HC Deb 23 November 1984 vol 68 cc591-8

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]

2.30 pm
Mr. John Fraser (Norwood)

I wish to raise the issue of the most deplorable figures for unemployment that Lambeth has known, and to condemn the Government, who are the author of that catastrophe.

If anybody wishes to study the consequences of free market economics, monetarism and what I am sure that the Minister would be proud to call the capitalist system, he needs only to walk about 100 m from the mother of Parliaments to begin his course in the London borough of Lambeth. Lambeth stands on the doorstep of one of the richest capital cities in the world, yet it has been reduced to a wretched state of poverty and despair. From time to time that has led to individual and sometimes collective violence. Everybody knows that we had an outbreak of riots in Brixton in 1981. We all know that Lord Scarman found that one of the contributory causes to and one of the background reasons for that mass and expensive outbreak of violence was the social conditions of Lambeth. However, since the Brixton riots in 1981, unemployment has gone up by 50 per cent. The position is deplorable.

Numerically, Lambeth has the greatest male unemployment, the greatest single female unemployment, the highest total of all-round female unemployment and the greatest single total unemployment in London. If we look at the categories in terms of percentages, we have the third highest level of unemployment of males, of single females and of totals throughout the Greater London region. In October, the official figure for the number of unemployed in Lambeth was 24,847 people, on Manpower Services Commission statistics. That is an increase of approaching 400 per cent. since the Government took office in 1979. It means that of the population, from babies to pensioners who are wondering whether their local post office will be closed, only one in 10 works as a percentage of those who are what is called economically active.

That figure of 24,847 unemployed is only the official statistic which has come about after the Government changed the method of collecting unemployment statistics about a year ago. The unofficial figure is higher and more likely to be accurate, and is calculated by the employment division of the town planning department of Lambeth borough council. It is more accurate because the statistics take into account those who fail to appear on the official statistics because they do not claim unemployment benefit. Those figures, taking into account those who are in reality unemployed but who are not registering for benefit, give an unemployment total of 27,583 people—8 per cent. up on unemployment in October 1983.

These figures are unofficial, but they do not lack credibility. If one translates them into levels of unemployment for men and women, they give us a rate of unemployment for males in Lambeth of 25.4 per cent. That means that more than one man in four is out of a job in my borough. For women, the figure is 15 per cent. That percentage rate of unemployment in Lambeth is almost exactly twice as high as the overall rate of unemployment throughout London, and 50 per cent. higher than the national rate of unemployment.

Lambeth is especially raw and vulnerable. Yet what contribution do we get from the Government? Yesterday they proposed to abolish one of our biggest employers, the GLC, which is one of the greatest providers of employment in its own right as a county authority as well as being responsible for the provision of leisure facilities on the South Bank, which is part of my borough, although not part of my constituency.

The memorandum to the Bill introduced by the Government proposes that one effect of abolition would be 8,000 redundancies. I accept that they will not all occur in Greater London or in my borough, but under the Bill a substantial part of the Government's programme for London involves the creation of redundancies.

The overall figures that I have given are bad enough—they are appalling—but the figures for the young unemployed in Lambeth are catastrophic. I would not have believed the figures and would have thought that they were someone's black propaganda if I had not seen them for myself in the publication of the MSC.

The number of full-time education school leavers now unemployed in Lambeth is 3,562. At least, that is the number of those claiming benefit. I shall put that into context.

Recently my local education office, told me that in Lambeth about 2,000 children a year left our schools to seek employment on the labour market. But the figure for unemployed full-time school leavers is 3,562. In other words, it is almost twice as high as the yearly total of people leaving school to seek employment, despite the fact that 926. school leavers in the constituency are on the youth training scheme. The figures would amount to about two and a half years supply of school leavers in the borough if it were not for the youth training scheme.

The figures are a catastrophe and even underestimate the dimensions of unemployment. A good many people, even young people, do not register for benefits and so do not appear in the figures. Those catastrophic—it is not too strong a word—figures also disguise the fact that about two out of three black school leavers in my borough are likely to be unemployed. I cannot be sure of the exact figures, because for the past two years the Government have ceased to collect them on ethnic unemployment, but going back to the position in about 1982 I should say that it is likely that about one in two white school leavers and two out of three black school leavers are unemployed.

The Government's response is only 583 vacancies for about 27,000 people looking for jobs. Between March 1983 and March 1984 there was a 50 per cent. rise in the number of those aged 20 years or under who are unemployed. During that time young male unemployment rose by 84 per cent. But there is yet another facet of the despair, disillusion, poverty and deep sense of grievance that the situation creates. I refer to the duration of unemployment. The unemployed of Lambeth are not browsing round the labour market deciding whether they want jobs and changing from one job to another, but are in a sort of economic detention camp.

In July 1984, 9,500 of Lambeth's unemployed, or 41 per cent. of the total number unemployed, had been out of a job for 12 months or more. Another 4,500, or 20 per cent. of the total, of those officially unemployed, had been out of a job for more than six months. From my experience as a Minister in the Department of Employment I know, as the minister will know, that the longer someone is unemployed the more chance they have of remaining unemployed. That has two further effects. It adds to the sense of grievance, rejection and hopelessness among young people and most certainly adds to the anger of the older unemployed who find that when their unemployment benefit runs out after 312 days their life savings— particularly if those people are in their fifties and sixties and have been thrifty enough to save some money—will begin to run out. They are denied unemployment benefit and are subject simply to the social security payment rule. Thus the life savings that they have put away for their retirement begin to run out because they have to support themselves in that atrocious situation. I blame the Government. One could not say that the people of Lambeth have priced themselves out of the labour market. There are 95,000 households in my borough and 51,000 of them receive rate rebates. Many of the householders who receive rate rebates are working people. One cannot say, therefore, that wages are too high.

One could not say that there are too many strikes in Lambeth. I do not think that anyone in Lambeth has heard of a strike, except perhaps a one-day strike. One cannot say that the problem is caused by inflation, because it is true that the rate of inflation has fallen from about 10 per cent. to about 5 per cent. over the past three years. One cannot say that the state of the pound is to blame—that our goods are overpriced in overseas markets or our services overpriced for foreign visitors. On the contrary, the pound has fallen in value. One cannot say that there is a shortage of capital. From Lambeth one can see the City of London, where billions of pounds are pumped not into our inner city areas but into foreign investment.

One cannot, therefore, blame the people of Lambeth for creating the unemployment. One cannot accuse them either of not making a contribution. The Government have doubled their rates. They are paying much more money in that way. The Government have also doubled VAT. The people of Lambeth are not failing to contribute by way of taxes. The Government have taken away the earnings-related supplement for unemployment benefit and cut the rate support grant by £140 million over the past five years. The Government have cut housing benefit, so the people of Lambeth are contributing more in that way, too. The Government have closed some of their hospitals, brought about compulsory sackings at St. Thomas's and King's College hospitals, and cut services at those hospitals. One cannot accuse the people of Lambeth of not contributing to the general good through additional burdens of taxation in its various forms.

There should be no lack of demand for labour. There are over 25,000 people on the housing waiting list in Lambeth. In London as a whole there are 235,000 people on housing waiting lists, and nearly 40,000 a year are described as homeless. Houses in London, as in the rest of the United Kingdom, are deteriorating faster than they are being repaired or replaced. Private tenants, local authority tenants and owner-occupiers share the same problems of deteriorating premises and inadequate grants. The Government cannot say that there is no demand for the labour of the people in my borough.

One body has made a positive and specific contribution towards dealing with unemployment in my borough—the GLC's Greater London Enterprise Board. The Government's response to that contribution is to abolish the GLC. I have here a list of the schemes which GLEB currently has in hand. They are for the most part ethnically led. That means that they are to deal with some of to worst areas of unemployment in the borough. Ten small business schemes will create about 55 jobs. In the middle of my constituency, in Milkwood road, GLEB is developing five acres of land for industrial purposes. One hundred and thirty four jobs will be created and the construction work will occupy 65 job years.

Throughout the borough of Lambeth the Greater London training board, again assisted by the GLC and the London borough of Lambeth, is providing various forms of training in order to give people access to jobs. Neither the GLC nor the borough is in any way unwilling to try to stem the appalling tide of unemployment, hopelessness and despair, and the consequent social instability.

Unemployment is not an issue for the unemployed alone; it affects the whole community. I can see what is happening around me. the community is falling apart as a result of the scandalous effects of Government economic policy in a borough which is not distant and which is not suffering from the structural decline of traditional industries. The borough is on the doorstep of Parliament, but it is subjected to massive unemployment, massive poverty and deprivation.

I do not know what the Minister can say which will bring us any hope, but I make no apology for raising the subject, which is in the forefront of the mind of anybody who is interested in society, the community or politics in Lambeth.

2.47 pm
The Parliamentary Under-Secretary of State for Employment (Mr. Alan Clark)

I fully accept the seriousness of the unemployment problem in Lambeth, just as I accept the sincerity of the hon. Member for Norwood (Mr. Fraser) in raising the matter. Some of his language was intemperate and some of his accusations were unwarranted, but that does not diminish the concern which he obviously feels about the subject. The hon. Gentleman described in graphic detail the frustration and hardship suffered by many of his constituents. I shall try to answer as many of his comments as possible. I shall refer to my colleagues in other Departments the issues that fall outside my responsibility, such as his curious accusation that the Government have caused the compulsory sacking of 30 people at St. Thomas's hospital. A reply to that charge will be sent by my colleagues at the DHSS.

I shall preface my answer with some general remarks about unemployment because these truths are, alas, universal and affect Lambeth as much as any other part of the kingdom.

Unemployment is the most serious problem facing not only this Government but Governments throughout the industrialised world—although we have suffered more than most. Unemployment in the United Kingdom has been rising for the last 20 years. It was rising sharply in Lambeth— and everywhere else— when the hon. Member was a Minister in the Department of Employment nearly nine years ago.

The root causes of unemployment are obvious. Our industries were overmanned, our workforce was undertrained, we were slow to change and slow to adapt to new technology, we paid ourselves more than we should have done and we became steadily less competitive. As a result, firms in Lambeth and elsewhere could not sell their goods. They closed down and shed jobs. People in Lambeth with jobs outside the borough were thrown out of work for the same reason.

In addition, Lambeth has its own special problems, as the hon. Member explained. He said that unemployment had risen by 50 per cent. since the riots of 1981. It is not inconceivable that those two facts are related. The reluctance of industry and commerce to go to an area which has been so grievously afflicted by riots is understandable and creates a vicious circle. The hon. Gentleman and his colleagues would do well to consider that.

This year I have taken over from my hon. Friend the Minister of State as my Department's representative on the Lambeth inner city partnership. I look forward to the next meeting on 19 December when I shall hear a great deal more about the problems.

In common with many other inner city areas, Lambeth has additional severe economic, environmental and social problems. It suffers from bad physical conditions, lack of suitable sites for large firms and an inability to attract new jobs.

The hon. Gentleman said that the Government had offered only 600 vacancies. The Government do not offer any vacancies. Vacancies are offered by private firms and establishments. They create permanent jobs and their expansion, if conditions are right, will continue to generate new jobs. It is not appropriate for the hon. Gentleman to blame only the Government for the special problems that affect Lambeth or to look only to the Government to remedy them. None the less, because of the special problems we are providing substantial urban programme resources to the area through the inner city partnership. This year £13.5 million has been allocated, and a substantial proportion of this will be spent on schemes to stimulate the local economy and provide employment.

A wide range of schemes is being supported to promote the construction of new industrial units and the provision of refurbished workshop units. Units covering about 165,000 sq ft have been given the go ahead this year, using £3 million of urban programme money.

One example with which I am sure the hon. Gentleman is familiar is the development of five acres of former railway sidings at Milkwood road where infrastructure work is being carried out to encourage private sector investment, and industrial units are being constructed.

Another example is the conversion of the former Bon Marché department store into the Brixton enterprise centre, with over 130 workshops, offices and shops. It was £800,000 of urban programme money that allowed this £3 million development by BAT Industries to become established, and it will soon be providing up to 500 jobs. The centre opened last month. Most of the retail units have already been let and 80 new small firms have rented offices or workshops.

It is particularly encouraging, bearing in mind what the hon. Gentleman said about the high proportion of ethnic unemployment, that over half these firms are owned by young black people. I noticed that the success of the operation was highlighted in The Standard earlier this week.

The inner city partnership has, in addition, allocated £900,000 for loans and grants to businesses. In the first six months of 1984–85, 73 firms have been assisted, 55 of which were new businesses. As a result, 235 new jobs are likely to be created and 152 existing jobs preserved.

Lambeth Council's business advisory service has been funded in large part through urban programme funds. It currently has 300 clients and deals with 1,500 queries a year. This is another example of the Government providing the support when it is needed and where it is needed, in order to help businesses that will provide the jobs of the future. On top of this, another £1.2 million of urban programme money is being spent on evironmental works—a large proportion in industrial and commercial improvement areas—to make Lambeth a more attractive place for investors and shoppers. We have to remember, too, that with nearly £7 million of the inner city partnership allocation being capital resources, many jobs are created on building work during the implementation of the programme.

The Government's urban programme aid to Lambeth—I hope that the hon. Gentleman will give credit where it is due—is an example of the Government's concern and their commitment to regenerating the local economy. Lambeth is deriving particular benefit from my Department's special employment measures because of its high level of unemployment. Many of the measures are designed to protect the more vulnerable groups such as the young and the long-term unemployed. Over 500 people in the Lambeth area are benefiting from the community programme and nearly 600 from the job release scheme.

The main thing that the Government can do to help industry is to put the economy on a sound footing, and we have made considerable progress in doing that. The hon. Gentleman must allow me to put to him some figures that highlight that progress in a national perspective.

Before the miners' strike began to affect the figures, output was at its highest ever level—up 3 per cent. between 1982 and 1983. Growth in the United Kingdom in 1983 was the highest of all the European Community countries. The combination of that level of growth and inflation at 5 per cent. is the best since the 1960s.

Manufacturing investment is estimated to have risen by about 15 per cent. in the first half of this year.

Mr. Tony Banks (Newham, North-West)

Where from?

Mr. Clark

I am glad to see the hon. Member for Newham, North-West (Mr. Banks) in the Chamber.

Manufacturing investment is directed to places where investors believe that they will get the best return. That is why it is in the interests of the whole community that places to which it is desired to attract investment should present as attractive an appearance as possible.

Mr. Tony Banks

rose—

Mr. Clark

I do not know whether it is in order for me to give way to the hon. Gentleman

Mr. Deputy Speaker (Mr. Harold Walker)

Order. With the consent of the Minister and of the hon. Member who intiated the debate, the hon. Member for Newham, North-West (Mr. Banks) may intervene.

Mr. Tony Banks

When I asked "where from?", I was asking from what base the percentage increase was calculated. I believe that manufacturing investment is 20 per cent. down on 1979 levels.

Mr. Clark

I will not intrude at short notice into the arcane subject of collecting statistics, but I will try to make sure that the hon. Member is appraised of the dates from which the figure was drawn.

The hon. Member for Norwood mentioned vacancies. Over the country as a whole, we have seen a steady rise in vacancies, to their highest level for four and a half years. The hon. Gentleman said that the number of unfilled vacancies in Lambeth was disappointingly low, but in October it was up by more than 40 per cent. on a year ago. Between April and October, the employment service placed more than 8,000 people in employment in the Lambeth area—20 per cent. more than in the same period last year—and many more will have found jobs by other means.

We have stopped the haemorrhage of job losses throughout the country. Whereas 1.5 million jobs were lost between June 1979 and June 1983, 250,000 jobs have been created in the past year. However, there remains the burden of our existing level of unemployment. That is inevitably aggravated by the steady increase in the labour force, which has grown by 400,000 since 1979 and is still growing. That gives some idea of the scale of the problem. We have to run even to stand still.

I gather that Lambeth borough council has estimated that 60 per cent. of Lambeth firms employ fewer than five people. Against that background, I should mention the enterprise allowance scheme which, as the hon. Member for Norwood knows, is an incentive to unemployed people who are deterred from starting their own business by the potential loss of benefit. So far, 55,000 unemployed people throughout the country have been helped to set up in business.

The response to the scheme in south London has been encouraging. Since its introduction, about 550 unemployed people have taken advantage of this opportunity, and nearly 400 people are currently receiving the allowance. As my hon. Friend the Secretary of State announced recently, the numbers taken into the scheme have recently been increased and will be increased again in the spring of next year. I hope that the hon. Member for Norwood will suggest the scheme to those of his unemployed constituents who might feel able to consider it.

The small businesses in Lambeth have a tremendous employment potential. They are an essential part of the economy and an important source of new jobs. We aim to remove any unnecessary restraints on their growth.

We are improving access to funding through, for example, the business expansion scheme, which is increasing the flow of venture capital, and the loan guarantee scheme which helps those who are unable to secure backing from traditional sources. I hope that the hon. Member for Norwood will draw the attention of local business men to those schemes when he talks to them about their problems.

We are helping to increase the stock of suitable premises, including small factories and workshops, such as those in the Brixton enterprise centre, and we are extending the enterprise training capacity of the MSC.

No survey of our measures would be complete without mention of the youth training scheme. I was disappointed that the hon. Member for Norwood appeared to suggest that his constituents on YTS were in the same position as the unemployed. There is a great distinction. Those on a training scheme are adapting and making themselves more easily employable when they emerge from the training. More than 900 people in the Lambeth area are receiving training under the YTS and more than 1,500 places have been made available since April. The hon. Member mentioned the large number of school leavers in his area who do not have jobs. The whole House will find that figure shocking, but I wonder how many of those school leavers rejected of their own volition the idea of joining the YTS.

Almost half of those on youth training schemes are of ethnic minority origin. A large proportion have no qualifications and many have learning difficulties with English as a second language. Yet a recent survey of schemes—

The Question having been proposed at half-past Two o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Three o'clock.