Unemployment and Industrial Policies

HC Deb 11 March 1985 vol 75 cc35-120 4.20 pm

Mr. John Prescott (Kingston upon Hull, East)

I beg to move, That this House condemns the Government's policies which have resulted in the highest level of unemployment this century; affirms the widely and rightly held conviction that governments can and should regard the systematic expansion of the economy, the reduction of unemployment, and the development of youth and adult training as essential policy objectives; and calls upon the Government to end its indifference to the disastrous decline of manufacturing industry and to embark upon an urgent programme of national economic recovery based on investment in the renewal and expansion of British industry, the improvement of the social and productive infrastructure and the strengthening of science and technology.

Mr. Speaker

I have selected the amendment in the name of the Prime Minister and I intend to operate the 10-minute limit on speeches between 6 pm and 8 pm. As a large number of right hon. and hon. Members wish to take part, I hope that everyone will bear that limit more or less in mind.

Mr. Prescott

Today's debate is about employment and jobs, the creation of wealth and the standard of living of our people. It is about the failure of six years of Conservative policies, which have resulted in unprecedented levels of unemployment, and about the Government's indifference to the misery and deprivation arising from mass unemployment, much of it created by their own policies. It is about challenging the use of mass unemployment as a deliberate part of Government strategy to discipline the labour force into accepting further reductions in wages, welfare and employee rights. It is also about the waste of the tremendous potential of our young people, the growth of long-term unemployment and the decimation of our industrial base, especially the manufacturing sector.

Today's debate is also about focusing public debate on the Government's claim that there is no alternative to their disastrous policies, which promise further unemployment, increased poverty and deprivation and a growing disparity between rich and poor, north and south. We firmly believe that those policies can and should be reversed. The reduction of unemployment must become a priority and that process must begin with the Budget next Tuesday.

The Government came to power in June 1979 with the slogan, "Labour isn't working", but their record since then has been far from good. They convinced the electorate that they would get people back to work. They said that they would restore the economy by reducing inflation, lowering taxes, improving profits, cutting public expenditure and reducing Government intervention, which they said would bring an inevitable reduction in unemployment through the creation of genuine jobs. According to the Government, 1985 is the third year of economic recovery, but unemployment is at its highest this century and is predicted to rise still further.

I have no desire to subject the House to a welter of statistics, which so often dominate employment debates, but I make no apology for using some statistics to remind the House of the scale and depth of the problem arising out of unemployment and perhaps to convince the Government of the need to reduce it, as well as to challenge and disprove the many half-truths and misleading statements constantly repeated by Government spokesmen in debates of this kind.

Last week's unemployment figure of 3.3 million or 13.7 per cent. of the registered working population is a massive indictment of six years of Tory policy. To any normal Government, it would be a badge of shame, but to the present Government, wallowing in the belief that there is no alternative, it is simply a statement of the casualties. Despite the rejigging of the figures, on any fair analysis unemployment is at least 4 million—three times greater than the total of 1.3 million that the Government inherited in 1979. For every month of the Government's period of office, 12,000 of our people have been thrown on the scrap heap. Indeed, the total for long-term unemployment—now 1.3 million — is as great as the total for all unemployment in 1979. Yet far from reversing their policies, the Government have sought to blame the world recession and even the weather, using selective statistics from other countries to justify the high levels of unemployment.

In a previous speech, using the OECD figures, I showed that if the United Kingdom had kept the average level of unemployment as it was in the 1960s and 1970s there would be 1 million fewer unemployed which could be directly attributed to the Government's own policies. Of late, the Secretary of State for Employment and the Prime Minister have sought refuge in the claim that the employment-to-population ratio is better in the United Kingdom. In 1979, it was 71 per cent., but by 1983 it had fallen to under 64 per cent. The average for the OECD countries fell from 64 per cent. to 63 per cent. in the same period, so the decline has been far greater in Britain. The Secretary of State shakes his head. My figures come from table 2 on page 15 of the 1984 OECD report. I am sick and tired of hearing the Secretary of State refer to tables of statistics which are wrong. He will have the chance to correct the figures in today's debate. It is important that we correct some of the untruths put forward by the Government.

Another favourite candidate when the Government are looking for scapegoats is Socialist France. The Government are fond of pointing to that country's problems, but France has halved its inflation rate and growth is higher than in Britain — built on industrial investment, more than half of it by public enterprise. Moreover, living standards in France have increased by more than 5 per cent. compared with 1.5 per cent. in Britain in a similar period.

Further twisting of the figures and of the truth is to be found in the Government's working population figures for the United Kingdom, which they claim are increasing. Between 1974 and 1979, despite an average growth in population of 200,000 per year, the Labour Government's policies increased the working population by 245,000. After six years of Tory rule, with a growth in working population of only 40,000 per year, the labour force is 1.8 million smaller. In reality, the 350,000 extra jobs claimed by the Government are part-time jobs and must be seen against the background of a massive fall in the number of full-time jobs, including 1.25 million in the manufacturing and engineering industries alone since 1979.

Mr. Tony Marlow (Northampton, North)

The hon. Gentleman referred to France. Although he disputes some of the figures, does he accept that employment is now increasing in the United Kingdom but not in France?

Mr. Prescott

There is a time lapse in growth and employment between the various economies, but in France the increase in the number of jobs has not led to a decline in the full-time working population, as it has in the United Kingdom. That is clear from the OECD reports. I do not put forward my own figures. I simply go to the book so often referred to by the Government. France is not, therefore, a correct analogy to take when considering why unemployment is so high in this country.

The unprecedented loss of full-time jobs in Britain is readily understood when one appreciates that the Government's declared policy was to shake out overmanned industries and to cut the number of their own employees in the Civil Service. They were elected on that platform and claim credit for it. The Department of Employment's statistics show that in the transport industry alone 150,000 jobs have been lost, primarily because of the cut in financial support for the industry, already at one of the lowest levels in Europe.

There has also been a reduction in the rate support grant, which has had considerable effect in reducing numbers of local authority employees, and the Government take credit for the expectation that the abolition of the GLC and the metropolitan councils will involve the loss of another 8,000 jobs. The Government's claims that high rates reduce local jobs have been cruelly exposed by their own leaked report from Cambridge university, which rejects the idea that the increase in rates leads directly to a reduction in local employment. A reduction of 90,000 jobs in the steel industry is now to be followed by many thousands—who knows how many? —in the coal industry, if the Government get their way. The Government spent £4 billion on defeating the miners and consider that to be a good investment. They now offer us NCB (Enterprise) Ltd., funded by a derisory £10 million in compensation. That is utter nonsense and a reflection of their priorities.

Finally, a collapse of fixed capital investment in the construction industry and the industrial sectors has certainly led to the loss of many hundreds of thousands of jobs. That is part of the Government's deliberate policy on unemployment, which distinguishes them from any other civilised European Government.

A further disturbing feature of the Government's policies involves the growth of the part-time labour market. We have seen the loss of 2 million full-time jobs and the growth of 300,000 in the number of part-time jobs. The regional implications are alarming. The loss of full-time jobs has not been spread equally throughout the country. The rate of loss of full-time jobs in the north has been four times greater than in the south. The manufacturing decline has hit the north and the midlands far harder than the south. The long-term unemployment rate is twice as great in the north on average as in the south, and affects the growing regional difference in income, further accentuating the north-south polarisation that exists after six years of Tory Government.

The final insult to such growing regional disparities is offered by the Government's own regional policy. They are now preparing to reduce expenditure on regional policies to a level below the real level of 1964, when only half a million people were unemployed. That is the scale on which resources are being reduced at a time when regional disparities are growing ever faster as a direct result of the Government's policies.

The great tragedy is that we have not during the recession used the £12 billion of oil money to invest and retrain in the so-called sunrise industries after the Government's destruction of the smokestack industries. The growth in information technology has been slower than it has been in the economies of our competitors. I refer the Government to the recent report of Professor Ashman into the future of our information technology industry. His fears about shortages of proper skills and of adequate financial backing for the industry have proved to be correct. His prediction of a growing deficit by 1990 became all too true in 1984 when we experienced a deficit of £2,000 million in information technology to add to the ever-growing record deficit in manufacturing trade.

Dr. Keith Hampson (Leeds, North-West)

Can the hon. Gentleman explain to the House why it was left to a Conservative Government to launch a scheme that brought mini-computers into all our primary and secondary schools? The hon. Gentleman criticises the growth in the number of part-time jobs. Does he object to women taking part-time employment?

Mr. Prescott

I certainly do not object to anyone finding work. I believe that the Government have a responsibility to do all that they can to create jobs. I will not accept that comment from an hon. Gentleman who constantly votes for a policy that is directly increasing unemployment. On computer skills, I refer the hon. Gentleman to the Government's report on computers and the supply problems of information technology. The report points out the tremendous shortages of graduates and computer people available to work in those industries.

Dr. Hampson

We have done something.

Mr. Prescott

The fact that there are now computers in our schools is welcome, but we have set aside for information technology only one eighth of what Germany devotes to that industry, and the Government have placed a moratorium on the amounts of money made available to information technology industries. If the hon. Gentleman showed more concern for those facts, we would have more respect for his criticism.

It is tragic that we have not used our oil money to support and equip that basic future industry. The income that the Government received from the privatisation of British Telecom would have been better used for reinvestment in information technology than for funding the outdated monetarist policy that has created much of our unemployment.

I do not attribute all the unemployment directly to the Government's policies—that is not my case—but during the recession unemployment in the United Kingdom has increased by a third more than unemployment in competitor countries. We could use this time as they have done, to embark on a massive training programme. The Government speak of the £2,000 million allotted to the YTS programmes and other schemes, but they are not providing adequate training to re-equip our labour force to meet the challenges that it faces. Our criticism of the Government's training programme is not that they are not providing enough money, or that they are not using it in the right way, but that they have set back training in this country by 20 years. They have undermined the whole basis of thinking on training.

For decades, Britain's failure to train has been a significant factor in our poor economic performance. The percentage of qualified workers in Britain is half that in the United States, Germany and Japan. The percentage of 20 to 24-year-olds with higher education is considerably lower here than in our competitor countries.

The network of 23 industrial training boards covering 53 per cent. of the working population and supported by statutory enforcement powers and levies was introduced by a former Conservative Government. Labour Governments built on the sound judgments of the ITBs, which provided apprenticeships for 43 per cent. of youngsters leaving school.

With the creation of the Manpower Services Commission national training objectives were established. However, tragically, the brave new world of the present Government's economic theories, with their one major disciple, the right hon. Member for Chingford (Mr. Tebbit) as Secretary of State for Employment, set about destroying the ITBs. On 10 November 1981 the right hon. Gentleman announced the Government's policy of reducing the number of ITBs from 23 to seven. He said: the training requirements of the sector concerned can be met effectively on a voluntary basis with less cost and bureaucracy." —[Official Report, 16 November 1981; Vol. 13, c. 30.] Previous Tory Administrations had come to quite a different conclusion when they established the ITBs. We shall have three or four years in which to judge the effectiveness of the new policy. The right hon. Gentleman was challenged by Mr. Eric Varley, then the Opposition spokesman, who said that the Government's policy would damage training in Britain and undermine our competitive position and that it was against the advice of the MSC, which required a strong statutory system. The right hon. Member for Chingford made it clear that the policy was in response to what industry had requested, and that he had acted accordingly.

Many reports have brought home one underlying truth about British industry. It is that our employers fail to give the necessary priority to training or to provide resources for it. A number of reports published in the past few years have reaffirmed the analysis that led to the establishment of the ITBs in 1964. It is interesting to read some of those reports. We have witnessed the return to a voluntary training system, even though some of the boards remain. We have seen the poaching of skills, and there have been demands from the National Economic Development Council, the TUC and the CBI that something be done about the desperate shortages of skills from which our economy is suffering, even though 3 million or 4 million people are unemployed.

The Department of Trade and Industry's report shows that there is a shortage of about 5,000 graduates in information technology, that employers should make a greater contribution to training, that technological progress in the United Kingdom has been hampered by our failure to develop human resources and that industry should accept more responsibility for the training and education of recruits. It shows that there are low levels of initial training, inadequate continued training and that correction of skill shortages lies principally in industry's hands.

The most recent report from another place on education and training in new technologies recommends the introduction of a national training levy across all sectors of the industry and a national training plan. These were the arguments of the 1960s. Now that technological change is more rapid than ever and we have severe skill shortages, the Government respond by dismantling the very structure that improved training by more than 25 per cent. in its first four years. Report after report tells us that we should return to statutory training requirements and levies from employers. The indictment of the Government is not so much that they have abandoned any intelligent approach to training but that they have overthrown what was accepted by earlier Tory Administrations in the 1960s.

Mr. Richard Tracey (Surbiton)

How was it that the 1984 Labour party conference condemned the youth training scheme, in opposition to the line taken by the Labour party's national executive and the Trades Union Congress?

Mr. Prescott

I am delighted to have the opportunity to put on record the TUC and Labour party policy to extend YTS to two years, finance it properly, have proper safety control and proper allowances. The hon. Gentleman should visit some of the schemes. Some are excellent, but others are no more than shifting cardboard boxes around warehouses. The hon. Gentleman might be satisfied that the latter meets the challenge of the future, but I am not.

The Government's stupidity in dismantling the training system is most clear when we consider our tremendous lack of skills as compared with our competitor countries. The Secretary of State recently came to the House to endorse the policy to close 29 of Manpower's 83 skillcentres in the name of not wanting to keep bricks and mortar. Inspectors must now get on their bike and cycle around to give training. The skillcentres are necessary because there is a shortage in all skills.

Mr. Kenneth Carlisle (Lincoln)

I am sure that the hon. Gentleman agrees that it is important that training is relevant. Does he agree that we should consider the practical implications of skillcentres? Lincolnshire's skillcentre is at Long Eaton, the result being that many people in Lincoln do not use it. It makes much more sense to use the money available to have training in the centres of engineering, where they are much needed.

Mr. Prescott

I am grateful to the hon. Gentleman for giving way. My objection is to closing skillcentres when they are desperately needed. Even worse, the Secretary of State is closing five profitable skillcentres. I should have thought that they would be especially attractive to Conservative Members. Some of them specialise in technology and youth training.

We hear much about productivity, a reduction of wages and a reduction of staffing levels. The National Institute's "Economic Review" compared productivity in Britain and Germany and concluded that the difference was not so much to do with manning levels or the type of machinery used as the type of skill and training of employees. Discussing the Government's policies, it concluded that, if anything, present Government policies towards training are likely to make Britain's deficiencies even worse. That is quite an indictment.

Labour's "Plans for Training" makes it clear that we shall have a two-year youth training scheme, finance it properly, increase fivefold the Manpower Services Commission work preparation and training programmes and improve community programmes. No doubt the Government are considering some such schemes. We do not object to the schemes, as they will help to reduce unemployment. Our objection and opposition is to conscripting youngsters and taking their benefits off them if they choose not to go into a scheme, as is apparently being considered by the Government.

The Prime Minister and Ministers have lectured the House constantly to the effect that there is no alternative to their policies, and unemployment has increased. The past three Budgets have apparently been designed to create jobs, but unemployment has continued to rise. If press statements and leaks are to be believed, the Chancellor intends to intervene again in this Budget to create jobs. I hope that he has more success this time. We believe that Governments can influence the framework of employment and reduce unemployment. Indeed, they have a responsibility to do so. The Government's support for interventionist policies seems to be growing. The Select Committee has been told that they are intervening on interest rates, exchange rates and even on oil prices. We welcome any conversion of the Government to policies to reduce unemployment that we have called for since 1979.

Discussions about unemployment have become especially pertinent because of the Chancellors's statement that he hopes to have £1.5 billion available for tax cuts. That has resulted directly from the pound's huge fall against the dollar, which has brought the Chancellor a reward, but which has been costly to the country in terms of investment, penal interest rates and uncertainty about inflation. Public debate about how best to use the £1.5 billion has led to a consensus that investment in infrastructure can create jobs. The debate is therefore about putting unemployment and its reduction at the heart of next week's Budget.

The Chancellor has an opportunity to do something effective, even within his monetarist terms. I am talking of real jobs, as did the Prime Minister when in opposition, rather than the 700,000 people who are in various schemes, designed mainly to reduce the unemployment figures. I should welcome an increase in and a redefinition of community schemes, and an improvement in the quality of training and allowances. The Opposition are not against expanding such schemes, which bring the unemployed together and fulfil needs.

If the Government present a package that merely extends YTS and the community programme, it will be clear that they are more anxious to fiddle the unemployment figures yet again than to reduce unemployment. If they genuinely want to reduce unemployment through the provision of full-time rather than part-time jobs, they should invest more in public sector infrastructure.

We reject the Government's argument that a reduction in wages will bring many jobs. We reject their abolition of wages councils for industries that pay only £70 or £50 a week. We reject the so-called Lord Young package, which reduces the costs of small businesses by repealing statutory employment protection benefits such as health and safety rights, maternity rights, unfair dismissal rights, equal opportunities and other employment rights. That is totally unacceptable and will be bitterly opposed by the Opposition.

The issue is how much we should put into public expenditure and in what areas it would have the best effect. The Opposition believe that a national recovery programme in both the public and private sectors would require a considerable amount of money and planning. We do not believe, and the evidence supports us, that the market system can produce the organisation required to achieve full employment, to which we are committed.

This debate is about a reversal of the ever-increasing level of unemployment. Never has a Chancellor been provided with so many schemes, opportunities and plans to reduce unemployment. The CBI and TUC have produced plans of varying amounts—from £3 billion a year to £6 billion a year—and even the Tory Reform Group has joined in the bidding. Even the national daily press has produced various plans. The Daily Mirror, the Daily Mail and the Daily Telegraph have all produced schemes which are different in composition and amounts, but are wedded to the concept that the Government can, and should, use this Budget to reduce the high unemployment now experienced in the United Kingdom.

One way of judging the Government's record on unemployment is by looking at local authority expenditure, particularly in housing. Local authorities have made a considerable contribution towards meeting training needs in their areas. They have created jobs by providing services. They have developed enterprise units, which have created many thousands of jobs, all of which have been achieved more cheaply than anything proposed by the Government. A report in The Guardian today said that the Audit Commission has made it clear that £1,000 million has been denied to local authorities which could have been used for housing. It was claimed that this had been at great cost to efficiency. That money has resulted from the sale of council houses, about which the Government were so demanding. Why has it not been used for housing and for getting our 500,000 unemployed construction workers back to work? That Audit Commission report is also an indictment of the Government. Many of those unemployed building workers could be put back to work and could meet the needs of our people. The Government stand indicted for failing to choose this priority.

I wish to conclude——

Mrs. Edwina Currie (Derbyshire, South)

Hear, hear.

Mr. Prescott

I notice that the hon. Lady is today dressed in red—[HON. MEMBERS: "Pink."] No matter, in spite of her remarks and concern, she has voted for more people being unemployed.

The Chancellor has an opportunity to consider a number of packages of private and public investment which, at a stroke, could send many of our people back to work. It will not be easy to send everyone back to work within three or four years. We should be absolutely clear about that. The sort of radical policies required to achieve that cannot possibly be obtained within the framework of the Chancellor's remit, but many could be sent back to work, thereby reversing the ever-increasing flow of unemployment.

If the Minister wishes to study a plan that has been publicly discussed he should look at the Daily Mirror package. Has the Secretary of State read it? Has he noted what it said about the provision of jobs? All of it has been costed and fed through computers. I shall not go into detail, but that plan suggests the provision of community schemes, help for special groups, provision of labour through job release and early retirement, and the construction of social facilities such as homes, roads and sewers for which so many are calling. That plan says that for £3.8 billion over 1 million people could be returned to work.

Has the Secretary of State asked the Chancellor whether it is possible to return 1 million people to work? The resources can be achieved within the Government's financial remit by adjusting the target for the PSBR and would allow us to provide for jobs rather than tax cuts. I pass that plan across the Table so that it can be fed into the Treasury computer. Will the Secretary of State say whether such a programme is possible?

At Question Time last week the Prime Minister claimed that the Government had created records — record output, a record standard of living and record job creation. That is almost a truism, because such things happen most years. The Prime Minister also claimed that there had been record investment, when in fact there has been record under-investment. The Prime Minister will go down in history as one who presided over record unemployment, record poverty, a record number of youngsters out of work, record long-term unemployment, record bankruptcies, a record deficit in manufacturing trade and record division between rich and poor, north and south—all of which the Labour Opposition will reverse when we return to power.

4.57 pm

The Secretary of State for Employment (Mr. Tom King)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: supports the Government's determination to pursue economic and industrial policies which maintain a sound financial framework, low inflation and steady economic growth and create the conditions for efficient, competitive and productive industry; welcomes its commitment to develop training opportunities for young people and adults and to help the unemployed through measures like the Enterprise Allowance Scheme and Community Programme; notes that these policies have already led to the creation of over 300,000 more jobs last year and believes that sustaining these policies offers the best hope of real and lasting improvements in employment opportunities". Many of us will have been deeply shocked by the revelation in The Times today of the sort of language that occurs in the other place. Many will have been deeply shocked at the reference made to one noble Lord by the person whom I understand is now described as the Church's rudest bishop who said: His mouth is for export and his head has no entrance". That comment could have been applied to parts of the speech of the hon. Member for Kingston upon Hull, East (Mr. Prescott). He stands before the House as the representative of a party which has been in government, during which time unemployment doubled, yet the hon. Gentleman spoke as though there was an easy and facile answer.

As I listened to him, I wondered whether he had voted for the motion at last year's Labour party conference—which in the end was defeated by the block vote system—which deplored mass unemployment and said that the answer was a 35-hour week, six weeks annual holiday for all workers, retirement at 60 for all—[Interruption.] I can understand why Opposition Members want to shout me down. This was the Labour party's answer to mass unemployment. That motion also called for a massive programme of public works, and believed that the "only solution is a socialist plan of production based on clause IV, Part 4 as the first priority of the next Labour government."

Mr. Prescott

Will the right hon. Gentleman give way?

Mr. King

No. I just wish to deal with this point. Is that what Labour Members really believe?

Mr. Prescott

rose——

Mr. King

We know that it is not.

Mr. Prescott

rose——

Mr. King

The hon. Gentleman can intervene when I finish this part of my speech.

I wondered whether that was what all Labour Members believed. [Interruption.] I can understand Labour Members wanting to shout me down and not wishing to hear these quotations. We are grateful to the New Statesman which has provided us with a document from Walworth road about what some other people in the Labour party believe. I understand why the right hon. and learned Member for Monklands, East (Mr. Smith) is waiting with interest. The Labour party's document states that the party has little credibility on policies for dealing with the economy … Labour has lost the economic argument, and that it must start from scratch. I cannot help thinking that the hon. Member for Kingston upon Hull, East has not got round to that piece of advice. The document continues by saying that the promises of full employment are overambitious and unconvincing.

The third part of the package suggested that the Labour party should approach companies for donations. I would not send the hon. Member for Kingston upon Hull, East as the ambassador on that assignment. The right hon. and learned Gentleman said We must appear relevant and modern. Our cloth cap image must be shed.

Mr. John Smith (Monklands, East)

I never said that.

Mr. King

No one would accuse the right hon. and learned Gentleman of a cloth cap image, and I certainly excuse him from that charge. The right hon. and learned Gentleman continued——

Mr. Smith

Answer the debate.

Mr. King

I shall answer the debate. The right hon. and learned Gentleman continued: It creates the image of Labour as a well-meaning party"——

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. If hon. Members wish to intervene, they know that they must rise to their feet and challenge the Minister.

Mr. King

The right hon. and learned Gentleman continued: It creates the image of Labour as a well-meaning party that prints money to solve each and every problem. As I listened to the programme suggested by the hon. Member for Kingston upon Hull, East, it became clear that that lesson had not yet sunk in.

Mr. Ron Leighton (Newham, North-East)

rose——

Mr. King

I shall give way in a moment. The jobs and industry campaign is to be launched shortly, of which one of the planks is a minimum of a £25 a week allowance for 16 and 17-year-olds in full-time education, yet the Labour party does not wish to appear to be printing money. That is about printing £1 billion of money.

Mr. Prescott

I am alarmed that the Secretary of State is the Government expert on trade unions and advises the Government about what trade unions do and do not do. I assure him that we do not hold a block vote at the Labour party conference. Members of Parliament have no vote at that conference. I am not embarrassed by the resolution that the Secretary of State is reading. The Secretary of State is opposing what every other European Government have been supporting, that is, a recommendation for the reduction of the working week and, probably, of overtime. That is one way of contributing to finding new jobs. Instead of criticising the resolution, the Secretary of State should make it clear that he is standing in the way of every other European Government which seek to follow that road.

Mr. King

I am sure that I am not the only hon. Member to be deeply shocked by the revelation that so thin and shallow is democracy in the Labour party that Labour Members are not allowed a vote at their own party conference. [Interruption.] If I was wrong and had too high an opinion of the Labour party, and if in fact, Labour Members have no vote, I apologise. I did not wish to be derogatory about the Labour party.

Mr. Leighton

Does the Secretary of State realise that it is offensive to the House for him to be so flippant and to spend his time on a knock-about attack on the Labour party conference? [Interruption.] If the Secretary of State can hear above the Whips' shouting, will he use his valuable time to explain the Government's policies and not waste the time of the House with this knock-about turn?

Mr. King

I listened to a long speech from the hon. Member for Kingston upon Hull, East and it is my duty to start by exposing the hon. Gentleman's complete hypocrisy in this matter, not least because a large part of what he said is specifically contradicted by the Labour party's policy document in which his right hon. and learned Friend the Member for Monklands, East has some interest.

The hon. Gentleman stated in guarded terms the Labour party's policy on youth training. If the hon. Gentleman is seeking to be a member of an alternative Government, he should know that resources will be limited to the proposal for the youth training scheme in the motion that was carried at the Labour party conference. The Labour party's proposal for youth training calls on unions to launch massive recruitment campaigns of YTS trainees to fight for full trade union control, union rates of pay, health and safety protection, —which they already have— five weeks paid holiday and 35 hour week. Does anyone seriously think that those changes are the highest priority for a youth training programme? It is vitally important that we build up the training content of it. [Interruption.] If hon. Gentlemen are telling me that the motion was not carried by a sufficiently large majority to make it binding on the party, the House should note that it was carried by a majority at the Labour party conference.

Dr. Hampson

Will my right hon. Friend inform Opposition Members and their spokesman who lauded the German example that in Germany, where they have youth training for 18-year-olds, it is recognised that the rate of pay should be dramatically lower than the average skilled worker's wage? On the other hand, our trade unions strive desperately to make the rates of pay as close as possible. That is why our employers are unwilling to hire young people.

Mr. King

I thank my hon. Friend for that comment.

I turn to the serious issues behind the motion. The hon. Member for Kingston upon Hull, East wasted the time of the House with rhetoric and rage when our unemployed deserve a more constructive approach to the problems that they face. People are not fooled by such presentation because they know that much more serious issues are at stake. The hon. Gentleman is cruel to deceive the people when he implies that if he and his colleagues were in government they could wave a wand. We must start with a sensible analysis of the problem. Over many years we have had the biggest shake-out in employment. People forget that only 10 years ago 228,000 people worked in our steel industry. Today there are only 71,000.

Ms. Clare Short (Birmingham, Ladywood)

That is the Government's fault.

Mr. King

The hon. Lady may like to recall that the right hon. Member for Islwyn (Mr. Kinnock) said: We did not avoid the responsibility of acknowledging the unavoidable need for manpower reductions.… Those outside the industry who pretend that steel can survive without very major changes are indulging in the most callous falsehood in the hope of instant popularity. We heard an echo of those latter words— indulging in a most callous falsehood in the hope of instant popularity"— in the speech of the hon. Member for Kingston upon Hull, East.

It is sobering to remember that, 30 years ago, 700,000 people worked in the coal industry, whereas now only about 190,000 work there. Thirty years ago, the railways employed 600,000 people, but the figure has now decreased to 180,000. Major changes have taken place against that background, and we have had to face the other serious problem of the increase in the work force during that period. It has increased by 3 million since 1955 and by 1.75 million since 1975. Against that background, an uncompetitive Britain has been least equipped to face the problems. Few hon. Members seemed to recognise the quotation given by my right hon. Friend the Prime Minister last Thursday: The only answer to the economic problems which have dogged Britain … is to improve the performance of our manufacturing industry." — [Official Report, 7 March 1985; Vol. 74, c. 1165.] Those were the words of the right hon. Member for Leeds, East (Mr. Healey) when he was Chancellor of the Exchequer.

There is no substitute for a sound and stable framework of economic and industrial policy, and our first priority has been to control inflation and to restore competitiveness. Our second objective has been to remove the obstacles to employment both in training—that is one area on which there may be rather more agreement between both sides of the House—and in taking effective measures to help those hardest hit.

The first of those components was the need to create a sound economy and to reduce inflation. The House knows the progress that we have made in that respect. The success has been mirrored, not in the three years of growth as the hon. Gentleman said, but in four years of sustained growth. As he knows, that has been reflected in the significant improvement in profits in manufacturing industry. Hon. Members on both sides of the House will welcome the dramatic improvement in investment in manufacturing industry, which increased by 13 per cent. during the past year, on the back of an increase in profits of 20 per cent. Manufacturing exports increased sharply by 11 per cent. during the past year, and the evidence of improved performance with the remarkable export figures that were quoted last week is further confirmation of an improvement in the economy.

Mr. Alan Williams (Swansea, West)

The right hon. Gentleman speaks of an improvement in manufacturing investment. Will he confirm that since his Government came to office investment fell by more than £3,000 million—by 41 per cent.— until less than a year ago? What little recovery there has been is simply an attempt by industry to beat the deadlines on investment allowances and on regional development plans.

Mr. King

It is true that, at first, there was a substantial decrease and much uncompetitiveness in the teeth of recession. There was also poor productivity—the trade unions cannot excuse themselves from blame—and a failure effectively to use investment. The more recent figures, which show an improvement in investment, may be marginally affected by the arrangements announced by my right hon. Friend the Chancellor of the Exchequer, but I believe that there has been a significant improvement flowing directly from the 20 per cent. increase in profits.

Part of our policy has been to try to improve competition, and one of the most successful components of it is—that dreadful word—privatisation. Does any hon. Member seriously suggest that we should turn Associated British Ports back into the British Transport Docks Board? Does anyone suggest that we should change the National Freight Company back to British Road Services? Does anyone suggest that British Telecom would be better off if it was back in the Post Office mixed up with the postal services?

If we are to have the serious and constructive discussion that the subject deserves, I hope that Opposition Members will admit, as they do privately, but prefer not to do from political platforms, that our privatisation programme has been widely welcomed. We have just had excellent news from China concerning Cable and Wireless, whose chairman said that new vigour and vitality has flowed through that organisation since it entered the private sector, which I hope will be accepted by all hon. Members.

We have not only had an improvement in the economy —[Laughter.] I am surprised that right hon. and hon. Members find employment, about which I thought they were so concerned, a matter for such continual ribaldry. I and my right hon. and hon. Friends believe that the subject is much more serious than that. The public will notice that the matter has been treated with levity by the Opposition, which is not the way in which the House should address this matter.

As we begin to have a stronger economy, we begin to see an improvement in unemployment which every hon. Member recognises is our most serious problem. The feature of unemployment until 1983 was not only an increase in the working population but a substantial loss of jobs. I have told the House before that we can demonstrate that we have turned the first corner. There are now more jobs—not just part-time jobs, as the hon. Gentleman tried to say, but full-time jobs. The number of self-employed is also increasing sharply. At last, instead of having fewer jobs, we have more jobs. Of course, we are not creating enough extra jobs to take up the increase in the working population, but the important thing is that we have turned that first corner.

Mr. Nigel Spearing (Newham, South)

The Secretary of State mentioned levity. Can he not distinguish between levity and derision? How does he reconcile the statement in the Government's amendment, which welcomes a commitment to develop training opportunities for young people and adults, with the closure of skillcentres?

Mr. King

I am grateful to the hon. Gentleman for bringing me precisely to my next point, which deals with the removal of obstacles in the labour market and the opportunities for employment. Training is at the heart of that.

The hon. Member for Kingston upon Hull, East referred reasonably to the National Institute "Economic Review", which highlights clearly, as did "Competence and Competition" and other reports in this area, the serious problems that we face in training and the need to develop, encourage and stimulate more training and better standards of qualification at all levels, including management, supervision and on the shop floor. The report shows that, although there has been investment in new technology, it has not been used fully because of a lack of skill and competence in its use. The changes that we have in skillcentres are precisely directed to that point.

We have decided not to go on training people in areas where fewer than half have a prospect of getting a job when there are shortages of skills in many other areas for the same reason. We have also increased capital expenditure on new technology and new equipment in the skillcentres. We are increasing the facilities to make the training more widely available in sectors that are some distance from the fairly limited existing range of skillcentres and we are ensuring that we are able to increase the amount of training that we provide. That is our determination and it is intended not so that the Government can wave a wand but so that we can give a lead in certain respects. We shall be active in encouraging what confidence and competition bring out—the need for employers to make a major contribution to investment in the future.

Mr. Michael Foot (Blaenau Gwent)

Does not the right hon. Gentleman understand that he is inflicting injury on the areas from which he removes the skillcentres? Does he not understand that some areas are determined to fight for their skillcentres? If he is serious about giving skills, could we not have a much bigger programme that would enable those skillcentres to continue and others to be set up?

Mr. King

I know that the right hon. Gentleman takes some interest in this matter, so he will know that we intend to expand the training programmes so that in the vast majority of areas we shall be doubling the number of people who are able to get training in the coming year. He will also know of the request that I made——

Mr. Foot

rose——

Mr. King

The right hon. Gentleman asked me this question, and I have been speaking for a long time, so I shall continue answering it. He will also know that I have specifically said to the chairman of the Manpower Services Commission that no closures should go ahead until he is satisfied with the alternative arrangements that are to be made. Some can be made quite easily. It will mean that resources will be released that can be used more effectively for training and will not be lost through losses and deficits from centres that are under-utilised.

The third leg of our policy is that during the recovery of the economy and the creation of more jobs, we have been anxious to be as effective as possible in the measures that help those who are hardest hit by the difficulties through which we are passing. I make no apologies for the developments that we have made on the enterprise allowance scheme, which has been as successful as any special programme and is being copied by other countries in the European Community as an effective method of helping the unemployed to start up their own businesses.

The success of the youth training scheme in helping youngsters to get effective training and a real start in their working life for the first time is something that I would have hoped that the whole House would support. I only hope that Labour Members will learn to improve their view of it.

I hope that the House will welcome the fact that the community programme, which I know is widely supported in the House, is to have added to it proposals for training to help the longer-term unemployed have a real chance of getting back into work. From the first signs, it looks as though we are making progress.

The background to the debate is somewhat different from the figures that the hon. Member for Kingston upon Hull, East gave. Some 66 per cent. of our working population is at work, against an average of 60 per cent. for the European Community, and those figures are somewhat different from the figures that he gave. We shall have to check his figures. My figures show that the United Kingdom had 66 per cent. in work, France and Germany had 61 per cent., with about 55 per cent. in Holland.

We have a higher proportion of our working population in work and we have turned the first corner in creating more jobs. But we also recognise the role that the Government can play. The country as a whole also has a role to play — industry, trade unions, employees and those who have opportunities to train to help to improve their potential for employment. We are determined to help people create jobs and get jobs. In the meantime, we are also determined to help those without jobs. Those are the policies on which we have stood and which we shall pursue. I commend the amendment to the House.

5.25 pm

Mr. Donald Stewart (Western Isles)

The Secretary of State spoke of turning the corner. We have had this kind of optimistic forecast for a number of years, but we seem no further forward. In spite of these "jam tomorrow" forecasts, the situation is, if anything, getting worse.

The Secretary of State referred to inflation. There would be no argument about the necessity for grappling with and reducing inflation, and I have gathered from Government claims that inflation has been conquered. Rising unemployment was put in the scales in the Government's fight against inflation. That objective has been achieved and inflation has been brought down to a reasonable level, but the unemployment figures continue to rise. If that were the sole purpose of the exercise, it has been much ado about nothing.

I shall refer to the Scottish context. In January, Scotland's unemployment figure was 16 per cent., the same as it was in the disastrous month of February 1983. So much for the ridiculous claims by the Government and by the Secretary of State for Scotland in particular, that Scotland is leading the United Kingdom out of a recession. That has not been noted in Scotland and it is one of the most fraudulent claims that has ever been made. All the evidence—output, business optimism and unemployment figures — conspire against any assertion that Scotland is leading a recovery in the United Kingdom.

The figures from the Department of Employment show how serious the position has become, even in one year. In January 1984, in my constituency 19 people were chasing each vacancy. In January 1985 that had gone up to 36—almost double. In Tayside, a year ago 38 people were chasing each job, but now more than 61 are chasing each job. That shows that February's unemployment figures do not improve the problem. Rather, they show that the position has become considerably worse. Even on an unadjusted basis, although it went down slightly, the hard core figure is unfortunately still relentlessly travelling upwards.

Over several years the Scottish industrial base has been dismantled. Industrial production is less than 90 per cent. of the 1975 level, and neither the oil-related employment nor the advent of the micro-electronics industry has been able to provide enough in the way of new jobs. If it were not for the fact that 18,000 skilled and qualified people leave Scotland each year, mass unemployment would be even worse.

We are often told in Scotland that we are not as badly off as some other regions of the United Kingdom. In unemployment terms that is the case at present, but we should never allow people to believe that Scotland's situation has improved over the past few years. The regions of England with which we are compared, such as the north, the north-west and the midlands, have merely got much worse. It is no consolation to us in Scotland to be told that we are better off than some poor region which is going through a traumatic period of industrial readjustment and is experiencing horrific levels of unemployment.

Another truth is that we have had various initiatives in Scotland which were supposed to improve our position. There is no doubt that some of them have. We have had regional policy initiatives over many years, although these are now being downgraded. Since 1975 we have had the Scottish Development Agency, which I claim was set up largely as a result of the pressure of having 11 Members of my party elected to the House of Commons.

It is not unusual for hon. Members representing constituencies in the north of England to complain about Scotland getting what they describe as favoured treatment. My reply to that complaint is that if we in Scotland have been getting a good deal out of the British system, there can be no argument for our staying in it. If we have had any sort of favoured treatment in the past, I dread to think what would have happened if we had never had any.

In any case, it is a myth that Scotland has had anything that it did not fully deserve. We contend that we deserve a lot more, and that is why self-government is essential for the improvement of the employment position in Scotland and, indeed, every other aspect of life there.

Scotland should never experience an unemployment figure even of 16 per cent. The paradox is that potentially we are a tremendously wealthy country with a favourable size of population compared with the balance of resources. Yet, as a region of the United Kingdom, we are one of the poorest parts of Europe. I maintain that self-government is the key to resolving that paradox and the way to ensure that Scotland enjoys the low unemployment level of 3 or 4 per cent. which exists in those independent countries of Austria, Norway and Sweden. I contend that that is the league in which Scotland should be included. It should not be part of the United Kingdom, where the Government seem to be indifferent to growing unemployment, with no policy being put forward to improve the situation. It has come to be regarded like the common cold: it has to be endured, but it cannot possibly be cured.

I warn the Government that in the present climate people will not stand indefinitely for a Government who are totally indifferent to the unemployment figures.

5.32 pm

Mr. David Howell (Guildford)

I agree at least with the right hon. Member for Western Isles (Mr. Stewart) that we have had these debates before and that inevitably some rather repetitive elements come into them. However, despite all the clatter that the Front Bench contributions seemed to raise, and despite the noise that came from the 25 Labour Members who listened to the hon. Member for Kingston upon Hull, East (Mr. Prescott) giving his rather bellicose introduction of the motion, over time the climate in these debates is changing and some new and more realistic understandings are creeping in. I have in mind two in particular.

The first is a wholly positive and constructive one. It is that there is a very great deal to be done which can be done without inflationary finance. We are not caught in that hopeless trap which many people thought existed 10 years ago, where any attempt to counteract the forces creating a new employment pattern would lead immediately to an upsurge in inflation. Certain things can be done and, during the time of this Government, I believe that we have begun to establish the possibilities within a sensible non-inflationary framework.

The second realisation is that we are dealing with part of a huge worldwide trend of changes in the pattern of employment and in the nature of work. There are those who have said several times, including today, that there are other countries which seem to have done better. They cite Japan, with its amazingly low unemployment level, and the United States of America, which has created millions of jobs. That is true, although I advise hon. Members that these matters are not quite as obvious as they seem. For a start, in Japan the unemployment figures tend not to include people who have been unemployed and are no longer seeking work after a few months. Recently, I had the opportunity to write an article which was published in Japan praising the Japanese for their low unemployment figure. I got back some very rude remarks from all over Japan to the effect that that was not so, that they had a very high unemployment rate, and that the true figure was disguised in certain ways. We ought not to fall too easily for the idea that some wonders are taking place there.

It is true that in the United States an enormous number of new jobs have been generated. A great many regulations and inflexible obstacles standing in the way of millions of people getting into work have been got rid of. But we must not forget that of the school leavers in the United States 73 per cent. go on to higher education, whereas here it is between 40 and 44 per cent. That explains why a great many people who would otherwise, I suspect, be looking for work in the United States do not feature in the unemployment figures.

So my first simple point is that all countries face entirely new conditions as the structure of industry changes in all the industrialised world.

Mr. Williams

The right hon. Gentleman overlooks the magnitude of the addition that Government policies have made to job losses in Britain. Is he aware that, since this Government came to office, of every 100 jobs that there were in manufacturing we have lost 23, whereas the Germans have lost 10, the French have lost 10, the Swedes have lost eight and the Japanese now have 103? The difference between those figures is the failure of this Government.

Mr. Howell

No one disputes that we have had a magnitude of change. Where the right hon. Gentleman is being a little shortsighted is in assuming that it all suddenly began in 1979. He knows that we have been trying to change our structure for a generation, under successive Governments, not, alas, with great success. Now, when reality intrudes, the structural change is very painful and difficult and creates ugly pockets of long-term unemployment which are a major social problem.

Since all countries face these new conditions, we, too, must realise that a totally new approach is required to the new employment conditions that are emerging throughout the industrialised and industrialising world.

I believe that we should start from a positive stance and get away from the gloomy idea that nothing can be done. We have to be realistic and accept that there is no possibility of a return to full employment in the conventional sense, which I suspect still lingers in the more romantic breasts of the Opposition, where we could see the preservation of an industrial society in which everyone had a job for 47 hours a week, 47 weeks of the year and 47 years of his working life. That world has gone. To try to pursue policies to bring it back will cause great disappointment and bitterness.

There is plenty to learn and plenty to do in modern society. There is no need to allow the outdated idea of the scrap heap to linger. That can be overcome, but only by setting ourselves new goals and by not continually talking about full employment as though we could get back to it in the old sense when we cannot.

We can go forward to a society which is fully occupied, in which people have the training and skills and the education opportunities to create employment for themselves and to fill their lives satisfactorily. We can do that and, in a sense, that should be the new goal for the 1980s, just as full employment was the goal for the 1950s and, under the Labour Government, the goal was fair shares for all in the late 1940s. Our goal should be a fully occupied society.

Mr. Marlow

Many people were very surprised when this massive and disastrous unemployment hit the Western world. Can my right hon. Friend say why we should not be surprised again in the future and go back to full employment? Why not?

Mr. Howell

Because the nature of employment is changing. If my hon. Friend reflects, he will see that the old pattern of very large manufacturing units employing thousands of people in heavy manual, semi-skilled work is disappearing, for obvious reasons. People are finding capital equipment and ingenious electronic equipment which in many cases can do the jobs better and with far less physical impact upon those who previously had to do them. All I am saying is that that pattern of full employment will not appear again. We have to work for and create social and tax policies for an entirely different pattern of employment.

If we do not recognise that and we continue battering away as though the old order could return, matters will get worse. It is puzzling and vexing to see the registered unemployment figure so high—and I am sure that my right hon. Friend the Secretary of State is very worried about it. Despite the growth of new jobs, including part-time jobs, the figure of unemployment, especially of people remaining in long-term unemployment, remains miserably high. Unless we are more vigorous in building on the approach that we are taking in this matter, the position will get worse.

In considering the plight of the inner city areas with high unemployment—and we do not need to think only of the north, and the hon. Member for Kingston upon Hull, East should accept that Hackney and Tower Hamlets are good examples of such areas — it does no good to compare them with Ethiopia. That was an unfortunate bit of hyperbole coming from the pulpit. But nor, I believe, does it help the Conservative party, or public understanding of what the Government are trying to do, to attack episcopal hyperbole, because hyperbole is needed to bring home the urgency of the problem, particularly in inner city areas.

As I say, there is no need for the hon. Member for Kingston upon Hull, East always to talk about the north in connection with other matters. One need go only 5 miles from here, to some of the inner city areas of east London, to find conditions which are totally unacceptable by the standards of any Government, and certainly by the goals which the Conservatives have set for the social market economy.

We must build on much of what the Government are doing and bring some new ingredients into what should be a new approach. Of what should that new approach consist? First, it should contain recognition of an aspect which Opposition Members have difficulty in recognising—that the pattern of employment is so changing that we now have not merely 2.25 million self-employed, with the numbers growing all the time, but that a whole, new style of life and pattern of activity of work and job creation is emerging. We have not fully recognised that change in our policies.

Further, about 23 per cent. of all people in work are working part-time. The hon. Member for Kingston upon Hull, East seemed to find that trend deplorable. Whatever his view of it, that trend will grow. More people will seek jobs on a flexi-time and part-time basis, with husband and wife working at different parts of the earning day to contribute to the family income.

That will be very much the pattern of the future, not merely because people find it more convenient, but because industry, using micro-electronic equipment and modernising with electronic devices, finds that its needs for jobs are less of the traditional type—the eight hour day fixed sort of employment throughout the week—and more of the type involving part-time work at different times of the day and night.

Secondly, we must extend the training and education facilities that we provide. The youth training scheme has been a success and we should build on that. I long for the development which some hon. Members on both sides of the House want, which is to carry on the YTS scheme through to provision for all up to 18 years of age. If we really had training or education available for every teenager, it would be right to recognise, with Lord Beveridge, that the dole for teenage school leavers was no longer an option.

That would be a sensible aim if, for every teenager, there was the opportunity of training or education. In that event, being unemployed and drawing unemployment pay would not be an option. If I felt that we had reached the stage when those facilities existed for every teenager in the land, I would willingly support the suggestions—I have no idea whether they will be turned into a policy—which were originally made, if not in the 1944 White Paper, by Lord Beveridge, that we should not necessarily have unemployment pay as an option for teenagers. That could happen if, in every case—and it would have to be in every case — they had the opportunity to do something else. That is an area in which we should move forward, and it sounded from what my right hon. Friend said that steps will be taken in that direction.

Thirdly, the hon. Member for Kingston upon Hull, East was right to say that we must create a technically skilled labour force. We do not have that at present and much unemployment, particularly in inner city areas, is due to the fact that technical skills are not present. We must inject those skills not just into the school system but into the post-school system. We must create the understanding in schools and in further education that jobs come from enterprise.

We are now developing in schools young enterprise schemes which bring home the fact that jobs do not fall off trees or always come from the Government, or even from employers, but that more and more jobs come from new ideas, often generated by school leavers themselves.

Fourthly, we must develop a great deal more the idea of insulating benefits. That is the idea at the centre of the enterprise allowance scheme. Ten years ago some people would have been shocked at the thought that people drawing benefit from the state for being unemployed could also be employed. I suggest that hon. Members on both sides of the House are changing their views about that.

The enterprise scheme allows people to seek work, to establish themselves in jobs and earn while continuing to draw benefit. That is the sensible way forward and we shall see much more of that type of activity. When the hon. Member for Kingston upon Hull, East says that part-time work is reprehensible, he overlooks the fact that opportunities of this type will open out far more in future and that we must adapt our social security policy, as we have begun to do, to allow for such changes.

Fifthly, we must face the issue of cutting taxes. Opposition Members have got themselves into a lather about the alleged choice between tax cuts and infrastructure spending. The choice is not that sharp. There is room for both. The cutting of taxes on lower incomes is essential for what are called "supply side reasons"—to encourage more people to go into and start up work, perhaps carrying on trades of a small but good income-earning nature—and when I talk of tax cuts I include the idea of cutting or restructuring the national insurance system in relation to contributions.

I welcome a number of effective studies that have been conducted by various people, including a number of hon. Members, among them a study done by my hon. Friends the Members for Lewisham, West (Mr. Marples) and for Carshalton and Wallington (Mr. Forman) and another study conducted by my hon. Friend the Member for Beckenham (Sir P. Goodhart), both of which recommended that type of tax cutting, which is the restructuring or lifting of the burden of the national income contribution, particularly in respect of the lower paid.

We have made major strides in getting rid of the surcharge, which a previous Labour Government, with great unwisdom, shoved on to employment and labour in the 1970s. Now we must get on and rethink the whole aspect of contributions.

Although all this will take time, because we are talking about resources, I would include in the tax cutting aim cutting that tax which was previously the child tax allowance, which became the child credit and which is now the child benefit. It would make sense, if there was room in due course, for that to be cut or, in other language, for child benefit to be increased.

We need to raise the VAT threshold because at its present level it is a great discouragement to new commerce and business to spring up, particularly in inner city areas.

Sixthly, we also need some infrastructure developments, although I do not share the view of the hon. Member for Kingston upon Hull, East that that would be an engine of employment. It clearly would not. One need consider only east coast electrification, which is costing £300 million to create 3,000 jobs, to see that it cannot be described as a great engine of employment.

However, small sums of expenditure, for example on home improvements and on refurbishing some of the fine inner city houses which have fallen into misery and decay, are worthwhile. Such expenditure should be encouraged, and it helps to stimulate the private sector and employment in that sector. We should not have any difficulties about that.

I should also like to see one or two spectacular projects go forward, including the Channel fixed link. That will best be done by private enterprise if it is pitched on a modest basis and not too much in the spirit of Jules Verne. If that is done, it should be possible to raise private finance for an attractive private service between private railway stations in London and Paris, with a private railroad right the way through from the United Kingdom to the continental mainland.

Mr. Barry Sheerman (Huddersfield)

I was suspecting that the Prime Minister had sacked the wrong member of the Cabinet, especially having listened to the contribution of the Secretary of State for Employment. However, was the right hon. Member for Guildford (Mr. Howell) not responsible for failing to get through the North sea gas-gathering pipeline? It would have been a magnificent job creation project and would have put Britain's energy policy ahead by many years.

Mr. Howell

It is a sad fact of government that it is not always possible to persuade one's colleagues of the virtue of certain projects. The one that the hon. Gentleman mentioned was and is dear to my heart. We would now be in a stronger position with our gas supplies and energy supplies generally if the project had gone ahead.

Finally, the end of the coal strike brings many opportunities for reducing energy and fuel costs. That will bring a direct social benefit for those who pay highly for their electricity and gas each week, as well as an enormous industrial benefit. We can now pave the way towards lower electricity prices. In the book of many of us, the central issue in the coal dispute has been to find a way of moving from high-cost electricity to entry into the international world of competition with competitive electricity prices. We now have the opportunity also to liberalise the natural gas market by linking our system with the continental grid and the Norwegian sector.

We have had to go through a hideous era of high energy prices—I was involved in it and found no pleasure in presiding over it when energy prices were roaring upwards — and there is now an opportunity to introduce a substantial lowering of natural gas prices. In many countries, and in Britain in due course, this process will force oil further out from the domestic heating market.

These few topics should be part of a broader picture which it is important to grasp and to take further forward. The central features of the picture are enterprise, education and training. Those are the three qualities which we should drive into the system by every possible means so that we can begin to ameliorate the appalling problems of inner city areas and high unemployment areas.

Can this be done? Is there enough room to enable it to be done? Does it involve a shopping list which no one can possibly pay? It is important to show the direction in which we are moving so that we can at least start on the chosen path. Can we make a substantial start? I believe that we can. A number of those who have argued over the years for sound money and prudent finance first and foremost are now rightly saying that there is fairly considerable room for making quite a good start along the path which I have described even as soon as next Tuesday 19 March.

Mr. Samuel Brittan is a friend of mine and a respected commentator, and only the other day he wrote in the Financial Times: A £9.5 billion projected borrowing requirement based on credible spending estimates would be better received than £5 billion based on funny numbers. That is a sound comment and one that I would commend to all hon. Members. The City editor of the Daily Telegraph wrote: A hair-shirt budget to please fickle financial minds would in these circumstances be wholly inappropriate. Professor Patrick Minford of Liverpool, the high priest of the supply siders, argues that we should go for a borrowing requirement of £8 billion. The truth is that with these sorts of figures, additional revenues from the higher dollar price of oil and any tax additions which my right hon. Friend the Chancellor of the Exchequer is able to raise from other sources — I suspect that there will be some — a considerable start can be made in implementing the type of programme that I have outlined without inflation and without pushing up interest rates.

There are those who ask how it is possible to talk in such terms during a sterling crisis. But it is a false perspective to imagine that we are in the midst of a sterling crisis that requires hair-shirt economics. There is, of course, the dollar crisis. The soaring price of the dollar is creating severe volatility and danger throughout the Western world and my right hon. Friend the Prime Minister is right to say that in due course it may have brutal results. There is no need for unilateral penance for this on the part of the United Kingdom.

The problem that we have in handling our economy, which our neighbours do not experience in handling theirs, is oil price instability, which is difficult to control. I think that we can make a slightly better contribution to resolving the problem than we have made so far. I understand that we shall be debating that issue on Thursday and I have no doubt that views will be expressed on that occasion.

In the meantime, we have a 14 per cent. interest rate, which obviously threatens recovery. We have that rate because we are told that it is necessary for money supply reasons and strict monetary policy. But monetary targets are now coming under control, so I think that there is room for lower interest rates in addition to the other items to which I have referred. An interest rate of 14 per cent. hurts employment in inner city areas such as Hackney and Tower Hamlets, and great industrial areas such as Birmingham, as much as high taxation and the other burdens of which we have spoken. We need to see lower interest rates and less tax burdens of all sorts. It should be realised that they are not alternatives to each other.

We need to see the expansion and extension of the idea of education and training far outside the period of formal education. We should build on the youth training scheme and other schemes over which my right hon. Friend the Secretary of State has presided so energetically and effectively. Above all, we need to bring home to the public that there is a goal that we can achieve. It is one that is within reach. It is not the same goal that we have sought to reach in the past. We must seek to move forward to a fully occupied society. I believe that we have the resources and confidence as a nation and Government to do that.

5.58 pm

Mr. Jack Ashley (Stoke-on-Trent, South)

In an overlong speech the right hon. Member for Guildford (Mr. Howell) made some constructive points, and that is more than can be said of the Secretary of State's contribution. The Secretary of State made no effort to rise to the occasion and to speak with the seriousness which we expect of someone in his position. It was obvious from his speech that he has no intention of changing the disastrous policies that he is pursuing. He has opted for the lemming approach of economics. We have had six years of that crazy stampede to destruction. Manufacturing industry has crumbled, bankruptcies have increased, interest rates are soaring and unemployment is rising to catastrophic levels. However, the Secretary of State has the brass neck to boast about the Government's achievements. I do not know how he does it.

The economic and industrial case against the Government has been well rehearsed, and I congratulate my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) on his scathing indictment of the Government. I would like to emphasise that the Government's policies are not only economically damaging, but deeply divisive. The old cliché about two nations has taken on a new and frightening dimension. There is a growing, enveloping, threatening, corrosive bitterness that is developing among the have-nots of our society. The great challenge for Britain is to secure economic change without social discord. Our economic decline, compared with that of other countries, underlines, despite what the right hon. Member for Guildford said, the need for economic improvement. To try to transform the economy by using the whip of fear and unemployment is to create sullen bitterness and eventually aggression. There will be aggression and it will come not just from the miners' strike.

The British people have shown that they cannot be intimidated during war. They certainly will not be bullied during peace. The Government are on a loser trying to bully and bulldoze the British people with their policies. There is no point in the Secretary of State boasting about statistics showing what the Government have accomplished, because those statistics are irrelevant to the millions of people on the wrong side of this great divide which has been created by the Government. Such speeches do not allay the fears, anxieties and bitterness.

I go along with the Secretary of State when he says, that magic wands cannot be waved and miracles cannot be created and that there is no facile answer. My hon. Friend the Member for Kingston upon Hull, East did not suggest that there was an easy answer. He suggested constructive alternative policies. Although there are no easy and simple solutions, the fact is that living standards and the lives of people can be improved and changed by Government policies. The Secretary of State knows that. Instead of the Government creating such policies, they are going in precisely the opposite direction. If all the Budget forecasts are correct, the Government will lurch even further away from progress if the Chancellor gives that £1.5 billion handout in tax relief to help the fortunate with jobs rather than create jobs for the unemployed.

The Government are making miscalculation after miscalculation and are further devastating the economy and dividing the nation. The Government miscalculate when they assume that tax cuts will create incentives and regenerate the competitive spirit. Most people who win the pools do not work harder—that is a fact of life. The captains of industry who next Tuesday will receive these free dividends from the Chancellor of the Exchequer will not work harder either. It will be a waste of money.

The Government miscalculate in their assumption that the free market can solve——

Mr. William Cash (Stafford)

rose——

Mr. Ashley

I usually give way, but I shall not give way in a 10-minute speech. Privy Councillors should not abuse their position and make long speeches. Ten minutes is my maximum.

The Government's mistake is in assuming that the free market can solve our economic problems. The Government miscalculate in their confident assumption that public intervention is damaging. Conservative economists can construct the most elaborate theories on the operation of the market, but experience—not only in Britain but throughout the world — shows that free markets get out of hand if they are left to run riot. The market has a role, but it should not be a dominant one.

Government intervention — I world call it Government involvement — is vital in a modern economy. Beneficial intervention can take many forms — investment, training and exports are but few examples. Perhaps the most significant example in terms of unifying our divided nation is Government intervention in regional policy.

Before the Government, in their slavish adherence to the free market philosophy, began to dismantle regional policy, that policy was primarily responsible for helping to iron out some of the appalling inequalities between wealthy and poverty stricken regions. The policy reduced not only inequalities between regions but the divisions in our society. When the Minister of State, in a recent statement, spoke of "flexibility and cost effectiveness" he was using euphemisms for slashing the regional aid budget. That is a shallow and short-sighted policy, because the Government are merely accelerating the great divide.

The Government have failed, not only to help devastated areas, but to prevent areas which are now on the slide from becoming devastated areas. I hope that the Minister of State will tell us whether he was right in saying that there was a 35 per cent. limit on those living in designated areas, thus preventing some areas from being helped. Conflicting answers have recently been given to me, and I would appreciate clarification.

If the Government are to do more for the regions, they need a deeper understanding of and a more subtle approach to the problems. North Staffordshire is a case in point, because that region has been pounded by a series of devastating body blows. It will soon resemble a punch-drunk boxer. The Government should help the area, because it is disastrously reliant on a handful of industries, none of which is a growth industry in terms of employment. Mines, potteries and steel have shed nearly 40,000 jobs over the years. No regional economy can sustain such loss without a grave threat to its future—especially one such as north Staffordshire, which has a below average percentage of jobs in the service sector.

When north Staffordshire asked for aid, the Minister gave a negative answer. The Government should change their attitude not only to that region but to all the regions and recognise the virtue and value of Government intervention. Above all, the Government should tackle the scandal of mass unemployment. Mass unemployment on this level is not simply a disappointment; it is a major scandal. The Government need to give constructive help to individuals, regions and the economy. I hope that the Government will ditch their dogma, park their prejudices, stop the devastation and bring constructive help to the economy as a whole.

6.8 pm

Mr. Peter Thurnham (Bolton, North-East)

I have listened to this debate, as to previous debates on unemployment, with great interest. Like my right hon. Friend the Member for Guildford (Mr. Howell), I believe that we can return to full employment. There are no quick and easy solutions. The problems go back many more than the six years to which the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) referred.

I have studied the problem of unemployment as it has built up. I keep all the papers that I have read and those that I hope to read in a large cardboard box at home, and I keep finding that I need a larger box. It is obvious that there are no magic cures and no miracles. The more I study the matter, the more I come to the inescapable conclusion that there is only one answer and only one way in which we can be rid of unemployment and achieve our true goal—a higher real standard of living for all our people.

The Germans and the Japanese know the answer. They have had no choice. They have increased their share of world markets by sheer hard work while ours has declined. After the war, those countries had no alternative but to turn their nations into what we like to forget now—one big sweatshop. Everyone was busy toiling for their survival and, ultimately, a higher standard of living than this country has today.

If we find the swimming pools of competitive world markets too chilly for our comfort, the answer is for us to warm ourselves by the heat of our exertions and not to confuse the moist air of our welfare saunas with the true sweat of our brows. Our ancestors sweated to make this country the greatest workshop in the world.

The Americans are still fired by the Protestant work ethic. What has happened to our faith in this country? Our new immigrants pack their mosques. Must we look to our ethnic minorities to achieve the fruits of hard work, whether it be the newest millionaires or the latest recruits to the Cabinet, while we still hear the unions' parrot cries for more comfort and less work?

Why has supplementary benefit become a staple diet for so many in this country who have been priced out of work? Supplementary benefit should be what it says it is—a supplement to an income from a real job — not a substitute for earned income. We must encourage people to take whatever work they can find and then supplement the income of those in greatest need. It is total household income that counts — take-home pay and supplements. Family income supplement was brought in by a Conservative Government. It was opposed by the Labour party. Wages councils have failed. They have legislated for pre-tax earnings and done nothing to reduce unemployment. That has increased the burden of taxes on the low paid who are in work.

The Government may think that their job is to sit on their hands but first they must untie the burden of legislation. If help to the self-employed and small firms is another way of saying, "Free the people", I am all for it. All our firms are small by world standards. We shall restore this country to greatness and increase the standard of living of all our people only by the sweat of our brows.

6.12 pm

Mr. David Penhaligon (Truro)

I heard what the hon. Member for Bolton, North-East (Mr. Thurnham) said. Like him, I am a professional engineer. I rather suspect that we must have worked under different circumstances if he believes that the solution to our problems is the "sweat of the brow" argument.

The Secretary of State made one of his less worthy contributions to our debates. I thought that he was beginning to represent the hard face of his party. I now realise that, relatively speaking, he is now on the wet side, given the speech that we have just heard. The Secretary of State's speech boiled down to a confession by the Government that they have no idea what to do next.

The House is discussing the tragedy of unemployment. It is all around us. In our visits to our constituencies and communities, we are only too well aware of what is happening. There are 3.25 million people who have succeeded in obtaining assistance from the Government because of their unemployment. By the old method of calculating unemployment, we probably have 3.75 million people unemployed; 1.3 million of them have been unemployed for longer than a year. I have visited people on YTS schemes and have been disappointed to hear of the frustration and disappointment felt by many young people on the schemes. I believe that they could be a useful part of the training structure. It worries one to find that drugs and vandalism are all part of life. I believe that they are related to unemployment.

I take issue with the hon. Member for Kingston upon Hull, East (Mr. Prescott) because he kept talking about the north and the south as if the south were some employment paradise. My county has 24.3 per cent. of its male population unemployed. That is as bad as anywhere in this country. We have the distinction of having the biggest unemployment black spot.

Today we are talking about manufacturing. That is fortunate, because I believe that the biggest tragedy of the past 10 years—I am not being so narrow as to pretend that it started only with this Government—has been the loss of our manufacturing base. We now have a deficit of over £6.2 billion a year on manufactured goods. There is no alternative for this nation but to earn its living through manufacturing in its broadest sense. The ability to make and sell things is the basis of the British economy. We cannot have an economy based on the export of raw materials because we do not have them on any long-term basis. This is a densely populated country. We live on our ingenuity. Britain was built on its ingenuity. We are seeing the erosion of a great deal of that ingenuity and of the opportunity for people to use and explore it.

There is no future in the overmanning of our industries, discouraging investment, or restrictive work practices. They are not solutions to our problems. Great Britain, which I believe has a future—I am sure that the House believes that—should be using at least a portion of its oil money to rebuild its economic base. Instead, we see some £10 billion a year leaving Britain for investment overseas. Those funds are transferred by the Government's friends. There is no bolder comment by the economists and investors of our nation than the fact that they are willing to invest in anything anywhere but not here.

The Government have complicated matters by a long running policy of deliberately high interest rates. That kills all medium and long-term investment stone dead. The base rate is 14 per cent.—really 17 per cent., some 12 per cent. over inflation. It means that we are a quick-return economy. It partly accounts for the expansion of jobs in the service industries. They are welcome, but we shall not in the long term rebuild our economy on that base.

For a sustained period, the Government have used interest rates to keep the pound above what it would have been. Sadly, that has not stopped the pound falling; it has merely delayed it for a few weeks, months, or a year at the best. One wonders what has been gained. On the whole, that policy has kept imports cheaper and exports dearer than they would otherwise have been. That policy means a loss of jobs, a loss of value added, and the disappearance of the basis of our economy. It is difficult to envisage a policy that could have destroyed more jobs than the one that the Government have pursued over the past couple of years. A number of hon. Members have already agreed that many things need correction.

If we investigate the numbers of unemployed it is amazing to find—even in an area such as mine—how few skills there are, even with the horrifying unemployment levels. We need to increase our skills. There is a lack of investment in information technology.

The engineer in me tells me that in 15 to 20 years' time the economies that will be successful, buoyant and prosperous will be those that use the existing new technologies and apply them to many of what we regard as common or garden products. That is the basis of our economic future and it is where the Government should be applying their money. All the Government have done is cut skillcentres, cut technology in universities and cut development aid to some industries from £700 million to £400 million. That is a tragedy.

The alliance amendment outlines what it believes to be the basis of the Budget strategy. There is no lack of money. Unemployment must be causing losses of about £12 billion to the Chancellor. It is said that he has £1.5 billion available for tax cuts. We, like the right hon. Member for Guildford, believe that we could expand the PSBR without the economy collapsing around our ears, even if that ever was a reasonable risk. We believe that money could be used to cut national insurance contributions and to increase infrastructure investment.

In particular, we deplore the Government's refusal to allow local authorities to spend the money that they have accrued from council house sales. It is money that is actually in the bank; I am not talking about borrowed money. We should like to expand training and to build on the youth training scheme so that it includes all 16 and 17-year-olds. We should like to expand the community programme to the point where it includes 250,000 people.

Fundamental to the debate and to the judgment that we shall make on the Budget next week is the question whether the Government are at last recognising that the erosion and the loss of our industrial base is a tragedy not just for today, tomorrow or next year but for this generation and the next, and for the generation after that.

I believe that we have an anti-industry Government, sometimes accompanied by an anti-industrial philosophy within the nation. If we want an economic future for Britain, if we want better pensions for our parents, and a better Health Service, we have to get the industrial sector right. My accusation is that the Government have manifestly failed to do that. It is not easy for the Government to solve every problem facing them, but they could do better than they have.

6.21 pm

Mr. Mike Woodcock (Ellesmere Port and Neston)

I am privileged to represent the industrial town of Ellesmere Port, which has among its distinctions the fact that the hon. Member for Kingston upon Hull, East (Mr. Prescott), who opened the debate, received his education there. It is a town that is full of good, honest, hardworking people, but it suffers from many of the problems of our industrial cities and towns. Above all, it is a town which is dazed by the present unemployment levels. In the past four years 15,000 jobs have been lost in the area, and one person in four in the town is now in the dole queue. It is a tragic story.

In 1960 Ellesmere Port was a boom town. Investment was high, employment was high, major employers moved in, and a huge petrochemical complex was constructed, with not one but two major oil refineries. There was massive public sector housing, a new civic centre was built, and life seemed good for the people of Ellesmere Port.

Now young people find it almost impossible to get a job. Usually, Government training schemes are their only hope of employment. My surgeries are full of people who want to work, have the skill to work, and are of the age to work, but who find no work opportunities. They feel that their lives are being wasted. Together with unemployment, we have the associated problems of crime, vandalism and drugs, which are all on the increase. Undoubtedly, there is a direct link between those things and unemployment.

With 15,000 job losses in five years, with 5,500 people unemployed in the town today, and with one in four people on the dole, is it any wonder that the people of Ellesmere Port are losing hope? It is a problem on a scale which they cannot comprehend and certainly cannot solve.

Recently, we significantly added to the potential problem by the decision to introduce unleaded petrol, which poses a threat to 2,000 jobs in my constituency. I believe that that decision was wrong. I accept that the case for unleaded petrol has been argued and decided on another occasion, but that decision will destroy jobs in the lead industry, add significantly to industrial costs, and diminish the ability of the whole of British industry to compete in world markets.

In addition, last week the Shell Oil Company announced that a further 1,000 jobs are to go in Ellesmere Port. It is seeking a 30 per cent. reduction in staffing in the giant oil refinery in the town. We have already seen the closure of a small, uneconomic oil refinery in the town operated by Burmah, and we are now faced with massive job reduction in Britian's largest oil refinery. There is potentially a 20 per cent. increase in unemployment in the town.

I could respond in several ways. I could bleat about Government policy or the lack of it. I could criticise the company. I could implore the company to keep those workers on. I could demand massive state investment or state handouts to soften the blow. I could reiterate some of the arguments which have been heard today from the Opposition Benches. But I will do none of those things, because I do not believe that any of them provides the answer to unemployment.

For the answer, we need to look behind the problem. That refinery in my constituency was built when it was estimated that present consumption of oil would be twice what it is now. It was estimated that today the throughput of the refinery would be 20 million tonnes a year. The actual throughput is between 7 million and 8 million tonnes. Plans were laid for the refinery before the new industrial revolution that we are now going through, and before the smokestack economy of the United Kingdom began to deteriorate and diminish. At that time, there was a direct link between gross national product and energy requirements. Today, no such link exists.

Now there is a massive over-capacity in the oil industry, with the demand for oil products down by a massive 35 per cent. in the last 10 years. We now live in a different world, in which fundamental restructuring of economies is taking place all over Europe. The United Kingdom is no exception to that restructuring—and nor are the north-west, the oil industry and Ellesmere Port. Shell, like many other organisations, must respond. Its management has concluded that present work practices in the refinery are not competitive. There are too many levels of management, there is too much bureaucracy, and manning levels are simply not competitive.

A recent independent survey of refineries throughout Europe concluded that the Ellesmere Port refinery is one of the worst in Europe for manpower productivity. Therefore, it is right and proper that the company should put its house in order, become competitive and secure the future of the refinery. If that means job cuts, that, too, is right, but it is not the answer for 5,000 unemployed in the town or for the 1,000 who are likely to join them.

Before I suggest how we might create the necessary jobs, I should like to reflect for a moment on the relative positions of our two great energy industries, oil and coal, because they are both subject to Government policy, and it is the Government who largely determine the success and importance of each of those industries.

The oil industry contributes massively to the national purse through taxation; the coal industry does not. The oil industry receives no subsidy whatever; the coal industry receives massive subsidy from the taxpayer. The oil industry is profitable; the coal industry is unprofitable. The oil industry has no oppressive trade unions; the coal industry has. The oil industry has accepted economic reality; the coal industry is only now starting to accept economic reality.

If the same taxation and subsidy policies were applied to both industries, there would be no need for redundancies in my constituency. Oil would be so cheap and coal so expensive that there would be a massive increase in the demand for oil and a massive decrease in the demand for coal. How, then, can the Government justify redundant mineworkers receiving much bigger redundancy payments than redundant oil workers? Surely, given the favoured treatment of coal, the coal industry should be giving massive support to redundancy payments in the oil industry, rather than the reverse. The oil industry, through massive taxation, is helping to finance massive payments to the coal industry. Therefore, I ask the Government whether they will finance the same redundancy terms to oil workers in my constituency as are being offered to redundant workers in the coal industry.

However, leaving aside the unreasonable treatment of oil vis-a-vis coal, how can we create jobs in the new industries? How can we solve the problems of the 1,000 people who are to lose their jobs in my constituency? I do not believe that anyone knows the answer, but certain things will have to happen. Certain things will have to be done by the Government, by the management of British industry, by educators and trainers, and by trade unions.

I fully support the broad objectives of Government policy, but I want to see lower taxes on jobs, and less regulation and red tape in respect of those with the ability to create jobs. I want to see less employment protection, which today inhibits employment. I want to see cuts in business rates and more incentives, particularly taxation incentives, to smaller firms. Next week the Chancellor of the Exchequer has the opportunity to bring about those things, by bringing forward a Budget for jobs, which I sincerely hope he does.

Further, I want to see more concern about the decline of our industrial base. In the past four years our manufactured goods' trade with our EEC partners has increased each year by £2 billion, and they live in the same world as we do. It is not enough to talk about growth in the service sector. It is no use having a service sector if there is nothing left to service. Nor is it enough to rely on North sea oil to fill the gap. That should be a bonus that pays for the re-equipment that is necessary in the new industrial revolution, not a subsidy that allows continuing inefficiency and uncompetitiveness. I want to see the introduction of some temporary schemes that utilise the unemployed, to deal with our crumbling infrastructure, derelict land and vandalism. I want to see the expansion of community service programmes to provide socially worthwhile jobs for young people.

I also want to see management looking much more overseas, not only to export markets, but to management and work practices that are being adopted in more successful economies, notably in the United States of America and Japan. I want to see managers recognising that as Socialist ideology withers—which it is doing—managers have regained the right to manage and the duty to exercise strong leadership and to expand organisations to create new jobs. I want to see managers being opportunists again, as our forefathers were, by exploiting commercial opportunities worldwide and by rekindling the flame of entrepreneurship and innovation. I want to see wider opportunities for share ownership and profit sharing.

I want to see a better attitude on the part of educationists by realising that education must be relevant to industrial needs and job creation. They should realise that they have to respond to the same realities as those whom they serve. I want to see better management training in industry. It is probably true to say that the average plumber receives more training than the average manager in this country. I speak from 20 years' experience in industrial training. Far too much of our management training is carried forward by groupie, soft behavioural scientists with Left-wing views. Those who train managers are key opinion-formers who need commercial understanding and commercial values themselves. Finally, I want to see a more reasonable attitude from trade unions and the adoption of a more flexible approach to the essential restructuring that is taking place.

If the Government, management, trainers and trade unions do those things, we shall begin to create the new jobs that we so desperately need.

6.31 pm

Mr. Jack Dormand (Easington)

I shall make a brief speech on a rather narrow but important part of the unemployment problem. However, I shall preface my theme by referring to the Secretary of State's speech. I am sorry to have to say that I found it superficial, meretricious and, indeed, patronising. It did the House no good, on the most important subject of the day—that of unemployment—to have the 15-minute knockabout speech that we had from the Secretary of State, when all my right hon. and hon. Friends were waiting to hear what the Government would do about unemployment. It was a most disappointing speech. I am genuinely sorry that that happened.

I should also like to refer to the speech of the right hon. Member for Guildford (Mr. Howell). He referred to my part of the country, the northern region, on three occasions. If I understood him correctly, he said that we need not look to the north these days because there are comparable situations in other parts of the country. I hope that that is reasonably correct——

Mr. David Howell

indicated assent.

Mr. Dormand

I see that the right hon. Gentleman nods in agreement.

It is a condemnation of the Government's policies when we have such a situation throughout the country. I mentioned that for this reason, coming from the North as I do and having made many speeches on its problems The unemployment rate of the northern region remains the highest in the country outside Northern Ireland. Since the Government came to power in 1979 the rate has increased literally every month.

I should like to deal with present and future unemployment in the coalfields. I remind the House, if it needs reminding, that the year-long miners' strike, which has just ended, was about jobs and the effect of pit closures on mining communities. It was not about wages and working conditions. The fact that the miners and their families were prepared to endure so much hardship for so long demonstrates their concern about jobs.

I heard the chairman of the National Coal Board on Radio 4 yesterday, when he made it abundantly clear that he could hardly wait to close uneconomic pits. When closures take place — I suspect that it will not be too long before they do—the Government must accept great responsibility for the provision of alternative employment. It is significant that the first statement about Government action to provide alternative employment in the coalfields did not come until the strike was in its ninth month. That in itself demonstrates the Government's lack of commitment to the mining areas. Thought, planning and preparation should have been undertaken when the Government came to power in 1979, having regard to their well-known attitude towards the coal industry.

When the first statement was made, what did it say? It said that the magnificent sum of £5 million was to be made available to help with the provision of new jobs. I well remember the guilty look on the face of the Secretary of State when he made that statement. He knew that was nothing more than a token gesture. The fact that he doubled the amount to £10 million shortly afterwards was proof of the inadequacy of the provision. He has gone further since then and said in answer to a question from me that if more than £10 million was required, he would look at the position again.

The fact of the matter is that if the Government really believe in providing new jobs for redundant miners, a sum of at least £50 million will be needed in the first place if the mining areas are even to begin to have the opportunity to have a new life. After all, we are talking about a dispute that has cost the nation £3.5 billion — indeed, some estimates have doubled that amount. The sum that I am suggesting is trivial compared with what the Government have spent in their efforts to break the strike. It is facts such as those that make us wonder whether the Government are really concerned about helping the mining communities when pits begin to close. We shall need much more proof than has been shown so far.

Another aspect of Government policy should be re-examined. I understand that the funds provided are to be administered by a private consortium. I presume, therefore, that the governing factor for any investment project will be whether it will make a profit, and so there will be an ultra-cautious approach to the investment. I make it clear that I am not against making a profit. However, in the circumstances that will arise in the coalfields—I repeat that it seems to me that they will arise shortly — we shall need a bold, imaginative and high-risk attitude towards those problems. Why is it a private consortium? It ought to be a public body, with people on it who know the coal mining areas, who know their people and their attitudes. I ask the Government to think again about that, otherwise we shall have a narrow, restrictive and unimaginative policy that will have little or no effect on job opportunities in the coalfields.

I conclude with a special plea for the north-east. There are three successful job finding agencies there—the new town corporations of Washington, Aycliffe and, in my area, Peterlee. The corporations are concerned not just with the new towns, as many people appear to think, but with a much larger sub-region. In the past eight years, the Peterlee development corporation has provided no fewer than 6,000 new jobs. That success story is based on dedication and expertise. Yet, incredible though it may seem, the Government propose to abolish all three development corporations in nine months' time, presumably just when the first pit closures begin to take effect.

I realise that this is a matter for the Department of the Environment and having raised the matter many times in the past three years I appreciate that that Department is looking at the matter again. Nevertheless, I strongly urge Ministers at the Department of Employment to add their weight — I see the Parliamentary Under-Secretary of State nodding assent—to the case for extending the life of those corporations not for ever but at least for four or five years. The way in which the miners' strike has ended gives new urgency to that need. I am glad that my hon. Friend the Member for Bishop Auckland (Mr. Foster), who represents Aycliffe new town, is present and indicating his support. It would be the height of lunacy to wind up the corporations at a time when the threat of further unemployment in the north-east looms so large. I hope that Ministers in all the Departments concerned will add their weight to the opposition against this madcap proposal. If they can face with equanimity the prospect of 50 per cent. male unemployment in an area such as the north-east it will be further proof of their callous and uncaring attitude to the crucial problem of unemployment.

6.41 pm

Mr. Piers Merchant (Newcastle upon Tyne, Central)

The debate will remain utterly sterile if it develops, as it began, into an argument about where to attribute blame rather than how and where to take action. I am interested in the latter because I come from a constituency in the north and from a city in which unemployment is 20 per cent. or more. In some areas which I represent unemployment is more than 50 per cent. and I care deeply about those in my constituency and elsewhere who are suffering as a result of unemployment.

I should dearly love to be able to prescribe an immediate cure that would sweep away unemployment tomorrow, but that would be cheap and misleading, because, as the House well knows, there is no such prescription. Yet the Opposition like to pretend that they have just such a prescription. Today their prescription is more and more public spending and that is now being advanced with abandon by Labour Members. Of course, it sounds good and is superficially attractive. I admit that I, too, have at times been attracted by the simplistic argument that we should pour in Government money to cure unemployment. That is why in my maiden speech in July 1983 I called on the Government to produce public investment plans for the north-east to create more jobs—and I do not entirely recant. I welcome the go-ahead for the east coast rail electrification project, I wait in hope for Government investment in new power station building and I support further road modernisation projects.

There is scope for public spending where there is genuine need, but not simply for the sake of public spending. What has taught me to be more cautious than I was 18 months ago has been the near hysterical demand for more and more public cash on the basis that it will solve unemployment, when it is clear that that is not so, coupled with the clear proof that the present policies of spending restraint are working. The control of inflation, the steady annual growth in production and investment in new and profitable growth industries show that that is the way to high employment. Very high public spending has entirely the reverse effect because of the impact on inflation, taxation and interest rates.

I cite an example which deals with the claim made by the hon. Member for Kingston upon Hull, East (Mr. Prescott) that rate rises do not contribute directly to high unemployment. He was presumably also trying to show that high taxation does not affect unemployment. That is rubbish, and provably so. In Newcastle, recent rate rises have been one of the most significant causes of unemployment and a severe dampener on the creation of the new jobs so badly required — a matter not even touched on by the hon. Gentleman.

I shall be more specific. On Wednesday, Newcastle is to fix a rate rise of 23 per cent. For the city alone, excluding the county precept, the rates will rise to 292.2p in the pound. Jobs have already been lost. One of the city's biggest stores — Bainbridge's, a branch of the John Lewis partnership—has said that 136 job losses in the past few years have been directly attributable to high rates. The rate that it pays in Newcastle city centre is now 20 per cent. higher than the rate applying to its store in Oxford street, which is arguably the best shopping site in the world. The present annual rate for that firm in Newcastle is £674,000. It is no wonder that jobs are affected. That shows that the argument that rate rises have no effect on employment is absolute rubbish. I could cite many more examples of commercial ventures in Newcastle to prove that rate rises squeeze out employment.

Mr. Andrew Rowe (Mid-Kent)

Does my hon. Friend agree that the disgraceful scenes in which there were cheers from the Labour party when Edinburgh fixed a rate increase of 79 per cent. are symptomatic of the Opposition's whole attitude to rates?

Mr. Merchant

It also shows a commitment to public spending for its own sake, without any real appreciation of the effect on employment.

Mr. Harry Cowans (Tyne Bridge)

The hon. Gentleman will be aware that the largest enterprise zone is situated in Newcastle. If his argument is conclusive, he should be able to point to a boom in that area, because no rates are paid. In fact, there has been very little increase in the number of jobs created in the enterprise zone, although no rates are payable. Can the hon. Gentleman explain why that is so?

Mr. Merchant

The hon. Gentleman perhaps overlooked the Dreadnought project in his contituency, the mentors of which have cited the enterprise zone as a crucial factor in the establishment of a large factory with great relevance for future jobs and production in the city centre.

The high rate levels in Newcastle are a direct attack on employment and will have a direct and catastrophic effect upon jobs and thus on the livelihood and welfare of many hundreds of people. Nothing so clearly illustrates the double talk of Labour supporters on unemployment than their continual whining in opposition, when they fail abjectly to take any helpful or meaningful action when they are in a position to do so—as they are in the areas in which their party controls local government. It also exposes their claims in favour of high public spending as a job creator.

I want unemployment in this country, especially in the depressed areas, dramatically reduced — but on a permanent basis, not mere window dressing. Essentially, this requires the stimulation of enterprise, industry and investment, which in turn depends not on higher taxes, inflation and interest rates, but on the reduction of all three. Government action in those areas has already helped. Financial stability and low inflation have already attracted overseas investment to the northern region. We already have Nissan and Grove Cranes and others will undoubtedly follow.

Nevertheless, further steps are required to ensure the essential conditions in which an enterprise culture can flourish. More tax cuts are needed, with firm action to reduce interest rates without affecting low inflation levels. Inevitably, that requires firm control of public spending, and especially an end to the waste of public cash in subsidies to loss-making industries, which merely distort the economy and do not prevent long-term unemployment.

There would be thousands more jobs in the north-east today had money not been diverted in past years into trying to breathe life into dead industries—including part of the coal industry, to which the hon. Member for Easington (Mr. Dormand) referred. Money spent on subsidising the coal industry could more effectively have been invested in growing and profitable industries, which would have generated the jobs that are now lacking.

More steps are needed to promote enterprise, by reducing unnecessary controls in planning, tax and the labour market. I agree with my hon. Friend the Member for Ellesmere Port and Neston (Mr. Woodcock), who summed up those points very neatly.

More must be done by the region to promote itself, and particularly to promote investment. Let us not, however, be diverted by the red herring of the Northern Development Agency. There are enough agencies already. In fact, there are too many. We need more co-ordination, but I hope that my hon. Friend the Minister will give credit to the work already done by the North of England Development Council in attracting work and promoting the region. I hope that the council will continue to attract for that purpose the high level of Government support and cash help that it has enjoyed in the past.

Mr. Derek Foster (Bishop Auckland)

Can the hon. Gentleman explain, when he is singing the praises of the North of England Development Council, how he can continue to support a Government who propose to reduce the council's budget by 30 per cent. although the region has the highest unemployment rate in the United Kingdom?

Mr. Merchant

I am happy to wait for the Government's announcement on that issue. I am confident that they will weigh up the situation in the north and take account of the need for promotion agencies to work in a proper and co-ordinated manner.

Electorally appealing though it might be, I do not propose to bore the House and court popularity by supporting a policy of high public spending. Such policies might create short-term jobs, but they would do nothing in the long term. I want lasting jobs and the necessary radical restructuring of the region's economic base. I want strong and inspired business leadership. I therefore support my Government's determination to tackle the fundamental problems, rather than just talk about them.

6.53 pm

Mr. Tom Pendry (Stalybridge and Hyde)

I do not propose to give way to any hon. Member. The hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) gave way three times, and I think that he thereby did a disservice to the House.

Mr. Speaker

Order. That is not quite fair to the hon. Gentleman. I allowed him a little extra scope because he gave way. It is the practice in our debates that we give way if the need arises.

Mr. Pendry

I thought that I was courting your favour, Mr. Speaker, but never mind.

The official unemployment figure for my constituency is 17 per cent. or more, which means that about 6,000 men and women were without a job last month. The figure is not as high as in the constituencies of some other hon. Members who have spoken, but for my part of the world it is very high. Without doubt, too, the figure would be much higher if the Government made a proper count. We constantly hear that the Government consider hidden unemployment to be insignificant. By devoting their energies to peripheral pursuits such as chasing so-called social security scroungers rather than pursuing positive economic policies, the Government act as though unemployment of any kind is insignificant.

My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) believes that more than 4 million people are unemployed in this country. He may well be right. However, even the independent unemployment unit estimates that no fewer than 3.7 million people are unemployed, and that figure is significantly higher than the figure put forward by the Government.

A survey carried out in Tameside reaffirms the validity of those figures and shows clearly the under-counting involved in the official figures. Tameside council's figures show that since 1979 15,000 jobs have been lost in the borough, while unemployment has risen by 10,000. What has happened to the remaining 5,000 people? The answer is that Tameside has traditionally been an area where a large number of women work. In the past, a very large proportion of women in the borough have been either in paid work or looking for work. The basic rate of pay in Tameside is well below the national average, as has been pointed out many times in this place. Women have therefore been obliged to work in order to make ends meet.

Almost one in five of all people in all the working age bands in Tameside are now inactive. Over three quarters of the inactive people are female. Is it not ironic that a Government headed by a woman Prime Minister are driving women back to the home, not only in Tameside but in the country at large? The Government may consider that hidden unemployment is insignificant. It is not insignificant to the ordinary working people in my constituency. It may be considered insignificant in Winchester or in Eastleigh, which have unemployment rates of 5 per cent. or so. It may be insignificant to the working women of Tunbridge Wells or Guildford, where unemployment rates are less than 7 per cent. However, it is not insignificant in Hattersley, in my constituency, where unemployment is running at about 25 per cent.

My constituency is not the only one to suffer. As hon. Members from the south have made clear, the problems are not confined to areas north of Watford. However, the situation is especially difficult in the north, the north-east, the north-west, Scotland and south Wales. The institute for employment research at Warwick university has shown that for every 10 per cent. rise in the official unemployment rate there is a 7 per cent. fall in the number of women in the labour market. The more one examines the results of local surveys on employment trends the more clearly one realises the need for the Government to change their economic policy. The recent Tameside survey shows that roughly half those claiming unemployment benefit have been unemployed for more than a year. Among those aged 45 and over the percentage is 69 per cent. That is a crucial age band. There is a great deal of wastage among older skilled workers. However, for those aged 25 to 35, the figure is worse still. Over 70 per cent. of those claiming benefit in that age group have been unemployed for more than 12 months. How have the Government responded to the local situation? They have closed the skillcentre. That is the only response that they have made.

It is clear that the Government have misled the country over the true extent of the loss of jobs, and that they have dismally failed to respond adequately to the problems. Instead of closing down skillcentres, they should be pumping money into training. If they are not prepared to listen to the TUC, the CBI and the National Economic Development Council, perhaps they will be prepared to listen to the House of Lords Select Committee that considered the issue of unemployment, and that argued that the Government should expand the public services through selective expansion schemes. As the Government are worried about wage inflation, they might note that Professor Layard and Stephen Nichol of the London School of Economics have argued convincingly that long-term unemployment will have little or no effect on wage inflation. By refusing to act, the Government stand condemned.

It is unfortunate that Tory Members from the north-west have left the Chamber—thankfully there are not too many of them. It is not a case of Big Brother, but they are being monitored by Tameside council. By their voting habits, those hon. Members are widening the gap between north and south. In what the leader of the council, Roy Oldham, calls the "under one flag policy", constituents will be told clearly of the speeches and voting habits of Members of Parliament from the north-west. Those Tory Members would be well advised to note that they are being monitored.

Mrs. Currie

On a point of order, Mr. Speaker. Is it in order for the hon. Gentleman, who has refused to give way, to threaten hon. Members on the basis of what they have said in the House?

Mr. Speaker

The hon. Gentleman must take responsibility for what he is saying. I have listened carefully and do not think that he is out of order.

Mr. Pendry

Thank you, Mr. Speaker. Members of Parliament are being monitored because they are thought to be making matters worse for the areas that they represent. I am surprised if that is a denial of democracy. It is a democratic act by locally elected representatives. Tory Members from the north-west ignore that monitoring at their peril.

7.1 pm

Mr. Andrew Rowe (Mid-Kent)

I represent an area with high unemployment and am not afraid of my actions here being monitored. We have between 16 and 18 per cent. unemployment in a large part of my constituency, but there are many constructive things to be said.

I should like to draw the Government's attention to matters about which they already have some knowledge, as it will do them no harm to be reminded of them. No less than 50 per cent. of Britain's work force do not have the equivalent of even one certificate of secondary education. A higher proportion of our 16-year-olds go straight into work or, lamentably, on to the dole, and fewer of our adults are on training or self-improvement courses than in any of our major competitor countries.

If we are short of people in training, we are not short of paper qualifications. For years, the crafts, trades and professions have demanded increasingly narrow qualifications and have created diplomas, certificates and degrees to match them. Far too many are statements of time spent rather than of standards reached and still cater for a compartmentalised labour market, which has already passed away. What is worse is that employers do not understand what they mean and young people do not understand the merits of what they confer, especially in the medium-term.

When the Manpower Services Commission met the Select Committee, it agreed that the system does not meet the needs of the Government, employers or trainees. Moreover, it does not even mesh with the youth training scheme certificate. We need action on that now.

The Government should examine carefully what is going on in education. Faced with huge problems, some of which I have described, it is understandable that the Government preferred to use an instrument that is under their direct control rather than try to manoeuvre a decentralised and structurally inert education system. Huge strides have been made, but the time has come to ask whether there is too large an imbalance in resource allocation between the MSC and the education system.

It is enormously demoralising for teachers, who might be worried about the maintenance of their school or the capacity of its books and stationery allowance to meet the cost of equipment such as computers, to see growth only in an agency which concentrates on those whom the education system has let down. When the MSC gave evidence to the Select Committee, I asked about this. It told me that it had a hard black line of accountability to the Secretary of State for Employment, and a dotted line of accountability to the Department of Education and Science. The dotted line should be brought much closer to the hard line. There should be much more consultation and joint planning by the education system and the MSC.

We should be more imaginative about bringing resources into the education system. The Select Committee recently visited a major recruitment agency which does some of its own training. It has discovered that there is an insatiable demand for skilled people to work word processors and other machinery, so it is about to expand its training capacity. That expansion will be in a purpose-built centre equipped with machinery for use principally in the evenings and at weekends. All over the country there are schools with spare capacity, because of falling rolls, which could provide the accommodation. When asked why it did not use that accommodation, the agency replied that accommodation was an insignificant part of its costs. The House should imagine the advantages of the hardware, which is so much in demand, being at a school and there being an arrangement by which selected pupils could use the equipment when it was not being used by the professional agency. The agency would often get first choice of pupils leaving that school and the staff of the school could work with the agency. The agency said that its greatest problem was getting skilled teachers—the education system has plenty of them. Such imaginative sharing should be encouraged.

There is a too little sung contribution to employment in my area. If, on television, there appeared in flashing lights the news that 1,800 new jobs had been created, people would think that an improvement, but the 1,800 jobs created by the Medway enterprise agency in the past two and a half years do not emerge in lights because they are created in small numbers. More than 500 small firms have been established through the medium of this tiny organisation, and only 5 per cent. have gone out of business. That shows that, with skill, careful counselling and monitoring, it is possible to bring small firms into existence, which then employ people.

The banks, however, are still far too niggardly because, they say, they have not the time, resources or skill to assess whether a small business with no track record will succeed. Here is one enterprise agency with a proven record of judging the likely success of people wanting to go into business. Rather than investing in Mexico, Argentina or anywhere else for the sake of gains which rapidly disappear, our banks should pay far more attention to the success of these enterprise agencies and use them to monitor potential small businesses.

A change of attitude is also required. Only the other day a card came through my door from a firm which wanted my money. It said, "We were sorry you were out. We would like you to ring up and make an appointment. We can only call between 9 and 5. We cannot say whether we can come at any specific time, only whether it will be morning or afternoon." That was the South of England Electricity Board. Given that 66 per cent. of women in the labour market are able to have some form of employment, it is obvious that many people will not be at home during working hours. The electricity board's response has not been to find people to work in the evenings or at weekends, when most people are in — I suspect that that contravenes trade union practice — but to pour investment into new ways of reading meters by remote control. Consequently, meter readers as a breed will disappear.

That encapsulates the kind of attitudes which have stripped us of jobs. If the electricity board had had the flexibility to employ people to call on households when workers were at home, rather than expecting them to give up half a day to meet the board's caprices, we might have established some advantage.

7.11 pm

Mr. Ron Leighton (Newham, North-East)

It is a pleasure to follow the thoughtful and constructive speech of the hon. Member for Mid-Kent (Mr. Rowe).

We should use this debate to give the facts and tell the truth about our current level of unemployment and to end misrepresentation. Last year, in its corporate plan, the MSC forecast that unemployment would fall. In the draft corporate plan now before us it says that in the previous 12 months that did not happen, that unemployment rose by 150,000 and that it is still increasing. In other words, the situation is getting worse, just as it has for every year that this Government have been in office.

The Government came to office promising a new approach and economic expansion and success leading to full employment. They took over when unemployment was 1.3 million and had been falling for two years. They launched their monetarist experiment, and the jobless total immediately rocketed. It has not stopped increasing since. In unfiddled terms it is well over 4 million, with all the suffering and mass misery that that has meant.

Last week the Secretary of State had the gall and impertinence to criticise the record of my right hon. Friend the Member for Blaenau Gwent (Mr. Foot). It was claimed that the Secretary of State was creating more jobs. Let us take the number of employees in employment as the test. When the Labour Government left office, there were 317,000 more jobs than when they came into office. Now there are 2 million fewer jobs than when this Government came into office. As a result, this Government are charged with presiding over the destruction of 2 million jobs. We are now losing jobs more rapidly than we were in the 1920s and 1930s. The truth staring us in the face is that the Conservative party is the party of mass unemployment, and that on any test its monetarist experiment has been an appalling disaster which has brought hardship, pain and misery to millions of homes and families. It has been the biggest catastrophe to hit this country in peace time.

It would be far more fitting if the Treasury showed some contrition and a recognition of its failure. It should at least show that it cares, but all we get is bluster, as evidenced by the disgraceful speech of the Secretary of State. He merely sought to exonerate himself and to place the blame on everyone else. He seemed to be saying, "It is nothing to do with us; we are only the Government", but that is not what they say at election time.

The amendment says that some jobs have been created in the last 12 months. The figures show that that is the case. How, then, is it possible for jobs to be created, but for unemployment to go up? The answer to this mystery is that the official unemployment figures grossly underestimate the total. Many hundreds of thousands of people are seeking work, but because they cannot claim benefit they are not on the register and are not counted. Many hundreds of thousands of women fall within this category.

Rather than a growth of full-time jobs in the last 18 months, there has been a growth of casualised, part-time, insecure, low-paid employment, with no employment protection, written contracts or holiday or sickness pay. In other words, there is a sub-group of second-class workers. Two processes have occurred simultaneously — the growth of a sub-group of casualised, second-class workers, doubly exploited with no employment protection, alongside the continued remorseless destruction of full-time jobs, with a consequent growth in unemployment.

The pressure is on from the loony Right-wing pressure groups to rescind all legislative employment protection so that even more people can be pushed into this second-class group of low paid workers, as a result of which the poorest of our people will be paid even less.

The Government have now dreamt up a new alibi. They now tell us that the cause of unemployment is that wages are too high. They say that the solution is that wages must come down. After six years of tax cuts for the rich and financial incentives for the better off, we are told that the problem of unemployment and poverty is soluble only by creating even more poverty.

If that were the way to achieve progress, we would be succeeding now, because we are the lowest wage economy in the OECD. Although our more successful competitors pay much higher wages, and although real labour costs here have declined, we are told that wages must come down. The implication is that unemployment is the fault of the unemployed and that the way forward is that the poor must become poorer.

We were once told that unemployment is caused by inflation. Now that inflation has come down and unemployment has gone up, we are offered this other excuse and remedy—that wages must be reduced, that the pay and conditions of the poorest must be depressed and that people must go from the dole to the sweat shop and be priced into jobs. That is the new philosophy, but who can believe it? This loony idea is economically illiterate.

The Government's Green Paper on the relationship between employment and wages is a bizarre document. The Treasury model was tampered with and phoney equations were fed in to achieve the result. I am pleased that the Minister smiles, because it really is a sick joke. According to the simulation, there are four ways in which jobs appear. First, firms should employ labour, not machines. It is claimed that one third of the increase in jobs comes from employing more men rather than machines. It is recommended that we should slow down the rate of productivity increase; and investment and innovation are to be deterred. That brings us back to the Chancellor's idea of low-tech, no-tech, low-pay jobs. That would take us down the cul de sac of industrial decline. It stands common sense on its head.

Secondly, it is suggested that with lower wages people would save less and spend more, but the evidence for that is feeble. Thirdly, it is suggested that the Government would lower taxes and interest rates, but in view of what they have done in the last few months there is not much evidence of that. Fourthly, it is claimed that the higher profits which firms achieve through lower wages would be immediately invested, but I am not sure whether that means here or abroad.

Those conclusions were possible only by simulations on a rigged economic model. The untampered model at Warwick shows only one tenth of those figures. I stopped reading at page 37, because it shows that more than two thirds of the new jobs in the first year of the simulation came from an increase in Government employment. Which hon. Members believe that? We all know that the Government are cutting the Civil Service and public employees. We have all read the recent public expenditure White Paper which plans both a cut in real wages and continuing cuts in manpower. The Green Paper, therefore, lacks all credibility. Even if its contents were true, it would only scratch the surface of the unemployment problem.

If the level of pay is the key critical variable in determining employment, we would expect exployment to be highest in those regions where pay is lowest. Pay is lower in the northern region than in the south-east, but unemployment is higher, and vice versa. The same applies to industries. Electrical engineering is doing better than mechanical engineering, yet pay is higher in the former than the latter.

There has been an experiment in reducing wages—youth wages. On 16 January, in an answer, I was told that between April 1979 and April 1984 the earnings of males over 21 rose by 79 per cent., of those between 18 and 20 by only 63 per cent., of those under 18 by only 57 per cent., and that for females it was far worse. Earnings for young workers have declined markedly in both absolute terms and relative to those of adults. According to the new theory, we would have expected increased youth employment, but, instead, unemployment among young people has tripled and is disproportionately higher than for adults. That has been underlined by the young workers scheme. That scheme depresses youth wages and is the most expensive of the special employment measures. It has not increased youth employment. The argument is a phoney alibi and excuse. The Government must increase output, and thereby youth employment.

7.22 pm

Mr. Richard Hickmet (Glanford and Scunthorpe)

I find it extraordinary that the Labour leadership accepts no responsibility for the present levels of unemployment—that attitude was encapsulated in the speech of the hon. Member for Newham, North-East (Mr. Leighton)—and offers no reasonable alternative to Government policies.

I remind all hon. Members that for 12 months we had a coal strike, which throughout was supported by the Labour party and the Leader of the Opposition. The strike, which was supported and fostered by the Leader of the Opposition, has had a significant effect on unemployment levels. The industries involved in supplying the coal industry with goods and services have seen the National Coal Board's capital investment programme of about £1 billion for the past 12 months disappear. How many jobs depended on that capital investment programme? The repairs and renewal programme of the NCB must also be taken into account.

The British Steel Corporation has been obliged to pay £3.5 million a week to move ore, coal and coke into the steelworks. The strike has meant that it has had to cut its capital investment programme. In my constituency that has had a significant effect on the industry involved in servicing and maintaining that capital programme in the steelworks. The Leader of the Opposition failed to condemn the attempt of Mr. Scargill to close down Llanwern, Ravenscraig and Scunthorpe steelworks. How many jobs would have been lost in those industries had Mr. Scargill and the Opposition had their way?

Does the House remember the two national dock strikes? Who stomped up and down the country doing his best to persuade the dockers to strike? It was none other than the hon. Member for Kingston upon Hull, East (Mr. Prescott). What effect did that have on employment opportunities? How would it have affected unemployment if the dockers had come out on strike? How many jobs would have been lost? How many jobs have been lost by the refusal of the railwaymen to move ore, coal and coke? British Rail has lost millions of pounds, markets and customers, and jobs will be lost as a result.

The Labour party's record on unemployment is one of shame and cowardice, and the leadership of the Opposition has done more to increase unemployment during the past year than anyone else, except perhaps Mr. Arthur Scargill.

Despite that fact, the economy as a whole grew by 2 per cent. during the past 12 months, and would have grown by 3 per cent. had it not been for the strike. The gross domestic product is at its highest level and is set to grow by a further 3.5 per cent. in the next 12 months. Manufacturing output has increased by 3.5 per cent. in the past year, and is now 8.5 per cent. above the 1981 trough. Construction output is estimated to have risen by 4.5 per cent. in the first three quarters of 1984. Private industrial orders received by the construction industry in the three months to November 1984 were 61 per cent. higher than in the corresponding period for 1983. Investment spending on private dwellings reached a record annual rate, and for the first three quarters of 1984 was running 20 per cent. above the 1978 rate in real terms. By the second quarter of 1985 the economic recovery will have lasted for four years. That is longer than any recovery since 1945. I note that Opposition Members can only sneer at that record.

Investment brings jobs, and private sector investment is the most productive and efficient. Manufacturing investment rose by 15 per cent. in the first three quarters of 1984. As a direct result of the Government's economic policies on spending, borrowing and money supply we have achieved those remarkable statistics.

The Opposition have pointed to the value of the pound against the dollar, but the effect of that on our trading position has been dramatic. During the past three months exports rose by 7.5 per cent., and they are 11.5 per cent. higher than a year ago. Imports have risen by less than 10.5 per cent. Those figures further confirm the general increase of economic activity in the United Kingdom. Exports to the United States rose by 40 per cent. last year—a performance which is in line with that of our main competitors. Inward investment is taking place and is likely to continue to take place on a record scale.

I strongly urge Ministers at the earliest opportunity to obtain a new round of GATT talks to bolster the United States' President in his determination to avoid the imposition of trade barriers. We are now seeing the benefit of the Government's economic and domestic policies, which have seen the United Kingdom's output per head in manufacturing and our productivity growth for the whole economy increase at a faster rate than that of any of our European competitors.

The growth of our economy is reflected in increased employment. In the year ending September 1984, the numbers in work rose by 342,000. Merely to stand still, we have to create new jobs. We have to create about 500,000 new jobs a year. The Government must ensure that enterprise and initiative is allowed to flourish, and that it is worthwhile to employ people and to work. That incentive must be fostered. I hope that the Chancellor of the Exchequer will heed the many calls to reform employers' and employees' contributions, and to raise tax thresholds to ease the unemployment trap.

In addition, the Government must appreciate the effect of wages councils on employment. If the Government are looking to the catering industry as part of the service sector to provide new jobs, they had better abolish the catering wages council. The catering industry is not prepared to employ workers on rates which make the business entirely uneconomic. People, especially the young, are being priced out of work by wages councils, and the time has come to abolish them.

Mr. Prescott

What have they done for Scunthorpe?

Mr. Hickmet

I am asked by one of the most unpleasant Members in the House—the hon. Member for Kingston upon Hull, East—to say what Government policies have done for Scunthorpe. They have given Scunthorpe three enterprise zones. Since designation, 100 jobs have been created in the enterprise zones and a further 500 are in the pipeline. Developments include Hygena, Kaye Plastics, Humberside Fabricators, Twinburn Engineering and Mike Derby. In another enterprise zone, Government grants of £2.2 million have assisted in the creation of a further 252 jobs. I note that the constituency that the hon. Gentleman represents failed to get development area status, whereas mine did. He should look after the interests of his constituents a little better rather than shouting insults across the Floor of the House. Actions speak louder than words; I got it and he failed.

I reject the Opposition motion because it is bogus, it fails to acknowledge the tremendous strides that the British economy has made and it proposes remedies which have been tried, which have failed disastrously and which will fail again.

7.31 pm

Mr. Michael Hancock (Portsmouth, South)

This afternoon, hon. Member after hon. Member on the Opposition Benches has exposed the Government's record for what it is worth, and I imagine that that is not much in the eyes of the majority of British people. The record is built on a false promise made in 1979 by the Prime Minister, who said that she would get this country back to work. It was a hollow promise indeed, because it is remarkable that, of the 69 months that have elapsed since she made the promise, in only three months has the jobless total failed to rise.

From the comments of the Secretary of State this afternoon, it would appear that he is proud of that record. There was no embarrassment and little concern about that broken promise, but there is real anxiety about it in the country. During the past few months it has been interesting to see Conservative Members become increasingly fidgety about the problems of unemployment. They realise that if something is not done they could easily join the 3.5 million people on the dole queue should the British people repay the Government for that broken promise about employment.

Since 1979 the Government have increased unemployment by 2 million, and they have increased the deficit on our visible trade to £11.5 billion. They have the highest interest rates since we left the gold standard in 1931. The failure of those policies, coupled with the strength of the dollar, led to the recent sterling crisis and the runs on the pound. International markets have no confidence in the management of our economy, and few hon. Members have confidence in the Government's ability to push the economy to a point where it can offer a real opportunity to end the plight.

We have heard quotes from various newspapers today, including the Daily Mirror and the Daily Telegraph, which put forward plans for employment. Conservative Members have told the House what they wish to happen, and we await the speech of the right hon. Member for Old Bexley and Sidcup (Mr. Heath) when he exposes to public comment his ideas about the Budget that Britain will need to get unemployment down to a reasonable level. I commend to the Government the Budget proposals put forward by the alliance. They warrant wide respect, and they could work. Our plan is a real plan for jobs. It would create jobs, keep inflation down and keep the pound stable. We are always asked how many jobs it would create. That is a difficult question to answer, but what we have said consistently is that if wage settlements were kept at 2 per cent. below the presently forecast levels of 7 to 8 per cent., by 1988 unemployment would be below 2 million.

Our Budget would expand the economy by spending the £1.5 billion which the Chancellor of the Exchequer intends to use for tax cuts to cut unemployment. That could be done by a 1 per cent. cut in employers' national insurance contributions, or by spending £1 billion on capital projects such as housing repair and construction. We should remember that one in eight of unemployed people used to work in the building industry. We could spend money on road and rail repairs and on public investment in the fabric of Britain, which has deteriorated dramatically since the Government came to power. Public investment is now a third of what it was in 1979 and one quarter of the total in 1974.

The alliance wants the community programme to be expanded. More than one and a quarter million people —almost one in four of the jobless total—have been unemployed for more than a year. Despite its defects, the community programme is the most effective way of putting the long-term unemployed back to useful work, especially on environmental and construction projects which need urgent work. I see many such prospects in my city every day. The sewerage system in Portsmouth, which was created in Victorian times, is expected to deal with the problems of the 20th century, but it is completely inadequate. That is a classic example of where public sector investment could easily achieve not only long-term expenditure savings but almost immediate employment. Therefore, we recommend an increase in the community programme next year from 130,000 to 250,000 people, as a first step towards our objective of an improved scheme offering 500,000 places, with an enhanced training element.

In addition, we propose a new programme for the long-term unemployed aged under 25, more than half of whom have not experienced proper jobs. That would involve an initial commitment to 75,000 places, doubling to 150,000 places over two years. The gross cost of those measures would be £685 million — a small price to pay for no mean feat.

The cumulative effect of the Government's policies on training has been damaging, and time and again this afternoon we heard from Members who have personal experience of the problems. The Government have run down the industrial training boards, threatened to close one third of skillcentres, reduced university places in science and technology faculties, and made shortsighted cuts in research and science projects. We would reverse those cuts as an urgent priority, extend the youth training scheme to two years and make it available to all 16 and 17-year-olds who wished to take part. That would be a major step towards the objective of enabling 16 to 19-year-olds to have access to education and training. It is impossible to predict with certainty the extra demand on the YTS, but we estimate that another 250,000 places will be required. The gross cost will be £600 million, which is once again a good investment for so many people.

How many Conservative Members have experienced the changes that have occurred in industry? Before I entered the rarefied atmosphere of this place, where people seem to be reluctant to understand the problems of the real world, I experienced those changes in the factory where I worked. I saw people in their 40s and 50s displaced by machinery. Only eight or nine months ago, when I was in that environment, I saw the strains and pressures on people who were turned out of their jobs and who knew that their prospects of being retrained were being slowly but surely eroded, and that their opportunities to obtain meaningful employment in their lifetimes were fast receding. It is sad that Conservative Members are reluctant to accept the problems of the unemployed or those who are about to be made unemployed. Perhaps that is because they sit in this rarefied atmosphere and do not fully understand the consequences of their actions. I commend the Budget proposals of the alliance, as they are small steps that need to be taken to achieve the goal that we should all like to achieve—the country back at work.

I am surprised that the Secretary of State was not red faced with embarrassment over the promises that his Government and colleagues have broken over the past six years. I saw nothing in his speech of that embarrassment. Other hon. Members are in a far better position than I am to criticise that speech and compare it with others that he has made. If I were unemployed today, I would find it a sad reflection on the Government that the person who is given responsibility to help me this afternoon gave little hope of salvation. His lack of consideration and concern is the most damning of all the things in the Government's attitude to the unemployed.

The proposals that I have briefly outlined make up a plan for jobs which shows real concern for the problems that we are facing. It is not a plan that we shall hear from the Chancellor next Tuesday. His Budget will reward the rich and well off, while pursuing the policy of putting even more hopelessness in the way——

The Minister of State, Department of Trade and Industry (Mr. Norman Lamont)

rose——

Mr. Hancock

No, I shall not give way. The hon. Gentleman will have an opportunity to make his own contribution at the end of the debate, and we can only hope that it will be a more helpful contribution than that of the Secretary of State.

Our plan is a plan for jobs and hope. I hope that, as a result of the concern expressed by Opposition Members, the Government will take notice of the problems of the unemployed and that the Budget next week will reflect the need for the Government to take positive action to help the unemployed.

7.41 pm

Mr. Tony Marlow (Northampton, North)

I always feel a little sad at these debates because, although there are many hon. Members with great ability, tact and skill on the Opposition Benches who have many worthwhile ideas to put forward, they have not done so. Instead we have had a bad-tempered attack of economic indigestion from the hon. Member for Kingston upon Hull, East (Mr. Prescott). I understand that at one stage he was transport spokesman for the Labour party. That is easy to understand as his speech had all the characteristics of a runaway empty express train rattling through a tunnel—empty because it had no content and through a tunnel because he could not see where he was going.

Apart from a few flat earthers on the Opposition Benches, most of us are more orthodox and realise that we live in an increasingly difficult and competitive world. That competition is not just the old competition but the growing competition from the far east, the low wage economies, Brazil and other parts of the world. Nobody owes us a living. We are not self-sufficient in raw materials or food and it is essential that we trade to provide the goods that we do not have within our borders. If we are not efficient, we cannot trade. The more efficient we are, the less it costs us to import these vital supplies.

What I am about to say may interest the hon. Member for Kingston upon Hull, East because I shall criticise my right hon. Friend the Prime Minister. She was wrong to say that there is no alternative. There is an alternative means of dealing with the problems of unemployment—I concede that to the Labour party. It is the policy adopted in Eastern Europe— the siege economy where, if one needs something, one does not trade for it but barters for it. There is no freedom because labour is directed. There is no wealth because the only available incentive is that of becoming a party member. In some of the mini-Socialist republics in this country we have seen how that would work here. There is no unemployment because overmanning develops into double-manning. It does not help a great deal because what hon. Members opposite do not point out when they put these ideas forward is that double-manning halves the living standards of those it affects.

We have had experiments in the United Kingdom in this way and we have the fun statelets such as that under Red Ken—I think that he has been renamed Scab Ken after what happened last night—which more than doubled the expenditure of the Greater London council over the past three years. He is now talking about no cuts in jobs and services. Perhaps he would like to look back on the effect that that extra £400 million taken off the domestic and commercial ratepayers might have had on jobs and services.

There is only one way to deal with the problems of unemployment. We have to realise that the Government do not create jobs. We have to realise that it is the Government's job to allow others to create new jobs and to sustain existing jobs. It is up to the Government to stop getting in the way. They can do that in two ways. One is by reducing bureaucracy. It is fair to point out that many of our laws and much of our legislation come from Brussels. There is a tendency for the empire-building bureaucrats in Brussels to introduce more legislation. If we allow the political initiative to fall into the hands of the bureaucrats we shall get bureaucracy. I should like the Government to say plainly that we do not want things such as the Vredeling directive and the fifth directive. Anything coming from Brussels should be subjected to two stringent tests. Firstly, will it further the interests of free trade? If it will, we should take it. Secondly, will it increase the burden of bureaucracy? If it will, we should kill it.

The Government should do something about VAT on small businesses. The amount of administration and work that goes into keeping the VAT accounts for somebody who has only just started and has many other burdens with which to deal is unfair. I should like to see the exemption ceiling on VAT raised to £50,000.

There are other burdens about which the Government can do something. For example, there is the financial burden on industry. We are coming to realise that one of the state's problems is that just about every state activity is an engine of increased expenditure. For example, each year, for the same number of patients, the Health Service gets more expensive. Each year, we have more old people and therefore more patients. Each year we have more pensions to pay. The provision of the same quantity of defence equipment becomes more expensive each year in real terms. This is why this and any other Government have to be so careful over public expenditure.

One sector where we can be more careful than we have been is in local government. There has been a progression, a change in the nature of local government. Some 100 years ago, the Victorian aldermen provided facilities, such as parks, and dignified buildings in our urban areas. Now a growing number of services is being provided by local government, growing in complexity and resulting in growing empires. The old feeling of those working in local government that they provided a public service has gone. Now local government has to resolve the competing interests of, on the one hand, the people for whom the service is being provided, and, on the other, the public sector unions that are employed. It is an unequal battle.

We have moved on. Now, in some areas of the country, getting into local government is looked upon not as an opportunity to provide services for the citizens but as an opportunity to set a political platform, and sadly this is unrestrained by the discipline of the ballot box. The new slogan is "no representation without subsidisation". We should now move to a position in which local government is more and more restricted to the control and regulation of services and not to the provision of the services themselves. The provision of local services should be moved from local government to the private sector—the building, maintenance and control of houses could all be done by the private sector. Let us move all the services that we can out of local government and towards the private sector. We have done a massive amount of work in privatising the nationalised industries and allowing those who work in them more involvement in their industries. Let us move on further.

Let us remember what happened during the mining dispute. Both the railways and private hauliers were supposed to be moving coal. The railwaymen felt that, whatever they did, the taxpayer would cough up the money, so they went on strike and did not move the coal. However, the private hauliers needed the work so that they could keep in business. They did the work effectively and efficiently, and they carried it through. There is a moral in that. It is that in the real world of the real economy, the private sector provides the goods.

Of course, we need training, and we need better training than we have had so far. My right hon. Friend said that the Government intended to spend even more on training. But, again, why not, as we are doing, move that towards the private sector, which is more reflective of the need and is more flexible? I fully support my right hon. Friend's proposed move in that direction.

Another form of training which I should like to see is a move towards a national community service — [Interruption.]/ — in the youth training scheme — [Interruption.] I shall explain it, if I can, despite all the ill-tempered caterwauling coming from the Opposition Benches. I wonder whether within the youth training scheme we could develop, as an option, a voluntary form of national community service representing a training for life. Of course, we want to train for specific skills. But if we could have a growing option of three months of Outward Bound-type training followed by community work in the environment and inner city areas, working to help others in the community and getting people together from different parts of the country, different walks of life and different aspirations as, in a way, we had with National Service, as a voluntary part of the youth training scheme, that would be a great advance. It would be a different option, of course. But let us see how it goes. Let us see how it grows. Let us provide people with a broader view of life.

The Government are there to hold the fort, but let us leave it to the people. Let us get the people motivated. Let us give them a stake in society. Let us privatise, denationalise and give people the opportunity to become involved in co-operatives. Let us do all that we can to help.

7.52 pm

Mr. Sean Hughes (Knowsley, South)

I accept that the pattern of employment is changing. I also accept that unemployment is not an act of God. It is not in that category of disasters against which it is impossible to insure. Quite simply, it is one of the consequences of how we order our economic affairs.

At the weekend I read the Prime Minister's comments on what she saw as attacks on the conventions of democracy. One of those conventions, developed this century and especially in the post-war period, is that the Government have a responsibility towards the unemployed.

The word "unemployment" came into general use only at the turn of the century. I came across a copy of the "Encyclopaedia Britannica" for 1911 which still described it as "a modern term." The responsibility of the state for unemployment concentrated the minds of politicians in that immediately pre-world war 1 era. It is interesting to note that the unemployment figures which prompted such concern among Edwardian politicians rose to a peak of 7.8 per cent. in 1908. Such a figure today would prompt talk of an economic boom in boroughs such as mine, where the latest unemployment figure is 25.6 per cent.

Just as national averages are meaningless because of the huge regional disparities, so regional averages vary widely from one area to another, within areas themselves and between age groups. The latest figures published are that there are 1,286,183 people under the age of 25 unemployed, and that number constitutes 38.5 per cent. of the total number of unemployed. The number of people under the age of 20 unemployed is 571,664, and that constitutes more than 17 per cent. To take just one local figure, there are 1,197 people under the age of 18 registered as unemployed in my borough's careers office, and of that number 928 have never worked. There were 475 job applications at the careers office, and there were 45 places.

Those statistics do not describe the boredom and the purposelessness to be seen in young people hanging round streets and shopping centres in constituencies such as mine. It reminds me of J. B. Priestley's description of his visit to Blackburn in 1933, in his book "English Journey". He commented on how the young unemployed were trying to kill time by playing table tennis. He wrote: Probably by the time the North of England is an industrial ruin, we shall beat the world at table tennis". The only difference now is that we do not have the table tennis.

The position is made much worse when the Government react to this problem with punitive attempts to take supplementary benefit from 16 and 17-year-olds who are looking for jobs. The Government's flirtation with compulsory training suggests that there are still Government supporters who have not yet accepted that a man or woman out of work is not necessarily a blameworthy idler. That is especially true of the long-term unemployed. In January of this year, 1,316,000 had been unemployed for more than 12 months. More than 761,000 had been unemployed for more than two years. More than 454,000 had been unemployed for more than three years.

We have had several debates on unemployment, and the most frustrating feature is that the Government seem to be completely unmoved. The frustration which I feel as an employed, paid politician pales into insignificance when compared with the frustration boiling up in the unemployed in constituencies such as mine.

I accept that the Government will not announce their sudden conversion to the Opposition's point of view, compelling and authoritative as was the argument of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). So I shall lower my sights a little. On many occasions my right hon. and hon. Friends have asked the Government to say when they expect to see unemployment coming down. I simply ask the Minister to give us an idea of the time scale involved. My constituents have a right to know when the sacrifice which they have been asked to make will start to bear fruit. Even in war time Governments make some concession to suggest when victory is expected, and this Government have lasted longer than the second world war. It is debatable which has caused more damage.

Government supporters tell us constantly that the Opposition do not have a monopoly of concern. Secretaries of State and other Ministers constantly say how the present levels of unemployment are not acceptable. But we need to be convinced by more than words. We expect some action.

How many times do we have to say that the Government's policies are creating hopelessness? There is a growing body of people who believe that if an area solves its own problems, all will be put right, but the case for Government intervention is overwhelming. A borough such as my own is not capable of solving its own problems. The wealth is not there. There is a growing feeling that long-term unemployment is a fact of life and that 3 million is the norm and not the high. That is not even disputed any more in areas such as Knowsley. There is no confidence, either, that technology will create more jobs. Areas such as my own are fast becoming without hope.

Unemployment and job vacancies do not form some neat equation working on the reverse of the principle of last in, first out. The harsh reality is that the longer a person is unemployed, the less likelihood there is of his getting a job. The longer a person is unemployed, the more he is viewed as unemployable and, worse still, the more he is tempted to consider himself as unemployable. That is why the unemployed have the right to know when it is all coming to an end. Will the Minister now give the time scale? If not, we can only presume that the Government have no idea when unemployment will start to come down. If that is the case, they will deserve the odium of history for embarking on a disastrous experiment, oblivious of the dangers that it holds for ordinary people.

8.1 pm

Mrs. Edwina Currie (Derbyshire, South)

Unemployment is both a human and economic tragedy, no more so than in areas such as Merseyside, where I grew up, and I acknowledge everything that the hon. Member for Knowsley, South (Mr. Hughes) said.

However, it should be recognised that unemployment is concentrated. My constituency has an unemployment rate of 7 per cent., which is half the national average. We feel that there are some lessons to be learnt from that fact. I say with respect to the hon. Member for Easington (Mr. Dormand) that, although it is a coal mining area, we have managed to prove that there is life after coal; most of the pits closed about 20 years ago.

I congratulate my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) on his acquiring Government help for his area. However, the history of many parts of the country shows that that kind of help is tinged with poison. My constituents believe that we are extremely lucky to have avoided regional aid and Government assistance, with all the distortions that they bring.

We in Derbyshire, South have a good work force and a good management, producing the commodities that people want, at the price they want to pay, the goods being delivered on the date that they are wanted, with our goods going for export throughout the world. It is to those facts that we attribute our low rate of unemployment.

Some of the problems of unemployment are beyond the will of any Government to resolve. We have heard almost nothing in this debate about demography. About 1 million more people will be added to the British work force by the end of this decade, and it will be 1990 before the number of people leaving the work force is equal to the number of people entering it. That is not a problem that any Government should ignore.

The Labour motion contains some inherent problems. Opposition Members call for more investment, particularly in manufacturing. They seem to forget that more investment in manufacturing has steadily led to fewer rather than more jobs. It does lead to higher productivity, higher output and higher sales. Exports are doing wonders for the balance of payments, and we now have what has long been sought as the holy grail—export-led growth.

Last year in manufacturing, investment went shooting up by about 7 per cent. during the summer quarters compared with the previous two quarters, and the estimates are for investment of about 12 per cent. for 1984 as a whole. At the same time employment in manufacturing in Great Britain is still going down. In September 1983, it stood at 5,547,000 and a year later it was 5,514,900. Investment in manufacturing means more capital-intensive activity replacing labour-intensive activity.

The main growth in employment is in the service industries. We now have two and a half times more people in those as we have in manufacturing, and the office revolution has not yet begun to hit us. We shall have to watch that.

Thus, calling for more Government investment in manufacturing, as the motion does, is, first, unnecesssary because the private sector is doing it perfectly well without Government interference and is making far better choices than my colleagues in Whitehall could begin to make and, secondly, private industry will do even more if the Government help to reduce its costs, such as national insurance contributions, rates, taxes and all the rest.

In any event, I believe that more Government investment in manufacturing would not only not help unemployment—and would not help in the short run at all—but might even be damaging. For every £5,000 taken from a company to create employment elsewhere a job is lost in that company, with no guarantee of a replacement after it has gone through—I say this with respect—the sticky fingers of the civil servants and has found its way into some Government scheme. In the long run, new investment will lead to new technology and to new jobs—but only if the Labour party paymasters, the trade unions, start actively welcoming and encouraging technical change in Britain.

Labour Members do not understand the great social changes that are underlying all the figures that they have been quoting. Employment has been rising steadily. Historically, we have a high percentage—about 66 per cent. now—of the population of working age at work. New jobs are being created. Between September 1983 and September 1984, there were 153,000 net new jobs, but 152,000 of those went to women working part-time. Between March 1983 and March 1984, we had 266,000 new jobs, of which 213,000 went to women working part-time. In other words, the ladies are getting much more better as we go along at nabbing the jobs that are on offer.

The hon. Member for Newham, North-East (Mr. Leighton) described women as second-class workers. In fact, most employers consider that we are first-class workers, and we are certainly the employees of first choice, and there are a number of reasons for that. One is the willingness and flexibility of the female work force, partly because it is not unionised. It is not, therefore, subject to the pressures of those who want to change the world in the way that the leader of the National Union of Mineworkers would like to do, seeking to use his industry's work force to do it.

The main reason is cost. Women are cheap and plentiful and there is no evidence that the supply is drying up. Suppose an employer takes on two women working the average part-time hours of 21.9 hours a week at just below the figure at which they would start to pay national insurance and tax. The women will get, say, £33.99 a week each take-home pay. The employer will get 43.8 hours a week for £68 less tuppence.

If, instead, the employer takes on a man full-time, whose average hours—based on last year's figures—would be 43.5 hours a week for the same money, the man will take home only £53.50 a week after deductions of £6.12 national insurance contributions and £8.83 for tax, and the employer will fork out £73.11, including national insurance contributions. That is 7.5 per cent. more than the cost of employing the two ladies. In addition, the full-time worker has all the protection of the employment legislation and will probably receive holidays and so on.

Part-time women workers are now doing roughly half the average working week of the men and are picking up one third of the male full-time earnings. Half the work for a third of the money is a bargain, so it is no wonder that they have got jobs. The message is clear for any employer: lay your hands on as many women as possible and employ them. For any women with a family, the message is also clear: it makes far more sense for a woman to work, say, 20 hours a week and collect £30 to £35 cash in hand, than for her husband to put in hours of overtime and pay the 39 per cent. marginal rate of tax and national insurance, particularly as the married woman probably does not qualify for the dole.

The result is that employment goes up, but unemployment does not come down. The problem for Labour Members is that these differences will not go away. Women will not give in. The will not go back to the kitchen sink, and all the articles in Marxism Today about how important the women have been to the striking miners show how determined women can be when they really put their minds to something. It is clear that they will not be dictated to by Labour Members, whose nostrums will have only one effect, which is to accelerate this pattern of working. They will end up replacing more male jobs with cheap female workers.

Labour Members would increase the costs of employing people, whereas we must decrease them. They would increase public expenditure and taxation, whereas we must decrease them. They would increase the number of rights of workers and obligations of employers, whereas we must decrease them. They want equality, and that means encouraging women to leave the home and look for a pay packet. On behalf of the women I say, "We have done it, chaps, and look where it has got you." No amount of the blustering in which Labour Members indulged will disguise the lack of credibility of the Labour motion's central philosophy on jobs. They cannot deliver without an incomes policy. My namesake—though he is no relative—Professor David Currie, who is one of their advisers, has said so; they cannot begin to deliver such a policy, and they never could. They cannot think of any way of generating employment without lifting billions of pounds by way of extra tax from man and master alike. All that would do would be to accelerate the destruction of British industry, not just in terms of jobs but in terms of output and trade. Their policies could only make things worse, and that is why I reject the motion.

8.10 pm

Mr. Don Dixon (Jarrow)

The dole queues have grown longer and the crocodile tears have become larger since the debates on unemployment in 1979. We hear a load of waffle from Conservative Members who have probably never seen a pair of overalls, let alone worn a pair. This comes rather hard to those of us who have had some experience of the dole queue.

The Secretary of State for Employment has told us that unemployment requires a constructive approach. The Government's policy has trebled the number of unemployed since 1979. Is that constructive? I support my colleagues who have rightly drawn attention to the appalling level of unemployment and I condemn the policies that have produced the economic and social disaster that currently blights the United Kingdom. Since becoming a Member of this place, I have attempted always to draw attention to unemployment in my constituency. I have done so in debates and in written and oral questions. I have used every parliamentary device available to me to highlight the grave situation that prevails in Jarrow under the Government's policies. I take up the issue again to show the further industrial deterioration that has taken place in the northern region generally, and in Jarrow especially, over recent years.

When I was newly elected to this place I heard the Prime Minister talk about artificial jobs. She told us that she wanted real jobs. If it were not for the artificial jobs that the Government have created, unemployment would be nearer 5 million than the present 4 million. The Secretary of State for Trade and Industry tells workers that their salvation lies in getting on their bikes and finding jobs. Does he realise that those who can take that advice, assuming that they can find jobs to go to, are the young and active? If they leave their communities to find those jobs, an additional burden is placed on the old and infirm. The young and active will not take with them old people's homes, community centres, libraries and other local authority services. The result is an increasing burden on local authorities, especially with the Government's policies of rate capping and cutting generally local government expenditure.

High unemployment and attendant poverty are an underlying problem in Jarrow, south Tyneside and the northern region. Jarrow, like the rest of the northern region, has depended always on basic industries for employment. These industries include shipbuilding, coal, steel and heavy engineering. Since 1979 we have witnessed closure after closure. Boldon colliery, the last pit in my constituency, was closed in 1981. Only this month, British Shipbuilders has decided to put in mothballs the last shipyard in my constituency. British Steel has announced that by the end of the year the last steel plant in my constituency is to close. It claims that this is due to the EEC quota. I suggest that the Government make every endeavour to increase the quota for the United Kingdom to try to save the plant and 254 jobs. As I have said, the plant is due to come to an end by the end of the year.

Closures have a spin-off effect within the Community. Service and supply industries will be hit and this will cause further unemployment. Shops, pubs and clubs are all hit by recession. Indeed, the south Tyneside district council decided to set up a welfare rights take-up campaign, because the area's economic and unemployment problems have produced low family incomes, a high mortality rate, a high dependence on benefits, a population decrease because of migration and a wide range of social problems. It was found that one in two of the householders of south Tyneside relied on housing benefit. In a 12-week campaign the welfare rights officers dealt with up to 100 cases a day. There were 5,571 inquiries and 3,200 claims. The result of the campaign was that about £500,000 was made available to those who did not realise that they were entitled to benefit.

The latest figures of the Department of Employment tell us that unemployment in the northern region is 237,000. Almost half of those people are resident within the Tyne and Wear area. About 100,000 of those who are unemployed within that area are long-term unemployed, which means that they have been out of work for over 52 weeks. Unlike some hon. Members, I do not talk about percentages when dealing with unemployment. It should be realised that in unemployment debates we are discussing wage earners, one-parent families and many others who are all human beings. We are talking about those who are out of work and not about percentages. The unemployed wish to support their families and it annoys me when I hear the unemployed, including those with whom I used to stand in the dole queue, referred to as percentages. An unemployed person does not gain much satisfaction from being tapped on the shoulder and told that unemployment has reduced by 1 per cent. That person is 100 per cent. unemployed and he wants a job. He wants to support his family and that is what it is all about. We are discussing human beings who want the dignity of work that comes from the right to work.

The House might be interested in the number of jobs that were reported in the press as having been lost during the month before Christmas in the Tyneside area. There were 2,100 with British Shipbuilders; 400 with NEI, Gateshead; 360 with Cape Insulation, Washington; 334 at the Royal Ordnance factory, Birtley; and 246 at British Steel at Jarrow, which is to be phased out at the end of the year. This means that 3,440 were thrown on the human scrap heap during the month before Christmas.

My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) talked about 29 of our 81 skillcentres having been closed. In Tyne and Wear, the Killingworth skillcentre is to be closed with the loss of 56 jobs and 250 training places. It is in an area that requires training places for those who have been thrown on the human scrap heap. Only one training facility remains in the county and that is at Felling. The nearest skillcentre north of the Tyne is at Edinburgh. There are even doubts about the unemployment rehabilitation centre for the disabled, which shares accommodation and costs with the Killingworth skillcentre.

As I have said, unemployment in the northern region is 237,000. The region has relied on basic industries and the Government's policy is turning the area into an industrial desert. The only remedy that the Government offer to those in the desert is to turn themselves into industrial nomads. They invite them to leave the places where they were born and bred and where their families have lived for years.

At the same time, the Government have reduced regional aid from £700 million to £400 million. Despite what the hon. Member for Derbyshire, South (Mrs. Currie) said, the Tyne and Wear area relies on regional aid. The area has relied on employment in basic industries and that has been cut. In my constituency 25 per cent. of the male work force relies on heavy industry for employment as against 7 per cent. in the rest of the country. That is why the region is top of the unemployment league.

Mrs. Currie

rose——

Mr. Dixon

I cannot allow the hon. Lady to intervene as I know that others wish to speak before the occupants of the two Front Benches reply to the debate. Only 10 minutes are available to me and I wish to advance additional arguments. I apologise for not giving way to the hon. Lady.

Regional development grant has been reduced for the top tier from 22 per cent. to 15 per cent. To top it all, the NEDC, one of the job creation agencies in the northern region, has been told that the Government will cut its grant in aid in the current financial year by 25 per cent., or £280,000. This is to happen in an area which has the highest unemployment in the United Kingdom. The only job creation agency in the region is to be subject to cuts, and I hope that the Minister will have second thoughts.

The region wants the policy that has been outlined by my hon. Friend the Member for Kingston upon Hull, East. It is a disgrace that so many construction workers are unemployed when so many others require housing. Surely it would be easy to enable construction workers to return to work. I missed part of the debate because I attended a meeting to discuss the Transport Bill that is currently in Committee. The proposals in that measure will increase unemployment in the northern region. Many transport workers will find themselves unemployed. At the same time the Government say that not enough people are using public transport. The Select Committee on Transport considered an analysis which showed that for every person declared unemployed, 150 public service trips a year are lost. If one multiplies the 4 million who are unemployed by the 150 public service trips the answer is 600 million trips. It is no good the Secretary of State for Transport saying that insufficient people are using the transport system.

We require positive policies and help for our regions, giving hope to the unemployed. We do not want the nonsense of saying, "Get on your bikes and go somewhere else" or of cutting back on local authorities which are providing for the old and infirm. I hope that the Government will come across with something positive. I hope that at this late stage the Government will take notice of the new Tory group called CARE which has just been set up. If ever there was a prostitution of a word, that is it. I believe that 150 Tory Members of Parliament comprise that group on unemployment. I hope that they will note what Opposition Members have said. I hope that, at last, Government Members will show some social conscience.

8.20 pm

Mr. William Cash (Stafford)

What does the Opposition motion really say? It alleges that we have the highest unemployment level this century. It affirms that we should expand the economy, reduce unemployment and develop youth and adult training. It calls for an ending of the decline of manufacturing industry and economic recovery based on investment in British industry, the improvement of infrastructure and a strengthening of science and technology. We reply that we support a sound financial framework with a determined policy of low inflation and steady economic growth with an efficient, competitive and productive industry and with training opportunities for young people and adults alike of the type already in place, and we shall prove their worth.

I share the concern of all hon. Members from all political parties at the unacceptably high unemployment. But saying that is not enough—we must do all that is possible realistically to bring it down. On listening to the Opposition I often get the impression that they forget that, to reduce unemployment, people must be employed. It would be a cruel deception to encourage people to be employed in industries that have no real future, such as uneconomic pits or uneconomic steel works. There are no easy or short-term answers.

The problem has been developing for 40 years, and was accelerated by the sudden increase in oil prices in 1973. I believe that this much is understood and accepted by both sides of the House.

What can be done to improve the economy and thereby produce real jobs? Our economy certainly will not be improved by the continued year by year increases in rates, such as those my constituents suffer under the Staffordshire county council. I offer my constituents an answer—vote those representatives out of office in the county council election in May.

We need an enterprise economy. The Opposition motion says nothing on that subject. An enterprising economy will come only from the efforts of the working people — shop floor, management and self-employed. We shall achieve an enterprise economy only if we produce goods that are better than those from abroad. One of the most pathetic arguments that I have heard is that we must not reduce taxes because the added income will go on imports. The truth is that, unless we produce goods that are better than those imports, we cannot hope to compete in world markets.

How best will we be able to produce the conditions in which we can compete in these markets successfully? First, we must be as efficient as our competitors — for example, it is hopeless for us to be in the position recently indicated by a survey of the National Institute Economic Review. The survey showed that German firms producing the same products on the same machinery managed labour productivity on average 63 per cent. higher. Moreover, 50 per cent. of those in supervisory positions on the shop floor had proper training compared with only 25 per cent. in this country.

Secondly, we must have a tax and banking system that will genuinely provide incentives to work and to risk capital. We look forward to the Budget on 19 March in the hope that this really will be a Budget for enterprise, jobs and investment. We hope that it really will encourage people who are now out of work to find that it is worth their while to be in work while providing management in new and efficient enterprises with the opportunity to expand and to take on new labour.

I have already put forward proposals in the Small Business Bill now before Parliament for the removal of red tape and unnecessary overregulation. Measures along those lines can help our economy to flourish. This must be done, and it can be done, in a balanced way. The scare stories of the Opposition are pure nonsense. We must look for all the means that are available to us to provide an enterprise economy with effective training for those in schools and for school leavers so that they have a reasonable opportunity to find and to keep long-term employment. Neither they nor anyone else will be able to obtain employment or to keep it unless they are managed and trained to produce goods that beat those produced elsewhere in the world. They need also the incentives of good pay with low taxation.

I have said before and I shall say again that it is worth the Labour party's taking on board the fact that its Socialist allies in France and Spain have tried the worn-out policies that the Labour party advocates and have abandoned them. If Labour Members really want their voters to be prosperous and employed in long-term jobs, they should seriously ask themselves why the economies of Japan and the United States knock the rest of the world into a cocked hat. It is enterprise, not ideology, that creates jobs. The Government are pursuing realistic policies that can and will provide enterprise. There is no other way of solving the problems of the unemployed. I urge the House to reject the Opposition motion.

8.27 pm

Mr. Derek Fatchett (Leeds, Central)

Sadly, this has been yet another typical debate on unemployment. One Conservative Member after another has said, "There are problems. We sympathise with the plight of the unemployed. Yes, we have been in office for six years, but unemployment is nothing to do with us. Indeed, if we had not been in office, presumably the position would have been exactly the same. We cannot even claim the credit for making it any worse or better." The next stage in their argument is to say that they always promised us that there would be no easy solution to the problems of unemployment. "There is no miracle" has become the phrase widely used by Ministers.

Those of us who remember the 1979 election remember that the Conservative party was elected on the back of a poster which said, "Labour isn't working". The Leader of the Opposition at that time—the present Prime Minister — went around the country saying, "We have the answer to unemployment. We have a bottle here which we are selling to the electorate called monetarism. Take this dose regularly and all the problems will fade away and unemployment will disappear. The fact that unemployment exists in our society has something to do with wicked Socialism and social democracy."

The first solution put forward by the Government was, "Once we get inflation down, unemployment will disappear." It was in the first place a matter of getting rid of inflation. The Government now tell us that inflation is down to 5 per cent., and we accept the Government's figures. Unfortunately, to get inflation down to 5 per cent., the Government have added 3 million people to the dole queue.

After a time the Government shifted the argument. It was no longer an argument about inflation and unemployment. The Government's next argument was that it was necessary to create an enterprise society, as the hon. Member for Stafford (Mr. Cash) said. The Government said, "We have to cut taxes for the rich so that they will invest in British industry and so that we will create more jobs".

We have spent £3 billion a year cutting the taxes of the rich—a burden that the lower paid have had to bear. During that time unemployment has again increased. The Government have shifted their ground again. The first two monetarist solutions went. The hon. Member for Huntingdon (Mr. Major) shakes his head. I am glad that he agrees with me.

We now come to the third solution which is that there are rigidities in the labour market. The 3.5 million unemployed people are unemployed because of those rigidities. Someone made redundant presumably goes home and says, "I am unemployed because I am a rigidity. I am stopping the labour market from working in the way that the Government want." The rigidity argument is only an argument when the Government are stripped of the rest of their monetarist rhetoric. The rigidity argument is solely an argument for cutting real and money wages.

Let us consider that argument, because successive Conservative speakers have put it forward as an answer to unemployment. If that hypothesis were to work there should be some historical evidence to support it. In the 1920s and 1930s employer after employer cut money wages. Did demand in the economy increase? No, it decreased but unemployment increased. Yet the Government with all the brilliance of monetarism and with substantial intellectual weight behind them still say, "Let us go back to the 1920s and 1930s, cut wages and reduce unemployment." The reality is that the 1920s and 1930s added to the number of unemployed people.

The Government then say, "That may not have worked historically, but it will work now." For some reason, it will work in 1985. They study the arguments and decide that low pay will create jobs. I have taken some interest in that issue. I asked the Parliamentary Secretary at Question Time last week whether he could explain why, with an above average number of long-term unemployed in west Yorkshire, the county had wages that were below the national average. If he has a theory, he should be able to explain that. He said: It is true that certain people and certain institutions price individual workers out of the market. However, what is happening in west Yorkshire is related to regional factors".—[Official Report, 5 March 1985; Vol. 74, c. 768.] I thought that we could probably find out the extent to which those regional factors obtained. It is interesting to note that a study of the level of unemployment and the level of average earnings shows that the south-east is the only region that has above average earnings, and it has below average unemployment. Many regions which have below average earnings have above average unemployment. What do the Government say to the historical evidence and the present facts which show that there is no relationship between low pay and job availability? All the United Kingdom evidence points to the contrary. The Government's theory that depressing wages resolves the unemployment problem is not borne out by any evidence.

Each of those miracles has been paraded in front of us this afternoon — some of them already overtaken by events and the last one will soon come up against reality —and the Government have no answer to and do not care about the problem of unemployment or the unemployed.

The Secretary of State's speech illustrated government by abdication. He said that the Government had no responsiblility for the plight of the unemployed. That is a dangerous position, in economic and social terms, for any Government to take. A Government who are prepared to waste money on unemployment and see the division and waste that exists in inner cities and constituencies such as mine show the nature of this Government of abdication and despair.

I was intrigued to read in The Observer yesterday an interview with the Chancellor. He was asked: If you stopped being a politician suddenly for some reason or another, what job would you like to have? The Chancellor replied: None, if I could possibly afford it. If the Chancellor's policies continue, many of my constituents will not obtain a job. They will have the Chancellor's choice, not because they can afford it but because there is no job for them. If there is no change of Government policy, more and more people will become unemployed and wasted.

8.35 pm

Mr. Patrick Thompson (Norwich, North)

I wish to mention three specific points. First, I want to deal with the way that we fail to appreciate our graduate engineers—the people upon whom our future depends—secondly, Norwich and Norfolk, and, finally, the future of employment.

I have been astonished by what I have heard so far from the Opposition Benches. The Opposition motion, which I have read carefully, provides no positive thinking or guidelines for the future. It is a mere repetition of the platitudes that we have all read and heard so often before. It is astonishing that Opposition Members forget the period when they were in government. I have been around long enough to remember the period between 1964 and 1970. It was a disastrous period in this country's history, if ever there was one.

Even if I were unable to remember that period, I can remember the period between 1974 and 1979, when unemployment doubled and we ran into such a crisis that we finished up having to go to the IMF, with the winter of discontent and a general election that we resoundingly won.

Opposition Members have forgotten all that. They keep repeating the same old dreary platitudes that I remember hearing long before I became a parliamentary candidate or campaigned in any general election. They illustrate my point, which is that they fail to address themselves to the problem. While they are good on the negative, the Opposition's motion provides no positive guidelines However worried I may be about the difficulties in Norwich, there is no way in which anyone can support the Opposition motion. With their present performance, there is no chance that in the foreseeable future, if ever, they will have the opportunity to govern this country again We need only consider the world situation. Other Governments are following this Government's example. Let us take one example. President Mitterrand came into power full of Socialist ideals. He is now following the principles that we adopt.

We have discussed training this evening. It is of course good for a Member of Parliament to visit youth training schemes in his constituency—all of us have done that—to see that, despite what has been said by the Opposition, they show positive achievement. In Norfolk, the take-up of jobs as a result of the scheme is now as high as 80 per cent. Everyone on both sides of the House must welcome that.

It is important to change our attitudes towards the technically trained people upon whom we depend. I refer to our engineers. A few weeks ago we all saw in the press that Jaguar Cars could not obtain the graduate engineers that it wanted. I feel strongly that our graduate engineers deserve higher status and reward. I am sure that all hon. Members agree that we must give more support to our creative talent. It is as much a change of attitude as a matter of Government policy, and a change of attitude is necessary.

Whenever I see advertisements for young accountants, young lawyers and young production engineers, it is clear to me that we are not giving enough status and reward to our young production and design engineers on whom industry depends. We know, and every consumer knows, that far too often the design of products made on the continent of Europe is superior to that of our own products. I have not the time to give examples but we are all aware of them. The design of Japanese products is often a step ahead of the design of our products. These are truisms. We are all aware of them whenever we buy a new car, or whatever product it may be.

The honest way to provide new jobs is through the creation of wealth. That means designing the best products so that we can compete effectively in the world markets. We must improve our performance in that respect. Therefore, we must give more encouragement to our engineers to enable them to help in the creation of wealth and of new jobs. That is the kind of positive proposal that we should be discussing this evening, rather than the Opposition's endless gramophone record, "We did this" and "You did that".

This morning I was at the chamber of commerce in Norwich, where I was told that the employment prospects in Norwich and Norfolk are good. It is one of the areas where things are not as difficult as elsewhere. But there is one important point that I want to make on behalf of my constituents and business and industry in Norwich: we are held back by poor communications.

I am not one of those who believe that development of the infrastructure is some kind of magic wand that can be waved in order to put everything right. Any proposal for new roads should stand on its own merit. But I am saying unashamedly that we need improved communications in Norwich. We need a dual A11 all the way to Norwich. We do not need white elephants such as the Humber bridge. We need the kind of communications that will be of value to the area.

Mr. George Walden (Buckingham)

To support my hon. Friend's argument, may I remind the House that the taxi fare from Norwich to London is £75?

Mr. Thompson

I am grateful to my hon. Friend for supporting my argument about the importance of improving communications between London and Norwich. I support those who are campaigning for better road links between London and Norwich, whether they travel by car, taxi or any other method.

Only this morning I received a letter from the managing director of a very go-ahead machine tool business in Norwich in which he expressed his frustration at the poor road links between London and Norwich. I cannot make the point too strongly. It is important in regard to jobs in Norwich.

With regard to employment, we need to look further forward than we have so far in the debate. People in my constituency, of whatever political persuasion, agree with me that we are going through a revolution in regard to employment, training and leisure. The sooner we address ourselves to that fact, the better it will be for all of us. The Government are taking the right measures, as my hon. Friends have already said. The Opposition are bogged down in the past. During the many weeks of the miners' strike we had the same old story, the old class warfare, which goes back to days long before I was born. It is time that it stopped and that we had a positive motion from the Opposition. Therefore, I shall certainly be voting against the motion tonight.

8.45 pm

Mr. Frank Haynes (Ashfield)

I am not at all surprised at the contributions that we have had from the Conservative Benches today. It is all right for the Whip, the hon. Member for Huntingdon (Mr. Major), to laugh. I want him to listen. Conservative Members talk about the creation of wealth. I have worked since I was 14. I have made my contribution to the creation of wealth, but I have not had a fair return for that contribution. A few people have benefited from my work and that of millions of other workers in Britain.

There are one or two millionaires on the Conservative Benches. [Interruption.] There are no millionaires on the Labour Benches; they are all on the other side of the House. They have raked in their profits from big business and from the efforts of the workers of this nation. I happen to have been one of them. [Interruption.] Conservative Members are suggesting that I have my violin out, but I am talking about the creation of wealth—a subject that is mentioned regularly from the Conservative Benches and from the Dispatch Box.

My hon. Friend the Member for Leeds, Central (Mr. Fatchett) was correct when he mentioned the Prime Minister and what she said in the pre-election period in 1979. He reminded the House of the hoardings and the Conservative propaganda about Britain not working because we had a Labour Government. I have heard the Prime Minister say regularly at the Dispatch Box, and outside at various meetings that I have attended, "There is no alternative". That is all that we have heard from the Conservative Benches today. There has been no suggestion whatever of the need for any change, except from the hon. Member for Northampton, North (Mr. Marlow), who suggested that the Prime Minister was wrong in saying that there was no alternative. There is an alternative, and it is set out in the motion in the name of the Labour party, which deals with employment and industry generally.

There have been one or two suggestions from the Conservative Benches about privatisation. In the past, privatisation has failed the nation. [Interruption.] I do not know what the Parliamentary Under-Secretary of State for Trade and Industry, the hon. Member for Rossendale and Darwen (Mr. Trippier), is laughing about. He will have his turn later. Privatisation failed the nation. That is why industry had to be nationalised. One of the successes has been the mining industry — apart from the past 12 months, with all the problems. The nationalised mining industry has been a real asset to industry and to the nation's economy as a whole. I worked in it for 35 years before I came to this House, so I know what I am talking about.

When Conservative Members say that the workers of this nation are not prepared to accept change, that is a lie. [Interruption.] It really is a lie. I experienced the massive change that took place following the nationalisation of the mining industry. It was modernised because all the rich folks had been raking off all the cream before nationalisation, and all the good seams and all the good coal, leaving the rubbish for us to fight a war on. Following nationalisation, we in the mining industry accepted that a change had to take place.

Conservative Members laugh, but they do not know what work is. They have never worked in industry. That is their problem. Half of them were born with silver spoons in their mouths. [HON. MEMBERS: "Rubbish."] The point is that I have experienced real work. Many Conservative Members have two jobs. There is no work associated with that. They spend their time in the Chamber. They stay all night, keeping us here—we workers—then they nip off down to the Old Bailey for another rake-off. There are plenty of them doing that. Let us have it out in the open and on the table, so that we understand exactly what is going on.

It is being suggested that public expenditure should be cut back even further. The Secretary of State for the Environment is telling local authorities that they can spend only a certain amount of money in a year. Like some Conservative Members, I find that in my constituency people come to the surgery wanting improvement grants, but they cannot get them because this Government have cut them back. If the Government allowed the local authorities to spend the money, jobs would be created in the construction industry and property would be built. Conservative Members say that they are in favour of creating jobs, but it does not happen. It does not work out.

The Government had a policy of selling off council houses. Millions of pounds are stuck in the banks doing nothing, when we could be spending the money on the people whom we are supposed to represent in the House to provide them with good and decent housing. Yet young couples in my constituency who have their names on the housing list cannot get a house simply because the Government regularly cut back every year on public expenditure. It means that local authorities cannot do the things that they want to do.

There is another problem, and again it is related to the Government. One comes back to the Government all the time. I refer to textiles. I remember the other day the hon. Member for Macclesfield (Mr. Winterton) blowing his top over the multi-fibre arrangement and the Government not doing their job on the MFA. People are losing jobs in his constituency, in the textile industry. They have been losing them ever since the Government came to power in 1979, and are still losing them, as are constituents of mine in the textile industry, particularly in hosiery and knitwear.

My hon. Friend the Member for Leeds, Central was correct when he referred to income tax. I well remember that first Budget in 1979 when those millions were handed back to the rich, but the workers got very little. What did the Prime Minister say at the Dispatch Box? She said that the Government were going to invest the money in industry. This is what my hon. Friend told us, and by golly he was correct. What did the Government do? They flitted it to the other side of the world, looking for the highest interest rates—not in Britain, but somewhere else. The Government said, "Blow the economy in Britain. I am looking after my big fat roll in my pocket and trying to make it larger." That did not happen just in 1979, because it has been carried on each year since then. There is no doubt that if the Chancellor has another go in the Budget next week, because he says that he wants £1,500 million to hand back, the rich will benefit again and the workers will suffer.

Some of the suggestions from the Conservative Benches about the creation of jobs make me laugh. Conservative Members have been making such proposals right from day one, and the only thing that has happened is that unemployment has gone up and up. Yet we in the Opposition make a suggestion in our motion, and I am sure that it is good. I am sure that it would deal with unemployment and create the necessary jobs. The Government know that their monetarist policy is not working. It is not creating the jobs that we are locking for, so we are at a standstill. The only way that we shall get out of the rut that we are in is either to have a change of that lot over there in the Government, or for the people to ask for a general election and let a party go in that will deal with the economy properly and look after the people properly — the people whom we are supposed to represent.

8.56 pm

Mr. Lewis Stevens (Nuneaton)

I have listened to a great deal of this debate on unemployment, particularly the training aspects. There has been much of the old rhetoric from Opposition Members, with recourse to the old ideas. They say that they greatly regret that the industrial training boards are being cut, as if they were something that provided what this country needed. Yet they have been in existence since 1964.

In this country we are short of people trained in the skills that we want. When he opened the debate, the hon. Member for Kingston upon Hull, East (Mr. Prescott) made it clear that we were short of skills, yet the Opposition object strongly to the changes and training measures that we have introduced. It was right for the Government to get hold of the training schemes at the base—the YTS and so on—and introduce something to prepare us better for the future. Many of those old training schemes did not succeed. The Opposition believed that the old apprenticeship schemes were sacrosanct. Some were very good and some were very bad. They will not meet the needs of the future when training is needed. Training needs to be updated, and I am sure that the measures that the Government have taken are in the right direction.

My hon. Friend the Member for Norwich, North (Mr. Thompson) spoke about the underestimation of the value of graduate training. It is strange that we are still short of graduates in engineering, design and related technologies. It is the one area where the demand is greater than the supply from our universities. What have we done? We have still not transferred resources, if necessary from some of the other subjects at universities, to training in that area.

I agree with the Opposition on one aspect—and it is not often that I agree with the Opposition. The productive industries—the wealth-creating industries—are still the most critical to get moving in the right direction. The areas in which we have failed in the past are well known, such as the ability to innovate up to a point, but not to develop and produce.

There is still a great need to raise production in this country so that we can take more advantage of our own production in both home and export markets. If it is possible to provide special relief for some of our basic manufacturing industries through the forthcoming Budget that will be all to the good. We still rely to a large extent on creating jobs initially in manufacturing industry from which the spin-off in other areas will then come. I hope that the Budget will provide some help in that respect.

Yet again the Opposition have advocated pouring money into the infrastructure as though that alone will create jobs. Experience with the money given in regional aid shows that the cost per job is very high and there is no certainty that the jobs will be permanent. So many companies, some in my own area, into which Government money was poured in the 1970s merely stayed afloat just a little longer, until Government public money as well as private money went down the drain. That is no way to spend Government money.

Real resources are needed to help people to use their own initiative. The enterprise allowance, for instance, has been a success. Success lies in co-operation by everyone in industry, unions and management, in the technologies that will develop this country, not in throwing money about in an indiscriminate fashion over which there is little control — a policy which failed under the Labour Government but which the Opposition still advocate.

9 pm

Mr. Gordon Brown (Dunfermline, East)

If the Conservative Back Benchers who have spoken in the most recent part of the debate are the Government's friends, the Government certainly do not need any enemies.

The hon. Member for Nuneaton (Mr. Stevens) said that the problem was in manufacturing industry. Yet Government policy has been to ignore and even to decimate manufacturing industry. The hon. Member for Norwich, North (Mr. Thompson), who is no longer present, seemed to misunderstand the Government's policy altogether. He wanted public spending on roads and infrastructure, but Government policy is to cut such spending. He also wanted public spending on training for engineers, but the education and training budget has been cut. He wanted high wages for engineers, but for the past two years the Government's whole strategy has been to cut wages.

What we heard from the Government today has been no more than the lame excuses of a failed Government who have wasted a decade of oil-based opportunity pursuing mistaken policies based on a bankrupt ideological solution that could not and will not work. The Government may be wholly resolute, but they are also wholly wrong. Six years ago we were told that monetarism meant that the problems of poverty and unemployment could be solved only by the creation of more wealth for the very wealthy. After six years in which the rich have grown richer without one additional job being created we are now told that poverty and unemployment can be cured only by creating further poverty. Yet even among those who stand to benefit from the Government's low pay policy—members of the CBI —a survey last October showed that 90 per cent of such members do not believe that a reduction in the amount of pay and benefit will increase the number of jobs in this country.

At the heart of this debate and central to any consideration of the state of our economy is the collapse of manufacturing industry in this country. So severe has been the decline that 1⅔ million jobs have been lost since 1979 and manufacturing investment is 26 per cent. lower than in 1979. The decline is so catastrophic that even now that the pound is cheaper than it has ever been on the international market manufactured imports are outpacing manufactured exports by billions of pounds. The decline is now so great that not just our traditional industries but almost all the new industries and the technologies of tomorrow—petrochemicals, computers, telecommunications, data processing and information technology —have trade deficits of £1 billion or more.

In the 1984 calendar year alone, the fall of the pound brought the Chancellor an additional £3.5 billion in oil revenue. Yet the Government's solution to our economic problems is to cut the education, employment, training and trading budgets by half in the next four years. As a result, the historic low investment in manufacturing will continue and investment per worker will continue to be less than half that of Japan, the United States, Canada and our other competitors. The Government's plan is no longer for a high investment, high employment, high wage economy but for a low investment, low employment, low wage economy.

The Government's Ministers are the last men in Europe in the monetarist bunker. They are true to their prejudices to the last. We have Ministers who criticise the unemployed as lazy, feckless and incompetent, yet whose whole employment policy is based on the principle of doing absolutely nothing. We have a Prime Minister who has the audacity to return from America to lecture us about social security having met, in the President, one of the few pensioners in America who need not worry about social security. The Prime Minister holds a dinner to tell her Ministers that the solution to unemployment is for the unemployed to set up small businesses. They should invest their supplementary benefit on the Stock Exchange. Armed with their Girocheques, they should compete with the multinationals. Yet the Prime Minister's record in destroying businesses small and large is second to none in this century.

Five or six years ago we were told that unemployment had to rise to ensure economic recovery. At the time of the general election we were told that unemployment was rising in order to ensure a recovery. Now we are told that unemployment is continuing to rise because there is a recovery.

If there is a recovery, why has there been a 46 per cent. rise in the past year in the number of those unemployed for over three years? Our unemployment rate is already twice that of America and Germany, five times that of Sweden and Japan and one-third as high again as that of France and Canada. If there is a recovery, why is it that the NEDC says that it is hard to find any solid ground for expecting much improvement before the end of the decade? Why does the London Business School — normally a supporter of the Government—say that, even with the tax cuts proposed by the Chancellor, unemployment will continue to rise? Why is it that not one of the economic forecasts listed in The Financial Times today states that unemployment will fall over the next year? Why does the MSC say—as the Secretary of State for Employment should know well—that the number of the long-term unemployed will not fall in the lifetime of the present Government and that the numbers of jobs available for young people will decline over the next three or four years?

If there is a recovery, why is it that, in my constituency, unemployment is at a record high of 4,500 and has risen by 500 over the past year? Those people are casualties of the Government's economic war of attrition. Everyone knows that unemployment will continue to rise because of the crisis in the coalfields. In my constituency, there is even a threat to the royal dockyard.

The Government have created an industrial wasteland, called it a recovery and hailed it as a triumph of monetarism. Their highest aspiration now is not to rival West Germany but to keep pace with the South Koreans —not to keep up with Japan but somehow to keep pace with Taiwan. They have ravaged the prospects of a whole generation of working people. They have destroyed the hopes of entire communities. Because of North sea oil, never did a country enter a decade with so many opportunities. Never have a Government so squandered their opportunities, wasted their inheritance and betrayed the trust of the nation.

9.3 pm

Mr. John Smith (Monklands, East)

This important debate has been characterised by a number of features. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), who opened the debate, drew attention to the record levels of unemployment and linked them with the lack of training and the lack of industrial development in this country. The Secretary of State for Employment —the only hon. Member to have given the case for the Government today—did not rise to the occasion. I do not think that I have ever listened to a shoddier performance in the House. He treated the House in a patronising and almost contemptuous way. Towards the end of his speech, I began to realise that he had little alternative because he did not know how to meet the attack made by my hon. Friend the Member for Kingston upon Hull, East.

Another feature of the debate has been the almost complete absence of the alliance. I see that my hon. Friend the Member for East Lothian (Mr. Home Robertson) has taken over the alliance Bench. There is some just retribution in that. I hope that he will stay there.

Mr. John Home Robertson (East Lothian)

Withdraw.

Mr. Smith

My hon. Friend looks so much better having taken over the alliance Bench. Two alliance Members have come in, made a speech and left again, and, of course, they are not here now.

As has always been the case when we have debated employment and industry during the past few years, we have record levels of unemployment. Unemployment is now higher than it was during the great depression of the 1920s and 1930s. It is even higher than it was in Germany in 1930. That is not a matter of amusement. We know what happened to Germany. The Secretary of State for Employment is drawing my attention to the fact that the alliance has returned. I suppose that we are grateful for that. Having had a look at the member of the alliance who has returned, I shall change my opinion.

Mr. Penhaligon

Better than some.

Mr. Smith

I agree. I hope that the hon. Gentleman understands that attending these debates is quite an experience. He will learn a great deal. I also hope that he will learn something from my hon. Friend the Member for East Lothian who looked after the alliance Bench in his absence.

There are two sad and disturbing features of the high levels of unemployment. One is the number of long-term unemployed—more than 1 million—and the other, even more tragic, is the 1.25 million aged under 25 who are unemployed. On behalf of the whole nation, not just those whom we represent, the Opposition protest loudly at that waste of resources. The anger that people are feeling ever more deeply about the level of unemployment is growing weekly. Their anger will be visited on the Government who have presided over the growth of unemployment of the past six years.

When we discussed these matters in the previous Parliament, it was common for Conservative Members to say, "The Opposition must not accuse us of not caring about unemployment. We are sorry about it. It is a regrettable but temporary necessity. We care as much as you and it is unfair to accuse us of a lack of concern." That was some years ago. It was some hundreds of thousands of unemployed ago. It was before the Conservatives got a mandate to run the country again in 1981. As each month has passed and as the total of unemployed has risen relentlessly, the excuse has worn thin. I noticed that not one Tory has made that excuse or asked for that dispensation today.

The Government and those who support them do not care about unemployment. If they did, they would have done something about it long before now. At the best, they are indifferent to the social misery caused by mass unemployment, and, at the worst, they are content with the disciplinary effect that high unemployment has on the labour market. As our motion implies, we regard a reduction in our appalling level of unemployment as one of the central objectives which any civilised Government should have. The Government can, and should, reduce unemployment.

What will happen to our nation if that does not become the central objective of Government policy? There will be an emerging underclass in this country. Millions of people will be deprived of a decent standard of living. It will increase for those in work, but it will be continually denied to those out of work. Millions of children, unfortunately born either to the wrong family or in the wrong part of the country, will not be given the opportunity of a worthwhile career. Even for those in employment, the worry is growing daily that their children will not get employment or the education and training which their parents received.

Serious, debilitating and frustrating poverty is also increasing. My hon. Friend the Member for Knowsley, South (Mr. Hughes) spoke of the frustration felt by his constituents in relation to unemployment. The army of unemployed and the growing number of poor people are denied elementary justice. Even if the Government cannot speedily reduce unemployment, why do they persistently refuse to class the long-term unemployed as suitable for long-term supplementary benefit? That would be elementary justice while we get busy with the job of bringing unemployment down.

The Government could afford to do so. In the last Budget, instead of removing the investment surcharge on people who must have had capital of more than £70,000 to gain from the change, they could have financed the giving of long-term supplementary benefit to the long-term unemployed. That was the social, political and moral choice made in the last Budget.

Why is the reduction in unemployment not a central objective of Government? Why will not the Government accept any of the proposals put forward by the CBI, the TUC and NEDC for a modest capital construction programme?

Mr. Neil Kinnock (Islwyn)

And the Tory Reform Group.

Mr. Smith

My right hon. Friend reminds me that the Tory Reform Group is constantly referring to that. It said only the other day that rather than eat the seed corn, the Government were setting it on fire, so profligate were they in their handling of our national resources. Why will not the Government adopt any of these projects? The truth is that the reduction of high unemployment is given a low priority. The Government think that the people will accept this and that, in political parlance, they will get away with it.

There is a curious masochism about the British people. They sometimes think that they must suffer for their own good and that there is a sacrifice which must be made if benefit is to come in the long term. For a while they were prepared to put up with fairly high unemployment, in the belief that it was all for the best and that as a result our economy would improve with better jobs in the long term. But the awful truth is that their sacrifice was for nothing, and when they realise how much that suffering was totally unnecessary their anger will be visited on the Government.

Mr. Marlow

The right hon. Gentleman will know that during the last Labour Government unemployment increased very significantly and perhaps even doubled. What policies did the Labour party then have for dealing with unemployment, and what different policies does it now have?

Mr. Smith

When the Labour Government left office, unemployment stood at 1.3 million. Long-term unemployment alone stands at that level. At that time I remember 'the Conservative party saying that the Government were responsible for doubling unemployment. I do not understand why the Government are no longer responsible. If the Labour Government are blamed for causing unemployment to double, why on earth are the Conservative Government not to blame for raising it to its highest level in our recorded history?

The hon. Gentleman has forgotten a further important matter. The Labour Government received a few hundred million pounds of North sea oil revenues. This Government have had £30,000 million of North sea oil revenues. That is the greatest windfall our country has ever had. Has that money been spent on tackling unemployment, reinvesting in our industries, or building our infrastructure? No, every penny piece of it has paid for additional unemployment caused by the Conservative Government since 1979. That is the answer to the hon. Gentleman's question.

Today some of us were amazed to be told that we were now in our fourth year of economic recovery. One after another, Conservative Members told us how much production had increased, how well we had done, how the Government were succeeding, how we could look forward to further successes because a Budget for jobs was on its way and that next Tuesday more goodies would come and the country would take another step forward.

I remind Conservative Members of what one of their own kind said last week—they do not believe what we in opposition say. The hon. Member for East Lindsey (Sir P. Tapsell), who has been a critic of the Government for some time, but who is nevertheless a Conservative Member, spoke to the Oxford university Tory reform group. He assessed the Government's policies in the fourth year of our so-called economic recovery. He said: Having produced disaster — mass unemployment, the lowest levels of investment of any industrialised country except Portugal, industrial output below that of six years ago, the first deficit in manufactured trade in British history, almost uniquely high real interest rates and the lowest-ever standing exchange rates, with UK inflation still higher than in the US, Japan and West Germany—they proclaim success. That is the conclusion on the record of the Government by one of their own party after four years of recovery. The hon. Gentleman was so highly regarded by the Prime Minister that he was given a knighthood in the birthday honours list this year. I do not know whether she regrets that, but I doubt whether there will be any more such experiments in next year's birthday honours list.

So long as the Tory Government remain in office, unemployment will continue to rise because they have no plans to reduce it. As our people contemplate our predicament, another worrying thought will strike them. What is the future for British industry in the 1990s? If policies continue unchanged, British industry will become technologically obsolescent and will be staffed by an unskilled work force. If that coincides with the running down of North sea oil revenue and Britain running into a massive trade deficit, economic disaster faces us throughout the 1990s. That is a serious question and everyone must face it.

The Labour party intends to start a national debate about this, which will be argued both in the House and up and down the country. We shall draw attention to the need to create wealth. I am tired of being told by Conservative Members of the need to create wealth when for six years they have done nothing but waste our resources. They only talk about creating wealth, and their Government do nothing to assist that process.

I shall depict quickly three areas where the Government have a legitimate role to play in creating wealth, and where that is of great importance; first, in investment, secondly in research and development, and thirdly in education and training.

There is insufficient investment in the real economy of Britain. We are told month after month, sometimes in the House and sometimes outside it, that the City is a good mechanism for providing investment for British industry, and that the trouble with Britain is not a lack of money but a lack of viable projects. The Minister of State, Department of Trade and Industry is nodding. I hope that he read the Financial Times of last Saturday, which reported a speech by a member of the Cabinet with the headline "Minister attacks City". The speech was made by the Secretary of State for Wales, who may not be the most distinguished member of the Cabinet, but who is one of its more perceptive members. My hon. Friends' estimation of his perception will increase as I tell them what he said to the Cardiff Business Club only last week. He said that there was a "physical chasm" between the City and Britain's industrial areas, and continued: Among many household names in the financial world, there is at best a failure to comprehend the problem, and at worst a startling arrogance that leads them to conclude that all is well, that nothing calls for reform and that anyone with a good project can always find backing for it. Within this tiny island, we have a gulf of perception and even barriers of hostility, so that otherwise sane and sensible men can be heard derisively dismissing any venture in Wales, or for that matter in the North of England, on the general assumption that Wales is a bad place; that there are no capable businessmen there, and that in any case there is nothing to be seen but decaying coalminers"— that cannot be right— rundown steelworks and slag heaps. The correspondent went on to say: Mr. Edwards, who was a director of Sturge Holdings, the Lloyds' underwriting agents, and Brandts, the merchant bank, before entering politics, said he accepted that people with good business projects and new ideas could go to see these, 'great, if complacent, men in the luxurious palaces that they construct and rent in the narrow confines of the Square Mile.' He said that in Japan and the United States the financial men went out and found the projects for themselves. People did not have to come and meet them.

The Secretary of State ended with this stirring conclusion: Even the most complacent, and the most contemptuous and the most ill-informed of the old guard in the City cannot remain blind forever to the startling changes now taking place. Will the Minister of State tell us whether that is right or wrong? Does he support what the Secretary of State said or does he reject it? I regard it as startling corroboration of what we have been saying month after month and year after year.

We need a new approach to investment and to research and development. The amount of money that we are spending on devising new products and processes that will be the staple of our future industries is minuscule compared with our competitors on the Continent, in Japan and in the United States. As my hon. Friend the Member for Kingston upon Hull, East said, the amount that we spend on education and training is also derisory. We need an entirely new approach to education and training, and the Labour party and the TUC have already published their plan for training, which guarantees at least two years' training to everyone in the country. Indeed, I go further and say that the Opposition believe that proper education and training in a fast-changing technological age is the right of every citizen. This is what the Labour party proclaims; it is what we will argue with the people and it is what we will carry through when we become the Government.

If we got investment right, did more for research and development and if we had a proper plan for education and training, we could begin to create wealth and new resources and get people back to work on a long-term basis. But the trouble is that the Tory party has become the anti-industry party. It is the party of fast food services and of financial services. It may be the party of tourism. As the Chancellor reminded us, the jobs of the future will be not so much low-tech as no-tech.

The Conservative party admires short-term projects that give short-term returns. Indeed, all the financial institutions are geared to returns coming in after three or five years. The high-tech industries of the future need a much longer basis of finance than that, and that is what Labour, through its national investment bank and through committing the Government to financing the industry, will ensure in the future.

There was a period in the last Parliament when the Conservative Government appeared to be against what they called the smokestack industries, the old traditional industries. They kept assuring us, under a previous Secretary of State and Minister of State in the Department of Trade, that they were in favour of the sunrise industries. The right hon. Member for Mole Valley (Mr. Baker), who has now been sent to Siberia to deal with local government reform, used to be the Minister for Information Technology and he was devoted to advocating the cause of the sunrise industries. What has happened since then to microelectronics and information technology? There has been a sudden change.

On 12 November 1984, sneakily, in a parliamentary written answer that the Government thought that nobody would notice, they announced a total moratorium on all support for innovation schemes for microelectronics. One day, one could have a programme sanctioned by the Government and the next, one was dismissed by the stroke of a bureaucratic pen. The Government stopped these projects stone dead and announced that the matter would be reviewed. We know that the Secretary of State for Trade and Industry boasts about his Government dismantling aid to industry, withdrawing from the industrial scene and keeping out of the way of busy industrialists who are creating so much wealth. The Secretary of State is unlikely to bring back the support for innovation projects in anything like the way that it was before.

I am glad that the Secretary of State has come into the Chamber to hear the small part of my speech that I have reserved for him. The electronics components industry tells us that £100 million of investment is hung up because of the moratorium that the Secretary of State imposed, and that the effect of the withdrawal of capital allowances in the Budget last year has had a particularly damaging effect on the industry. Professor Ashworth, chairman of the information technology committee of the National Economic Development Office, said that what was wrong with the sunrise industries is that they are being eclipsed before they have even risen. He said that here we are, in the next industrial revolution, failing to the point when we cannot maintain key technologies.

That is a serious position for an important industry. I remind the Government that in 1979, when the Labour Government left office, there was a £600 million trade surplus in electronics. Now, there is a £2 billion trade deficit and Cambridge Econometrics has predicted that by 1993 we shall have reached a £9 billion trade deficit in the key industries of the future.

Let the Government not tell us that Government intervention is not working when Japan and West Germany have Government intervention and when even the United States, through the Department of Defence, has Government intervention to support and modernise this industry. The notion that the future of our economy and the whole of our industry should be imperilled because of the Government's ideological prejudice is something that people will find increasingly offensive.

The truth about the Government's economic and industrial policies, as the public are realising, is that they have come to the end of the road. The public know——

Mr. Tom King

What would Labour have instead?

Mr. Smith

I have told the House. We would have investment, research and development, education and training. We have come to the end of the road. We know that no economic success will come from the policies.

The people have realised something else. The Government have no capacity for breeding a united nation —they are dividing the country month by month. The north is divided from the south in terms of economic prosperity. The poor are divided from the prosperous, those at work from those out of work, those in education from those out of education, those in training from those out of training, and that continues as the days go by.

The Government have nothing to be proud about, let alone boast about. In the next two or three years —sooner rather than later—this argument will come to the centre of the political stage. It will be the responsibility of the Labour party and only the Labour party to argue the alternative case. When we have argued it successfully, we shall gain a majority to make in the 1990s a truly wealth-creating society.

9.35 pm

The Minister of State, Department of Trade and Industry (Mr. Norman Lamont)

This debate has been extremely well trailed in the press. Only a few weeks ago The Guardian informed us that the right hon. and learned Member for Monklands, East (Mr. Smith) would unveil, by pulling back the cord to great applause, the Labour party's new campaign on industry and jobs. After an interview with the right hon. and learned Gentleman, The Guardian commented: The campaign itself is a well thought out, wide ranging and highly ambitious attempt to convince a sceptical voting public that Labour now has a credible economic, industrial and employment strategy. As my right hon. Friend the Secretary of State for Employment reminded us today, all that was based upon a 57-page document leaked to the New Statesman which outlined the work of a committee set up under the Labour party and which said: Labour has lost the economic argument. People do not believe that our policies will work. The Keynesian argument has been tried before and failed … We should not promise too much too soon. In particular the term 'full employment' may now appear nebulous and over-ambitious. Instead, perhaps," ——

Mr. Leighton

rose ——

Mr. Lamont

Instead, perhaps," ——

Mr. Leighton

rose ——

Mr. Speaker

Order. I do not see the Minister of State giving way to the hon. Gentleman.

Mr. Lamont

Instead, perhaps, we should talk in terms of new jobs and building industry for the future. That is the basis of the campaign and it was the basis of the right hon. and learned Gentleman's speech.

We would be the first to welcome greater realism if that was really coming from the Labour party. We did not see very much of it today. We did not hear it from the hon. Member for Kingston upon Hull, East (Mr. Prescott), who talked about spending £2.8 billion to create 1 million jobs.

The hon. Gentleman asked me to run the calculation through the Treasury computer to see whether it was credible. The Opposition seem to be obsessed with computers. They seem to believe that the simplest proposition—the idea that the earth revolves round the sun—can be proved only if it has been through the Treasury computer. They will not believe anything until it has been tested in that way.

At least the Leader of the Opposition has paid some attention to the findings of his committee. Early last year he withdrew the Labour party's absurd pledge that it could lower unemployment magically to below 1 million.

I agree with the right hon. and learned Member for Monklands, East that the only way to resolve the problem of unemployment is to concentrate on building industry for the future, but he told us very little about the Opposition's plans. He told us a little about research and development, and he complained about Government stringency there. However, the facts are that in 1979 the Department of Trade and Industry, with the programme that it inherited from the last Labour Government, was spending about £171 million, or 6 per cent. of the Department's budget, on supporting science and technology. That is now some £448 million, or 18 per cent. of the Department's budget. The Government have been cutting back on supporting the loss-making industries and putting more of the money into supporting the industries of the future. We have doubled what we have been spending in supporting research and development. We have doubled it in real terms.

When the Opposition talk about the industries of the future, they always think in terms of large businesses and great injections of Government money into them. Over the past four years, from 1980 to 1983, the number of new businesses has exceeded the number of liquidations by about 500 a week. That has been true of every year of this Government. In 1984 the number of new registrations reached an all-time high. The small business of today will be the large business of tomorrow, and no Government have ever done as much as we have to encourage start-ups and new businesses.

Mr. Stuart Randall (Kingston upon Hull, West)

rose——

Mr. Lamont

No, I will not give way.

The right hon. and learned Member for Monklands, East talked about training, as did my right hon. Friend the Member for Guildford (Mr. Howell) and others. No Government have spent more money than we have on training. It is known that my right hon. Friend and other Ministers are considering the future of Government training—[Interruption.] When we want to spend more on training the Opposition call it fiddling the unemployment figures. When they want to do it, they call it investment in training.

Mr. Randall

rose ——

Mr. Lamont

According to the interview that the right hon. and learned Gentleman gave to The Guardian, he said that it would be necessary for a future Labour Government to spot winners. That may cause a certain amount of alarm, because the record of previous Labour Governments has not been all that good at spotting winners. I appreciate that one cannot win them all, but they do not seem to win any of them.

Mr. Randall

rose——

Mr. Lamont

No, I will not give way to the hon. Gentleman.

When we ask where the money is to come from, to spot the winners, the right hon. and learned Member for Monklands, East replies that it will come from the revenues of North sea oil. That is a favourite theme of his——

Mr. Randall

Will the hon. Gentleman give way?

Several Hon. Members

rose ——

Mr. Speaker

Order.

Mr. Lamont

The right hon. and learned Member for Monklands, East constantly congratulates himself on the part that was played by the last Labour Government in developing the North sea, but he ignores the part that was played by private enterprise. His comments about using the revenues of North sea oil for restructuring and aiding industry were silly. He likes to say that the revenues of North sea oil have been used to pay unemployment benefit — [Interruption.]— but he knows that one cannot say that a particular part of revenue goes to pay a particular part of expenditure.

Several Hon. Members

rose ——

Mr. Lamont

The right hon. and learned Member for Monklands, East says that we should not spend the equivalent of North sea oil revenues on unemployment benefit. What does he mean by that?

Mr. Randall

rose ——

Mr. Lamont

Is he saying that we should not pay unemployment benefit?

Mr. Randall

Will the hon. Gentleman give way?

Mr. Speaker

Order. The hon. Member for Kingston upon Hull, West (Mr. Randall) keeps rising, but he can see that the Minister will not give way. He should not persist.

Hon. Members

Give way.

Mr. Lamont

I shall give way if Opposition Members will listen to my argument. The trouble is that they are not interested in arguments.

The right hon. and learned Gentleman says that we should not have the present level of unemployment. It may surprise him to know that as we are in government we must start from where we are. Does he really argue that he can double count North sea oil revenues and say that he will continue to pay the equivalent of North sea oil revenues in unemployment benefit and at the same time use them to encourage British industry? That does not add up. It is double counting and it is absolute nonsense.

Mr. John Smith

The Minister says that we must start from where we are. I remind him that he started with 1.3 million unemployed, whereas the figure is now well over 3 million, and is probably truly 4 million. We left office when there were only a few hundred million pounds of North sea oil revenues. The Conservatives have had £30 billion in revenues. It must be correct to say that the Government have spent more on the extra unemployment since 1979 than we received by way of North sea oil revenues. If that is true, what is wrong with saying that we have wasted our North sea oil revenues on unemployment benefit?

Mr. Lamont

The right hon. and learned Gentleman has not answered my question. He has not explained how he can use North sea oil moneys twice over. That is what he has to say, and that is what his calculations must tell us. It seems that the Labour party has a new answer to the problem. The shadow Chancellor of the Exchequer, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), has the bizarre plan of reintroducing a form of exchange controls. According to his plan, institutions such as pension funds and charities will lose tax exemption if they invest abroad. The right hon. Gentleman has told us that the revenue will have to be ploughed into a national investment bank.

There has been some speculation about whether my right hon. Friend the Chancellor of the Exchequer intends to tax pension funds. The Labour party is saying already that it intends to tax pension funds when it forms an Administration. That is the effect of the plans that it is advancing.

British industry does not have a problem that is created by a shortage of finance. That was borne out by the Wilson committee, which investigated the issue at greath length. It concluded that, whatever the problem facing British industry, it was not one that was attributable to a lack of finance. Whatever else my right hon. Friend the Chancellor of the Exchequer is in favour of, I can assure the Opposition that it is not a national investment bank of the sort that they propose.

Measures such as the business expansion scheme encourage start-ups. About £75 million was invested last year in about 400 small companies through the scheme. Most mysterious of all in the Opposition's plans to generate jobs is their attitude to public expenditure. They have resisted each and every attempt to clarify their public expenditure plans. During the 1983 election they advocated about £35 billion to £40 billion of public expenditure. No one could believe that taxing and borrowing to that extent could do other than destroy more jobs than it would create.

Mr. Kevin Barron (Rother Valley)

rose ——

Mr. Lamont

The right hon. Member for Sparkbrook was frank when he told us that the programme was not credible. At the same time, the Labour party has not repudiated the claim that it made during the 1983 election. In The Guardian during November 1984 the right hon. Member for Sparkbrook wrote: The idea that having lost the last election we can write a brand new economic policy ought to be abandoned at once. That is what he wrote about the policy that he had described earlier as being an utterly credible policy. Where does the Labour party stand? Is it seeking public expenditure of £35 to £40 billion? Does it support the £6 billion package that has been advocated by the right hon. Gentleman the Leader of the Opposition, or does it support the mere £2.3 billion proposal of the right hon. Member for Sparkbrook? The shadow Chancellor certainly recognises the dilemma. He wrote recently about his party's programme as follows: Much of the Labour party's established economic programme is right". I am sure that his party will be reassured by that and delighted to know that the right hon. Gentleman thinks that a large part of its economic programme is right. He added: It is in part damagingly opaque and its credibility has been diminished by over-precise estimates at the speed at which jobs can be created. That must be the first time, even for a Punch columnist, that precision and opaqueness have been equated. However, I accept his argument that we cannot be precise about the rate at which new jobs are to be created. I hope that the right hon. Gentleman is not saying that if the Labour party is not to be precise on that score it will seek to raise unrealistic hopes about the level of jobs that can be created.

Mr. Barron

rose ——

Mr. Lamont

We all know that jobs do not come from Government spending. They are derived from firms' profits and by the Government setting the right conditions for the economy.

Mr. Barron

rose ——

Mr. Lamont

That was well recognised by the right hon. Member for Leeds, East (Mr. Healey), who said: The only answer to the economic problems"— [Interruption.] Perhaps the Opposition would listen to what the former Labour Chancellor of the Exchequer said.

Mr. Sheerman

It is the hon. Gentleman's fault.

Mr. Barron

rose ——

Mr. Allan Rogers (Rhondda)

rose ——

Mr. Speaker

Order. I say to Opposition Members on the Front Bench that it is very unseemly to shout across the Chamber at a Minister who is seeking to make his speech. The hon. Member for Huddersfield (Mr. Sheerman) did not interrupt his right hon. and learned Friend the Member for Monklands, East (Mr. Smith).

Mr. Lamont

The Government have repeatedly made clear our policy and attitude to public spending. The moment that anyone begins to look at Labour's policies and alternatives to our plans Labour Members say——

Mr. Barron

rose ——

Mr. Randall

rose ——

Mr. Walter Harrison (Wakefield)

On a point of order, Mr. Speaker. I have listened to the Minister and seen several of my hon. Friend's trying to intervene in the debate to discuss this matter. I have sat here quietly month after month. Surely the Minister should give way when my hon. Friends wish to enter the debate.

Mr. Speaker

No fewer than 22 right hon. and hon. Members managed to participate in the debate. I pay tribute to them for having spoken briefly. It is unseemly to shout across the Chamber or to seek to interrupt a Minister in the middle of his speech.

Mr. Barron

rose ——

Mr. Rogers

rose ——

Mr. Robert N. Wareing (Liverpool, West Derby)

On a point of order, Mr. Speaker.

Mr. Lamont

It is surprising that the Opposition simply cannot bear to hear any analysis and any attempt to criticise their policies. The right hon. Member——

Mr. Wareing

On a point of order, Mr. Speaker.

Mr. Speaker

Order. Is this a genuine point of order?

Mr. Wareing

I should like your guidance, Mr. Speaker. I know that you want to control the debate so that it is a quiet debate. Do you agree that the fact that a Minister refuses to give way encourages hon. Members to shout? There would be less shouting if the Minister gave way once or twice.

Mr. Speaker

I could not help hearing that the shouting started immediately the Minister rose.

Mr. Lamont

It is a pity that the Opposition simply cannot bear to hear anything about the policies. They cannot bear to hear the statement of the right hon. Member for Leeds, East. He said: The only answer to the economic problems which have dogged Britain since the war is to improve the performance of our manufacturing industry. That means higher productivity, better design, more vigorous salesmanship, more reliable delivery and servicing. That means good management, good relations and co-operation. [HON. MEMBERS: "Hear, hear."] I hope that the Opposition are saying, "hear, hear" to the fact that since 1980 productivity in manufacturing industry has risen 20 per cent. I hope that when they praise the virtues of design, delivery, salesmanship and servicing, they will recognise that it is obvious from the export figures that were published the other day that this country is massively improving its performance.

Mr. Randall

rose——

Mr. Lamont

In the last quarter of last year our manufactured exports were 15 per cent. higher than a year earlier and 13 per cent. higher than in the previous quarter.

Public spending is not the answer to unemployment. If it were, no country would have a problem with unemployment, because it is so easy to push up public spending.

Mr. Rogers

rose——

Mr. Lamont

This country would then have had falling unemployment——

Mr. Barron

rose——

Mr. Lamont

Public spending takes some 10 per cent. more of GDP than it did 20 years ago. If public spending is the answer, unemployment certainly should not have doubled under the last Labour Government, because they managed to push up the PSBR to 10 per cent. of GDP. The Opposition cannot escape this point. If the answer to unemployment is as easy and as simple as they say, it says little for their powers of persuasion at the last general election.

The right hon. and learned Member for Monklands, East said the other day: We must persuade people that wealth creation is the key to creating jobs in the caring industries like hospitals. Socialists must interest themselves more in the creation of wealth and not just redistribution of wealth. He said that somewhat sotto voce. One never knows which reselection committee might be listening.

Mr. Cowans

On a point of order, Mr. Speaker. I am not prone to raising points of order. I do not object to the Minister not giving way. That is his prerogative. I object to the perpetual turning of his back on Mr. Speaker. If he has a case to make, let him make it and not look behind.

Mr. Speaker

Order. The wisest thing to do would be to let the Minister complete his speech. Our tradition is one of robust speech, but that does not extend to shouting.

Mr. Lamont

It is meant to be a robust debate, but it also shows the Labour party's intolerance. It cannot bear to hear another view. We know that many Opposition Members have little respect for parliamentary democracy, but they should be prepared to listen to valid criticisms of their policy.

If the right hon. and learned Gentleman meant that the Labour party should always put wealth creation first, why has he always followed the Labour line of support for every strike since 1979? That includes the steel strike, the National Health Service strike, the water strike, the teachers' strike and the miners' strike. Let us consider the railways. The lonely loyalty of the railways has cost them about £240 million, and most of what freight traffic is left. It is estimated that strikes have cost the railways some 7,000 jobs a year. Now, after the damage has been done to the railways by strikes, the unions are asking for wage increases of over 30 per cent. Will we hear any criticism from Opposition right hon. and hon. Members of that wage claim? No, we will not.

Until recently the Opposition's chant was, "What economic recovery?" With GDP now at an all-time peak —some 4.5 per cent. above its previous peak in 1979—they have been forced to change their tack. We are not used to favourable comparisons between the United Kingdom and its European competitors, but when the United Kindom's performance compares well, we should not belittle our achievements. The United Kingdom led Europe out of recession last year, when we had the highest output growth in the EEC. Despite the miners' strike, United Kingdom growth is expected to be close to the EEC average for last year. Forecasters are once again expecting the United Kingdom to head the EEC growth table in 1985.

The Government having achieved a high rate of economic growth, the Opposition's criticism has changed. They say that manufacturing, in some sense, has not benefited from the recovery. If anything, manufacturing recovery has been faster than that of the economy as a whole. Since the first quarter of 1981, manufacturing has grown faster than the economy as a whole.

We have also had the excellent performance of our current account. We have had a current account surplus in each of the past five years. That had not happened since 1947.

It is clear that industry is responding to the Government's policy. Jobs will be created only if industry continues to respond. It is therefore vital that we continue with the policies that are beginning to get our economy moving and will keep it moving. I beg right hon. and hon. Members to support the amendment.

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

The House divided: Ayes 197, Noes 301.

Division No. 154]	[10 pm
AYES
Alton, David	Archer, Rt Hon Peter
Anderson, Donald	Ashdown, Paddy

Ashley, Rt Hon Jack	Gourlay, Harry
Ashton, Joe	Hamilton, James (M'well N)
Atkinson, N. (Tottenham)	Hamilton, W. W. (Central Fife)
Bagier, Gordon A. T.	Hancock, Mr. Michael
Banks, Tony (Newham NW)	Hardy, Peter
Barnett, Guy	Harman, Ms Harriet
Barron, Kevin	Harrison, Rt Hon Walter
Beckett, Mrs Margaret	Hart, Rt Hon Dame Judith
Beith, A. J.	Haynes, Frank
Bell, Stuart	Heffer, Eric S.
Benn, Tony	Hogg, N. (C'nauld & Kilsyth)
Bermingham, Gerald	Holland, Stuart (Vauxhall)
Bidwell, Sydney	Home Robertson, John
Blair, Anthony	Howell, Rt Hon D. (S'heath)
Boothroyd, Miss Betty	Hoyle, Douglas
Boyes, Roland	Hughes, Robert (Aberdeen N)
Bray, Dr Jeremy	Hughes, Roy (Newport East)
Brown, Gordon (D'f'mline E)	Hughes, Sean (Knowsley S)
Brown, Hugh D. (Provan)	Hughes, Simon (Southwark)
Brown, N. (N'c'tle-u-Tyne E)	Janner, Hon Greville
Bruce, Malcolm	John, Brynmor
Buchan, Norman	Johnston, Russell
Caborn, Richard	Jones, Barry (Alyn & Deeside)
Callaghan, Rt Hon J.	Kaufman, Rt Hon Gerald
Callaghan, Jim (Heyw'd & M)	Kilroy-Silk, Robert
Campbell, Ian	Kinnock, Rt Hon Neil
Campbell-Savours, Dale	Lamond, James
Canavan, Dennis	Leadbitter, Ted
Carlile, Alexander (Montg'y)	Leighton, Ronald
Carter-Jones, Lewis	Lewis, Ron (Carlisle)
Cartwright, John	Lewis, Terence (Worsley)
Clark, Dr David (S Shields)	Litherland, Robert
Clarke, Thomas	Lloyd, Tony (Stretford)
Clay, Robert	Loyden, Edward
Clwyd, Mrs Ann	McCartney, Hugh
Cocks, Rt Hon M. (Bristol S.)	McDonald, Dr Oonagh
Cohen, Harry	McKelvey, William
Coleman, Donald	Mackenzie, Rt Hon Gregor
Concannon, Rt Hon J. D.	Maclennan, Robert
Conlan, Bernard	McNamara, Kevin
Cook, Frank (Stockton North)	McTaggart, Robert
Cook, Robin F. (Livingston)	McWilliam, John
Corbett, Robin	Madden, Max
Corbyn, Jeremy	Marek, Dr John
Cowans, Harry	Martin, Michael
Craigen, J. M.	Mason, Rt Hon Roy
Crowther, Stan	Maynard, Miss Joan
Cunliffe, Lawrence	Meacher, Michael
Cunningham, Dr John	Meadowcroft, Michael
Davis, Terry (B'ham, H'ge H'l)	Michie, William
Deakins, Eric	Mikardo, Ian
Dewar, Donald	Millan, Rt Hon Bruce
Dobson, Frank	Mitchell, Austin (G't Grimsby)
Dormand, Jack	Morris, Rt Hon A. (W'shawe)
Dubs, Alfred	Morris, Rt Hon J. (Aberavon)
Duffy, A. E. P.	Oakes, Rt Hon Gordon
Dunwoody, Hon Mrs G.	O'Brien, William
Eadie, Alex	Orme, Rt Hon Stanley
Eastham, Ken	Owen, Rt Hon Dr David
Edwards, Bob (W'h'mpt'n SE)	Park, George
Ellis, Raymond	Parry, Robert
Evans, John (St. Helens N)	Patchett, Terry
Ewing, Harry	Pendry, Tom
Fatchett, Derek	Penhaligon, David
Faulds, Andrew	Pike, Peter
Field, Frank (Birkenhead)	Prescott, John
Fisher, Mark	Radice, Giles
Flannery, Martin	Randall, Stuart
Foot, Rt Hon Michael	Redmond, M.
Forrester, John	Rees, Rt Hon M. (Leeds S)
Foster, Derek	Richardson, Ms Jo
Foulkes, George	Roberts, Ernest (Hackney N)
Fraser, J. (Norwood)	Robertson, George
Freeson, Rt Hon Reginald	Robinson, G. (Coventry NW)
Garrett, W. E.	Rogers, Allan
George, Bruce	Rooker, J. W.
Gilbert, Rt Hon Dr John	Ross, Stephen (Isle of Wight)
Godman, Dr Norman	Rowlands, Ted
Golding, John	Ryman, John
Gould, Bryan	Sedgemore, Brian

Sheerman, Barry	Torney, Tom
Sheldon, Rt Hon R.	Wainwright, R.
Shore, Rt Hon Peter	Wallace, James
Short, Ms Clare (Ladywood)	Wardell, Gareth (Gower)
Short, Mrs R. (W'hampt'n NE)	Wareing, Robert
Silkin, Rt Hon J.	Weetch, Ken
Skinner, Dennis	Welsh, Michael
Smith, C. (Isl'ton S & F'bury)	White, James
Smith, Rt Hon J. (M'kl'ds E)	Williams, Rt Hon A.
Soley, Clive	Wilson, Gordon
Spearing, Nigel	Winnick, David
Steel, Rt Hon David	Woodall, Alec
Stewart, Rt Hon D. (W Isles)	Wrigglesworth, Ian
Stott, Roger	Young, David (Bolton SE)
Strang, Gavin
Thomas, Dr R. (Carmarthen)	Tellers for the Ayes:
Thorne, Stan (Preston)	Mr. Don Dixon and
Tinn, James	Mr. Allen McKay.
NOES
Aitken, Jonathan	Clegg, Sir Walter
Alexander, Richard	Cockeram, Eric
Alison, Rt Hon Michael	Colvin, Michael
Amery, Rt Hon Julian	Coombs, Simon
Amess, David	Cope, John
Ancram, Michael	Corrie, John
Arnold, Tom	Cranborne, Viscount
Ashby, David	Critchley, Julian
Aspinwall, Jack	Crouch, David
Atkins, Rt Hon Sir H.	Currie, Mrs Edwina
Atkinson, David (B'm'th E)	Dickens, Geoffrey
Baker, Nicholas (N Dorset)	Dicks, Terry
Banks, Robert (Harrogate)	Dorrell, Stephen
Batiste, Spencer	Douglas-Hamilton, Lord J.
Beaumont-Dark, Anthony	Dover, Den
Bellingham, Henry	du Cann, Rt Hon Sir Edward
Bendall, Vivian	Dunn, Robert
Bennett, Rt Hon Sir Frederic	Durant, Tony
Benyon, William	Dykes, Hugh
Best, Keith	Edwards, Rt Hon N. (P'broke)
Bevan, David Gilroy	Eggar, Tim
Biffen, Rt Hon John	Emery, Sir Peter
Biggs-Davison, Sir John	Evennett, David
Blackburn, John	Eyre, Sir Reginald
Body, Richard	Fallon, Michael
Bonsor, Sir Nicholas	Farr, Sir John
Boscawen, Hon Robert	Favell, Anthony
Bottomley, Peter	Fenner, Mrs Peggy
Bottomley, Mrs Virginia	Finsberg, Sir Geoffrey
Bowden, A. (Brighton K'to'n)	Fletcher, Alexander
Bowden, Gerald (Dulwich)	Fookes, Miss Janet
Boyson, Dr Rhodes	Forman, Nigel
Braine, Rt Hon Sir Bernard	Forth, Eric
Brandon-Bravo, Martin	Fraser, Peter (Angus East)
Bright, Graham	Galley, Roy
Brinton, Tim	Garel-Jones, Tristan
Brittan, Rt Hon Leon	Glyn, Dr Alan
Brooke, Hon Peter	Goodhart, Sir Philip
Brown, M. (Brigg & Cl'thpes)	Gower, Sir Raymond
Browne, John	Grant, Sir Anthony
Bruinvels, Peter	Greenway, Harry
Bryan, Sir Paul	Griffiths, E. (B'y St Edm'ds)
Buchanan-Smith, Rt Hon A.	Grist, Ian
Budgen, Nick	Grylls, Michael
Bulmer, Esmond	Gummer, John Selwyn
Burt, Alistair	Hamilton, Hon A. (Epsom)
Butcher, John	Hampson, Dr Keith
Butler, Hon Adam	Hanley, Jeremy
Butterfill, John	Harris, David
Carlisle, John (N Luton)	Harvey, Robert
Carlisle, Kenneth (Lincoln)	Haselhurst, Alan
Carlisle, Rt Hon M. (W'ton S)	Havers, Rt Hon Sir Michael
Cash, William	Hawkins, C. (High Peak)
Chalker, Mrs Lynda	Hayes, J.
Chope, Christopher	Heathcoat-Amory, David
Churchill, W. S.	Heddle, John
Clark, Hon A. (Plym'th S'n)	Henderson, Barry
Clark, Dr Michael (Rochford)	Hickmet, Richard
Clark, Sir W. (Croydon S)	Hicks, Robert
Clarke, Rt Hon K. (Rushcliffe)	Higgins, Rt Hon Terence L.

Hill, James	Pattie, Geoffrey
Hirst, Michael	Pawsey, James
Hogg, Hon Douglas (Gr'th'm)	Peacock, Mrs Elizabeth
Holland, Sir Philip (Gedling)	Percival, Rt Hon Sir Ian
Holt, Richard	Pollock, Alexander
Hordern, Peter	Portillo, Michael
Howarth, Gerald (Cannock)	Powell, Rt Hon J. E. (S Down)
Howell, Rt Hon D. (G'ldford)	Powell, William (Corby)
Howell, Ralph (N Norfolk)	Prentice, Rt Hon Reg
Hubbard-Miles, Peter	Price, Sir David
Irving, Charles	Prior, Rt Hon James
Jenkin, Rt Hon Patrick	Proctor, K. Harvey
Jones, Gwilym (Cardiff N)	Pym, Rt Hon Francis
Kershaw, Sir Anthony	Rathbone, Tim
King, Rt Hon Tom	Renton, Tim
Knight, Mrs Jill (Edgbaston)	Rhys Williams, Sir Brandon
Knox, David	Ridley, Rt Hon Nicholas
Lamont, Norman	Ridsdale, Sir Julian
Lang, Ian	Roberts, Wyn (Conwy)
Lawrence, Ivan	Robinson, Mark (N'port W)
Lee, John (Pendle)	Roe, Mrs Marion
Lennox-Boyd, Hon Mark	Rossi, Sir Hugh
Lester, Jim	Rost, Peter
Lewis, Sir Kenneth (Stamf'd)	Rowe, Andrew
Lightbown, David	Rumbold, Mrs Angela
Lilley, Peter	Sackville, Hon Thomas
Lloyd, Ian (Havant)	Sainsbury, Hon Timothy
Lord, Michael	St. John-Stevas, Rt Hon N.
Lyell, Nicholas	Sayeed, Jonathan
McCrindle, Robert	Scott, Nicholas
McCurley, Mrs Anna	Shaw, Giles (Pudsey)
Macfarlane, Neil	Shaw, Sir Michael (Scarb')
MacKay, Andrew (Berkshire)	Shelton, William (Streatham)
MacKay, John (Argyll & Bute)	Shepherd, Colin (Hereford)
Maclean, David John	Shepherd, Richard (Aldridge)
McNair-Wilson, P. (New F'st)	Shersby, Michael
Madel, David	Silvester, Fred
Major, John	Sims, Roger
Malins, Humfrey	Skeet, T. H. H.
Malone, Gerald	Smith, Tim (Beaconsfield)
Maples, John	Soames, Hon Nicholas
Marlow, Antony	Speed, Keith
Marshall, Michael (Arundel)	Speller, Tony
Mates, Michael	Spence, John
Mather, Carol	Spencer, Derek
Maude, Hon Francis	Spicer, Jim (W Dorset)
Mawhinney, Dr Brian	Spicer, Michael (S Worcs)
Maxwell-Hyslop, Robin	Squire, Robin
Mayhew, Sir Patrick	Stanley, John
Mellor, David	Steen, Anthony
Merchant, Piers	Stern, Michael
Meyer, Sir Anthony	Stevens, Lewis (Nuneaton)
Miller, Hal (B'grove)	Stevens, Martin (Fulham)
Mills, Iain (Meriden)	Stewart, Allan (Eastwood)
Mills, Sir Peter (West Devon)	Stewart, Andrew (Sherwood)
Miscampbell, Norman	Stradling Thomas, J.
Mitchell, David (NW Hants)	Sumberg, David
Moate, Roger	Taylor, John (Solihull)
Molyneaux, Rt Hon James	Taylor, Teddy (S'end E)
Monro, Sir Hector	Tebbit, Rt Hon Norman
Montgomery, Sir Fergus	Temple-Morris, Peter
Moore, John	Terlezki, Stefan
Morris, M. (N'hampton, S)	Thatcher, Rt Hon Mrs M.
Morrison, Hon C. (Devizes)	Thomas, Rt Hon Peter
Morrison, Hon P. (Chester)	Thompson, Donald (Calder V)
Moynihan, Hon C.	Thompson, Patrick (N'ich N)
Murphy, Christopher	Thorne, Neil (Ilford S)
Neale, Gerrard	Thornton, Malcolm
Needham, Richard	Thurnham, Peter
Nelson, Anthony	Townend, John (Bridlington)
Newton, Tony	Townsend, Cyril D. (B'heath)
Nicholls, Patrick	Tracey, Richard
Norris, Steven	Trippier, David
Oppenheim, Phillip	Twinn, Dr Ian
Oppenheim, Rt Hon Mrs S.	van Straubenzee, Sir W.
Ottaway, Richard	Vaughan, Sir Gerard
Page, Sir John (Harrow W)	Viggers, Peter
Page, Richard (Herts SW)	Wakeham, Rt Hon John
Parkinson, Rt Hon Cecil	Waldegrave, Hon William
Parris, Matthew	Walden, George

Walker, Bill (T'side N)	Winterton, Mrs Ann
Walker, Rt Hon P. (W'cester)	Winterton, Nicholas
Waller, Gary	Wolfson, Mark
Ward, John	Wood, Timothy
Wardle, C. (Bexhill)	Woodcock, Michael
Warren, Kenneth	Yeo, Tim
Watson, John	Young, Sir George (Acton)
Watts, John	Younger, Rt Hon George
Wells, Bowen (Hertford)
Wells, Sir John (Maidstone)	Tellers for the Noes:
Wheeler, John	Mr. Michael Neubert and
Whitney, Raymond	Mr. Peter Lloyd.
Wiggin, Jerry

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments):—

The House divided: Ayes 299, Noes 196.

Division No. 155]	[10.15 pm
AYES
Aitken, Jonathan	Clark, Dr Michael (Rochford)
Alexander, Richard	Clark, Sir W. (Croydon S)
Alison, Rt Hon Michael	Clarke, Rt Hon K. (Rushcliffe)
Amery, Rt Hon Julian	Clegg, Sir Walter
Amess, David	Cockeram, Eric
Ancram, Michael	Colvin, Michael
Arnold, Tom	Coombs, Simon
Ashby, David	Cope, John
Aspinwall, Jack	Corrie, John
Atkins, Rt Hon Sir H.	Cranborne, Viscount
Atkinson, David (B'm'th E)	Crouch, David
Baker, Nicholas (N Dorset)	Currie, Mrs Edwina
Banks, Robert (Harrogate)	Dickens, Geoffrey
Batiste, Spencer	Dicks, Terry
Beaumont-Dark, Anthony	Dorrell, Stephen
Bellingham, Henry	Douglas-Hamilton, Lord J.
Bendall, Vivian	Dover, Den
Bennett, Rt Hon Sir Frederic	du Cann, Rt Hon Sir Edward
Best, Keith	Dunn, Robert
Bevan, David Gilroy	Dykes, Hugh
Biffen, Rt Hon John	Edwards, Rt Hon N. (P'broke)
Biggs-Davison, Sir John	Eggar, Tim
Blackburn, John	Emery, Sir Peter
Body, Richard	Evennett, David
Bonsor, Sir Nicholas	Eyre, Sir Reginald
Boscawen, Hon Robert	Fallon, Michael
Bottomley, Peter	Farr, Sir John
Bottomley, Mrs Virginia	Favell, Anthony
Bowden, A. (Brighton K'to'n)	Fenner, Mrs Peggy
Bowden, Gerald (Dulwich)	Finsberg, Sir Geoffrey
Boyson, Dr Rhodes	Fletcher, Alexander
Braine, Rt Hon Sir Bernard	Fookes, Miss Janet
Brandon-Bravo, Martin	Forman, Nigel
Bright, Graham	Forth, Eric
Brinton, Tim	Fraser, Peter (Angus East)
Brittan, Rt Hon Leon	Galley, Roy
Brooke, Hon Peter	Garel-Jones, Tristan
Brown, M. (Brigg & Cl'thpes)	Glyn, Dr Alan
Browne, John	Goodhart, Sir Philip
Bruinvels, Peter	Gower, Sir Raymond
Bryan, Sir Paul	Grant, Sir Anthony
Buchanan-Smith, Rt Hon A.	Greenway, Harry
Budgen, Nick	Griffiths, E. (B'y St Edm'ds)
Bulmer, Esmond	Grist, Ian
Burt, Alistair	Grylls, Michael
Butcher, John	Gummer, John Selwyn
Butler, Hon Adam	Hamilton, Hon A. (Epsom)
Butterfill, John	Hampson, Dr Keith
Carlisle, John (N Luton)	Hanley, Jeremy
Carlisle, Kenneth (Lincoln)	Harris, David
Carlisle, Rt Hon M. (W'ton S)	Harvey, Robert
Cash, William	Haselhurst, Alan
Chalker, Mrs Lynda	Havers, Rt Hon Sir Michael
Chope, Christopher	Hawkins, C. (High Peak)
Churchill, W. S.	Heathcoat-Amory, David
Clark, Hon A. (Plym'th S'n)	Heddle, John

Henderson, Barry	Oppenheim, Rt Hon Mrs S.
Hickmet, Richard	Ottaway, Richard
Hicks, Robert	Page, Sir John (Harrow W)
Higgins, Rt Hon Terence L.	Page, Richard (Herts SW)
Hill, James	Parkinson, Rt Hon Cecil
Hirst, Michael	Parris, Matthew
Hogg, Hon Douglas (Gr'th'm)	Pattie, Geoffrey
Holland, Sir Philip (Gedling)	Pawsey, James
Holt, Richard	Peacock, Mrs Elizabeth
Hordern, Peter	Percival, Rt Hon Sir Ian
Howarth, Gerald (Cannock)	Pollock, Alexander
Howell, Rt Hon D. (G'ldford)	Portillo, Michael
Howell, Ralph (N Norfolk)	Powell, Rt Hon J. E. (S Down)
Hubbard-Miles, Peter	Powell, William (Corby)
Irving, Charles	Prentice, Rt Hon Reg
Jenkin, Rt Hon Patrick	Price, Sir David
Jones, Gwilym (Cardiff N)	Prior, Rt Hon James
Kershaw, Sir Anthony	Proctor, K. Harvey
King, Rt Hon Tom	Pym, Rt Hon Francis
Knight, Mrs Jill (Edgbaston)	Rathbone, Tim
Knox, David	Renton, Tim
Lamont, Norman	Rhys Williams, Sir Brandon
Lang, Ian	Ridley, Rt Hon Nicholas
Lawrence, Ivan	Ridsdale, Sir Julian
Lee, John (Pendle)	Roberts, Wyn (Conwy)
Lennox-Boyd, Hon Mark	Robinson, Mark (N'port W)
Lester, Jim	Roe, Mrs Marion
Lewis, Sir Kenneth (Stamf'd)	Rossi, Sir Hugh
Lightbown, David	Rost, Peter
Lilley, Peter	Rowe, Andrew
Lloyd, Ian (Havant)	Rumbold, Mrs Angela
Lloyd, Peter, (Fareham)	Sackville, Hon Thomas
Lord, Michael	St. John-Stevas, Rt Hon N.
Lyell, Nicholas	Sayeed, Jonathan
McCrindle, Robert	Scott, Nicholas
McCurley, Mrs Anna	Shaw, Giles (Pudsey)
Macfarlane, Neil	Shaw, Sir Michael (Scarb')
MacKay, Andrew (Berkshire)	Shelton, William (Streatham)
MacKay, John (Argyll & Bute)	Shepherd, Colin (Hereford)
Maclean, David John	Shepherd, Richard (Aldridge)
McNair-Wilson, P. (New F'st)	Shersby, Michael
Madel, David	Silvester, Fred
Major, John	Sims, Roger
Malins, Humfrey	Skeet, T. H. H.
Malone, Gerald	Smith, Tim (Beaconsfield)
Maples, John	Soames, Hon Nicholas
Marlow, Antony	Speed, Keith
Marshall, Michael (Arundel)	Speller, Tony
Mates, Michael	Spence, John
Mather, Carol	Spencer, Derek
Maude, Hon Francis	Spicer, Jim (W Dorset)
Mawhinney, Dr Brian	Spicer, Michael (S Worcs)
Maxwell-Hyslop, Robin	Squire, Robin
Mayhew, Sir Patrick	Stanley, John
Mellor, David	Steen, Anthony
Merchant, Piers	Stern, Michael
Meyer, Sir Anthony	Stevens, Lewis (Nuneaton)
Miller, Hal (B'grove)	Stevens, Martin (Fulham)
Mills, Iain (Meriden)	Stewart, Allan (Eastwood)
Mills, Sir Peter (West Devon)	Stewart, Andrew (Sherwood)
Miscampbell, Norman	Stradling Thomas, J.
Mitchell, David (NW Hants)	Sumberg, David
Moate, Roger	Taylor, John (Solihull)
Molyneaux, Rt Hon James	Taylor, Teddy (S'end E)
Monro, Sir Hector	Tebbit, Rt Hon Norman
Montgomery, Sir Fergus	Temple-Morris, Peter
Moore, John	Terlezki, Stefan
Morris, M. (N'hampton, S)	Thatcher, Rt Hon Mrs M.
Morrison, Hon C. (Devizes)	Thomas, Rt Hon Peter
Morrison, Hon P. (Chester)	Thompson, Donald (Calder V)
Moynihan, Hon C.	Thompson, Patrick (N'ich N)
Murphy, Christopher	Thorne, Neil (Ilord S)
Neale, Gerrard	Thornton, Malcolm
Needham, Richard	Thurnham, Peter
Nelson, Anthony	Townend, John (Bridlington)
Neubert, Michael	Townsend, Cyril D. (B'heath)
Newton, Tony	Tracey, Richard
Nicholls, Patrick	Trippier, David
Norris, Steven	Twinn, Dr Ian
Oppenheim, Phillip	van Straubenzee, Sir W.

Vaughan, Sir Gerard	Wheeler, John
Viggers, Peter	Whitney, Raymond
Wakeham, Rt Hon John	Wiggin, Jerry
Waldegrave, Hon William	Winterton, Mrs Ann
Walden, George	Winterton, Nicholas
Walker, Bill (T'side N)	Wolfson, Mark
Walker, Rt Hon P. (W'cester)	Wood, Timothy
Waller, Gary	Woodcock, Michael
Ward, John	Yeo, Tim
Wardle, C. (Bexhill)	Young, Sir George (Acton)
Warren, Kenneth	Younger, Rt Hon George
Watson, John
Watts, John	Tellers for the Ayes:
Wells, Bowen (Hertford)	Mr. Tim Sainsbury and
Wells, Sir John (Maidstone)	Mr. Tony Durant.
NOES
Alton, David	Deakins, Eric
Anderson, Donald	Dewar, Donald
Archer, Rt Hon Peter	Dobson, Frank
Ashdown, Paddy	Dormand, Jack
Ashley, Rt Hon Jack	Dubs, Alfred
Ashton, Joe	Duffy, A. E. P.
Atkinson, N. (Tottenham)	Dunwoody, Hon Mrs G.
Bagier, Gordon A. T.	Eadie, Alex
Banks, Tony (Newham NW)	Eastham, Ken
Barnett, Guy	Edwards, Bob (W'h'mpt'n SE)
Barron, Kevin	Ellis, Raymond
Beckett, Mrs Margaret	Evans, John (St. Helens N)
Beith, A. J.	Ewing, Harry
Bell, Stuart	Fatchett, Derek
Benn, Tony	Faulds, Andrew
Bermingham, Gerald	Field, Frank (Birkenhead)
Bidwell, Sydney	Fisher, Mark
Blair, Anthony	Flannery, Martin
Boothroyd, Miss Betty	Foot, Rt Hon Michael
Boyes, Roland	Forrester, John
Bray, Dr Jeremy	Foster, Derek
Brown, Gordon (D'f'mline E)	Foulkes, George
Brown, Hugh D. (Provan)	Fraser, J. (Norwood)
Brown, N. (N'c'tle-u-Tyne E)	Freeson, Rt Hon Reginald
Bruce, Malcolm	Garrett, W. E.
Buchan, Norman	George, Bruce
Caborn, Richard	Gilbert, Rt Hon Dr John
Callaghan, Rt Hon J.	Godman, Dr Norman
Callaghan, Jim (Heyw'd & M)	Golding, John
Campbell, Ian	Gould, Bryan
Campbell-Savours, Dale	Gourlay, Harry
Canavan, Dennis	Hamilton, James (M'well N)
Carlile, Alexander (Montg'y)	Hamilton, W. W. (Central Fife)
Carter-Jones, Lewis	Hancock, Mr. Michael
Cartwright, John	Hardy, Peter
Clark, Dr David (S Shields)	Harman, Ms Harriet
Clarke, Thomas	Harrison, Rt Hon Walter
Clay, Robert	Hart, Rt Hon Dame Judith
Clwyd, Mrs Ann	Haynes, Frank
Cocks, Rt Hon M. (Bristol S.)	Heffer, Eric S.
Cohen, Harry	Hogg, N. (C'nauld & Kilsyth)
Coleman, Donald	Holland, Stuart (Vauxhall)
Concannon, Rt Hon J. D.	Home Robertson, John
Conlan, Bernard	Howell, Rt Hon D. (S'heath)
Cook, Frank (Stockton North)	Hoyle, Douglas
Cook, Robin F. (Livingston)	Hughes, Robert (Aberdeen N)
Corbett, Robin	Hughes, Roy (Newport East)
Corbyn, Jeremy	Hughes, Sean (Knowsley S)
Cowans, Harry	Hughes, Simon (Southwark)
Craigen, J. M.	Janner, Hon Greville
Crowther, Stan	John, Brynmor
Cunliffe, Lawrence	Johnston, Russell
Cunningham, Dr John	Jones, Barry (Alyn & Deeside)
Davis, Terry (B'ham, H'ge H'l)	Kaufman, Rt Hon Gerald

Kilroy-Silk, Robert	Richardson, Ms Jo
Kinnock, Rt Hon Neil	Roberts, Ernest (Hackney N)
Lamond, James	Robertson, George
Leadbitter, Ted	Robinson, G. (Coventry NW)
Leighton, Ronald	Rogers, Allan
Lewis, Ron (Carlisle)	Rooker, J. W.
Lewis, Terence (Worsley)	Ross, Stephen (Isle of Wight)
Litherland, Robert	Rowlands, Ted
Lloyd, Tony (Stretford)	Ryman, John
Loyden, Edward	Sedgemore, Brian
McCartney, Hugh	Sheerman, Barry
McDonald, Dr Oonagh	Sheldon, Rt Hon R.
McKelvey, William	Shore, Rt Hon Peter
Mackenzie, Rt Hon Gregor	Short, Ms Clare (Ladywood)
Maclennan, Robert	Short, Mrs R.(W'hampt'n NE)
McNamara, Kevin	Silkin, Rt Hon J.
McTaggart, Robert	Skinner, Dennis
McWilliam, John	Smith, C.(Isl'ton S & F'bury)
Madden, Max	Smith, Rt Hon J. (M'kl'ds E)
Marek, Dr John	Soley, Clive
Martin, Michael	Spearing, Nigel
Mason, Rt Hon Roy	Steel, Rt Hon David
Maynard, Miss Joan	Stewart, Rt Hon D. (W Isles)
Meacher, Michael	Stott, Roger
Meadowcroft, Michael	Strang, Gavin
Michie, William	Thomas, Dr R. (Carmarthen)
Mikardo, Ian	Thorne, Stan (Preston)
Millan, Rt Hon Bruce	Tinn, James
Mitchell, Austin (G't Grimsby)	Torney, Tom
Morris, Rt Hon A. (W'shawe)	Wainwright, R.
Morris, Rt Hon J. (Aberavon)	Wallace, James
Oakes, Rt Hon Gordon	Wardell, Gareth (Gower)
O'Brien, William	Wareing, Robert
Orme, Rt Hon Stanley	Weetch, Ken
Owen, Rt Hon Dr David	Welsh, Michael
Park, George	White, James
Parry, Robert	Williams, Rt Hon A.
Patchett, Terry	Wilson, Gordon
Pendry, Tom	Winnick, David
Penhaligon, David	Woodall, Alec
Pike, Peter	Wrigglesworth, Ian
Prescott, John	Young, David (Bolton SE)
Radice, Giles
Randall, Stuart	Tellers for the Noes:
Redmond, M.	Mr. Don Dixon and
Rees, Rt Hon M. (Leeds S)	Mr. Allen McKay.

Question accordingly agreed to.

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

Resolved, That this House supports the Government's determination to pursue economic and industrial policies which maintain a sound financial framework, low inflation and steady economic growth and create the conditions for efficient, competitive and productive industry; welcomes its commitment to develop training opportunities for young people and adults and to help the unemployed through measures like the Enterprise Allowance Scheme and Community Programme; notes that these policies have already led to the creation of over 300,000 more jobs last year and believes that sustaining these policies offers the best hope of real and lasting improvements in employment opportunities.