and that has even more beneficial results on employment growth, investment and prices.

No doubt the Government will say that they do not believe the Treasury model. Indeed, they have no alternative to saying that if they want to stick to present policies. However, that will not be convincing unless we are told what the Treasury's own forecasting machinery is saying about the results of its own policies.

Thus, to my mind the evidence for the need to change course is massive and compelling. To alter policies in the way that I suggest would be prudent, and it would not be throwing away all that has been achieved. It would not mean that the heavy sacrifices of the past two years would have been made to no purpose.

There have been two important achievements. Wage settlements have been substantially reduced, as has overmanning. However, the benefits to be derived from that are still potential. The fall in wage inflation has not yet brought down price inflation, for the reasons that I gave earlier. The reduction in overmanning has not produced any exceptional rise in productivity. The rise in output per man-hour since 1979 is remarkable for a period of such severe recession, but it is not remarkable by historical standards. For instance, it has not exceeded the average rate of increase between 1970 and 1979.

The potential benefit, the rewards for the sacrifices made by the British people, can only become actual if the economy begins to expand. The policies that I propose—no doubt many hon. Members and many people outside the House can think of better packages, but something of the sort that I am proposing—are a way of cashing in on those hard-won achievements, not of throwing them away. Again, and finally, that is the path of prudence and flexibility, and I commend it to the Government.

5.7 pm

Mr. James Callaghan (Cardiff, South-East)

In some ways this debate is the precursor of Wednesday's debate. The central question that the right hon. Member for Chesham and Amersham (Sir I. Gilmour) has just put, and probably the most important question that he put, is one that must be conveyed to the Chancellor of the Exchequer because it represents the main division between us in the House, and not necessarily between the two sides: how and when is the recovery to take place? That is what the right hon. Gentleman asks, and that is the question that the people in the country are asking. The right hon. Gentleman is not alone. In Wednesday's debate, the Chancellor of the Exchequer, if he is to rally his own forces as well as giving hope to the country, should attempt an answer to the question which has been put by the right hon. Gentleman and which was formerly put by the right hon. Member for Worthing (Mr. Higgins).

I succeeded in catching your eye today, Mr. Speaker, because I believe that in some ways this debate is more important than Wednesday's debate in that today we are discussing employment. It is about the ends, what society is for. Wednesday's debate will be about the means.

Today we are facing a national emergency. I remind the House that it was only a little over a year ago that the Chancellor of the Exchequer forecast that unemployment for 1981 would be 1.8 Everyone knows that it is now touching 3 million. It was a mistake, a forecast error, of almost indescribable proportions.

I cannot understand the complacency with which the Secretary of State addressed us this afternoon. The Manpower Services Commission forecasts that next year 220,000 young people who leave school will go on the dole, that only one in three school leavers will find jobs. That is the estimate of the Manpower Services Commission. Is it true? [Interruption.] It is not my forecast, but that of the Manpower Services Commission. I want to ask the Secretary of State a perfectly fair question: is this the Government's estimate of what the situation is likely to be for school leavers during the next 12 months?

Mr. Ralph Howells (Norfolk, North)

Can the right hon. Gentleman explain why the Opposition express so much surprise at the level of unemployment when, at the time that he was Prime Minister, a Labour Party committee forecast that by 1980 there would be 2½ million people unemployed? That was a very accurate forecast.

Mr. Callaghan

The basic underlying assumption of that forecast was that there would be no changes in policy. I do not intend to make a party political speech. I am not merely trying to score debating points. The situation is too serious for that.

It is said that by the end of 1983 over 1 million men and women will have been out of work for over 12 months. We never used to get these estimates when these matters were under the control of the Ministry of Labour. Now the Manpower Services Commission gives the figures. The Government must have a view about them. If policies are to continue unchanged, is it likely that the commission is correct in saying that in 1983 more than 1 million men and women in this country will have been out of work for over 12 months? If so, it is a national disgrace, and I tell the right hon. Member for Chesham and Amersham that that is what divides us. Many factors separate me from the right hon. Gentleman, but what unites us is our belief that it is intolerable to try to run the economy with 3 million unemployed and that the Government must make every effort to change it.

From the Secretary of State we heard a contemptible speech. It was the speech of a man who seemed more concerned to prevent Shirley Williams from winning Crosby than about how to reduce the level of unemployment.

Mr. Tebbit

Will the right hon. Gentleman give way?

Mr. Callaghan

I shall not give way to the right hon. Gentleman. He is one of the most unlikeable men in the House, and I do not propose to give way to him.

Mr. Lyell

Ought not the right hon. Gentleman to have picked up what my right hon. Friend said about the new training initiative? The Government are settling down to tackle the problem of youth training which was not tackled by the right hon. Gentleman's Government, had not been tackled over the past 20 years and must be one of the most important contributions to the relief of our present unemployment problem.

Mr. Callaghan

I shall be coming to that. I hope that the hon. Gentleman will permit me to make my speech in my own way.

The other significant factor which must concern the Government is that according to today's Financial Times, the cost of unemployment is estimated to be more than £12 billion per annum. Is that really so? I know how that figure has been reached, but it is intolerable for the Government to go ahead, as they are with such complacency, as though they are ready to tolerate these levels of unemployment for the indefinite future. Unless the Chancellor of the Exchequer tells us differently on Wednesday, that is what they seem to be doing.

No remarks of the Secretary of State today would lead anyone to believe that an economic miracle was likely to occur in 1982 or even in 1983, and it is to pricking the bladder of complacency that the House of Commons must direct its attention today.

I remind the Secretary of State of his manifesto. Let us see how far he has lived up to it. It said that the major strategy of the Government who are now in office would be to create genuine new jobs in an expanding economy. As everyone knows, the economy is contracting and not expanding. Output has fallen by 17½ per cent. in the last two years, the number of jobs in manufacturing alone has fallen by more than 1 million in the last two years, and there will be no recovery.

The hon. Member for Hemel Hempstead (Mr. Lyell) asked me about the new training schemes. Like my right hon. Friend the Member for Chesterfield (Mr. Varley), I support the youth opportunities programme.

Mr. Douglas Jay (Battersea, North)

We started it.

Mr. Callaghan

As my right hon. Friend reminds me, we started it. It is being criticised now, and the basis of the criticism is twofold. It is not only the level of the remuneration which is criticised. It is because when young people complete their training, they go back on the dole. That was never the purpose of the scheme. The chairman of the Manpower Services Commission, Sir Richard O'Brien, wrote recently: In 1978 a short period of work experience would see an unemployed young person on his or her way to a job. It was not wholly true, but it was nearly always true in those days. Now the nature of the scheme has changed. A young person does some training and then goes back on the dole. What sort of future are we offering young people?

Some schemes are good; others are not so good. There are wage subsidies to employers. I do not disparage them. But all these schemes put together do not begin to add up to the Government's target of genuine new jobs in an expanding economy.

What is worse is that the number of apprenticeships in industry is falling. Given that fact, the Secretary of State intends, apparently—although he has been a little coy about it—to abolish some of the training boards. In engineering there is a substantial shortfall in apprentices Companies have taken on no more than 12,000 out of 20,000 apprentices who are needed. More are to come from another area, but that is the shortfall overall. In road transport there is a shortage of apprentices. The same is true in construction and printing. I could mention others. I merely select those four illustrations from a wide range of industries where fewer apprentices are being taken on than are necessary to maintain future capacity.

Recently I was shown the results of a survey made by one industry in South Wales together with the individual responses of a number of employers. They confirmed what we heard today from the Secretary of State, that the cost of apprentice training is high. In a return which I saw it was said to be £8,000 per apprentice. But they went on to complain not so much about the high cost as about the fact that, at the end, the employer would not necessarily keep the man whom they had trained and that they were not making a reasonable profit at present because of the lack of demand.

The second conclusion was that some employers were taking on for work experienced young lads to carry out work which normally was done by apprentices. They said that firms were not taking on young people when older skilled men left and that some firms had reduced their training efforts—this harks back to the first point—because they found their competitors getting the benefit of the training which they themselves had originally done. They criticised the product of schools and then stressed that individual firms could not provide a solution.

Surely that is the case for keeping the training boards going in some form or other. If they are not successful at the moment, rather than abolishing them we should amend them and make them successful. We need the training. We need the skill. The next generation will want it.

I saw the returns made by a number of firms, and I spent some time examining them. All the progressive films wanted some method to equalise the financial burden which some of them now had to bear when they trained apprentices. I hoped to hear the Government's response to that in the speech today by the Secretary of State. I did not hear a word about it. Does he think that this state of affairs matters? If so, what does he propose to do? Is he worried about the levels of apprenticeships? In view of the serious position shown by what I have seen, I expected at least some comment from him about that. I heard not a word.

Unless we hear differently from the Chancellor of the Exchequer on Wednesday, or unless the views held by the right hon. Member for Chesham and Amersham prevail with his colleagues, I can conclude only that the Conservative Party is condemning a generation to longterm unemployment. We have 3 million unemployed. I do not know whether any Government supporter will be able to say with confidence that he expects to see that figure reduced substantially.

As a House of Commons, are we really willing to tolerate that indefinitely? Surely we cannot. Those of us who were very young in the 1930s do not want to see a repeat of what happened then, but we are seeing it repeated.

Mr. Jay

It is worse.

Mr. Callaghan

The material conditions are better, but what is just as bad is the apathy, the hopelessness and the feeling of loss of self-respect, which is what we find as we travel round the country.

I do not know whether hon. Members watched a BBC programme on television the other night showing articulate, intelligent, frustrated, angry and alienated young people expressing their views. What kind of society are the Government attempting to build for us and for them? If we are not careful, these young people will represent a lost generation.

I want now to list one or two of the steps which I recommend to remedy the position. There are different methods. We may not all have in mind the same ones. There are differing options which should be considered, and I shall put mine forward, too. I wish that the Secretary of State had said more. However, he seems to be interested only in swinging the balance of power decisively in favour of employers through new industrial relations legislation.

The monetarists in the Government-the Prime Minister, the Chancellor of the Exchequer and the Right wing of the Conservative Party-are leading the country to disaster, just as surely as the militant Trotskyists in the Labour Party are leading my party to disaster, alienating Labour supporters as they go. Therefore, no one has anything to crow about. However, from the country's point of view, the disaster is more dangerous in the case of the Conservative Party, because it is running the economy. The Tories will invite an extreme Government, indeed they will ensure that there is an extreme Government, unless they can get back on course again.

In some ways the Right-wing monetarists in the Conservative Party are the other side of the coin from the militant Trotskyists in the Labour Party. The economy is being run at too low a level to do all that we need to do by way of replacing obsolescent or worn-out capital and essential jobs. The TUC called for a £24 billion reconstruction scheme. We may or may not agree with everything in it. The scheme was spread over five years. The Government immediately dismissed it. When do the Government see the economy moving ahead?

As the Secretary of State said in his fourfold analysis, the Government rejected the plan because they thought that it would be inflationary. However, this afternoon the Secretary of State affected to see a new realism in wage claims and settlements. Surely that is contradictory. If the new realism is present, the Government can afford to take a little risk with reflation. If it is not present, they cannot. If there is realism, the TUC's plan will not be inflationary.

The Secretary of State taunted many of my hon. Friends. I should make it clear that today's realism comes not from a change of heart but from fear of unemployment. The right hon. Gentleman knows that perfectly well. We all know what conclusions follow. I wish that there had been a change of heart because there had been an understanding and acceptance that pay increases that exceeded productivity led to high inflation. However, the Government have deceived themselves if they believe that. We shall see what the true position is when, during the winter, a number of issues build up involving the tanker drivers, the gas workers, nurses, miners and water workers.

The Government's policy has failed; there should be no doubt about that. Inflation now is higher than it was in 1979, and there are twice as many people out of work. We need a new attitude from the Government. Despite previous failures, that must mean a change in their attitude towards the trade unions. I accept that there are things that are wrong with the trade unions. Indeed, I spelt them out when I was on the platform at the TUC conference. Of course there are things that are wrong. However, the Government's attitude of hectoring, of continually bullying and dismissing the trade unions and of pushing them outside the community of the nation, invites disaster. The Government have been terribly shortsighted in the way that they have behaved.

My right hon. Friend the Member for Chesterfield was right. We need the co-operation of the unions if we are to make a success, not of the Government but of the country. That is the way in which to approach the issue. Britain needs a twin-track policy if there is to be an economic recovery. It should consist of a carefully calculated and directed capital investment programme to renew our industrial and social capital, to fill essential jobs and to do work that is now being left undone. I agree with some of the Secretary of State's proposals.

We also need—neither the Secretary of State nor anyone on this side of the House has said anything about this—an agreement on incomes and on the general level of wage increases. That is necessary if we are to prevent the inflation that the Government fear and that will otherwise result. Britain does not have a choice between having an incomes policy and not having one. The question is whether it will be rational, properly constructed, whether it will be negotiated and agreed and whether it will be fair. People say that such a policy has failed and that we need only look at the winter of 1978–79. Hon. Members should look at the three years before then and consider the progress that was made.

When I hear criticisms of the Government that I led, I recall that when the Labour Party left office there was a growth rate of 3 per cent. per annum, unemployment was less than 1.4 million and had been decreasing for 18 months, industrial manufacturing investment was 20 per cent. higher than it is today, and inflation was lower than it is today. When the Conservative Party can match that, it will be entitled to criticise what we left behind.

The present policy will not succeed. I am offering an alternative, but it is a bargain. The TUC has put forward a £24 billion plan for five years. The Government should tell the TUC that, if inflation can be conquered, they are ready to accept such a plan or something like it. The details do not matter. They should say that the conditions are that if they accept the plan there must be an agreement on how to proceed with increases in wages and their link with productivity. I would say that to the TUC, and I would put the onus on it to see how far agreement could be reached. We did that before.

Why is the Secretary of State so sneering about everything? That is his whole approach to politics. He is sneering about something which happened, which was successful and which worked, and there were not 3 million people out of work at the time. Hon. Members should have no doubt that if Mr. Scargill wins the election for the president of the National Union of Mineworkers it will be because the Government have persuaded the miners that he will be the most doughty fighter and the most intransigent opponent that they could find. Anyone who read Mr. Kitson's interview in The Observer on Sunday will have seen what he is proposing to do. I am not defending him but the Government had better take this point into account. He will say that he was beaten over BL but that he will win over the tanker drivers. I do not know whether he will win or lose, but what a way to conduct the economy and the wage system of Britain. The Government encourage that by every step that they take relating to the economy and the trade unions. That is a serious indictment of the Government's tone and attitude.

We should lessen the tension and we should reduce the scourge of unemployment. I accept that everyone wishes to reduce unemployment, but it is a disgrace to us all. After 36 years in this House, I never thought that I would have to stand in the Chamber and speak when 3 million of our men and women were out of work. When we came back to the House after the war we determined that we would not have such a situation. There are only three or four of us left, but that was our determination and intention. I feel that we have failed when unemployment has reached such a level. However, I also feel that it is unnecessary for us to fail.

The Government should begin discussions with industry and with the trade unions to lessen this fearful blight upon our national welfare. If I thought that the Government would do that, I should be happy, but because I believe that they will not do that, and because the Secretary of State has shown no sign of even beginning to understand the problem, I feel that the sooner the Government go, the better.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Bernard Weatherill)

May I say to those who have not been to see me to discover the chances of being able to speak that more than 40 right hon. and hon. Members wish to speak. Obviously not every right hon. and hon. Member will be able to speak, but many of them will be able to do so if speeches are kept relatively brief.

5.28 pm

Mr. Julian Critchley (Aldershot)

What is life but a series of errors? The Government have not escaped the consequences of that iron rule. Since 1975, and more especially since the Conservative Party came to office, we have placed economics above politics in a way that could almost be described as Marxist. We have been zealous in the pursuit of false gods. Monetary targets have been at the heart of the Government's strategy. It is a matter of some relief that those targets have not been reached. Had the Government squeezed the economy as much as they wanted to, the recession would have been very much worse.

At long last we are promised a degree of flexibility. Should we not attempt to stop shooting the economy since we have been missing it for so long? The truth is that the Tory Party has fallen into the hands of the new saints—St. Margaret, St. Nigel, St. Leon and St. Norman. I do not mean St. Norman Stevas, who has gone on to his reward, but St. Norman Stylytees, who is the mask worn by this Government to rally their friends and to frighten their enemies, or is it the other way round?

We are half-way through the life of the Government. What does monetarism amount to now? The Prime Minister has her voices, the Secretary of State for Employment has his bike and the Chief Secretary to the Treasury has his brother. I am no economist, but when I see what those who claim to be economists have done to our economy, I feel no sense of shame. Nevertheless, I know enough about politics to be able to put economics in its proper place.

What are the Government's objectives and what were their objectives when they were elected in 1979? They are and were the restoration of national morale and national prosperity. I see no hope of winning those objectives unless the Government can persuade the majority of people to move with them over the next 18 months to two years. I can see the prospect of some economic improvement, but I cannot see how that will be translated into political advantage.

If we fail to translate any improvement in the economy to political advantage, a good number of pin-stripe-suited gentlemen on this side of the House will spend their declining years in the "Shirley Williams Sunset Home" in Worthing. The SDP threatens to change the face of politics. It travels without ideological luggage. It stands four-square in favour of motherhood, the flag and apple pie. It has on offer, for the first time, class-free and guilt free politics.

What can we do? [Interruption.] One should never ask a rhetorical question in a public meeting. There is no need for further legislation on the trade unions. Unemployment is doing our job for us, and the Employment Act of my right hon. Friend the Member for Lowestoft (Mr. Prior) needs time to work through the economy and to work properly. The introduction of new laws in this area is the politics of the party conference. It is necessary now to do whatever is humanly possible to relieve the more obvious social and economic sores. Now that we are to be more flexible, we should strive to reduce the impact of erratic exchange fluctuations by joining the European monetary system as my right hon. Friends the Members for Sidcup (Mr. Heath) and Chesham and Amersham (Sir I. Gilmour) have proposed. Now that we are to be more flexible, should we not remove unnecessary shackles from our export industries by ending the national insurance surcharge, as my right hon. Friend the Member for Chesham and Amersham and others have proposed?

What of our monstrously high interest rates? In medieval England the usury practised by the banks and building societies today would have been a crime and a mortal sin into the bargain. The strange feature of what happens today is that it should now be, for our masters, a cardinal virtue. It was my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) who said that we should recognise unemployment for what it is—a moral and social evil of the first order.

The Government should persist with their plan to subsidise the recruitment of young workers, in spite of the narrow-minded opposition of the TUC. I hope that serious consideration will be given to the more ambitious plan of my right hon. Friend the Member for Chesham and Amersham for subsidising employment for anyone who has been out of work for more than six months.

The "saints" are claiming, and with all the authority of the Holy Inquisition when faced with heresy, that there is no alternative. I have news. There is an alternative. It is being propounded by some of the most senior arid distinguished members of our great party, in and out of Government. The alternative is that we should strive for higher growth and that that growth should be given higher priority. Growth requires increased demand and that can be achieved by higher investment and easing the squeeze on industry. The economy needs a stimulus of between £4,000 million and £5,000 million.

We must change not only the substance but the style that lies behind our Government. We should support the vision of my right hon. Friend the Member for Henley (Mr. Heseltine) of a great alliance between private enterprise and central Government to clean up and develop our inner cities. We should heed, before it is too late, the insistence of my right Friend the Member for Worcester (Mr. Walker) that the needs of the people should be put before any single economic doctrine. I say "Amen" to that. The same principle should be applied to any political doctrine, whether it be of the Left or of the Right.

5.35 pm

Mr. James Molyneaux (Antrim, South)

Listening to the right hon. Member for Cardiff, South-East (Mr. Callaghan) I could not help being impressed by his evenhanded predictions about the fate of the two main parties. I derived a great deal of comfort from that because it appears that there is hope for the other parties in the House.

I have no doubt that on Wednesday the House will return to the subject that has featured prominently in the last three speeches. Had it not been for the events of last Friday I might have been tempted to offer some feeble defence of the Government's policies. However, last Friday made life a little complicated for me and so I shall confine myself to entirely different matters.

In the Notices of Motions published today is an item entitled the draft Industrial Relations (Northern Ireland) Order 1981. It applies to Northern Ireland the provisions of legislation on industrial relations for Great Britain passed in the last two Sessions of Parliament. In Northern Ireland we have been spared the more serious manifestations of bad industrial relations that have plagued the rest of the Kingdom. Excellent industrial relations are the norm in Ulster and that is one favourable factor upon which we still depend for the attraction and retention of enterprise in our Province.

However, my right hon. and hon. Friends will not be opposing the order because it is our stated conviction that a common statutory code for industrial relations, whatever it is, for the United Kingdom as a whole is, on balance, greatly to the advantage of Northern Ireland. In that respect, as in almost every other, the law should be uniform throughout the United Kingdom.

The Gracious Speech heralded further measures in that sphere. We hope that the Secretary of State will present such measures to the House in a form that provides for their automatic application to Ulster. That would underline our equal right to take part in the shaping of that legislation.

At this early stage I offer two indications of our general attitude. First, we shall look askance at any provisions that purport to introduce into the law of the country adjustments demanded by the European Court of Human Rights. We believe that it is for this legislature, and this legislature alone to decide what is best for the circumstances of the country and that industrial relations will not benefit from any outside interference in our legislative process.

Secondly—perhaps I am influenced by Ulster experience—the attempt to bring the criminal law directly or indirectly into play in industrial relations is unlikely to have happy results.

My colleagues and I look forward to participating in that and other aspects of business in the coming Session but it would be considered strange if I did not take this opportunity to refer briefly to events that have taken place in London since the House last sat.

It is my duty, and not a mere formality of House of Commons courtesy, to assume that the Prime Minister was and still is sincere in her statements that she is "rock firm for the Union" and in her repeated references to the so-called guarantee to Northern Ireland embodied in the 1973 Act and other declarations.

Unfortunately, I must tell the Prime Minister that actions proverbially speak louder than words. Statutes can be changed or repealed. That has happened before now. The only true test of the Government's intentions and sincerity is that their actions are seen to be consistent with their professions.

The Prime Minister's meeting last Friday with the Irish Premier and the communiqué that followed constitute a contradiction of her assurances and will powerfully encourage those waging a terrorist as well as a covert war against the people of Ulster. Both the fact of the meeting and the language of the communiqué issued from it concede to a foreign State what the Prime Minister has hitherto consistently repudiated—an acknowledged role and status in the internal affairs of Northern Ireland.

That concession has been rendered even more damaging by the announcement that there will be further such meetings and that they will take place in a specific framework. I refer to intergovernmental institutions of a kind which, as far as I am aware, no British Government have ever been prepared to create with the Government of any other country—let alone a country that is economically of no importance to the United Kingdom and that professes the desire to annex part of its territory and people.

I must say candidly to the Government that they will look in vain to my right hon. and hon. Friends and myself for anything but strenuous and unremitting opposition so long as they adhere to the course on which they appear now to have embarked.

5.42 pm

Sir Hugh Fraser (Stafford and Stone)

I shall not attempt to follow the hon. Member for Antrim, South (Mr. Molyneaux), but I hope that the whole House, and especially the Government, will pay due attention to the words that he has just spoken. I shall also endeavour to be brief.

The former Prime Minister, the right hon. Member for Cardiff, South-East (Mr. Callaghan), and I became Members of the House on the same day. Over the past few years, we have faced the economic decline of this country and the growth of unemployment. Today, this is a matter not of individual deprivation as it was in the 1930s, but of deprivation of hope from a rising generation and a burden which, unless it can be changed, this country cannot forever sustain. That is the problem as I see it.

I find myself in considerable accord with what my right hon. Friend the Secretary of State said today. He was extremely realistic in his approach to the problem. I shall not weary the House with too many figures, but I give some which are relevant to bring out the two main areas of the problem. One is the destruction of our industrial base. In my view, no country with 56 million people can depend purely on service and State industries to survive. The other is the impact of this on the youthful population.

Figures for the 1930s—I do not know whether they have been adjusted by experts using the machines that my right hon. Friend has used—show that unemployment was probably not 3 million, but more like 2½ million. The population of this country at that time was 45 million. Today it is 56 million and we have an unemployment rate which I calculate to be 3 million plus the additional number who are kept in employment by Government subsidies of various kinds. The "raw" unemployment figure is therefore about 3.3 million.

Those figures can be adjusted, of course. There is a very large "black" or cash market where people find employment. There is also the problem that, because of the poverty trap, many people find it more profitable not to be in work. I do not wish to stray into the area of Wednesday's debate on the economy, but this is clearly an area in which an adjustment could be made. Higher benefits should be taxed, while lower rates of pay should attract tax remission. I suggest that the Government should consider that.

Far more serious is the situation of this country with its very large population which includes an element which is no longer British—a racial or coloured element of 2½ million people who are either descendants of immigrants or are immigrants themselves—which creates a further problem in considering the general problem of unemployment.

I give one further figure to illustrate the position in manufacturing industry. The number of jobs in manufacturing industry has dropped by about 2 million over the past decade. The highest number of jobs, I believe, was in 1966 when 25.3 million people were in employment. Today, that figure has dropped to about 23.2 million at the latest count, and it is still falling. Yet, wherever one goes, and whenever one has contact with industry, one finds that there is still a problem of overmanning. One has only to read the comments of Sir Richard Marsh on the newspaper industry in the press today or to consider other industries to see that the idea that we have now reached the nadir of unemployment is, unfortunately, probably incorrect. Overmanning still exists and it is bearing most heavily on the manufacturing side.

I do not wish to become too much involved in the broader economic issues. I merely point out to the Opposition that the greatest chance for a recovery in the industrial base lies in private investment in new technology. I hope that the Government will be able to do more in that regard than they have so far. But the problem will remain. Opposition Members have pointed to the fall in the number of apprenticeships. Of course, the number of apprenticeships falls when industry is unprofitable. It also falls when techniques which were applicable and important 10 years ago are now better carried out by machines. But even if all the apprenticeship schemes of 10 years ago were reinstituted, that would make only the most minor impact on the fact that there are now more than 1 million people unemployed between the ages of 16 and 23. What is more, that figure is likely to rise.

I do not know when the recovery will come. Inevitably, by its very nature, Britain depends greatly on world trade. America is now experiencing not a recession but a depression. The situation in Europe is by no means advantageous to Britishers trying to export into that area. The Third world is now crippled by over-borrowing. Indeed, in the last five years the greatest growth in the Third world has been in borrowed money, and we are now finding that the Third-world countries can no longer pay the interest. For those reasons, the recovery will be difficult to achieve.

That is why the problem facing Britain is so fundamental. It is not just a matter for the Department of Employment. It should also be the concern of the Department of Education and Science, the Home Office and, above all, the Treasury. They should ensure that steps are taken to introduce proper training programmes and to spark recovery.

I should like to see the Prime Minister herself head a Cabinet committee to deal with these problems, because they go right across the board. The problem is not so much one of the financial deprivation of the individual, but rather the deprivation of Britain's future. Huge tasks lie ahead. For example, much of our environment and infrastructure is falling into desuetude, even collapsing, in some areas. Things can be done to remedy this situation, and they should be considered.

I have advocated some form of national service, either compulsory or along the lines of the voluntary scheme in the United States. When Roosevelt came to power in 1934, the first thing he did was to establish the conservation corps, which employed 600,000 volunteers. We should consider something like that. We should also consider the German system, under which for two years school leavers receive an education to prepare them for life. That is why I wish my right hon. Friend well in his new position. Let him have help.

I beg the Government to look at the broader issues. They should ensure, be it by voluntary service, conscription, the German system or whatever, that we are not faced for ever with the problem of 3 million unemployed, with the weight falling on our manufacturing industry and our youth. Their youthful energies surely should be put to purpose so that the regeneration of Britain can at last begin.

5.54 pm

Mr. David Stoddart (Swindon)

The right hon. Member for Stafford and Stone (Sir H. Fraser) and all other hon. Members who have spoken refereed to unemployment as the great crisis issue now facing us. Everyone will agree with that, except apparently the Secretary of State, whose speech offered nothing new to the unemployed and no hope for them either.

Indeed, all we heard once again were the tired old clichés that we have heard from the Government over the last two and a half years—that the problem is due to world recession. That is the favourite excuse. But anyone who examines the record of the last two and a half years will know perfectly well that the Government have piled home recession on to world recession and have caused the present slump and the 3 million unemployed who go with it.

Conservative Members who have recently resigned office and are now criticising their Government were party to those decisions. Indeed, had they stood up and been counted at the right time, we might not have reached the present unemployment crisis.

Unfortunately, the Secretary of State has had to leave the Chamber, but I want him to know that I resent his remarks and insults to the unemployed. His remark about his father getting on his bicycle was a variation of the older theme by the Prime Minister who told people to move if they wanted a job. The unemployed will not think much of that. They will be grossly insulted by such remarks.

I know, because before the war my father was unemployed, just like the Secretary of State's father. But he had to travel further than a bike ride to get a job. He had to move from Pen-y-Graig in the Rhondda valley to London before he could get a job, a distance of 155 miles by train. He then had to take all the menial jobs available in the soft South. But now the unemployed are told to get on their bicycles to find jobs in places where there are no jobs or houses. No wonder they are insulted, and no wonder I feel insulted for them.

It is all very well for the Secretary of State to give this House and the Opposition the whip lash of his tongue, but the unemployed do not deserve it. They deserve respect and assistance from the right hon. Gentleman. In future, instead of rounding on them, I hope that he will render that assistance because that is his duty.

We are told that the Government are set on a monetarist course and that it cannot be changed without disaster. Labour Members reject that argument because it is no argument at all. Britain has adequate resources, particularly if we reintroduce exchange controls to stop the resources flying abroad, and embark upon the expansion that we and an increasing number of Conservative Members support. There is so much to be done. If one goes outside one's house, one sees pavements crumbling and roads falling into disrepair. One sees the railways collapsing under the weight of debt and the lack of maintenance that has gone on for many years. Housing waiting lists are getting longer at a time when very few houses are being built. Local authorities, which should be resuscitating their areas, are now being clobbered by the Secretary of State for the Environment, who is being put under pressure by the Chancellor and the Prime Minister.

Even if we ignore that side of the picture, there is still much to be done in terms of future energy policy. We are told that in 20 years the oil will be running out, and that we shall need to save heat and use energy substitutes. But now, when we have plenty of oil—although we are wasting that resource in paying 3 million unemployed people to do nothing—the Government are dragging their feet on a policy that could not only do much for future conservation, but could put many of those 3 million people to work. Instead of embarking on a rational fuel policy, they have decided to build pressurised water reactors at a cost of £1,200 million each, at the rate of one a year. In my view, they are dangerous and, indeed, may not be built because of public pressure. If, instead of spending money in that way, the Goverment were to embark upon a programme of insulation in houses and combined heat and power programmes, they would create, with the insulation project alone, an additional 80,000 jobs. If they also embarked on combined heat and power programmes they would create upwards of 250,000 jobs. That would be money well spent for the future. Those are the policies that we should be looking to the Government to provide at this crisis point.

Another policy item that the Government should seriously consider, which should have been considered a long time ago, is the retirement age. The Under-Secretary of State for Employment knows that I have written to him on the matter. It is well known that over a long period a growing number of people have recognised the inequity of different retirement ages for men and women. Further, they have recognised that in the interests of the economy there should now be a common retirement age of 60.

The TUC and the trade unions have long been in favour of that policy, and the Labour Party has now adopted it. Even more significantly, the CBI adopted it at its annual conference this year. The Government must consider the matter more seriously. For minimum cost they could reduce the unemployment rate by 1,200,000. That would be the effect of reducing the retirement age for men from 65 to 60. Conservative Members should do as the CBI is now doing, and put pressure on the Government to bring about this long overdue reform.

I had wanted to speak about industrial relations, but as time is moving on and as about 40 Members wish to speak I shall touch on it only briefly. Although the Government may believe that trade union bashing is a popular pastime and a substitute for policy, the proposals that we understand they have for the trade unions will fail. When they fail, the Government will then wish to put even more draconian measures into operation, and that will be the first step towards Fascism.

The Government and Conservative Members seem to have much in common with certain Eastern European States on discipline. One of those States has had to set up a free trade union movement to get rid of the impositions placed upon it by centralised Government. I warn the Government not to embark on that sort of line with our trade union movement and, instead, to adopt some of the measures that I and other hon. Members have suggested to get down the disgraceful unemployment rate.

6.5 pm

Mr. Alan Haselhurst (Saffron Walden)

I can easily raise two and a half cheers for the contents of the Gracious Speech. Many of the measures contained in it are civilised and constructive, and I shall have no difficulty in supporting them. However, in two major areas I fear that the emphasis may be in danger of being put in the wrong place.

I hope that I shall be forgiven, on a day that is devoted to employment and training, if I preface my remarks by referring briefly to local government. I am surprised that we have allowed our concern with reducing expenditure to carry us into what some people see as a constitutional conflict. I am not sure why we are risking this confrontation. What is the amount of money that we are hoping to save? How many authorities will be affected? What sort of weapon are we creating for the future by proposing a referendum in the local government process? Those are just some of the worries about the referendum proposal. The very fact that such a measure can be discussed raises doubts as to whether there is a true understanding anywhere—not simply on this side of the House—of the proper relationship between local and central government.

What is proposed is a diversion from the real point, which is rating reform. The difficulties about that speak for themselves, but so do the difficulties of continuing to live with the present rating system. When it is suggested, on top of all else, that the new legislation has only a temporary life, I am bound to ask whether it is so vital to us or worth the political candle. The Government should speed up their efforts on rating reform instead of commencing a battle that they need not fight, for gains that are dubious in the extreme.

Mr. John Page (Harrow, West)

In case my hon. Friend should be intoxicated by the cheers that he received after his previous intervention, may I ask whether he realises how many people in London and elsewhere greatly resent the totally unreasonable rates that are being levied on them? Does he realise that they are demanding that the Government should do something about it?

Mr. Haselhurst

I am in no doubt whatever as to the proper concern of my hon. Friend's constituents in Greater London and of people elsewhere. Of course something has to be done, but I believe that a better way of doing it is by reforming the rating system. We can make local authorities accountable through a better system of financial arrangements than we can through a referendum.

Whereas we know the Government's intentions on local government expenditure, we do not yet know their intentions on employment legislation. Perhaps we know the direction in which they are being urged. Undoubtedly, there is enthusiasm for further changes in the law and Opposition Members should not suppose that it is confined to those who attend Conservative Party conferences.

There is enthusiasm because our present system of industrial relations reeks of inequities, which are offensive to a free society and an affront to common sense. Yet they are there, and many of them have been embodied in the system for a long time. It may, therefore, seem weak and pusillanimous if I then urge some hesitation before we commit ourselves to the details of legislation. Yet it is right to think very hard before we finally commit ourselves. It is fair enough to beef up the protections in relation to union membership agreements and to boost the democratic process within unions—although it is clear that there is not 100 per cent. enthusiasm among employers, even for measures of that sort. Once we bring union funds into play, we are taking risks. It is hard to disentangle action against funds from action against those who guard the funds if they choose not to co-operate.

The usefulness of laws depends on the judgment of those who may consider using them. They exist to guide and control behaviour. In an ideal situation, they do not have to be invoked. The fact that there is a law on theft does not mean that we invoke it in every instance of discovery of an offence being committed. A number of considerations may affect a decision to prosecute. But at least in such a case the decision is personal and is unlikely to affect others. Given grounds for action against union funds, a sensible employer will invoke the law only in extremis. However, it needs only one employer without the best judgment and clearest foresight to plunge the legal detonator. The chain reaction of explosions could produce an industrial crisis of large proportions. We have seen that happen before.

If experience counts for anything, the electorate becomes disenchanted. What is done in part with an eye on political bonus becomes an acute political embarrassment. One spark could quickly become a conflagration. Undoubtedly, there are some in the union movement—we had a reminder only this weekend—who would welcome a holy war for their own political ends. I hope that no one in the Conservative Party will be deceived again into thinking that a battle against the unions is desirable in itself, or is a cause that can outlast, let alone prevail in, a whole election campaign. I realise that that view may not be popular, but it must be said. It should be weighed carefully before we deal with legislation.

There is another reason for caution. The Government, to their enormous credit, are about to embark on a major new training initiative that will have a beneficial effect on unemployment among young people. For anything lasting to be achieved in that area, the co-operation and good will of employers and trade unions will be required in full measure. One is bound to ask whether it is worth putting at risk a major success in the training sphere for an elusive gain in balancing the rights of unions and employers. In political terms, any unpopularity that might stem from our appearing to shrink from curtailing union excesses could be made up by what we achieve in unemployment and training. People in the Conservative Party are every bit as worried about unemployment as they are about trade unions.

There is a second caution. I ask the Government to be careful that their policy on training boards does not vitiate the new initiative on training. We do not yet know the scope of the substantial further measures to which my right hon. Friend the Prime Minister referred in her comments on the Gracious Speech. I hope that the plans will be ambitious. There is only one chance to get them right. We cannot make a mess of it this time and come forward in one or two years—or even another Government in three or four years—and say that we are making a fresh start once again. Above all, the young people will be wholly disillusioned by that time. We have little time left.

I agree with the stirring words of my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) on that issue. The scale of what is proposed is important. I plead that we opt for a two-year training period, even if full implementation is delayed for a number of years. Nothing less than that will be adequate to deal with the manpower problem. There are many details to be arranged in settling a major new programme. I wish to stress the linkage between the future of the training boards and the new training initiative. I may not quarrel with the substance of what my right hon. Friend the Secretary of State will announce on the future of the training boards, but hope that we get the timing right.

I hope that there will be a linkage with education. The new training measures will have a relevance that begins earlier than the age of 16. I hope that, before long, legislation will be proposed to bring together education and vocational preparation in a coherent manner. So important is it to build a new ambitious structure for training and vocational preparation, so important is it to show that we can offer a better prospect to the young people who have the misfortune to be unemployed, that I hope we shall not find ourselves enmeshed in endless controversy duing the coming year that could impede our progress towards those desirable and vital objectives. I hope that that order of priorities will prevail in determining the final details of what is put before us in this Session.

6.16 pm

Mr. John Morris (Aberavon)

The whole House listened carefully to the well-argued speech of the hon. Member for Saffron Walden (Mr. Haselhurst). I shall return to it later when I deal briefly with the subject of training.

Wholehearted support of the Government has been a scarce commodity during the debate. The Secretary of State for Employment—he is supposed to look after employment, although he is obviously Secretary of State for unemployment—produced not one ounce of constructive thought. He has an unusual and abrasive style. He cannot help that, and we forgive him for it. He must realise that now that he is a senior Cabinet Minister he has responsibility to come to the House with some constructive thoughts.

We listened carefully to the right hon. Member for Chesham and Amersham (Sir I. Gilmour) and his proper contemplation of the need for jobs, growth, and prices. He was right to demolish once and for all the parrot cry of the Government that "There is no alternative". He must have been relieved to leave the Cabinet. However, as my hon. Friend the Member for Swindon (Mr. Stoddart) said, he must bear his full share of responsibility for what happened while he was a Cabinet member.

The Opposition cannot unseat the Government, much as we wish to do so. Many of our colleagues have believed that we could do that. However, the Government can be unseated only by the growing awareness of such Members as the right hon. Member for Chesham and Amersham that the present policies cannot prevail. As the election approaches, more and more Conservative Members will know in their hearts that they will not return to the House.

The right hon. Member for Stafford and Stone (Sir H. Fraser) was right to say that he did not know when the recovery would come. No one knows that. Certainly no one on the Treasury Bench will tell us when there will be any sign, benchmark or hallmark, in any shape or form, that the recovery is on its way. However good the speeches and debates from Opposition Members, it is only the awareness of Conservative Members that can, in the interests of all our people, bring about a change in policies.

I do not wish to concentrate on the mass of statistics about unemployment. The right hon. Member for Stafford and Stone referred to more than 3 million unemployed. That is a tragic figure. However, when I speak of unemployment I think of the people in my constituency who are my friends. I have known them and worked with them for a quarter of a century. I am concerned about their children who come to me week after week with their problems. Nearly one out of every five families in my constituency suffers unemployment. That is the situation we face. It is not a mass of global figures. It comes down to individuals with whom one shares allegiances—people who have given a lifetime of service and who now find themselves unwanted.

What a tragedy it is for young people. Unemployment is not confined to one class; it does not happen only among the young, unskilled, unqualified 16-year-old school-leavers. It goes right up to the young undergraduates who find that the world is closing the door in their faces the moment they become available on the labour market. There is no hope for them, and it is that air of hopelessness right across the country that is so tragic.

In my short speech, I shall deal with the raw facts in my constituency, and especially in the Port Talbot travel-to-work area, which has been so hard hit. We have listened to the claims of the Prime Minister that we have a slimmed-down Britain, ready to leap ahead. Port Talbot and the steelworks have certainly been slimmed down. No one needs to tell me or anyone in the House of the value of increased productivity, the importance of being able to sell products competitively on the world market. That is not economics but common sense, whether we speak of a small shopkeeper or a big steelworks.

However, there is the other side of the coin. Who pays for this increased productivity and for the great signs of progress? It is a grave error for any Government not to have a policy to deal with the casualties of productivity and change. In my area the provision for these casualties and their children is totally inadequate.

The Prime Minister came to South Wales in July 1980 and the advice she gave us was to move. I will paraphrase her remarks, which were that unless there were jobs it was our duty, if there was no other course, to move to find work. I was overseas in the last two weeks when it was reported that the Secretary of State for unemployment, in a somewhat less felicitous and more vulgar way, said that people without work should get on their bikes. Where does the Prime Minister advise the people of South Wales to go to? In the 1930s we went to Slough, and to Birmingham. The father of my hon. Friend the Member for Swindon (Mr. Stoddart) left Pen-y-Graig, in the Rhondda, to come to England. But where do we go to now? There is no haven of full employment in London or the South-East, and the West Midlands have had a tragic history over the last few years. The problem that faces us is whether we are to remain conditioned to, and institutionalised in, the hopelessness of South Wales today or whether there is some other advice that the Government can give us.

By last July, the increase in unemployment since May 1979 in the travel-to-work area in my constituency was 132.6 per cent.—an increase of 6,936 people. The last available figure for unemployed persons under 25 years in that small area was 4,738. That is the measure of the tragedy, the disaster of the slimming down of one great steelworks and all the ancillary works in the construction industry. Tomorrow I shall be meeting representatives from one such works. Everyone is suffering. It is against that background that we can evaluate the much-trumpeted millions allocated by the Government and gauge their alternative policies to deal with the sheer misery of the casualties that I see every week in my constituency.

I had the privilege of setting up the Welsh Development Agency. The agency tells me that 66 factories have been completed or are being constructed since April 1979. That is welcome. How many jobs are those factories expected to provide? There are over 12,000 unemployed, and the total number of jobs that can be expected from all those factories when they have reached their full complement of labour, is 1,368. I asked the Secretary of State for Wales how many jobs are presently in the pipeline for this area, and he said that just under 200 can be expected to arise in the next three to four years.

I shall not weary the House by referring to figures, save to say how tragic and how hopeless is the situation. When I asked earlier in the year how many pupils were likely to leave school in West Glamorgan in July I was given the figure of 5,000, and a further figure of 2,500 for the Port Talbot travel-to-work area. That is on top of the existing tragedy.

I am sure that the House is persuaded, without further words from me, that there is a major problem, and the responsibility for it rests on the Government. We are wholly dissatisfied. What do the Government intend to do about it?

Last year the British Steel Corporation halved the number of apprentices at Port Talbot. It was said to be because of the rundown. But this year the number of apprentices was nil. This lost generation of people will never again have the opportunity. Once they have lost the opportunity to train, it can never return, because they will be too old to start apprentice training later in life. They will have to look for alternative means of training or employment. I would, therefore, look very carefully at any proposal that the Government may make for the training of young people. But, unhappily, many of our young people will be too old to take up apprenticeships.

Sometimes it is suggested that if there are no jobs available for people after their training, we should stop training them. I emphatically reject that suggestion. When I was at a Commonwealth Parliamentary Association conference in Fiji a few weeks ago, I suggested that, as part of our miserable contribution to the Third world, we might devise some new machinery for the secondment of a number of young people who, having been fully trained, were unable to find jobs in Britain. They would in that way be enabled to make a contribution, along the lines of the Brandt proposals, to the hungry and demanding Third world.

Such a system would couple idealism with self-interest. It would be possible to kill two birds with one stone. We could continue training young people and then, if and when the upturn came, we would have a pool of labour in various parts of the world ready and willing to return to Britain and provide us with some of the skills that would be so desperately needed.

Week after week I receive reports about industries in which apprentices are unable to complete their apprenticeships, and of apprentice opportunities that are lost. If the upturn ever comes, it will be a great tragedy if we are then short of the necessary skills for industry.

Undoubtedly, we are faced with a tragic and hopeless situation. I do not know what the Secretary of State for Wales is supposed to be doing about it. In the early days of the Government, he went from one end of Pembrokeshire to the other trying to prove to his boss how dry he was, making speeches to the effect that he was "more monetarist than thou". He has been very quiet recently, except to say, in a speech at Llandrindod the other day, that we should have faith. Faith in what?

What have the Government to show in Wales for the last miserable two and a half years? The Secretary of State seems to spend his time as a progress chaser for his boss's husband's correspondence. He must do more than that. He must justify his salary. He must prove to the people of Wales that he is interested in Wales, that he has a policy for Wales, and that he is there as an advocate for Wales and not an apologist for the Government in Wales, which is what he and his colleagues are now.

6.30 pm.

Mr. Tim Renton (Mid-Sussex)

I am sure that the right hon. and learned Member for Aberavon (Mr. Morris) will understand if, in the next few minutes of my speech, I do not follow the arguments that he has put. I should like to concentrate on the role of trade unions in our society and what might appear in the forthcoming trade union Bill. The right hon. Member for Chesterfield (Mr. Varley) queried, at the time of an intervention of mine, my right to speak on trade union matters at all. What experience did I have? he implied. I have one very good right to speak on such matters. It is that Clive Jenkins managed to remove my union card about three years ago. I would have liked to have taken Clive Jenkins to court but I was told that he was within his legal right, as general secretary of ASTMS, in removing my union card. Fortunately for me, my job as Member of Parliament for Mid-Sussex did not depend on my holding that union card.

I subsequently joined APEX. I was not on the picket line along with Shirley Williams and the right hon. Member for Sheffield, Park (Mr. Mulley) some years ago. It is however, as a member for APEX that I am now president of the Conservative trade unionists. I attended our conference in Sheffield last Saturday—the conference attended by many hundreds of trade unionists at which my right hon. Friend the Secretary of State for Employment spoke.

My right hon. Friend's new job is well defined in a famous remark of Ernie Bevin who referred to trade unions as islands of anarchy in a sea of chaos. My right hon. Friend's task, surely, is to make the anarchy and the chaos a little less. It is a task in which success has eluded successive Governments since 1968–69. I believe that hon. Members on both sides of the House should wish my right hon. Friend well and hope that he will have some success. the message from our conference in Sheffield on Saturday was that trade unionists, by and large, would welcome another Bill that carried forward the step-by-step approach of my right hon. Friend the Member for Lowestoft (Mr. Prior) but went further to protect the position of the individual in unionised situations. As one delegate at the conference said: The closed shop cannot be dismantled, but its effects can be. All hon. Members, I believe, should welcome a further step to raise substantially the compensation to those sacked from their jobs for refusing to join a union in a closed shop with both employers and unions made responsible for paying that compensation. This would have the effect of deterring employers from agreeing to new oppressive closed shop arrangements. They would know that they were potentially liable to substantial compensation.

I believe that there is also a case for examining the issue of ballots among employees in existing closed shops to see whether those closed shops should continue. Such ballots should, perhaps, be held within a year of the new Act becoming law. They might be repeated at five-year intervals to find out whether employees wish their closed shops to continue. My right hon. Friend might also consider invalidating commercial contracts that require union labour only. This is a back-door method of forcing closed shops on the work force. The experience of British Leyland last week underlines the case for better defining secondary picketing and secondary action, what is legal and what is not.

Many trade unionists would welcome contracting into paying the political levy being made the legal norm rather than the present method of having to contract out, although I understand how bitterly such a move would be fought by some union leaders. It would, however, be welcomed by many individual trade unionists.

I am not nearly so certain—I support the remarks of my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) —whether the Government should, at this stage in the step-by-step approach, move into the area of actually reducing the immunities of the trade unions. This would for example, raise the issue whether collective agreements should be made enforceable at law, thereby putting union funds at risk in the judgments of commercial courts. I listened carefully to the arguments advanced by my hon. Friend against such a move.

I should like to add two further points. First, if collective agreements are made enforceable at law, this is likely to lead to a proliferation of unofficial strikes. Secondly, I doubt very much whether any large employer will follow the route of taking union officials to court. One has therefore to ask what is the point of giving the employer a new weapon that he will never want or dare to use. This will not alter the balance of power in favour of management at the expense of the unions. It is rather like a quartermaster sergeant giving the Rifle Brigade a long bow on the grounds that it was a useful weapon that had been successful at Agincourt. We would be running the danger of putting the unions' backs up without creating any change in the balance of power.

Mr. Whitney

rose——

Mr. Renton

I am sure that my hon. Friend will have a chance to speak later. If he will forgive me, I should like to continue.

A more fruitful path for the Government to follow is to consider how to help the unions to reform themselves by such methods as secret ballots for national union officials, by seeing that properly audited accounts are available more quickly if a union wishes to remain a friendly society and by achieving proper and quick accountability in the use of the political levy. The political levy is much abused at present in order to buy more votes at TUC and Labour Party conferences. This is the path that we should follow. It was Len Murray who said: We cannot disinvent the trade unions. They are here to stay". That is obviously true. The Government's role should be to see that trade unions use their industrial muscle as usefully as possible for their own members and fairly from the point of view of the community. This leads to the question "What do we judge the role of the trade unions in our society to be? What is the role of unions? What should be their proper attitude to management?"

This matter is raised in paragraphs 28–32 of the Green Paper on trade union immunities. I should like to remind the House what paragraph 28 says about the duties that trade unions and employers owe to the community as a whole. It says Are they merely pressure groups with obligations only to their own members and no duty to take a wider view? Or have they already, by virtue of a very long if informal relationship with the state and their importance in the running of a complex modern economy, become bodies of a different type whose influence and concomitant duties have, however, not yet been properly defined? Between the Civil Service language in that paragraph, all hon. Members, I believe, would agree that the duties and responsibilities of trade unions have not yet been properly defined but that, equally, they are clearly here to stay. The question of trying to define their responsibilities is a very much bigger issue than changing from a soft line to a harder line on trade union legislation.

Why is it that the Japanese car factories do not have strikes while British Leyland regularly has them? Clearly, the answer lies not in legislation but in attitudes of co-operation between management and work force which are unknown in Britain. We all see, endlessly it seems, pictures of small groups of Japanese workers in their factories early in the morning discussing how to improve productivity during the coming day. I suspect that we all become nauseated by those pictures. But we should wonder, equally, why that does not happen in Britain and still shows no sign of happening.

I believe that the CBI was on the right track last week in Eastbourne when it talked of the necessity of having a dialogue with the TUC about unemployment and training. When one considers Alex Kitson, the acting general secretary of the Transport and General Workers Union, one despairs. One wonders how a dialogue with such an official could ever take place. He is a man who is going to town on making it plain how irritated he is that the BL strike did not work and he is now determined to bring out the tanker drivers. He has never won a ballot for national union office in his life, so what on earth is he doing leading the largest of our unions?

However, the Government are not in the business of despairing. I should like to make three suggestions. First, my right hon. and hon. Friends should consider offering both the TUC and the CBI a formalised place on a consultative body discussing and planning new initiatives. After all, it is clear that individual trade unions have much more experience at the coalface and on the shop floor than anyone else, and we should make use of that experience.

Secondly, and leading on from that, I believe that the time has come to look at the composition of the National Economic Development Office. I suspect that it has started to outlive its usefulness, that it has become too large, and that it is a meeting of all the great and the good, from the Governor of the Bank of England to the general secretary of the TUC onwards. Very often, when all the great and good meet for two hours or so, they find that they have nothing much to say to each other.

We should look again at the NEDO to see whether a smaller body, meeting more frequently, could be more useful than the present organisation, in its present composition.

Thirdly, the Government should consider offering to help in the mergers of unions in the years ahead. We all know that there are far too many unions in Britain. Many of them are craft unions perpetuating old skills and old demarcation lines that are no longer relevant to our industry today and that cause unofficial strikes. The Government could make a gesture, for example, by saying that redundancy payments to national union officials in cases in which unions are merging would be met out of Government funds for a certain period.

Mr. Jim Craigen (Glasgow, Maryhill)

Will the hon. Gentleman give way on that very interesting point?

Mr. Renton

No. I hope that the hon. Gentleman will forgive me. Many hon. Members wish to speak, and I am about to enlarge on that point.

That is the sort of area at which the Government could look in a constructive spirit in order to help the merger of unions to come about, which is much needed on the industrial scene.

The task of Government is, above all, to try to help our unions to become responsible and democratic and much more accountable to their members, whilst limiting the amount of damage that trade unions can do to individuals or to employers, notably through unofficial action. One step in that process will be the forthcoming Bill to be introduced by my right hon. Friend the Secretary of State. That Bill will be opposed publicly by many Labour Members and by some trade union leaders, but I believe that it will be welcomed secretly by many trade union leaders and a great number of trade unionists.

I end by reminding the House of the following quotation: Great as freedom may be, it has to rest upon a basis of Government". That saying was from Isaac Foot, the father of the present Leader of the Opposition. We have to find that "basis of Government" in relation to the trade union movement.

6.44 pm

Mr. David Winnick (Walsall, North)

I shall refer later to one or two of the points made by the hon. Member for Mid-Sussex (Mr. Renton).

First, the background to the Gracious Speech that we are now debating is the appalling tragedy of the return of mass unemployment. I should like to mention what has been happening in the West Midlands. Reference is often made to the fact that unemployment was fairly bad before the present Government came to office. Registered unemployment in the West Midlands in June 1979 was 5.2 per cent. The latest figures for the region show that it is now over 15 per cent. Therefore, there has been a threefold increase in unemployment in the region.

Perhaps it is as well to bear in mind the number of people who are denied the opportunity of earning their living. In June 1979 the figure in the region was 121,521. The latest figures show that nearly 350,000 people in the West Midlands are unemployed. Of course, the real figure is much higher when one includes those who do not bother to register—particularly women—and those on various youth opportunities schemes which will last for only a short while, after which those involved will return to the dole queues.

The Secretary of State for Employment must know that it is no use anyone in other parts of the country getting on a bicycle or a train or into a car and going to the West Midlands, to Birmingham, Coventry or the Black Country. There is no work available in that region, for the reasons that I have mentioned. That is not surprising, bearing in mind what has been happening in manufacturing. According to a reply that I received today from the Secretary of State for Industry, in the three months to August 1981 the index of production for manufacturing industry was 89.7, compared with 107.4 in the second quarter of 1979. The impact of that downturn in manufacturing output has been felt more in the West Midlands than in any other part of the country. Unemployment has been rising more in that region than in other parts of the United Kingdom, including Northern Ireland.

The Government's economic policies—tight money, very high interest rates and, for much of the time an uncompetitive exchange rate for the pound—have largely brought the present unemployment tragedy to the West Midlands and the country as a whole.

The Government talk about helping the unemployed. Perhaps I may ask how one helps the unemployed who are in many cases the direct victims of the Government's economic policies. For example, we have had the phasing out—by next year it will be abolished—of the earnings-related supplement for unemployment benefit. The amount of money may not have added up to much, but at least that gave some help to the unemployed person and his family. What possible justification was there for the abolition, by the middle of next year, of this supplement, which at least gave some assistance to those in the dole queues?

The Gracious Speech states: My Government share the nation's concern at the growth of unemployment". That is rather like a murderer having some compassion for his victim. It is simply not true that the Government share the nation's concern for the victims of unemployment. On 10 August, in a characteristically frank speech, the Secretary of State for Trade spoke about the advantages of unemployment. He reminded the country that there were certain advantages in the growth of unemployment since the Conservative Government have been in office.

The right hon. Gentleman said that no one should suppose that unemployment is not a national advantage, provided that the Government have the stamina to stick to the policy and the compassion to temper its sharp and personal effect. In many ways, large-scale unemployment has been deliberate Cabinet policy.

In the West Midlands there has been a large concentration of metal-based industries. Those concerned about the region have, over a period of years, urged that new technological industries should be brought in. Although there are advantages in metal-based industry and car manufacturing, those industries should not be so concentrated that when there is a downturn in manufacturing output the region is hit so badly. The Government must give that sort of assistance.

I took a deputation from Walsall to visit the Department of Industry, where there did not seem to be much enthusiasm or planning to try to deal with what has been happening in recent years. We asked the Minister and his officials whether they had any plans to bring new industries into the region. We were told that they had no plans at all, which is not a very promising outlook.

The working week needs to be further reduced. Last week the engineering industry started a 39-hour working week, which was brought about by a strike in the industry some 18 months to two years ago. There is a strong case to reduce further the working week in that industry to 35 hours as soon as possible. Along with many people in the trade union movement, I am concerned about the amount of overtime worked. At a time of large-scale unemployment, we should reduce some of the excessive overtime being worked, although for those on low wages overtime is a means of taking home a reasonable wage packet.

There is a considerable problem with youngsters who leave school at the first opportunity, often with a minimum of qualifications. Even when there were employment opportunities—before the Government came to office—many of those youngsters had considerable difficulty. The difficulties are now much more acute. Employers can pick and choose. Often it is those who have left school at the first opportunity who cannot find work and remain unemployed, not just for months but for years at a time. We should be concerned about those youngsters when we talk about training, the retention of industrial training boards and the encouragement of training apprenticeships. Those policies are in total contrast to those being pursued by the Government.

The hon. Member for Mid-Sussex spoke in favour of action against trade unions. He referred to himself as the president of the Conservative trade unionists. That is rather like me being involved in the trade associations of the Stock Exchange and merchant bankers. However, I am sure that the hon. Gentleman has been duly elected by secret ballot. With his substantial trade union background, he is in a position to be the president of the Conservative trade unionists.

The hon. Gentleman said that he had some reservations about removing legal immunities from union funds. I read in one of yesterday's newspapers that the organisation of which the hon. Gentleman is president has strong feelings on the matter. The lady who runs the group, apparently not the president, said "This is dynamite". She then went on to say: We warned the Heath Government not to go down that road in the 1971 Industrial Relations Act, but they took no notice. The Conservative Party has no election mandate to take such a step. It would damage the Conservatives on the shop floor and lead to confrontation with the unions. The lady is Mrs. Margaret Daly, who runs the Conservative trade unionists from—surprise, surprise—Conservative Central Office.

I am, like the hon. Gentleman, a member of APEX. Moreover, I am a member of the executive council of that trade union. I am not a sponsored Member of Parliament, but I declare my interests accordingly. All attempts to remove legal immunities from unions, and put seriously at risk their funds, could lead to great difficulties and much injury in industry. As the TUC has warned, it could lead to a repeat of the Taff Vale case, which took place at the beginning of the century and which had such wide repercussions for Britain.

Much of what was said today by the Secretary of State for Employment and Conservative Members, such as the hon. Member for Mid-Sussex, about the need for what they described as union reform was said about 10 years ago. Similar arguments were advanced to justify the Industrial Relations Bill. They said that it was necessary and relevant and that the country wanted such a Bill.

What was the outcome? Because of a Conservative majority in the House, the Bill became law, but within one year it was useless. When the dockers went to prison in 1972, they made it clear that they would not accept the offensive and penal nature of the Industrial Relations Act. When the general council of the TUC declared its full support for the dockers, by various legal devices they were released from prison. The Act no longer worked. The Secretary of State for Northern Ireland, when he was the Conservative spokesman on employment matters during the previous Labour Government, said that the Conservative Party had no intention of repeating the 1971 Act. He said that the Conservative Party had learnt its lesson.

Have the Government learnt their lesson? There is tremendous pressure from the Right wing of the Conservative Party to bring about the sort of penal and offensive measures against the trade union movement that were attempted in 1971. Those measures will be passed in the House because the Government have a majority, but they will not work. The trade union movement will fight such legislation, and it will be right to do so. Working people have a right to defend their position. I have no doubt that there will be the same outcome as 10 years ago.

The hon. Member for Mid-Sussex referred to Grunwick and said that he was not on the picket line. He said it almost with pride. I was on the picket line at Grunwick. Before mass picketing occurred there—which was not until six or seven months after the strike started—there was ordinary picketing. However, attempts at ordinary picketing did not achieve the necessary result. All peaceful persuasion proved unsuccessful.

The issue at Grunwick was the right of employees at the factory to belong to the union—which happened to be APEX—and have it recognised by management. Almost to a man, Conservative Members defended Ward's attitude and refused to acknowledge the right of a considerable number of the employees who had the cheek to believe that in a democratic society they could belong to a union and have that union recognised. That was long before there was any question of mass picketing. The loophole in the law gave Ward his victory.

Conservative Members say that they want trade union reform. I want reform, but reform so that there can be no repeat of Grunwick and of the cowboy antics of George Ward. Ordinary people should not have to struggle for their elementary rights. As soon as a Labour Goverment come into office, they should bring about that reform by amending trade union legislation.

The Prime Minister is bitterly hostile to trade unionism, as her attitude over Grunwick demonstrated. It is almost impossible for her to speak of industrial relations without a strong bitterness and prejudice against trade unions and the trade union movement. Many Conservatives look on trade unions as the enemy, although they say that they are in favour of certain types of union activity. They cannot understand why working people need to belong to a union and to protect that organisation by 100 per cent. membership agreements. Without trade union protection, certainly in a large company, the ordinary employee has no protection. He is in no position to argue or to bargain with employers over hours of work and wages—certainly in multinational companies. His only protection is to belong to a union.

Plenty of anti-union legislation has been passed over the years. More was passed in the previous century than in this century. Governments were confident that legislation could deal with the unions, but time and again anti-union legislation has been repealed. At the end of the day the unions usually win, as they did over the 1971 Act. If the Government are stupid enough to introduce the offensive and penal legislation that their Right-wing supporters want, it will be defeated in the country. The next Labour Government will certainly repeal all that is offensive to the trade union movement.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

After commendably brief speeches, hon. Members are drifting towards longer ones. I ask for restraint.

7.3 pm

Mr. David Madel (Bedfordshire, South)

The subject for debate is wide. We could spend much time on discussing the Green Paper on trade union immunities and the training initiative.

First, I wish to make two small points concerning my constituency. Like every other area, it is suffering from the increase in unemployment, business uncertainty and a great deal of fear about how we shall get through the next decade. A fortnight ago we had a stoppage at Vauxhall Motors, the largest employer in the area. One reason for the unpopular stoppage was to protest about tariff-free car imports from the Republic of Korea. The employees are not against normal trade, but there is an almost 100 per cent. restriction on British cars going to Korea, yet we appear to allow the Korean Pony to be imported tariff-free.

There must be fair trade and competition. The car industry has massively reorganised and re-equipped, to a great extent on a European basis. We are dependent on other European factories and they are dependent on us. However, we cannot compete when we face unfair foreign competition. The Government have promised to look into the question of Korean imports. I hope that they will soon let me know the position. If further tariff-free inroads are made into the British market, and we cannot export to Korea without hindrance, our employment base will be further weakened.

Secondly, like many of my hon. Friends, I have a small BL plant, Pressed Steel Fisher, in my constituency, at Dunstable. The employees there voted to accept the BL offer, but they now look for greater participation and co-operation with management. They voted to save BL. They did not vote down Mr. Kitson, although some people interpret the vote in that way. The overwhelming vote was to make a success of the company.

Talbot has dramatically improved industrial relations and productivity. The way is clear for BL management to build on the good will and hope that come from the vote. I ask Sir Michael Edwardes to pay attention to the smaller BL plants and to do all that he can to explain what their future will be. Pressed Steel Fisher in Dunstable feels somewhat left out of BL corporate strategy. I hope that Sir Michael will build on the majority vote to accept the offer and get across what the management is trying to do, what the future of the company is and what the job opportunities will be in the next decade.

There has been talk of looming industrial troubles. The right hon. Member for Cardiff, South-East (Mr. Callaghan) mentioned the dispute involving tanker drivers. In fact, it has not yet come to a dispute, but peace is in the balance. It is a delicate and difficult situation. A stoppage would inflict swift and fearful damage on industry and on agriculture. We shall need exceptionally nimble footwork by ACAS, management and unions to avoid a stoppage.

I pay tribute to ACAS for the work that it has done in the past four months. It steered British Rail out of a possible damaging industrial dispute, although all three unions in the dispute gave three to four weeks' notice of a stoppage to allow negotiations to continue. ACAS also played a useful role in steering BL out of a full-scale dispute.

However, we must consider the instances where, if employees in key and vital sectors of the economy cease to work, industry will inevitably suffer severe damage. As a result of negotiation and bargaining, could not the strike threat be lifted in such sectors in exchange for a comprehensive reorganisation of negotiation?

I am pleased to hear that we are to have a White Paper on trade union immunities, discussion and then a Bill. That is a commendable way to proceed, with plenty of consultation. Dealing with strikes by key groups of workers, paragraph 337 of the Green Paper states: It is possible to argue that the most effective way of making progress on this question is through voluntary 'no strike' agreements between management and unions in those sectors of industry where strikes might threaten the national interest. We have not yet had voluntary no-strike agreements, but trade unions could use that part of the Employment Act 1980 to hold a ballot of all members on taking away the strike weapon in exchange for other things. A postal ballot would be expensive, but the cost would be reimbursed by the Government.

Now that the Act is settling down the country looks to trade unions to make maximum use of it. Two important uses for a ballot may be for changing trade union rules and, as my hon. Friend the Member for Mid-Sussex (Mr. Renton) said, for trade union mergers. Under the Act the Government would foot the bill. At the end of the Green Paper on trade union immunities comparisons are made between what this county does about key workers and what other countries do—Australia, Sweden, the United States and France, to name but four. All our industrial competitors have fall-back positions when there are threats of strikes in essential services or industries.

It appears that before drastic action is taken in those countries an established conciliation service intervenes and is able to secure a settlement. I am convinced that in a complicated modern industrial democracy it is both possible and essential to include negotiating conciliation procedures so that we do not have industrial upheavals and earthquakes as a result of key workers going on strike.

Industries in this country are increasingly interdependent. That is at the forefront of the economy's key sectors. I ask that trade unions make greater use of the Employment Act 1980 and see whether we can create a system whereby the threat of strike action can be removed.

The Secretary of State for Employment mentioned the future of training documents He made a welcome point when he said that he would be announcing later that we would reorganise training. On the subject of the open tech, as it has been christened, I shall quote from paragraph 23, subsection (3) "A New Training Initiative." It states: There is a need to open up widespread opportunities for adults, whether employed, unemployed or returning to work, to acquire, increase or update their skills and knowledge during the course of their working lives. If we are to follow that document's recommendations, there has to be financial help for those who are unemployed and who want to take advantage of one of the courses once the open tech has been established.

I hope that the Government can soon say that they are equally concerned for unemployed people to be able to benefit from the new system as they obviously are for people in work who will need to be retrained. We must avoid unemployed people being deterred from taking courses as a result of financial difficulties caused by their unemployment. I am sure that the open tech can and will lead to fruitful co-operation between employers and employees. If we get the opportunity right for the unemployed, at least it will offer hope to those who are now suffering from the very difficult employment situation.

I welcome the fact that the Government are granting an extra £40 millions to help apprentices in their first year. The Government are presently subsidising 28,000 apprentices. What people, especially those in their last school year, need to know is how long the commitment is for. Are we to increase the numbers we are willing to subsidise in the next three to four years? The answer to that question is desperately important for people who are now in their last school year. Given that we are having this ever-increasing debate on the school curriculum regarding 14 to 16-year-olds, what the Government are prepared to do to help apprenticeships is relevant.

Nearly everyone involved in this debate hopes that our improved training opportunities will lead to something like the unified scheme that exists in West Germany. I have two things to say that are absolutely essential before we get such a scheme off the ground. First, we must get the 14 to 16-year-olds' curriculum adjusted so that people can move easily to the approved schemes. Secondly, industry and the Government must see to it that there are sufficient instructors ready to help when the scheme is under way. Reviving the economy requires a more skilled workforce. There is no risk or danger in investing heavily in order to provide wherewithal that people will need to take advantage of what is offered.

It is with the demand side of the economy that we should be most concerned. There has been a great deal of re-equipping, modernisation and reducing of the workforce in industry in the last five years. In other words, an enormous upheaval has occurred. Now that that modernisation has taken place and the workforce has been reduced, people are asking what they can now expect.

There must be no further reduction of net disposable income—quite the reverse. Net disposable income should increase so that we start to revive activity in our factories. We have said a great deal in the past about shifting expenditure from Government to the individual and to business. We have certainly succeeded in slowing down the increase in Government spending. However, what is now needed is that both industry and individuals should have the opportunity to increase their spending. We need an increase in the amount of disposable income. A revival of demand in this country is necessary. However, there is all the difference in the world between a revival of demand and an upturn in factory activity from wild and uncontrolled Government expenditure. I hope that on Wednesday the Chancellor of the Exchequer will address himself to the central point of net disposable income and demand.

7.17 pm

Mr. John Grant (Islington, Central)

My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) made the sort of quality speech that we ought to get from Ministers. Unfortunately, we rarely get such speeches nowadays.

My right hon. Friend talked about a national emergency. I am sure he is right about that; the nation is in a crisis. If anybody doubts that admittedly crude assessment he might do worse than ask a representative cross-section of the 3 million unemployed to provide an alternative definition.

It is against a grave and perilous background that we are presented the Queen's Speech which plumbs new depths in its irrelevancy and insensitivity and in the sheer complacency behind its bland words. The Queen's Speech abjectly fails to confront the deep-seated problems facing the nation. That was reflected again in the Secretary of State for Employment's sorry contribution.

We do not need to be surprised by the Government's failure. From day one, at Downing Street, the Prime Minister has pursued her purloined economic theories with the kind of stiff-necked obduracy which, inevitably, must bring her party and herself to political doom. Anxiety is reflected in the type of speeches heard in the debate from the Government's Back Benches.

The nation needs and deserves better. It deserved, in the Queen's Speech, a genuine message of hope and an admission that the Conservative Party's pre-election pledges of more jobs, lower taxation and lower prices had all been broken. It ought to have stated that the so-called "monetarist experiment" had been an unmitigated disaster and that the economic and social fabric of our society had been damaged—irreparably in many places.

However, the Queen's Speech contains a series of platitudes about the importance of reducing inflation, improving efficiency and strengthening industry. We are told that the Government share the nation's concern at the growth of unemployment and will continue to direct help to those groups and individuals most hard-pressed by the recession. They are weasel words. We have received the same sort of weasel words from the Secretary of State for Employment this afternoon.

I allow for the impact of international recession—I do not dismiss that aspect as the Conservatives did when the Labour Party was in Government—but the Government bear the prime responsibility for the current grave state of the nation. Few families are now untouched by unemployment or by the fear of unemployment.

We have received a complacent view from the Prime Minister while she sits on top of a pyramid of industrial stagnation. Industrial stagnation prevails in many parts of the country. I will not go through all the quotations, but it is the same Prime Minister who in 1977—when employment was at a very different level—suggested that a Conservative Government would have been drummed out of office if they had produced that level of unemployment. The drum beats are getting louder and louder. The Prime Minister pretends that she cannot hear them.

I leave aside the precise statistics in the interests of brevity, but output is down, investment is down, inflation is up, unemployment is up, public expenditure is up and taxation is up. Yet the Prime Minister talks glibly about an economic upturn. She must have a different crystal ball from the CBI, the London Business School and, in respect of unemployment, the Manpower Services Commission, which predicts a horrifying trend, particularly for youth unemployment.

The Prime Minister and the Secretary of State talk about special employment measures and industrial training, but the Government have cut, cut and cut again in those areas. They have cut the budget of the MSC, we face the pending dismemberment of the industrial training boards, and the various employment services are unable to cope with the enormously increased burden that the Government's economic policies have imposed on them.

In my constituency there has been fighting in the unemployment benefit office as the frustrations and humiliations of the dole queues have boiled over. Staff and claimants alike have been subjected to undue pressure. There were 16,490 people out of work in Islington last month—the highest-ever recorded figure. That represents a 65 per cent. increase in the past year. Let the Prime Minister tell those people about her concern. I shall be glad to show her round.

The right hon. Lady talks about looking after underprivileged groups. I hope that we shall be told before the end of the debate of just one new measure that the Government have introduced to help the employment of the disabled. They have cut back in areas affecting the disabled, where I was involved in securing substantial advances when I was a Minister at the Department of Employment. It is a tragedy that that has occurred, but we see the same story with the low-paid workers who are covered by wages councils.

There has been a scurrilous campaign on the Conservative Back Benches to undermine the wages councils, and we must face the fact that that campaign has not been without ministerial encouragement.

What about the ethnic minorities? The Secretary of State spoke about discrimination in employment, but when I sought to intervene he would he would not give way. I think that I know why. He knew what I wanted to say. What is he doing about the Commission for Racial Equality's code of practice for employment? The Government have held it up for months even though the commission and industry have finally reached agreement on it.

That code of practice should have been brought to the House for approval. It was about to be presented when the Prime Minister made her ministerial changes and it seems that the document has been put back on the shelf and we can get no indication of when it is likely to come before us. The Government show no urgency in dealing with that matter, despite recent events in our inner cities, where unemployment has been a major factor in what has happened.

That brings me directly to the new Secretary of State for Employment, who assures us, with that friendly, affable charm that we all know so well, that he is not looking for confrontation. That is his story. His main contribution to the resolution of the chronic problems of the nation is another anti-trade union Bill. That is the size of it.

The Prime Minister told us last week that she believes that there will be widespread support for a new Bill on trade union matters. She got it right, though it was probably a slip of the tongue. She did not use the phoney description inserted in the Queen's Speech which referred to "employment and labour relations".

Any proposals brought to the House by the Government merit serious consideration and cannot be dismissed out of hand, but the advance briefings by the Department of Employment have been enough to enable us to form a fair preliminary judgment.

If the Prime Minister and the Secretary of State take time out to discuss such matters further with industry—trade unionists and managements—they will find, far from the widespread support that the Prime Minister speaks of, a singular lack of enthusiasm for another package well before the previous one has had time to bed down.

If the Prime Minister and the Secretary of State talk to responsible shop stewards or personnel managers at the sharp end of industry, who have to deal with the problems day by day, they will find that they resent constant disruptions of their working arrangements that have nothing to do with genuinely improving labour relations.

It is significant that at the recent CBI conference there was a clear rejection of further such moves at this time. One employer said: Certainly it would be reprehensible for the Government to seek to use industrial relations legislation to divert us from the consequences of their adherence to a single, rigid, insensitive dogma. But that is precisely what the Government's proposals are about. The Government know it and employers know it. The proposals are not about strikes or closed shops. Those are not causing our troubles. Indeed, the Secretary of State boasted again about how strike figures had fallen.

I do not say that the unions could not do far more to put their own house in order. But the Government are searching desperately for a scapegoat for the failure of their economic policies. What better prospect is there than the trade unions? They have a generally unpopular image—it is true that they have caused much of that themselves—their industrial strength has been weakened and they have an inbuilt tendency to hurt their friends more than their enemies.

However, as my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) said, the Government calculate that the blackmail of unemployment will secure the submissive reaction that they want. We shall have to wait and see. Nothing is certain in industrial relations, but the Secretary of State was put in to do a job. His terms of reference were clear enough—"clobber 'em". He will do that to the unions and will probably give a new meaning to the term "wildcat".

These are sad days. We have had great Ministers of Labour in the past, irrespective of party—I think of Ernest Bevin and Sir Walter Monckton—and some not so great Ministers who have, nevertheless, done that extremely difficult job with compassion, tact and understanding. Looking back at them, it is hard to avoid the conclusion that we have just about reached rock bottom, and the Secretary of State underlined that in his speech.

The right hon. Gentleman has made his mark. He has told the unemployed to get on their bikes. When it is time for him to pedal off into the sunset, like the John Wayne of the Cyclists Touring Club, it is unlikely that he will be remembered for much more than that callous remark and for exerting a disruptive and malevolent influence on the labour relations scene.

I will not deal with the industrial relations proposals in detail. We shall be coming back to them all too often in the near future, but they can be bracketed with the other two major legislative measures on local government and privatisation in their doctrinaire irrelevance to our real problems. I record in passing my opposition to both those particularly distasteful proposals.

There is so much to be done to achieve the just, caring and prosperous society, where we pay people to work and not to be idle. Some of the gaps are glaringly obvious. We need more homes, better education, better training for our young people, who are suffering so grievously from unemployment, and an improved National Health Service.

I deviate for a moment on to a topic with which I was involved previously—the need for this country to do far more to relieve suffering and poverty overseas. The Prime Minister's recent visit to Mexico, set against the background of our savagely reduced aid programme, was nothing more than a contemptuous piece of ministerial and diplomatic window dressing. The United Kingdom's response to the Brandt report has been an object lesson in cynicism and evasion.

Above all, if we are to get the nation back to work and to create again the conditions in which industry and commerce can thrive, we must have a measured package of expansion. There have been a number of suggestions in the debate about how that could be done. We need it desperately. We know from the Prime Minister that we will not get it now, but when the change of policy is secured—I hope that it will be before the next general election, but it will probably have to wait until after that—it will need to be accompanied by a fair and sensible policy for incomes—I mean incomes generally and not just pay—and prices. I echo the words of my right hon. Friend the Member for Cardiff, South-East. We shall need such action if inflation is to be restrained and unemployment beaten back.

I have been an unswerving advocate of that approach for many years. I go no further now than to assert that I have never envisaged that as a short-term crisis measure. If we can remove it from that context we may be able to avoid the worst shortcomings of the past. We certainly cannot overcome the joint enemies of unemployment and inflation without such a policy. That is not favoured by the Labour Party or by the Government. It is a sad and tragic mistake which the Labour Party will come to regret if it cannot put it right.

Nor will the nation be assisted in dealing with unemployment by turning our backs on our Community partners. I have never been a Euro-fanatic, but I believe that the balance of advantage is demonstrably in favour of retaining EEC membership, and that withdrawal will hit jobs in this country. I do not believe that the position taken by my party in this connection is compatible with the internationalist approach to which the Labour Party once adhered so firmly.

I want to refer briefly to my third point of dissension—which again has an employment aspect—with Labour Party policy. The Queen's Speech refers to the preservation of peace. In my view, the right hon. Lady's militarist sabre rattling, along with that of the President of the United States, has given a massive boost to the neutralists, or to those who think that Britain should shelter under the American umbrella, while relinquishing any real responsibility. However, whatever the cause of the current anxiety, there is no case for Britain to contract out of its obligation to play a full part in the defence of the free world. That is not the way to disarmament or to a lasting peace. Moreover, there is a responsibility on the Labour Party to spell out the employment implications of its defence policy, as my hon. Friend the Member for Pontypridd (Mr. John) has tried to argue, so far with little support.

The hon. Member for Aldershot (Mr. Critchley) mentioned the style of government. He made a valid point. The right hon. Lady's Prime Ministerial style has much to do with the difficulties that we are in today. Her doctrine of personal infallibility, of imposing on the people what she thinks is good for them, has a great deal in common with the blinkered sectarian approach of the hard-line Left that is destroying the Labour Party. It is my opinion that the nation is crying out for leadership, but for leaders who will listen to the people and who will respond to them. They are not getting it from this Government, nor from the Prime Minister, and certainly not from the Chancellor of the Exchequer, with whom the Prime Minister seems to persevere, presumably in the hope that there is life somewhere in there.

Sadly, we are not getting it either from the official Opposition. I am not entirely sold on opinion polls—far from it—but I wonder how an Opposition leader can lag in public esteem behind the worst, the most lamentable Prime Minister that we have had in the post-war era. It gives me no pleasure to say that, but it is time for the unmentionable to be mentioned from these Labour Benches, because these matters are relevant to the 3 million people who are unemployed today. It is time that these things were said openly. It is time that I said to my right hon. Friend—I warned him that I should be speaking in this vein tonight, but I understand why he cannot be present—that his continued attempts to appease the unappeasable, to placate and accommodate, in particular the right hon. Member for Bristol, South-East (Mr. Benn), have brought him, along with our whole party, into public ridicule, scorn and disrepute.

This situation is not a media creation. The leader of the party must bear a good deal of responsibility through a series of actions or non-actions. I have heard too often for comfort in recent weeks the comparison made with Chamberlain. In truth, there have been too many mini-Munichs littering the Labour Party's constitutional and policy-making paths in the past year or two, and it does not appear to be ending.

Of course, not all of that is the fault of my right hon. Friend, but the language of priorities has too often been replaced by the harsh, shrill doctrine of intolerance and intimidation. Sensible, moderate policies of the kind that the last Labour Government pursued and which we should be pursuing now in Opposition are being abandoned or presented, in some case gift-wrapped, for others to adopt. The Labour Party is being allowed to walk half-naked into the polling booths. The Leader of the Opposition wanders around with his first-aid tin. The party's wounds need major surgery, not sticking plaster, but at this stage there is not much sign of an operation on the ailing patient.

The message from the polling booths is clear enough at Warrington and Croydon. They have told us that the people reject extremism, whether it comes from the Right or from the Left. Before the Social Democratic Party gets too euphoric I must say this. I do not criticise that party, as many people do, for not having clear-cut policies at this stage. Rather, I am worried that some of its leading figures seem to pronounce their own views as though they are already conclusive. Some of them, for instance, have worried me with their undue emphasis on the virtues of the market economy, rather than the mixed economy. We shall have to embrace new technology in this country. We shall not be able to do that and deal with the consequent unemployment by relying on the virtues of the market economy. It cannot be done. Those are the kind of issues that have to be tackled.

I am also concerned about the apparent inability at the moment of some people in the SDP to distinguish between needless bureaucratic imposition on the individual, which we all deplore, and necessary State intervention to prevent exploitation. The SDP has to get those issues right.

I apologise, Mr. Deputy Speaker, if I have taken longer than I should, but this is the first time that I have spoken as a Back Bencher for about nine years. I came into politics primarily to try to help the underdog and the underprivileged, and to work for social justice. In my view, all those matters are alien to this Government, and the unemployment figures are the clearest possible indication of that. Sadly, the Labour Party now has other overriding preoccupations that are counter-productive to those aims and objectives that I still hold dear. Too many people in positions of authority in the party are either unable, unwilling or, in some cases, too cowardly, to act to change that situation.

Mr. Winnick

Not so.

Mr. Grant

If there is one clear message that stands out in these turbulent political times, it is this: listen to the people, talk to the people, trust the people. That trust must be returned. The two major parties, for quite different reasons, have forfeited that trust, and they have no one to blame but themselves.

7.36 pm.

Mr. Tony Marlow (Northampton, North)

When some of our people are bleeding, it is the duty of the House to try to come together to bind the wounds. In the war against inflation, industrial decline and world recession, the casualty list has been long and gruesome As in all battles, it is not those in the rear echelons and those who keep their heads down, but rather the most courageous and the enterprising who have borne the brunt. The innocent and the best have paid, if not with their lives, with their livelihoods. Fathers of young families have been declared redundant and had the appalling situation where they have had to go home and tell their families that they have lost their jobs. They have been desolate and disconsolate and, as the weeks and months without a job have passed, the feelings of rejection and financiall insecurity have given way to alienation and despair. It is a dreadful prospect for a family to have a father or a breadwinner out of work for a long period. It is a very difficult circumstance in which to keep a happy marriage going. It is a frightening basis on which to bring up young children.

I believe that those of my colleagues who, now that we are three quarters of the way to victory over this problem, wish to surrender and sue for peace, are doing no service to those who find themselves in these tragic circumstances.

Our young people, recently out of school, believing that the world would be at their feet and they on the threshold of adult life, instead find nothing. They find that they are unwanted. They drift discarded. The age of 16, 17 and 18 is a very confusing, uncertain and worrying time. To have nothing worth while to do at that age is the height of cruelty. It is unsurprising that we had troubles in the summer.

When I was in the Army, we were taught to believe that there were no such things as bad troops, only bad generals and bad officers. While never excusing the violence that took place this summer, circumstances do very largely contribute to events.

The ages of 16 to 18 are formative years, and the experiences and the habits gained at that time stay with people for ever. The legacy of the disappointments which our young are suffering now will be carried forward to future generations. The scars on their attitudes could be with them for the rest of their lives.

Even so, where there is a choice, as the economy picks up, the priority must go more towards, and must be more important for, the mature worker, the man who is obviously more set in his ways and less flexible in the sort of job to which he can change, the man who has the highest skills and the man who needs the job because not only he but his family also are dependent on it. For the young we must find something different.

It has become accepted wisdom for our 16-year-olds that a job means manhood, money and maturity and that if they have not got jobs they are missing out, just as 150 years ago some 12-year-olds who were not permitted to carry brushes up the chimneys of the rich might have felt that they, too, were missing out.

There is something wrong. We should re-examine our thoughts. Do we really believe that at the age of 16 all our young people should start on the conveyor belt of a working life through to 65? There is something else. It is a cruel deception that our 16-year-olds should expect to start to work at that age. And when there are no jobs for them, how much greater is the disappointment? We can and we must find something else.

We have been trying to find something else. We have the youth opportunities programme, which in many respects is very good. I have to say that I am most grateful to the Manpower Services Commission which this summer laid on a first-class programme for me and some of my colleagues to see some of its schemes at work—and very imaginative and good schemes they were too.

I do not wish this to sound pejorative, but in some respects the youth opportunities programme is negative: "If you've got nothing else to do, come on the youth opportunities programme". It is negative because, whilst people are on it, they are looking for jobs. To that extent, it must be second best because participants are trying to get out of it and on to something else. As well as the youth opportunities programme we should be looking for other ideas.

My right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) put forward his proposals in a very straightforward and effective manner to bring back some form of national service. Youth Call has put forward a discussion document about a form of national community service. The Government have proposals for a mixture of training, work experience and education for our young people. I ask the Government to bear in mind that there must be a great range of these opportunities because there are those who, when they leave school, do not and cannot know what they want to do. They do not want any more education. They do not want any more industrial training of the sort about which we are talking at the moment. What is more, a good one third of jobs in the foreseeable future will be undertaken by those with no specific industrial training and who will not require it. Instead, they will require a developed and positive attitude to society and working life.

One of the roles of the Government is to lift people's imagination, to give them hope and to show them something towards which they can move. Just as some of my colleagues are suggesting that we should go for a Channel link, a Severn barrage or some great national project with which the people can identify, so also for our young people we should devise a stimulating, imaginative and challenging scheme which they would wish to join and which at the same time could benefit the community.

Twenty years ago we had national service. I am not suggesting that we should reintroduce what we had 20 years ago. I am not saying that we have any need for a large national service Army. I am not saying that we have any need for the same tight discipline as we had under those national service conditions. Times and attitudes have changed. I am not even saying that we should have a compulsory scheme. I am saying that we should make a virtue of the necessity of present circumstances and devise a scheme with many of the good characteristics which were available when we had national service.

I should like to see a one-year scheme of national community service—a voluntary scheme, but with the commitment of one year from those who joined it. It would provide many of the advantages and lessons which were available 20 years ago. It would allow people to travel. It would allow them to mix with people of different backgrounds and circumstances. It would allow society to come together. It would allow people to get a greater understanding of the problems of others. It would give people experience of different activities and different jobs so that they were better able to make up their minds about the careers that they wanted to pursue. So many of our 16-year-olds have left school, gone to the factory up the road and stayed there for the rest of their working lives. How much better to get people around and to let them sample and see so that later they can decide for themselves what they want to do.

In brief outline, I should like to see a one-year voluntary commitment for boys and girls. They would start with a three-month period of what might be described as induction training, where they would come together, do some form of Outward Bound activity, learn some basic skills which would be of use to them later in the scheme, and realise that they had other people dependent on them; where they would work as a team and have responsibilities for others; where they would meet challenging circumstances which they had not met before; where their minds and attitudes would be broadened; and where at the same time they would be preparing to select that option which they wanted to choose next.

There would be three basic options, although throughout the scheme would be as flexible as possible, with as many different variations as it was possible to introduce. The first basic option would be an environmental option—working in the environment, be it in the inner city area, on the coastline, in the national forests or on the canals. Many of these ideas have been put forward before.

The second option would be in community service very much in line with the ideas put forward by Youth Call—working with young people, with the elderly, in schools and in hospitals helping those who wished for and needed help from other people.

The third option would be a form of cadet military service. Each part would be voluntary. People would choose that which they wanted to do. Those who did the military service would learn such skills as driving, vehicle maintenance and how to operate wireless sets—all in themselves useful skills. But if at some later and unfortunate time we required a civil defence force or a larger reserve Army, we would have at the back of us people with the required skills.

A lot of people would not wish to have a military option in such a scheme. But I believe that it is important if for no other reason than that it would be a strong and potent recruiting sergeant. We want to get together everyone in the country—from different backgrounds, different races and different fortunes. If we want to get the kids from the harder parts of our inner city areas, we have to give them something positive and challenging with which, in their machismo way, they can identify. If we have a military option in. the scheme, I believe that hundreds and thousands will come forward, and, having come forward, may actually spend their time on the environmental or the social services option.

Let us please look at these possibilities. Let us see what we can do for our young people. We have schemes at the moment, some of which are good. But let us increase the range. Everyone is different. Let us find challenges for everyone to participate. Let us produce something for people to look at and say "Here is something imaginative which our Government are producing and which is outside the range of normal political circumstances. It is something new and different with which people can identify." Let us do something exciting.

7.49 pm

Mr. Ernie Ross (Dundee, West)

The hon. Member for Northampton, North (Mr. Marlow) followed—but not slavishly—in the footsteps of his right hon. Friend the Member for Stafford and Stone (Sir H. Fraser). Although I wish him every success in his efforts to convince the Conservative Party of the worth of some of his suggestions, I do not necessarily agree with his conclusions or support the ideas that he put forward. At least he put them forward in a much more reasonable manner than the right hon. Member for Stafford and Stone. Indeed, I regret that the right hon. Gentleman is not in the Chamber.

Both the right hon. Member and the hon. Member used the old hoary Tory argument that at a time of massive unemployment we should dress young people up in uniforms and march them away. Young people do not intend to be marched away and we do not intend to allow those right hon. and hon. Members to do that to our young people.

Perhaps the hon. Member for Northampton, North will convey my next remarks to his right hon. Friend. If they are concerned about training they should bear in mind that the cost of one Trident submarine-about £1,000 million—equates with the total cost of 44 British universities. If they are concerned, they should agree to cancel one of those submarines and put the money back into the education system, where it is desperately needed.

In 1968, the Royal Commission on trade unions and employers' organisations produced the Donovan report. It received a mountain of evidence from the TUC, the CBI, employers' associations, trade unions, academics and companies. It came to firm conclusions about the closed shop and suggested that it had advantages that both sides recognised. In 1971, the Government of the right hon. Member for Sidcup (Mr. Heath) ignored the suggestions contained in the Donovan report and outlawed the closed shop. The industrial relations research unit at Warwick university researched into the effects of the decision to ban the closed shop and discovered that it had little or no effect. The main reason that the unit gave was as follows: The closed shop …proved such a stable and sturdy institution that …in the end even the law had to bend to the inevitable. The main reason was that the employers defended it almost as tenaciously as did the workers. In 1976, in an interview with the Financial Times, the former Secretary of State for Employment, now Secretary of State for Northern Ireland—hardly an unfriendly voice—said: Most people accept that it is perfectly reasonable to tell new recruits that they must join a union if they want a particular job. This is established practice in many factories. When asked about 100 per cent. union membership, the right hon. Gentleman said: No, not 100 per cent, which is why we advocate the conscience clause. But we would not accept 'free riders' who take the benefits of union acitivities without participating in them. That is one of the major reasons why trade unions are suspicious of the continued attack on them contained in the Gracious Speech. Clearly, in some instances trade unions need closed shops if only to allow them to organise effectively within certain companies. Management do not necessarily disagree with that sentiment. The Donovan report also stated that support from the employers for the closed shop rested on the view that it ensured that they were dealing with an organisation that represented all our people—which would seem to be an extension rather than a restriction on democratic rights—and that the closed shop helped to secure the observance of agreements.

Like the other Gracious Speeches that I have had the misfortune to listen to from the Opposition side of the House, this Gracious Speech is a continuation of the twin pillars on which the Government came to power. The first pillar consists of restoring to those who support the Government the profit margins that they felt had been eroded. The second pillar consists of an attack on the workers, first through unemployment and then on the worker's ability to defend himself through employment legislation. That philosophy is based on the premise that in a democratic society, trade unions have too much power. It was difficult for an active trade unionist to take the Tories' basic proposition seriously in 1979 but it is even more difficult today.

In an economy dominated by large and, more often than not, multinational corporations, investment decisions are taken by faceless men without adequate consultation and, in the majority of cases, without any consultation with the trade union movement. Factories, shops and offices close, sometimes threatening the economic life-blood and social viability of whole communities. We concede that industrial relations are conducted in a more civilised and sophisticated manner than in the 1930s. Trade union power has achieved much on behalf of working people. The power of employers has been restrained and as a result we live in a more civilised and democratic environment.

However, to suggest that employers cannot run their businesses and meet their shareholders' aspirations because of trade union power and pressure is to misread the balance of power in British society. The old power relationships still exist. Employers hire and fire. Employers increase prices, usually just after they have concluded wage agreements with the trade union movement. They reduce output at will, sell off assets and make decisions to invest abroad, usually to exploit cheaper or less organised labour. They then bring the manufactured imports back to Britain to threaten the very workers who originally produced the profit.

Trade union power has forced employers to take more account of employees. The trade union movement is much stronger and better equipped to protect its members. However, to suggest seriously, in 1981, that trade unions have the whip hand and that employers are hemmed in by a combination of trade union power and legal restrictions is to stand reality on its head. Even the Employment Protection Act, which was hated by management and blamed for poor economic performance, could not change the rules. Under that Act employers were still able to sack workers for incompetence and misconduct or able simply to close factories and to forget all about their social responsibilities.

Legal and quasi-legal approaches to deep-seated industrial relations problems do not work, nor can they. In a democratic society laws cannot be imposed to deal with basic conflicts of interest betweem employers and workers. Trade unionists simply will not accept attempts to control the rights that they and their predecessors won during decades of struggle. It is the task of any democratic Government to accept that reality and to refrain from attacking the trade union movement. That view is shared by several people and was expressed last week at the CBI conference. For example, it was said that Good human relations, not industrial relations, are socially and morally necessary, and also good business. You cannot legislate for good human relations, top management must see their importance. It is not only the trade union movement that says that further industrial relations legislation is unnecessary.

There can be little doubt that the major problem facing us is that of high and rising unemployment, which has already devastated the lives of many individuals and families. All the economic forecasts show that unemployment will become much worse in the next few years. In the city of Glasgow alone, more people are out of work than were out of work in the whole of Scotland 15 years ago. In the city of Dundee, 15,700 people are out of work and that is the largest number since the 1930s. In Dundee long-term unemployment—those out of work for more than a year—accounts for 25 per cent. of all those unemployed.

In the past two years the number of unemployed persons in Dundee has increased by about 90 per cent. The situation can only become worse. Just over 20 companies have closed and 60 firms have shed labour. The chances of finding work in Dundee are slim. There are only 250 job vacancies in the city. That means that the odds on any person getting a job are 60:1. In certain industries the position is worse. In the engineering industry the odds are 280:1, in the construction industry the odds are 330:1 and in the textile industry no one has a chance of a job, because there is not a single vacancy.

Bad as the situation is for the majority of people, it is even worse for young people. Because the young unemployed do not have employers, they cannot join trade unions. Wages and conditions on "make work" schemes are decided not by negotiation but bureaucratically, by the Government.

The Secretary of State argues that young people have priced themselves out of the labour market. Young people's enterprise and effort had a market value when they were cheap but, in the Secretary of State's eyes, they cannot be allowed to compete with adult workers. The Government's policy involves young people being employed as cheap labour. The cheapness of the labour is a result not of free collective bargaining but of direct State intervention.

The slogan "training for all" involves defining youth as a source not just of cheap labour but of malleable labour. Trainees are excluded from the normal processes of trade union bargaining. They are subject to the ideological argument that they are lucky to have a job at all.

The concept of training is misleading. Most youth training schemes and work experience programmes do not give young people marketable qualifications. They do not equip them with real skills with which they can make a career. The Government's employment policies clearly mark out young people as a section in the labour force—cheap, disciplined and clearly separated from adult workers and other young people taking higher education. Such young people lack a sense of commitment to our society. They feel that they are unused, pushed around, excluded, treated without respect and at the mercy of others.

A range of proposals have been made by the trade union movement with which the Government might try to alleviate some of the serious problems. I shall not try to rehearse them tonight because I do not believe that this debate is about trying to convince the Government to change their policies. It is more about getting rid of the Government.

Not only am I of that opinion; the Financial Weekly of 16–22 October carried an article headed: The Thatcher disaster. It stated: Margaret Thatcher is a tough, determined and single-minded politician, and rightly respected for those qualities."—

Hon. Members

We have heard it before.

Mr. Ross

Keep on getting it. Hon. Members have heard it once and they will keep on getting it until exactly what it means gets through.

The article continues: Mrs. Thatcher has one fault that makes a vice of her virtues: she is mistaken. Right about many issues, some small, some great, but determinedly wrong about the central issue of British government, the economy. And not just wrong, but disastrously wrong.

Mrs. Renée Short (Wolverhampton, North-East)

And big-headed.

Mr. Ross

As my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) says, she is also big-headed. The article concludes: The nation is not to be sacrificed to one party—let alone to the blinded stubbornness of one politician and the rubber backbones of her flunkeys. Nor need it be. The best—though of course it won't happen—would be for the Prime Minister and her Chancellor to say to themselves the famous words that Cromwell used to the Long Parliament, and Admiral Sir Roger Keyes to Chamberlain: 'You have been sitting here too long for any good you have been doing, in God's name go'. The three million people registered as unemployed would echo that.

8.2 pm

Mr. Kenneth Warren (Hastings)

That act is hard to follow. Many of my hon. Friends wish to take part in the debate so I hope that I can be as brief as I intend to be.

The hon. Member for Dundee, West (Mr. Ross) said some magic words. He said that the trade unions were now better equipped to protect their members. Unfortunately, the hon. Member for Walsall, North (Mr. Winnick) said that working people had the right to defend their own positions. That is what happened last week at British Leyland. The trouble is that the trade unions are not being led with the style and standard that their members expect. Nowhere was that seen more clearly than in the vote last week. However, one has high hopes because, arising out of the disastrous British Steel Corporation strike, one can see a more effective trade union which has put the steel plants at Port Talbot and Llanwern at least at the standard of plants in Japan.

The problem is that when trade unions are wanted, they do not give the workers the protection that they anticipate. That was my experience when I worked in a nationalised industry and was a tinpot branch official of the General and Municipal Workers Union. The management did not consult me as it was supposed to do. The trade union advice was that there was nothing that it could do. One hoped that if one belonged to a union protection would be provided when needed, but on the day of the battle the union leadership disappeared over the hill backwards.

I do not share the pessimism expressed by my hon. Friend the Member for Mid-Sussex (Mr. Renton). In my experience bad trade unionism never exists when there is good management. We praise the West Germans and Japanese too much for what they achieve in relationships by quality circles which I practised 15 years ago. There is nothing new in them. It is a different title for what was a formal management task.

I welcome what has been said about the need for better training systems. Much unemployment nowadays has come about because the training systems have not given young people the chance to be employed. Tens of thousands of young people have the right to expect a job at the end of their training, but often their skills do not match the opportunities. One can pick up technical magazines for the computer industry and read of thousands of vacancies. However, young people coming off the school production line do not have the qualifications which should have been given to them in the 10 years before they leave school.

I shall concentrate on training boards and the work that they should do. I understand that my right hon. Friend the Secretary of State wants more young people to take up apprenticeships. I warn him against that. I spent five years as an apprentice but found that I and my colleagues could have done the training in half the time. We were not as well equipped as five years of study should have made us.

An excellent book has been published by Clive Jenkins' Association of Scientific, Technical and Managerial Staffs—one of the few unions which has researched training boards. That reveals that there are almost no apprenticeships in the United States compared with apprenticeships in Britain. There are even fewer in Belgium. Both countries have made remarkable progress in the last five years. Increasing the number of apprenticeships will not necessarily solve our problems.

In Belgium about 55 per cent. of children who could leave stay in school. Many of them transfer to full-time vocational education. One must be careful about fixing on the idea of old-style apprenticeships because they do not always lead to modern job opportunities.

I have read 22 out of the 24 training board reports issued in the last two years. There is a lot to be desired in their standards of presentation and in their description of what they do. No two are alike. None of them relates to the same date. The disclaimers in some have to be read to be believed. For example, the cotton and allied textile industry training board took four months to produce and to record the 1980–81 year. In its foreword it states that it is not possible for factual details arising from training activities which have taken place during the 12-month period to be published within a few months of that date. It cannot say what it has done. It is a thin, paper document. It does not compare with the glossy document published by the engineering industry training board which waits until page 47 before it states the members of the board. It is produced by a company called Heffers of Cambridge.

The boards are coy about the information that they give. Of the 22 which I read, three did not wish to reveal their administration costs, five did not wish to say how many full-time trainees they had and 12 did not wish to reveal how many staff they had.

The chemical industry training board, for example, showed the extraordinary anomaly that it expected a levy of more than £17 million, but, after going through all the bureaucratic processes of exempting all those who did not have to pay because they were good chaps, it ended up with a mere £64,000 income from the industry. So the Government make up the difference. One wonders why the Government could not have intervened earlier. If one takes that board as a specific example—and I assure the House that it is not so very different from the others—one finds that it had £2 million operating expenses, yet it managed to give only just over £1 million in training grants. That is a most extraordinary business operation. Incidentally, the board has reserves of £668,000 in cash and assets. That sounds quite a lot, until one discovers that, of the 24 boards, the 22 that I investigated have reserves for a rainy day of more than £82 million. That is an extraordinary situation. Admittedly, the construction industry training board with £24 million reserves and the road transport training board with £18 million reserves make up most of that. Nevertheless, the boards are earning about £8 million a year in interest money which I believe they should be deploying.

Against that background of information, one's constituency problems take on a different aspect. I therefore sincerely hope that the Government will bring forward effective legislation to put the boards on a proper, organised financial footing so that we may clearly see what they are doing and ensure that they give value for that enormous amount of money to those whom they are supposed to represent.

I cite examples of companies in my constituency. It would be invidious to give names, as they are afraid that the boards may descend on them with the usual inquisitions. One company wanted to train motor mechanics. The company has been training apprentices since 1964. It is not a big company, but since 1964 it has enrolled 28 apprentices, 13 of whom are still in training, 10 have completed their training and some are now undertaking other types of training. That company found that it had to spend about £2,000 a year in addition to the training costs to satisfy the paperwork requirements of the training board to which it was responsible. It was then told that it must supply even more details or it would be required to pay a larger levy.

That is the kind of nonsense that drives small companies out of business. Indeed, in one case that was brought to my attention the training board involved intended to take the company straight to Carey Street on the Monday morning. Fortunately, I managed to get hold of the lawyer representing the board on the Friday night and obtained some breathing space. But it is surely not the job of the training boards to put small firms out of business, because that merely transfers all the burdens of training to the unemployment register.

Another company in my constituency over six years paid out £5,800. That may not seem a large sum, but it is a lot of money to a small printing company. What has it received in return? It received one grant of £49 in 1978 towards the expenses of sending one man on a training course somewhere else.

We are therefore not getting the response that is needed nowadays to promote the training of young and older people in the skills which are relevant to the jobs available to them. I beg the Government to look carefully into the question of matching skills to job opportunities available to people. I am sure that many people do not deserve to be unemployed and are ill served by the training boards whose job it is to match their skills to the jobs available.

8.14 pm.

Mr. Ronald W. Brown (Hackney, South and Shoreditch)

The more I listen to the debate, the more my mind is taken back to 1965–66 when my noble Friend Lord George-Brown was trying very hard to change the hearts and minds of men and asking them to face the country's problems. The House will recall that at that time we had the declaration of intent, the national plan and the concept of productivity, prices and incomes policy. It was argued that the declaration of intent brought people together—employers, employees and the Government—to pull on the same rope in the same direction. The national plan evaluated resources so that pressure could be brought to bear where it was needed. For example, where skilled labour was not available we undertook industrial training to provide it. The idea of productivity, prices and incomes policy was to ensure that they were relevant one to the other.

The Government at that time were saying that we could not pay ourselves more than we were earning. They went on to point out that if we kept ourselves in hand and achieved 25 per cent. more productivity in five years we could pay ourselves £6 for every £5 that we paid ourselves in 1964. What has the Secretary of State for Employment said today? He has said that we cannot pay ourselves more than we earn. But where was he when we discussed this in 1964–65? He was screaming his head off on the Opposition Benches demanding free collective bargaining. He joined the extreme Left wing and every lunatic in the business in demanding free collective bargaining with no controls whatever. They now have precisely what they fought for.

My noble Friend's concept was defeated. I think that history will show that if only we had continued with that policy, if only the Tory Party and its friends in the media, as well as the extreme Left wing, had not colluded to bring down that idea at a time when there were only 300,000 unemployed and when there was growth in industry and new industries developing, the situation today might be very different. My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), who made an impressive speech today, was involved in that. The Labour Government tried to achieve a new concept of partnership within the country. If everyone had joined us to achieve that, society might not be in its present state.

In my view, therefore, responsibility for our present trials and tribulations must lie at the door of all those who argued for free enterprise, effectively saying "Do as you like, the sky is the limit; there is nothing to stop you. Never mind about my friend, I'll go for what I can get". Even as late as May 1979 the Tory Party fought the general election on the basis that if people voted Tory they would have free collective bargaining. The sky would be the limit. The people have now learnt exactly what that meant. I have not brought a great wedge of papers to quote Tory election promises, but I remember appearing on television with the hon. Member for Basingstoke (Mr. Mitchell), who is now a Minister. He became extremely angry when I suggested that what the Tories meant by free collective bargaining was that collective bargaining would be free but that at the end of the day if one did not take what the Tories offered one would get the sack. He thought that that was terrible and quite wrong. Yet that is exactly what the people have got.

Therefore, while one may observe the situation today and perhaps hang one's head in shame that the Labour Government of 1964–70 were not more forceful in getting our ideas accepted, the tragedy is that the country is the loser. I believe that this is now almost irrevocable. I do not see how we can replace 3 or 4 million jobs. As I have said so often, the figure is not 3 million. It is 4 million or more, and the Government know it. However much they fiddle and tinker with the figures or introduce new indices, the number of unemployed in this country is now approaching 5 million. By the end of 1982–83, unemployment shall be of that order. Therefore, the country ought to be willing to apportion some blame where it lies—on the Tory Party itself.

I want to talk about industrial training, because this is an aspect of the subject that we are discussing tonight. Unfortunately, I am not privy to what will happen because the Secretary of State did not say what he intends to do with the training boards. However, I speak in support of the furniture and timber industry training board. I am parliamentary adviser to the furniture workers' union, and I have argued constantly for that training board to be kept in business. I argued the case when we previously debated the subject, and I pointed out that no evidence was available of shortcomings in the operation of the board which demanded its demise.

I understand, however, that following a Manpower Services Commission sector investigation the Government propose to dispense with all but six of the training boards. Oddly enough, I am also led to believe that they propose to establish a new one for the oil industry. The furniture and timber industry training board has done a magnificent job in difficult circumstances. Many of the employers are in charge of small industries that have no money to help themselves and therefore need the guidance and help of the training board.

I wonder how it can be argued that that training board should disappear when it is proposed to establish one for the oil industry. The oil industry is an extremely powerful industry which can easily arrange its own training and do everything almost on a golden handshake basis, but apparently it needs to be directed by an industrial training board. I find that difficult to understand. I shall be interested to learn why the Secretary of State proposes to take the oil industry to task by establishing an industrial training board for it.

Today's Financial Times has identified the six training boards that will remain. Presumably there has been some heavy press briefing. It says that training boards will be retained for engineering, construction, road transport, hotels and catering, rubber and plastics and clothing. That indicates that the furniture and timber industry training board is to be phased out. I ask the Secretary of State to review that decision.

According to my information, following the sector review, the commissioners reached the view that the board should be retained broadly within its present scope. As an alternative, if it was politically unacceptable to Government, I understand that they offered a second choice, which was to replace the existing board with a combination of voluntary and statutory arrangements. However, the commissioners positively deferred their decision about the board's future pending a further investigation into the viability of the alternative arrangements now proposed by the trade associations.

All the evidence suggests that of all the training boards the one that does not receive contemptuous review is the furniture industry training board. It has done a remarkable job, has received the approbation of everyone working in the industry, and has the support of people in education.

If, as is the case, that board has the confidence of those employed in the industry for being effective and efficient, it surely makes good sense to retain it. By all means let us refine or improve it. All things need improving, and I have no objection to that, nor have those who work in the industry. However, it would be nonsense simply to destroy it for the sake of being even-handed.

The furniture industry today is under enormous pressure. More than anything else, it needs stability and continuing improvements—the very things that the training board has been giving. It has assisted in achieving this stability and has done remarkably well. The board is doing a good job, its members are men of calibre and the industry has found it useful. In the light of all the evidence, I hope that the Minister will assure me that he has sufficient confidence in the furniture and timber industry training board and will not do away with it.

8.26 pm

Mr. Raymond Whitney (Wycombe)

As parliamentary adviser to the furniture workers' trade union, the hon. Member for Hackney, South and Shoreditch (Mr. Brown) knows the industry very well. He is therefore aware that the impression he has given of universal approbation of the furniture industry training board is quite incorrect. That is absolutely not the case.

I am happy to agree with the hon. Gentleman on the need for a new partnership in industry between trade unions and management. But that is not a new need. It has existed for many years—indeed, for decades. That need existed in 1969, when according to the memoirs, the right hon. Member for Cardiff, South-East (Mr. Callaghan) played his own particular role in torpedoing the efforts of the then Labour Government's proposals contained in "In Place of Strife" to introduce a more rational arrangement into Britain's trade union relationships.

We also know that that need was clearly recognised by the last Conservative Government. In fact, there is a strong case for believing that, had the 1974 election not gone the way it did, the changes introduced in the 1971 Act might well have stuck and we would not have been faced with the sort of problems that confront us today. If we are to get out of those problems, we must understand their causes before we can find a cure.

Again I quote the right hon. Member for Cardiff, South-East in evidence. This quotation is used so often that I am sure he heartily regrets ever having made it. At the Labour Party conference in 1976, the right hon. Gentleman hit the kernel of the truth. One of the truths he offered the nation at the time in relation to unemployment was as follows: We used to think that we could increase employment by boosting public spending. I tell you in all candour that that option no longer exists". That was absolutely right in 1976, and it is even truer now, given the 3 million unemployed with whom the Government must deal.

We must therefore ask why this situation has occurred. Has it arisen because of alleged monetarist policies—a tight grip on the creation of new money? If we compare our performance with that of other industrialised countries, it can be seen that that is not the explanation. A Government who have allowed the money supply to increase over the past two years by 30 per cent. can, by no stretch of the imagination, be condemned as monetarist. Is it because the Government are tightly cutting down on spending? Again, when we make a comparison with our industrial competitors who are doing so much better in coping with the difficult world position in terms of the health of their economies and the level of their unemployment, we can see that that explanation does not hold up for one second.

For example, if we look at our public sector borrowing as a percentage of gross domestic product compared with that which obtains in France under a Socialist Government and in Germany under a Social Democratic Government, we can again see that there is no reason to suggest that our problems are caused by an over-tight grip on public expenditure. Therefore, we are forced to look at another cause of our problems. Our unique distinction that sets us apart from our industrial competitors is, sadly, the position of our trade unions. When I mention trade unions, it is important to recognise that I am not speaking about the 12 million trade union members. I am speaking about the trade union structure and the leaders who feed on, and who have risen with, that structure.

Over the years, they have gained for themselves economic power on the basis of their political power. They have retained nineteenth century attitudes to the economy, greatly and intensively reinforced by the twentieth century power that they have accreted unto themselves, and mightily helped by the present Leader of the Opposition when he acted as Mr. Jones' poodle for two years when he had the privilege of occupying the position of Secretary of State for Employment.

We have now generated a small group of people who, in nearly all instances, have risen to their positions of power with only a thin relationship to the democratic process.

Mr. Eric Ogden (Liverpool, West Derby)

rose——

Mr. Whitney

I shall not give way to the hon. Gentleman, but I invite him to look at most voting procedures, see how general secretaries obtain their power, the percentage of votes cast, and the lengths of their tenure of office.

I repeat that I am talking about a fairly small handful. Mr. Paul Routledge, labour editor of The Times, who by no stretch of the imagination could be condemned as a Tory, says that just eight union leaders hold it within their power to control the destinies of the Labour Party. We all know the significance of that for the country. We saw that fact of life in operation in the case of Mr. Alex Kitson. As we were told by my hon. Friend the Member for Mid-Sussex (Mr. Renton), Mr. Kitson rose to his position without having ever submitted himself to a national ballot for his office. Yet he is now chairman of the Labour Party, the man who visited in the Soviet Union in 1977, and said that the Soviet workers were better off than British workers——

Mr. Winnick

rose—

Mr. Ogden

rose—

Mr. Whitney

He is also the man who performed extraordinary ins and outs in his support of the right hon. Member for Bristol, South-East (Mr. Benn) in his bid for the deputy leadership of the Labour Party, against the express wishes of the membership of the Transport and General Workers Union.

Those are the sort of people that the country has to deal with, not just in Government and not just at trade union level. The country is suffering, and the individual trade union member is suffering because of the coercive powers that we have, sadly, put into the hands of those few people over the decades. Even the noble Lord McCarthy—who can hardly be said to be an enemy of the trade union movement—said that the real power of the closed shop lies in the coercive powers that it gives to trade unions. The result is that this country, which only a few years ago had the highest paid labour force in Europe, is now a low-wage economy. That is the result of the extraordinary political power that has been wrested from the country thanks to the movement's unique relationship with the Labour Party. That is why there is no question of the Conservative Party being a low-wage party. It is a high-wage party, based on productivity and good unit labour costs.

Conservative Members know the score. Opposition Members know what is at issue. They understand that the real destroyer of jobs is, as the right hon. Member for Cardiff, South-East said in 1976, the work force pricing itself out of work. The Government's duty is to rectify that position. That must be done by law. The Government's duty is not to help the bosses and the management but to hold the balance of power between ordinary workers and union members against union leadership. If the Government fail to take this opportunity to do that they will fail in their targets.

The Government have three duties for which they were voted into office—to control the money supply, to control public spending, and to create the conditions in industry that will provide real jobs. That can be achieved only with sensible reform of trade union law.

8.36 pm

Mr. Ron Leighton (Newham, North-East)

It is a convention of the House to welcome a new Minister when he assumes his responsibilities. That has not happened today, possibly because of the Secretary of State's perceived insults to the unemployed during his Blackpool speech. He also made a rather repulsive speech today. I hope that the Under-Secretary, who is invariably polite and well behaved both in the Chamber and outside, will take him by the hand and teach him good parliamentary manners.

There was a great deal of advance publicity about the new Secretary of State. The trailers were strictly X certificate, detailing the horrors to emanate from him. He has lived up to those trailers. The press claimed that his appointment was an implied rebuke to the previous incumbent of the office who wanted to weaken and undermine the unions by a step-by-step process. The present Secretary of State wishes to do that by leaps. However, I do not believe everything that I read in the newspapers. I shall wait and see what happens.

The Secretary of State must be facing great temptations. He is operating in the backwash of the British Leyland dispute. We all know what happened there. He has seen the results of the Sir Michael Edwardes style operation. Sir Michael comes across as a James Cagney figure. He awarded himself a 38 per cent. increase, and then put a decimal point between the three and the eight and offered the work force 3.8 per cent. He told the work force that that was what they would receive; there was no question of negotiation. He said that unless they accepted his offer he would unilaterally abolish the British motor industry. Perhaps there will come a time when someone will tell Sir Michael that the British motor industry does not belong to him. There is a limit to the number of times that he can take such action. Nevertheless, he got away with it. Because of that, I can understand that the Secretary of State is facing great temptations.

The right hon. Gentleman could attend next year's Conservative Party conference and receive even greater applause than the Secretary of State for the Environment by saying what he would do as a "bovver" boy trampling over the trade unions. It is true that the unions are weaker in their bargaining power because they are policed by unemployment. The Secretary of State has a Conservative majority in the House and can, therefore, push through his legislation. There is nothing we can do to stop it.

The Secretary of State should ask himself whether he should succumb to the temptation to weaken the trade unions in the way that the press tells us that many Conservative Members are urging him to do. He should do nothing about the trade unions. He should leave the situation exactly as it is. He should be warned by the previous attempts, which have all ended unpropitiously and in tears.

We have spent two years of this Parliament's time on employment Acts. Very few employers have made use of them and many unions advise their members to ignore them completely. I warn the Secretary of State that he is in danger of making the law an ass. I am a great believer in the rule of law in our present complex industrial society. I should not like him to end up with egg on his face because he made laws that could not be implemented.

As the Secretary of State knows, industrial relations are human relations and they cannot be legislated into existence; otherwise it would have been done long ago. For example, one cannot legislate that a man shall love his wife, or vice versa, and one cannot do something similar in industrial relations.

Mr. Tebbit

That is a good point. One cannot legislate to the effect that a man shall love his wife, but one can legislate to the effect that if the wife is grossly abused the husband will have to pay for it.

Mr. Leighton

That is the case, and I agree with the right hon. Gentleman, but it is not the same thing as love. This is a delicate question and I hope that he will not put on his "bovver" boots and maintain the attitude of his opening speech. If he does, he will find himself in difficult waters where cleverer men than he have foundered. I hope that he will proceed with caution. The closed shop is the subject which arouses the most ire and hysteria on the Conservative Benches. It is here that the Secretary of State will have the greatest temptation. Will he allow himself to be urged on by these siren voices to try to deal with the closed shop?

I am sure that many of the lawyers and professional men on the Conservative Benches know that agreements, such as 100 per cent. membership of unions, exist as a traditional part of British life across wide sections of our society. I do not see any cause for excitement about that. There is no need for urgent or precipitate action—quite the reverse. I urge the Secretary of State to resist those ideological and dogmatic voices. In talking to one of his colleagues below the Gangway, he spoke of having a practical experience of life rather than a rarefied and ideological approach. I should have thought that he would appreciate the point I am making.

I wonder what would happen if non-trade unionists were put down a coalmine? There are good reasons for 100 per cent. agreements, such as safety in a coal mine. I work in the printing industry and anyone here who has been in a newspaper machine room and seen the rotary presses knows that if they were operated by unskilled labour there would be the risk of losing an arm or a finger in those machines. Professional standards and skills are involved.

Before I came here, I worked for 33 years in nothing other than closed shops, and never felt any loss or restricton of my freedom. I never met anyone who objected to those arrangements. As someone who negotiated with the employers, I can also say that I never met an employer who objected to those arrangements. They objected to all sorts of other things, but they never mentioned the closed shop. There are even advantages that the employers can see in the closed shop. What is the advantage of having sloppy trade union arrangements? We keep a certain discipline by having a closed shop.

I should like to say a few words about training in my capacity as a Member sponsored by the National Society of Operative Printers, Graphical and Media Personnel. The Under-Secretary of State engagingly explained to us in Committee that he had an open mind on all these matters. I am sure that he is now formidably informed. The Manpower Services Commission's document entitled "A Framework for the Future" sets out on page 6 the criteria for having a statutory board. The first question is whether the proposals include a central body for determining a training strategy for the industry. The second is whether the proposed arrangements cover the majority of firms and employers in the industry. The third is whether the training facilities would be adequately staffed and funded.

The Scottish employers all favour a statutory body. Thomson British Holdings favours a statutory body. I understand that there are no proposals from general publishing, news agencies, photography, reprography, and letterpress blockmaking. The periodical publishing associations have made no proposals, the book publishers want nothing to do with it. The display and screen printers have shown no interest. The Newspaper Publishers Association has no proposals and cheerfully admits that it poaches skilled labour from elsewhere. The Newspaper Society wants to set up two committees without any staff.

The British Printing Industries Federation last year praised the 1964 legislation and said that there had been no training before 1964. The federation seems to have changed its mind, because some firms want to save some money, and now proposes two lay committees without any back-up. It wants a staff of six and an expenditure of between £100,000 and £150,000. ITV has a staff of 170 and a budget of £2 million. I can well understand that the board might want to slim down. I spoke to the chairman today and he said that he can envisage a slimming down by one third and a levy of 1.2 per cent. of the payroll being made.

All the unions are opposed. I have worked in various sectors of the printing industry and there is cross-sector fertilisation. But there is no provision in the present arrangements for a central body. There are also very bad relations between the various employing groups. The relations between the British Printing Industries Federation and the Newspaper Society are an example. I hope therefore that the Secretary of State sees a case for the continuation of the training board.

The MSC pamphlet says that the suggestions lack credibility notably about the resources that would be needed (and about how they will be provided) to sustain the qualitative improvements of the past 10 years and to promote further improvements. We cannot therefore feel confident that the substitution of voluntary for statutory arrangements would secure advances in line with the objectives of the New Training Initiative. The last paragraph of this section of the pamphlet says: If such agreement is not forthcoming"— and clearly it is not— or if developed proposals for a voluntary framework advanced by the employers do not adequately meet the criteria set out in paragraph 6.7 of this report"— and it is clear that they do not— we would regard a statutory board as necessary. I plead with the Government on behalf of those in the industry to keep a statutory board for the printing industry.

8.51 pm

Mr. George Gardiner (Reigate)

In what I trust will be a brief contribution I should like to say how warmly I and, I am sure, a large number of people in this country welcome the commitment in the Gracious Speech to introduce legislation on employment and labour relations. We have had from the Opposition an orgy of demonology aimed at my right hon. Friend the Secretary of State. I suspect that this is motivated not by any understanding or appreciation of his character but rather by an awareness that he speaks for a great many upon whom the Opposition thought they could count for support. I refer to those who are members of trade unions and who wish to see some change in the law in these matters.

There have been blood curdling warnings from the Opposition, yet I see no need for the reforms of the kind being discussed to interfere in any way with the legitimate activities of trade unions in representing the interests of their members. I illustrate this with a few examples. There are two areas of concern. The first relates to the closed shop. I have never believed that it was advisable or practicable to try to sweep away this institution. It has been embedded in certain industries for far too long. But I see no reason why workers should not be given a right of choice.

The Employment Act 1980 gave a right of choice to workers in that it was suggested that new closed shops should be introduced. I should like to see that right extended to those who were dragooned into closed shops under legislation introduced by the Opposition. It is hard to see how any self-respecting trade union leader could argue that giving those in existing closed shops a right to decide whether they should continue could bring about the demise of the trade union movement.

Equally, I should like to know how it can be argued that paying greatly increased compensation to those who fall foul of this institution undermines the trade union movement in the least. I have worked in a closed shop. It was a closed shop that at least operated with some tolerance towards those who chose not to be part of it.

The second area of concern relates to legal immunities. So far as I am aware, there is no question of a general removal of these immunities, but rather a suggestion that certain limited areas should be defined where abuses of trade union power are damaging to the economy and to the interests of the workers involved. When the previous Secretary of State published a Green Paper on trade union immunities, the response came from a wide range of employers' bodies and business interests, large and small. Certain proposals emerged that had the backing of a wide cross-section of those who responded. I shall pick out just two and ask how, if these were enacted, they could damage legitimate trade union interests.

It was suggested by some that there should be limitations on secondary action. We know how often in the past workers have been dragooned into coming out on strike or into blacking goods when they have no dispute whatever with their own employers. One of the suggestions made by the CBI, the Institute of Directors and others was that workers who are asked to come out in secondary support should at least be given some right to vote on that proposition. Would that undermine the whole structure of the British trade union movement? I greatly doubt it.

Secondly, it was suggested by many in making submissions in reply to that Green Paper that the immunity of trade union funds should be qualified in respect of industrial action taken before established disputes procedures had been exhausted or, where such procedures did not exist, until the conciliation machinery of ACAS had been employed to find a solution. If that were done, would that undermine the legitimate bargaining interests of the trade unions concerned? Is it not desirable from all points of view—those of management, workers and the country at large—that the strike should not be a weapon of first resort but rather a weapon of final resort? What trade union leader could pretend that any inhibition on striking before talking was detrimental to the interests of trade unions? Was it in defence of this principle—strike first, and do not negotiate—that the Tolpuddle martyrs marched? Of course not. It has nothing to do with the legitimate activity of trade unions in this country.

There are many other points that I should have liked to make, but the fundamental question is whether there is a role for the law here at all. It is funny that those who frequently say that there is no role for the law in industrial relations are the same people who say that there is a clear role for the law in race relations and all sorts of other areas where we set legal limits on what we seek to do and to steer behaviour in the right directions. There is a role for the law in defining the boundaries within which legitimate trade union activity can be conducted. In the White Paper and in the Bill which follows, I look forward to seeing an imaginative reforming measure that will bring our industrial relations law into the second half of the twentieth century, to the benefit of the whole nation and of the workers involved too.

8.58 pm

Mrs. Renée Short (Wolverhampton, North-East)

Having sat here all day and seen hon. Members come and go, it is nice to see that the Secretary of State has returned to the Front Bench. The House has heard two memorable speeches in the debate—one from the right hon. Member for Chesham and Amersham (Sir I. Gilmour) and the other from my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). They were interesting and constructive speeches and were in direct contrast to the speech made by the Secretary of State earlier. His was a thin sort of knockabout partisan speech, which did nothing to endear him to Opposition Members. It was rather like the Gracious Speech, which was also thin.

I am concerned about that part in the Gracious Speech which says that the Government hope to see further reductions in the level of wage settlements. I am concerned about that because wage cuts—which is what the Prime Minister wants—only make a bad situation worse.

We now have more than 3 million unemployed. If we take into account the youngsters on YOP and MSC schemes, and those working part-time who cannot find full-time work, the figure is much higher than 3 million. In that case, we need better wages, not worse, to stimulate demand. The Prime Minister would like to keep down wages. She says that we should follow British Leyland's example and keep wage rises down. But what is she doing to keep inflation down if she wants reciprocity from the trade unions? Wage cuts will reduce demand further and increase unemployment. The Government seem not to understand that.

What are the Government doing to persuade the CBI to accept new technology? Part of the difficulty of British industry today is that so much of it is backward and management refuses to invest in new technology. If that process is not reversed rapidly, we shall find that we are continuing to import new technology from abroad. The time will come when we must produce that equipment ourselves.

The right hon. and learned Member for Hexham (Mr. Rippon) said that, apart from the appalling human and social consequences, the cost of 3 million people unemployed is about £15 billion a year, which is a staggering waste of the nation's resources. Yet when the Select Committee asked for £30 million to save the lives of mothers and babies, that request was refused. The right hon. and learned Gentleman was right to demand a planned programme of public investment to stimulate industry and provide jobs. As he put it, we must provide hope where there is despair. That plea fell on deaf ears, especially those of the Prime Minister and the Secretary of State.

The Prime Minister and the Cabinet have approached the matter in the wrong way. They have increased public spending in the wrong direction and in foolish, profligate ways for which there is nothing to show except a terrifying budget deficit of £10.5 billion. The Chancellor, too, has got everything wrong.

The CBI thinks otherwise, which is not surprising. The Chairman of the CBI says that he agrees with the Government's overall objectives. He also says that what the nation needs is realism— Better the therapy of realism than the sickbed of fantasy. Most observers would believe that we are on the sickbed, thanks to the Government's totally misdirected therapy.

My local authority has attempted to introduce some therapy of its own to get unemployment under control. It has set up an organisation to help and attract small businesses to the town, where thousands of young people are unemployed. The unemployment rate is higher than the national average, and almost daily—as the hon. Member for Wolverhampton, South-West (Mr. Budgen) knows—firms that have long been household names in British industry are closing down. What happened when the local authority tried to set up that organisation? It was attacked by the hon. Gentleman, who is reported to have asked the Secretary of State for the Environment to intervene and to prevent the scheme from taking off. Even modest self-help is affected when it suits a Conservative Member to attack a Labour council faced with enormous difficulties.

In the last year of the Labour Government, 1978–79, my local authority—and that of the hon. Member for Wolverhampton, South-West—had a net rate fund expenditure of £52 million. The Government rate support grant for needs, resources and domestic elements, after adjustment for the West Midlands county council share, came to £29.7 million. The percentage of Government support received towards that expenditure was 57.1 per cent. This year the net rate fund expenditure is running at £93 million and the rate support block grant and domestic relief grant from the Government amounts to £38.2 million, which is only 41 per cent. of the expenditure. The support has fallen from 57 per cent. to 41 per cent. under this Government. If for 1981–82 Government support had remained at the 1978–79 level, the council would have received an additional £15 million for the current year, which is equivalent to a rate of 36½p in the pound. That is a staggering amount.

The situation is similar with the housing revenue account. Expenditure in 1978–79 was £19 million, and housing subsidies amounted to £6.2 million—Government support of 32.5 per cent. This year expenditure is £33.8 million, with housing subsidies of only £4 million, which represents only 12.1 per cent. of Government support. That is a reduction from 32½ per cent. to 12 per cent. Again, had the amount of general Government support this year remained at the 1978–79 level, the council would have received an additional £11 million in housing subsidies, which is equivalent to an average rent of £5.50 per week for each council tenant. An enormous burden is being placed on Wolverhampton metropolitan borough tenants—a burden which creates tremendous difficulties, particularly with so much less money coming into the average household.

My constituents are also concerned at the Government's attitude to the major industries in our area and in the West Midlands as a whole. Large numbers of people are being put out of work. Important industries are having to apply to the Government for help to carry on. It is sad that, under successive Governments, nationalised industries have gone to private industry for managers and chairmen.

Mr. Speaker

I understand that the Front Bench speakers are willing to give five minutes to the hon. Member for Thanet, East (Mr. Aitken). No doubt they will apportion the time between them.

9.9 pm

Mr. Jonathan Aitken (Thanet, East)

I am grateful for the opportunity to speak for five minutes, Mr. Speaker.

I agree with the hon. Member for Wolverhampton, North-East (Mrs. Short) that we have heard two outstanding speeches in the debate—one from my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) and the other from the right hon. Member for Cardiff, South-East (Mr. Callaghan). I wish to pick up the theme that both struck and follow the new and central point of the debate from the Back Benches.

The right hon. Gentleman brought to the attention of the House the desperate and worsening plight of the long-term unemployed—people who have been out of work for over 12 months. The statistics loom dangerously. Today there are 600,000 long-term unemployed. The November statistics will show that the figure has risen to 750,000. It is forecast that by early next year the figure will be well over 1 million. We cannot continue to shut our eyes to a problem of that magnitude.

The time has come to ask on behalf of the long-term unemployed pertinent and perhaps even heretical questions. First and foremost, are we not making the mistake of over-committing our resources to youth unemployment? For example, is it fair that the youth opportunities programme should be getting £700 million of taxpayers' money next year to offer school leavers ½million work experience places, while the long-term unemployed will be offered only 25,000 comparable places under the community enterprise programme? That is the only existing life-line for the long-term unemployed.

I hope that the House will not misunderstand me. Of course, I am not saying that youth unemployment should not be given high priority. However, the despair, miseries and frustrations of unemployment are not so dramatically different whether one is young or middle aged. The Government's special measures—funding 500,000 places on the YOP and only 25,000 places for the long-term unemployed—suggests that Whitehall believes that it is 20 times worse to be unemployed when young.

That imbalance needs to be corrected. How can we correct it? My right hon. Friend the Member for Chesham and Amersham was on the right lines. The vehicle for his ideas is a radical overhaul of the community enterprise programme. If such an overhaul were imaginatively administered, it could be a bridge between those who argue for a programme of public investment and infrastructure and those who argue that we need only a small modification of the Government's existing policy.

In my constituency, where there is high concentration of long-term unemployment, the CEP has a programme in which 17 men in their twenties and thirties are refurbishing a dry dock in Ramsgate harbour. They earn £70 to £75 a week for doing an excellent job. That is just the sort of small infrastructure project which is valuable to community and industry. Similar projects could be found on a large scale nationwide. With respect to the Manpower Services Commission, whose circuits are already overloaded with operating a youth employment programme, it is not the best organisation to take on the management of an expanding community enterprise programme.

Why does not the Secretary of State for Employment contract out the community enterprise programme and, for that matter, parts of the youth opportunities programme to private industry? Let private industry find the projects, administer the schemes and pay the men and women on them. Let private industry get back from the Government a profitable management fee for doing that. The MSC can still play a monitoring role with a modest degree of privatisation to the community enterprise programme to give some imaginative help to the long-term unemployed.

The long-term unemployed are bound to move to the centre of the stage in the unemployment debate. In about a year 40 per cent. of the unemployed will have been out of work for approximately a year. A startling figure in today's Financial Times shows that each jobless person is costing the country £4,300 a year —£84 a week. The men in my constituency, involved in the community enterprise programme, cost the country only £70 a week and look like a good bargain for the country, and they keep themselves in work.

We have heard two approaches from the Front Bench today: TINA—There is No Alternative—and TINO—There Is No Opposition. We need a new approach and some new alternatives, and we start from the two major speeches in the debate.

9.14 pm

Mr. Barry Jones (Flint, East)

The House is glad that the hon. Member for Thanet, East (Mr. Aitken) was finally able to catch your eye, Mr. Speaker. From 3.30 pm, with the exception of the Secretary of State for Employment's speech, I did not discern any warm support for the Government's position. However, at about 6.30 pm the Mid-Sussex light cavalry arrived and brought some support for the Secretary of State.

One of the most interesting speeches in the debate was delivered by the right hon. Member for Chesham and Amersham (Sir I. Gilmour). If I had to describe it briefly, I should say that it was sceptical and slightly mocking, and it certainly exhibited a profound disbelief in the Chancellor of the Exchequer's prediction that economic recovery is at hand.

The right hon. Gentleman was followed by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), who made a powerful and compassionate plea for those facing long-term unemployment. He said that Britain faces a national emergency and that the Government are leading the country to disaster. I suspect that, in their hearts, a majority of Conservative Members agree with those serious words.

The hon. Member for Aldershot (Mr. Critchley) made a speech of withering scorn containing the gem that the Conservative Party has fallen into the hands of the saints. His hon. Friends enjoyed his measured cheek, and only the PPS Bench and the Government Whips did not enjoy the hon. Gentleman's literate attack. I was intrigued when he said that some Ministers were proposing changes in policy and in the presentation of policy. Oh, that there were time for Cabinet Ministers to be able to take part in the debate and make their positions clear.

The right hon. Member for Stafford and Stone (Sir H. Fraser) spoke strongly about the deprivation of hope for the unemployed and insisted that it must be ended, especially for the young. All hon. Members who have taken part in the debate have reflected the serious unemployment throughout Britain, and a few statistics will quickly concentrate the mind.

In the Liverpool travel-to-work area unemployment is 18 per cent., in Wrexham it is 19.6 per cent., at Shotton it is 17.7 per cent., in North Lanarkshire it is 20–5 per cent. and in Strabane in Northern Ireland it is 36.2 per cent. Yet the Queen's Speech contained only 28 neutral words for the army of the unemployed, even though most economic forecasters expect unemployment to worsen by at least 500,000 in the next few years, and nobody is optimistic about the long-term outlook for those who have been unemployed for more than six months.

The disabled and ethnic minorities are particularly hard hit, and even the Professional and Executive Recruitment Agency forecasts a 112 per cent. increase in unemployment among managerial staff.

The Queen's Speech expresses concern at the growth of unemployment, but it is not a realistic set of statements. Reality is an unemployed man who has to feed, clothe and shelter himself and his wife on less than £50 per week. This Christmas will be blighted for countless boys and girls in the homes of unemployed parents.

The Government should be especially ashamed of the crisis that they have created for the young unemployed. As my right hon. Friend the Member for Chesterfield (Mr. Varley) said, only 30 per cent. of those who complete YOP courses obtain employment.

A large firm in my constituency advertised 100 apprenticeships this year and received 3,400 applications. It interviewed 800 of the applicants, and many able, dedicated and idealistic young people were turned away. It was a soul-destroying task for those who interviewed the eager applicants. Another large firm in my constituency last week declared 131 redundancies, 26 of whom were trainees. The Government have much to answer for what is happening in the regions, which are now suffering from heavy unemployment.

My hon. Friend for Glasgow, Maryhill (Mr. Craigen) initiated a debate on the youth opportunities programme as recently as 21 October. After his attacking speech, my hon. Friends the Members for Ashfield (Mr. Haynes), Keighley (Mr. Cryer), Workington (Mr. Campbell-Savours), Rother Valley (Mr. Hardy), Dearne Valley (Mr. Wainwright), Bolsover (Mr. Skinner), Bothwell (Mr. Hamilton) and Glasgow, Provan (Mr. Brown) joined in the debate. They argued passionately for an increase in the £23.50 allowance. The Under-Secretary, in his reply, said that an announcement would be made in the not-too-distant future. I had hoped that he would give us some information tonight. He should not forget that the Widnes divisional Conservative Party and the national young Conservatives have written to his right hon. Friend the Minister of State arguing for a considerable increase in the allowance. I hope that he will tell us when the Government intend to do the decent thing and give the youngsters an increase.

I deal now with the trade unions. The Prime Minister, like Cromwell, has despatched her dissidents to Ireland. Embarrassed by heavy criticism of its economic strategy, the Conservative Party has now embarked on a new offensive against trade unions. The Secretary of State for Employment does not represent, as did his predecessor, the Disraelian tradition in Conservative politics. That was made clear in the sentiments that he expressed today in his opening speech. Is he prepared to listen to his right hon. and learned Friend the Member for Hexham (Mr. Rippon) and to the Conservative trade unionists who made their point of view clear at the Blackpool conference? I shall quote what the trade unionists said at that conference, because it deserves careful study: A careful examination of all the proposals put forward by various CTU groups throughout the country highlighted that, as with the Employment Act 1980 a cautious and moderate approach in industrial relations is still vital. The right hon. and learned Member for Hexham, earlier in that debate, said: Legislation, unless it is carried with a degree of consent, will do nothing to solve the problem of unnecessary and foolish strikes or to re-establish good industrial relations where those do not already exist. The Secretary of State might be a wiser man if he were to heed the heroic words of the TUC elder statesman, Mr. Bill Keys, who recently, in evidence to the Select Committee on Employment, said: I have one submission to make to you and to the Government: for goodness sake let us stop pussyfooting about when we have 3 million unemployed and when the basic fabric of our society is being destroyed around us". He went on: Stop putting us up like coconuts in an alley to have damn things fired at us". I hope that the right hon. Gentleman and his ministerial colleagues will study carefully the evidence that the TUC gave that day to a Committee of the House.

The Government are about to construct a legal charter for vengeful, vindictive and intimidatory behaviour from every rogue and embittered employer. I warn the right hon. Gentleman that, in the crucial sector of industrial relations, it may well create many fierce local encounters and certain angry national responses. Many employers still see labour as a commodity to be bought at the cheapest price. That was what moved my hon. Friends the Members for Dundee, West (Mr. Ross) and Newham, North-East (Mr. Leighton) to say what they did earlier in the debate. If the right hon. Gentleman and the Prime Minister cannot acknowledge these fundamental industrial truths, they are lacking in statesmanship.

It would be foolish of the Government to turn upon the unions. For example, the Manpower Services Commission has quite bluntly said that the youth opportunities programme could not operate and would collapse without trade union co-operation.

It appears that the Government's objective is to shackle the trade union movement, chiefly by constraining further the closed shop and by eliminating immunities. As my hon. Friend the Member for Walsall, North (Mr. Winnick) said, that would be folly. It would divide British society further, it would not get the 3 million workless back to work, and there is no doubt that it would make the industrial relations scene far worse than it is today.

I suspect that the Government have a political, not an industrial, motive and that their aim is simply to direct attention away from their economic and social failures and, of course, to please the Right-wing supporters of their party in the country.

It is not for the Opposition to pity the civil servants in the Department of Employment—far from it. But it appears from our vantage point that they are broken-backed and demoralised. The Prime Minister and her Secretary of State have finally ended the long-running attempts by the Department, under Tory Governments, to achieve a consensus. As my right hon. Friend the Member for Chesterfield said, the imposing attitudes of Mr. Macleod and Walter Monckton have been forgotten. The right hon. Member for Chingford (Mr. Tebbit) is now the master. After delivering of himself an ugly and offensive speech at Blackpool he is proposing, we suspect, ignoble and venomous legislation. Even at this late hour, we urge him to desist.

A number of right hon. and hon. Members, including my right hon. Friend the Member for Cardiff, South-East, mentioned apprenticeships. The House may be interested to know that up to 10,000 fewer apprentices and similar trainees have been recruited in the current training year compared with 1979–80. Clearly, this is a serious shortfall. Even worse, the number of apprentices recruited by the Property Services Agency has been cut from 518 to 36.

Reports from many industries confirm that apprentice recruitment this year will be disastrously low. In the road transport industry, the number taken on in the present training year will be about 75 per cent. below requirements and 50 per cent. below the previous year. In engineering, reports suggest that the intake will be little more than 60 per cent. of requirements. In the printing industry, the intake has been halved over the last two years.

Without statutory industrial training boards, how will the Manpower Services Commission ensure that action is taken to maintain the level of craft intake into British industry? In practice, the MSC has used ITBs as a delivery mechanism for ensuring a higher apprentice intake than would otherwise be the case. I hope that the Under-Secretary of State will say how such arrangements will be handled without statutory industrial training boards.

The recession is already having a major effect on the provision of training facilities. It is understood that the British Transport staff college is closing. Debenhams has closed its management centre. The House ought to hear how such a trend, with such disastrous consequences for the future, can be reversed if most of the statutory training boards are wound up.

Only statutory training boards can fulfil the objectives of "A New Training Initiative." Ministers have said that it is their avowed intention to support effectively the new training initiative. However, they do not fully comprehend the main result of their policy thrust towards voluntary training boards. There have already been many redundancies among company training staff and we fear that little priority will be given to training once statutory backing is removed.

When the Government savage the existing training board system, as we fear they will, they will destroy the only current mechanism that will help them make the new training initiative work. To millions of workers, the training boards represent some assurance of sound industrial training and some hope of future prosperity. If the Government axe 17 training boards, they will end that hope and assurance. The Minister should concede that with 3 million out of work it is bad industrial psychology to attack the statutory system.

The Minister should come clean and admit that his impending attack on the statutory boards is designed to save up to £30 million per annum. We know that the Minister is strapped to fund the new training initiative. It does not seem to occur to the Government that in the short term it will cost much more to wind up the boards. What calculations have been made? Unless the Government plan to make industry pay the winding-up cost—otherwise there will be a terminal levy—the cost for the wind- up wilt surely be far more than was previously estimated. Will the accumulated boards' reserves be returned to industry? We suspect that the training boards will become the Department of Employment's latest expenditure cuts. We suspect that they will be the Secretary of State's first contribution to the Prime Minister's decision to press on regardless with her monetarist economic strategy.

It will be disastrous for Britain if the training boards are disbanded. It will certainly be disastrous if they are disbanded before something better is put in their place. That is precisely the point that the hon. Member for Saffron Walden (Mr. Haselhurst) was trying to make. As late as this evening, the TUC, having seen the Secretary of State today, made its views known through Mr. Bill Keys, who led representatives of the TUC general council to see the Secretary of State. Mr. Keys tonight said: Totally spurious claims are being made by Government Ministers about the so-called virtues of a voluntary approach to training in contrast to a statutory approach. But practically all the proposals for voluntary arrangements from employers envisaged totally inadequate resourcing and staffing and none of them look capable of prompting any significant progress on the New Training Initiative …The Government should think again before annihilating valuable industry training arrangements. But if the Government presses along on its present apparent course, the New Training Initiative has little chance of success. Even at this late hour I urge the Department to think again and to avoid a suicidal course.

In my constituency in the sizeable town of Flint, male unemployment borders on the obscene figure of 40 per cent. Nothing in the Gracious Speech persuades me that the young unemployed, the long-term unemployed and the redundant man over 55 years of age can hope that in the next few years the dole queues will be drastically cut. Neither strikers nor the closed shop are wrecking the economy; unemployment is wrecking the economy. It is not trade union power which is bankrupting thousands of companies; Government policies are doing that. It is not large pay rises which keep Britain in recession; it is the fact that three million people receive no wages at all. The Government should resign or urgently change their policies.

9.36 pm

The Under-Secretary of State for Employment (Mr. Peter Morrison)

We have had a wide-ranging debate and I shall attempt to deal with all the points, but that is a tall order.

As my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) pointed out, matters were raised concerning the Chancellor of the Exchequer, the Secretary of State for Education and Science, the Secretary of State for Industry, the Secretary of State for Scotland, the Secretary of State for Wales and, indeed, the Secretary of State for the Environment. I found it somewhat odd that my right hon. Friend the Secretary of State for Employment was accused of being dogmatic. [Laughter.] Labour Members may laugh, but he has not, as they will have noticed, published his proposals on industrial relations, on training boards or on new training initiatives, not least because he wanted to hear what the House had to say on all these matters. To accuse my right hon. Friend of being dogmatic seems to be inappropriate.

The right hon. Member for Cardiff, South-East (Mr. Callaghan) said that today's debate was in some ways as important as next Wednesday's debate. I agree with him. I find it absolutely astounding, and I think that he will agree with me, that neither the Liberal Party nor the Social Democratic Party appeared to feel the same. During today's debate, which has now lasted for six hours and will continue for about another 20 minutes, one Liberal Member has been present for just over three quarters of an hour. During the six hours of the debate no more than two members of the Social Democratic Party have been here to listen to what the House has to say about unemployment. Neither party has even intervened or said a word about their policies.

Mr. Ogden

Will the hon. Gentleman give way?

Mr. Morrison

I shall not give way to the hon. Gentleman. He and his hon. Friends were not here. They did not speak. I was sad that the right hon. Member for Cardiff, South-East was personally abusive to my right hon. Friend the Secretary of State for Employment. Perhaps I am a young, newish Member, but I did not expect to see an ex-Prime Minister behave in that way to a Secretary of State.

The hon. Member for Antrim, South (Mr. Molyneaux) made some remarks that he obviously wished my right hon. Friend the Secretary of State for Northern Ireland and the Prime Minister to hear. I have no doubt that they will read carefully what he had to say on the matter, particularly since my right hon. Friend the Secretary of State for Northern Ireland was formerly the Secretary of State for Employment. The matters that he raised on employment will be close to what he dealt with in his previous job.

My right hon. Friend the Secretary of State for Employment made an offer to the right hon. Member for Chesterfield (Mr. Varley), the Opposition employment spokesman. He asked him to make some constructive suggestions. I listened carefully, but the right hon. Member for Chesterfield did not answer even one question. He did not listen to what the Secretary of State said about his approach to the trade union movement. My right hon. Friend said, as he has made plain many times, that he welcomes meetings with the TUC on matters of common interest. To suggest, as the right hon. Member for Chesterfield and many of his hon. Friends did, that my right hon. Friend will not pay attention to trade unions is not playing fair, nor is it true.

My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) talked about cashing in on our hard-won achievements over the last two years. He will accept that many of his remarks were directed at my right hon. and learned Friend the Chancellor of the Exchequer. He will also accept that a public sector borrowing requirement of £10½ billion is not as deflationary as his speech implied. My hon. Friend the Member for Aldershot (Mr. Critchley) said that he wanted a further reflation of £5 billion. That would make the PSBR over £15 billion. I hope that, on reflection, that is not what he wants.

The right hon. Member for Cardiff, South-East was in agreement with us when he made a speech on 30 June 1978. He said: Inflation is the main enemy. Emotionally, unemployment is the thing that burns us up, but inflation is the main enemy—because inflation is the father and mother of unemployment …in a country like ours, where 29 per cent. of the gross national product is derived from foreign trade, it …would be absurd for us to slide into a position where we said we don't mind if our inflation levels get out of control. We've let them get out of control—there should have been a firmer and tougher policy by all of us, including the trade union movement and the government at the time. He and I are in agreement, although what he said then is a little counter to his present position.

We are talking about jobs. As the right hon. and learned Member for Aberavon (Mr. Morris) said, we must be competitive to create jobs. Earlier, he said that that was not just economics but common sense. I could not agree more. Whatever members of the Tribune Group might say, that will remain the case. If we do not remain competitive we are bound to lose jobs. To suggest that we should reduce the working week without looking over our shoulders to see what is happening to our main competitors—the Japanese, the Germans and the Americans—is a great mistake.

To be competitive we need several ingredients. I shall refer to three. First, we need good industrial relations. That involves a proper and sensible balance so that the employer and employee are working for each other and not against each other, as has been the case so often in the past. Secondly, we need sensible manning levels, which means redundancies in some cases because of previous overmanning. Thirdly, we need a work force that is adaptable and flexible. That involves a changed attitude to training. On that matter, there has been common ground throughout the House. The Secretary of State will be pleased to hear what my hon. Friend the Member for Mid-Sussex (Mr. Renton) said about the views that he heard at the recent CTU conference.

The official Opposition have a genuine sense of grievance about industrial relations legislation. Their sense of grievance must be with the SDP.

The SDP does not have a particularly honourable role in this respect. I have looked up the voting figures to see how many members of the SDP now in the House supported the Government in 1974 and 1976 when the present Leader of the Opposition was putting through the legislation. On the 1974 legislation, 16 presently sitting in the House supported the official line. To that, one must add Mrs. Williams and Mr. Jenkins. In 1976, 19 of them supported the Labour Government. To that, one must add Mrs. Williams and Mr. Jenkins. What are they saying now? Are they going against what they said before?

Mr. Campbell-Savours

They are never here.

Mr. Morrison

We should like to know some day, if they would come and tell us.

Mr. Ogden

If the Minister gave way occasionally, he might hear these things.

Mr Morrison

With great respect, the hon. Member for Liverpool, West Derby (Mr. Ogden) has only been present for about an hour.

Mr. John Grant

Rather than fighting the Crosby by-election in the Chamber today, may we have an answer to the debate?

Mr. Morrison

As the hon. Gentleman knows, I have said a great deal about what has been happening in the debate all day.

I listened carefully to my hon. Friends the Members for Bedfordshire, South (Mr. Madel) and Mid-Sussex and indeed others on the subject of industrial relations. Time and time again, we heard accusations from the Opposition, particularly from the hon. Member for Walsall, North (Mr. Winnick) and to some extent the hon. Member for Flint, East (Mr. Jones), that our proposals and indeed any legislative proposals to reform industrial relations were irrelevant to the economic problems facing the country. It seems to make no difference that they do not know what our proposals are.

To argue that the reform of industrial relations has no part to play in our industrial recovery is nonsense, and the Opposition know it. My hon. Friend the Member for Reigate (Mr. Gardiner) put that point very cogently. Relations between management and employees and their outcome in terms of pay and productivity are a major factor in determining how far companies can respond to the competitive pressures in the economy. For too long now, large parts of our manufacturing sector have been bedevilled by poor industrial relations, by obstructive attitudes and needless disputes which have insidiously undermined our competitiveness.

Mr. Leighton

We have spent almost two years of this Parliament on industrial relations legislation. Is the Minister saying that that was all to no avail? Moreover, his right hon. Friend the Secretary of State said that we had the lowest strike record in the last 50 years. Why, then, does he wish to waste Parliament's time going through all this again?

Mr. Morrison

As the hon. Gentleman knows, my right hon. Friend the current Secretary of State for Northern Ireland believed in a brick on brick approach. My right hon. Friend the Secretary of State for employment is pursuing an exactly similar policy.

Of course, the problems cannot be overcome simply by changes in the law. I should be the last person to claim that. No legislation, and certainly no Government, can assume the main responsibility for improving industrial relations. That responsibility must rest with managers, their employers, and the trade unions.

There are two principal reasons why unemployment has risen. The first is simply that there has been a world recession. The second is that there has been demanning on a larger scale than would otherwise have been necessary, had the problem been properly tackled over the years. I think that my right hon. Friend the Member for Chesham and Amersham would agree with me on both counts.

The right hon. Member for Chesterfield referred to the number of people in work of working age. I must tell him that we have a higher proportion of people of working age in work than any other country in the EEC with the exception of Denmark—[Hon. Members: "It has come down."] It may have come down, but we have a higher proportion than any other country with the excption of Denmark.

It is no use Labour Members pretending that there are easy solutions. If they do so, they delude themselves and many other people as well. Wherever I go, I am told "It is true that we were overmanned. There were too many people but we are are now becoming competitive." It is pointless to pretend otherwise.

It is not just a one-way trip. There is some good news as well. As my right hon. Friend the Secretary of State for Industry pointed out the other day, small businesses are being born at the rate of 2,500 per week. That is far greater than the level of bankruptcies. In the third quarter of this year, there were 1,398 bankruptcies. It can therefore be seen that 2,500 new businesses per week is a much larger figure.

Another interesting factor is that today, employment in factories that have expanded, or in new factories, has increased by ⅓million compared with a year ago. Admittedly, more jobs have been lost, partly because of the recession and partly because of the reduction in overmanning. But the fact is that the stream is flowing in both directions.

As my right hon. Friend said earlier today, an enormous number of people are still finding jobs every week—more than 100,000, perhaps up to 140,000. About 70,000 people leave the unemployment register each week.

Let us look at the figures relating to school leavers. In doing so, I again return to the remarks of the right hon. Member for Cardiff, South-East. Goodness knows, school leavers face a difficult problem. Last year—one cannot be absolutely sure—about 700,000 left for work and by April of this year nine out of every 10 were in work or benefiting from the youth opportunities programme.

This year, about 700,000 school leavers have again left for work. By the time the new term started—that is to say, when the school holidays were over—we reckon that between 250,000 and 300,000 had already found jobs. It is almost certain that that figure will be greater by now.

I accept that the picture is black, but opportunities do exist. Of course, opportunities will be greater in some parts of the country than in others. Over and above the 250,000 to 300,000 who have found jobs, another 200,000 of this year's school leavers are on the youth opportunities programme. That is good news for them, but apparently the Opposition wish to have amnesia over it.

I accept that too many are still without a job. The right hon. and learned Member for Aberavon talked about the situation in South Wales. Compared with other parts of the country, that area undoubtedly faces great difficulties. However, I understand that, thanks to the Welsh Development Agency, 4,222 jobs have been created in Wales in the first six months of this year, and that is somewhat larger than the figure quoted by the right hon. and learned Gentleman.

I do not underestimate the difficulties, but to suggest that the Government do not care is both wrong and not borne out by the facts. This year, more than £1 billion of taxpayers' money will be spent on measures specifically designed to help those without a job. That vast sum will be increased by more than £400 million next year. That means that every taxpayer will contribute about £50 next year to help with special employment measures. In October, 700,000 people were benefiting in one way or another from those schemes.

My right hon. Friend the Member for Stafford and Stone, the right hon. Member for Cardiff, South-East and the hon. Member for Flint, East rightly spoke about apprenticeships. Of course, the Government are aware of the problem. If they were not, they would not have injected over £40 million this year to support between 30,000 and 35,000 first year apprentices and 4,000 apprentices who have been made redundant.

The hon Member for Swindon (Mr. Stoddart) spoke about the age of retirement. The Government are aware of the problem and have suggested that the age limit for the job release scheme should come down from 64 to 63 and then to 62. My hon. Friend the Member for Thanet, East (Mr. Aitken) spoke about the long-term unemployed, and I listened to his speech with interest. Of course the Government are concerned, which is why we have the community enterprise programme.

The subject of the level of allowance for people on youth opportunities programme schemes was raised with vehemence by some Opposition Members. As they know, the present allowance is £23.50, and as the hon. Member for Flint, East pointed out, I answered a debate on the matter recently. The fact remains that 14,000 people are joining the programme per week, in the knowledge that the allowance is £23.50. However, I have listened carefully to the comments of the hon. Gentleman and his hon. Friends in the past, and we shall make a decision in the not too distant future.

My right hon. Friend the Prime Minister said in July that the Government were examining ways of improving the programme, with particular reference to training. I said earlier that training was the third important element with which I intended to deal. I hope that the House will be aware that the Government fully support the objectives set out in "A New Training Initiative." Both my right hon. Friend and I are determined that those objectives will be reached—as determined as my hon. Friend the Member for Saffron Walden (Mr. Haselhurst). However, we accept that that can only happen with proper co-operation from industry and education. Both my right hon. Friend the Member for Stafford and Stone and my hon. Friend the Member for Northampton, North (Mr. Marlow) mentioned certain aspects that we should be examining—the German system, national community service, and so on. We are considering, and shall continue to consider, those aspects.

In general, there has been broad agreement from those who have commented on the new training initiative on its three main objectives. It is important that all parts of industry and education should be involved in the programmme. My hon. Friend the Member for Mid-Sussex mentioned TUC and CBI participation, which we have on the Manpower Services Commission.

I come now to the comments that were made on industry training boards. We shall be making decisions on the boards shortly and we shall make an announcement soon. I do not think that the Opposition can accuse my right hon. Friend the Prime Minister of Tory dogma. A Tory Government introduced industry training boards in 1964, and in 1973 a Tory Government amended them. The Tory Party is sound on industrial training and industry training boards. As the House knows, the training board system has been under review since early 1979 and the series of consultations about their future has stirred uncertainties. That has not been good for training and it has made life difficult for the staff of the boards. That is why we wish to make a decision as soon as possible. At six o'clock this evening, my right hon. Friend met the employment policy committee of the TUC. Views were exchanged about objectives on a wholly amicable basis.

There are good signs. Pay settlements are down to approximately half of what they were in the last pay round. Inflation is down by almost half since 1980. Short-time working is down and stoppages are down.

Debate adjourned.—[Mr. David Atkinson.]

Debate to be resumed tomorrow.