Unemployment

HC Deb 05 July 1982 vol 27 cc66-108

7 pm

Mr. David Penhaligon (Truro)

I beg to move, That, in the opinion of this House, the continuously rising trend of mass unemployment in circumstances of world slump and a stagnant United Kingdom economy requires a government-funded, locally administered programme of capital, maintenance and conservation works, expansion of personal services for the elderly, the sick and the educationally deprived, two-year youth traineeships, and incentives for job-sharing. I recommend to the House the Select Committee report by another place. The Committee was under the chairmanship of my noble Friend the Baroness Seear. Much of what we have to say tonight is similar to the findings of that Select Committee because that was a remarkably useful document. If I could make the report compulsory reading for nearly all hon. Members, I would achieve something useful.

There are 3 million unemployed. Everyone in the country knows that. We talk a great deal about the latest figure and whether it has gone up or down a few thousand. The figure of 3 million unemployed is tragic. Aspects of that figure are more tragic than the figure itself. For example, I draw the House's attention to the fact that 1 million people have been unemployed for over a year. More remarkable is the fact that 250,000 people under the age of 25 have been unemployed for over a year.

Some of the social effects of unemployment are well documented and are known to hon. Members. They have been studied at length at various inquiries. Those of us who do not live in some of the more publicised areas where there are social effects of high unemployment know, merely by walking round our constituencies and talking to people, how much despair there is. I am sure that all hon. Members hear the forlorn question "Will I ever work again?" Time after time we all hear that question.

Liberals believe that the long-term prosperity and employment prospects of the nation are dependent on a strong industrial base. That is overwhelmingly so. In the long run we see no alternative to renewed determination to achieve expanding productivity and encourage innovation and investment in our industrial base. Liberals believe that that, combined with a new industrial settlement based on profit sharing and greater employee involvement in the running of the enterprise, should be a long-term strategy for Britain.

We recognise that the Government have made some progress on inflation and productivity, although we believe that the price paid has been too high. We believe that the nation would be insane to pursue policies that simply threw away those hard-won gains. Any short-term strategy that reduces competitiveness will, in the long run, do far more harm than good.

A simple general reflation, particularly if the nation has not had the chance to endorse an incomes policy through a general election, could cause the entire United Kingdom economy quickly to degenerate into a disaster when we would witness the bane of all Governments—simultaneous increasing inflation and rising unemployment. Therefore, we reject a simple general reflation of the British economy. However, we do not believe that that is any excuse for doing nothing. We accuse the Government of not doing enough for those who have been hardest hit.

Some further analysis of the figures brings home that point. In January 1980 355,000 people in Britain had been unemployed for over a year. I have already said that that figure is now over 1 million. In January 1980 just 55,000 under-25s had been unemployed for a year, although that is far too many. The figure now exceeds 250,000. Now, in total, 1.1 million people aged under 25 are unemployed.

Liberals believe that there is a strategy that can mitigate the worst effects of the recession and high unemployment without simply taking the economy back to where we started three or four years ago. The motion outlines the gist of what we intend.

We want a Government-funded, locally-administered programme of capital, maintenance and conservation works, and an expansion of personal services for the elderly, the sick and the educationally deprived. We want two-year youth traineeships and incentives towards job sharing.

Some people may ask why that programme should be locally administered. We advocate that on a number of grounds. We believe that such a system is much less bureaucratic than Whitehall. The people in charge will react faster than Whitehall. Schemes put together locally will be more appropriate to the locality to which they are applied than schemes dreamt up by Whitehall. The programme should be run by a combination of the Manpower Services Commission, county or district authorities, the local trade unions, the local businesses and probably some voluntary organisations.

The emphasis of the organisation must be to help those who are particularly affected by the recession. It must be on improving infrastructure and training. The schemes should be directed at those who have been unemployed for over a year and the unemployed who are under 25. Local schemes are not difficult to envisage. Sewerage in Britain is becoming an appalling joke. There have been massive collapses in sewers built about 80 or 100 years ago in some of our Northern cities. There should be great investment in British Rail when the present dispute is settled, we hope sensibly, so that full advantage can be gained from it.

There should be massive local schemes on insulation. The Government's alternative is to build nuclear power stations, which cost £1 billion each. We should like to see local schemes of improving local road structures and our transport. Those who live in rural areas, as I do, are not hard pushed to think of villages and towns where dramatic road improvements have been urgently needed for a long time.

My hon. Friends will be going into greater detail on such schemes. It is not difficult to think of the infrastructure that can be improved. It is not difficult to think of schemes that in the long run will not just help the unemployed of today, but improve the infrastructure of the United Kingdom so that, when the economic revival comes, it is based on something real. We would also massively increase the number of home helps. That alone could save the National Health Service hundreds of millions of pounds in care of the elderly—an issue that will become one of the great problems of the next decade.

Training must be developed on two fronts. It is a remarkable feature of the current incredible level of unemployment that few highly skilled people are unemployed. If hon. Members do not believe me, they should visit their local labour exchange, talk to the manager and ask how many skilled people are currently available in his area. I agree that there are quite a few in some areas, but as a percentage of the total they are few. An improvement in the training of the British work force will mean that improved skills will be passed on to the British economy.

There should be training for the 16 to 18 age group. During the next few years, emphasis should be placed on working towards a new frame of mind so that 16 to 18-year-olds are regarded as trainees, as in a half-way house between full-time education and full-time work. They should be regarded as full-time trainees, spending some time in local colleges of further education and some time in a work place. That would break down the ludicrous divide that has developed in Britain during the past decade of people being regarded as being either educated or working. There must be a transitional stage.

Such a scheme must be far better than the youth opportunities programme. I recall the programme being introduced. I confess that at the time I thought that it was a sensible measure and that it could help to deal with some of the problems that I have encountered. I welcomed it, but it has degenerated and is no longer acceptable.

One of the joys of representing a constituency such as mine, where accents are perhaps stronger than in others, and also being a native of the area, is that one receives letters that are written as the writer speaks. One of my dear farming friends complained to me about the local Manpower Services Commission. There were a couple of paragraphs of tirade about "they B's" down at the employment exchange. He then tore into the real purpose of his letter. He asked me why he did not have his free boy. "Harry up the road got a free boy. Bill down the road got a free boy. Where is my free boy?" Being a modern Cornishman he said that if they had run out of free boys he would have a free maid. My constituent clearly believed that it was his right to have either a free boy or a free maid. That is what YOP has degenerated into and why it is no longer an acceptable method of training our young people.

A better scheme will be much more expensive than that which was recently announced by the Secretary of State for Employment. Training is an important part of giving our young people a real opportunity in life. The main thrust of the Liberal argument is that there is an alternative that does not stoke up inflation while helping those who are most affected by the recession.

Restructuring in much of our industry is necessary. We know from our experience that much of it is painful, especially to those who are directly involved. But the Government must be seen to do far more for their victims. They must do more for their victims if they hope to continue with some of the improvements in industry that have been achieved. If they do not, the backlash that many people know is already building up will develop into a thrust that will push the Government's improvements to one side. Too many people have suffered a great deal. The Government would be foolish to ignore them.

I have outlined specific and practical measures to reduce unemployment that will not at the same time wreck a strategy, parts of which we approve of. A change in policy such as I have outlined is needed, to save our cities, our social life and the young people whom we know well. I hope that the House will accept the motion.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Mr. Speaker has selected the amendment in the name of the Prime Minister.

7.15 pm

The Minister of State, Treasury (Mr. John Wakeham)

I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof: this House, greatly concerned about the problems of unemployment, supports the Government's policies to improve the performance of the British economy, which offer the best prospect of a permanent improvement in employment opportunities, as well as the Government's substantial programme of special employment and training measures designed to help those hardest hit by economic adjustment. The Liberal Party is right to use its Supply day to focus attention on the economy, which is a central issue, and on the United Kingdom's poor performance. We have no quarrel with that. There were passages in the speech of the hon. Member for Truro (Mr. Penhaligon) with which I agreed. I am not sure, however, that I agree with all of his anecdotal evidence. We were less than happy with the terms of the motion. It does not properly address itself to the gravity of the deep-seated problems that face the United Kingdom's economy, over and above the massive problems that face us as a result of the world recession.

Our amendment recognises in part that it is not possible to discuss unemployment sensibly without looking more widely at the performance of the British economy and the way in which the Government have tried to tackle its deep-seated problems. We have recognised that the problems must be tackled with consistency of purpose if the economy is to provide and sustain a growth in employment.

When the Government came into office we had witnessed the British economy become one of the weakest and most inflation-prone of those of all the major industrial countries. Its relative decline had been long run. That was demonstrated in the trends of rising unemployment and inflation. By 1980, inflation had risen above 25 per cent. and unemployment was nearly 1½ million. Our share of world trade had been halved, living standards in several European countries were half as high again as our own. Many of our great industries had long since ceased to be able to compete effectively in world markets. For example, we were building only three in every 100 new merchant ships; 25 years earlier we had been building three in every 10. In the car industry, by 1980, fewer than half of the new cars bought in Britain were made in Britain. In 1960, the United Kingdom was a net exporter of 500,000 cars. By 1980, we were a net importer of ½ million.

We were losing our traditional markets, and the deep-seated problems of the British economy had been getting worse. Unrealistic wage settlements were rapidly helping to price British goods out of the very markets that could sustain our wealth and employment. Unit labour costs doubled between 1975 and 1980. In Canada they rose by 50 per cent, in the United States by one-third, in Germany they rose by one-sixth and in Japan there was no increase.

The increase in Britain as compared with our major competitors was marked, and a sure prescription for rising unemployment.

In the years up to 1980 also personal incomes had been rising fast at the expense of company incomes. Between 1977 and 1980, real personal disposable income rose by 17 per cent. while companies' incomes fell by one-third. That squeeze on profits meant a squeeze on investment. A squeeze on investment means a squeeze on tomorrow's jobs.

When we came into office, past failures had been catching up with us rapidly. The effect of that long run process in human terms can be seen in many areas. The failure to be able to compete effectively meant that we lost our markets, and the loss of those markets meant that we lost jobs. No one can deny the connection between the two.

While this was happening, there was no shortage of demand in this country. The propensity to import proves that. But if there was no shortage of demand, there was a shortage of supply of British-made products of the right type, the right quality and the right price. During the 1970s, there was a 300 per cent. increase in wage costs while output rose by only 15 per cent. Only 5p in every extra £1 of demand went into higher output. The other 95p went into higher prices or higher imports.

Of course, our problems were not solely of our making. They were compounded by the oil price shocks—the first nearly a decade ago and the second some three years ago. Each was equivalent to a loss of some 2 per cent. of GNP in OECD counties. As a result of those shocks, growth in OECD countries was halved and growth in world trade was also halved. A barrel of oil is now 26 times as expensive as it was in 1970. We are still living through the effects of the impetus that those price increases gave to the general rate of inflation and to the problems of adjustment that they caused.

To a large degree, however, we the industrial countries brought the problems upon ourselves. There is widespread agreement that the economic policies pursued by the American Government in the late 1960s and early 1970s must take some share of the blame. This coincided with a boom in many industrial countries including our own, but the growth that we saw then could not be sustained. The oil price rises to which I have referred were but an extreme example of the surge in commodity prices generally, which in turn was just one symptom of the stress and strain under which the international economy was operating.

The only solution to all these difficulties was to increase flexibility and to improve competitiveness with new products, improved quality in old products and lower costs, all of which Britain found it difficult to provide because of our deep-rooted domestic problems.

Therefore, my right hon. and learned Friend the Chancellor of the Exchequer in his first Budget said that his strategy would be based upon four main principles. First, there was a need to strengthen incentives by allowing people to keep more of what they earned so that hard work, talent and ability were properly rewarded. Secondly, there was a need to enlarge freedom of choice for the individual by reducing the role of the State. Thirdly, there was the need to reduce the burden of financing the public sector and thus leave room for commerce and industry to prosper. Fourthly, there was the need to ensure so far as possible that those taking part in collective bargaining understood the consequences of their action. That is the way to promote a proper sense of responsibility. People had to understand and accept that the only basis for real increases in wages and salaries was an increase in national production. Higher pay without higher productivity could only lead to higher inflation and unemployment.

My right hon. and learned Friend also stressed that those four principles in themselves were not enough. We realised that it was crucial for the health of British industry to bring down inflation and interest rates. We recognised that inflation destroyed competitiveness, undermined confidence, created uncertainty and reduced consumption. We knew, too, that higher interest rates reduced the incentive to invest, cut company incomes and, like inflation, reduced confidence. Our economic policies therefore had to be aimed at creating the stable climate that would allow industry to change and to grow. Our priority has been the defeat of inflation because only with inflation under control and continuing moderation in the growth of wages and other costs is there a chance for competitive and profitable industries, with competitive and productive work forces turning out products that people want to buy. Only with these will there be new and permanent jobs.

Bringing inflation down and keeping it down is the greatest single contribution that the Government can make to ease unemployment, because the link between unemployment and inflation is the key to understanding the plight that this country has suffered. The rise in unemployment is not the bill that we are paying for reducing inflation now, but the bill that we are paying for having allowed inflation to continue for so long in the past.

In all this, we have led the way towards an international acceptance that responsible and balanced fiscal monetary policies are the way to become the masters rather than the servants of inflation. Other countries throughout the world are increasingly accepting the wisdom of that formula and their inflation rates, too, are beginning to fall.

The aim of our economic policies has been to create the right climate for long-needed changes in the economy to take place, but these have been framed in the recognition that it is not the Government but the people who create the wealth and the jobs that flow from it.

In addition to persevering with fiscal and monetary policies which create the climate for change, we have undertaken specific measures to encourage and foster enterprise and the growth in the jobs that go with it. First, we have sought to get rid of the excessive controls imposed by Government. These contributed to problems on the supply side of the economy. Therefore, one of our first and most important steps was, where possible, to sweep away, and where complete abolition was impossible, to ease the burden of those controls. Exchange controls, dividend controls and controls on pay and prices have been abolished, as have office development permits. Industrial development certificates have been suspended and planning controls have been eased, as have many of the more oppressive provisions of employment law.

We have also set about reducing and reforming taxation. Income tax rates were reduced in the Government's first Budget to restore incentives and to provide scope for enterprise and initiative. We have reduced the weight of capital taxes. Through the encouragement of schemes for profit sharing by employees, we have promoted the wider ownership of capital that is so crucial to our economic aims. We have removed some of the disincentives to de-mergers and have seen an encouraging trend in management buy-outs. All of these factors will increase the flexibility and adaptability of the British economy.

Mr. Derek Foster (Bishop Auckland)

The Minister has given an extremely impressive catalogue of the initiatives taken by the Government to encourage enterprise to flourish. Can he explain how, despite all that, the Government have managed in three short years to destroy more jobs in the Northern region than were created in 15 years? Small firms are going out of business every day, and more enterprises have gone out of business in the North-East since the Conservatives came to power than were created previously. How has that come about?

Mr. Wakeham

I do not know whether the hon. Gentleman heard the earlier part of my speech. The whole thrust of my argument has been that we are dealing with a deep-seated problem going back many years. Given the world recession and the changes that are necessary, the increase in unemployment which, most regrettably, has arisen in recent years has been the direct result of failure to deal with those problems over a long period, and not the result of the policies of the present Government. Our policies are designed to create jobs in the future and there are beginning to be signs that that is now happening.

My right hon. and learned Friend the Chancellor's most recent Budget was described as a Budget for industry, which means a Budget for jobs. In it, £640 million was taken off the national insurance surcharge and industry's costs were reduced by the energy, construction and innovation packages. There was also £1½ billion to be spent on special employment and training measures in 1982 and 1983, excluding the community work scheme announced in the Budget.

Mr. Robert Maclennan (Caithness and Sutherland)

I cannot quite follow the logic of the Minister's speech. He told the hon. Member for Bishop Auckland (Mr. Foster) that the Government accepted no responsibility for the doubling of unemployment since they came to office. Yet in almost the next sentence he says that the Government claim some responsibility for having produced a Budget for jobs. How many jobs did the Budget create?

Mr. Wakeham

We are trying to achieve an improvement in the country's industrial structure. I am surprised that the hon. Gentleman does not regard that as the right policy to pursue. It is naive to suppose that one can look at so recent a Budget and decide whether it has been a success or a failure according to the number of jobs created since April. Having known the hon. Gentleman for many years, I know that he is capable of arguing on a better basis than that.

My right hon. Friend the Minister of State for Employment will discuss further the employment measures that we are taking. Our expenditure plans have been framed to help those most badly affected by the recession. The plans published in the public expenditure White Paper last March represented a flexible response to changed circumstances, but that flexibility was tempered by a necessary prudence.

There have been many calls for more money to be spent to alleviate unemployment. Today's motion is only one of many such calls. We have had to resist pressure from our critics to reflate the economy. Superficially tantalising programmes have been advanced for higher spending and borrowing and lower taxes.

However, it is worth bearing in mind the recent experience in France. Just over a year ago the new French Government implemented a policy of reflation in order to secure high growth and to reduce unemployment. The result, contrary to the trend in all other major economies, is that in France inflation is where it has stood for nine months—14 per cent. Unemployment has been rising faster than in Britain. Now the French Government have courageously taken action to put the economy right. With the latest devaluation comes a package of economic measures to put a lid on inflation and curb public spending. The word "austerity" replaces "expansion".

If only our French friends had been in a position to learn at the outset from the failures of the Labour Government. They, too, relied on massive public spending and borrowing, on nationalisation, subsidies and controls to create rapid economic growth and full employment. But the alleged trade-off between inflation and unemployment failed to materialise. Unemployment and inflation rose together. Over the period from 1973–74 to 1976–77 unemployment more than doubled and price inflation reached almost 27 per cent. The pound sank to an all-time low and only crisis measures imposed by the International Monetary Fund brought back sanity.

Mr. Penhaligon

The Minister could not have heard what we said. The argument for general reflation was dismissed. We recognised that it is in the long-term interests of Britain to have a strong industrial base. We made it clear that we want to do nothing to stop that progress. We would not act in precisely the same way as the Government, but we recognise that some progress has been made. The thrust of our argument is that there are specific and practical measures to reduce unemployment among those who have been the most hard hit. Can the Minister give us the Government's views on that argument?

Mr. Wakeham

I said earlier that there was much in the hon. Gentleman's speech with which I agree. My hon. Friend the Minister of State, Department of Employment, will deal with the points raised.

It would be a disservice to both the employed and the unemployed of the country to answer the call to alleviate unemployment with major new expenditure. To do so would be to fall into the old trap of trying to provide a short-term solution to a long-term problem. Yes, one can always buy jobs in the short-term, but in the longer term the price is more inflation. To try to buy those jobs would be to throw the economy back into the vicious cycle of inflation and unemployment. I agree, it is possible to buy more jobs, but whose jobs should we sell in doing so?

We have also introduced specific measures to help reduce the restrictions that have long and damagingly hampered Britain's economic performance in the labour market. The Government have taken firm action to reduce these and help people price themselves back into jobs. We have set about restoring the balance of industrial power. We have sought to give the unions back to their members and to the workforces that they claim to represent. Excessive trade union power has been a major factor in the growth of unemployment because excessive wage increases have priced unionised and non-unionised workers alike out of their jobs.

Much of our industrial policy has been geared to the positive promotion of industrial change, and hence the generation of jobs. Of course, a great deal of money is spent on supporting the casualties of the past. Indeed, this year over 50 per cent. of the Department of Industry's budget still goes in this way. This is the price of past intervention and warning to those who ask for further Government intervention and means subsidisation But the emphasis even now is much more on support for innovation. We recognise that the Government have a role in accelerating the use of new technology. That is why we are supporting microprocessors, fibre optics, robot machine tools, computer-assisted design and manufacture, and advanced computer technology. That is why the small engineering firms investment scheme is helping this hard-hit sector to re-equip with new equipment for the upturn, and why we have put money into new technology. We are considering help with the fifth generation of computers. We are boosting the information technology revolution. The Budget included tax and expenditure measures amounting to £130 million over three years specifically to support and encourage innovation. By promoting industrial change we are promoting the new industries that will provide jobs for the future.

Finally, I mention the encouragement we have given to small businesses. Among the measures we have introduced are the business start-up scheme, the loan guarantee scheme and the venture capital scheme. The last Budget, like its two predecessors, was designed to provide a special tonic for small businesses and we shall continue to publicise the measures that are available to them. The encouragement we have given is important because the small business sector is the real home of initiative and enterprise, quite apart from having a significant contribution to make to the economy in terms of output and employment.

Mr. Tim Renton (Mid-Sussex)

As regards the small business loans scheme, can my hon. Friend, wearing his Treasury hat, assure us that, even if there are a fair number of failures among the small firms initially encouraged by the scheme, the Treasury will nevertheless view the continuance of the scheme with a kindly and generous eye? It is inevitable that in helping entrepreneurs to get under way some will go bust in the first year or two. If that happens it would be a pity if the Treasury were too pessimistic about the future of the scheme.

Mr. Wakeham

I can give that assurance to my hon. Friend. The loan guarantee scheme has a factor built into it because we recognised that very point. There are bound to be a number of losses because that is in the nature of venture capital. We recognise that, and would not expect the Treasury to do anything else. We shall need to look at the experience gained and at the losses compared with the benefits. If any adjustments are necessary, we shall make them. The Government will encourage the scheme because we believe it is a success and is meeting a very important need.

So we have done a great deal both specifically and generally to help to create a climate for a secure growth in employment. Our economic policies offer the best prospect of a permanent improvement in employment opportunities. Inflation is now down to 9½ per cent. and its trend is firmly downwards. Getting it down and keeping it down is a pre-condition for a growth in output and employment which can be sustained.

Most outside commentators agree with our assessment that output will rise and inflation will continue to fall in the course of 1982. Of course, unemployment is still at a tragically high level and the rate of return on industries' investment is still much too low. In spite of the gains in productivity, and the increases in competitiveness and output that have taken place over the past year, the economy is still at an early stage in its recovery from recession and from a period of painful but necessary change.

Our economic policies have been designed to create the climate that will allow that recovery to gain strength. To do that we must maintain the strategy that we intitiated in May 1979 and have been pursuing ever since. The successes we have seen on inflation and interest rates are not the result of the 1982 Budget—the full benefits of that are still to come through. They are the result of previous Budgets and our determination to stick to our economic policies.

However, there are limits to what Government can and should do. We have set out clearly the financial framework within which economic decisions can be made. But economic growth and the defeat of inflation are the responsibility of us all. It is up to work force and management now to ensure that the gains in productivity, competitiveness and profitability are not lost through excessive pay settlements. In the last analysis, a higher level of employment will depend not on what Government do but upon continued improvement in industrial competitiveness and profitability and sustained moderation in pay bargaining.

7.40 pm

Mr. Giles Radice (Chester-le-Street)

I should like to congratulate the hon. Member for Truro (Mr. Penhaligon) on the manner in which he moved the motion. Hon. Members have also heard an interesting but selective view of recent history and events by the Minister. I must say that the hon. Gentleman was remarkably complacent about unemployment. He was more complacent than almost any Minister I have heard in the House for a long time.

The Government have been in power for three years. It is therefore legitimate for the House to make a judgment on their record in employment and unemployment. The facts speak for themselves. In May 1979, the total number of unemployed was 1,299,000. In June 1982, it was 3,061,000, an increase of almost two and a half times. However one views the figures, the increase is dramatic. I take first the long-term unemployed. In April 1979, those out of work for more than a year numbered 346,000. In April 1982, the figure was 994,000. The Manpower Services Commission says that the figure today is almost certainly 1 million. That is an increase of well over two and a half times.

In April 1979, 190,000 of those under 20 were out of work. In April 1982, the figure was 500,000, again an increase of over two and a half times. Another means of studying youth unemployment is according to proportion of the age group. In January 1979,9 per cent. of the under-20s were unemployed. That was far too high. However, in January 1982, over 22 per cent. of the under-20s were unemployed, despite all the youth opportunities programmes and so on. Youth unemployment is higher than among the rest of the population. It is rising faster and lasting longer.

For many years, unemployment has been far greater in some regions than others, as I know, representing a Northern region constituency. It is, however, clear from the figures that during this recession the regions with already high unemployment have suffered the most. In the Northern region, unemployment in May 1979 was 7.9 per cent. In May 1982, it was 16 per cent. In Wales, in May 1979, it was 7.5 per cent. It is now 15.8 per cent. In the North-West, the figure in May 1979 was 6.7 per cent. It is now 15.1 per cent. In Scotland, the figure in May 1979 was 7.3 per cent. It is now 14.5 per cent. The new region to join the super-league is the West Midlands. Whereas unemployment in that region in May 1979 was 5.1 per cent. and below the national average, it is now 15 per cent.

If one analyses the figures of total unemployed, the long-term unemployed and youth and regional unemployment figures, one sees clearly that this Government have presided over a dramatic increase in unemployment—an increase that has huge economic, social and personal costs. The Minister said nothing at all about that.

The House of Lords Select Committee report on unemployment estimates that the fiscal cost of unemployment represents £5,000 per unemployed per year, or £15 billion. The report also concludes that unemployment is among the causes of ill-health, crime and civil disorder. I know from my surgeries—I am sure that other hon. Members will agree—that it is also a threat to personal happiness and family life. Again, nothing of that was heard from the Minister.

The Government have three arguments to justify their approach. The first, which we do not hear so much about at the moment, is that things will get better. The Government have been saying this for three years. The Chancellor of the Exchequer on 23 December 1980 rejected out of hand a prediction that 3 million people would be out of work in Britain by mid-1982. The Chancellor was also telling the Commons Treasury Committee in March 1981 that he had considerable confidence in asserting that the recession would bottom out some time during the first half of the year. Yet, judging from the latest reports, recovery is once again put off into the future.

The CBI is gloomy about business prospects. The London Business School has downgraded its growth forecasts. The Bank of England and, we are told, the Treasury have lost their optimism about what is going to happen this year. The Manpower Services Commission, in an interesting analysis in the Financial Times today of 15 forecasts, sees no chance of any reduction in unemployment this year. It is also very uncertain about what is going to happen next year.

The second argument heard from the Government is that it is somehow not their fault. This was heard again today from the Minister. According to the hon. Gentleman, it was all the fault of the Labour Government and we are paying for what happened during the 1970s. Another version is to blame the trade unions or the world slump. I note that the Chancellor of the Exchequer, instead of addressing himself to unemployment over the week-end, was thinking aloud about a third batch of industrial relations legislation.

Mr. John Golding (Newcastle-under-Lyme)

He thinks that the election is in the bag.

Mr. Radice

That is correct. It is right that the world slump is a factor. But neither Ministers nor Conservative Members admit that unemployment in the United Kingdom has risen faster and higher than that of all other European countries. We hear what happens to oil prices. We never hear that we are self-sufficient in oil and that the increase in oil prices should have allowed us to grow faster—not slower—than our competitors. Output has actually fallen by 7 per cent. since May 1979. This is the proud record over which the Government preside.

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

I wonder if the hon. Gentleman will construct a theory to explain why the Ford motor company in Britain, although fully equipped and staffed to build all the Ford motor cars that are sold in Britain, only sells about half that number because it only produces half the number. Does the hon. Gentleman blame the Government for that, or does he think that there is some little problem of industrial relations, inflation and other things that go back into the past?

Mr. Radice

There has, of course, been a long-standing problem in the car industry as in other parts of our industry. Hon. Members on both sides of the House agree that we need to improve our competitiveness.

Mr. Foster

Will my hon. Friend explain to the Secretary of State that the United Kingdom Ford motor company was the only part of the European Ford motor company making profits? Will the Secretary of State explain why that has happened?

Mr. Radice

We can all select particular parts of the argument to suit our position. The Secretary of State wanted to interrupt me because he thought that I had made a good point about the falling output of the United Kingdom and needed a diversion, which is a well-known tactic of his.

The third argument sometimes used by the Government is that there is no alternative to their policies, and we had much of that from the Minister. They say that there is no alternative to the policy of depressing the economy by monetary and fiscal squeeze and cuts in public spending, and that that is the only policy that any Government can ever pursue.

The Minister said that other countries are learning from our experience. I do not know what they are learning. However, he is ignoring what is happening in other countries such as Austria and Sweden, where there is much lower unemployment and inflation. He mentioned France, and it was interesting to hear him read lectures to the French Government. However, unemployment is begin-ning to come down in France, as is the level of inflation, neither of which facts he mentioned.

The Secretary of State may laugh, but those are the figures. The Government's attitude also ignores the proposals from many quarters—from the Opposition, from the Liberals and the Social Democrats, from the House of Lords Select Committee, from the CBI and the TUC. They also ignore common sense. Is it really likely that one could create real jobs—that is what we hear about from the Government—by cutting demand, as the Government seem to believe? That is not possible.

The Liberal Party has made some suggestions for alternative policies, of which, as far as they go, I am in favour. However, they do riot go very far because, with 3 million unemployed and 1 million out of work for over a year, we shall need a far more comprehensive and sustained effort by Government than was suggested, despite his eloquence, by the hon. Member for Truro. We shall need, over a number of years, economic expansion, sustained growth of output and expansion of public investment and public services to create jobs in house building, sewerage schemes, urban renewal, railway electrification, modernisation of telecommunications. These are all proposals that the Government have set their face against, but which would be valuable for the economy and in the creation of jobs. We also need more vigorous regional policy.

We shall also need systematic job creation measures to help the long-term unemployed. Most of us are extremely disappointed with the Government's record on that. They have not got down to the problem. We shall need massive expansion of training to help the young unemployed.

We shall also require a combined effort by Government, industry and the trade unions if the economy is to run at a higher level of demand, as we believe—I do not know if the Liberal Party believes it and I am not certain what the Social Democrats believe—that we have to run the economy at a higher level of demand.

We must have investment by industry and if we are to keep inflation down we shall need an agreement on incomes—I believe that strongly. We are in favour of a national economic assessment, with the trade unions, and the Labour Party is far more likely to get such an assessment than any other party.

Mr. Ian Wrigglesworth (Thornaby)

At what price?

Mr. Radice

I understand that the Secretary of State prefers an incomes policy of 3 million unemployed, but I do not think that this is a sensible way to run an economy. We can have growth in output as well as keeping inflation down. That is possible, and something for which we strive.

Above all, what is required is political will. We have a responsibility to face up to the problems of unemployment. The Government did not do that. We have been told that the Government think that they can get away with 3 million unemployed. If that is the case, they are even more cynical than I supposed. They will do lasting damage not only to their fortunes, but to the economic, social and political fabric of the country.

What is required is not just a new set of policies but a new Government attitude to unemployment. If the Conservative Party cannot change its views, it should make way for a party that can.

7.56 pm

Mr. Nicholas Lyell (Hemel Hempstead)

The hon. Member for Chester-le-Street (Mr. Radice) resumed his seat after a burst of enthusiasm, but I wonder whether he might not be happier resuming it, not on the official Opposition Front Bench, but on the other opposition Bench. Perhaps it would be a good thing for the country if one day he did so.

I intend to make one or two radical suggestions and, since most radical reform comes from the Right, I feel that I am on strong ground. I shall feel on stronger ground, and my right hon. and learned Friends will also feel that, if I start by saying what I sincerely believe—that the sentiments in my right hon. Friends' amendment are much more soundly based than the broad mishmash—containing some good ideas, which I acknowledge—in the motion.

There is no doubt that the Government's emphasis on the fundamental need to improve the United Kingdom economy and its ability to compete are not only to be applauded but are essential to the maintenance and improvement, for the vast majority of our people, of employment prospects.

We must not forget when discussing unemployment that between 85 per cent. and 90 per cent. of the eligible working population is employed. If their jobs are to remain secure and to be of a nature that will keep the country in, or restore it to the forefront of, the industrial world of modern technology and service industries, we have to create and maintain a climate in which that 85 per cent. or 90 per cent. of jobs can be maintained.

I can illustrate this from my constituency. In Hemel Hempstead we have a large number of businesses, some of which have gone through a difficult period as a result of many defects in employment practices and weaknesses in our economy. They underlie clearly, as all hon. Members must recognise, the recent rise in unemployment figures from the approximately one and a half million that we inherited to three million today.

It is noticeable that just one of my local businesses—one of the larger ones—has laid off during these three years enough people to account for the whole rise in unemployment in my constituency. It is not the only business to lay off people, and this shows the underlying strength of so many of our firms. While jobs have been lost, even in my fortunate constituency, many jobs have been and are being created. It is the fundamental good sense of Government policy that provides the seedbed or the soil in which those strong jobs can grow and flourish. That is why I strongly support the fundamental ethos of the Government's amendment.

Before putting forward my more radical ideas, I wish to applaud the part of the amendment that draws the attention to the new training initiative. I greatly welcome the applause given to that new training initiative by the right hon. Member for Crosby (Mrs. Williams) and her acknowledgment of the fact that this Government have put the scheme into effect, although the Labour Government were unable to do so before the general election when she was a member of the Labour Cabinet. The new training initiative and the new youth training scheme will provide 517,000 training opportunities for 16 to 17-year-olds and at least 300,000 new placements for those who would otherwise be unemployed. That is to be greatly welcomed. It is a radical reform from the Right and we should welcome it, just as the whole country is welcoming it. The fact that it receives more widespread support than from the Right alone is a sign of its strength.

Mr. Foster

I cannot believe my ears. The most Right-wing Secretary of State for Employment that we have ever had happened to sign the dotted line but the initiative is the result of a consensus worked out since 1977 by the education and training agencies and the voluntary organisations. How does the hon. and learned Gentleman dare to say such a stupid thing?

Mr. Lyell

In his indignation, the hon. Gentleman has not listened to me.

Mr. Foster

The hon. and learned Gentleman said that the initiative came from the Right.

Mr. Lyell

I said that the scheme had been put into effect by the Right. The party of the solid and sensible Right has implemented what others have only talked about. [Interruption.] Some hon. Members may find that humorous, but it is a sad fact that when the Labour Government had the power they were unable to do anything, in practice, about the situation.

However, I should like to build upon the rock of our sound financial and economic policies, which will sustain the jobs that we now have. I shall argue the case for national community service with a civil defence and home defence option. I recognise that that is to some extent a radical case, but I am glad that all the parties have given it some thought. That is beneficial. It may comfort the hon. Member for Truro (Mr. Penhaligon) to know that some of its elements can be culled from the motion. However, I say no more than that.

We must ask whether the Government's policies—right as they undoubtedly are—are sufficient to enable us to tackle successfully the problem faced by Britain and by the Western world. No one expects a Government to dither over possible changes in the future. No one can govern from the Front Bench by saying that the Government might do this or that. However, such ideas can be aired from the Back Benches on both sides of the House.

I pick up the figure of 1.1 million unemployed under the age of 25, because that fits neatly into my argument. Today, there are about 3 million unemployed, excluding school leavers. In July 1981 there were 2,850,000 unemployed, including school leavers. That figure, is somewhat lower than the figure for 1982. Nevertheless, at that time 1.16 million young people aged 24 or under were without a job and spent an average of 12 weeks without employment. That shows that even when the number of unemployed falls as a result of our sound economic policies—[Hon. Members: "When?"] As hon. Members know, to some extent, that is a silly question. I believe that those sound foundations exist and that the number of unemployed will fall within the foreseeable future. The more important question is whether that will, of itself, solve the structural problems facing Britain and all other nations. If the 300,000 new jobs created by the new youth training scheme are subtracted from the figure of 1.1 million it leaves a balance of 800,000. That is approximately equivalent to the number of young people who reach the age of 18 each year. In this decade, the number of those reaching 18 every year is between 870,000 and about 830,000. We already know that about the same number of young people will be out of work for the foreseeable future. I have chosen the decade as a suitable period, because it is hard to see beyond that, but sensible to make policies within that framework.

Sensible people ask themselves whether there is work to be done. The answer is that there is work to be done in the social services, in caring for the elderly, in the Health Service, in education, in conserving and improving our environment and in home, local and civil defence. That work needs to be done, and is highly suitable for young people. I echo the words of Professor Ralf Dahrendorf when I say that it is relevant work and that properly organised it could be fun. That is important if the work is to capture the imagination of the young. In addition, young people are ready and willing to serve. To some extent, such ideas have been canvassed by the body known as Youth Call. Recently, the report of the House of Lords Select Committee on unemployment considered these ideas. Youth Call built upon the work of Mr. Colombatto of the London School of Economics. It is constructive work and I have based much of my case upon it. The work was rather belittled by the report and that was emphasised by its reference to a "Mr. Colombattino". That is an interesting way of putting down an argument and it may be taken up by other hon. Members, with amusing effect. However, I assume that it was a printer's slip and not deliberate.

Thus, I have shown that there is much work to be done. Mr. Colombatto pointed out that there were between 600,000 and 1.4 million jobs on the civil side, such as the social services. It can be argued that he has exaggerated or underestimated the number of jobs in each area, but I have considered the matter carefully and find no serious fault with the theory as a whole. To illustrate the value of his theory it should be borne in mind that at present it is difficult to finance ancillary staff to help with young children in the classroom. The education of young children is already aided by the assistance of sixth formers, but could be furthered by the introduction into the classroom of young people with some sense of vocation. It is obvious that young people could also help with the care of the elderly and so on and there is no need to expand that point.

Mr. Harry Greenway (Ealing, North)

My hon. and learned Friend has touched on an important area. Would he tie in with what he has said the need to have more than good will and a need to have real knowledge of what a person has to do with young children?

Mr. Lyell

I accept that. I have fairly long experience of the world of infant schools and playgroups. My wife is a trained infant school teacher with a good deal of experience of that area. One is always influenced by one's wife, as the Secretary of State knows well.

Mr. Tebbit

Why pick on me?

Mr. Lyell

Because my right hon. Friend is such a good example of all matters beneficent.

There should be an opportunity for training for these posts, which would last between six months and a year. It would depend on the cost of the scheme how many jobs one sought to create and the length of time that one took. That there should be an element of suitable training is self-evident and it is not so difficult to train people when they are on a one-to-one relationship with existing staff that the scheme need fall down on those grounds.

I turn now to the other self-evident need—the need for home and civil defence training.

Mr. Ted Leadbitter (Hartlepool)

The hon. and learned Gentleman has tripped fancifully over the social and other services where there is a great need for manpower. So that I can feel happier about his fanciful notions, will he tell the House which Government have attacked those services more and have imposed expenditure cuts on those services that have caused unemployment among teachers, among the ancillary services and among the hospital services? I am not here to listen to Hans Andersen's fairy tales. I wish to know which Government have done that. Tell us now.

Mr. Lyell

The hon. Gentleman should do some homework before he accuses those of us who have done it of being fanciful. The hon. Gentleman should also knock a little economic sense into his head. He is so ready to criticise the ideas of others.

Mr. Leadbitter

Confess.

Mr. Lyell

The hon. Gentleman fails to recognise that if one does not keep public expenditure under control the jobs of millions of people will be endangered, as the failure to keep it under control by his Government some years ago damaged the jobs of many people, who have now been thrown out of work.

Mr. Greenway

Will my hon. and learned Friend give way?

Mr. Lyell

I shall not give way at the moment, although I am sure that my hon. Friend's intervention would be helpful.

I would remind the hon. Member for Hartlepool (Mr. Leadbitter) that under the present Government 47,000 more people are at work in useful tasks in the Health Service such as nurses, midwives, and doctors than under the previous Government. That shows something about priorities that the hon. Gentleman seems to have forgotten. However, I have allowed myself to digress.

I turn now to the important need for better home and civil defence training. I do not wish this to be confused in any way with our professional Army, which I would not involve in the training, but it has to be recognised that we know little or nothing—I think that the Falklands conflict has highlighted rather than hidden the fact—of what we might have to face if ever we were presented with armed conflict from the Soviet bloc. We wholly fail to think about or wholly underestimate the force of the conventional attack, let alone the nuclear attack, with which we might be faced. Our will and our ability to defend ourselves would be immeasurably advanced if we gave home defence and civil defence training to all our young people, as virtually every other country in Europe now does. Indeed, only Eire and Britain fail to take that precaution. Countries such as Sweden, Finland, Austria and Switzerland all do it as a matter of course. To those pacifists on the Opposition Benches who might be thinking of objecting, I say that this is a wholly defensive posture that should have their full support as well as the support of those of us who have a profound belief in the defence of our nation in any event.

That kind of training could be carried out by a cadre formed from those who leave the Armed Forces. It is not generally recognised that 45,000 professionals leave our Armed Forces every year and it would not be difficult swiftly to build up a suitable cadre to carry out that training. We have in our 423 Territorial Army centres and in a substantial number of public buildings and other areas that are available the basic infrastructure on which such a system of training, based locally—here again I find something to hand to the hon. Member for Truro—could be built in all parts of the United Kingdom.

Before I sit down, it is incumbent on me to deal briefly with cost. In order that this can be considered more seriously and deeply I shall send a copy of the paper that I presented not long ago to the Konrad Adenauer institute in Germany, where I was glad to find similar thoughts being expressed by members of the Christian Democrats—the CDU. That paper sets out the costings in greater detail.

In summary, on the basis of an honorarium, or payment of the same amount as would be provided under the new training initiative—about £25 a week—offsetting the costs by no more than the unemployment costs, which I am taking as £22.50 per week for each individual—that is literally the benefit and I am not offsetting any of the somewhat airy-fairy benefits that are often put forward as offsets by those who make this type of argument—it would be possible to provide 600,000 jobs a year on the basis of nine months' service for an overall cost of between £1,200 million and £1,500 million. That is not an insignificant figure against the background of important matters such as the public sector borrowing requirement. but it is not such a large figure that it is incapable of being contemplated. At this point I am entitled to say that there are other offsetting benefits that could be taken into account of a less quantifiable kind than the mere unemployment pay that goes out in cash from the Treasury. I quote one because the graph struck me so forcefully and because it probably has not been highlighted before. Even the crime figures follow with extraordinary accuracy the unemployment figures. This has happened through Governments from the late forties and early fifties. Crime is an expensive matter and I mention it as one of the less tangible offsets.

I said that I would put forward some radical thoughts and I have come in for a certain amount of criticism from those into whose heads such thoughts have not hitherto entered, but I hope, nevertheless, that they will find a more fertile seed bed as time gives an opportunity for the hard carapace of the seed to crack and the shoot to grow. I hope that my seed does not fall upon stony ground in the Treasury as well as among Opposition Members.

8.18 pm

Mr. David Alton (Liverpool, Edge Hill)

I was interested to hear the hon. and learned Member for Hemel Hempstead (Mr. Lyell) talking about crime figures and the cost of unemployment, I hope that the Prime Minister, who has denied that there is any relationship between rising crime and unemployment, will take the hon. and learned Gentleman's argument on board. I was also pleased that the hon. and learned Gentleman referred to the Select Committee of the House of Lords, which was more than the Minister did. The report contains many fine proposals. It seemed that the Minister was oblivious to the economic and social costs of large-scale unemployment, which crucifies so many areas.

The hon. Member for Chester-le-Street (Mr. Radice) talked about the need for an incomes policy. I agree wholeheartedly with him. I hope that he will relay that message to the Labour candidate in my constituency and to many of his right hon. and hon. Friends who do not believe in incomes policies. I agree that an incomes policy is entirely desirable.

Mr. Radice

I do not believe in a statutory incomes policy, which I believe is the Liberal Party's policy.

Mr. Alton

Hope springs eternal, but it is gratifying that the hon. Gentleman has come some way down the road of incomes policies. I hope that he will find it in his heart to join us in advocating a statutory incomes policy. As so many of his right hon. and hon. Friends and Labour Party candidates would dissociate themselves from any sort of incomes policy, the hon. Gentleman is somewhere on the right road.

It came as no surprise to my right hon. and hon. Friends and myself to find that the Liberal Party had been given a Supply day this evening, especially when we learned that England would be playing in the World Cup. We last had a Supply day debate when the Liberal and Social Democratic Parties were taking part in another contest at Crosby on Merseyside. It seems that there is something more than coincidence in the timing of these debates.

Mr. Golding

Is that why the Liberal Party decided to put up a Cornishman rather than a true Englishman to open the debate?

Mr. Alton

English or not, I am always happy to follow in the footsteps of my hon. Friend the Member for Truro (Mr. Penhaligon). I am glad that so many of my right hon. and hon. Friends have been able to stay away from the World Cup this evening and to be in their places for the debate, and I am glad to see that some members of the official Opposition are present.

I am sure that all hon. Members are aware of the old and true adage that the devil will find mischief for idle hands to do. Nowhere has the folly of leaving tens of thousands of fellow citizens on the dole queue been more vividly illustrated than in Liverpool, part of which I represent. To pretend that there is no relationship between the dole queue and mounting crime, or the dole queue and inner city disturbances, is at best naive and at worst a deliberate attempt to cover up the consequences of pursuing ruthless and mercenary economic policies.

The hon. Member for Chester-le-Street asked for details of Liberal proposals. He should know that they are all outlined in our document entitled "A Chance to Work", which is available from the Liberal publications department for those who are interested. Before turning to the details of that document I shall direct the attention of the House to unemployment in Liverpool. There are many warnings in Liverpool for other areas which may not yet—perhaps this is true of Hemel Hempstead—have experienced the worst excesses of unemployment. Unemployment in Liverpool since 1971 has increased by about 200 per cent. In that year 5.1 per cent. of the local people were unemployed, compared with 3 per cent. nationally. Today 18.6 per cent. are without work in Liverpool compared with 12.8 per cent. throughout the rest of the country.

The latest figures for Merseyside show an increase of 5,000 jobless with nearly 134,000 out of work in the region. This means that one in five Merseysiders are out of work. My hon. Friend the Member for Truro spoke about the effect that unemployment has on young people. Two out of every five on Merseyside who are under 25 are without work. Underneath those statistics are some alarming trends. More than 4,000 of the 5,000 new jobless on Merseyside are school leavers. There are 54 people registered as unemployed for every unfilled vacancy listed at the city unemployment office. Over 40 per cent of the registered unemployed in Liverpool have been out of work for longer than a year, compared with 25 per cent. nationally.

This generation has undoubtedly been especially hard hit, with about 53 per cent. of those unemployed between the ages of 19 and 34. In parts of the city the story is even worse, with up to 50 per cent. of the population jobless. The manager of one employment office, in Leece Street, told me this morning that 12,665 people are currently registered as unemployed and that only 491 jobs are available. Sixty per cent. of those registered unemployed in that office have been unemployed for 12 months and 54 per cent. are between the ages of 19 and 34.

Not only do those figures highlight the insidious growth of unemployment; they show that a whole generation has been blighted by a curse that they are powerless to resist. In that city there will soon be more citizens without work than in paid employment. What have the people and the Government done in the face of industrial decomposition that has caused the loss of 89,000 jobs in Liverpool during the past decade?

A year ago this week, after I had warned the House only weeks earlier in a debate on youth unemployment that a time bomb was ticking away in the heart of our cities, thousands of young people took to the streets and rioted. The Prime Minister appeared on television dressed in white and speaking at the Royal Agricultural Show. She subsequently appointed the Secretary of State for the Environment as funeral director for Merseyside to bury our remaining businesses one by one.

Then, like Marie Antionette, the Prime Minister dispensed her patrimony. Let them have trees, festivals, and a garden centre but forget about jobs. In tackling the chronic problems of our inner cities, the Prime Minister and her Cabinet colleagues have demonstrated all the subtlety and sensitivity of a Sherman tank. The youngsters of Liverpool describe her as the Sid Vicious of British politics. Her cosmetic exercises will not disguise the harsh realities.

The Government coined the phrase "real jobs" that the hon. Member for Chester-le-Street mentioned. They would do well to consider the merits of a £20 million garden centre on the edge of Toxteth in relation to real jobs. It is all very well for the hon. and learned Member for Hemel Hempstead to advocate that we should have more home helps, ancillaries and other professionals in local government—I support that policy—but since the Government took office Liverpool city council has lost £63 million in rate support grant. Many real jobs in the public services, such as those of street sweepers and social workers have been lost or not refilled. That is wholly attributable to the £63 million reduction in Liverpool's rate support grant. The story is the same in the private sector. The city planning officer for Liverpool estimates that in four years, another 30,000 people could be unemployed, adding to the mountain of unemployed.

Since the Prime Minister took office, one real job has been lost in Liverpool every hour and a half. Without a determined effort to combat that calamity, the House can expect more disturbances and unrest once the distractions of the World Cup, the Pope's visit and the Falklands conflict have passed. In 1945, Sir William Beveridge made a speech to the Liberal Party Assembly that is contained in another book that I can commend to the House, also published by the Liberal Party publication department, entitled "Why I am a Liberal". I understand from my hon. Friend the Member for Truro that some copies are still for sale.

In that book, Sir William proclaimed that full employment was required in a free society. He could have been speaking about our job creation programmes and cosmetic remedies when he said: Employment depends upon spending. It must become the responsibility of the State to ensure that spending in total is adequate for full employment, because no other body in the community has sufficient powers adequate for the purpose and adequate spending will not come automatically. But spending, in addition to being adequate, must be spending to advantage, not digging holes and filling them up again and not spending on luxuries and trivialities while any substiantial proportion of the people go short of essentials. He went on to draw a distinction between outlay and spending, preferring the word "outlay" because it suggested design and the careful laying out of money for a purpose rather than getting rid of money, whatever the object.

In the same spirit of design and outlay—the spirit of Keynes and Beveridge, both members of the Liberal Party—Liberals today commend the proposals in the report of the House of Lords Select Committee chaired by another eminent Liberal economist, Baroness Seear, and our document "A Chance to Work". Liberals believe that where there is work, people should be employed to do it. If there is insufficient work to keep everyone employed full time, rather than paying people to make things that are not needed, unemployment should be reduced by work sharing.

The two methods of attacking unemployment are not mutually exclusive and both should be used. Unemployment, at an annual cost—something about which we heard nothing from the Minister when he talked about the effect on the public sector borrowing requirement—

Mr. Don Dixon (Jarrow)

I am interested in the Liberal Party's attitude towards work sharing. Does the hon. Gentleman mean that living standards and wages will be reduced?

Mr. Alton

No. Liberals believe in wealth sharing. Our proposals for industrial democracy and for ensuring that wealth is shared in the community must go hand in hand with work sharing. Not only should people have the chance to do a job; they should have the chance to earn a decent income that will enable them to live decent lives. At present we have a crude form of work sharing—it is called unemployment. Surely we can organise matters better than at present, when 12 per cent. of the population are continually unemployed and the rest have work.

The Minister made no reference to the cost of unemployment. It now costs about £5,000 a year to keep people on the dole queue. That is a total cost to the Exchequer of about £15 billion a year. That is not an efficient way to lubricate the economy but a tremendous waste of lives when there is work to be done.

Mr. Lyell

The hon. Gentleman said that 12 per cent. are continually on the dole. That is not correct. Among that 12 per cent. a high proportion of people are moving from one job to another. It is important to recognise the length of time that they are on the dole. It is important not to suggest that one can create public sector jobs at great expense without doing damage.

Mr. Alton

There are about 12 per cent. out of work. The hon. and learned Gentleman is right to say that some of them will find another job. Equally, some people in job creation programmes and work training schemes will come out of those schemes into unemployment. The sad truth is that an enormous number of people are becoming unemployed for longer and longer periods. I could take the hon. and learned Gentleman to parts of my constituency and introduce him to people who have been unemployed for most of the past decade. That is what he must see. They are not temporarily out of work but have been unemployed for a long time.

As to the hon. and learned Gentleman's second point about the cost involved in creating jobs, I believe that we cannot afford not to. I refer him to paragraph 14.2 at page 142 of the Select Committee report, which states: In our opinion, no government has yet really faced the costs and consequences of continuing widespread unemployment and balanced these against the costs of remedies. If we do nothing to tackle unemployment, the costs involved in riots and disturbances and in leaving people out of work—the futility and bitterness in their lives—will continue to well up. That is a price that we cannot afford to pay.

I turn now to the specific proposals advocated by the Liberal Party. About 400,000 building workers are unemployed, yet only two weeks ago at Question Time the Secretary of State for the Environment, in reply to a question from my hon. Friend the Member for Cardigan (Mr. Howells), admitted that 500,000 homes in England and Wales—2.7 per cent. of all households—are still without an inside toilet, running hot water or a bathroom. What a crime that is, in this day and age. That is work that must be done. Some homes must be improved and others refurbished. My hon. Friend the Member for Rochdale (Mr. Smith) has said that we should introduce more improvement grants for rewiring. That is a sensible suggestion for many of our older areas where a full improvement grant cannot be obtained for simple jobs such as that. It is essential for many homes that are becoming dangerous because of the state of the wiring.

Mr. Stephen Ross (Isle of Wight)

Will my hon. Friend agree that it is misleading for programmes such as "The Money Programme" to say that houses built before 1919 can get a 90 per cent. grant for reroofing? That does not apply in many authority areas. Only a limited number of authorities can give such grants. It is still discretionary.

Mr. Alton

Yes, indeed. We should like to see an extension to the housing action area programmes to ensure that many houses will qualify for grants in the future which do not at present. We would put the emphasis on grants for renovation and improvement rather than the building of more houses. In Liverpool there are some 6,000 empty council houses. We do not need more; we need to improve the quality of those already there. That needs sensitivity in planning. It is madness that we have reduced our energy conservation programme. Insulation programmes have dropped by about 60 per cent. over the last 12 months, although one third of the heat that goes into people's homes goes out through the roof. That is nonsense. We should employ people to do those jobs while saving energy at the same time.

In cities such as Manchester the sewerage system is falling to bits. Since 1975 there have been over 50 major collapses in the central area. There are 35 miles of pipe that need replacing. It places at risk the health and safety of citizens. What sense does that make while building and construction workers are paid to be idle? The system would cost about £60 million to replace, yet the water authorities are allocating £2 million a year. On that basis it will take 30 years to complete the renewal and by then the next ring of the city's system will have started to crumble and need renewing. The project would use entirely British products, and of the £60 million about 60 per cent. to 70 per cent. would be labour cost. That would provide about 4,000 jobs for at least one year.

There are many similar sensible projects which could provide useful employment. Sir Terence Beckett of the CBI pointed out: The infrastructure in Britain is beginning to suffer very badly. We don't have enough rolling stock on the railways; the roads are falling into disrepair. When my hon. Friend the Member for Colne Valley (Mr. Wainwright) asked Liberal associations throughout Great Britain for their suggestions for regional regenerations, many sensible ideas were put forward. Councillor Jim Hepple, a Kent Liberal councillor, suggested that it would be sensible to complete the missing link in the M20 from Maidstone to Ashford. He suggested that coastal defence works in north Kent and the Isle of Sheppey were something that the area needed and that would provide jobs.

The Essex county council Liberal group suggested land reclamation and land drainage schemes. The northern regional Liberal party has suggested that rivers could be cleaned up. It suggests that 500 jobs could be created by cleaning up the Rivers Tyne and Tees which it describes as the filthiest rivers in the United Kingdom. Councillor Eric Robinson of the Shropshire Liberals spells out the economic and tourist benefits for central Wales and west Shropshire that would result from improving the stock, the signalling and the lines on the Cambrian and Central Wales line. Cambridge city Liberals have asked us to urge the Government to complete the electrification of the railway line from Bishop's Stortford to Cambridge and Royston to Cambridge. The list goes on and on.

Mr. Golding

What goodies do the Liberals have for north Staffordshire?

Mr. Alton

There will be many suggestions for new jobs. The examples I have given are purely illustrative and demonstrate that all over the United Kingdom the Liberals are planning for when we form an alliance Government. We will then have the opportunity to implement some of the proposals.

Some hon. Members will quarrel with the cost. It is worth calculating, however, the cost in cities such as Liverpool of not tackling unemployment. Our programme recognises that the scourge of unemployment threatens the order of a free society. It recognises that the State is here to serve the citizen. Liberals are often accused by Conservatives of taking a first step towards Socialism. The Labour Party sees our approach as a last-ditch defence of capitalism.

Our programme for conquering unemployment is neither. It is not a choice between unemployment and inflation or between the State and the individual. Taking production, distribution and exchange into the hands of the State has little to do with full employment. Employment depends on spending and not on the increased regimentation of the individual by the State. Equally, the Government must learn that liberty through economic servitude, as well as from arbitrary power, depends on the provision of employment for all our citizens.

I urge the House to support the motion and to reject the Government's amendment.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Order. It may help those who are waiting to be called to know that the wind-up speeches are due to begin at 9.30 pm.

8.40 pm

Mr. Tom Benyon (Abingdon)

I am glad to contribute to the debate. The motion and the debate have been a great deal more imaginative and constructive than many others on the most important issue that faces the Government and the nation. Many such debates have merely recycled ancient arguments, and repetetive cant characterises them.

I am sure that all hon. Members believe that unemployment is an unmitigated tragedy. It is a social evil without parallel and an utter waste of national and personal resources. It leads to increased vandalism and other crimes, to increased psychiatric problems in the home, to an increase in social tension and to a breakdown of the family unit. So far no one has mentioned the seriousness of an increasing proportion of coloured people being unemployed compared with the white population.

About 3 million people are unemployed. Frequently in such debates the Opposition accuse the Government of being cruel and having engineered these circumstances as a caprice. No one with their democratic marbles arranged in the correct order could believe that a democratic Government could wish for or engineer the tragedy that now obtains. We are not in the business of spinning dreams to our electorate. It is usually far more intelligent than it is given credit for. It must realise that we would reduce unemployment if we could, consistent with maintaining our most important electoral pledge to reduce inflation. Inflation is the main engine of the unemploy-ment that we are fighting. We made our attitude clear before the election.

Mr. A. J. Beith (Berwick-upon-Tweed)

Is not the basis of the Conservative difficulty that they refuse to accept an interventionary incomes policy, so must rely on unemployment to control inflation?

Mr. Benyon

If I continue, I might touch on that point.

We face the problems of balancing the circle of inflation and unemployment. It is easy to identify the problem but much harder to produce constructive and workable solutions. The Western world faces an industrial revolution. We are too close to it to see it clearly. The recession, the introduction of the microchip, improved communications, which have vastly outstripped our wildest imaginings five years ago, the reduction in over-manned industries, industries dying apace and the change in the prehistoric practices of which the Labour Party has been the custodian and guardian for so long have swiftly changed the scene. That is why I say that we are facing an industrial revolution.

I do not wish to make an overtly party political speech because this is a matter that transcends party divisions. However, to date, the trade union movement has not accepted its full share of responsibility for the present unemployment. It does not seem to see clearly that workers cannot continue to enjoy an increased standard of living without increased productivity and unless they embrace the necessary changes. If we do not embrace those changes, our competitors will do so and will beat us to the markets. This has already happened. The trade union movement bears a considerable responsibility—not by any means the whole responsibility, because in these matters there is no absolute black and white argument—tor the unemployment that we are experiencing.

Mr. Foster

The hon. Gentleman seems to be accusing the trade union movement of not understanding that improvements in productivity are necessary. That is quite unfounded. For 25 to 30 years, the trade union movement has understood full well that productivity gains are necessary. Its argument and the argument of the Labour Party is that we have not had the productivity gains that are necessary because of the serious lack of investment by the hon. Gentleman's friends.

Mr. Benyon

I thank the hon. Member for Bishop Auckland (Mr. Foster) for that intervention. It would be useful if, after this debate, he telephoned the general secretary of ASLEF and told him that. The whole burden of our argument and, as I understand it, the argument of the management of British Rail against that obdurate union is its failure to embrace modern practices and its insistence on maintaining practices that may have been highly relevant in 1918 but are singularly irrelevant in 1982. The hon. Gentleman and I are in complete agreement. I only hope that he manages to explain to the leader of his party the point that he makes so compellingly to me, so that he can pass on that important message.

Many changes will need to take place in the attitude of workers. No longer will it be possible for people to join firms and know that they can work there up to the age of 60 or 65, with a three weeks' annual holiday. The pattern is changing. I implore my party—indeed all parties—to watch how the pattern changes, so that we can adapt our policies to fit this changing view, this kaleidoscope of the current scene, which has been shaken so violently by matters that are totally outside our Government's control. Governments often tend to go from crisis to crisis, hoping to survive one month or three months longer. We need to take a longer look. We should consider the possibility of work sharing. We should find what does not work, and discard it.

It has been said in many quarters that one of the panaceas or palliatives may be early retirement. I had the privilege to go to France with the Select Committee on Social Services to see President Mitterrand's dream in reality, and see whether early retirement encourages employers to employ 16 to 20-year-olds. Unfortunately, that does not seem to be happening in France. I hope, therefore, that before bringing forward proposals, Governments and Oppositions will study what is being done abroad to see whether what they propose works there. If what they intend does not work there, it cannot possibly work here.

I agree with my hon. and learned Friend the Member for Hemel Hempstead (Mr. Lyell) who talked about the need and opportunities for employment in service industries to look after the old, the needy and the educationally deprived. It is a considerable sadness to me that Oxfordshire county council does not have the funds to provide educational facilities for sub-normal 16-yearolds. Cuts now will result in increased costs upon the social services later when families are unable to cope with their problems.

I hope tilt the Government will see a way to increase the rate support grant. Sadly, we cannot hypothecate it to a particular purpose. When funds to local authorities are increased one is always worried that they will be spent on increasing their bureaucracies. Perish the thought that that would happen in Oxfordshire. However, it does happen and it would be nice if there were a way to hypothecate it.

Much of the debate on unemployment that takes place on our television screens does irreparable damage to our democratic structure. A party can ask the electorate to vote for it in order that it can reduce unemployment from 3 million to 1.5 million. That damages the whole fabric of democracy. It spins further promises to the electorate which anyone who thinks about them will know cannot be kept. We cannot buck the international trend. With the rising tide of unemployment across the Western hemisphere, through Australia, New Zealand, Canada and America, we cannot expect simple solutions to Britain's problems.

The Government's considerable success to date in reducing the level of inflation is laudable. The Government's cuts in taxation and attempts—which have not gone far enough—to simplify taxation are equally laudable. One must support the Government's start-up scheme and other incentives for small businesses, the youth opportunities scheme and other training programmes.

However, there is little point in starting up new businesses if the climate is entirely hostile to them. High interest rates have been damaging to new businesses. It is no good encouraging entrepreneurs and potential entrepreneurs to start businesses or extend existing businesses by the purchase of new plant and machinery—which, incidentally, usually leads to further unemployment, not less—if exchange rates fluctuate from $2.40 to $1.80 within a year. It is impossible to run a manufacturing business against such a backcloth. Many things can be done to smooth out such fluctuating rates. I shall not burden the House with the details now, but action can and should be taken. It is bitterly unfair to encourage people to start businesses and expect them to succeed against such a backcloth.

What can the banks do? Banks play a vital role. They do an excellent job and it is all too easy for hon. Members to criticise them. They are an easy target to snipe at. Last year the Government saw fit to impose a retrospective ad hoc tax on banks. That was wrong in principle. Having set a precedent, others less friendly in the House will seek any convenient gravyboat in which to stick their snout for whatever purpose they have in mind. Nevertheless, I can understand the Government's point of view. Banks were not popular and they still are not. I received no letters from my 115,000 constituents in Oxfordshire complaining about the Government's action. Therefore, politically speaking, the Government's case was impeccable. Colleagues in the House who have received rude and curt letters from their bank managers thought that it served them right.

The banks could take pre-emptive action to ensure that that does not happen again. The banks should not just hand out fivers to all and sundry but should do more to help small businesses start and to explain to us what they are doing to alleviate the problems of unemployment. I am sure that the banks are doing a great deal, but what they are doing is not trickling through. Why did the Government have to start the Government guarantee scheme with a two-point premium over the already substantial interest rates? Why could not the banks have done that themselves? It would probably have been good business. The banks said afterwards that they would have liked to do that, but why did they not do it?

Why do not the banks tell us what they have done to prevent unemployment? How many firms have they helped to start? How many firms have they stopped from going bust? They should take pre-emptive action to tell us in the House and the public what they are doing which would do a tremendous amount to improve their image.

It is no good the banks saying to me that their over-riding priority is to their shareholders. I know that. The banks do a first-class job for their shareholders—good luck to them. We are told that last year an ad hoc one-off tax cost the banks £½ billion. That meant that for the whole of one quarter of last year they might just as well have lain in their beds, for all the profits they made to distribute to their shareholders. A little more entrepreneurial flair and a little more attempt to communicate what a valuable service they provide for the community would pay them handsomely and make the Government's job of putting another tax on them much harder.

It is no good joint stock bank general managers lobbying us when it is too late. The time for them to start is now, by showing society and the House not only that they have a well developed social conscience but, more importantly, that they have helped society in a time of a national crisis of unemployment which is good PR.

Recently I started a campaign for Enterprise Abingdon and Enterprise Didcot. I should like to introduce a commercial into my speech, following the example set by the hon. Member for Liverpool, Edge Hill (Mr. Alton) whose speech was about Liverpool's problems. I recognise that the problems there are serious.

The Enterprise Abingdon, Enterprise Didcot and Enterprise Faringdon campaigns are attempts by the community and the chamber of commerce in those areas to band together with the National Westminster Bank and Barclays Bank in helping small firms start up. They are doing that in conjunction with local firms of accountants and solicitors to try to help people who have a good idea, are scared of banks, do not understand how partnerships work and do not know whether to incorporate. The community is gathered together to help those people with good ideas start their own little business. I commend the banks for accepting that initiative. I hope that that positive contribution is extended. I recommend it to colleagues in all parts of the House, who should take the lead in their areas.

8.57 pm

Mr. Ian Wrigglesworth (Thornaby)

I congratulate the Liberal Party on the motion. I warmly commend it to the House.

The hon. Member for Abingdon (Mr. Benyon) has made some interesting remarks on the role that the banks might play. I support the general thrust of his argument.

He talked about the people who criticise the Government for the present level of unemployment. He should not misunderstand those people's remarks. They are criticising the Government not for deliberately creating unemployment, although some people do that, but for being misguided in following policies and priorities that give rise to the unemployment levels today. I am pleased that in the last few speeches some of the sense of despair and anxiety among the unemployed in the communities in which they live has been brought into the debate. The hon. Member for Liverpool, Edge Hill (Mr. Alton) mentioned that. There have been riots and difficulties in Liverpool, so he was well qualified, unfortunately, to do that.

The Minister made a depressing speech. It was a recitation of the party political broadcast material that one has heard so often from Ministers since the Government came to office. At this point in the Government's term of office, when the level of unemployment is not only unacceptably high but looks as though it will remain at that level for a long time, the Minister's speech was almost an Alice-in-Wonderland performance. It was deeply depressing to those people who are suffering the ravages that unemployment brings to their lives.

I shall remind the House what unemployment means to so many people. There are areas of Teesside where the level of unemployment is 30 or 40 per cent. There are wards in Middlesbrough where one third of the working population do not have a job. That means strains in the family, tension between the man and his wife, children asking for toys at Christmas and on birthdays which their parents cannot afford. It means misery and not being able to pay the gas or electricity bill. Deep anxiety arises from the fear of not being able to do so, of not being able to pay the rent or of possible eviction. I am sure that many hon. Members come across those problems in their surgeries. Thousands of human problems arise out of the misery of unemployment. I sensed in the Minister's speech, and others, that that sense of despair and misery is not coming through in the way that it should.

The Minister's speech would have been a little more acceptable if there were any signs of a real recovery in the economy. The whole thesis of his speech was that we had to make great sacrifices to achieve a new understanding, a new atmosphere and a new environment in the nation and industry. One might be able to accept that argument intellectually if it were showing any signs of producing the desired results. But what is the point of achieving low inflation if that does not bring with it more growth, reduced unemployment or greater wealth in the economy?

We have witnessed unemployment levels unprecedented in post-war years. We have witnessed a greater depression than in any other OECD country, in both depth and length. There has been a 20 per cent. drop in manufacturing production and a drop of 7 per cent. in GDP since the Government came to office. What a price to pay for the dogma that the Government pursue. If there were any sign that that will give rise to substantial recovery—we need it even if we are to start nibbling at the 3 million unemployed—the Government might be proud of their record in the past three years. As matters stand, however, they should be ashamed. They should be searching for new policies and a new approach that will stop the misery and the poor record on everything other than the one or two indicators by which the Government set great store.

I hope that the Government will stop looking at merely the public sector borrowing requirement, the money supply and the level of inflation and examine the longer-term objectives that they are trying to achieve. There is a consensus on the matter throughout the country, other than within the Conservative Party. The CBI, the Labour Party, the Liberal Party, the Social Democrats, everyone, understands that there can be no progress on the fundamental issues of unemployment, production and wealth creation unless there is some reflation of the economy.

In a sense, sadly, it has taken President Galtieri to do what the combined resources of the CBI and all the other bodies which I have just mentioned have not been able to do. By destroying some of our ships and other equipment of war, he has brought about, as we learned earlier this week, some of the reflation and increased production that will come into the economy. That is a sad way of getting more jobs on Tyneside and in other parts of the country where those armaments are made.

If the Government are to do anything about the real problems affecting the people of this country, they must reflate the economy. They cannot do that by pouring money into the economy, as suggested by some, without restraint. That would give rise to increased inflation, and then the brakes would have to go on. It would almost certainly give rise to increased imports, a balance of payments problem and all the problems that we have had in the past. We believe that the only way to overcome that is steady reflation. Our party outlined that in an economic policy statement published only two or three, weeks ago. We need steady reflation of the economy that does not result in bottlenecks and increased inflation, and it should be accompanied by an incomes policy.

We intend to go into the next election with that commitment. No party since 1959 has had such a commitment in its manifesto, but it is one which every Government since then have had to introduce before a general election. Surely the lesson which all those Governments should have learned is that if the economy is to achieve increased wealth and greater employment, there must be reflation accompanied by an incomes policy.

I have dealt with the long-term strategy. The motion deals predominantly with the short-term measures which must be taken. Steady reflation cannot happen all at once. We cannot take 3 million people off the unemployment register overnight. I hope that the Government will consider some of the proposals in the motion. I do not agree with the proposal, popular among some Conservative Back Benchers, for what appears from the figures given to be an enormous home and civil defence programme, or compulsory community service for young people. If £1½ billion of public money is to be spent, I can think of many better things on which it should be spent—not least, education and training schemes or reflation through construction programmes. That would help young people and many others.

The proposals contained in the motion include expansion of personal services for the elderly, the sick and the educationally deprived … and incentives for job-sharing". It also includes conservation works. Those proposals will benefit not only the unemployed but the whole community. As the hon. Member for Edge Hill said, a programme of reconstruction, modernisation and insulation of houses would benefit the economy through energy conservation and the growth of employment in the construction industry. Most of all, however, it would provide improved housing conditions for the many thousands of people, especially those in council houses, who come to our surgeries week in and week out, desperately wanting the dampness and other problems in their houses eradicated. Today, people are living in council houses that are a scandal. It is certainly so in my constituency. Those people desperately need Government funds to ensure that they live in conditions appropriate to this part of the twentieth century.

There are many spin-offs from short-term projects such as those suggested in the motion. I hope that the Government will take them seriously and consider introducing them as early as possible.

If we are to increase the number of jobs, as we must if we are to reduce the awful figure of 3 million, we must also have an industrial and industrial relations policy to improve our competitiveness and increase productivity.

It is all very well for the Minister to tell the House of the wonderful things that the Government are doing in microchips, robots and all the other things on which they are lavishing money—although not as much as they would have us believe—but he should read some of the speeches made by his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) when he was Secretary of State for Industry. I remember that the right hon. Member circulated to his civil servants a message that it was not the Government's job to intervene in or assist industry and that it was entirely for the markets and the private sector to obtain the growth, jobs, modernisation and other wonderful results of the Government's philosophy being put into effect. We had two years of that under the former Secretary of State for Industry.

It is remarkable to note, from the speeches made since the present Secretary of State for Industry took office, the major shift in policy direction. It is as great as the shift that took place when the right hon. Member for Bristol, South-East (Mr. Benn) was removed from the Department of Industry.

Thus, industry has to face a change of direction not only when there is a change of Government, but also, and almost as radically, within the Government. The uncertainty that is created within Government policies as well as between different Governments is the enemy of investment and job creation. The Government should seek a partnership with industry in which there is open discussion and decisions on priorities. There must be selective assistance from the Government within sectors and between sectors to ensure that such assistance is properly directed and not wasted on the blunderbuss approach we have sometimes had.

A partnership, rather than Government telling industry what to do or closing the door and leaving industry to get on with no assistance at all, might achieve the results that that policy has created in Japan, West Germany, and other countries in the Western world. They have achieved a growth that, as was pointed out by the hon. Member for Chester-le-Street (Mr. Radice), has led to double the standard of living that we have in this country. The natural demand arising from that policy is to get away from this doctrinaire ding-dong battle in which industry is kicked around like a football between the two old major parties.

That is one of the major changes that must be brought about at the next election. The Liberal Party and the SDP will go forward on a policy of reconciling the country into a partnership and not splitting it on a doctrinaire approach. That is what is needed from an industrial policy. Such a policy will give confidence to industry. There will be certainty and investment, and that in turn will give rise to increased productivity and the wealth that will help to reduce unemployment.

The country is crying out for that approach. That is the approach the country needs. In making a swerve—not a U-turn—the Department of Industry has started going in the right direction. I hope that it will seriously consider the proposals contained in the motion so that we can reduce unemployment before the next general election. Those of us who come from regions of high unemployment are appalled to see the ignorance in some sectors about the way in which industry has been ravaged.

The change in Government policy is striking. After reducing the assistance available to many regions, the Government have now revised that approach and are going back to giving assistance to some areas from which it had been withdrawn. I welcome the extension of special development areas, especially in my constituency and that of my right hon. Friend the Member for Stockton (Mr. Rodgers). It is, however, a pity that the changes took place under the previous Secretary of State.

I hope the Minister will say in his reply what is to happen about the Nissan car plant project. Over recent days, there has been enormous speculation about whether the plant will be built at all in the United Kingdom. That is depressing news for people on Humberside, Teeside and Tyneside and in Wales and other parts of the country who have worked long and hard to make the case for the plant coming to their areas. I strongly hope, wearing my constituency hat, that the plant will come to my area. An enormous amount of money, time and effort has been spent on preparing the case for this plant. The Minister has a duty to all those parts of the country, especially those in Wales and the North, to state whether the plant is coming. The situation is not at all clear.

I hope that the Minister will also say something about the extension of training schemes. As my right hon. Friend the Member for Crosby (Mrs. Williams) says, we believe that education and training schemes need to be extended and that there should be considerable changes in the whole apprenticeship system. The Minister will, I hope, make clear what the Government are doing.

The debate has been a useful reminder of the need for short-term measures to bring down unemployment. It will, I hope, stimulate some activity within the Government and show that those on the Liberal and SDP Benches have proposals for the longer term as well as the shorter term that will succeed in getting unemployment down from its unacceptable level of 3 million.

9.17 pm

Mr. Harry Greenway (Ealing, North)

I shall not take the same road as that followed by the hon. Member for Thornaby (Mr. Wrigglesworth). The hon. Gentleman recommended a return to reflation, which means inflation, tied in, if necessary, with a statutory incomes policy. We shall watch the response of the nation. The Pavlovian response and cries from his right hon. and hon. Friends commit them starkly to the hon. Gentleman's ideas.

I shall be brief. It is right to try to give other hon. Members the chance to speak. No one has taken account in this debate of a fundamental revolution in which teaching machines have taken over many of the functions of teachers, self-service garages have taken the place of garages with pump attendants, containerisation has replaced docks, and supermarkets and a cash till have replaced jobs formerly done by many people in small and large shops. As a nation and as individuals, we have gone along with this revolution. No one would go out of his way to use a petrol station where a job was provided for a pump attendant when a self-service garage is available. It is the same when one considers supermarkets as opposed to ordinary shops. Our approach to the motion needs to take account of the fundamental revolution that has taken place in society and social practice.

There are more jobs in manufacturing industry in the London borough of Ealing than in any other London borough. I am in close touch with a large number of firms in the way that my hon. and learned Friend the Member for Hemel Hempstead (Mr. Lyell) is in his constituency. One of the things that hits me between the eyes harder than anything else is the tremendous effect of high rates on industry. That factor has not been mentioned in the debate, but, for example, the Hoover factory, which has just lost 1,200 jobs, had to face a supplementary rate demand from the GLC of £200,000. That was the straw that broke the camel's back.

I have been to shops which had supplementary rate demands from the GLC last October of £1,000 or £1,800. That sort of money has cost jobs in shops and factories. We have to examine rates and the effect that they have. In the GLC the doubled rate in under 12 months of the Labour GLC has had a serious and detrimental effect on jobs. I should have liked to hear hon. Members from opposition parties referring to that.

The difference in the level of rates between Conservative and Labour-controlled authorities is marked. For example, when we compare the rates of Brent borough with those of Ealing, the latter is only half that of the former. Jobs are coining from Brent to Ealing for that reason. They have to for the companies to survive.

Two or three people setting up businesses in my constituency have raised a problem with me. They have pointed out that on the Isle of Dogs there is a new regional development zone, where those setting up businesses do not pay rates for 10 years. Other business men would like that sort of concession for their rates. The Government should consider that seriously because what is sauce for the goose should be sauce for the gander. People who do identical jobs in these zones have concessions that should also go to those setting up businesses outside the zones. There is no sense in transferring jobs from Ealing to the Isle of Dogs if they are the same jobs. One needs to create new and additional jobs.

It has recently been found that every time rates go up by £5,000 a job is lost, and my experience bears that out. In London, the GLC has doubled rates and is taking £25 million of that increase to fund a job creation scheme. It has been estimated, and never been denied, that each job that the GLC produces under the scheme—which is run by a director being paid £40,000 a year, double his predecessor—will cost £10,000.

There was an even wilder statistic in the late 1960s when the Labour Government were trying job creation programmes and new jobs were said to cost £78,000. The GLC may have improved on that, but at £10,000 a new job, crudely speaking, if an old job is lost each time the rates go up by £5,000, two jobs are going for the price of one.

There is a great need for a bomb to be put under the antidumping unit of the EEC. It affects businesses in many constituencies, and certainly in mine. Hoover and other companies that I know have made representations to the unit about goods coming into the country at political prices from Eastern Europe. For example, Hoover has been making representations for two and a half years without anything being done. Thousands of jobs have been lost. That department moves incredibly slowly, and to our disadvantage. Something must be done about it.

London also has to contend with the GLC's Luddite attitude. The Hoover factory is such a good example that I shall mention it again. I have worked hard with the directors to get them to produce a scheme for new jobs. They obtained planning permission from the London borough of Ealing, which is Conservative-controlled. Some of the jobs are more technicaly oriented than those that have been lost. However, the Labour Party on the GLC opposed that planning permission for the simple reason that the new jobs are not exactly the same as those that have been lost. That is nonsense. The GLC should recognise that the new jobs must be different, because otherwise the old jobs would not have been lost. The answer is to retrain people so that they can fill the new jobs. I should like Labour Members to put strong pressure on the GLC and other Labour-controlled bodies so that there is a new approach to such matters.

There is much more to say, but some hon. Members have spoken at length and I shall be brief so that others can speak. In theory, I warmly welcome job sharing. However, employers will have to pay twice the stamp and the insurance and they will be neither prepared nor able to do so. I hope that the Minister will consider that point when he replies to the debate. The hon. Member for Truro (Mr. Penhaligon) suggests that extra care should be given to the educationally deprived, but does not he realise that there is already a shortage of experts in that area and that it would be difficult to find qualified people? The hon. Gentleman is being glib and he does not convince anyone. The scheme should be thought out in much greater depth.

9.26 pm

Mr. John Golding (Newcastle-under-Lyme)

I very much welcome the new youth training scheme, although many people are pessimistic about whether employers will be able to provide the places. However, I wish to draw the attention of the House to the plight of the unemployed.

The new training scheme is being introduced at the expense of the unemployed. It is being concentrated on 16 to 17-year-old school leavers. The existing provision for 17, 18 and 19-year-olds is being phased out. The opportunities that now exist for the young unemployed are being removed to pay for the new training scheme. That is most undesirable. What provision will the Government make—I hope that the Minister's parliamentary private secretary will allow him to listen—for those 17-year-olds who are unemployed but who are not school leavers? What provision is being made for the 18 to 19-year-olds? What is the position of this year's entrants to the youth opportunities programme who are on a six-months scheme? Will they be given further opportunities next year, or will they become victims of the transitional arrangements?

I believe that very little provision will be made. We are told that 18-year-olds have the community enterprise programme. However, as the Select Committee and many others have pointed out, it is wholly inadequate and cannot provide for our 1 million long-term unemployed. Indeed, 18-year-olds find it almost impossible to compete with adults for sponsorship under the community enterprise programme. As a result of the lack of provision for the 17 to 20-year-old unemployed, long-term unemployment among the young is growing. That will have disastrous consequences. What are they to live on? What are the unemployed 20, 21 and 22-year-olds to marry on? The effect of the supplementary benefit rules is that if a young couple marry and the girl is in work the long-term unemployed young man will receive no benefit. This is leading to "Love on the Dole". We must examine the financial plight of young people who have had no time to acquire savings, no time to accumulate financial reserves, who are being put into the direst of poverty through no fault of their own because they cannot get work.

I ask the Government to take another look at the special measures and not to replace them when introducing the youth scheme. I hope that they will re-examine the young workers' scheme and introduce subsidies and other measures that will mean that all youngsters, irrespective of whether they are school leavers, will have the chance to have work, income and the opportunity to regain their self-respect.

9.31 pm

Mr. Richard Wainwright (Colne Valley)

All hon. Members, and especially Back Benchers, are rightly jealous of the use of our scarce parliamentary time. It was therefore a great misfortune for both sides of the House that the Treasury Minister, in spite of having heard the motion proposed eloquently by my hon. Friend the Member for Truro (Mr. Penhaligon), found that he had been given the wrong speech. To make matters worse, he addressed it to the wrong people in the wrong part of the Chamber. For most of the time he appeared to be addressing the Labour segment of the Opposition, which does not have the time of the House this evening. On other occasions he appeared to be addressing President Mitterrand.

There can be no excuse. The motion appears on the Order Paper. We are not discussing some words that were thought up overnight on the back of an envelope like the taxes of the previous Labour Government. The motion is a combination of a document entitled "A Chance to Work", which the Liberal Party published last February, and which went into substantial detail, a splendid document from the SDP's economic policy group called "Towards Full Employment", and the report of the Select Committee of another place, which appeared only last month, on unemployment. I must register profound dismay at the way in which the Minister went on about the Government's macro-economic policies, as though we had not sat through four Budget speeches under this Government already.

Another sad commentary on the debate is that without exception Conservative Members who have contributed to it have been either from Greater London or the Home Counties, whereas the speeches of those on the Opposition parties' side of the Chamber who wish an attempt to be made to come to grips with this intractable and appalling problem have been made by those who represent various extremities of the provinces where unemployment is a long-standing problem.

A smear which came into the Minister's speech which I repudiate at once was his suggestion that our proposals are short term. That is wrong. Every proposal that we have mentioned should and could last for many years. We have no time for quick palliatives to deceive the people during the period before the next general election. Ours are long-term schemes that are built to last. Furthermore, they are all low-cost schemes with modest import content and they are specific. I hope that the Minister of State, who will have a heavy burden when he replies to the debate, will recognise that we have been addressing specific areas of the problem and that we want no more vague lectures on the macro-economic problems of unemployment.

I took great exception when the Minister of State asked the rhetorical question "Whose jobs shall we sell to create the jobs that the Liberals propose?" How many jobs have the Government sold to pay for the ascertained cost of unemployment, which is now about £13 billion a year? The Government should think of the hundreds of thousands of useful wealth-creating jobs which could be endowed if the Government were not saddling themselves with the prodigal cost of vast unemployment, which the Select Committee in another place computes at at least £13 billion a year.

The Government are victims of four fallacies. The first is that economic recovery will be spontaneous and that when all the economic factors have come into the right conjuncture, the economy will take off like a balloon. That fallacy has already been demonstrated by the Treasury Select Committee four times in this Parliament, and no serious thinker any longer gives credence to it.

Secondly, the Government believe that the inevitable social disorder that long-term unemployment is generating can be dealt with by well-paid police forces and Armed Forces. Like my hon. Friend the Member for Liverpool, Edge Hill (Mr. Alton) and others, I tell the Minister that that is wrong.

The third handicap under which the Government labour is their obstinate refusal honestly to cost the various remedies that members from all parties put forward. We owe the Select Committee in another place a great debt because it strongly advocates that the Government should seriously cost the various proposals for long-term employment and that if they did so they would see that the expense is nothing like what has been alleged by Ministers.

I quote from page 159 of the Select Committee report: It is essential that the Treasury should cost remedies in the full consciousness of what it and the country lose when those in work become unemployed. Only when this is done, does the true cost of remedies become apparent. Many are cheaper than they superficially seem. The Government continue to pretend that, whereas all the proposals for dealing with unemployment are expensive, unemployment is not already putting an appalling financial burden on the country. I hope the Minister of State will come clean on that subject. The hon. and learned Member for Hemel Hempstead (Mr. Lyell) gave some interesting details on the Youth Call proposal. He will not expect a Liberal to be enamoured of the various devices that would be necessary to make such a scheme almost compulsory. I remind him that the Select Committee said that this sort of remedy was wasteful and unrealistic because it dealt with the young unemployed as if they were a homogeneous group who would be happy to be herded into a scheme, the objectives of which might to repellent to many of them.

My hon. Friend the Member for Thornaby (Mr. Wrigglesworth) spoke from his deep, grim experience of persistent and chronic high unemployment in the North-East. The commitment that he gave on behalf of the alliance to an incomes policy to underpin the expansion of the economy is fully endorsed by the Liberal Party.

One of the most appalling prospects of the legacy that the Government will leave to their successors is not only that they have obstinately refused to discuss plans for creating useful jobs, but that they are not even planning for recovery. There is now ample evidence that the Government are short of up-to-date plans for programmes such as roads, waterways, coastal erosion and coping with massive flood defence problems. It is the duty of any Government—even if they feel that they cannot put such plans into operation immediately—to keep plans up to date, so that when the right moment comes they can be put into operation. I hope the Minister of State will tell us the position on planning in Government Departments on these major public works. I fear that it will be an unhappy tale.

One aspect of our job creation plans has not figured in the debate until now. We believe—the Select Committee supports us—that there is room not only for many overdue public works but an urgent need for relatively unskilled manpower in many aspects of our health and welfare services. The Select Committee reminds us that the National Health Service is desperately short of people to care for the mentally sick, the elderly, the disabled and others who need special provision. It points to the need for nursing auxiliaries, ward clerks, porters, cleaners and maintenance people. It also makes the telling point that health care becomes less satisfactory the further one moves from London and the South-East. The incidence of high unemployment coincides with the greatest need in the Health Service.

The same is true, certainly in my experience in West Yorkshire and Greater Manchester, of the welfare services for which local government is responsible. They are desperately short of relatively unskilled people who could be of immense value in helping the elderly and the disabled. That is why we referred to them specifically in our motion.

The main handicap with job sharing—employers who have helpfully tried to promote this scheme will agree—is the difficulty with occupational pensions. People who would be willing to share their jobs and their ordinary current remuneration feel that they must draw the line when they realise that they are damaging their pension prospects. That makes the matter a job for the Government. It is the Government's duty to cut through the pension knot and to bring forward a scheme with a pool of pension money so that those who share jobs and who show some humanity to their fellow workers are not frustrated simply by the occupational pension difficulty. I hope that the Minister of State will refer to that in his reply.

Those hardest hit by economic adjustment", to quote from the Government's amendment, are well over 1,500,000. The Government have a duty to produce schemes for them. If they do not like our schemes they must think of something better. But silence and obstinacy are no answer to this massive human problem. Our motion does not try to crab the various training and youth employment schemes that the Government have produced, so there is no need for the Minister of State to be defensive when he replies. We wish to hear whether the Govermnent are prepared to respond to a specific call for many more projects to restore our physical assets, to look after the elderly and deprived, and at the same time, by happy combination, to give useful, satisfying and productive employment to people who will otherwise become victims of complete despair.

9.42 pm

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

I congratulate the Liberal Party on the moderate and constructive character of the motion before the House. It contrasts favourably with what one can only call the blunderbuss approach of the Opposition motion that we debated a week or two ago. Their approach contained no positive suggestions or ideas as to what we should do, unlike the Liberal Party motion. It was entirely negative and, other than a call for general economic reflation, it had nothing solid to say.

It is worth reading out a key phrase in the Select Committee report since the hon. Member for Truro (Mr. Penhaligon), who opened the debate, made it plain that he would base many of his comments on the report. The hon. Member for Colne Valley (Mr. Wainwright) also referred to it. Paragraph 14.13 of the Select Committee report under the heading "Remedies" states: At the risk of stating the obvious we stress our conviction that no remedies for unemployment will be effective for long if they lead to a renewed phase of sharply rising inflation. We do not believe we can simply spend our way out of trouble. General reflation at the present is a primrose way leading to destruction. The primrose way leading to destruction—the programme for general reflation—was proposed by the Opposition when we last debated this matter. Perversely, of course, at least three or four Labour members of the Select Committee repudiated the primrose way to general reflation. I assume that the Liberal Party repudiates it because its spokesman was the Chairman of the Select Committee.

I am a little worried about the position of the SDP. If the report I received from my hon. Friend the Minister of State, Treasury was correct, the hon. Member for Thornaby (Mr. Wrigglesworth) advocated a steady reflation and yet the SDP member on the Select Committee in another place repudiated that doctrine. There is much to be said for unity in diversity or diversity in unity.

Let a hundred flowers bloom, As long as every idea is put forward we can always debate it. The balance of opinion appears to be against the concept of general reflation.

The hon. Member for Colne Valley asked me not to launch into a general macroeconomic review. However, the macroeconomic background must be the one against which we consider special measures. There is always an overflow of the cost of special measures into the broader macroeconomic framework, which has to be taken into account. I believe that my hon. Friend the Minister of State, Treasury was entirely right to introduce the debate with the proper macroceconomic background. The hon. Member for Colne Valley witl be pleased to hear that shall not repeat it, except to remind him and the House of one key set of statistics that are absolutely critical in everything with which we are grappling. It is a set of statistics that I used recently and my hon. Friend repeated this week. It was the appalling league table results in unit labour costs in manufacturing industry in the period 1975–1980. It needs to be remembered and written on our minds and hearts. In the quinquennium 1975–1980 United Kingdom unit labour costs in manufacturing industry doubled. In Canada they went up by 50 per cent., in the United States of America they increased by one-third, in West Germany by one-sixth and in Japan they did not increase at all. That is the macro explanation of why we have three million people unemployed.

Mr. Tom Ellis (Wrexham)

Would not the Minister agree that the single biggest determinant in keeping low unit labour costs is that planned capacity should be fully utilised and that one can only achieve that by some kind of reflation?

Mr. Alison

Yes, it would be a good message to get across to the National Union of Railwaymen in respect of the trains standing in the sidings on the St. Pancras line. They cannot be used and that capital is under-utilised. It was the effect of the unions on unit labour costs in that period that laid the foundation of the present high level of unemployment. There is no other macroeconomic factor with which we need bother.

I come to the suggested specific special measures to reduce unemployment, to which the motion refers and about which many right hon. and hon. Gentlemen have spoken. Many of the suggestions put forward were mirrored in the Select Committee's report. I make no complaint about that. It is a stimulating and constructive document. I welcome the emphasis on special measures as a proper corollary to the strategy of reducing inflation and improving competitiveness, which is the critical background.

The Government have committed massive resources to special measures. In the year before we came to office £333 million was spent on the measures. This year it will be more than £1½ billion and the next year nearer £2 billion. The astonishing thing is the relative increase in what we are spending on a whole range of special measures even compared with the relatively large rise in unemployment. Had the Labour Government spent pro rata on special measures to help the unemployed as we are, we might have inherited fewer unemployed.

Mr. Radice

Perhaps the Minister has not noticed that unemployment is two and a half times more now than it was then.

Mr. Alison

It has roughly doubled and the amount spent on special measures has increased tenfold.

Moreover, we have shown our commitment to the principle of special measures by introducing new initiatives—new special employment measures such as the community enterprise programme launched in April 1981, the young workers' scheme launched this year and the enterprise allowance launched in February on a test basis. Further ideas and initiatives are in the process of development, particularly the new youth training scheme, the voluntary service scheme and the scheme for the long-term unemployed announced by my right hon. and learned Friend the Chancellor of the Exchequer in the Budget.

The rapid extension of the range of assistance has been accompanied by the maintenance or extension of existing measures, such as the job release scheme. But we are not irrevocably committed to a specific and unvarying programme of measures. We review all the measures each year and compare them with other possible measures. We shall note most carefully the ideas canvassed tonight.

Although we are not irrevocably hooked on a specific and unchangeable programme, we try to apply certain criteria. For example, we consider the programme's main objective—whether it will help the right people in the way that they most need it. We consider the side effects—whether the scheme is consistent with our strategy of keeping down inflation and helping businesses to prosper. One significant side effect that we must take account of is the one mentioned by my hon. Friend the Member for Ealing, North (Mr. Greenway) of possible increased rate charges caused by local authority-based schemes. That could be disastrous for local employment and local businesses.

We work out the cost of the scheme not only in gross terms. We take into account the offset in savings on allowances and so on for the benefits that have to be paid in the job release scheme, for example. We have to consider carefully the net effect.

Mr. Richard Wainwright

Broadly speaking, does the Minister accept the conclusion of the Select Committee in another place that the annual average cost of an unemployed person is about £5,200?

Mr. Alison

I do not accept that figure. Half of it is based on the notional offset of losses in tax that may accrue to the Government. It is a highly speculative and uncertain field. For example, unemployment caused by large wage rises can have a higher revenue yield for the Government. It is better in revenue terms to have high unemployment caused by huge wage increases. The way that the tax system works one can get an increment of tax yield. We cannot accept the offsetting tax factor at its face value. It is more complicated than that. We would take a lower figure. But I do not wish to be drawn into that argument in detail tonight.

We also consider the effect on unemployment as one of the principal features of a scheme. Our schemes stand up well by those criteria, especially compared with others. For example, the new youth training scheme has clear objectives—to improve the prospect of employment for young people by providing a year's foundation training for entrance to work. The youth task group report, which the Government have accepted, states that the new scheme is about providing a permanent bridge between school and work. That is why it is to include people in jobs, with the emphasis on the quality of training. Clearly, proper training is the central objective, and it is a rational and sensible objective.

The scheme will be costly—perhaps over £1 billion a year, when it is in full operation. This expenditure has to be financed from somewhere, but we firmly believe that the provision of proper basic training will pay dividends for us. It has done so for our international competitors, and we think that it will do the same for us in the end. So that expenditure is worth making.

The scheme will reduce unemployment—another of the criteria that we consider. At any one time, perhaps ¼ million young people, who otherwise would be unemployed, will be engaged on this far more constructive alternative. Thus, by the criteria that I outlined, this new training scheme is clearly worth backing.

I briefly turn to the criticism made by the hon. Member for Newcastle-under-Lyme (Mr. Golding) about the relatively sharp emphasis on the 16 and 17-year-olds at the expense of the 18-year-olds. The emphasis is on the 16 and 17-year-olds. For the 18-year-olds we should look to other schemes, for example, the CEP, the new Budget scheme, perhaps job release, which should help the 18-year-olds, and of course the temporary short-time working compensation scheme. However, it is quite true that the primary emphasis in the youth training scheme is on the under-18s.

Another example is the scheme for the long-term unemployed. Many hon. Gentlemen who have spoken in the debate emphasised the demoralising effect of long-term unemployment. We entirely agree that it is deeply demoralising and extremely undesirable. For the past year or so, our emphasis has rightly been on providing opportunities for the young. However, it is also right to look again at our provision for the long-term unemployed. The longest-running scheme in this connection is the community enterprise programme. That is now well-established and is working effectively. Its objective is to provide useful work experience for the long-term unemployed and to undertake work of community benefit—exactly the kind of work that the Liberal motion, with its emphasis on local construction schemes, conservation, environmental improvement and so on, would advocate. The scheme is not cheap. It will cost over £150 million gross in this financial year, and it has been expanded this year. The scheme helps 30,000 people at any one time, which is an increase of 5,000 compared with last year.

However, the scale of the problem suggests that more is needed. Simply to expand the community enterprise programme further, as some hon. Gentlemen have suggested, including the hon. Member for Chester-le-Street (Mr. Radice), with a further increased tranche over and above the increase this year, would be very costly. We could reach the point at which the effect of financing the measure would have serious side-effects on other of our governing criteria, in the sense that real jobs could be put at risk because of the extra taxation or the higher interest rates.

That is why we turned to the Chancellor's Budget scheme, which, with net additional expenditure of £150 million, is likely to provide at least 100,000 places for people of a variety of ages, in exactly the area which the Liberal motion suggests, but at somewhat lower cost.

Many hon. Members commented on the waste involved in supporting unemployment while important work needs to be done. The Chancellor's new initiative addresses that problem by inviting unemployed people to work on the basis that each week they will receive an amount equivalent to their benefit payments plus a little extra for expenses.

I have tried in a very short time to refer to a number of the points that were raised. I want to emphasise that the House of Lords Select Committee report is an interesting and constructive document. It produces a range of proposals. It must involve a good deal of money. Our initial costing is at least £5 billion extra, if we were to accept all its proposals. However, we do not rule out any of the ideas in the programme. We shall study them carefully. We have not made our formal response yet to the Select Committee report, but in due course we shall do so. We shall weigh up and attempt to evaluate the suggestions made in the motion and in the speeches that supported it. We are bound to remind the House and the Liberal Party that, although public expenditure this year has gone up, it went up by £5 billion on the total prescribed in the last public expenditure White Paper. Another £5 billion on top of that for the whole range of the Select Committee's proposals would be difficult to accommodate. I am not sure that we can go anywhere near down the whole line but the matter has caught our eye and we shall do our best to respond constructively. For that reason I suggest that the Liberal Party should accept our amendment to their motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 35, Noes 154.

Division No. 255]	[10 pm
AYES
Alton, David	Ogden, Eric
Brocklebank-Fowler, C.	Owen, Rt Hon Dr David
Brown, Ronald W. (H'ckn'y S)	Penhaligon, David
Cartwright, John	Rodgers, Rt Hon William
Crawshaw, Richard	Roper, John
Cunningham, G. (Islington S)	Ross, Stephen (Isle of Wight)
Ellis, Tom (Wrexham)	Sandelson, Neville
Faulds, Andrew	Steel, Rt Hon David
Ginsburg, David	Stewart, Rt Hon D. (W Isles)
Grant, John (Islington C)	Thomas, Jeffrey (Abertillery)
Horam, John	Thomas, Mike (Newcastle E)
Howells, Geraint	Wainwright, R.(Colne V)
Jenkins, Rt Hon Roy (Hillhead)	Wellbeloved, James
	Williams, Rt Hon Mrs (Crosby)
Mabon, Rt Hon Dr J. Dickson
Maclennan, Robert	Wilson, Gordon (Dundee E)
McNally, Thomas	Wrigglesworth, Ian
Magee, Bryan
Mitchell, R. C. (Soton Itchen)	Tellers for the Ayes:
NOES
Aitken, Jonathan	Costain, Sir Albert
Alexander, Richard	Cranborne, Viscount
Alison, Rt Hon Michael	Dorrell, Stephen
Ancram, Michael	Dover, Denshore
Arnold, Tom	Dunn, Robert (Dartford)
Aspinwall, Jack	Dykes, Hugh
Atkins, Rt Hon H.(S'thorne)	Eden, Rt Hon Sir John
Atkinson, David (B'm'th,E)	Elliott, Sir William
Baker, Nicholas (N Dorset)	Fairgrieve, Sir Russell
Beaumont-Dark, Anthony	Faith, Mrs Sheila
Bennett, Sir Frederic (T'bay)	Fisher, Sir Nigel
Benyon, Thomas (A'don)	Fletcher-Cooke, Sir Charles
Berry, Hon Anthony	Fookes, Miss Janet
Bevan, David Gilroy	Fowler, Rt Hon Norman
Biggs-Davison, Sir John	Gardner, Edward (S Fylde)
Blackburn, John	Garel-Jones, Tristan
Bonsor, Sir Nicholas	Goodhart, Sir Philip
Boscawen, Hon Robert	Goodlad, Alastair
Bottomley, Peter (W'wich W)	Gow, Ian
Boyson, Dr Rhodes	Greenway, Harry
Braine, Sir Bernard	Griffiths, Peter Portsm'th N)
Bright, Graham	Gummer, John Selwyn
Brinton, Tim	Hamilton, Michael (Salisbury)
Brooke, Hon Peter	Hampson, Dr Keith
Brown, Michael (Brigg & Sc'n)	Havers, Rt Hon Sir Michael
Browne, John (Winchester)	Hawkins, Sir Paul
Bruce-Gardyne, John	Hawksley, Warren
Buck, Antony	Hayhoe, Barney
Butcher, John	Heath, Rt Hon Edward
Cadbury, Jocelyn	Heddle, John
Carlisle, Kenneth (Lincoln)	Henderson, Barry
Carlisle, Rt Hon M. (R'c'n)	Hill, James
Chalker, Mrs. Lynda	Howell, Ralph (N Norfolk)
Chapman, Sydney	Hunt, David (Wirral)
Clark, Sir W. (Croydon S)	Jessel, Toby
Clarke, Kenneth (Rushcliffe)	Jopling, Rt Hon Michael
Cockeram, Eric	Kaberry, Sir Donald
Cope, John	Kimball, Sir Marcus

Lang, Ian	Osborn, John
Latham, Michael	Page, John (Harrow, West)
Lawrence, Ivan	Page, Richard (SW Herts)
Lester, Jim (Beeston)	Percival, Sir Ian
Lloyd, Ian (Havant & W'loo)	Price, Sir David (Eastleigh)
Lloyd, Peter (Fareham)	Proctor, K. Harvey
Loveridge, John	Renton, Tim
Lyell, Nicholas	Rhodes James, Robert
McCrindle, Robert	Ridsdale, Sir Julian
Macfarlane, Neil	Rippon, Rt Hon Geoffrey
MacGregor, John	Rost, Peter
McNair-Wilson, M. (N'bury)	Rumbold, Mrs A. C. R.
Major, John	Sainsbury, Hon Timothy
Marlow, Antony	Shaw, Giles (Pudsey)
Mather, Carol	Shaw, Sir Michael (Scarb')
Maude, Rt Hon Sir Angus	Shepherd, Colin (Hereford)
Mawby, Ray	Smith, Tim (Beaconsfield)
Maxwell-Hyslop, Robin	Speed, Keith
Mayhew, Patrick	Speller, Tony
Mellor, David	Spicer, Michael (S Worcs)
Mills, Iain (Meriden)	Stainton, Keith
Mills, Sir Peter (West Devon)	Stanbrook, Ivor
Moate, Roger	Stevens, Martin
Monro, Sir Hector	Stradling Thomas, J.
Montgomery, Fergus	Taylor, Teddy (S'end E)
Morris, M. (N'hampton S)	Tebbit, Rt Hon Norman
Mudd, David	Temple-Morris, Peter
Murphy, Christopher	Thatcher, Rt Hon Mrs M.
Needham, Richard	Thomas, Rt Hon Peter
Nelson, Anthony	Thorne, Neil (Ilford South)
Neubert, Michael	Townend, John (Bridlington)
Newton, Tony	Trippier, David
Onslow, Cranley	van Straubenzee, Sir W.

Viggers, Peter	Wickenden, Keith
Waddington, David	Wilkinson, John
Wakeham, John	Winterton, Nicholas
Waller, Gary	Wolfson, Mark
Ward, John
Watson, John	Tellers for the Noes:
Wells, Bowen	Mr. Donald Thompson and
Wheeler, John	Mr. Archie Hamilton.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.

Mr. Deputy Speaker

forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House, greatly concerned about the problems of unemployment, supports the Government's policies to improve the performance of the British economy, which offer the best prospect of a permanent improvement in employment opportunities, as well as the Government's substantial programme of special employment and training measures designed to help those hardest hit by economic adjustment.