§ I begin with unemployment. To have millions of people at a time without work, many of them for long periods, is a tragic loss to any community. To be unable to find work is an affront to personal self-respect. This waste of human resources is today the misfortune of many societies besides our own. It is naturally a cause of deep concern to every Member of this House.
It is no service to the unemployed to suggest that there is some swift or simple remedy. For years, for example, it has been argued—it is still argued today—that we could get unemployment down if only we were less concerned to fight inflation. The right dose of reflation, more generous public spending, so the argument runs, would soon see unemployment tumbling down.
Would that it were so easy! But successive Governments for 20 years have been tempted to act on that advice. And with what result? All the time the tide of unemployment has been rising insistently from one business cycle to the next.
The truth is that "reflation" does not create jobs that last. In the longer run, it helps to destroy them. If more public spending was the proper engine for growth and jobs, Britain should now lead the world in both. Yet in fact unemployment today is almost eight times higher than it was 20 years ago.
The unemployed deserve a more considered response than that—one that is based on analysis of the root causes of the social blight of unemployment.
So this afternoon I want to remind the House once more of two figures that virtually tell it all. Since 1960 the real purchasing power of the average citizen in Britain has risen by over two-thirds, but the real rate of return on the capital employed in British industry has fallen by five-sixths. In other words, our present living standards have for years been plundered from the store of investment for the future.
Nor have we put to good use the investment that has been made. Too often we have tried to mitigate the inescapable consequences of poor productivity and shrinking international competitiveness by clinging to manning levels that could not be sustained.
We have only to recall, by way of example, the history of the British Steel Corporation. Had we not, throughout the middle 1970s, put off the painful choices, the corporation and those who work in it would have faced the current slump in world demand for steel in far better shape to weather it. Far fewer jobs would have been lost. Acquiescence in poor productive performance and overmanning may put off the evil day. But it only makes the inevitable adjustment all the harder when it comes, as come it must.
And so today we face the huge task of helping to create the conditions in which the unemployed can obtain work, in jobs that will last; and, as a vital step in this, encouraging wages to be at a level which will enable these more secure jobs to be created. My principal Budget measures will help in that direction.
Some of the obstacles to fuller employment have been created by successive Governments. Actions taken with exactly the opposite intention have often had the effect of keeping people out of jobs, actually adding to unemployment.
The Government have taken action to remove a number of these obstacles. We are seeking, by our employment 731 legislation, to create a more reasonable balance of bargaining power between the partners in industry. But in truth we need much wider change than can be brought about by Government or Parliament alone. We need a clear-sighted change in our national understanding of the problem, and then a more practical, more flexible approach.
The key point is this. Somewhere in the gap between the levels of income which we pay to those out of work and the earnings enjoyed by those who have a job are rates of pay which those now out of work would be glad to take if they had the chance. But convention and a narrowness of vision prevent those bargains being struck. When jobs are in abundance, any employer will make sure that he keeps up with the market, by offering high enough pay to recruit and retain the workers he needs. And trade unions will naturally enourage him. But when business is tight and jobs are scarce, the same employer owes it to the unemployed, as well as to his own employees, to react to the changed market, to pay at rates which leave room for him to earn enough for further business and further investment—and so for new jobs. In this situation too, trade unions have—or should have—exactly the same interest. That is the best service that any employer or union leader can offer to the unemployed.
Attitudes are changing in that direction. And so prospects for employment are improving. But it will take time. That is why we have already committed substantial sums for special employment and training measures to help those hardest hit. Our plans for 1982–83 provide nearly £1½ billion for special employment and training measures. By 1984–85, its first full year, we plan to spend over £1 billion a year on the new youth training scheme alone—a major advance for school leavers who cannot find jobs.
A number of these measures—for example, the young workers scheme—are intended to help the labour market work more flexibly, to help make wage levels more responsive to economic reality, and so lead to the creation of lasting jobs.
We should all wish to do more, within what the economy can afford, to reduce the continuing personal burdens of unemployment. It is clearly right to do all we can for those obliged to spend a long time without a proper job.
We can all see, in our local communities, tasks of environmental improvements, or of bringing help to those in need, that are crying out to be performed. Lord Scarman rightly drew attention to this in his recent report. He pointed out that there could be great advantage in schemes for socially useful activity, in place of current unemployment and social security arrangements. There are people needing work and work that needs to be done; the need is to match the two.
Many people believe—certainly this Government do—that it should be possible to take further constructive action along these lines. Let me give the House some indication of what we now have in mind.
The central idea would be to give those who have been on the unemployment register for some time the chance to work for the benefit of their own community, while still getting broadly the equivalent of their benefit entitlement plus an addition for expenses and the like. They would 732 remain free to take a regular job if it came along. And it would be for them to decide whether or not to participate in such a scheme.
This concept may be unorthodox. Certainly it is no substitute for long-term jobs. But in today's world it makes a great deal of practical sense. The Government would like to see it tried, to see it carried through successfully, on a wide, indeed on a nationwide, scale, with people working on non-profit-making projects brought forward by local sponsors of all kinds, including voluntary organisations and the churches, and indeed local authorities.
My right hon. Friend the Secretary of State for Employment is, therefore, asking the Manpower Services Commission to work up urgently a flexible and voluntary scheme on these lines, so that the Government can take firm decisions in the early summer on a new initiative for the commission to run alongside the present community enterprise programme.
We shall look for the commission's advice on what is possible; but, for illustration, net additional expenditure of some £150 million a year excluding supervision costs ought to be able to support around 100,000 places. That would be excellent value for the taxpayers' money—value for the community and a constructive opportunity for those who choose to take part. We should indeed be ready to back this kind of development on an even larger scale if the demand is there.
The Government therefore hope that all those in the community who could play a part in promoting this scheme will give it their early and careful consideration. And I hope that this new initiative will also be welcomed in all parts of the House.