Employment Situation

HC Deb 27 January 1982 vol 16 cc902-80 4.25 pm

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

I beg to move, That this House, greatly concerned about the difficulties facing those who cannot find jobs, supports the Government's policies which are helping to make British industry more competitive and which therefore offer the best prospects of a permanent improvement in job opportunities for people in this country.

Mr. Speaker

I have selected the amendment in the name of the right hon. Gentleman the Leader of the Opposition for the main debate.

Mr. Tebbit

The Government were clear that the House would wish to have this early opportunity to discuss the employment situation.

There can be no doubt that we stand on common ground in our attitude to and in our feelings about the plight of those individuals, the people who make up the unemployed, those sad statistics, and their families. None of us can have any doubts or differences about the problems which unemployment can bring, even though there is now, of course, a comprehensive safety net of the sort which did not exist in the past.

Nor can there be any disagreement that the 3 million unemployed in this country represent a tragic waste of our human resources—something which none of us can contemplate with other than deep regret. We all want to improve employment prospects for our people and we all have every reason to do so.

Regrettably we can agree across the Floor of the House on not much more than that. Indeed, apart from the fact of 3 million unemployed, the Opposition are hardly willing to agree the facts. So in an effort to extend that common ground let us try to establish some facts.

Are the Opposition today ready to deny that there is a world recession and that that has been brought about by the succession of oil price rises? Do they believe that we can insulate ourselves from the impact of that recession?

I must say that if the Opposition line is, as it has so often been recently, that it is solely Government policies that have brought unemployment to its present level, they will have to explain how it is that President Mitterrand's France has 2 million unemployed or West Germany 1.7 million—their highest figures since the early post-war years.

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

It is not Mitterrand's France; it was d'Estaing's France. Mitterrand has been in office months only.

Mr. Tebbit

The hon. Gentleman is anxious, as always, to push the blame on to somebody else. President Mitterrand's France and Germany have, in addition, conscripts in the army which, of course, takes them out of the labour market. Germany has almost a quarter of a million conscripts; France has well over 200, 000. Germany's foreign labour farce fell by half a million between 1973 and 1978.

Indeed, in Germany, Holland and Sweden unemployment has increased by about 50 per cent. in the past year, and in the last few months unemployment has been rising faster there than in Britain. Surely not even Opposition Members can argue that those rises stem from the policy of this Government.

Mr. Donald Stewart (Western Isles)

If, as the right hon. Gentleman claimed, the effect of Government policies on unemployment is minimal, does he agree that the Saatchi and Saatchi posters before the election were completely dishonest?

Mr. Tebbit

No. What I am saying is that no one can pretend that the increase in unemployment in Britain in the midst of a world recession is solely the Government's responsibility.

During the first 32 months of the present Government's time in office oil prices have risen from about $15 to about $34 a barrel. During the equivalent period the Labour Government suffered a rise of about $2 a barrel. I have the figures here. The world economic position was very different then compared with what it is now.

Any Government is affected by events outside the country. In recent months there has been an extremely large increase in unemployment in other countries. It is a common problem.

Mr. Geoffrey Robinson (Coventry, North-West)

Does the Secretary of State know of any set of forecasts for unemployment in countries comparable to ours showing unemployment rising to 3 million-plus? Does he think that any other Government in Europe would allow those figures to be attained?

Mr. Tebbit

I do not speak for the forward policies of other Governments in Europe. I am speaking for what is actually happening in Europe, not for the forward policies of other Governments. Whatever their policies are, they all face extremely rapid rises in unemployment. The sole exception at present, perhaps, is Japan, which has done extremely well. [AN HON. MEMBER: "What about Austria?"] I shall give the figures for Austria, and I shall give the figures for France, which has managed to suppress the rise in its rate of unemployment for the moment, but has an increase in its unit labour costs of no less than 13 per cent.—with all that that implies for the future.

Mr. Frank Hooley

(Sheffield, Heeley) rose—

Mr. Tebbit

I shall not give way to the hon. Gentleman. I have already given way sufficiently.

We had other long-lasting and deep-seated problems which some of our major competitors did not fully share. [AN HON. MEMBER: "Rubbish".] I should be obliged if the hon. Gentleman would listen to what I have to say and then decide on the merits of the case instead of on his own blind prejudice.

Mr. Peter Shore (Stepney and Poplar)

The Secretary of State was on a very important point when he spoke about the effect of oil prices. Nobody would deny that they are very important. The right hon. Gentleman pointed out that they had doubled in 1979–80, and we accept that, but he denied, implicitly or explicitly, that they had risen in previous years. Will he confirm that oil prices rose by four times between 1973 and 1974, and, furthermore, that his right hon. Friends in Opposition never drew attention to that in any economic debate?

The Prime Minister (Mrs Margaret Thatcher)

We did so many times.

Mr. Tebbit

If the right hon. Gentleman checks the figures, he will find that the price of a barrel of oil—

Dr. John Cunningham (Whitehaven)

Oil prices rose by four times.

Mr. Tebbit

I wish that the hon. Gentleman would not act as a juvenile parrot. I heard the right hon. Gentleman's question, and I am answering it. There is no need for it to be parroted by the hon. Gentleman. I am telling the right hon. Gentleman, in the intervals between the hon. Gentleman's discourtesy, that the price of a barrel of oil was $9.60 when the Labour Government came into office. Thirty-two months later—the same span as this Government have had in office—it had risen by about $2. In the equivalent period of the present Government's time in office the price has risen from less than $15 to about $34 a barrel.

Mr. Shore

What the right hon. Gentleman is saying is absurd. It is torturing figures to the point of lunacy. It is true that in the period that the right hon. Gentleman is describing, beginning in March 1974, the price rose in that way, but the Labour Government came to power three months after the quadrupling of oil prices. The right hon. Gentleman must address his mind fairly to that fact.

Mr. Tebbit

The right hon. Gentleman is fond of using statistics for his Government's period in office, and I am giving him figures for the same period.

Who, even among the Opposition, would deny that much of our industry when the present Government came to office was and had been for some time, as had our commerce and our local and national Government, both inefficient and overmanned? It is possible to take examples from where one will. I ask hon. Members to read again the Central Policy Review Staff report on the motor industry, to look at how manning levels have now fallen in the steel industry, and to ask whether it would not have been better had those manning levels been achieved five years, three years or even two years earlier—and, in particular, achieved without a damaging and needless steel strike.

I ask hon. Members to ask managers throughout the country what has been happening to the efficiency of their firms. Indeed, if hon. Members want to see what problems still exist, they should take an independent view and read what Paul Routledge said in The Times yesterday. Referring to what is going on in British Telecom, he quoted the chairman on a catalogue of labour inefficiency as follows: Out of date methods of work; 'over 40 per cent. of field supervisors' time is spent on paperwork'. Inter-union arguments on operating computer terminal…Time-wasting in putting in telephones.

All those matters, which are, regrettably, typical of the overmanning and inefficiency which have characterised much of British industry in the past, have been largely rooted out now in the private sector, but we still, unhappily, have a long way to go in much of the public sector.

Mr. John Golding (Newcastle-under-Lyme)

Does the right hon. Gentleman understand that the increase in productivity in British Telecom since 1970 has exceeded that of almost any other industry? It is certainly higher than anything achieved in the private sector.

Mr. Tebbit

I quote again: staff levels and wages grew by 18 per cent in 1979–80 and by 31 per cent. in 1980–81, 'far outstripping growth' That makes it very difficult to achieve increasing levels of productivity.

When the recession struck Britain, we had hardly begun to face the stored-up problems of years of poor industrial performance: years of stunted and inadequate growth in productivity and years of excessive growth in wages compared with productivity—that is, years of uncontrolled increases in unit labour costs.

I have quoted the figures before, and no doubt I shall do so again. 1 despair of the Opposition's understanding them, but at least they might remember them.

Between 1970 and 1980 money incomes rose by 345 per cent. and output by 17 per cent. Prices rose by 188 per cent. and unemployment rose by 193 per cent. That could qualify for the description of a dismal decade.

Mr. Michael Foot (Ebbw Vale)

Ask the right hon. Member for Sidcup (Mr. Heath) about those figures.

Mr. Tebbit

The right hon. Gentleman may choose to use different figures, but those are the figures published by the Central Statistical Office. [Interruption.] Does the right hon. Gentleman want to dispute the basis of official statistics that were issued when he was in Government? He does not. The right hon. Gentleman has a new system. He disputes the official figures issued by Conservative Governments, not those issued by Labour Governments.

For more than five years of that decade, let me emphasise, we enjoyed, if that is the word, the policies of Tweedledum Foot and Tweedledee Williams. Between them, ably assisted by the right hon. Member for Bristol, South-East (Mr. Benn), although, to be fair, hampered from time to time by the happy and sometimes successful partnership of the IMF and the right hon. Member for Leeds, East (Mr. Healey), they left our industry set up to be the fall guys of the world as the recession bit.

Unemployment was still falling as a consequence of the policies of the IMF years, but inflation was already being stoked up again. Inevitably, as the recession struck, unemployment rose, exacerbated by our lack of competitiveness. Through that decade of decline, each recessionary trough was marked by a new peak of unemployment.

None of this should have come as a surprise, because what was happening was clear all the way through. There are those who still believe that we could have fudged our way through this recession, as we have with others, and let the British disease run its course until the sick man of Europe became the pauper of Europe.

For the Conservative Government that is not an option. It would perhaps have been easier to tackle these accumulated problems without the added dificulties of the recession. But we had no choice. The recession was there and the old problems had to be met. Without tackling the old problems of poor product design, poor marketing, slow delivery, unnecessarily high costs and inflexible use of manpower—

Mr. Foot

indicated dissent.

Mr. Tebbit

Does the right hon. Gentleman think that those problems did not exist or that they should not be tackled?

Mr. Foot

The right hon. Gentleman is not fit to answer for any Government; not even this Government.

Mr. Tebbit

Although that may be the view of the right hon. Gentleman, it was not the view of the electorate. What is more, having lost 25 members of his party in the last two years, he should keep quiet.

Dr. David Owen (Plymouth, Devonport)

Is the right hon. Gentleman aware that he has been speaking for 15 minutes and that we have not yet had a constructive proposal about the serious problem of unemployment? We have had a long catalogue of scapegoating and party politics. When will the right hon. Gentleman address himself to the real problem?

Mr. Tebbit

The right hon. Gentleman must be fully aware that attempting to deal with problems without first going into their background is most unwise. If he, as a doctor, treated his patients without first diagnosing their problems, then I can see why he came to the House of Commons.

There is little doubt that there can be no prospects of a recovery which would lead to new, better paid, more secure and more productive jobs unless we tackle the problems that I have listed. Some of the problems are undoubtedly on the manpower front. They have to be tackled. Would British Steel be the better if it returned to the manning levels of 1979? Would British Leyland's chance of survival be enhanced by going back to the overmanning of three or five years ago?

We have removed some of the barriers to progress to that end. The Employment Act 1980, the new initiatives on reforming training, the Government's support for training in new technologies, and our moves to get more realistic wages for young people have helped to that end. We have improved the incentives for entrepreneurs by creating new schemes of encouragement and help for small businesses. It is managers and work forces who will take advantage, and are taking advantage, of the chances and the incentives to improve the performance of their firms.

It is in the interests of Opposition Members to claim that the economy is heading downhill. They enjoy it, they love it, they sit and giggle at it, but it is clear that the trough of the recession was passed in the second quarter of last year. In the three months to November, industrial output rose by 1½ per cent. and manufacturing output by 1 per cent. Perhaps most important of all, output per man hour in manufacturing rose by 8 per cent. between the fourth quarter of 1980 and the third quarter of 1981. Output per head rose by 10 per cent. over the same period.

At last, we have begun to gain on our competitors in terms of unit labour costs. At last, we have seen a year in which our unit labour costs rose less than 4 per cent. against over 5 per cent. for our main competitors. In Germany it was 4 per cent., in Japan it was 6 per cent. and in France it was 13 per cent. if 13 per cent. in France is not good news for any motor manufacturer other than Renault and the other French companies, I do not know what is.

At last, after years of decline, our international competitiveness is being regained. The gains are showing through in, for example, an increase of more than 20 per cent. in engineering export orders in the second half of last year. No one outside the Opposition pretends that there is an instant solution to the problems. Equally, it is only the Opposition who resolutely refuse to give any weight or credence to the indicators—the measurements—of what is going on in the economy and the extent to which they are pointing to and recording a recovery from the trough of recession.

Obviously, output is one measure, but, perhaps of critical importance to unemployment, the figures for short-time working are falling and the figures for overtime working are rising. This month, for the third month running, we have seen figures for unfilled vacancies higher than those for the same month a year earlier. The numbers of vacancies notified to the jobcentres and to my Department have been rising since April 1981. That trend line of vacancies has always led the unemployment figures, both up and down, and after some hesitation it now seems to be established on a firm upward trend.

Mr. J. Enoch Powell (Down, South)

If the right hon. Gentleman is leaving the topic of competitiveness, I wonder whether he would address himself to a problem that worries many people. We have a persistent and massive surplus on our trading account. That being so, the effect of an increase in our international competitiveness must be an increase rather than a decrease in unemployment.

Mr. Tebbit

That is not necessarily so. As the right hon. Gentleman rightly hinted, the effect would be an upward pressure on sterling. That would have a favourable effect on the inflation rate and perhaps allow us to have lower interest rates than would otherwise be possible. That could then begin a benign spiral of holding down costs and might allow us to live better rather than worse as we have been doing in recent years.

Mr. John Grant (Islington, Central)

rose—

Mr. Tebbit

I should get on.

Amidst the tragedy of 3 million unemployed we can now see, unless we are blinded by prejudice or spite, the hopeful signs for the longer term health of the economy upon which job security and job creation can be built. But there is no instant solution. Who could seriously suggest that the problems of 30 years could be solved in 30 months? I shall leave it to my right hon. Friend the Secretary of State for Industry to detail the measures—

Mr. John Grant

rose—

Mr. Tebbit

This is a short debate and I really should get on.

I shall leave it to my right hon. Friend the Secretary of State for Industry to detail the measures that he is undertaking to help industry. They include aid for the traditional industries—steel, motor cars and shipbuilding—and for the new: data processing, information technology and the like. Unlike the handouts of previous times, which merely insulated inefficient and overmanned businesses from the need to change, the aid today is linked to measures to bring them into viability and independence.

For many businesses, with or without Government aid, the choice has been stark. As markets contracted in the world recession, they had to shed labour both to meet shrinking order books and to increase efficiency because the happier option of expanding production without taking on new labour was not available. Businesses that did not do so ran the risk—the risk often became the reality—of collapse with the loss of every job in the firm. So the great shake-out of labour, aimed at and talked about so often in the past, happened. It happened not at a time of our choice, but at a moment dictated by events.

Alongside these weaknesses in our economy and alongside the world recession we, in common with our predecessors, faced a third factor—demographic change. The total population of working age increased by nearly 900, 000 in the five years to 1980 and will increase by about 1 million in the five years to 1985. In the second half of the 1980s, the demographic factors, in that sense, become more favourable. By the early 1990s, our population of working age will fall back to the level of the mid-1970s. At present, however, we need 200, 000 new jobs a year merely to keep pace with demographic change. In particular, we face a bulge in the number of 16-year-old school leavers coming on to the job market. The numbers reaching school leaving age peaked in 1980–81 at about 920, 000—about 180, 000 above the level of a decade earlier. Happily for the job market, the number is now declining again but only slowly initially. That is why, in examining what the Government can do to ease the shocks and pains of the inevitable but long overdue adjustments in our economy, it was the plight of young school leavers that caused me most concern.

As a result, the lion's share of the £4, 500 million expenditure over three years on special employment and training measures will go to young school leavers. There is in any experience, however unhappy, the prospect of gaining some advantage. In dealing with the crisis of unemployment, I have taken the opportunity to improve our standards of industrial training. It is common ground between us that in industrial training we have fallen behind our competitors abroad. Far too many of our youngsters entering the work force have lacked any training at all. Our apprenticeship system may have been admirably suited to the first half of the twentieth century, but it certainly is not suited to the last quarter.

By welding together our special measures programme to meet the problems of unemployment and our training programme to meet the competition of better trained work forces abroad, we have set out to meet that challenge. The House should not underestimate the scale and scope of these programmes. It is all very well for the SDP in its amendment to call for a two-year programme of training for young school leavers. What stopped the right hon. Members for Crosby (Mrs. Williams) and Plymouth, Devonport (Dr. Owen) from implementing even a one-year scheme when they were in office? Was it the Lib-Lab pact? Was it the then Secretary of State for Employment? Did they not possess the weight to take it through the Cabinet? Were they unable to obtain the credit from the IMF to take it through? Whatever the reason, they did not invent it until they got into Opposition and after they had left the Labour Party.

Today, there is also in being the community enterprise programme, and that has been increased to 30, 000 places.

Mr. John Grant

It should be doubled.

Mr. Tebbit

No doubt. Everyone would like double everything—double wages, double jobs, double all. That is the SDP programme.—[Interruption.] I do not believe that the hon. Gentleman seriously thinks that I am frightened of him. Some fishes are too small for serious fishermen.

The job release scheme is being extended from 1 February to men of 62. For the disabled, it is already 60. The young workers scheme is also in operation. There has been a good response from industry. This can open up jobs to youngsters willing to take realistic wages. I hope that it will not only be employers who promote this scheme to would-be workers but that youngsters of 16 will go to employers and point out that they can be paid £40 a week at a wage cost to employers of only £25.

The youth opportunities programme is a continuing success. I freeely give credit to the previous Administration for the inception of the scheme. The number of youngsters seeking places speaks for its success. At the latest count, about 240, 000 people were benefiting from the scheme. In all, more than 1 million young people have benefited. It is right that the House should congratulate the Manpower Services Commission, the employers, the voluntary services, education departments, the local authorities and all the others who have helped to operate the scheme. [An HON. MEMBER: "And the trade unions".] And the trade unions. Indeed, everyone who has been concermed. The trade unions are, of course, included within the MSC, which is a tripartite body.

The Christmas undertaking was all but achieved, and 280, 000 of this year's unemployed summer school leavers have been taken into the YOP. Only 15, 000 youngsters could not be offered places by Christmas. I hope that support will be extended and increased this year and next as the YOP fills the gap until the youth training scheme is in full operation from September 1983. Indeed, in 1982-83, I hope that 100, 000 of the YOP opportunities will be 12-month enhanced quality places approaching or even reaching the YTS standard.

Alongside these measures, we shall continue to offer support to apprentice training, although this will be increasingly orientated to late twentieth century style apprenticeships and to other adult training schemes. I have mentioned the Department of Industry's spending of £3 billion and my Department's plans to spend £1.5 billion a year on these programmes by 1983–84.

Contrary to what is implied by the economic illiteracy of Labour's "Plan for Expansion", to which the Opposition amendment refers, unlimited spending out of limited resources is a recipe for economic disaster, not recovery. There are no short cuts. Our industry and commerce must provide the goods and services that the customer wants at a price that he can afford. If not, someone else will. Jobs will be created in Germany and Japan and lost here in Britain. [AN HON. MEMBER: That has already happened."] That is the problem. Over the last 10 years and beyond we have lost against these growing economies. Like it or not—the Opposition generally dislike it—there is a growing mood of realism which, even if not too widely evident in the upper echelons of some unions, is evident among their members. Restrictive practices are being removed. Pay claims are being related to what employers can afford—and settlements certainly are.

Pay is far from being the sole cause of inflation, but excessive labour costs feeding through into prices are a major cause of job losses. Cleaning up the mess of the winter of discontent—honouring the Labour Party's commitments to the Clegg commission—left a rate of wage settlements approaching 20 per cent. in 1980. By the end of the 1980–81 pay round, it was down to about 9 per cent. [Interruption.] We honoured the Clegg commission recommendations; we said we would. It was set up as the only answer to the mess into which the previous Government had got themselves during the winter of discontent.

The CBI figures suggest that settlements are now running at about 6 per cent. to 7 per cent. That is the common sense of managements and work forces showing through. Together with an outstanding good record in strikes—the figures to be published later today show that in 1981 the number of days lost was less than one-third of the average over the last 10 years—these real advances have shown through in terms of increased productivity, increased competitiveness, increasing export success and an increasingly firm foundation for future expansion.

Nothing in life is certain.

Mr. Clinton Davis (Hackney, Central)

Will the Secretary of State give way?

Mr. Tebbit

I suspect that this is certain.

Mr. Davis

Amidst the "Tebbits" of information that the right hon. Gentleman drops from time to time. can he say whether the Government accept any responsibility at all for the 3 million unemployed?

Mr. Tebbit

I accept, and the Government accept, responsibility for some of the consequences of getting the economy back into a shape in which it can compete across the world. The House must ask whose responsibility it is when overmanning is tackled and cured. Is unemployment the responsibility of those who tackle the problem or of those who allowed it to build up? The common sense of management and work forces is now showing through.

Nothing in life is certain. Nothing can be taken for granted. All the gains could be thrown away in the mistaken belief—in the persistent heresy—that forcing demand into the system at a time when inflation is still too high, when Government borrowing and taxation are too high, can do other than bring the shortest term relief at the expense of the longest term disaster.

I began by referring to the common ground of our concern for the plight of the unemployed and our determination to beat the problem of mass unemployment, but from there the common ground disappears.

Both the amendments—the amendment that you, Mr. Speaker, have chosen from the old Labour Party. led, if that is not to overstate the case, by the right hon. Member for Ebbw Vale (Mr. Foot), and the amendment from the new Labour Party led by… led by—Somebody help me. Who is it led by? Come on, give me a hint. According to the amendment on the Order Paper today it seems to be led by the rather shy right hon. Member for Crosby. Both parties have retreated straight back to their common ground of spending resources that they know we do not have. They do not even know how much they want to spend.

Yesterday the right hon. Member for Chesterfield (Mr. Varley) was asked by Mr. Ian Ross of ITN how much reflation he wanted. The right hon. Gentleman said "Oh, I am talking in terms of billions." We guessed that, but of how many billions was he talking? Was it £1 billion, £2 billion, £3 billion, £4 billion or £5 billion? Has the right hon. Gentleman become another arithmophobic?

Memories, particularly political memories, are short. Blessed, selective amnesia can strike the House in the same spot time and again. I bet that the right hon. Member for Crosby has forgotten that in The Times of 2 February 1977 she said that we were seeing the increase of unemployment throughout the industrialised world and that it was a problem for which we still had no real answer. That is, until today. Today she has found it.

As the House considers the motion and the amendments, I invite hon. Members to recollect that the Government have been in office for 32 months and will be in office for much longer yet. I invite hon. Members to cast their minds back to events 32 months after the Labour Government took office in February 1974. That takes us to October 1976.

I am sorry that the right hon. Member for Leeds, East is not in his seat because he would remember his conversion to monetarism on 28 September on the occasion of his U-turn on M4. Of course, he had started to believe when in his July Budget he cut £1 billion off expenditure and raised national insurance contributions by £1 billion. That was when he said that the long-awaited economic miracle was in our grasp. Fumbled again. In September he had just raised MLR to 13 per cent., sterling was tumbling out of control and he had to apply to the IMF for aid—for a loan of £2.3 billion.

By 25 October sterling was down to $1.57. The right hon. Gentleman had raised MLR to 15 per cent. on 7 October. All that was in pursuit of a sound Socialist economy. By 15 December he had introduced a Budget of £2.5 billion, cutting foreign aid, cutting housing, cutting education and social services and putting up prices. The right hon. Member for Cardiff, South-East (Mr. Callaghan) then said "Pessimism is overdone." That is true. It was. When the right hon. Gentleman and the then Chancellor were monetarists on dog leads from the IMF things went fairly well, but as soon as they broke free the troubles, culminating in the winter of discontent, were upon them.

There is no sensible alternative to our policies. There could be a return to the Socialist planning policies that brought the Labour Government to their humiliating plight after 32 months in office—policies that left us a nation in debt, industries overmanned and uncompetitive and inflation stoked up to go through the roof. Those policies were supported by members of the SDP in Government, even in the last vote of confidence, and endorsed when they stood for election as Labour candidates in the days when the right hon. Member for Crosby still said that the right hon. Member for Bristol, South-East was a moderate. What comfort can there be for the unemployed in going back to those policies? There can be none whatsoever.

The Government have combined firmness of purpose and steadfastness in pursuing the long-term objectives of more, better and secure jobs based on the ability to meet and defeat our competitors. We have taken that view with a determination to fund and operate special employment and training measures to help people damaged by the toll of unemployment. I am happy to say that, under that dismal toll of unemployment, the signs are that the economy is growing and that the returns for the efforts and hardships are coming through.

Mr. Dennis Skinner (Bolsover)

Rubbish.

Mr. Tebbit

The hon. Member for Bolsover (Mr. Skinner) might not be able to read the figures, but the Employment Gazette publishes graphs so he can see the way that the figures are moving up.

To throw that away in a wave of self-indulgence, mistaking it for constructive help, would be madness—economic madness. It would be a disaster for both the 12.7 per cent. unemployed and the 87.3 per cent. employed alike. What is more, I remind a few of my hon. Friends, it would also be electoral madness for them, as it was for the Labour Party in 1979.

I repeat that no one can guarantee success in these affairs. Much progress has been made. We know well that any improvement in unemployment must lag behind the gains in productivity, the gains in competitiveness and the increased flow of jobs on to the register which we have seen. It would be folly to throw all that away in repeating a failed Socialist experiment, even with the Labour SDP, in the mistaken belief that the softer option is the better option.

Above all, it would be a cruel and heartless deception of those who have been hardest hit by the mutual follies of Governments—yes, Governments—industry, commerce, unions, workers, management, and all of us in the past. There can be no turning back now. Let us have the courage to take these policies through the rest of the way to success.

5.10 pm

Mr. Eric G. Varley (Chesterfield)

I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof, appalled at the toll of unemployed people, which now exceeds 3 millions, and is among the highest proportionately in Western Europe, calls upon Her Majesty's Government to institute a programme of capital investment in civil engineering works, house construction and improvement and energy conservation, to make employment subsidies available for jobs for the long-term unemployed and to initiate a proper two year skill training scheme for school leavers and a re-training programme for those with obsolete skills; deplores the official Opposition's unrealistic and ill-considered policies which take no account of their impact on inflation; and urges Her Majesty's Government to include fiscal and incomes policies among the means for curbing inflationary pressures instead of relying on high interest rates and lengthening dole queues.

When I was elected to the House in 1964, I never believed that I would take part in a debate about 3 million unemployed. We expected something better from Her Majesty's Secretary of State for Employment. We have just listened to a thoroughly nasty speech. When it exuded sympathy, it was at best unconvincing and at worst positively repulsive. It was full of the lame excuses that we have come to expect from the Conservative Party. It contained some selective statistics about oil prices, but the right hon. Gentleman failed to remind the House that for the whole of the period during which the Government have been in office they have had North Sea oil, to the full value of the British economy. That has been a tremendous boost, and it was not available when oil prices quadrupled under the Labour Government.

When the Secretary of State dealt with what he called the realities of the situation, he showed himself in his true colours. He insulted not only the Opposition—we can take that from the right hon. Gentleman—but some of his right hon. and hon. Friends, and particularly his right hon. Friend the Member for Sidcup (Mr. Heath) and his Administration. No one would believe now, listening to what the right hon. Gentleman said, that that Administration included the present Prime Minister. The Prime Minister's appointment of the Secretary of State to his present position is an insult to the unemployed.

Mr. Geoffrey Dickens (Huddersfield, West)

Rubbish.

Mr. Varley

The Secretary of State is the wrong man in the wrong place at the wrong time. Looking at his qualities, it is impossible to imagine that he will have a distinguished career as Secretary of State for Employment, but it is certain that he will go down in history—it is his unenviable fate, for which he will be remembered—as the Minister who presided over 3 million unemployed. Judging from what he said this afternoon, he actually blames them for it. Overmanning is a subject about which the right hon. Gentleman talks from time to time—it is necessary to reduce overmanning—but why does he not occasionally, instead of running down British industry, point out that there are some superb successes? That has always been the case.

There is no part of the country or no type of worker that is immune to the Government's destructive policies. Practically every family in the land now has some direct or indirect experience of unemployment. Its tentacles stretch from Scotland to the South-East, infecting the country in areas which never knew it, even in the worst days of the 1930s.

In previous recessions, unemployment increased in different parts of the country in a manner that maintained the ratio between the regions. The present Government's unique achievement is that they are spreading unemployment more evenly than ever before across the face of our country. As one might expect, the areas in which unemployment has always bitten deep and which have never fully shared in national prosperity have been very hard hit by the present slump, but regions that have never known serious unemployment before now shiver in the grip of it. The picture is both appalling and instructive.

Mr. Dickens

What would the Labour Party do about it?

Mr. Varley

In Northern Ireland, for every 100 people who were without jobs under the Labour Government, there are now 186. In Scotland the figure is 197. A similar picture is to be seen in the South-West and in Wales, where the figure is 209. In East Anglia there are now 224 unemployed for every 100 when Labour left office. In the North-West the figure is 225. In Yorkshire and Humberside the figure is 243.

Those figures are terrifying enough, but I come to areas which, until now, have always known prosperity. In the South-East—an area represented by the Secretary of State for Employment and the Prime Minister among others—for every 100 people unemployed when Labour left office the number now seeking work is 252. The same is true in the East Midlands. Now we come to the Government's extraordinary achievement. In the West Midlands, for every 100 unemployed when the Prime Minister walked into Downing Street, there are now 297. It has taken the right hon. Lady to bring the percentage of unemployed in the West Midlands to the same level as in Scotland. It takes a special sort of incompetence to turn the West Midlands into a depressed area.

The Prime Minister waffles on about the paramount importance of competitiveness, but it is her special achievement that the most competitive industries have suffered, along with the less competitive. All have suffered—industries with high wages, industries with low wages, industries with high prices, industries with low prices, industries which are heavily unionised and industries which are thinly unionised. The Thatcher blight has hit them all. It has hit metal manufacturing and textiles, engineering and footwear, distribution, both wholesale and retail, local government and the building industry. Nobody has escaped. Companies have fallen like ninepins.

The Department of Trade has recently confessed that last year the number of company liquidations reached an all-time record level. Small firms, damaged as never before under the present Government, are laying off workers, as are large factories. Yet the Prime Minister, in her new year message, had the nerve to say: We must do something to help small businesses develop and grow, because that is where the new jobs come from.

At Question Time yesterday the Prime Minister filibustered and answered only two or three main questions. She force-fed the House with statistics which were irrelevant, inaccurate and misleading. She made great claims about the number of vacancies—"vacancies up", she said—but she was very careful not to give figures, and she was very careful to choose a base date that suited her. In fact, when Labour left office, there were five unemployed for every job vacancy, and heaven knows that was bad enough. Today there are not five unemployed workers chasing every vacancy, but 25. That is the triumph over which the Prime Minister was crowing yesterday.

Mr. Clinton Davis

Is my right hon. Friend aware that in the area of East London that I represent nearly 1, 300 youngsters are chasing 22 jobs? Presumably the Secretary of State would regard that as a triumph.

Mr. Varley

My hon. Friend is right.

The figures are available for individual areas. The entire country is a depressed area. The South-East and the West Midlands have been reduced to a level that previously would have attracted development area status. An even more devastating fact, which the Prime Minister concealed when addressing the House yesterday. is that production in manufacturing industry has fallen by 15.4 per cent. In looking around her for some body or someone else to blame for these intolerable unemployment figures, the Prime Minister tried to make something of the fact that the population of those who had reached working age had been rising.

It is the Government's special achievement that the number of workers in employment has been falling. Even though unemployment rose under Labour, the number of workers in employment rose as well. When the Labour Government left office the employed population stood at 25, 120, 000. In June 1981, the latest period for which figures are available to me, it had declined to 23, 418, 000. Bearing in mind the other figures that are available, I am sure that it is worse now.

The Prime Minister tries to minimise the grim significance of the figures by saying that some people are losing jobs but others are getting them all the time. She makes it sound like a conveyor belt. I have heard Conservative Members use that sort of analogy outside the House. The number of people who have been out of work for more than a year has more than doubled in 12 months. The number is now 874, 000. The long-term unemployed, in the jargon of the Department of Employment, are not travelling merrily along the conveyor belt. They are imprisoned in a lift that is soaring upwards out of control.

There are others. There are those who cannot be thrown out of a job, because they have never had a job. There are those who find, when they leave school, that the community has no use for their talents and ideals. Bright-eyed youngsters are given the impression that once their formal education is over society has no use for them. It is among young people that the toll is worst—for every 100 unemployed when the Labour Government left office the number is now a terrifying 404. All that the Secretary of State can offer those young people is that by the end of 1983 they will be eligible for his new training scheme, with its princely recompense of £15 a week. What is more, any young boy or girl who has the impertinence to turn down that unrivalled opportunity will be punished by being made to forfeit supplementary benefit.

That is not the only form of blackmail in which the Secretary of State is indulging. He has come up with a new scheme, which is being tried out in selected parts of the country. My hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) has informed me that it is being conducted in his constituency and in other areas. The unemployed are being ordered to fill in a new, long questionnaire in which they are required to answer detailed personal questions—my hon. Friend has provided me with a copy of the form—and told that if they refuse to comply they will forfeit their unemployment benefit. That is the penalty for refusing to co-operate in the Tebbit inquisition. When questioned on this today the Department of Employment was unable to point to any parliamentary authority authorising the questionnaire or the withholding of benefit. Perhaps the Secretary of State will investigate this, as it is a matter of great interest to the House.

Mr. Tebbit

I think that it is a long-established practice that if people are not available for work, which is what the form asks, they do not receive benefit.

Mr. Varley

That may be a long-standing practice, but this is certainly a new one. I assume that the questionnaire was approved by the Secretary of State before it was sent to selected offices in the Northern region, Yorkshire and Humberside and South-East London. It arises out of the Rayner report and is a new exercise involving long and detailed personal questions, some of which, of course, relate to whether the person is available for employment. People are being told by local offices that if they do not fill in the form, which is not required by the vast majority of offices, they will lose their unemployment benefit. If the Secretary of State does not know about this, perhaps he will take the matter on board and report to the House in due course.

Mr. Tim Renton (Mid-Sussex)

rose—

Mr. Varley

The debate has already been truncated. If I give way to the hon. Gentleman. I shall not be able to give way again.

Mr. Renton

That is an extraordinary statement. With regard to the new training initiative, is not the right hon. Gentleman showing his normal characteristic attitude, which is that if he finds a gold bar in the street he tries to make it look like a wooden leg? Would he really recommend that parents should advise their children to take home £18 per week in supplementary benefit rather than a training allowance of £15 per week? Is it not significant that when the right hon. Gentleman was Secretary of State all that he did was to produce Green Papers about training, whereas my right hon. Friend has gone ahead and is bringing in a scheme?

Mr. Varley

The Secretary of State is taking an initiative that was launched by the Manpower Services Commission, but he is likely to spoil it by the level of allowances offered. An allowance of £15 a week will be regarded as derisory. I wanted a proper training scheme for young people. In view of the facts that I have outlined, it is now more urgent than ever. When the youth opportunities programme was introduced by the Labour Government, 70 per cent. of those going through the scheme found a job. The proportion is now less than 30 per cent., and goodness knows what it will be under the new scheme. The Opposition are in favour of training, but it must be proper training, with a proper rate of payment. I hope that the Secretary of State will do something about the questionnaire to which I referred.

The unemployment benefit, which the Secretary of State may find it necessary to cut in selected areas as a result of the Raynor report, has been shown to be less in real value than it was in 1971. Under the Conservatives, the real value of unemployment benefit has fallen to its lowest level since that time. Soon, as in the 1930s, it will be possible to distinguish the children of the long-term unemployed by their physical appearance from those whose more fortunate fathers were able to hang on to their jobs. In the face of the damage that they have inflicted on the country, instead of taking action to improve the situation the Government are trying to talk their way out of it.

The Secretary of State referred to the international statistics. Has he seen the reports in today's newspapers about the Common Market? On the Brian Walden show he said that before the end of the Government's term of office unemployment would begin to fall and people would flock back to support the Conservative Party. That is not the Common Market's view, which is that: when the next General Election is due—3, 600, 000 people will be out of work in Britain". But, according to the same statisticians, it will be falling in West Germany and in France. [Interruption.] The right hon. Gentleman had better join the club if he wishes to become an anti-Marketeer.

No weekend is complete these days without another effusion of complacency from the Chief Secretary to the Treasury, the Pangloss of the Conservative Administration, but it is the Prime Minister who doles out the most liberal doses of syrup. Not only does she not fool the people, however—she does not even fool her own colleagues. The right hon. Member for Lowestoft (Mr. Prior), who was sacked as Secretary of State for Employment and sent away to Northern Ireland for daring to tell the truth, is perhaps a good example. I wonder who he had in mind when he said at the weekend: Nor is it any use simply proclaiming that the only solution to inflation is to set oneself flint-faced against any request for extra Government spending. Whoever the Secretary of State for Northern Ireland had in mind, tomorrow the Prime Minister will be holding a crisis Cabinet.

The Prime Minister

No.

Mr. Varley

The right hon. Lady says that it is not a crisis Cabinet. I can only say that it should be, because we have a crisis of unemployment. The country will be interested to know that instead of taking unemployment seriously the Prime Minister has decided to laugh about it. I thought that she cared. There will be no point in that Cabinet meeting unless the top item on the agenda is how to tackle unemployment.

The Prime Minister will say that our proposals to deal with unemployment will cost a great deal of money, but unemployment is costing a great deal of money. Unemployment is costing about £13 billion per year. The nation is spending more and more on financing unemployment. It is spending more on unemployment than on the National Health Service. It is spending more on unemployment than on education. It is spending more on unemployment than on the rate support grant, and the precious revenues from North Sea oil are being squandered to finance unemployment.

That £13 billion could be used as a fund to finance long-term, secure jobs. Public money can be used to finance worthwhile public investments. Only this week British Aerospace unveiled its new Jetstream aeroplane at the Scottish Aviation factory at Prestwick. Orders are already coming in. Without public ownership and public investment, that factory would have been closed long ago.

I do not know whether any of my hon. Friends heard the Secretary of State on the radio this morning lavishly extolling the merits of Smith's Dock Ltd., the shipyard on Teesside, and the showpiece vessel that it has just launched. Smith's Dock is part of the nationalised British Shipbuilders. It would not exist today had British Shipbuilders not been nationalised by the Labour Government. It would have disappeared ages ago.

It is particularly rich that the Secretary of State, of all people, should lavish praise on that company, because as a Back Bencher in the last Parliament he spent 58 sittings in the Standing Committee on the Aircraft and Shipbuilding Industries Bill doing his worst to try to kill that measure. If the right hon. Gentleman had his way today, there would be no Smith's Dock, no showpiece vessel, no aerospace factory in Scotland and no Jetstream. What was done there can, should and must be done elsewhere.

A fraction of the money being frittered away unproductively on unemployment could be used to provide about 100, 000 jobs for building workers to build homes for our homeless, because there will be a colossal housing problem in a few years' time. The Prime Minister, the Secretary of State and the Cabinet know that.

The disaster threatening some of our older cities, with their crumbling sewage systems, could be put right by creating jobs in the construction and material industries. Instead of picking on the nationalised industries and using them as their scapegoat, the Government should use their potential to get the British economy moving again. Local authorities, which are taking such a hammering from the Government, could be used to provide massive support for customers in the private sector. I do not know about Conservative Members but private firms in my constituency tell me they are kept going by orders from the public sector.

The right hon. Lady says that she cares about unemployment—

Mr. Richard Needham (Chippenham)

rose—

Mr. Varley

I should like to give way, but I must proceed, because of the shortage of time.

The right hon. Lady says that she cares about unemployment. If so, she must cast aside her dogma and obstinacy. Instead of telling us that she cares, she must take action to prove that she cares, but I fear that that is too much to ask of her and her colleagues.

The Secretary of State said that there was no alternative. I do not know how that went down with the right hon. Member for Chesham and Amersharn (Sir I. Gilmour), the former Lord Privy Seal. This is a no plan, no hope Government, who in their first Queen's Speech in May 1979 promised to create a climate in which commerce and industry can flourish… and increased employment in all parts of the United Kingdom"—[Official Report, 15 May 1979; Vol. 967, c. 48.]

What a shoddy deception those words have turned out to be. I wonder what St. Francis would have said about 3 million unemployed. It is richly ironic that in the month when the number of registered unemployed has topped 3 million, the Tory Party has provided a new contract for Saatchi and Saatchi. At least this time they will not have to recruit the Hendon Young Conservatives to pose as a phoney dole queue for them.

The Government have failed. They have failed on inflation, which is higher now than when they came to office. They have failed on production, which is lower now than when they came into office. They have failed on humanity. They are ready to see unemployment soar above even this week's criminal figure. It is time that they went. It is time that the Prime Minister went. Sooner or later the country will get rid of her.

5.34 pm

Sir Russell Fairgrieve (Aberdeenshire, West)

I am somewhat surprised to find myself so high in the batting order. I was disappointed by the speech of the right hon. Member for Chesterfield (Mr. Varley), because he said nothing constructive about what the Opposition might do.

The right hon. Gentleman's speech also disappointed me for historical reasons. He will recall that during the last Parliament I had the pleasure of serving as the Tory Whip on the Petroleum and Submarine Pipe-lines Bill, which he steered through the House until he was replaced by his right hon. Friend the Member for Bristol, South-East (Mr. Benn)—someone who understood absolutely nothing about industry.

No political party has a monopoly of sympathy for those who are unemployed or a monopoly of the causes for it. Having said that, nothing can remove the trauma of being unemployed or what it does to a person's dignity or morale, especially when the bread-winner gets up in the morning, sees the children going to school, his wife begin the housework and he has no proper job to go to. The only redeeming feature is that today unemployment is not accompanied by the deprivation and hardship that went with it in the 1930s, when there were families short of clothing and short of food.

I am of an age to remember well the dole queue stretching right round the market place of the small Scottish textile town of Galashiels, where I grew up. Fortunately, I had parents who made sure that my sister and I as children understood what that meant, because we were made to visit and help where there were whole families living in single rooms. As a result, we saw and understood what real hardship was.

I never really saw unemployment again until after the Korean war, when our firm went on short time for a few weeks. That experience taught me another lesson—that the head of the firm must be its chief salesman. Other matters can be delegated to competent managers, but the head of the show must take full responsibility for marketing the firm's products and keeping people employed.

The trouble today is that it has taken Britain 20 years to arrive at our present situation, and any idea that it can be cured in a couple of years should be forgotten. We have made so many mistakes during that period, which started about the time that we missed going into Europe with our now main competitors. About 20 years ago we had about the highest standard of living in Western Europe and today we have about the lowest. That can be measured by many statistics, such as pay, pensions, holidays and all the other things that go to making up the standard of living in any developed country.

We have only to look around us to understand the causes of unemployment. British unemployment is seen in German cars, Japanese television sets and Italian refrigerators, or by going to Europe and seeing how many British vehicles are among the German, French and Italian ones, or what proportion of British-made consumer durables are being sold in Europe. If we were only buying and only selling a higher proportion of British-made goods, unemployment would drop considerably.

Also, one has only to enter our restaurants and hotels and see the number of people of non-British origin working there to witness another aspect of British unemployment, because either we cannot or will not do these perfectly respectable jobs. If we add overmanning and outdated labour practices that have been allowed to continue, and even grow, over so many years, it is not surprising that we have reached our present state of affairs.

Of coure, one has to accept two other facts: we are in the middle of probably the most severe world recession that we have ever experienced, and the last few years have seen the horrific increase in energy prices.

Having said all that, in a debate of this nature one must try to be constructive and see what might be done to start bringing down unemployment over the years ahead. I want to consider some of the possibilities. Already the private sector of British industry, which faces tough competition, has taken major steps to make itself more efficient. This can be seen right across the board, but, regrettably, this does not apply to the public sector, particularly the nationalised monopolies, where we have yet to find a discipline that can take the place of competition. Ideas about job sharing are sound, but have to be left to the individual. We all know of families, with children away from the home, where the husband and wife can have three or four jobs between the two of them. It could be that this is unnecessary when other families have no jobs at all. I think that we can fairly look to a reduction in overtime giving jobs to others, and early retirement for those who would like to take it.

There is only one area where I cannot agree entirelyginwith the Government's arguments, and that is on bringing down the age of male retirement. In this day and age, with women's lib and all that type of talk, there is no real justification or point in both sexes not having the same retirement age. However, we are told of the phenomenal sums that it would cost to bring the male retirement age down to 60. I cannot go along with that argument fully, as it must surely mean the interchange of some unemployment benefits for pension payments. But even if this full course is difficult, surely a start can be made now on the gradual reduction from 65 to 60.

Again, we must look at our industry. There is no point any longer in making steel that nobody wants or ships that no one will sail. However, there are areas of expansion in the service industries. There is tremendous scope in tourism and the hotel trade, and those industries could expand. We must consider retraining people, because we know that there are many unfilled vacancies in the new industries of electronics and electrical engineering. We have out-of-date apprenticeship schemes, which take too long to train at too high a price compared to our competitors.

Surely the evidence of the past 20 years is there for all political parties and Governments to see. Every time that we have tried to throw only money at our problems, more inflation has arrived and we have ended up with a higher plateau of unemployment. We cannot go back to that proven failed palliative. We must beat inflation right out of the economy so that there is a sound financial and industrial base upon which competitive industry can grow. As we become competitive, so there will be a greater demand for our products and more people will be required to produce them and the scourge of unemployment can start to be taken out of our industrial and national life.

5.44 pm

Mrs. Shirley Williams (Crosby)

First, I should like to associate my party with the regrets that were expressed about the accident at Cardowan colliery. We, too, very much hope that the men who were injured will make a rapid recovery.

For the moment, I shall not follow the speech of the hon. Member for Aberdeenshire, West (Sir R. Fairgrieve). This afternoon we have seen the Secretary of State for Employment rise to his usual high level of party cracks, cheap insults and not a single constructive idea in the 33 minutes during which he spoke. That is what we have come to associate with him. It is sad for Parliament that that is the best that we can do at a time when 3 million men and women are unemployed.

Yesterday, the Prime Minister was rather different. She put up a brilliant piece of stonewalling. However, what emerged from that stonewalling, which might have qualified her for the Test match in India, was a clear indication that unemployment had risen, that it would continue to rise, and that Her Majesty's Government had not the faintest idea how to bring it down. In saying that, she was doing everything that she could to avoid answering some of the difficult questions, although the Prime Minister knew very well that sooner or later those difficult questions would be asked.

At a time when Britain as a whole has 12.7 per cent. unemployment, there are areas of the country where unemployment is 18 per cent., 19 per cent., 20 per cent. and even 25 per cent. In the area that I have the honour to represent, Merseyside, the figure is now 18.2 per cent., and that has been the kind of figure we have had for many months. The proportion of long-term unemployment is steadily rising, and people who have been unemployed for more than a year now constitute almost one-third of the unemployed.

However, that is only the beginning. Regional differentiations are not as great as the generation differentiations. Within the generations we now have youth unemployment at 25 and 30 per cent., and in the inner cities in some cases it is approaching 50 per cent. and more. Heaven help the person who is young and unskilled, and heaven help the person who is young and unskilled and black, because his chances of getting a respectable job are now less than evens.

The Government know very well that the unemployment figures for 1983 will be higher than the figures for 1982. Every respectable independent forecast, and that of the Treasury itself, demonstrates that. Most of the independent forecasts go on to say that unemployment in 1984 will be worse than in 1983. To give the pathetic news that vacancies are increasing when they are only half what they were in 1979 or 1978 and that overtime is increasing hardly seems to me to be much of a credit to the Government. These things are only signs, but the Government are looking at a situation that is getting steadily worse. I shall say something constructive, and I hope that Parliament will think constructively about the tragedy that now faces many of our people.

The Secretary of State for Employment said—and it was a fair point—that there is no simple solution. There are, however, two simple solutions. The first, which has been tried during the past two and a half years and found profoundly wanting, is monetarism. It has been applied as though one could simply take an economic doctrine and apply it to a complex, highly organised society of imperfect competition, assuming that it would operate as it operates in the economics textbooks. It does not operate that way at all. What happens is that unemployment rises long before prices fall, and long before wages fall. What happens is that investment collapses before inflation is got under control.

However, there is an equally simple solution, and that is to throw money at the problem, to talk about merely increasing public expenditure, to talk about import controls, and increasing and inflating the economy until everyone is back in employment. That does not work either, for the straightforward reason that inflationary pressures rapidly get out of control if one pursues that course.

May I say to the official Opposition that they must face two questions before their policies can be taken seriously. I say this to the right hon. Member for Chesterfield (Mr. Varley), who made a good and constructive speech. The first question is: when will they face the question of competition in the economy? The second question is: when will they face the necessity for an incomes policy? That is something that they must face, regardless of the views of some trade union leaders who support them.

What of the Government? They will introduce a Budget next month. We are told that it will be able to bring about a reflation of between £1½ billion and £2 billion. Good, but what are the Government likely to do with that reflation? First and foremost, they must restore the value of unemployment and other social benefits. Anything less would be to cheat the people of this country on the pledges that the Government themselves made. Secondly, the Government must restore the indexing of personal allowances, not least of the age allowance, which has led to the most profound disillusionment and confusion among old-age pensioners, who now pay tax earlier than they paid it last year, because the age allowance was never increased in line with inflation in 1981–82.

Thirdly, I hope that the Government will decide not to spend whatever else they can afford on reducing the standard- rate of income tax, because there is no way more expensive in PSBR terms of creating new jobs than that. Hon. Members know well that it leads to more imports.

What do we suggest instead? We have constructive proposals. First and foremost, we suggest that the time has come to reset the context in which Britain's competitiveness must be restored by public investment within an overall programme amounting to between £5 billion and £6 billion gross a year, concentrated on the labour intensive programmes of house improvement and modernisation, energy conservation and civil engineering works on the basic infrastructure. Sound and reali5tic economic groups, including the Cambridge Econometrics Group, have estimated that the PSBR cost of creating jobs in those areas is between £2, 500 and £3, 500, which is less than the cost of keeping a roan or woman unemployed.

The Government should devote themselves to a modest programme of public investment in areas that are labour and skill intensive, and not capital intensive—for that is not the sensible way in which to do it. But as well as setting the context in which employment might recover, the Government must also set the direction.

The Secretary of State for Employment accused me—I shall not waste much time on it—of doing nothing about training and education of a technological nature when I was Secretary of State for Education. But as a result of the initiatives that I took then—co-operative industrial awards, teaching companies and engineering scholarships—the increase in young men and women trying to enter engineering and technology course:3 in 1979–80 and 1980–81 was the greatest since the Second World War. Today, those young people are facing unemployment as a result of their willingness to move to subjects that would be of long-term help to Britain. I fear for them, because the promises to them will once again have been broken.

What does the Secretary of State propose to do? He is introducing a youth training scheme that is essentially cosmetic. He has seen apprenticeships decline by 25 per cent. while the Government have been in office, apprenticeships that were not replaced by any effective skill training scheme. The youth training scheme is not that. It is a one-year, cosmetic attempt to take young men and women off the unemployment rolls and to give them nothing resembling a real skill or qualification. One does not receive that in one year of a cobbled together, cheap scheme.

Mr. Tebbit

Will the right hon. Lady give way?

Mrs. Williams

I shall finish what I wish to say first, because the Secretary of State may also wish to reply to that.

The scheme does not begin until September 1983. There seems to be no evidence that the Government have attempted to recruit training officers, to establish where redundant educational premises can be made available for the purpose or to take up the many vacant places in training schools that would be available for proper skill training schemes if the Government put their back into the job in a way which there is no evidence they have tried to do.

Mr. Tebbit

The right hon. Lady should think carefully about what she is saying. My criticism of her is that, in her amendment, she calls for a two-year training scheme for all school leavers, but she could not in her time organise even a one-year scheme. I have secured the financial resources for that. The right hon. Lady has not seen any details, but she is convinced that it will be a failure. By saying that, she is doing all that she can to make it a failure and to deprive youngsters of that training. She seems unaware of the fact that the scheme will spend £1 billion a year on about 300, 000 youngsters, which is sufficient to give them a good, sound basis of training and to repair some of the omissions of their education, which occurred despite the system set up by the right hon. Lady. She is doing a great disservice to them.

She also asked me to identify the schools and workshops. She seems to have forgotten that the Manpower Services Commission is charged with that responsibility and has the resources with which to do it.

Mrs. Williams

The Secretary of State's intervention was useful and I am glad that he chose to make it. I do not deny that the youth training scheme may have its uses, although I believe that it will not work because it is an exceptionally cheap scheme. The Secretary of State has not addressed his mind to the creation of a genuine skill training scheme, which is modulated, and which leads us to fill some of the terrible gaps in the numbers of technicians and technologists.

The Secretary of State has something else to answer for. If he has looked at the files—I suspect that he has—he knows that in 1979 the Labour Government left behind them a scheme agreed with the CBI and the TUC, which was meant to start in 1980, for a two-year training programme. The Government of whom he is a member chose to pigeon-hole that scheme and are introducing nothing until 1983. I refute what he said, because he made no attempt to carry on with that scheme. The money was available.

Britain suffers from a serious shortage of technicians, technologists and skilled craftsmen and women, which is becoming more serious all the time. The Secretary of State should ask his industrial friends about that. The evidence is that if there is a recovery—heaven knows when that will come—it will run more rapidly into the bottleneck of skill shortage than any previous recovery.

I ask the Secretary of State to address his mind to changing Britain round from becoming increasingly an up-market Third world economy into a country with the skills and qualifications to enable it to move into the technologically advanced societies to which it should belong. He should speak to his right hon. Friend the Secretary of State for Education who, the more he ponders, the more likely he is to make the wrong decision. He is carving up the higher education system not by trying to change it, which many of us would welcome, but by trying to destroy it. In a country with the lowest proportion of highly qualified manpower of all the Western European advanced countries, he is trying to chop back on what was already a disgracefully low proportion of young people able to have higher skills.

I do not believe that we shall make any constructive proposals about reducing the 3 million unemployed, which shames Britain today, unless we face up to the need for a programme of public investment in a context in which private industry can again flourish. Secondly, we must consider our long-term direction, which means the upgrading of manpower in a way that the Government have failed to tackle.

Thirdly, I say to all the parties in this House that the evidence given by Professor Barker of Cambridge and many others is that the single most effective way in which to create an answer to long-term unemployment is to reach a basis for a sensible and lasting incomes policy. I do not pretend that any of us have succeeded in doing that so far. If we are serious, and not just scoring off one another, in an attempt to help the unemployed, we must address ourselves to that problem. We must do so not by considering the doctrine that says that it is wrong because it is not part of monetarism, nor should we fear a reaction from a small number of trade unions. We owe it to those who are unemployed in our society to face up to the problem seriously and honestly and to try to save what may well become a doomed generation.

6 pm

Mr. John Townend (Bridlington)

I looked forward to the remarks made by the right hon. Member for Crosby (Mrs. Williams) because I thought that we might get some original ideas on how the Social Democratic Party would deal with the terrible unemployment problem. I am afraid that I was disappointed. I noted her suggestion that there should be a massive increase in capital expenditure on the nationalised industries. However, she gave us no idea how to control those industries, which we have lamentably failed to control in the past. The return on capital in them has been deplorable, as everyone agrees.

Mr. Bob Cryer (Keighley)

Give us some figures.

Mr. Townend

The right hon. Lady said that we should increase the benefits. Where will the money come from? She said that she would reduce taxation by upgrading the allowances. We have heard that before; spend more, do not tax more and reduce taxation. Where would we get the money from? Either we borrow more and, therefore, interest rates rise, thus increasing the burdens on industry, or we print more money, which leads to inflation. That policy will end in the same way as it did before—an application to the IMF and massive inflation.

Mr. Cyril Smith (Rochdale)

I shall ask the hon. Gentleman two simple questions. First, what nationalised industry runs housing and energy conservation? The right hon. Member for Crosby (Mrs. Williams) asked about that. Secondly, is not the hon. Gentleman aware that it can be cheaper, in national expenditure terms, to pay people to work than to pay them not to work?

Mr. Townend

The right hon. Member for Crosby referred to massive expenditure in the nationalised industries. I accept her point about energy conservation. The other point that the hon. Member for Rochdale (Mr. Smith) made, is the same as the one that used to be made by the Leader of the Opposition when I was a county council leader. His solution for unemployment on Humberside was to put more and more people on the local authority payroll and to increase the rates. If it was as simple as that unemployment could be solved overnight, but we all know that the creation of jobs costs far more money than unemployment. No one would deny that the tragic level of unemployment is a major problem—nowhere more so than in my constituency.

The level of unemployment in Bridlington is 18.5 per cent. and there is male unemployment of over 23 per cent. However, it was unfair of the right hon. Member for Chesterfield (Mr. Varley) to blame that on the Government because, with respect, no fair-minded man could do that. We must consider the factors that have caused the long-term problem.

I agree with the Secretary of State that the principal reasons for the problem is that for several decades we have seen a decline in British industry's competitive position compared with that of its overseas competitors. That is principally due to a refusal to accept new technology, to overmanning, restrictive practices and low productivity. Many of the problems have been caused by excessive union power, but there is also a significant responsibility on management which, in many areas, has been weak and poor.

When industrial survival depends on reducing overmanning, it is inevitable that unemployment should rise. Demanning occurred principally in the private sector, but in two nationalised industries—British Steel and British Leyland—much progress has been made.

It has recently been publicised that in the last financial year British Leyland expected to produce the same number of cars using 30, 000 fewer people. If its workers had not lost their jobs, the rest of the firm's jobs would have been at risk, because the company would have collapsed. Much needs to be done to improve the competitive position of other nationalised industries. Over the past couple of weeks, there has been much publicity about British Rail. There is great scope for British Rail, just as there is for local authorities and water authorities.

There was a very high level of real unemployment for a considerable time, but it was disguised by overmanning; two men doing one man's job. The second cause of the problem has been the world recession.

That is being acknowledged more and more by the general public. A fortnight ago, I called on a man in Bridlington who had just been made redundant. In those circumstances, I expected to receive much criticism about the Government's policies. On the contrary, I was heartened that he took such a realistic view. He said "Mr. Townend, this is not just a British problem. The firm where I worked was owned by an American company. We made the machines and the Americans sold them throughout the world. There are no orders at the present time and if American salesmen cannot sell them, this is a world problem."

There is a third cause for the problem. I shall not be popular for raising it, because it is often swept under the carpet by both Front Benches. If the House had listened to the advice of the late Sir Cyril Osborne and legislated to restrict Commonwealth immigration much earlier, we would not have brought in so many people to do jobs on the railways and buses which should have been disappearing even then.

Opposition Members must accept a considerable share of the responsibility because, if the Labour Party had supported strict immigration control when it was first mooted, our unemployment problems would have been greatly reduced.

Assisted area status policies have been followed by this and the last Government and they have adversely affected Bridlington. I have always doubted the cost effectiveness of the whole programme, particularly when one considers the cost per job created in places such as Invergordon.

I have been perturbed for some time about the effect of assisted areas on adjacent areas, which receive less help or none at all. There is always the danger of a creeping malaise setting in. For example, if one area is helped, it attracts jobs and that makes it difficult for the adjoining area. That happened in Bridlington, an intermediate area bordered by the Hull development area. That made it practically impossible to attract any new jobs to the town and discouraged the expansion of existing businesses and creation of new businesses. When a business man sets up a new firm, why should he not go 10 miles down the road and get greater help and larger grants? The policy has resulted in a most unfortunate situation. Bridlington now

More significantly, out of the 102 travel-to-work areas in Britain, in special development or development areas, no fewer than 67 have lower unemployment than Bridlington and only 33 have higher unemployment. The situation will continue to worsen until the Government rectify that anomaly.

I was disappointed when the Minister replied to a parliamentary question that I tabled this week. He said that the Government were not prepared to uprate Bridlington to development area status. That answer is not acceptable and I shall not let the matter rest until we get justice for the area.

On the national scene, an aspect of the figures has been ignored by Opposition Members. They overlooked the fact that the unemployment figures are significantly overstated because of the growth of the black economy in recent years, particularly in the more prosperous parts of Britain.

Although there are some encouraging signs, there will be fairly high unemployment for some time. I support my right hon. Friend and am heartened by the high level of exports and the improved competitiveness of much of British industry. Although business is improving and orders will increase over the next year, that will not halve an immediate effect on unemployment, because most firms can increase production without taking on substantial additional labour.

With the development of the microchip and the increasing introduction of the robot, manufacturing industry is unlikely, in the foreseeable future, to create the number of jobs required. In the middle of a technological revolution that will affect the pattern of employment for the next 50 years, it is strange that the Opposition should completely ignore that point. It is only after wealth has been created by efficient manufacturing industry, using the microchip and the robot, and after that wealth has been spent through public expenditure, taxes and private expenditure that new jobs will be created in the service sector.

Given the natural time-lag between the recovery of manufacturing industry and the creation of service jobs, I congratulate my right hon. Friend the Secretary of State on his new training initiative. It will cushion the problem of youth unemployment in the two or three years before demographic changes result in a reduced number of school leavers.

he Government could take some useful initiatives to create jobs in the service sector. They could remove some of the fiscal disadvantages that discriminate against the service sector. For example, useful incentives have been given to build small nursery units, but tax incentives are given only if they are used for a conforming use, which is a manufacturing industry. In future, it will be as important to create service jobs as manufacturing jobs.

One of the tourist industry's problems is that, unlike many of our EEC partners, such as France and Italy, Britain is prejudiced against the service industries. Many people think that it is servile to have a job in the service industries. It is incredible that more than 600, 000 people are registered as unemployed in the South-East, when there are nearly 200, 000 foreigners working in the area. A significant proportion of them work in the catering, hotel and restaurant industry, because many British people refuse to take such jobs. If only youngsters in Brixton would take the Tube to the West End, many of them could get jobs—if they were prepared to do so—as kitchen porters. It is important that the Government should educate people so that they are prepared to accept the jobs available.

To an extent, I support the suggestions made by the right hon. Member for Crosby. In the past 20 years there has been a significant increase in the amount of maintenance, painting and decorating done at home on a do-it-yourself basis. Often, people do the work not because they like it, but because of financial necessity. The Government might well consider giving tax allowances to those who spend money on maintaining their houses. The cost would not be as high as might be imagined. In order to be eligible for the allowance, people would have to keep invoices and that would be a major blow to the black economy and would result in many small contractors being drawn into legitimate business, registering for VAT and filing returns with the Inland Revenue.

My next suggestion will not be popular with the Opposition, but may offer significant job opportunities. I refer to personal and ancillary services, such as gardening. Many old people with substantial and inflation-proof pensions need domestic help. Some form of tax allowance might offer substantial opportunities and, once again, we might be able to hit at the black economy.

It is important to do everything possible to create real, not make-believe, jobs. I strongly support the new young worker scheme, introduced by the Government, to subsidise employers who take on young people in the first year. In Bridlington, we are not just waiting for Government help, but have recently formed an employment liaison commitee to co-ordinate the activities of all the agencies and bodies interested in creating jobs. One of its purposes is to draw the attention of employers and small businessmen to all the aids given to those taking on young people. At the first meeting, I strongly urged employers to take on young people and to take advantage of the young workers scheme. The chamber of trade and the hotel and restaurant association made a significant point. They said that they could not take advantage of that worthwhile scheme, despite their wish to do so, because the minimum wages council rate is more than £40 per week. It is nonsense that the Government should bring forward proposals to encourage employers to take on young people at under £40 per week and should give a subsidy of £15, when another set of Government regulations say that that is against the law.

The right hon. Member for Crosby mentioned apprentices. An increase in the number of apprentices is far more important than anything else. In my constituency small employers in particular find that apprentices in their first year are quite uneconomic. The staffing rates are very high compared with those found in our industrial competitors, such as Germany and France. I hope that the Government will open discussions with the CBI and the trade unions to discover whether it is possible to reduce the starting rate to below £40 for the first year of an apprenticeship, so that people can take advantage of the scheme.

I strongly support the Government's policy. The problem is not of their creation. The solution is not easy. Changes will affect us into the next century. Anyone who thinks that the problem can be solved by spending a lot of money in six months is doing the unemployed and the country a disservice. After some short-term benefit, there would be even higher unemployment.

6.16 pm

Mr. Jim Craigen (Glasgow, Maryhill)

When I listened to the hon. Member for Bridlington (Mr. Townend), my spirits were uplifted. Until he spoke, I thought that there was little prospect that the Government would change their policy. I never thought that I would hear the hon. Gentleman argue the case for development status, tax incentives and all these other items that will add to the public sector borrowing requirement.

Mr. Campbell-Savours

The hon. Gentleman was a hard-liner when he was elected.

Mr. Craigen

That is the point. He was very much a cut, cut, cut man in all our previous dealings with him.

Mr. John Townend

I have made my position clear on assisted area status. I am doubtful about the cost-effectiveness of the scheme. I should like the whole lot to be abolished so that we can compete on an equal basis.

Mr. Cryer

The hon. Gentleman is wriggling.

Mr. Townend

While we have assisted area status, we want justice.

Mr. Craigen

The hon. Member for Bridlington wants equality plus.

I am puzzled why the Government should choose to debate employment. At this mid-term stage, the right hon. Gentleman's policy on employment and the economy as a whole offers little hope. The right hon. Gentleman spoke about overmanning in British industry, and at that point I felt that the Department of Employment was overmanned by one Secretary of State.

There is no doubt that the working population is growing despite a reduction in the number of those in employment. Obviously an international recession will affect Britain's economic fortunes, but 30 per cent. of unemployment within the EEC is attributable to Britain. That shows that there are domestic economic problems for which the Secretary of State and his Cabinet colleagues are responsible.

As I listened to the Secretary of State, an anecdote about President Calvin Coolidge came to mind. In the 1920s, when it was not the done thing for Governments to be involved in economic policy, a newsman asked the President what he thought about the state of the United States economy. The answer was "Why ask me?" We received a similar response from the Government today. Apparently they do not feel that they are responsible for the state of the economy. The Minister gave us precious little hope about where we are going over the next 3, 5 or 10 years.

One fact has emerged. We shall not see a resuscitation of our manufacturing base. Industry will contract. The higher productivity that we want will inevitably mean that, although there may be new opportunities, there will not be the same number of opportunities in our existing and established industries. Therefore, we look to the service sector, to which the hon. Member for Aberdeenshire, West (Sir R. Fairgrieve) referred, but I could have intervened during his speech to point out that the number of people employed in the service sector is falling. The fall in the buoyancy of the economy will inevitably affect many of the small businesses which we want to see developing.

When the Chancellor of the Exchequer presents his Budget in March, I hope that he will have weighed up the effects of his fiscal measures on employment opportunities. All of us are receiving representations from vested interests about the effects of possible changes in VAT or other fiscal measures on employment opportunities. I hope that the Chancellor will produce a manpower or employment Budget at the same time as his normal fiscal Budget.

The hon. Member for Bridlington expressed anxiety about intermediate and development area status. I am reaching the conclusion that regional policy is a dead duck. I see little sign of a renewal in the possibilities of regional policy. Many of us face higher unemployment in our constituencies—even higher than the figures given by the hon. Gentleman. It is incumbent upon the Government to think ahead and contemplate the measures needed to shape our economy.

Leaving aside the inner London boroughs, which have special problems, I would be pessimistic about the future employment fortunes of the Home Counties. Central London depends to a considerable extent on office employment. Two-thirds of the people who work there are employed in the great glass houses. Office technology is developing. Indeed, the Government are encouraging it. They have no alternative. However, the fact remains that in the long term such developments will have a profound effect on employment opportunities in the South-East. When unemployment hits, it will hit hard. Government Back Benchers may for once be less complacent about its impact. Many of us have experienced high unemployment in our constituencies, year in and year out.

I originally felt that a Channel tunnel might damage prospects north of the Wash, particularly in Scotland, and was sceptical about the project, but I now believe that the United Kingdom needs a significant and imaginative project in the 1980s. The Government threw away an opportunity to help the economy of Scotland, indeed of the whole of the United Kingdom, in deciding not to back the gas-gathering pipeline.

The Government should weigh seriously the psychological impact of a Channel "brunnel" or tunnel. Scotland, although it may be far removed from it geographically, has the steel, shipbuilding and construction and power engineering capacity. We may seem like mercenaries providing jobs on a project 400 or 500 miles away, but it may have a longer term beneficial effect on central Scotland's economy, as well as giving the United Kingdom the necessary significant project for the 1980s.

As I say, regional policy is dead, but a disturbing aspect of today's speeches has been that a dog-eat-dog feeling is developing between different areas.

My right hon. Friend the Member for Chesterfield (Mr. Varley) mentioned the change to voluntary registration for the unemployed and the pilot schemes to be conducted in various benefit offices. The most disappointing aspect of the change is that the Government appear to have shifted from the jobcentres' role to place people in employment. One difficulty is that they are running out of jobs.

The benefit offices will have problems with the scheme, which will be designed not to hand out more public money but to winkle out people and stop them from receiving benefits.

Mr. Tebbit

I find much of what the hon. Gentleman has said interesting and relevant to the debate, but let me tell him a little more about the pilot scheme and the new form. The first question asks whether the applicant is available for any job that he could do. If the answer is "Yes", there is no need for him to fill in the rest of the form. If the answer is "No", further questions require to be answered to see whether he is available for work or why he may not be.

Mr. Craigen

I have seen the questionnaire. There may be a check to see whether people have answered the form correctly.

I believe that there will be problems. There will be unpleasantness, and the staff will have the difficulties. People will rightly be indignant about the way that the staff are obliged to treat them because of the questionnaire.

I wanted to see something done about new training initiatives. The right hon. Member for Crosby (Mrs. Williams) has now left the Chamber—

Mr. David Lambie (Central Ayrshire)

The whole Social Democratic Party has gone.

Mr. Craigen

That is right.

I did not want to interrupt the right hon. Lady when she was speaking, but I believe that, apart from giving the initial training to young peope when they leave school, the important thing is to train them for the skills that are required. We are creating an escalator effect so that young people have not only qualifications, experience and skills, but the possibility to move into permanent employment, with recognition of the time that they spent in the new training initiative.

There is a danger that we could be training young people in yesterday's skills for tomorrow's requirements which do not call for those skills. That is why I believe that one cannot divorce the overall employment opportunities from what the Government—whether it is a past or future Labour Government or the present Conservative Government—seek to do. Young people are rightly looking for permanent employment. They are not looking for cul-de-sac opportunities which do not lead anywhere, but which create the illusion and promise that they will.

The remarkable thing about the young workers scheme, the inadequate YOP allowance and the disgraceful trainee allowance that has been promised under this scheme is that a Conservative Government, who are pledged through their philosophy to free and unfettered collective bargaining, are for the first time intruding noticeably in the wage settlements that young people will have. The hon. Member for Bridlington used to talk about the wages council rates, which he thought were too high. He is now complaining that they are too low.

Mr. John Townend

I should make it clear that I objected to the fact that the starting rates for the wages council were higher than £40 a week, which prevented employers from taking advantage of the young workers scheme.

Mr. Craigen

That brings me to the point that I was about to make, that the Government will have to concentrate on reducing the price for employers to employ people. Employers are not concerned only with wages and salaries. They must pay national insurance contributions and other taxes. They must also train young people. The Government will have to reduce those other factors much more in their considerations, so that employers' payments are at reduced prices.

I found some interesting statistics recently about the number of people who are emigrating. Hon. Members have talked about the number of people coming into this country, but more people are deciding that there are opportunities abroad. Apparently, despite the international recession, those people are finding those opportunities. Nearly 250, 000 left this country in 1980.

Today's outline of the Government's economic strategy was threadbare. The remark of the former Lord Privy Seal about the country heading for the rocks is true. The trouble is that the Prime Minister is sitting on a rock like a mermaid, half in and half out of the water. She is not clear about what she should do. If she reflates the economy, she will be in trouble. The alternative is to continue to submerge the economy.

Therefore, I have not been particularly uplifted by today's debate, apart from the twinkle from the hon. Member for Bridlington, who hinted that in some Conservative quarters there was a prospect that at long last the significance of high unemployment was being recognised.

6.35 pm

Mr. Kenneth Lewis (Rutland and Stamford)

More years ago than I care to remember, when I first came into active politics as a young Conservative—in those days we were called the Junior Imperial League, but we have since lost our Empire—I thought that unemployment was the greatest scourge in social terms. I have not changed my mind.

A debate about unemployment must enable us to discuss how we can create more jobs. It is not a debate about how we make the nation more efficient because if one can make a nation more efficient only by creating more unemployment, if one is in Government or a party behind Government, there is something wrong. People do not expect Governments to solve problems of efficiency, new technology and so on in industry by allowing unemployment to rise.

Listening to the Opposition, one gets the impression, as one might expect, that the Government are wholly to blame for present unemployment. The truth is that there is unemployment in the whole Western world. The Western world has to decide how it can best solve that problem, because if it does not, society and the whole Western world will go more and more to the Left. The Government have a high unemployment rate, partly due to the international situation. There is rising unemployment in Europe, in the countries of our main competitors and also in the United States.

Unemployment has also risen because of some self-inflicted wounds. I have not yet heard much about that in Opposition speeches. The hon. Member for Glasgow, Maryhill (Mr. Craigen) did not mention the fact that in recent years the trade unions have produced policies that have been agreed even by the Trades Union Congress—which should be more responsible, although some of its constituent unions are not—which have put their own members out of, work. Those policies have priced their members out of jobs.

It is remarkable that even today while we are discussing an escalating rate of unemployment a railway union is on strike. That strike is losing British Rail £6 million a day, thereby putting it further into the red and making it more difficult for it to employ people, let alone increase the pay of those it employs.

The Western world is also faced with the employment effects of the new technology. We have a backlog of problems brought about through not having faced up to it over the last few years. The Minister spoke about that. The new technology is gathering momentum and coming on stream much quicker than Governments, people in industry and myself thought likely. That momentum has been given a push by countries in the Far East such as Japan, Taiwan and Hong Kong that are forcing the pace.

Have the Government got a plan for dealing with new technology in relation to its effect on jobs? As fast as Government stimulates new jobs other jobs may be lost, because, as technology develops, it cuts back the labour force.

It is time that a Cabinet committee was set up to look ahead to the need for reduced hours, an earlier pension age or whatever to deal with this new technology. We need an "Industrial Beveridge". We had a Beveridge during the war to provide a report on welfare needs after the war. We now need an industrial Beveridge to assess what can be done to deal with the need for less work. If we have no plan and just sit and wait for things to develop, what will happen is that 3 million unemployed will become 4 million and 5 million and no Secretary of State for Employment will be able to do anything about it.

We know that 3 million unemployed now is too many and that it blights young persons, who grow from school into adulthood without getting other than temporary jobs or skills, believing that there is no permanent job ahead. We know that the careers of people in their fifties are spoiled when they suddenly find themselves out of work and are unable to get the promotion that they were expecting when they were in their forties. That is a devastating thing to happen to anyone.

The total number of unemployed will grow in the short term, as the Secretary of State said. He could give us little comfort on that, not only in his speech but in various television and radio performances in the last two days. Unemployment is not something that he can exactly control. The ghosts of the 1930s are walking abroad. As I said, I came into politics to try to exorcise those ghosts.

We have to ask two questions, however. Where does the responsibility of Government lie and what can the Government do about unemployment? The Government are not responsible for all the unemployment but, I believe, their policies are responsible for some of it. If some of my hon. Friends say that no part of the Government's policy is responsible for any of the unemployment I can only say that we cannot persuade the people that that is so. Where people rest their votes they expect their problems are rested. When people elect Governments they expect those Governments to help solve the problems.

What can the Government do? Clearly they must do something to try to stimulate and initiate new jobs. People do not expect miracles. I do not believe that, coming to the next general election, the people will expect a miracle. However, they will expect some progress and light at the end of the tunnel. They will not accept the word from the driver on the train—the Prime Minister—or from the guard—the Chancellor of the Exchequer—that the light is coming at the end of the tunnel. They will expect to see that light themselves.

The Treasury and the Government cling to one or two fetishes that are debilitating any opportunity of improving the situation. First, the Government have a good record on inflation, which they are bringing down. At the end of this year I believe that inflation will have come down to 7 or 8 per cent. The Treasury should make do with that until the next general election. If they try to bring inflation down lower, to 5 or 4 per cent., they will leave nothing to be done in the next Parliament and they will ruin their chances of bringing down unemployment and, therefore, of winning the next election. That is one fetish to go slow on.

I am pressed frequently, as we all are, to reduce Government expenditure. Again, the Government have a good record in the reduction of expenditure. When Ministers are looking at further possible cuts in expenditure they should ask themselves if whatever they propose will mean the loss of many jobs. With rising unemployment I do not believe that it is acceptable that Government expenditure should be cut in those areas where it would result in the loss of more and more jobs.

The third impediment that is causing problems is the Treasury's wish to hold down too tightly on the borrowing requirement. It is lower today in percentage terms than it was in 1970 and 1974. We have North Sea oil and we have just had an announcement of the most successful trading month and of an accumulation of successful trading months. When the country as a business is making money in every direction it does not seem to make sense that it cannot borrow more. Any company that is making money strongly can borrow easily. The Government ought to be able to relax on the borrowing requirement by at least £3 billion when the Budget comes up.

What should the Government do with that £3 billion? They should first recognise that they control a large section of the economy. In the Conservative Party we believe that the Government control too much of the economy. The Labour Party took more and more into the public sector. The Government have been handing back to the private sector from the public sector as much as they could, and quite rightly. They could not do it all in three years. They cannot do a great deal more in the next two years. They can do a bit but there is a limit.

The Government will, therefore, still have, in the public sector, a large area of activity. In the private sector labour is being cut because of new technology and because of trade being less buoyant. Therefore, there will be a limit to new jobs in the private sector. That is why I believe it is necessary for the Government to boost the public sector, that sector that they might wish they did not have but with which they are stuck, to make up for what the private sector cannot do.

We need a capital works programme, and it needs to be spread about. I am not one of those who believe that the Channel tunnel is necessarily the right kind of capital programme at this moment. It is too slow to come on stream in terms of jobs. I want capital programmes in housing, building, local government and roads—the kind of things that employ people in various parts of the country, because unemployment is not now in only one or two areas. It is all over the place—in the West Midlands, the East Midlands, the area where I have my constituency and where we never expected to see it at anything like so high a level.

Next, the Government need to help private industry by cutting some of the weight of taxation—not corporation tax, but the national insurance surcharge. We can take £ billion or more off that.

We hear a great deal about what the Government have done for small businesses. They have done a great deal for new business start-ups, but my hon. Friend the Minister for Industry and Information Technology might look at existing small businesses to see whether they could do with a little support, with a reduction in Government taxation. It is pointless to start new small businesses if some of the older small businesses find the climate so difficult that they fall flat on their backs.

I fought in the 1945 general election. There are not many hon. Members left, on either side of the House, who fought in that election. All of us on the Tory side thought that we would win, but the then Government lost heavily. Many who expected to gain seats lost, and some who held safe seats lost them. The Tory party's defeat in that election arose from a myth, one that stuck, after being propagated all through the war in the Daily Mirror. The myth was that the Tories had created unemployment in the 1930s. It was indeed a myth, because when the Labour Party was in office unemployment was at its peak between 1929 and 1931. It was the Tory Government, from 1935 to 1937, that started to bring unemployment down.

My father was out of work for two years during that period, and he was in and out of work after that. That was when I said that I would never sit quietly if such a problem were repeated.

We have two years before a general election. We must be careful to see that the old myth is not attached to our party when we enter that election. We must begin to bring unemployment down, and show that we are in business by being successful in doing so. We do not even have to get it below the 2 million mark—I do not think that arty Government can do that now—but if we do not bring it down and are not seen to be giving people hope we shall not be fighting a myth this time. The myth will have become reality.

6.54 pm

Mr. David Lambie (Central Ayrshire)

One of the important aspects of this debate, as those of us who have been present since the beginning will recognise, is that no one, apart from the Secretary of State for Employment, has yet spoken in support of the Government's policy. Irrespective of party, every hon. Member who has taken part in the debate has spoken against Government policy and called for a change in it.

We are more than halfway between elections, and Conservative hon. Members are beginning to realise that soon they will have to fight an election. Going to the country with 3 million unemployed—or 4 million, as I think it will be next year—they have not a snowball's chance in hell of being elected.

In Scotland, it is not a myth that the Tories have always been the party of unemployment. They were the party of unemployment during the 1930s, and they are the parry of unemployment again today.

Part of my speech has already been made by the hon. Member for Rutland and Stamford (Mr. Lewis), who made a good Socialist speech and provided a good Socialist solution. It was much better coming from the heart of the hon. Gentleman, as a Conservative, than from many of us on the Opposition Benches who have experienced the problems of unemployment in our own areas and sometimes speak from the head as well as the heart.

There are 3 million unemployed. The Prime Minister has said that there are encouraging signs, but the Secretary of State said on the radio yesterday that a more honest estimate of the future was that we had not reached a peak and that we should still see unemployment rising.

Many hon. Members have said that unemployment is now a national problem. In the old days an hon. Member from an area of high unemployment, such as Scotland, had no problem when he wanted to take part in debates on unemployment, because the only hon. Members who were interested were those from Wales, the North-East of England and Scotland. One did not need to put in one's name. One was called immediately, because the House was empty. Now it is difficult for us to take part, as hon. Members from the North of England, the Midlands, London and the South-East are demanding the right to speak about unemployment, because it affects them. Although they cannot equal the averages that we experience in the old industrial areas, they can prove that the increase in unemployment is much higher in their areas than in the old heavy industry areas.

My right hon. Friend the Member for Chesterfield (Mr. Varley) said that the whole country was a distressed area. That is correct, but some of us represent what can only be described as disaster areas.

Unemployment last reached the 3 million mark 49 years ago—in 1933. The apologists for the present level say that the problem is not so acute today, because in 1933 the rate was 22 per cent., whereas the average over the United Kingdom today is 12.7 per cent. Their percentage for the United Kingdom is correct, but in Scotland it is 15.3 per cent., and yesterday in my area it reached 24.7 per cent. Not only is unemployment in Central Ayrshire much higher than it was in the the 1930s, but it is now more than double what it was there. It is hitting every family. Unemployment at 24.7 per cent. makes my constituency the black spot for unemployment in the United Kingdom. It has the highest district rate of unemployment in the United Kingdom. Male unemployment is now 28.9 per cent. In the Garnock valley, which is a steel area where the open-hearth furnaces have been closed, the male unemployment rate is 33.6 per cent. If people working on the short-time subsidy and young people doing dead-end jobs under the youth opportunities programme are excluded, in the Garnock valley nearly every second person is unemployed or facing unemployment.

I do not think that hon. Members representing English constituencies, whether Labour or Conservative—especially in the South of England where the average is 12 or 13 per cent. unemployment—understand the seriousness of the problem facing the people in Ayrshire and the West of Scotland.

Mr. David Clark (South Shields)

The same applies in the North-East.

Mr. Lambie

My hon. Friend points out that the same applies in the North-East. These people come from areas which we would consider prosperous. If Central Ayrshire had an unemployment rate of 12.7 per cent., I should consider it to have full employment, because it has never had such a low level of unemployment.

I am not looking for a miracle. I am not asking the Government to introduce Socialist policies or to carry out the demands made by the hon. Member for Rutland and Stamford, who wanted increased public investment. I hope that at the crisis meeting of the Cabinet tomorrow there will be a majority for some change in the Government's policy. We need a U-turn. If we do not get it, unemployment will rise to an unacceptable level. I sometimes wonder why my constituents are so complacent about and accept unemployment. I do not think that the people of Britain will accept unemployment at the 4 million mark. We are heading towards a dangerous situation.

At the beginning of the year Cunningham district council called a crisis meeting to deal with the problem of unemployment. We brought together the regional councillors, the district councillors, the Members of Parliament for the area, the Scottish Development Agency, the PSE industries, and every group that could do something to ease unemployment. We made an estimate of the problem, what solutions were needed, and asked the Secretary of State for Scotland to arrange a meeting. We have not yet received word from the Secretary of State that he is willing to meet us. Yet the area is the unemployment black spot for the United Kingdom.

I hope that the Secretary of State for Employment will take my complaint to the Prime Minister. Why is the Secretary of State for Scotland not here today? Why is the Minister at the Scottish Office with responsibility for industry not here? Where are they? Scotland has the highest regional unemployment rate in the United Kingdom and the appropriate Minister is not present. He has not been here today. We have had one or two Ministers for Scotland, but they have no responsibility for industry. The Secretary of State for Employment should take this matter up with the Prime Minister.

If this is a mark of the interest shown by the Scottish Minister with responsibility for industry in an employment debate, he should be out. We hope that the Prime Minister will reorganise the Scottish Office. She has got rid of the Solicitor-General. I hope that she will take this opportunity of getting rid of the Secretary of State for Scotland and the Minister with responsibility for industry at the Scottish Office at the same time and appoint somebody who will at least attend debates.

Mr. Tebbit

I shall certainly inquire what it is that has kept my hon. Friends away from the debate, and the hon. Gentleman's speech. I shall mention to the Leader of the Opposition the absence of the Shadow Secretary of State for Scotland at the same time, if that will help him.

Mr. Lambie

It is no use making excuses. No one in Scotland can justify that the Secretary of State is not here or that the Minister of State for Scotland is not here when he is directly responsible for the manpower services in Scotland. He does not have to go through the Secretary of State for Employment. I hope that point will be taken up.

I hope that the Secretary of State for Employment will find out from the Prime Minister why the Secretary of State for Scotland has not answered Cunningham district council's request for a meeting, especially as the area is the black spot for unemployment in the United Kingdom.

Mr. Craigen

My hon. Friend may know that the Shadow Secretary of State for Scotland was here, but walked out in disgust after he had heard the statement by the Secretary of State for Employment.

Mr. Lambie

Perhaps he should have waited to hear me.

To give some idea of how Scotland has been discriminated against—because we have weak Ministers who are interested not in the problem but only in the glory of position—I should like to draw the Secretary of State's attention to another point.

On 13 November the Under-Secretary of State for Industry announced details of a new enterprise allowance. The Manpower Services Commission, in a press notice, said: Under the scheme, the MSC will pay an 'enterprise allowance' for up to one year to provide a regular income during the early stages of a new business. Applicants will have to live and propose setting up their business in the pilot areas.

I have recently been interested in the setting up of a workers' co-operative with unemployed construction workers. I thought that here was a good idea to get them launched. I applied for the new enterprise allowance, which would give them the opportunity of still receiving their unemployment benefits, or a sum equivalent to that, during the first year of the operation of the new company. I contacted the office of the Manpower Services Commission in Scotland and asked for information about the new enterprise allowance. The MSC replied: The pilot scheme will start on 25 January and applications will be taken until March 1983. The Government has made available just over £2 million to finance the scheme which should allow about 1, 500 successful applications. I thought that was a good idea, and I wanted to apply for the co-operative to receive the new enterprise allowance.

I then discovered that the pilot schemes were not to be found in Scotland. They were in Coventry, the Medway towns and North-East Lancashire. There was not one in Scotland. I represent the unemployment black spot for the United Kingdom, but it does not qualify for the new enterprise allowance.

I was told that the Minister responsible for industry in Scotland read about the scheme in the newspaper. The Government started a new initiative and did not even tell the Scottish Office that the initiative did not apply to Scotland. The Minister read about it in the newspapers. He will also read about this debate in the newspapers tomorrow. He will read about it and say "I am sorry".

I should like to know from the Secretary of State for Employment why the north Ayrshire area is not part of the pilot study. Is this discrimination against Scotland, which has the highest unemployment rate in the United Kingdom? I suggest that we forget about the Scottish Minister. I should like to hear an assurance from the Minister who is to reply to the debate that the north Ayrshire area will be included in one of the pilot zones for the new enterprise allowance.

Unless the Government change their policy, unemployment will rise to 4 million. My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) said that regional policies had failed. I agree with him to some extent. But regional policies work only within the framework of Government economic policy. It is Government economic policy that has failed. I hope that the Government will change their policy at tomorrow's Cabinet meeting. If they cannot change their policy with the present Prime Minister, they should ask her to go. She has outlived her usefulness as Prime Minister.

7.11 pm

Mr. Kenneth Carlisle (Lincoln)

There have been many debates on this subject during the three years that I have been an hon. Member. The seriousness of the problem has been recognised. All parties are concerned that unemployment stands at 3 million. I take a contrary view to that of the hon. Member for Central Ayrshire (Mr. Lambie), who assumes that compassion is to be found only on the Labour Benches. Concern is felt just as keenly on the Conservative Benches, as shown by my right hon. Friend the Secretary of State and also by my hon. Friend the Member for Rutland and Stamford (Mr. Lewis).

There is general recognition that the present level of unemployment cannot be tolerated for long, not only on human and economic grounds, but because a democratic and capitalist system would be put under intolerable strain if it continued. I am surprised that the Opposition often treat this subject so frivolously. They suggest that unemployment is the creation of the last two years. In their hearts they know that today's problems have grown from the mistakes of 20 years or more. The cause can be found in the deep structural problems in our way of life and our economy. To suggest that the crude remedies put forward by the Opposition will succeed is no succour to the many unemployed who genuinely want work.

People know that more reflation and the pumping of money into an unreformed economy, as suggested by the Opposition, will merely fuel inflation and create further unemployment. That is surely the lesson that history has taught us. If we are to show genuine concern for the unemployed, we must also have the rigour to lay open the real causes of the disease. That is what my right hon. Friend the Secretary of State tried to do. In the same way, compassion for the elderly is shown not simply by mouthing concern, but much more by demonstrating where the money and effort can be found to tackle the problem. Our unemployment is part of a world crisis. It is also partly of our own making over the years.

Despite our trading strength, we no longer possess sufficient clout in the world to change events greatly. We are, however, responsible as a society for what happens in the United Kingdom. Events in Poland during the last year have shown how an economy can disintegrate through the inability of a country to create the right political and economic system. Poland has perhaps an excuse. Its system is imposed from outside. We have no real excuse. We possess the freedom to find our own solution. Before that can happen, we have to recognise and face the cause

Our unemployment has been caused overwhelmingly by our inability to compete. Our failings have perhaps been disguised over the past 20 years by a falling pound and unprecedented world prosperity. A world recession has ended this process and made us face our problem fully. It is possibly nostalgic to think of those days following the Second World War when Britain possessed over 40 per cent. of the world market for ships. The figure is now less than 3 per cent. Even 15 years ago, we and the French were producing 1 million cars each a year. Now we produce fewer than a million, while the French make 3 million.

If only this country had remained competitive in these two fields, one can imagine the extra jobs that would now be available, not merely in building ships and producing cars, but in the supplying industries, such as steel, engineering and electronics. Our inability to compete in those two spheres has been mirrored elsewhere. The effect on unemployment has been catastrophic. It is sad even today to see ASLEF pulling the railways in the same direction. Unless the railways become as productive as possible their plight will echo that of shipbuilding and even more jobs will be lost.

Any Government who are genuinely concerned about unemployment must look to the central problem of our ability to compete. At the heart of the problem is our record on productivity and unit costs. It is only fair to recognise the outstanding achievements of the Government, which have brought home to the public for the first time since the war a sense of understanding of the reality of the problem.

One has to understand the problem if one is to find a solution. Opposition Members must face that. People now accept that a solution to the crisis of unemployment lies to a great extent in our own actions. As a trading nation we have to match and then beat the very best in the world. The realism of recent pay settlements and the wholesale abandonment of restrictive practices are proof of this growing sense of realism. The first step that we have achieved is therefore an understanding of the problem.

The results of this realism are beginning to show. They will be remarkable. We should speak of these growing areas of success consistently and proudly. Our unit costs, which were stressed by my right hon. Friend the Secretary of State as being so important, are rising at a rate of only 2 per cent. a year, the lowest of any industrial country. I hope that that will be welcomed by the Opposition. Individual stories in various industries are just as good. There has been the much publicised success of some of the public corporations. Productivity in British Steel has grown dramatically. Hon. Members welcome the success at Llanwern. At British Leyland, productivity on the Metro is as good as that achieved on the Continent.

Most achievements occur in the private sector far from the glare of publicity. A recent interesting survey carried out by the CBI in the West Midlands promises great hope. The report stated that companies throughout the Midlands had undergone change and improved performance on a scale sufficient to raise hopes of an economic resurgence. Of the 197 companies covered by the survey, the majority have introduced new products, and even whole new product ranges in the last two years. New technology has been introduced and efficiently and productivity raised. Seventy per cent. have broken into new markets, half have expanded exports, and many have more than doubled exports.

In the very tough conditions, with a high pound, that have prevailed during this time, that is a tremendous achievement. It is happening both in the West Midlands and in the East Midlands and elsewhere throughout the country, even, I am glad to say, in Scotland. Hon. Members would be wrong to underestimate the massive structural changes that are taking place. These offer the best hope for the future. The managements and work forces that are now earning success deserve to be congratulated. A change need not bring unemployment. Japan, where new technology has been embraced more vigorously than in any other country, has only 2 per cent. unemployment. If we do not do these things, our unemployment will become worse.

The Government have been active in establishing the structures within which work can be created. In many ways that is the real role of the Government. They must create the structures within which we can develop our energies. One such success, of which the public perhaps knows too little, demonstrates what the Government have been doing. It is the setting up of the projects and exports policy division of the Department of Trade. That was established in 1980 to co-ordinate the full range of Government services which help firms pursuing major overseas projects. The new division has helped.

We are now winning huge export orders which total more than ever before. Included in those orders are an Indian steel plant worth £1.5 million, a power station in Hong Kong worth £1 billion, a mill contract in Mexico worth £330 million and a university in Oman worth £150 million. They are diverse projects, but they all help to create jobs in numerous small businesses in Britain which supply materials for those massive contracts. In that and in other ways the Government have created the climate for change. They have given good help where the Government have a genuine role.

We must recognise that if our competitve ability is to continue to improve the Government must achieve more. They must continue to attack inflation and to do their best to hold interest rates down. Both steps demand a sensible rather than a rash reflation.

I ask the Opposition parties, and some of my hon. Friends, to consider the danger which an over-hasty reflation would bring, with increased inflation and even higher interest rates. Just as important is our need to curb public sector costs. We must succeed in that respect this year. For too long the Government, by failing to curb public sector costs, have put an unfair burden on the struggling private sector, which, rightly, has complained ceaselessly.

The goals of reflation, lower interest rates and lower public sector costs must be achieved to improve our ability to compete. One cannot pretend that our competitive ability will solve unemployment just like that. One must not take too narrow a view of the problem. It is essential to create the wealth that can give us the economic freedom to tackle the crisis in a serious manner.

For example, if we generated sufficient wealth we should be able to extend even the excellent new training initiative announced by the Government, under which spending on the young is to be doubled. We could also develop a national community service, about which there has been much talk. We could look for even earlier retirement and we could establish more meaningful training for people who are made redundant in middle age.

Increased vigour in the economy would spawn many new businesses. All types of schemes could spring up in the community and they would employ people constructively. All such ideas—education, training and community schemes—have to be funded ultimately by competitive business.

The Government have an understanding of the central problem. They have examined the heart of our national problem. There are growing signs that success can be won. I believe that the Government have the determination to win through to that success. Only when we are truly competitive can we hold out real hope that unemployment will be diminished and that many more people will find work. That is the goal that the country, the Government and the Opposition wish to achieve. Only if we are competitive can we seek to achieve that goal.

7.25 pm

Mr. Doug Hoyle (Warrington)

The hon. Member for Rutland and Stamford (Mr. Lewis) is about to leave the Chamber. He made a constructive speech. I was sorry that he was not speaking from the Front Bench. The Secretary of State made a disgraceful speech. From him we heard the most unfeeling comments from the most uncaring person in the House. He showed that he was prepared to sacrifice the people on the anvil of political dogma, whatever the cost. He did not have the humility to say to the House that in the two years that the Government have been in power unemployment has doubled. He did not say, as he might have, that during the last 18 months of the Labour Government unemployment went down month by month. The trend was towards a reduction in unemployment. If we are to have a constructive debate we must start from there. It is not true to say that there is no solution to unemployment. We were showing that there is. The tragedy was that we were not in power to continue that trend.

Mr. Tebbit

The hon. Gentleman could not have been listening carefully. I said that during the latter part of the Labour Government's term of office unemployment was falling. I referred particularly to it as being one of the benefits of the time when the IMF dictated economic policy to the Labour Government and it came through after the normal lag that one expects with unemployment figures.

Mr. Hoyle

The Secretary of State referred to the latter months of the Labour Government. I said that unemployment was reduced over the last 18 months. The trend continued. We were developing our policies and they would have carried us to prosperity. The Secretary of State did not explain the reversal of those policies when his Government came to power. That is what led to a doubling in unemployment. It will not stop there. Unless there is a change in policy along the lines outlined by the hon. Member for Rutland and Stamford unemployment will reach 4 million. At what point will the Government begin to reflate to bring down unemployment? We failed to get an answer from the Secretary of State.

The Secretary of State provided no recognition that the Government were to blame. I was dismayed by the lack of recognition of what lies behind the statistics. We are talking about 3 million unemployed, the poverty of our people, the despair and the tragedy in the regions. There is no hope. Somehow we must restore hope. There is no sign from the Government Front Bench that the lesson has at last been learnt.

Mr. Tebbit

I am sorry to intervene again, but the hon. Member is an old friend and he is being indulgent. What makes him think that inflationary policies reduce unemployment? The fall in unemployment during the Labour Government's period in office came after the appropriate lag following the institution of IMF policies. That was the whole point. When the policies were reversed in the latter part of the Labour Government's period in office they stoked up matters ready for the great rise in unemployment again. It is simple.

Mr. Hoyle

There we go again. The right hon. Gentleman is not prepared to accept any responsibility. At one time he was a pilot. That was before he went into bicycling. If he had flown a plane in the way in which he is running the Department of Employment it would have crashed long ago. Unfortunately, he is taking the country in that direction. Neither he nor the Cabinet will take any of the blame for what has occurred. The problem cannot be solved in that way. Now we need not more deflationary measures but expansion. The hon. Member for Rutland and Stamford said that in his able and courageous speech. I only hope that some of that comes through at tomorrow's crisis meeting of the Cabinet.

Mr. Campbell-Savours

Could it be that the Secretary of State was wrong when he suggested that the cause was the IMF's intervention when it was in 1976 that the Labour Government decided to pursue an incomes policy in agreement with the trade unions?

Mr. Hoyle

My hon. Friend makes an interesting point. However, that was not the reason for our recovery. I am sorry that I cannot address my remarks to the right hon. Member for Crosby (Mrs. Williams) because after she spoke she left the Chamber.

Mr. Arthur Lewis (Newham, North-West)

The right hon. Lady always does and she always has.

Mr. Hoyle

Indeed, for long periods during this important debate, there has been no representative of the Social Democratic Party in the Chamber, and there is now no representative of the Liberal Party present. That shows the contempt with which they view the unemployed. That does not surprise me, because I have always thought that the SDP was a party more interested in dinner suits than boiler suits. It is more interested in dining rooms than board rooms and more interested in fashionable places than work places. The absence of SDP Members proves once again the contempt in which they hold the House. They would far rather go about the country than be in the House where policy can be effected.

Mr. Ian Wrigglesworth (Thornaby)

Will the hon. Gentleman also point out to the House that for most of the time that he and his predecessors have been speaking there have been only about 10 out of over 200 Labour Members present?

Mr. Hoyle

That is a higher proportion than the proportion of SDP and Liberal Alliance Members, which has been nil. When, nought is multiplied by any number, it is still nought.

There is only one way to reduce unemployment. I say to my hon. Friend the Member for Workington (Mr. Campbell-Savours) that it cannot be done by an incomes policy. It can be achieved only by trying to plan our economy and by trying to get public investment going again. There is a theory on the Conservative Benches that there is no connection between the public and private sectors. The prosperity of the private sector depends upon the prosperity of the public sector.

We need a vast investment in the public sector. We need about £24 billion over the next four years. It seems that the right hon. Member for Crosby is trying to steal the clothes of the Labour Party by going for investment in the public sector. I disagree with her on the scale of that investment. It must be far higher in the first year due to the collapse of the economy under the Conservative Party. That figure must be in the region of £8 billion.

All Labour Members have their favourite targets in the public sector. They may be housing, the Health Service, the gas pipeline, electrification of the railways or the Channel tunnel. All such projects would create jobs. However, that would not be enough because we must stop the export of capital overseas that has occurred under the present Government.

By removing exchange control restrictions, we find that pension funds of British workers are being invested in Japan to put British workers out of work. That is ludicrous. We should set up a national investment bank and use some of the pension and insurance funds to back it. We need to draw in the new science and technological industries of the future. We should be investing in biotechnology. This could create new jobs and initiate a breakthrough in pharmaceuticals, help to cure disease and use waste to create cheaper fuel.

All this is possible. The tragedy is that while the Government are talking about short-term measures our competitors are investing in new industries, as they have been for some time in microelectronics. This is where we should be going in future. However, once again we are falling sadly behind.

Whenever Conservative Members speak they bemoan the fact that we are not as competitive as many of the countries with which we must compete. The real reason for that is that investment has not gone into those industries in the past. That is what has happened in the shipbuilding and the motor industries and it is now occurring in the electronics industry. The only way to achieve investment in those industries is through public investment. That is the way to get back. It may be painful for the Secretary of State to listen to this, but I can assure him that that is not as painful as having to listen to his address today. It can be done and there is only one party to do it.

Mr. Renton

Will the hon. Gentleman give way?

Mr. Hoyle

I am sorry, but I shall not give way. The hon. Gentleman has only recently returned to the Chamber. He has been absent for most of the debate.

We can carry out those policies only by planning. We can do it only be extending the public sector. That is the way to move forward. Only the Labour Party has the plan to do it. I believe that the Labour Party can do for Britain what Roosevelt did for America during the depression years. We can begin to bring a new spirit and to revive our economy. The sooner we get the opportunity, the better, because the people, particularly the unemployed, are crying out for a change of Government.

7.38 pm

Mr. Keith Wickenden (Dorking)

I hope that I shall be forgiven if I begin my speech with a gentle criticism. The problem of unemployment is too deep-seated, too structural and too important to be the subject of the many petty party political points that have been made during the debate.

We have heard many statistics. As an accountant, statistics are always highly suspect to me. However, there is one statistic about which every one of us should be ashamed, and about which the unemployed and the nation will be infuriated if they come to hear it. During the past two and a half hours, 96 per cent. of right hon. and hon. Members have not been present. To be absent for a debate on such a serious issue, one of the most serious problems facing the country, is a matter for shame and nothing else.

I have tried hard to listen to all of the speeches in the debate. I have heard again and again expressions of concern and worry, but very little in the way of constructive suggestions. The first suggestion from the Opposition Benches was not made until the speech of the right hon. Member for Crosby (Mrs. Williams). The right hon. Lady suggested that what was needed was a public investment programme of £5 billion to £6 billion. She did not explain how it was to be paid for. She did not say that if it were to be paid for by increased borrowing the inevitable result—as we have seen for the past 30 years—would be an increase in inflation and, after a short period, a further increase in unemployment. That is the inevitable result of public sector borrowing and it cannot be avoided.

Mr. Ron Leighton (Newham, North-East)

No.

Mr. Wickenden

The hon. Gentleman says "No", but that is the history of the past 30 years. Surely no intelligent person could gainsay that.

If we are to increase public sector borrowing, we must realise precisely what that will do to every family, including the unemployed. The present level of public sector borrowing, by which I mean Government and local authority borrowing, is £150 billion. To convert that into figures that at least I can understand, it represents more than £10, 000 for every family in the country, including the unemployed. All those families have to find almost £20 a week in tax to pay the interest on public sector borrowing that has been incurred to sustain a standard of living that has not been earned. Some wish to increase it still further. The measure of irresponsibility that that implies is, in my view, outrageous.

In addition to there having been few suggestions on how we should cure unemployment, there has been little understanding of what creates employment. I was astonished to hear the hon. Member for Warrington (Mr. Hoyle) say that the only reason why British industry is uncompetitive is that we have not invested sufficiently. It is true that we have not invested enough, but that is only one facet of the problem.

I refer the hon. Gentleman to a survey that was carried out by an independent American consultancy team, which contrasted the performances of two almost identical factories with modern production plant, one at Speke in Liverpool, the other on the Continent. The Continental factory was nearly twice as competitive and efficient as the British one. It does the unemployed no good for hon. Members to bandy about false facts and to hide from the truth.

The cause of unemployment, like the cause of most things, is terribly simple. The cure, unfortunately, is not so simple. The cause of unemployment is simply that our factories and centres of service industries no longer sufficiently provide goods and services at prices which the rest of the world is prepared to pay. If they did, the rest of the world would flood to our shores for those goods and services and we should have no unemployment problem.

Mr. Hoyle

I have listened with rapt attention to what the hon. Gentleman has said. In the textile industry, although many factories are old-fashioned and family ownership is common, people have invested—albeit a little late—and are investing much money and have created a modern industry. There are no restrictive practices. Indeed, the unions have bent over backwards to assist. The textile industry has been destroyed by the flood of cheap imports, so the picture that the hon. Gentleman paints is not always true.

Mr. Wickenden

I accept that the textile industry faces special problems, but the hon. Gentleman's point bears out what I have said. We are not producing goods as competitively as other countries.

I have considerable experience of the shipbuilding industry. I regret that I have been forced at times to place orders abroad, not always because of price—although, regrettably, British prices are not always competitive—but simply because British yards were unable to meet the required delivery dates and competitors abroad were. That is dreadfully sad.

I return to my main theme. We concern ourselves, rightly, so much with unemployment that we do not spend enough time looking at the true answer, which is the creation of real employment. I readily accept the criticism made by the hon. Member for Central Ayrshire (Mr. Lambie) that those of us from more fortunate parts of the country do not have direct experience of the tragedy of unemployment, and I concede that I represent a fortunate constituency. In Surrey we do not have anything like the problems faced by other parts of the country. We have a great deal of industry, but it is more diverse and not engaged in the heavy trades.

Although I have no direct experience of unemployment, I hope that I am not being too immodest if I say that I have considerable experience of creating employment. The company with which I have been fortunate enough to be associated for the past 10 years has, in the past 15 years, increased the number of its employees from 300 to 7, 500. I am proud to have played some small part in the creation of that employment. The only way to create employment is not to create fictitious jobs, although that is a palliative and will do in the short term, but to encourage those sections of industry that are capable of growth in such a way—not by subsidy, which usually does more harm than good—that they develop through organic growth.

Our major employers have slimmed down considerably in employment terms over the past three or four years. Most of them have now reached the stage at which they are almost uniquely in a position to compete with many of our foreign competitors. I do not for a moment believe that if the world recession were blown away tomorrow major areas of private industry would take on large numbers of employees. Nor do I believe that the State industries would do so, because, as we know only too well, they are for the most part heavily overmanned.

If those two major employment sectors do not do that, and if we are not to have unacceptably high unemployment for ever, we must ask ourselves where employment is to come from. I believe that we must look at the way in which we created employment in the first place. ICI and GEC were not created overnight. Incidentally, I should say with a certain personal bitterness that if the Office of Fair Trading and the Monopolies and Mergers Commission had been as active in the 1960s as it is in the 1980s GEC would not have been allowed to happen, which would have been a disaster in terms of unemployment.

We must go back to the small industries that were created in days gone by and formed the cornerstone of the whole of our present industry. It is not just a question of pouring money into them. If there is one lesson that we should have learnt from our regional aid policies it is that, sadly, so much of the taxpayers' money that has been put in has been wasted. If the Opposition do not believe that, I will give examples.

Only last week we debated the tragedy of the Invergordon smelter, which has cost the taxpayer £100 million to provide 900 jobs for a relatively short period. That is more than £100, 000 per job.

Mr. Campbell-Savours

Many more jobs than that are involved.

Mr. Wickenden

In all the discussions last week, the figure was 900. If that is not correct, the Opposition were citing incorrect figures. But even if it were double that figure, that would still be £50, 000 per job. How much could be done with £50, 000 in a small business to employ three or four people and really create something, rather than trying to create a fictitious industry, which at the end of the day failed?

Mr. John Home Robertson (Berwick and East Lothian)

The hon. Gentleman oversimplifies the situation. Organic growth of the type that he describes might be possible in Dorking, but how on earth can he expect to create the kind of employment necessary to revitalise central Ayrshire, or Easter Ross, where Invergordon is, without massive public expenditure of some kind?

Mr. Wickenden

I shall give a perfect example. Last year the Dunlop Rubber Company closed an old factory in Coventry. Unemployment is as grave in the West Midlands as anywhere else. That factory, built in the 1920s, was closed with the loss of a considerable number of jobs. If it had remained empty for long, it would have been demolished. Due to the foresight of a business acquaintance in Coventry, my company was persuaded to buy the factory at a knockdown price and to invest a relatively small sum in turning it into 28 small factory units ranging in size from 800 sq ft to 3, 000 sq ft. We advertised it once and 102 people applied, many of them wishing to start up in business with their redundancy money from Massey-Ferguson, Chrysler and other companies in the area.

Mr. Campbell-Savours

How many jobs w ill be created?

Mr. Wickenden

Three hundred jobs will be created. If somebody had not done something about it, there would have been none.

Mr. Campbell-Savours

The hon. Gentleman makes a very important point. He is trying to prove that this would work in our constituencies in the Northern region, and I should like to believe that it would. In the Northern region, many local authorities, in line with what the hon. Gentleman has said and in conjunction with private business, have tried to restore mills and convert them into units. In one case in my constituency a number of small nursery units are lying empty because we cannot get the kind of organic growth that the hon. Gentleman advocates. I only wish that it were possible to generate that growth. How can people in those constituencies be put back to work if the hon. Gentleman's theory does not work?

Mr. Wickenden

The hon. Gentleman said that it does not work, but it has done so in an area with some of the highest unemployment in the country. It has worked in Corby and other places. It cannot necessarily work everywhere, but it is something that has not been properly tried.

Mr. Tebbit

I agree with what my hon. Friend says. If it is any comfort to the hon. Member for Workington (Mr. Campbell-Savours), let me tell him that I saw such a scheme on a smaller scale in operation when I visited Middlesbrough last week. Small workshop factories of the sort described by my hon. Friend were being established in an old biscuit factory that had been taken over as a joint project between the Manpower Services Commission, the officials of my Department and the local authority.

Mr. Wickenden

I am grateful to my right hon. Friend. That is exactly the point that I am trying to make.

I give further examples of public investment in large companies that have not worked. There is the De Lorean works in Northern Ireland. I believe that the sum invested so far is £80 million, which created 2, 500 jobs, but sadly it now looks as if they are seriously at risk. Chrysler at Linwood never did work almost from the day it started, but perhaps the most monstrous creation of all was British Leyland, which was put together for all the wrong reasons—[Horn. MEMBERS: "Absolute nonsense."] I know a lot about how British Leyland was put together, because I was involved in many of the discussions that took place at the time. It should never have been put together in the first place. Sadly, it is probably too late to break it down into its constituent parts, which could be successful given the opportunity.

I spoke of the need for a completely different re-think and said that instead of trying to attack unemployment we should create employment. The problem goes much deeper than that. We need a truly radical look at the whole system of our economy.

Our tax system is absurd, in that direct taxation starts below the official poverty level. Therefore, as a nation we employ bureaucrats to give our citizens money with one hand through social security and to take it away, through taxes, with the other. One cannot envisage a more damaging or foolish system. Indeed, it specifically sets out to discriminate between those who work, those who save and those who invent and create. As a trading nation, we cannot afford to do that.

If we are to solve our economic and unemployment problems, we must go back to the root causes. We should look at things such as our taxation system and perhaps stand it on its head.

Housing is another reason why so many of our competitors have been able to cope with their unemployment problems more flexibly than we have done. Britain has the most inflexible housing system that it is possible to imagine, even though it was created for good and high-sounding reasons. We have a system of security of tenure—quite rightly—to protect the tenant, but in the process we have destroyed the very fabric of the private rented system. We have created a private sector of slums because we cannot provide the housing that our people demand.

Two years ago I took my son to Colorado in North America to train for a specific task. I went with him to find him somewhere to live and to make sure that he was properly settled in in his training course. I asked an American colleague how I should find him some accommodation. He looked at me as though I was slightly mentally deficient and said "Look in the classified advertisements section of the newspaper". I did so, and for that small town in Colorado there were three full pages of flats to rent at very reasonable cost. They do not have security of tenure, and consequently a market is created. Our well-meaning policies actually hurt the people whom they are designed to help, and that is the tragedy of our system.

Had she been present, I should have liked to address a question to the right hon. Member for Crosby. She said—

Mr. Arthur Lewis

On a point of order, Mr. Deputy Speaker. On the last occasion on which the right hon. Lady spoke she left the Chamber immediately afterwards. I raised a point of order on that occasion. Once again she has made her speech and walked out. The hon. Member for Dorking (Mr. Wickenden) now wishes to refer to the right hon. Lady's speech, and in so doing will take more time and delay my hon. Friends who still wish to take part in the debate.

Until the new Social Democratic Party came along, the custom in the House was that hon. Members remained and listened to the debate. I again ask the Chair to point out that if a right hon. Member is lucky enough to use the back of the Labour Party to get a Privy Councillorship, which gives her privilege to get called whenever she wants, she ought to remain and listen to the debate.

Mr. Wickenden

I hope that the hon. Gentleman will forgive me if I do not follow him. Having complained about party political points earlier, I can hardly make one against the right hon. Lady now.

Perhaps another member of the SDP can answer my question. Reference was made to the need for an incomes policy. As a point of information, I genuinely want to know whether that means a permanent incomes policy, because I do not believe that any other sort of incomes policy stands any chance of success. We have tried incomes policies in the past and have always discovered that in the end the lid comes off, there is a mad scramble and the situation is exacerbated.

My remarks so far have been gloomy. I come to a few of the bright spots that exist. The right hon. Member for Chesterfield (Mr. Varley) referred, uncharacteristically and ungenerously, only to the record level of bankruptcies. It is perfectly true that the level of bankruptcies is now the highest ever, at 180 a week. It is also true that new businesses are starting up at the highest level ever—2, 500 a week. New company registrations in the first nine months of last year—during the Civil Service dispute when one would have expected registrations to be lower—were running at the rate of 1, 000 a week. They are bright spots which should not be overlooked. We should not always concentrate on our deficiencies. Occasionally we should concentrate on the good points.

Unit costs are now at more competitive levels than they have been for years, and our balance of payments is now healthily in surplus. That could provide for many of the things that we ought to be doing.

I draw a personal bright spot to the attention of the House. To my astonishment, I discovered only a few weeks ago that by volume my company accounts for about 45 per cent. of our nation's exports. No doubt that had something to do with the recent decision of the Monopolies and Mergers Commission. In the last two years the amount of freight carried by my company has been severely depressed, but 17 weeks ago an upturn began. At first we feared that it was yet another false dawn. It is not. That upturn has been sustained and is increasing. Most important and encouragingly of all for the nation, for the first time in four years the freight forwarders who place the orders are booking space six months ahead.

We shall never solve our unemployment problems until we tackle the root—the necessity to create real employment. We must do so in a way that does not drain the taxpayer or cause inflation, but which allows our nation's natural talents to flourish in the way that I know they can.

8 pm

Miss Joan Lestor (Eton and Slough)

I entirely agree with the final sentiments of the hon. Member for Dorking (Mr. Wickenden).

My complaints about the Government are twofold. First, it is now almost three years since they came to office, yet they sit there today saying "There is nothing that we can do about it. We have not really found a way of creating more jobs and dealing with long-term unemployment", implying—and, in some instances, saying—that it is all the fault of the people in industry who ask for too much.

Secondly, and perhaps more important, the Government fought a general election on the basis of the Saatchi and Saatchi slogan "Labour isn't working", when unemployment was in fact falling. Unemployment has soared under this Government, while they sit there helplessly saying that they do not quite know what to do about it. If the Government continue to cut the purchasing power of the people who are in work and the purchasing power of the people who are drawing benefits, they will cause further unemployment, because people will not be able to buy the goods produced by the people in work. That is simple, basic economics, and that is the situation in which we now find ourselves.

I want to remind the House of something that the then Leader of the Opposition said in April 1979. She said: But we Tories believe in policies that will create real jobs—not just in paying youngsters to do artificial jobs without a future. Nevertheless, any youngster who reviews the schemes now before us knows that they represent an artificial job, a job that offers no guarantee of work in the future, and that society is saying to him "We shall keep you off the streets and keep you occupied so that you are not reflected in the unemployment figures". It is worth putting on record that between 60 and 70 per cent. of the young people on the schemes that were created under the Labour Government got jobs. I wish that it had been 100 per cent.

One of the worst aspects of the figures that we have been given is that a high percentage—40 per cent.—of the unemployed people are under the age of 25. That is a horrific figure. The tragedy is that many of those young people will be unemployable, if the situation goes on much longer.

The effect is rubbing off on our children and young people who are still at school who, instead of being able to say what they would like to do when they leave school, know that the prospects of doing what they would like to do are becoming gloomier all along the line. The opportunities for many of them in higher and further education are being drastically cut, as we have heard during the past two weeks, and the schemes that are available to them offer very little. So the outlook is gloomy.

Long-term unemployment has doubled in the past year. That is a cause of grave concern to all of us. However, listening to the debate today, and indeed to debates on unemployment generally, what strikes many of us is that, in the main, people are talking about male unemployment, for many reasons, which I shall elaborate. Unemployment among women is rarely mentioned. However, yesterday's figures demonstrated that female unemployment has grown by 250, 000 since this Government came to office. Under the Conservative Government, female unemployment has quadrupled. Every month, an average of 12, 300 women come on to the the job market. That figure conceals the large number of women who do not register The figure given by economists now is that there are probably 2 million unemployed women workers in this country.

From October of this year, the unemployment figures will be compiled in a different way—on the basis of those claiming benefits, not those registering at unemployment exchanges. Thus, large numbers of women will be excluded from the official figures, including married women unemployed for more than one year and, of course, part-time workers.

A Government Minister recently said that a mother does not have the same rights as a father in work. The hon. Member for Aberdeenshire, West (Sir R. Fairgrieve), in a speech in which he sought to be constructive, spoke of how damaging it must be for a man to get up, not be able to go to work, and to see his wife doing the jobs around the house, and so forth. Society has not been like that for a long time. Unless we wake up to the fact that nearly the same proportion of women as men are financially responsible for dependent children, we shall still fail to understand the employment situation. In the main, women are not sitting at home being kept by husbands who are now becoming unemployed. Many women are the sole breadwinners in their homes, and many of them, married to men on low incomes, have been able to keep the family above poverty line. Only 18 per cent. of men in the labour force today provide the sole support for wives and their dependent children. So that is one matter that deserves consideration.

In areas where women are either the sole breadwinner—because the man's job has gone—or have been working to try to improve the family's standard of living, we now find that the wife's job, too, is threatened. That aspect has not been considered by the House tonight. Eighty-four per cent. of part-time workers are women who, in the main, are not covered by any redundancy legislation. Their jobs, in the main, are the first to go.

There is the scandal of the women in the school meals service. Many of them are not covered by redundancy payments. They receive no unemployment money, and they are not included in the official unemployment figures. Officially, those women have simply ceased to exist. When we talk about unemployment—and, as my hon. Friends have said, it is far higher than the official figure that was given—we tend to forget the large numbers of women, in particular, who are excluded from the official classification.

Mention was made earlier in the debate of the textile industry, and the way in which it has been decimated, in spite of the fact that, in terms of investment and co-operation, it is one of our best industries. Since 1979, 60, 000 jobs went in the clothing industry, where 90 per cent. of the workers were women. In the past two years, 50, 000 jobs have gone in the school meals service, and 100 per cent. of those workers were women. In the retail trade, 123, 000 jobs have been lost since 1979, and 70 per cent. of those employees were also women.

There is another matter that we should bear in mind. It was said earlier that unemployment was not regional, but spread throughout the country. That is true in areas such as mine, which has traditionally managed to escape the ravages of recessions. Now we have rising unemployment. I have news for the hon. Member for Bridlington (Mr. Townend), who said that one of the reasons for this was that we did not stop Commonwealth immigrants coming in. My area, which escaped this problem in recent years, and still has amongst the lowest unemployment figures, is also an area to which people have come from all over the country and from all parts of the world. To say that one causes the other is a way of trying to apportion blame in a society that should be looking for the fundamental reasons.

The rapid increase in female unemployment over the past two years has been in areas that were earlier called areas of industrial growth, not in areas where there has been a decline in our traditional industries. For example, in the South-West, female unemployment has increased by 80 per cent. In the South-East, it has increased by 135 per cent. In the West Midlands, I am told by my colleagues that it has increased by 153 per cent.

This country is suffering not from a shortage of work, but from a shortage of jobs. We have people with skills that are not being used. We have resources that are not being used, and we have colossal unmet social need.

How anyone can argue that we cannot pay for investment in industry because unemployment is costing between £12 billion and £13 billion a year is beyond me. We are told that we must have public expenditure cuts and that we must not spend so much money, but while we are doing that public expenditure has soared because we are paying people not to work.

Yet if we consider hospitals, education and the housing problem—in my constituency it is the worst it has been since I became a Member of Parliament and house building is at its lowest for 70 years—there is a demand for those gaps to be filled. The work is there. The contradiction that the Government do not seem to face or understand is that they are paying people not to perform the skills for which they have been trained, and in which money has already been invested, to provide the services to and meet the needs of other people who find themselves in economic, social and cultural decay.

Mine is not an easy answer, but it is one way in which, by investment, by using money constructively rather than destructively, by selecting the industries that we must save and create, by investing in labour intensive areas and recognising that investment in industry will be in capital investment areas so that we must find the balance in social areas and by extra expansion in the public sector, we can begin to redress the balance. Others have done it, but we do not yet seem to have got the message.

Mr. Wickenden

If it were simply a question of diverting resources from unemployment benefit into salaries and giving people jobs, that would be a simple and easy answer and we would build houses. The problem is that when we try to create jobs in the construciton industry or elsewhere the labour content is only 30 per cent. of the total cost. If we are at present spending £30 billion a year on unemployment benefit, it would cost £50 billion a year to employ those people productively.

Miss Lestor

I do not wish to pursue that too much, but one should consider the tremendous loss to Britain in terms of the wealth that would be produced if people were put to work to build houses needed by other people and the saving to the nation if we did not have to put children into care because they are homeless or put people into bed-and-breakfast establishments because there is nowhere for them to live. We must get our sums right. I accept that we must borrow to invest. Every business begins by doing that. However, do not let the Government try to persuade people that we are so impoverished that we must cut public expendture and that there is no money for anything else. That has been the Government's biggest "con". Public expenditure soars while people with skills, who are prepared to meet other people's needs, are paid to be unemployed.

I accept what has been said about the desire for a shorter working week, a shorter working day and the lowering of the retirement age. That has always been among the aspirations of my movement, but that in itself is neither the cause nor the cure of unemployment. The Government, whose contribution to the debate has been pessimistic—they fought an election saying that they would cure unemployment—are presiding over the biggest slide in unemployment that we have seen. The nation will judge them soon on the fact that they are now creating a situation where social unrest is bound to happen because of the misery, desperation and the lack of hope that they have inflicted upon our society.

8.14 pm

Mr. Tony Marlow (Northampton, North)

The fact that 3 million of our people are unemployed is a tragedy. The fact that hundreds of thousands of our young people have nothing positive to do—no sense of purpose, no role and no exciting prospects and, by lacking the stimulation and adventure that young people crave so much, turn instead to riot and misadventure—is an even greater tragedy.

As my right hon. Friend the Secretary of State for Employment so ably said, what has happened during the past few years would have happened whatever Government had been in power. During the world recession, as the most uncompetitive economy where for generations Governments of both complexions have neglected our industrial problems, we have had the recession worst and first.

At last, as we can see from the productivity figures that have recently been released, industry is on the way to a cure and is getting better. However, tragic though the position is, it would be wrong to add unnecessary callousness and insensitivity to it by Opposition Members using such previously unimaginable miseries as a golden vein of propaganda or as an endless ammunition train for sustaining petty party warfare. I do not believe that will happen. All hon. Members—Opposition and Conservative—are appalled and stirred by what they see. Deep inside we all care.

The Opposition know that we are all in this together. Although we may disagree on certain aspects of philosophy or policy they, like us, know that unemployment is our main priority. Our paramount need is to do something about it. We have some common ground, and I beseech Opposition Members, in the national interest, on those areas of policy on which we can agree, to join us so that we can work together.

I wish to concentrate upon the subject of young people. We are very much in uncharted waters, where the change in circumstances has been so great and the speed of the current so fast that our attitudes, our institutions and our approaches will change. In that new environment we have an immense opportunity and a duty to guide those changes in a radical and virtuous direction. We are not looking for ad hoc solutions or day-to-day palliatives. We are not looking for a calamine lotion with which to swab the spots of urban unrest and rural vandalism. What we wish and need now is a new deal. So dire and dramatic is the vista that has now seared deeply into our national subconsciousness that we shall have the national support and good will to give us the willpower to achieve such a new deal.

Hon. Members will have read, seen or heard about an excellent pamphlet produced last week by an organisation called "Jobs in the Eighties" written by Bob Tyrell. That sets out the challenges and the new conditions that we shall face. We are talking now about jobs in the 1980s, not in the 1960s or 1970s. My hon. Friend the Member for Bridlington (Mr. Townend) made the proper point that we must do something about apprenticeships. However, we must bear in mind that in the 1980s only a quarter of jobs will be in manufacturing industries. We must also bear in mind that in the 1980s and 1990s people will increasingly move from one job to another. That means that they must have not only flexibility so that they can learn the skills with which to go from job to job, but the flexibility of approach.

In the 1980s some people will face the prospect of long periods without jobs. We must train and prepare them, if that happens, to accept it so that they can do something worthwhile with their lives. We must prepare them for the enforced leisure that may come their way so that they may still have a worthwhile, satisfying and active life.

Just as 150 years ago many 12-year-olds expected to spend their adolescent years climbing chimneys or crawling under looms—perhaps the few who did not felt that they were deprived because they were not given the opportunity—so now every 16-year-old has been brought up to believe that he should have a job at 16. Why is that? Is it civilised and right to expect children to start on the conveyor belt of working life at such a young, unformed and uneducated age? How, at that age, can the majority expect to choose a vocation, career or life's activity? What do they know of the world outside? What experience have they had to make a committed choice in such a way that they can pursue an activity or job to satisfaction and effectiveness?

Necessity may be the mother of invention. So what? Sometimes that does no harm. Necessity has now given us the chance to set up a new, structured and varied preparation for our young people.

Those who have read the excellent document produced by "Youth Call" will be aware of the great vista of unmet and, presently, unmeetable needs of society which young people, properly encouraged. eagerly and challengingly could satisfy.

I am delighted, as are my hon. Friends, to see the Government's new programme—£l, 000 million a year—giving almost unlimited scope to the imaginative development of new and radical approaches. At the moment, young people have a developing range of opportunities. They can go into further education, higher education or apprenticeships. We should not dream of stopping their desire to go into jobs. They will soon be going into the new youth training scheme, but I seek to offer something additional—wider and perhaps more exciting than the range that we have already got.

It would be for those who want adventure and experience before setting out on their working lives.

Mr. George Foulkes (South Ayrshire)

Let them join the Palestine Liberation Organisation.

Mr. Marlow

The scheme will be for those who wish to serve their community and for those who do not yet know what sort of job or activity they want or who cannot locally find what they need. In short, it will be for those who want a training for life—for the 1980s, the 1990s and the new century awaiting them.

Those who have spent time in the Services or who did national service recognise the "educational" benefits of that experience: the chance to grow up in a helpful environment, to meet, mix and travel, assess, to develop self-confidence, self-assurance and initiative. I would not dream of proposing nor would it be sensible to do so that we went back to national service. There is no need, and the circumstances are not appropriate for that. However, I suggest that we set up a pilot scheme for what—for want of a better expression, although I do not much like it—has been called "national community service" to cater for 4, 000 young people.

I should dearly like to give full details about that scheme, but time will not allow because other hon. Members want to speak, but I assure hon. Members that details have been worked out, as have costs, and that the proposal has been discussed with other people. I assure the House that it is workable. In Canada, there is a project called Katmavik, which is going like wild-fire at the moment and is very workable. In short, I suggest a one-year voluntary scheme for young people, not necessarily just for 16-year-olds or those who are unemployed.

Young people would start off for the first three months on a period of preparation, induction and sorting to decide what they are going to do next and getting the necessary training and preparation. They would have three main areas of activity during that period: outdoor work and adventure, vocational training and specific preparation for the remaining nine months.

The remaining nine months could be in three basic areas. I am not saying that we cannot have other areas as the programme develops. We could devise other activities for the young people, but the three basic areas would be community service—we have many excellent community service schemes now—environmental activities—we have many excellent environmental schemes now—and. perhaps, as a recruiting sergeant, some form of cadet service training. I do not mean only military service training. It could be emergency service training or anything of that sort. However, one could propose such a scheme for the more machismo kids in the city centres—"Come and join us and have some adventure for nine months." They could join the professionals, have some excitement and become men. There would, of course, be suitable courses for women.

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

I am intrigued by this scheme, but is the hon. Gentleman saying that it would be nine months of voluntary service or that the participants should be paid? If they should be paid, who will pay them?

Mr. Marlow

I can reassure the hon. Gentleman that it must be voluntary. There is no way that it could be done through conscription because people would vote with their feet. One cannot throw a manual of military law at 16-year-olds these days. It must be voluntary and something that people want to do. It must be worthwhile and something that will benefit society.

I see the scheme as being a distinct part of the new Manpower Services Commission scheme, which will cost some £55 per person a week. We would provide the instructors, accommodation, food, clothing and pocket money within the scheme. Within the money that the scheme is providing, we could provide something more exciting and more wide-ranging than we now have. It would be part of the 300, 000 places that the Government are now setting up. We are not seeking additional funds. We shall get a great deal of support and sustenance from industry. We should be looking to industry to give us a degree of sponsorship. On top of that, we should ask industry to let us have some of its young managers to join our scheme at the lower levels of management as part of their training as managers.

I shall add some of the principles involved. The cost would be less or no more than other schemes. Hopefully, it would be residential throughout, and within, but a distinct part of, the youth training scheme that my right hon. Friend projected. I know that it will have the support of industry. It will also have a great element of self-sufficiency.

Other aspects we could go for would be a degree of horticulture and agriculture. Children from city centres could set up small farms and some of the food and products they grow could be fed back into the scheme. Accommodation, for example, in the inner city areas could be provided by those on the scheme. We could take over an abandoned terrace and make it habitable for our own use.

Another basic principle of the scheme would be that activity within the community and local areas would largely be done on an agency basis. We would set up the induction training, but the field activity would be done by voluntary organisations and the local authorities now doing it. We should be able to say to them that we have people who have been together for three months with skills available to do jobs and ask them if they want them. I am sure that they would come running to us.

There are many other excellent schemes that I fully support and admire. This scheme is different and, in many ways, more challenging. It provides something that others do not. Like the well-known advertisement, it reaches the parts that other schemes do not yet reach. As anyone who has experience will know, it offers the value of a sustained residential experience. There would be a great deal of group activity and people would realise that they were responsible for others within the group. That would help to build loyalty, responsibility and esprit de corps. We would include vocational training. We would help to develop in young people a positive attitude towards the community in which they will grow up, live and work. Most importantly, we would also develop a sense of self-dependence and initiative so that, whatever job the young went for and whatever their circumstances, they would make the best of them.

Many people say that people should look upon their problems as opportunities. The sad circumstances in which we find ourselves and the difficulties in which our young people are placed are an opportunity. I am sure that the Government will grasp that opportunity with both hands.

8.30 pm

Mr. Stan Thorne (Preston, South)

As you probably know, Mr. Deputy Speaker, since the beginning of the debate Conservative Members have spoken for 142 minutes and Opposition Members have spoken for 99 minutes. On a simple mathematical calculation, I could quite reasonably speak for 43 minutes and balance the account. I do not propose to do so, because I am sure that other Opposition Members would like to speak, but, given that the next speaker will be a Conservative Member, it is doubtful whether they will be able to.

In January 1982, in the Preston travel-to-work area there are, in cold figures, 18, 393 unemployed people, and that is equivalent to 12.4 per cent. of the employee population. In January 1979 the figures were 7, 751 or 5.3 per cent. of the employee population. In two and a half years of Tory rule, economic lunacy and total disregard for humanity—as the figures reflect—there has been an increase in unemployment of 137 per cent. in my area. If British Leyland has its way, a further 1, 800 redundancies will affect my area.

The Secretary of State says that everything is the fault of the recession, forces beyond our control, and so on. As briefly as possible I shall deal with some of the causes of the problem, and I shall refer specifically to Leyland Vehicles. As hon. Members will know, about 8, 000 workers are on strike at Leyland Vehicles. The strike began last Thursday and stems from the management's refusal to negotiate with the trade unions about a plan that the trade unions had produced, which refers to productivity and jobs.

Of course, the plan conflicts with Sir Michael Edwardes' corporate plan. If the management believes that the corporate plan is too strong to be questioned, that demonstrates the management's weakness, because it is not even prepared to consider the trade union plan. Unfortunately, it also illustrates what passes for industrial relations in the empire that Sir Michael Edwardes rules over. What are the trade union suggestions?

Mr. Dickens

On a point of order, Mr. Deputy Speaker. The debate concerns employment, yet we have heard nothing other than a speech about an internal dispute at British Leyland. I think that that is quite out of order.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

The hon. Gentleman may think that, but each hon. Member must be responsible for how he interprets his speech.

Mr. Thorne

It is an appalling suggestion, but understandable, considering whence it came. The hon. Gentleman clearly does not read much and does not know that a plant that had 9, 000 workers only a few months ago now has only about 5, 000. If that fact is not relevant to employment, I do not know what is.

When I was rudely interrupted, I was about to give some of the trade union suggestions. They say that Leyland Vehicles must retain its manufacturing capacity. Eight out of 10 jobs at Leyland are in component manufacture. The key components threatened with outsourcing are engines and gearboxes. Five of the seven United Kingdom truck manufacturers are owned by United States companies. Only Leyland Vehicles and the much smaller ERF are in United Kingdom ownership. If the United Kingdom is to remain in international truck manufacturing, Leyland Vehicles must continue to design and manufacture its engines and other key components. That factor is relevant to employment. However, management plans are moving towards handing over control to United States multinationals—Cummins for engines and International Harvester—yet the Government have the temerity to talk of British competitiveness. What irony!

Out-sourcing is detrimental to our balance of trade. The International Harvester DT466 engine which Leyland Vehicles is planning to buy will be built in the United States and shortly in Spain. That is tantamount to exporting jobs. The Cummins engines supplied to Leyland Vehicles are likely to come from Cummins' United States factory, with only "screwdriver assembly" in the United Kingdom. The increase in imports will make the management of our economy that much more difficult.

Management's phasing out of in-house component manufacture will be irreversible. The design teams, the particular work force and the skills entailed in the present production team will be dissipated and Leyland Vehicles will fall into a permanent state of dependence on other—mostly foreign—engine manufacturers. The trade unions at Leyland therefore demand that the Leyland Vehicles management and the Government maintain and extend the in-house manufacture of major components at Leyland Vehicles, which would obviate the need for the present round of redundancies which the management is seeking to promote.

If Leyland is to remain an engine manufacturer it requires a new foundry, which will cost about £30 million. The new trend is towards lighter alloy engines, made from thin-walled castings. Leyland Vehicles has the expertise for the new technology and has, indeed, produced prototype engines, but for mass production a new foundry is essential.

Investment is long overdue in machine tools. Machines are still being used at Leyland stamped "WD". In the past four years only a derisory £2½ million has been spent on new machine tools at Leyland Vehicles, with the bulk of investment money going to the new assembly plant, the technical centre and in parts.

Leyland Vehicles management did not carry out the programme of renewal of worn out and outmoded equipment envisaged in the 1975 Ryder plan. Had it done so, British Leyland might be in a much more realistic competitive position. At Leyland there is an increasing demand for investment in a new foundry and in machine tools. The Government have a responsibility to ensure that that investment is provided if we are to maintain a truck manufacturing interest of any value in the United Kingdom.

The Leyland Vehicles management policy of cutting back investment is in direct contrast to the expansion of Cummins, the American engine manufacturer. Despite a loss of $6 million last year, Cummins has launched a massive investment programme amounting to 150 mill ion per year in new plant and engines for the big upswing in demand that it expects in the mid to late 1980s. The company is backed by money from the giant oil company Teneco Incorporated. What can be done and should be done by the Government, given our North Sea oil revenues, to provide investment in British manufacturing rather than to promote imports from the United States of Cummins engines?

There are one or two problems with regard to outsourcing. Some things that have happened have disturbed the trade unions at British Leyland. Selling off has much to do with the present position at British Leyland. We all remember Kenaton. Leyland Vehicles' pattern making shop was closed and some of its machinery was sold to Kenaton Engineering, a company owned by a senior member of Leyland Vehicles management. Kenaton now makes patterns for Leyland Vehicles.

In 1981 the British Leyland subsidiary, Prestcold, was sold to a private company, Suter Electrical, of which the chairman and chief executive is David Abell, who was formerly manager at Leyland Vehicles. Before that he was in charge of Prestcold. It is curious that the person who bought Prestcold is the same person who, on leaving it in April 1979, publicly admitted in the Financial Times of 11 April that he must take the responsibility for their present financial near-collapse. It was that profit squeeze that decided British Leyland to sell Prestcold. I only hope that the Comptroller and Auditor General will examine closely some of the financial arrangements involved in selling not only Prestcold, but Kenaton.

Mr. Tam Dalyell (West Lothian)

I should like to make the point, particularly in the presence of the Secretary of State for Industry, that when, on 30 November, I made a long speech at the Public Accounts Committee debate on related topics, and subsequently on 1 December went to see Mr. Gordon Dawney, the Comptroller and Auditor General, at Audit House, I hoped that there would be a report in a few weeks. Some of us believe that the Comptroller and Auditor General, who I understand is working hard, has a difficult task. Had it been clear-cut, surely he would have had the report by now.

Mr. Thorne

Like my hon. Friend, I am perturbed about the situation. There have been various reports, some in the financial press and some in The Times and The Guardian, which raise curious issues, particularly in regard to the selling of Prestcold.

My hon. Friend will also be aware of the Bathgate tractor situation. About half the investment at Bathgate has gone into the new tractor range. Now that it has been designed, developed and proven, it is being sold off. British Leyland refuses to disclose the price. A key figure in the negotiations has been Mr. Jack Smart, the former deputy managing director of Leyland Vehicles.

Mr. Arthur Lewis

Has my hon. Friend notified the Secretary of State for Trade of the point that he is making which is that the Auditor General may be busy? Will the Secretary of State for Trade listen, or will he say that he will have an investigation made because this is taxpayers' money? Will he give an assurance that he will have the matter investigated?

Mr. Thorne

I am sure that the Secretary of State is familiar with the situation. What he is probably hesitant about, and what the House ought to demand, is a public inquiry into all the selling off that has taken place at British Leyland.

I am anxious to let others speak in the debate. A relevant factor in the employment situation is the action of the Secretary of State for the Environment in regard to the block grant and its impact on the ability of local authorities to purchase new fleets of buses. That has affected the production of buses at British Leyland. We are also anxious to promote the sale of buses in Third world countries. Why management considers that the elaborate and sophisticated Olympian bus is the sort of thing we can take into Third world countries I have no idea.

I could deal with some other aspects of the trade union report which the management is still reluctant to discuss. The worsening employment situation in the North-West demands that the plan that the trade unions have prepared should receive urgent and full consideration not only by those involved in the industry but by the Department of Industry. The Department of Employment should use its influence to ensure that that is done, in order to guarantee jobs at Leyland and the long-term future of this part of our manufacturing base, without which in the late 1980s and early 1990s we will have even higher unemployment figures.

8.49 pm

Mr. Raymond Whitney (Wycombe)

The hon. Member for Preston, South (Mr. Thorne) has done the House a service by dwelling in detail on the problems of British Leyland and in particular on the present dispute. Nothing else points up more clearly the problems and the causes of the unemployment with which we are trying to deal in the debate.

The hon. Member may have been listening to the "Today" programme on Radio 4 this morning when a speaker from the trade union side in that dispute was making the sort of case that he has made tonight. In another item shortly afterwards a representative of Opel motors was telling listeners that the great benefit of selling in this country was that all other manufacturers of motor cars around the world could sell at 40 per cent. above prices obtaining elsewhere precisely because we have been landed with a price structure that is related to British Leyland, despite the fact that hundreds or, indeed, billions of pounds of British taxpayers' money have been put into it. That is precisely the problem that we must recognise and deal with.

If Opposition hon. Members would stop their understandable political hysterics and recognise the realities, we should have a much more fruitful debate. They should acknowledge that our problems are suffered by the whole industrialised world, and in particular the older industrial world—the Western European nations. Their rates of unemployment are climbing fast and coming very much into line with ours. When we consider the effect in Germany, for example, of the loss of guest workers we can see clearly that they are not immune from the problems that we face.

Moreover, we should accept that the percentage of our population in civil employment is higher than anywhere else in Western Europe, with the single exception of Denmark. We suffer from the problems of hardening of the industrial arteries. We have old-style industries, long-based industries and a population with a high standard of living and high expectations. There are many restrictions in our society, where there have been, and are, more problems than anywhere else. We know all of those problems. In particular, our real distinction is the range of blockages to high productivity, to which, sadly, our antiquated union structure has contributed.

Western Europe as a whole is now under fierce pressure from the newly industrialised countries. We all know about the pressure of Japan, but it will not stop with Japan. There are Korea, Hong Kong, Taiwan, Singapore and all the rest. The countries of Western Europe that survive will be those that show flexibility and a readiness to adapt to the challenge.

We at last have a chance to break out of the vicious circle into the much talked about virtuous circle. The vicious circle that we have been locked into is poor productivity, high prices, inevitably low sales and low profitability—therefore low investment and, therefore, loss of jobs. We all know that position too well. Now we have begun to move in the other direction.

We have heard about increases in productivity. Over the past 12 months our unit labour costs have increased by only 2 per cent.—lower even than in Japan. That is a marvellous start. According to a recent estimate, our manufacturing competitiveness improved between 1978 and 1981 by 10 to 15 per cent., taking into account the improvements in unit labour costs and the recent falling pound. That is going in the right direction.

The move having been started, that is the way to go, if we have the courage to hold on to what has been achieved. It is the way to create profitable industries, to lift our incredible average rate of return of 2 per cent. There can be no sensible investment at that level, but if we can hold on to the increase in productivity there will be investment and then more jobs. That must be the only way forward.

Another sign of hope is to be found in the improvement in the savings ratio. An interesting article in The Economist in December, entitled Hands off next year's recovery", said that savings ratios, which had been so high, showed signs of falling, and one way of making sure that the fall was checked would be to indulge in another orgy of reflation, or further inflation, with all that that would do to interest rates, and indeed to the level of the pound, and what that would do to inflation. If that happens it has been shown again and again throughout history that the savings ratio goes up because people, understandably, become scared. However, if they come to understand that inflation is being held in check, every experience gives reason to hope that that savings ratio will fall and demand will be put into the economy. The Economist says: This potential for extra spending exceeds anything that a giveaway budget would achieve. That is a lesson that giveaway Budgets cannot create genuine growth.

The figures show that we already have the opportunity in the demand we still have in the economy. It is easy to forget, in the doom and gloom that we often hear in the media and inevitably in our debates, that our imports increased by 14 per cent. in 1981. That must not be forgotten, although our balance of trade is marvellous. That 14 per cent. represents a challenge to British industry and to the sort of people referred to by my hon. Friend the Member for Dorking (Mr. Wickenden) in his splendid speech, which was based on deep experience of industry. He pointed out that all those small industries can look for their markets from the imports and that is where their challenge and opportunities lie.

The ultimate essential is that we do not do what has happened four, five or six times in the economy under Governments of both complexions since the war. We have embarked on a policy of common sense; not one of crazy monetarism but one recognised by Governments all over the world. The Government have followed sensible fiscal policy, but each time that we came within a measure of success, just as the lift-off was coming, Governments lost their nerve. That has led to an injection of funny money or the creation of paper money put into the economy at a time when the economy was generating demand. The country has gone straight back into the whirlpool of inflation.

When my right hon. Friends are taking important decisions tomorrow I beg them to recognise the lessons of the past, to understand fully the signs, that the only genuine jobs can come from the private sector, and to take full account of the fact that, as the Treasury's statistics have shown, since 1971 the return on investment in the public sector has never been significantly above zero.

Already built into the Government's spending plans is a major increase in public sector spending. The burden must be removed from the private sector and it must be given every opportunity. It will respond—the market and the demand are there and we still have the talent. What we now need is the courage to stick to the Government's convictions. I hope that they will recognise this.

I hope too that the Government recognise what they have achieved so far and that if they turn away now the sacrifices that have been extracted from the private, non-guarded sector will have been in vain. If they do that, the country will not forgive them. If they hold their nerve the country will recognise their courage and jobs will return in the only sensible way they can—through being genuine jobs, created by real demand, of which there is plenty.

8.59 pm

Dr. David Clark (South Shields)

I share the deep concern over the 3 million people without work throughout Britain. As the representative of a constituency with over 26 per cent. male unemployment in a region—the Northern region—that traditionally has, and continues to have, more unemployment than any other part of Britain, I find it strange that a Northern voice has not been heard today. It would be an insult to the 222, 000 unemployed people in the North if I attempted, in one minute today, to put their case.

9 pm

Mr. Stanley Orme (Salford, West)

This major debate, part of a two-day debate on unemployment and the economy, takes place against the background of 3 million unemployed and the need to create another 5 million jobs by the mid-1980s. That is the size of the problem facing Britain and our economy. The opening speech of the Secretary of State for Employment was a disgrace. The right hon. Gentleman did not face the problem. Nor did he give any real answers about how the Government intended to tackle it. Even some of his hon. Friends were critical of the Government's policy, or lack of policy.

Reference has been made to the special Cabinet meeting—a crisis meeting as it was called—that is to take place tomorrow morning. It is not a special Cabinet meeting. It is the normal Cabinet meeting at which there will possibly be a short debate lasting about an hour. That will not be sufficient to discuss the problem and all that needs to be done.

The Opposition recognise that there have been problems in British industry over a number of years. The Labour Government took measures through the National Enterprise Board and other agencies to create employment. When we left office, unemployment was coming down. However, in the metal manufacturing industries, there has been a 28 per cent. fall in employment during the last two years. A total of 1.25 million jobs directly related to the manufacturing sector have been lost. That is a tremendous increase. With a reduced manufacturing sector, the job becomes more difficult than ever.

There must be another way. Critics of the Government's policy can be found far beyond the Labour Party and the trade union movement. They include Conservative Members, members of the Cabinet, the CBI and parts of the City. The Labour Party believes that tinkering with the problem cannot achieve the major changes that are required. We believe that a fundamental change must take place in our economy and in industry. That is why the Labour Party is putting forward an alternative strategy. That is why we have linked the debate to Labour's "Plan for Expansion". We say that there is a Socialist alternative. I wish to spell out some of the main factors of that alternative.

A drastic increase in public expenditure directed to creating jobs must be a first major priority. There are areas that cry out for such investment—the construction industry dealing with new housing and inner cities, railways electrification, investment in telecommunication, replacement of the nineteenth century sewerage system in many major industrial cities, new power station capacity, road maintenance and construction, and the provision of the gas pipeline.

Mr. Arthur Lewis

Will my right hon. Friend add to his list that thousands of hotel and catering workers from foreign countries are allowed to work in Britain, but 116, 464 British catering workers are unemployed? How crazy can we get? There is high unemployment in the industry, yet we allow workers to come in from foreign countries.

Mr. Orme

I hope that my hon. Friend will allow me to develop our strategy. I believe that we can create jobs for residents of the United Kingdom.

The Government, through the National Enterprise Board, could invest in coal, oil and gas extraction, biotechnology, mining equipment, heating, ventilation, air conditioning, refrigeration equipment, solid fuel technology, electronics, scientific instruments and energy savings. They are only a few of the areas in which there could be investment.

Investment in the public sector overflows into the private sector and creates jobs in both the private and public sectors. To make that investment the borrowing requirement must be increased. We face that squarely. Against that, one must set increased employment, increased savings and a reduction in payments of unemployment benefit, as my right hon. Friend the Member for Chesterfield (Mr. Varley) said earlier.

The PSBR might rise for a time, but, in the long term, growth in the economy will cause a return flow of money into the Exchequer. That will increase resources which can be allocated to benefit the whole community. The nation would be borrowing to finance productive investment instead of borrowing to finance increased unemployment, as is happening now. We accept that there would be a need to borrow and that the PSBR would be increased.

A pamphlet produced this month by the CBI asks in a heading How can it be done?". The answer in the pamphlet is "By higher Government borrowing". That is what the CBI says today. If we were in a position to implement such policies, it would be seen how we could put that increased borrowing into effect.

The Secretary of State for Industry (Mr. Patrick Jenkin)

The right hon. Gentleman has given an astonishing list of projects ranging through industry for public investment. He must tell the House how much the Labour Party wishes to see invested hi such projects, how much extra borrowing would be necessary and how much higher interest rates would have to be to finance such investment.

Mr. Orme

In my opinion, a minimum of about £8 billion or £9 billion would have to be put immediately into the economy. That is based on the TUC's annual report for this year. That report gives the figures and the facts. Such investment would lead to increased borrowing. It would be an investment to borrow. It would not be detrimental to the economy. I am sure that my right hon. and hon. Friends support that.

Conservative Members often ask what effect there would be on inflation. Measures could be taken. One would be to cut VAT, which has had a dramatic effect on inflation. Action could be taken on interest rates. There could be a relaxation in nationalised industries' external borrowing limits and in the employers' national insurance surcharge. We now spend more on unemployment benefit than on the National Health Service and something must be drastically wrong. A great deal of discussion—not least from the Government Benches—has dealt with overmanning and productivity. Productivity is one of the key areas that must be tackled by a Labour Government.

Planning and industrial democracy are urged by the Labour Party. Over recent years, British industry has suffered from lack of investment and low productivity. Despite the intrinsic wealth that Britain possesses from resources of North Sea oil, gas and coal, the crisis affecting the advanced countries of the world is worse in the United Kingdom than in any of our main competitor countries. Therefore, a policy of direct Government intervention in industry through planning is crucial.

That intervention can come through sector working parties, the Manpower Services Commission, a strengthened National Enterprise Board dealing especially with research and development—which is an area that has been greatly neglected and that the Government have played a part in running down—and the setting up of a planning commission to examine overall strategy. By those means a policy on which to base growth in our economy could be achieved.

We must look at some of our competitors. France has a Minister responsible for planning. The Japanese have created a planning organisation. These are both indications of Government intervention. The difference between Britain and its main competitors is that the competitors intervene directly in many ways into industry while our Government have washed their hands of industry. It is worth examining the type of intervention that has taken place in Japan and the effect that this has had on its economy and the world economy.

In the 1960s, capital intensive products such as steel, motor cycles and ships were priorities within the Japanese economy. By the mid-1970s, more complex products such as cars and colour televisions dominated the Japanese industrial strategy. For the 1980s, knowledge intensive industries such as computers, special chemicals, robotics, machine tools, telecommunications and energy-saving equipment have been identified as priorities. Many of the ideas that were developed in the United Kingdom are now being exploited elsewhere. We need a policy of intervention in the economy.

When we refer to planning, we are talking about both management and workers who produce, design and instigate. We hope that it will be possible for workers to participate in the decision-making machinery, because if productivity is to increase such co-operation is essential.

There is also a clear and long standing case for strengthening the rights, the status and influence of workers and their unions in the work place as part of the process of extending democracy throughout society. The measures that the Secretary of State plans to introduce in his trade union Bill will have an adverse effect on such developments. Instead of achieving the co-operation of work people in industry, the Secretary of State will bring about hostility and consequential problems. The problems of overmanning and productivity will be pushed to one side and will not be discussed.

Therefore, we believe that it would be possible to negotiate development contracts in major areas of the economy, including the multinationals.

What are the Secretary of State's views on the Davignon proposals on disclosure of information by the multinationals now situated throughout Western Europe? That disclosure of information is important, but the Opposition feel that it should go beyond that, into investment prospects and that the Davignon proposals are not sufficient in that respect. We believe that it would be in the interest of many major companies in our economy, in both the public and the private sectors, to have such agreement and to be able to arrive at such understanding.

Sir William Clark (Croydon, South)

What does that mean?

Mr. Orme

It means that if one has a planning agreement one can look at investment, forward planning and projects and the work people who will be asked to produce the products will be taken into consultation and will play a part in decision making. That sort of action is long overdue.

The need for long term investment is obvious. The Opposition believe that this should be achieved through the use of North Sea oil revenues and other forms of investment. As my right hon. Friend the Member for Chesterfield said, £13 billion or £14 billion are being wasted. That is the cost to the economy of unemployment or social security benefit and the loss of tax and savings. It all adds up to a tremendous drain on the economy at a time when that money should be invested in it.

The abolition of exchange controls, of which there has been little public notice, is of major importance. The abolition of controls and the subsequent outflow of money for investment abroad instead of in Britain is a disgrace. That money could have helped industry in the form of research and development and investment at a time when it is greatly needed. As the Secretary of State knows, more than £5 billion has left the country since the abolition of exchange controls. We regard that outflow of money as a factor of major importance. [Interruption.] I thought that hon. Members were listening. I am explaining the proposals that the Labour Party is now discussing throughout the country and that we are putting forward as our policy. Conservative Members often ask "What is your policy? What are you doing?" We now have a policy of "plan for jobs"—an overall collective policy that we intend to put into operation at the earliest opportunity.

If the economy achieves growth and gets back to prosperity in any shape or form, there will be a danger of sucking imports into the United Kingdom. If we are to implement a sensible trade policy, there must be planning for trade with a properly negotated policy on import ceilings and quotas with our main trade partners. Many of our competitors—for example, the EEC, Japan and the United States—now operate various forms of import controls against British goods. There have been complaints from Conservative Members and continous complaints from Opposition Members about British goods being excluded from foreign markets. We should be able to discuss the matter on a sensible basis. That does not mean that we would not allow imports, but they could be controlled by quotas and ceilings. We can also plan for import substitution and help to produce goods within the United Kingdom from which I am convinced our economy can benefit. Our objective is to secure a growth in imports consistent with balance of payments stability.

We have seen what the Government have done. We have seen their attitude to public ownership. They have given away some of the most profitable public sectors of our economy. The word they use is "privatisation", but the real word is "denationalisation". Those sectors have been disposed of at give-away prices. That action has affected some of the most central parts of our economy.

Recently I saw a newspaper report that the Secretary of State and the Government were keen to make a major inroad into telecommunications. In the steel industry debate the other night, we heard that they wanted to privatise steel. Tens of millions of pounds of public money have been put into these industries and they are to be handed away.

Mr. Marlow

What nationalised industries have the Government given away? What has been sold has been sold at the market price.

Mr. Orme

The BNOC comes to mind, as does British Aerospace. The Government want to get rid of parts of British Leyland and the steel industry. They want to get rid of sections of the telecommunications industry. The list is considerable. Perhaps the Secretary of State will give that list to the House. It is a policy of giving away assets which belong to Britain and which have been paid for by British money. I want to make it clear that the next Labour Government will renationalise those assets at the earliest opportunity.

We have been talking about public ownership and its success. A future Labour Government will extend public ownership in key sectors of the economy, not least in the areas where new industries, such as microelectronics and high technology, will have to be created. This is where public money can go, where investment can take place and where we can give a positive lead to industry. A Labour Government, not a Tory Government, created Inmos. That should be firmly taken on board.

I come now to the employment not least of young people leaving school and of women. Those two sections have suffered drastically. The training measures that the Secretary of State has introduced are inadequate. Much more needs to be done. We need to train for skill. If we get an upturn in the economy, as I think the Secretary of State would agree, we would be short of skilled workers. Nevertheless, his Department has closed 17 training centres. We shall have to reopen training centres arid provide training for skill.

Mr. Tebbit

Is the right hon. Gentleman referring to training boards or training centres? The training boards were doing no training. That is why they were closed.

Mr. Orme

That will not wash at all. We must train young people between the ages of 16 and 19. We must also face the fact that many school leavers will have had no training at all by the time they reach their twenties. The trade union movement will have to face the fact that m many instances people will enter industry when they are older simply because of the problems that the Government have created. I have no doubt that the trade union movement will accept its responsibility.

I represent part of the city of Salford, which has seen a 44 per cent. staff cut in a university that was training for skill. The Prime Minister went there the other day and told the Vice-Chancellor "John, you are doing very well. I hope you will succeed". The staff in that university have been reduced by almost half. Industry and the trade unions in the area have amalgamated to oppose the policy, but everyone over the age of fifty, irrespective of ability—be they manual workers or academic staff—will have to go by March.

Mr. John Grant

The Secretary of State dodged the chronic problem of the hardcore, long-term adult unemployed, of which there will be more than 1 million before the end of the year. All that the right hon. Gentleman could offer was 30, 000 places on the community enterprise programme. Is that not scandalous?

Mr. Orme

When I left: the DHSS, the long-term unemployed totalled 300, 000. It is now 1 million. Drastic measures will have to be taken to overcome the Government's attitude.

Some Conservative Members have treated with levity the measures that I have put forward. We have outlined a constructive package of proposals that will create jobs within the economy and reverse the type of policies that the Secretary of State and the Government are pursuing. The right hon. Gentleman must have heard his hon. Friend the Member for Rutland and Stamford (Mr. Lewis) make it plain that if the Tory Party does not act on this issue it will again become known as the party of unemployment. The electorate will judge the Government at the appropriate time, and we shall then be able to undo some of the tremendous damage that they have done to the economy.

I was trained in the private sector of manufacturing industry. As I travel the country, I now see efficient firms forced to the wall because they find it impossible to maintain production and employment.

The Government's policies have failed. An hour's discussion at a Cabinet meeting tomorrow morning will not resolve these problems. It is time that these issues were taken to the electorate so that the people can judge. If they were, we firmly believe that we would see the return of a Labour Government.

9.24 pm

The Secretary of State for Industry (Mr. Patrick Jenkin)

We have been warned. The right hon. Member for Salford, West (Mr. Orme) has spelt out with horrifying clarity the madcap ideas upon which his party seems to be bent. It will never have an opportunity to put all those horrors into action. The only thing that he did not spell out was how long it would be before the IMF was called in. Last time it was two years. If he goes on with policies of the sort that he has outlined to the House it will be two months, not two years.

It would be difficult to imagine a more grossly irresponsible approach to the management of our economy. If the right hon. Gentleman still harbours the illusion that that sort of policy mix will solve anything at all, it is a triumph of hope over experience. The right hon. Gentleman has suffered from a degree of amnesia about what happened when his Government tried to carry out some of those policies. I find it rather depressing that he has learnt so little.

Until the right hon. Gentleman spoke the debate was characterised by a profound concern on both sides about the level of unemployment. There was an acknowledgment—not, I might say, by the right hon. Member for Salford, West, but by many speakers on both sides—of some of the causes of the high unemployment that we face: the successive oil price shocks, which affected not only us but the whole consuming world, and the effect of the world recession. There was agreement on both sides—I do not know whether the right hon. Gentleman agrees—that there are no simple solutions.

There was an interesting contrast between the right hon. Gentleman's speech and that of his right hon. Friend the Member for Chesterfield (Mr. Varley), in that the right hon. Member for Chesterfield did not mention Labour's "Plan for Expansion". He opened the debate, yet he said nothing about it even though it is mentioned in the amendment that he moved.

I did not hear the speech of my hon. Friend the Member for Dorking (Mr. Wickenden), but I gather that it was of very high quality. He put forward the simple proposition on which the Government's policy is based: that the way to more secure and better-paid jobs depends upon industry becoming more competitive.

My hon. Friend the Member for Aberdeenshire, West (Sir R. Fairgrieve) referred to the flood of imports of consumer goods that fill our shops and showrooms—cars from Germany, refrigerators from Italy, and television sets from Japan. The list is endless. We have lost customers to the competition.

When we discuss unemployment we should remember that Governments do not create jobs. Not even employers create jobs. It is the customers who provide jobs. Despite all the talk about whether this or that policy will cut unemployment, the acid test is whether, as a result, industry will become more competitive and find more customers. Both the right hon. Member for Salford, West and his right hon. Friend completely ignored the fact that in the disastrous period at the end of their last period of Government the effect of the overspill from Clegg and the post-dated cheques was felt and this country lost about 50 per cent. of its competitiveness—[Interruption.] That was the case in 1978. When I say "competitiveness", I mean in real terms and not phoney price competitiveness because of the depreciation of the pound.

Mr. Shore

The Secretary of State has made either a serious or a frivolous point. Will he tell us what the exchange rate for the pound was in May 1979 and what it became 12 months later, because that decisively influenced the competitiveness of British goods in export markets?

Mr. Jenkin

The right hon. Gentleman is trying to duck the responsibility of his Government—the massive pay explosion that surrounded the events at the end of 1978. The right hon. Gentleman knows that the explosion in private sector wage costs and the explosion that followed the Clegg report were the direct responsibility of his Government. He left us the post-dated cheque.

Customers provide the jobs and pay wages. A nation that cannot keep its customers is unable to earn its living, and a nation that cannot earn its living cannot keep its people in jobs. Our present unacceptably high unemployment is a direct reflection of our ability as a nation to earn our living. The House will be depressingly familiar with the phenomenon that we have seen during the past 30 years or more—with each downturn in the economy, unemployment has risen higher than in the previous downturn. The process is accelerating. During the recession over which the Labour Party presided it doubled, and during this recession it has doubled again. Steadily, and inexorably, British industry was becoming less and less competitive.

Mr. Michael Foot (Ebbw Vale)

Rubbish.

Mr. Jenkin

The right hon. Gentleman says "rubbish", but it is true. It has been recognised in this debate by some wise speeches from hon. Members on both sides of the House.

I come now to the thoughtful speech of the hon. Member for Glasgow, Maryhill (Mr. Craigen), during which he said—I hope that I quote him correctly— No way will we see the resuscitation of the manufacturing base in Britain". I do not accept that for one moment. We are and will remain, as far as ahead as can be seen, an industrial country. I do not accept or even understand what people mean when they talk about a post-industrial society.

Mr. Craigen

Will the Secretary of State explain why the proportion of people working in manufacturing industry has gone down from 31 per cent. of the working population to 28.5 per cent. during the lifetime of the Government?

Mr. Jenkin

That has happened because we have lost business to competitors. A jibe that has been made again and again by trade union leaders is that the British worker spends Monday to Friday making British goods and Saturday buying foreign goods. That is why we have lost jobs.

For the foreseeable future—I agree with my hon. Friend the Member for Rutland and Stamford that it includes service industries as wel1 as manufacturing—industry will be the main source of jobs for our people and wealth for Britain. Upon the success of industry will depend our ability to raise the standard of living, increase pensions, improve the National Health Service and do all the things that all hon. Members wish to do. Above all, our success in the manufacturing and service industries will provide jobs for our people.

The message that I can bring to the House is that after the long years of decline the long haul back has begun. The British disease is beginning to yield to treatment because we are treating not just the symptoms but the causes; overmanning. restrictive practices, outdated production methods, poor industrial relations, weak management and pay rising far faster than output—the familiar litany of shortcomings that we know so well. That is beginning to change right through industry.

Firms have made themselves more efficient. Manufacturing productivity has improved. Overmanning has been cut. Restrictive practices have been abandoned. Pay settlements have been at a far more reasonable level and days lost through strikes have become fewer and fewer. Managers are once again managing. The result is that we are now winning hack customers. Manufacturing output in the third quarter of last year rose 2½ per cent. and in the three months to November was a further 1 per cent. higher.

Productivity, measured as output per head, rose by no less than 10 per cent. between the end of 1980 and the third quarter of 1981. Some hon. Members have suggested that higher productivity must inevitably mean more unemployment, but the right hon. Member for Chesterfield knows perfectly well what he said when he occupied my job and when he addressed the British Council of Productivity Associations in April 1978. His words are significant when we consider the country today. He said: Whatever the short-term implications of improving productivity, we must realise that without it our industry's competitiveness will drop further and further behind our rivals.

I call the right hon. Gentleman's attention to the short-term implications. Whatever he meant, he recognised that in the short term it meant higher unemployment. He knew and recognised that, and he was frank about it when talking to the association.

I shall quote some figures relating to unit labour costs which are the most remarkable indicator of what happened in the past 18 months. I hope that I have the attention of the House. The figures are for wages and salaries per unit of output in manufacturing industry. Unit labour costs, 18 months ago, were running 25 per cent. higher than a year earlier—a far faster rise than in any other major industrial country. This relates to internal unit labour costs and is nothing to do with the exchange rate.

In the first quarter of 1981 the figure fell to 16 per cent., in the second quarter to 8 per cent. and by the third quarter it was only 5 per cent. The latest figure is now only—[Interruption.]

Mr. Speaker

Order.

Mr. Jenkin

The latest figure for unit labour costs is now only 2 per cent. higher than it was a year earlier. To move from a 25 per cent. increase to 2 per cent. increase in 18 months is, by any standards, a remarkable performance.

Mr. Jack Straw (Blackburn)

rose

Mr. Jenkin

No.

Mr. Straw

rose—

Mr. Speaker

Order. It must be clear that the Secretary of State is not giving way. Therefore, he must be allowed to continue.

Mr. Jenkin

It is even more significant that the improvement is far more striking than in any other advanced industrial country. We are now beginning to beat the competition. No other major industrial country comes anywhere near our rate of improvement in unit labour costs. That augurs extremely well for the future.

We are now well placed to increase our market share; in other words, to win customers who provide jobs and pay the wages. Of course we still have some way to go, because we have not recovered the 50 per cent. of competitiveness lost between 1978 and 1980. We cannot let up. The improvements must be held and built on. That is why the battle against inflation is vital. It is not a question of either more jobs or lower inflation. Lower inflation makes us more competitive and that brings us more customers and, in turn, more jobs.

My hon. Friend the Member for Rutland and Stamford drew a distinction between making the country more efficient and providing more jobs. He expressed a worry—often held—that new technology will inevitably lead to fewer jobs. That fear has hampered progress down the centuries. I shall reassure him by quoting from an authoritative report by the Advisory Council for Applied Research and Development. It said that: more unemployment results from loss of market share following a failure to innovate than from the introduction of new technology. Conversely, if new technology leads to an increase in market share, there is generally an increase in employment opportunities.

The House should accept that important and authoritative statement from a very high-powered council, which has served Governments of both parties well.

Japan has been cited. The rate of unemployment there is very low, because the Japanese have innovated and won markets. That is why we have taken specific measures to encourage the spread of new technology, to promote innovation and competitiveness and to make our economy more responsive and adaptable.

Mrs Shirley Williams

rose—

Mr. Jenkin

I shall turn to the points raised by the right hon. Lady in a moment.

We have maintained and expanded the product and process development scheme and introduced schemes to accelerate the spread of modern microprocessor technology. Under the microprocessor applications project, £55 million has been allocated to make industry more aware of that enormously important revolution and to help with investment schemes. In addition, £55 million has been allocated to the microelectronics support scheme to help the industry develop its products.

Schemes in other countries were mentioned, but there was a notable forgetfulness about mentioning schemes in this country. There are schemes to support the development of fibre optics, of robot machine tools and integrated robot systems—[HON. MEMBERS: "They are on the Conservative Benches."] Opposition Members may have their joke, but these matters are important. We have renewed, for four years, the manufacturing advisory service. My right hon. Friend the Prime Minister has designated 1982 Information Technology Year—[Interruption.] The Leader of the Opposition is foolish to scoff. That initiative has been warmly commended by all the industries involved in information technology.

Mrs. Shirley Williams

rose —

Mr. Jenkin

The right hon. Member for Crosby (Mrs. Williams) mentioned schools. We have embarked on a project to put a micro-computer into every secondary school in the land by the end of the year. We hope to follow that with a scheme for primary schools. We need to expand those programmes. The help and support being given to industry to modernise, to introduce new technology and to innovate is crucial if it is to become more competitive. Even in public sector industries, such as British Leyland and British Steel, new technology is being introduced. I am grateful for the remarks made on that point by my hon. Friend the Member for Bridlington (Mr. Townend). In the lines making the Triumph Acclaim and the Mini Metro, British Leyland now has facilities and robots that are every bit as productive as those of any other European motor company.

Steel production at the South Wales strip mills was reaching levels equivalent to the best in Europe. Until the ASLEF strikes forced cuts in production, steelmaking on Teesside was breaking all plant records. It must be heartbreaking for those who, with the new spirit of co-operation in steel, have achieved a record level of output and competitiveness to find their efforts torpedoed by the locomen, who are clinging to the letter of a 62-year-old agreement.

Mrs. Shirley Williams

rose —

Mr. Jenkin

I shall give way in a moment. Central to the debate—the right hon. Lady forcefully made this point—is whether firm monetary control is part of the solution, as my hon. Friends have recognised, or part of the problem, which is the view of the Opposition parties. They fail to recognise that every major OECD country protects its currency by controlling the money supply. Moreover, they have been doing so for some years. I quote these words: I am convinced that a firm control of the growth of money and credit is an essential part of our strategy against inflation. Those were not the words of my right hon. and learned Friend the Chancellor or even the President of the United States. That is what the right hon. Member for Leeds, East (Mr. Healey) said when addressing the International Monetary Fund in 1976.

All over the world Governments are aiming to reduce the level of borrowing to bring down interest rates. I have a long list of the countries, but I shall not weary the House with it. In their efforts to curb spending and relieve the upward pressure of interest rates the British Government have for most of the year been conspicuously more successful than our overseas competitors.

There are always those—to her discredit the right hon. Member for Crosby is one of them, although she used not to be—who will argue that there is an easier way. The right hon. Lady called for a £5 billion to £6 billion public expenditure reflation. I remind her that her former right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) at the Labour Party conference in 1976 stated: We used to think that you could just spend your way"— [Interruption.] I am not surprised that the Opposition do not want to hear this, but they are going to. We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists, and that insofar as it ever did exist, it worked by injecting inflation into the economy. And each time that happened the average level of unemployment has risen. Higher inflation, followed by higher unemployment. That is the history of the last 20 years. I am willing to bet that no one cheered louder than the right hon. Lady.

Mrs. Shirley Williams

The Secretary of State's intelligence is such that he will realise that there are not only two alternatives. He referred earlier to new technologies. Will he tell the House why, when the major barrier to the acceptance of new technologies is the shortage of electronic engineers, the Government have seen fit to cut grants to the universities?

Mr. Jenkin

I am not surprised that the right hon. Lady wanted to change the subject. Even after the reductions being made by the University Grants Committee there will still be an increase in the number of students studying engineering in all disciplines. That is a fact. The right hon. Lady should know that.

The right hon. Lady spoke about a £5 billion to £6 billion expansion plan. The right hon. Member for Ebbw Vale (Mr. Foot) put forward an even more ambitious plan. The right hon. Gentleman and the right hon. Lady also hope to get reduced interest rates. We all know that the right hon. Gentleman believes in fairies, higher spending, lower taxation and lower interest rates. It is surprising that, in asking for higher spending and lower taxation, the right hon. Lady did not have the brass in the House to say that she wanted to see lower interest rates. It does not fit in with what she said during her election campaign. At the top of her list of what the SDP would do on economic growth is "Bring interest rates down." How can she square a massive increase in Government spending with a reduction in taxation and lower interest rates? The right hon. Lady once had a reputation for intellectual integrity, but if she carries on like that she will destroy it.

The SDP says that all those factors will be controlled by an incomes policy, but if ever there was a case of tot homines tot sententiae it is the attitude of SDP members to an incomes policy. No two of them can agree. The right hon. Lady wants an incomes policy backed by law. Mr. Roy Jenkins wants a Layard type of tax on employers. The right hon. Lady said that she wants an incomes policy backed by an inflation tax on those who get more. She wants it paid by the employees. Professor Meade, who advises the SDP, wants arbitration. The right hon. Member for Stockton (Mr. Rodgers)—he is the simplest of them all—wants an agreement between the CBI, the TUC and the Government. If that is not possible, he says that "the Government would have to go it alone". That reminds me of the character in the films who was always being tied to railways—with one bound he was free.

We are progressively bringing down pay increases to more reasonable levels, and we are winning through. Why does the SDP believe that next time it will be different? Members of the SDP have been in Government. They have tried and failed. At least the Liberals have never been in Government. They have not tried anything. We can leave that rag bag of politicians—those who have tried and failed and those who have never tried at all—to their own devices. We are now beginning to win through. Output is beginning to rise. Productivity is increasing. We have been winning more spectacular orders throughout the world than we have done for many years—£½ billion business in Nigeria in six months, a £¼ billion bank construction project in Hong Kong, a £170 million contract for a transpacific cable, a £150 million contract for a university in Oman and a £140 million gas storage project in Abu Dhabi.

Mr. Eric S. Heffer (Liverpool, Walton)

How much in Liverpool?

Mr. Jenkin

Those orders are on top of the massive steel plant orders won by the Davy Corporation in India, Mexico, New Zealand and elsewhere. We are laying the foundations for a solid, lasting recovery leading to a restored strength to our economy. We are beginning to win back the customers we lost. As this debate is about jobs, I repeat that it is customers who provide jobs. It is customers who pay the wages. It is our customers putting their money on Britain who will provide work for our people.

The Opposition's amendment would throw us all back to the disasters of earlier years. I ask the House to reject the amendment and support the Government's motion.

Question put, That the amendment be made:—

The House divided: Ayes 213, Noes 293.

Division No. 51]	[10 pm
AYES
Abse, Leo	Cunliffe, Lawrence
Adams, Allen	Cunningham, DrJ. (W'h'n)
Allaun, Frank	Dalyell.Tam
Alton, David	Davidson.Arthur
Anderson, Donald	Davies, Rt Hon Denzil (L'lli)
Archer, Rt Hon Peter	Davis, Clinton (HackneyC)
Ashton, Joe	Davis, Terry (B'ham, Stechf'd)
Atkinson, N.(H'gey)	Dean, Joseph (Leeds West)
Barnett, Guy (Greenwich)	Dewar, Donald
Barnett, Rt Hon Joel (H'wd)	Dixon, Donald
Benn, Rt Hon Tony	Dobson, Frank
Bennett, Andrew(St'kp'tN)	Dormand, Jack
Booth, Rt HonAlbert	Douglas, Dick
Boothroyd, MissBetty	Dubs, Alfred
Bottomley, RtHonA(M'b'ro)	Dunlop, John
Bray, Dr Jeremy	Dunnett, Jack
Brown, Hugh D. (Provan)	Dunwoody, Hon Mrs G.
Brown, R. C. (N'castle W)	Eadie, Alex
Brown, Ron (E'burgh, Leith)	Ellis, R.(NED'bysh're)
Callaghan, Jim (Midd'tn&P)	English, Michael
Campbell, Ian	Ennals, Rt Hon David
Campbell-Savours, Dale	Evans, loan (Aberdare)
Canavan, Dennis	Evans, John (Newton)
Cant, R. B.	Ewing, Harry
Carmichael, Neil	Faulds, Andrew
Carter-Jones, Lewis	Field, Frank
Clark, Dr David (S Shields)	Fitch, Alan
Cocks, Rt Hon M. (B'stolS)	Fitt, Gerard
Cohen, Stanley	Flannery, Martin
Coleman, Donald	Foot, Rt Hon Michael
Concannon, Rt Hon J..D.	Ford, Ben
Conlan, Bernard	Forrester, John
Cook, Robin F.	Foster, Derek
Cowans, Harry	Foulkes, George
Craigen, J. M. (G'gow, M'hill)	Fraser, J. (Lamb'th, N'w'd)
Crowther, Stan	Freeson, Rt Hon Reginald
Cryer, Bob	Garrett, John (NorwichS)

George, Bruce	Parry, Robert
Golding, John	Pendry, Tom
Graham, Ted	Powell, Raymond (Ogmore)
Grant, George(Morpeth)	Prescott, John
Hamilton, James(Bothwell)	Price, C. (Lewisham W)
Hamilton, W. W. (C'tral Fife)	Race, Reg
Harrison, Rt Hon Walter	Radice, Giles
Hart, Rt Hon Dame Judith	Rees, Rt Hon M (Leeds S)
Hattersley, Rt Hon Roy	Richardson, Jo
Heffer, Eric S.	Roberts, Albert (/vbrmanfo/T)
Hogg, N. (EDunb't'nshire)	Roberts, Allan('eoof/e;
Holland, S.(L'b'th, Vauxh'll)	Roberts, Ernest (Hackney N)
HomeRobertson, John	Roberts, Gwilym(Cannock)
Homewood, William	Robertson, George
Hooley, Frank	Robinson, G. (Coventry NW)
Howell, RtHon D.	Rodgers, RtHon William
Hoyle, Douglas	Rooker, J. W.
Huckfield, Les	Ross, Ernest (Dundee West
Hughes, Mark(Durham)	Rowlands, Ted
Hughes, Robert (Aberdeen N)	Ryman, John
Hughes, Roy (Newport)	Sever, John
Janner, HonGreville	Sheerman, Barry
Jay, Rt Hon Douglas	Sheldon, Rt Hon R.
John, Brynmor	Shore, Rt Hon Peter
Johnson, Walter (Derby S)	Short, MrsRenée
Jones, Rt Hon Alec (Rh'dda)	Silkin, Rt HonJ. (Deptford)
Jones, Barry (East Flint)	Silverman, Julius
Jones, Dan (Burnley)	Skinner, Dennis
Kaufman, Rt Hon Gerald	Smith, Cyril(Rochdale)
Kilfedder, JamesA.	Smith, Rt Hon J. (N Lanark)
Kilroy-Silk, Robert	Snaps, Peter
Lambie, David	Soley, Clive
Lamborn, Harry	Spearing, Nigel
Lamond, James	Spriggs, Leslie
Leadbitter, Ted	Stallard, A. W.
Leighton, Ronald	Stewart, Rt Hon D. (W Isles)
Lestor, MissJoan	Stoddart, David
Lewis, Arthur (N'hamNW)	Stott, Roger
Lewis, Ron (Carlisle)	Strang, Gavin
Litherland, Robert	Straw, Jack
Lofthouse, Geoffrey	Summerskill, HonDrShirley
Lyon, Alexander (York)	Taylor, Mrs Ann (Bolton W)
McCartney, Hugh	Thomas, Dafydd (Merioneth)
McDonald, DrOonagh	Thomas, DrR. (Carmarthen)
McElhone, Frank	Thorne, Stan (PrestonSouth)
McKay, Allen (Penistone)	Tilley, John
McKelvey, William	Torney, Tom
MacKenzie, Rt Hon Gregor	Varley, Rt Hon Eric G.
McNamara, Kevin	Wainwright.E.(DearneV)
McTaggart, Robert	Walker, Rt Hon H.(D'caster)
McWilliam, John	Watkins, David
Marks, Kenneth	Weetch, Ken
Marshall, D(G'gowS'ton)	Welsh, Michael
Marshall, Dr Edmund (Goole)	White, Frank R.
Marshall, Jim (LeicesterS)	White, J.(G'gowPollok)
Martin, M(G'gowS'burn)	Whitehead, Phillip
Mason, Rt Hon Roy	Whitlock, William
Maynard, MissJoan	Wigley, Dafydd
Meacher, Michael	Willey, Rt Hon Frederick
Mikardo, lan	Williams, Rt Hon A.(S'sea W)
Millan, Rt Hon Bruce	Wilson, Rt Hon SirH(H'ton)
Mitchell, Austin(Grimsby)	Wilson, William (C'trySE)
Morris, Rt Hon A. (W'shawe)	Winnick, David
Morton, George	Woodall, Alec
Moyle, Rt Hon Roland	Woolmer, Kenneth
Newens, Stanley	Wright, Sheila
Oakes, Rt Hon Gordon	Young, David (BoltonE)
O'Halloran, Michael
Orme, Rt Hon Stanley	Tellers for the Ayes:
Palmer, Arthur	Mr. James Tinn and
Park, George	Mr. Frank Haynes.
Parker, John
NOES
Adley, Robert	Arnold, Tom
Aitken, Jonathan	Aspinwall, Jack
Alexander, Richard	Atkins, Rt Hon H.(S'thorne)
Alison, Rt Hon Michael	Atkins, Robert(PrestonN)
Amery, Rt Hon Julian	Baker, Kenneth(St.M'bone)
Ancram, Michael	Baker, Nicholas (N Dorset)

Beaumont-Dark.Anthony	Gardiner, George(Reigate)
Bell, SirRonald	Gardner, Edward (S Fylde)
Bendall, Vivian	Garel-Jones, Tristan
Benyon, Thomas(A'don)	Gilmour, Rt Hon Sir lan
Benyon, W. (Buckingham)	Glyn, Dr Alan
Best, Keith	Goodlad, Alastair
Bevan, David Gilroy	Gorst, John
Biffen, Rt Hon John	Gow, lan
Biggs-Davison, Sir John	Gray, Hamish
Blackburn, John	Greenway, Harry
Blaker, Peter	Griffiths, E.(B'ySt. Edm'ds)
Body, Richard	Griffiths, Peter Portsm'thN)
Bonsor, SirNicholas	Grist, lan
Bottomley, Peter (W'wich W)	Grylls, Michael
Bowden.Andrew	Gummer, JohnSelwyn
Boyson.DrRhodes	Hamilton, Hon A.
Braine, SirBernard	Hamilton, Michael(Salisbury)
Bright, Graham	Hampson, DrKeith
Brinton, Tim	Hannam, John
Brittan, Rt. Hon. Leon	Haselhurst, Alan
Brooke, Hon Peter	Hastings, Stephen
Brotherton, Michael	Havers, Rt Hon Sir Michael
Brown, Michael(Brigg&Sc'n)	Hawksley.Warren
Browne, John(Winchester)	Hayhoe, Barney
Bruce-Gardyne, John	Heath, Rt Hon Edward
Bryan, Sir Paul	Henderson.Barry
Buchanan-Smith, Rt. Hon. A.	Heseltine, Rt Hon Michael
Buck, Antony	Hicks, Robert
Budgen, Nick	Higgins, Rt Hon Terence L
Bulmer, Esmond	Hogg, HonDouglas(Gr'th'm)
Burden, SirFrederick	Holland, Philip(Carlton)
Butcher, John	Hooson, Tom
Butler, HonAdam	Hordern, Peter
Cadbury, Jocelyn	Howe, Rt Hon Sir Geoffrey
Carlisle, John (LutonWest)	Howell, RtHonD.(G'ldf'd)
Carlisle, Kenneth (Lincoln)	Hunt, David (Wirral)
Carlisle, Rt Hon M. (R'c'n)	Hunt, John(Ravensbourne)
Chalker, Mrs. Lynda	Hurd, HonDouglas
Channon, Rt. Hon. Paul	Irving, Charles(Cheltenham)
Chapman, Sydney	Jenkin, Rt Hon Patrick
Clark, Hon A. (Plym'th, S'n)	JohnsonSmith, Geoffrey
Clark, SirW. (Croydon S)	Jopling, RtHonMichael
Clarke, Kenneth (Rushcliffe)	Kaberry, SirDonald
Clegg, Sir Walter	Kellett-Bowman, MrsElaine
Cockeram, Eric	Kershaw, SirAnthony
Cope, John	King, Rt Hon Tom
Cormack, Patrick	Knox, David
Corrie, John	Lamond, James
Costain, SirAlbert	Lamont, Norman
Cranborne, Viscount	Lang, Ian
Critchley.Julian	Langford-Holt, SirJohn
Crouch, David	Latham, Michael
Dean, Paul (North Somerset)	Lawrence, Ivan
Dickens, Geoffrey	Lawson, Rt Hon Nigel
Douglas-Hamilton, LordJ.	Lee, John
Dover.Denshore	LeMarchant.Spencer
du Cann, Rt Hon Edward	Lennox-Boyd.HonMark
Dunn, Robert (Dartford)	Lester, Jim (Beeston)
Dykes, Hugh	Lewis Kenneth (Rutland)
Eden, Rt Hon Sir John	Lloyd, Ian (Havant & W'loo)
Edwards, RtHon N. (P'broke)	Lloyd, Peter (Fareham)
Eggar, Tim	Loveridge, John
Elliott, SirWilliam	Luce, Richard
Emery, Sir Peter	Lyell, Nicholas
Eyre, Reginald	McCrindle, Robert
Fairgrieve, SirRussell	Macfarlane, Neil
Faith, Mrs Sheila	MacGregor, John
Farr, John	MacKay, John (Argyll)
Fell, SirAnthony	Macmillan, Rt Hon M.
Fenner, Mrs Peggy	McNair-Wilson, M.(N'bury)
Finsberg, Geoffrey	McNair-Wilson, P. (NewF'st)
Fisher, SirNigel	McQuarrie, Albert
Fletcher, A. (Ed'nb'ghN)	Madel, David
Fletcher-Cooke, SirCharles	Major, John
Fookes, Miss Janet	Marland, Paul
Forman, Nigel	Marlow, Antony
Fowler, Rt Hon Norman	Marshall, Michael(Arundel)
Fox, Marcus	Marten, RtHon Neil
Fraser, Peter (South Angus)	Mates, Michael
Fry, Peter	Maude, Rt Hon Sir Angus

Mawby, Ray	Shelton, William(Streatham)
Mawhinney, DrBrian	Shepherd, Colin (Hereford)
Maxwell-Hyslop, Robin	Shepherd, Richard
Mayhew, Patrick	Shersby, Michael
Mellor, David	Silvester, Fred
Meyer, Sir Anthony	Sims, Roger
Miller, Hal(B'grove)	Skeet, T. H. H.
Mills, lain(Meriden)	Speed, Keith
Miscampbell, Norman	Speller, Tony
Mitchell, David(Basingstoke)	Spence, John
Monro, SirHector	Spicer, Jim(West Dorset)
Montgomery, Fergus	Spicer, Michael(S Worcs)
Moore, John	Sproat, lain
Morris, M. (N'hamptonS)	Squire, Robin
Morrison, HonC. (Devizes)	Stanbrook, lvor
Morrison, Hon P. (Chester)	Stanley, John
Mudd, David	Steen, Anthony
Murphy, Christopher	Stevens, Martin
Myles, David	Stewart, A. (ERenfrewshire)
Neale, Gerrard	Stewart, lan (Hitchin)
Needham, Richard	Stokes, John
Nelson, Anthony	Stradling Thomas.J.
Neubert, Michael	Tapsell, Peter
Newton, Tony	Taylor, Teddy (S'end E)
Normanton, Tom	Tebbit, Rt Hon Norman
Nott, RtHon John	Temple-Morris, Peter
O'Halloran, Michael	Thatcher, Rt Hon Mrs M.
Onslow, Cranley	Thomas, Rt Hon Peter
Oppenheim, Rt Hon Mrs S.	Thompson, Donald
Page, Richard (SW Herts)	Thorne, Neil(llfordSouth)
Parkinson, RtHonCecil	Thornton, Malcolm
Parris, Matthew	Townend, John (Bridlington)
Patten, Christopher(Bath)	Townsend, CyrilD.(B'heath)
Patten, John(Oxford)	Trippier, David
Pattie, Geoffrey	Trotter, Neville
Pawsey, James	van Straubenzee, SirW.
Percival, Sir lan	Vaughan, DrGerard
Pink, R.Bonner	Viggers, Peter
Pollock, Alexander	Waddington, David
Prentice, RtHon Reg	Wakeham, John
Price, Sir David (Eastleigh)	Waldegrave, HonWilliam
Prior, Rt Hon James	Walker, Rt Hon P.(W'cester)
Proctor, K. Harvey	Walker-Smith, RtHon Sir D.
Pym, Rt Hon Francis	Waller, Gary
Raison, Timothy	Walters, Dennis
Rathbone, Tim	Ward, John
Rees, Peter (Dover and Deal)	Watson, John
Rees-Davies, W. R.	Wells, Bowen
Renton, Tim	Wells, John(Maidstone)
RhodesJames, Robert	Wheeler, John
Rhys Williams, SirBrandon	Whitelaw, RtHon William
Ridley, HonNicholas	Whitney, Raymond
Ridsdale, SirJulian	Wickenden, Keith
Rifkind, Malcolm	Wiggin, Jerry
Roberts, M. (Cardiff NW)	Williams.D.(Montgomery)
Roberts, Wyn (Conway)	Winterton, Nicholas
Rossi, Hugh	Wolfson, Mark
Rost, Peter	Young, SirGeorge(Acton)
Sainsbury, HonTimothy	Younger, RtHon George
St. John-Stevas, Rt Hon N.
Scott, Nicholas	Tellers for the Noes:
Shaw, Giles (Pudsey)	Mr. Anthony Berry and
Shaw, Michael (Scarborough)	Mr. Robert Boscawen.

Question accordingly negatived.

Main Question put:—

The House divided: Ayes 291, Noes 246.

Division No. 52]	[10.12pm
AYES
Adley, Robert	Atkins, Robert(PrestonN)
Aitken, Jonathan	Baker, Kenneth(St.M'bone.)
Alexander, Richard	Baker, Nicholas (N Dorset)
Alison, Rt Hon Michael	Beaumont-Dark, Anthony
Amery, RtHon Julian	Bell, SirRonald
Ancram, Michael	Bendall, Vivian
Arnold, Tom	Benyon, Thomas(A'don)
Aspinwall, Jack	Benyon, W. (Buckingham)
Atkins, RtHonH.(S'thorne)	Best, Keith

Bevan, David Gilroy	Gow, lan
Biffen, Rt Hon John	Gray, Hamish
Biggs-Davison, Sir John	Greenway, Harry
Blackburn, John	Griffiths, E.(B'ySt.Edm'ds)
Blaker, Peter	Griffiths, Peter Portsm'thN)
Body, Richard	Grist, lan
Bonsor, SirNicholas	Grylls, Michael
Bottomley, Peter (W'wichW)	Gummer, JohnSelwyn
Bowden, Andrew	Hamilton, Hon A.
Boyson, Dr Rhodes	Hamilton, Michael(Salisbury)
Braine, SirBernard	Hampson, DrKeith
Bright, Graham	Hannam, John
Brinton, Tim	Haselhurst, Alan
Brittan, Rt. Hon. Leon	Hastings, Stephen
Brooke, Hon Peter	Havers, Rt Hon Sir Michael
Brotherton, Michael	Hawksley, Warren
Brown, Michael(Brigg&Sc'n)	Heath, RtHon Edward
Browne, John (Winchester)	Henderson, Barry
Bruce-Gardyne, John	Heseltine, RtHon Michael
Bryan, Sir Paul	Hicks, Robert
Buchanan-Smith, Rt. Hon. A.	Higgins, RtHon Terence L
Buck, Antony	Hogg, HonDouglas(Gr'th'm)
Budgen, Nick	Holland, Philip(Carlton)
Bulmer, Esmond	Hooson, Tom
Burden, SirFrederick	Hordern, Peter
Butcher, John	Howe, Rt Hon Sir Geoffrey
Butler, Hon Adam	Howell, RtHon D.(G'ldf'd)
Cadbury, Jocelyn	Hunt, David (Wirral)
Carlisle, John (Luton West)	Hunt, John(Ravensbourne)
Carlisle, Kenneth (Lincoln)	Hurd, HonDouglas
Carlisle, RtHon M. (R'c'n)	Irving, Charles (Cheltenham)
Chalker, Mrs. Lynda	Jenkin, RtHon Patrick
Channon, Rt. Hon. Paul	JohnsonSmith, Geoffrey
Chapman, Sydney	Jopling, RtHon Michael
Clark, Hon A. (Plym'th, S'n)	Kaberry, SirDonald
Clark, SirW. Croydon S)	Kellett-Bowman, MrsElaine
Clarke, Kenneth (Rushcliffe)	Kershaw, SirAnthony
Clegg, SirWalter	King, RtHon Tom
Cockeram, Eric	Knox, David
Cope, John	Lamont, Norman
Cormack, Patrick	Lang, lan
Corrie, John	Langford-Holt, SirJohn
Costain, SirAlbert	Latham, Michael
Cranborne, Viscount	Lawrence, lvan
Critchley, Julian	Lawson, Rt Hon Nigel
Dean, Paul (North Somerset)	Lee, John
Dickens, Geoffrey	LeMarchant, Spencer
Douglas-Hamilton, Lord J.	Lennox-Boyd, HonMark
Dover, Denshore	Lester, Jim (Beeston)
du Cann, Rt Hon Edward	Lewis, Kenneth(Rutland)
Dunn, Robert(Dartford)	Lloyd, lan (Havant & W'loo)
Dykes, Hugh	Lloyd, Peter (Fareham)
Eden, RtHon Sir John	Loveridge, John
Edwards, Rt Hon N. (P'broke)	Luce, Richard
Eggar, Tim	Lyell, Nicholas
Elliott, SirWilliam	McCrindle, Robert
Emery, Sir Peter	Macfarlane, Neil
Eyre, Reginald	MacGregor, John
Fairgrieve, SirRussell	MacKay, John (Argyll)
Faith, MrsSheila	Macmillan, Rt Hon M.
Farr, John	McNair-Wilson, M.(N'bury)
Fell, Sir Anthony	McNair-Wilson, P.(NewF'st)
Fenner, Mrs Peggy	McQuarrie, Albert
Finsberg, Geoffrey	Madel, David
Fisher, SirNigel	Major, john
Fletcher, A. (Ed'nb'ghN)	Marland, Paul
Fletcher-Cooke, SirCharles	Marlow, Antony
Fookes, Miss Janet	Marshall, Michael (Arundel)
Forman, Nigel	Marten, Rt Hon Neil
Fowler, RtHon Norman	Mates, Michael
Fox, Marcus	Maude, RtHon Sir Angus
Fraser, Peter (South Angus)	Mawby, Ray
Fry, Peter	Mawhinney, DrBrian
Gardiner, George(Reigate)	Maxwell-Hyslop, Robin
Gardner, Edward (S Fylde)	Mayhew, Patrick
Garel-Jones, Tristan	Mellor, David
Gilmour, RtHon Sir lan	Meyer, Sir Anthony
Glyn, Dr Alan	Miller, Hal(B'grove)
Goodlad, Alastair	Mills, lain(Meriden)
Gorst, John	Miscampbell, Norman

Mitchell, David (Basingstoke)	Skeet, T. H. H.
Monro, SirHector	Speed, Keith
Montgomery, Fergus	Speller, Tony
Moore, John	Spence, John
Morris, M.(N'hamptonS)	Spicer, Jim (West Dorset)
Morrison, Hon C. (Devizes)	Spicer, Michael (S Worcs)
Morrison, Hon P. (Chester)	Sproat, lain
Mudd, David	Squire, Robin
Murphy, Christopher	Stanbrook, lvor
Myles, David	Stanley, John
Neale, Gerrard	Steen, Anthony
Needham, Richard	Stevens, Martin
Nelson, Anthony	Stewart, A.(ERenfrewshire)
Neubert, Michael	Stewart, Ian (Hitchin)
Newton, Tony	Stokes, John
Normanton, Tom	Stradling Thomas, J.
Nott, RtHonJohn	Tapsell, Peter
Onslow, Cranley	Taylor, Teddy (S'end E)
Oppenheim, Rt Hon Mrs S.	Tebbit, Rt Hon Norman
Page, Richard (SW Herts)	Temple-Morris, Peter
Parkinson, RtHonCecil	Thatcher, Rt Hon Mrs M.
Parris, Matthew	Thomas, Rt Hon Peter
Patten, Christopher(Bath)	Thompson, Donald
Patten, John (Oxford)	Thorne, Neil (llfordSouth)
Pattie, Geoffrey	Thornton, Malcolm
Pawsey, James	Townend, John(Bridlington)
Percival, Sir lan	Townsend, Cyril D, (B'heath)
Pink, R.Bonner	Trippier, David
Pollock, Alexander	Trotter, Neville
Prentice, Rt Hon Reg	van Straubenzee, SirW.
Price, SirDavid (Eastleigh)	Vaughan, DrGerard
Prior, RtHon James	Viggers, Peter
Proctor, K. Harvey	Waddington, David
Pym, Rt Hon Francis	Wakeham, John
Raison, Timothy	Waldegrave, HonWilliam
Rathbone, Tim	Walker, Rt Hon P.(W'cester)
Rees, Peter (Dover and Deal)	Walker-Smith, Rt Hon Sir D.
Rees-Davies, W. R.	Waller, Gary
Renton, Tim	Walters, Dennis
Rhodes James, Robert	Ward, John
RhysWilliams, SirBrandon	Watson, John
Ridley, HonNicholas	Wells, Bowen
Ridsdale, SirJulian	Wells, John (Maidstone)
Rifkind, Malcolm	Wheeler, John
Roberts, M. (Cardiff NW)	Whitelaw, RtHon William
Roberts, Wyn (Conway)	Whitney, Raymond
Rossi, Hugh	Wickenden, Keith
Sainsbury, HonTimothy	Wiggin, Jerry
St. John-Stevas, Rt Hon N.	Williams.D. (Montgomery)
Scott, Nicholas	Winterton, Nicholas
Shaw, Giles (Pudsey)	Wolfson, Mark
Shaw, Michael(Scarborough)	Young, SirGeorge(Acton)
Shelton, William(Streatham)	Younger, RtHon George
Shepherd, Colin (Hereford)
Shepherd, Richard	Tellers for the Ayes:
Shersby, Michael	Mr. Anthony Berry and
Silvester, Fred	Mr. Robert Boscawen.
Sims, Roger
NOES
Abse, Leo	B rown, Ron (E'burgh, Leith)
Adams, Allen	Callaghan, Jim (Midd't'n&P)
Allaun, Frank	Campbell, lan
Alton, David	Campbell-Savours, Dale
Anderson, Donald	Canavan, Dennis
Archer, Rt Hon Peter	Cant, R. B.
Ashton, Joe	Carmichael, Neil
Atkinson, N.(H'gey)	Carter-Jones, Lewis
Barnett, Guy (Greenwich)	Cartwright, John
Barnett, Rt Hon Joel (H'wd)	Clark, Dr David (S Shields)
Benn, Rt Hon Tony	Cocks, Rt Hon M. (B'stol S)
Bennett, Andrew(St'kp'tN)	Cohen, Stanley
Booth, RtHon Albert	Coleman, Donald
Boothroyd, MissBetty	Concannon, Rt Hon J. D.
Bottomley, RtHonA(M'b'ro)	Conlan, Bernard
Bradley, Tom	Cook, Robin F.
Bray, Dr Jeremy	Cowans, Harry
Brocklebank-Fowler, C.	Craigen, J. M. (G'gow, M'hill)
Brown, Hugh D. (Provan)	Crawshaw, Richard
Brown, R. C. (N'castle W)	Crowther, Stan

Cryer, Bob	HomeRobertson, John
Cunningham, G.(IslingtonS)	Homewood, William
Cunningham, DrJ. (W'h'n)	Hooley, Frank
Dalyell, Tam	Horam, John
Davidson, Arthur	Howell, RtHonD.
Davies, Rt Hon Denzil (L'lli)	Howells, Geraint
Davis, Clinton (Hackney C)	Hoyle, Douglas
Davis, Terry (B 'ham, Stechf'd)	Huckfield, Les
Dean, Joseph (Leeds West)	Hughes, Mark(Durham)
Dewar, Donald	Hughes, Robert (AberdeenN)
Dixon, Donald	Hughes, Roy (Newport)
Dobson, Frank	Janner, HonGreville
Dormand, Jack	Jay, Rt Hon Douglas
Douglas, Dick	John, Brynmor
Douglas-Mann, Bruce	Johnson, Walter (Derby S)
Dubs, Alfred	Johnston, Russell (Inverness)
Dunlop, John	Jones, Rt Hon Alec (Rh'dda)
Dunn, James A.	Jones, Barry (East Flint)
Dunnett, Jack	Jones, Dan (Burnley)
Dunwoody, Hon Mrs G.	Kaufman, Rt Hon Gerald
Eadie, Alex	Kilfedder, JamesA.
Ellis, R.(NED'bysh're)	Kilroy-Silk, Robert
Ellis, Tom (Wrexham)	Lambie, David
English, Michael	Lamborn, Harry
Ennals, Rt Hon David	Lamond, James
Evans, loan (Aberdare)	Leadbitter, Ted
Evans, John (Newton)	Leighton, Ronald
Ewing, Harry	Lestor, Miss Joan
Faulds, Andrew	Lewis, Arthur(N'ham NW)
Field, Frank	Lewis, Ron (Carlisle)
Fitch, Alan	Litherland, Robert
Fitt, Gerard	Lofthouse, Geoffrey
Flannery, Martin	Lyon, Alexander(York)
Foot, Rt Hon Michael	Lyons, Edward (Bradf'dW)
Ford, Ben	Mabon, Rt Hon Dr J. Dickson
Forrester, John	McCartney, Hugh
Foster, Derek	McDonald, DrOonagh
Foulkes, George	McElhone, Frank
Fraser, J. (Lamb'th, N'w'd)	McKay, Allen(Penistone)
Freeson, Rt Hon Reginald	McKelvey, William
Freud, Clement	MacKenzie, Rt Hon Gregor
Garrett, John (NorwichS)	Maclennan, Robert
George, Bruce	McNally, Thomas
Ginsburg, David	McNamara, Kevin
Golding, John	McTaggart, Robert
Graham, Ted	McWilliam, John
Grant, George (Morpeth)	Marks, Kenneth
Grant, John (IslingtonC)	Marshall, D(G'gowS'ton)
Grimond, RtHonJ.	Marshall, Dr Edmund (Goole)
Hamilton, James(Bothwell)	Marshall, Jim (LeicesterS)
Hamilton, W. W. (C'tral Fife)	Martin, M(G'gowS'burn)
Harrison, Rt Hon Walter	Mason, Rt Hon Roy
Hart, Rt Hon Dame Judith	Maynard, MissJoan
Hattersley, Rt Hon Roy	Meacher, Michael
Haynes, Frank	Mikardo, lan
Heffer, Eric S.	Millan, Rt Hon Bruce
Hogg, N. (EDunb't'nshire)	Mitchell, Austin (Grimsby)
Holland, S.(L'b'th, Vauxh'll)	Mitchell, R. C. (Soton Itchen)

Morris, Rt Hon A. (W'shawe)	Spearing, Nigel
Moyle, Rt Hon Roland	Spriggs, Leslie
Newens, Stanley	Stallard, A.W.
Oakes, Rt Hon Gordon	Steel, Rt Hon David
Ogden, Eric	Stewart, Rt Hon D. (W Isles)
O'Halloran, Michael	Stoddart, David
Orme, Rt Hon Stanley	Stott, Roger
Owen, Rt Hon Dr David	Strang, Gavin
Paisley, Rev Ian	Straw, Jack
Palmer, Arthur	Summerskill, HonDrShirley
Park, George	Taylor, Mrs Ann (Bolton W)
Parker, John	Thomas, Dafydd(Merioneth)
Parry, Robert	Thomas, Jeffrey(Abertillery)
Pendry, Tom	Thomas, Mike (Newcastle E)
Penhaligon, David	Thomas, DrR.(Carmarthen)
Powell, Raymond(Ogmore)	Thorne, Stan (PrestonSouth)
Prescott, John	Tilley, John
Price, C.(Lewisham W)	Tinn, James
Race, Reg	Torney, Tom
Radice, Giles	Varley, Rt Hon Eric G.
Rees, Rt Hon M (Leeds S)	Wainwright.E.(DearneV)
Richardson, Jo	Wainwright, R.(ColneV)
Roberts, Albert(Normanton)	Walker, Rt Hon H.(D'caster)
Roberts, Allan(Bootle)	Watkins, David
Roberts, Ernest (Hackney N)	Weetch, Ken
Roberts, Gwilym(Cannock)	Wellbeloved, James
Robertson, George	Welsh, Michael
Robinson, G. (Coventry NW)	White, Frank R.
Rodgers, RtHon William	White, J.(G'gow Pollok)
Rooker, J. W.	Whitehead, Phillip
Roper, John	Whitlock, William
Ross, Ernest (Dundee West)	Wigley, Dafydd
Rowlands, Ted	Willey, RtHon Frederick
Ryman, John	Williams, Rt Hon A.(S'sea W)
Sandelson, Neville	Williams, Rt Hon Mrs (Crosby)
Sever, John	Wilson, RtHonSirH.(H'ton)
Sheerman, Barry	Wilson, William (C'trySE)
Sheldon, RtHon R.	Winnick, David
Shore, Rt Hon Peter	Woodall, Alec
Short, Mrs Renée	Woolmer, Kenneth
Silkin, Rt Hon J. (Deptford)	Wrigglesworth, lan
Silverman, Julius	Wright, Sheila
Skinner, Dennis	Young, David (BoltonE)
Smith, Cyrill (Rochdale)
Smith, Rt Hon J. (N Lanark)	Tellers for the Noes:
Snape, Peter	Mr. Lawrence Cunliffe and
Soley, Clive	Mr. George Morton.

Question accordingly agreed to.

Resolved,

That this House, greatly concerned about the difficulties facing those who cannot find jobs, supports the Government's policies which are helping to make British industry more competitive and which therefore offer the best prospect of a permanent improvement in job opportunities for people in this country.