HC Deb 08 April 1982 vol 21 cc1137-44

3 pm

Mr. Christopher Brocklebank-Fowler (Norfolk, North-West)

On 24 July 1978 the present Minister of State, Treasury, then only the hon. Member for Brentford and Isleworth (Mr. Hayhoe), opened the debate on unemployment on behalf of the Conservative Opposition and accused the Labour Government—in c. 1149 of Hansard—of increasing unemployment by 25 people per hour, or by 600 people for every day of the Government's term of office since March 1974.

If that was a fair assessment of the Labour Government's achievement in combating unemployment, when, as the House will recall, no less a person than the present Leader of the Opposition was in charge of employment policy, it is fair to remind this Conservative Government that during the past three years unemployment has increased by 1,652,000, an average of 62 people per hour, or 1,509 people for each day that the Government have been in office.

My constituency is served by five employment offices. Although the boundaries of three employment office areas go beyond my constituency into the constituencies of Norfolk, North and Norfolk, South-West, the unemployment figures from them give a fair indication of what has happened within my constituency boundaries. Unemployment is now four times higher than it was when I entered the House in 1970 and has more than doubled in the three years since the Conservative Party came to office.

I shall examine the figures relating to the five areas of King's Lynn, Fakenham, Hunstanton, Swaffham and Downham Market. Whereas in March 1970 unemployment stood at 1,850, under the Conservative Government of the right hon. Member for Sidcup (Mr. Heath)—a Government that I was proud to support—unemployment fell. By March 1974 it had fallen to 1,473. Then came the two Labour Governments between 1974 and 1979, and by March 1979 unemployment in those five areas had increase from 1,437 to 3,608. In other words, it had more than doubled. In the past three years unemployment has increased from 3,608 to 7,609. The Minister must at least bear part of the responsibility for that.

The House will recall that one of the reasons that I gave at the time for crossing the Floor of the House was the Government's inability to control the substantial increase in unemployment that had taken place during their first two years. The House needs no reminding that each individual contributing to the statistics has lost that part of his self respect that comes from employment. He has lost the sense of being needed and the ability to pay his—or indeed her—way in the world without resorting to unemployment benefit, social security benefit or assistance from the social services.

I sought this debate not only to draw attention to the general problem of unemployment and the human suffering that arises from it, but to focus the Minister's attention on our part of the country. West Norfolk has traditionally experienced levels of unemployment that were broadly consistent with the national avarages and were frequently better than the rest of the East Anglia region. Now we have levels that are consistently higher and show signs of rising still further. What is particularly worrying for me is that more than 10 per cent. of those who are out of work in the area are under 19 and, although about 300 of them are on Government training and work experience schemes, there will be no jobs for them when they have finished. Well over half of the young unemployed have either received no training or are unlikely to receive training in the foreseeable future. For those individual boys and girls and, alas, a high proportion of those who are due to leave school now, and in the summer, the beginning of their adult life will be unforgettably blighted.

The Secretary of State for Employment on 27 January 1982 in a debate about the employment situation referred to the shake-out of labour, aimed at and talked about so often in the past". The Secretary of State complained that— It happened not at a time of our choice, but at a moment dictated by events."—[Official Report, 27 January 1982; Vol. 16, c. 907]. The increases in unemployment have been part of the Government's policy to control inflation without an incomes policy. My constituents wish to know what the Government propose to do to assist North-West Norfolk to overcome this most degrading and unacceptable of human problems.

Although the Government put great faith in the expectation that when the economy generally recovers unemployment will begin to decline, I believe that recovery will be slower and more difficult in West Norfolk than for the rest of the country. As old, locally established firms reduce their labour or go into voluntary liquidation there are few reasons why new firms should take their place. Communications in West Norfolk, and between West Norfolk and other centres of population such as Norwich to the east, Leicester and the industrial Midlands, Newark and the North are poor. Our rail service to London has not yet attracted the modernisation that would both speed and make more comfortable our communications with the capital. Indeed, the future of the rail link may be at risk.

Apart from the fact that my constituency has never benefited from the special assistance and incentives for industry of various types that have been available to other areas with comparable unemployment, there is a further disincentive to new companies moving into the area. It is unfortunate that 60 per cent. of the unemployed in my constituency are unskilled, and, even if there were to be a sudden resurgence in economic activity in the area, it would quickly lead to a shortage of skilled workers while the unskilled majority remained on the dole.

I should like the Government to embark on a major programme of new public works to improve our national efficiency. However, the Government are firmly committed against that policy, despite the reducing percentage of public expenditure devoted to capital projects. I shall, therefore, suggest a number of proposals that the Government might examine to assist us.

First, there should be some recognition that the East of England particularly is badly served by the trunk road network. Even within the planned public expenditure figures there is a strong case for giving a higher priority to improving the A17 and the A47. That would generate tourist traffic into the area, facilitate the passage of goods from the Midlands to our efficient docks and improve the distribution of products manufactured in the area.

Secondly, it would be helpful if the Government could examine the transport supplementary grant provisions affecting the Norfolk county council to ensure an early start to the planned improvements to the A149, which would improve access to the major resort of Hunstanton where there is currently unemployment amounting to 21.4 per cent. of the working population.

Thirdly, the Government should proceed rapidly to extend the powers available to local government to assist individual firms that were proposed by the Minister for Local Government and Environmental Services on 11 February. However, before confirming these powers, will the Government reconsider the suggestion that such expenditure should be restricted to a ½p rate in any one year?

The Government must realise that in sparsely populated rural areas the cost to local authorities of providing even small industrial sites for private letting is high. Larger sites, capable of employing more than 25 people, are still badly needed in some of the principal villages in my constituency. If local authorities are prepared to play a significant part in alleviating rural unemployment, they must have not only a greater freedom to borrow, but more discretion to use the rates for supporting local industry.

The Minister will appreciate that a ½p rate in the West Norfolk district council, for example, produces only £75,000 a year. That is too small a sum to make a significant difference to the appalling unemployment rate. The Government proposal to rescind the powers available under section 137 of the Local Government Act 1972, other than in the inner urban areas, removes from rural local authorities the ability to use up to a 2p rate for assisting industry.

Following the Burns report, while I recognise that the Government perceive local government's responsibility for, and capacity to give, useful assistance, they are denying it the necessary resources to act alone. They have provided the Manpower Services Commission with insufficient funds to implement joint schemes, such as the community enterprise project, with local authorities.

The Government should recognise that, after agriculture, the recreation and tourist industries are the largest employers in Norfolk. Yet under section 4 of the Development of Tourism Act dealing with the special development and investment areas, the resort industry in East Anglia receives no assistance. It shares that distinction only with the south coast of England.

In view of the high levels of unemployment in some coastal resorts and in the light of the redefinition of special areas due to come into force in August this year, I urge the Minister, following the representations by a delegation that I led to his right hon. Friend the Member for Lowestoft (Mr. Prior) when he was Secretary of State for Employment, to look again at our claim for special support for the tourist industry. Surely there is a case for dealing with incentives to tourism on a national basis to ensure that coastal resorts in Norfolk are not at a disadvantage compared with comparable resorts in most of the rest of the country.

It is common knowledge that the loss of employment from agriculture is a major cause of rural unemployment. I fear that unless action is taken in the near future to assist our local fishing industry still more jobs will be at risk. Will the Minister undertake to initiate discussions with his right hon. Friend the Minister of Agriculture, Fisheries and Food to consider the potential for the Wash shell fisheries? In the face of substantial competition from Holland and other European countries, our native shell fisheries are in decline, notwithstanding that the Wash is Europe's largest natural shell fishery.

Co-operation between the Government and our fishing industry in the Wash could not only produce substantial new employment opportunities, but remove the need to import shellfish, thus giving a considerable balance of payments advantage. It must be wrong, at a tune of economic difficulty, that as important a natural resource as the Wash remains unexploited.

I welcome the Development Commission's new power to designate priority areas, in the reasonable expectation that my constituency will be one, but it would be useful for the Government to discuss with the commission how it could give more rent relief over a longer period to firms that take up industrial units on joint schemes developed by the commission in partnership with the local authorities.

I invite the Government to examine carefully their proposals for new training initiatives and, in particular, their application to rural areas. I estimate that more than 20 per cent. of the eligible young in my constituency will not have the motivation to take up the opportunities that the scheme offers because of rural transport difficulties and the lack of self-confidence arising from the underachievement at school and at home of many of the most disadvantaged.

It is difficult to motivate the young to face lengthy and expensive travel in inclement weather for temporary training opportunities, when the net allowance of £21 after transport costs compares with £22.50 per week available on supplementay benefit or those who choose to stay at home. The Government should consider a standard rate of £25 for individuals on those schemes, plus a differential travel allowance so that a real incentive encourages even the least motivated to take up training places.

The levels of unemployment in various parts of my constituency range from one in seven to one in five out of work. My forecast is that there will be no significant impovement unless the Government take new initiatives that bear in mind the problems to which I have referred. At the next general election the Government's record will be judged by what they do to help us now.

3.16 pm
The Minister of State, Department of Employment (Mr. Michael Alison)

I congratulate the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler) on having had the good fortune to secure this Adjournment debate. I welcome the opportunity to reply at least to some of his points.

The hon. Gentleman made clear in his speech the deep concern that he feels over the difficulties that the part of the world that he represents is facing. Alas, north and west Norfolk have historically had a consistently high level of unemployment, with seasonally higher winter levels because of the area's extreme dependence on agriculture and tourism. However, I in no way wish to shelter behind that long-standing problem or underestimate the problems that unemployment brings.

Unemployment is not only a waste of valuable—indeed unique—human resources but has deeply harmful effects both on those who are unable to find a job and on the community as a whole. It is because unemployment causes so many problems that we are determined to find an effective remedy for it rather than to continue with the half-hearted and half-baked methods that seem so obviously to have failed in the past.

We do not believe that the problem will simply go away if we spend more on subsidised services and jobs that cannot be considered as real, lasting and viable. That has been tried many times before. Far from improving the position, it has led to escalating inflation, deteriorating competitiveness and an ever-rising trend of unemployment.

It is worth reminding the hon. Gentleman of this. I shall make a couple of historical allusions. The hon. Gentleman was perceptive enough to go back into history and study the roots of the problems. In the decade from 1970 to 1980, which embraced both Labour and Conservative Governments, domestic expenditure in the British economy rose by over 300 per cent. However, in those 10 years real output rose by no more than 25 per cent. That means that the overwhelming mass of money spent both by individuals and the Government went straight into higher prices and not into output. Therefore, increasing expenditure is no simple and automatic remedy.

Our policies are aimed at developing a soundly based economy, which means, among other things, bringing down inflation. As inflation is reduced and productivity continues to improve, British firms will become more competitive and so able to offer goods and services at home and abroad that people want to buy at prices that they are prepared to pay. That is the only way to create the new and secure jobs that we all seek, both in Norfolk and throughout the country. What we need is steady, sustained growth. That is no quick and painless short cut, least of all in a period of world recession.

Again I shall make a short digression for which I make no apology, following the hon. Gentleman's reference to the historical past and that major aspect of his personal history that led to his moving from the Conservative to the Opposition Benches. It was in the context of unemployment that the hon. Gentleman made that move. I again remind the hon. Gentleman of a crucial fact which explains unemployment and use it absolutely to rebut his allegation that the Government were promoting, sustaining or conniving to keep unemployment as a substitute for a prices and incomes policy. In the five years between 1975 and 1980—to consider the position as a league table—unit labour costs in Britain doubled. In Canada they went up by three-quarters, in the United States by one-half, in Germany by one-fifth, and in Japan they did not go up. There is a spectrum in which British unit labour costs doubled, and through that spectrum our competitors did better, right down to the Japanese whose unit labour costs did not increase.

The hon. Gentleman will recall that when he and I were elected to the House in 1979 it was almost simultaneous with another huge increase in world oil prices that led to the present international recession. Britain fell almost at the first fence because of our gigantic lack of competitiveness. That is the explanation for this gusher of unemployment that the previous Labour Government opened as a result of their failure to increase productivity with wage increases. The Government are trying to close that gusher, but it is more difficult to close than to open it.

Mr. Brocklebank-Fowler

Does the right hon. Gentleman agree that the scenario I have described shows that there is structural unemployment in my area? That is different from unemployment that is generated as part of the ebb and flow of the economic cycle. We have lost jobs that will not come back and that cannot be replaced by new jobs without public sector capital investment.

Mr. Alison

I acknowledge that there are structural difficulties in the hon. Gentleman's area. Like limbs that are weak, such areas will only get strong if the heartland is strong. There must be a strong, solid heartland for the extremities to profit and benefit. However, I shall come to some of the actions that we hope to take that will encourage the hon. Gentleman.

There are encouraging signs that our policies are succeeding. Inflation is falling. Total output rose in both the third and fourth quarters of last year, and manufacturing productivity—the key element to which I referred earlier—rose by 10 per cent. during 1981. The number of strikes in 1980–81 was less than in any year since 1941, and the number of working days lost is only one-third of the average for the past 10 years. Labour unit costs have stabilised, and workers are now showing a new sense of realism about the effects of future wage demands on their jobs.

Even in Norfolk the picture is not all doom and gloom. There are jobs to be had in the area, even in the present difficult circumstances. In fact, in the past 12 months over 3,400 people in north and west Norfolk were placed in jobs by the MSC's employment service. Many more than that will have found new jobs for themselves. Expansions are taking place in the area and new jobs are being created, although not at as fast a rate as we would have liked.

The Government have recently announced changes that will enable the Development Commission and the Council for Small Industries in Rural Areas to respond even more readily to the needs of the rural community. All the areas, except King's Lynn, fall within a Development Commission priority area and the commission has a factory building programme at eight locations in the area which comprises 34 units, of which 20 have been completed. In addition, the construction of 14 workshops has recently been approved. Within the priority areas, CoSIRA's advisory, training and loan services are now available to small retailers as well as small manufacturing and service firms.

The Budget provided further help for small businesses in addition to the large number of measures—75, no less—taken previously. The enterprise package included further reduction in weight of corporation tax; further increases in VAT registration limits; increase in global amount available for loans under the loan guarantee scheme this year; and a doubling of the investment limit under the business start-up scheme to £20,000 a year. The new measures will encourage start-ups and existing firms.

As I have already said, future job prospects in Norfolk, like everywhere else, will depend largely on our efforts to get the economy right. That will take time. The difficulties are deep-rooted. Meanwhile, we are protecting those hardest hit, particularly young people, through our programme of special employment and training measures. About 630 people in the Norfolk area are currently benefiting from the temporary short-time working compensation scheme, the job release scheme and the community enterprise programme. Nearly 4,500 young people have entered the youth opportunities programme since 1 April last year.

The hon. Gentleman referred particularly to expenditure on roads. It is one of the structural aspects of East Anglia about which he is particularly concerned. I understand that construction work on improvements to the A17 trunk road is progressing reasonably well. Local roads, including the A149, are the responsibility of the county council, aided by the transport supplementary grant from the Government. Norfolk did extremely well in the transport supplementary grant settlement for 1982–83 which was announced by my right hon. Friend the Secretary of State for Transport in December. The whole of Norfolk's bid was accepted for grant. It was one of only a handful of counties thus favoured. It is up to Norfolk to get on with its programmes in accordance with its priorities.

The hon. Gentleman also referred to fishing, which is again of considerable importance to the county. My right hon. Friend the Minister of Agriculture, Fisheries and Food is fully aware of the problems of the industry, not least in the hon. Gentleman's area. We currently have exclusive access to six miles from baseline off the Norfolk coast. In the negotiations for a revised common fisheries policy we remain determined to secure a basically exclusive 12-mile zone to safeguard our coastal fishing industry. That will at least provide a framework for security against which we may hope for a spontaneous generation for fishing in what is, as the hon. Gentleman rightly and properly knows, an area of enormous fishing potential.

The hon. Gentleman also referred to the prospects for youngsters. We both have a profound concern for the motivation and prospects of young people. The present predicament of young people is partly a product of lack of access to training. Their chances of escaping from that predicament are much bleaker without training. That is why we are concentrating our efforts in that direction.

The White Paper "A New Training Initiative: A Programme for Action", which was published by my right hon. Friend the Secretary of State for Employment last December, contains far-reaching proposals for industrial training, and particularly the major proposal designed specifically to help unemployed young people. The aim is that the new youth training scheme should provide a full year's foundation training for all unemployed 16-year-old school leavers. Everyone will be given the chance of a 12-month course, which will build on the experience gained from the current youth opportunities programme, which, since its introduction by our predecessors in 1978, has helped more than 1 million unemployed young people to gain work experience in preparation for working life. In the past four years the YOP has grown to between three and four times its original size. This year it will have about 550,000 entrants.

In Norfolk county alone almost 4,500 young people entered YOP between 1981 and the end of February, compared with little more than half that number in the whole of last year. We have nearly doubled the number of entrants. In the local authority districts of north and west Norfolk, almost 1,300 young people entered the programme during the same period, compared with just under 800 in the whole of the previous year. That shows that youngsters are taking up opportunities that will serve them well. The figures also show the magnificent effort made by the Manpower Services Commission and local scheme sponsors, many of whom the hon. Gentleman will no doubt know personally. They have done much to ease the plight of the young unemployed in Norfolk.

Mention should also be made of the efforts of Norfolk county council, West Norfolk district council and North Norfolk district council in working with the commission s area staff and the careers service in the area.

West Norfolk district council's 40-place training workshop in King's Lynn is an excellent example of its kind. It is one of 15 workshops in the country offering information technology modules as part of a pilot scheme. The district council also provides 60 other places of various types, all of which will be suitable for conversion to new-style places and have been approved as such already.

The hon. Member for Norfolk, North-West referred, in an important part of his speech, to local authorities engaged in industrial development——

It being half past Three o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Resolution of the House of 1 April, till Monday 19 April.