§ Mr. Bob Clay (Sunderland, North)
I beg to move,That this House deplores the continuing level of unemployment in the United Kingdom and its devastating effect on individuals and communities in the North, Scotland, Wales, Merseyside, inner London, the Midlands and many other areas; believes that temporary schemes provide no permanent solution but instead pose an increasing threat of conscription into enforced cheap labour; further notes that recent events in Britain and around the world threaten further increases in unemployment and demonstrate the fundamental instability of the casino economies with their continuing cycles of boom and slump which cannot be fundamentally solved by adjustment in exchange rates, interest rates, privatisations or market forces; therefore calls for the adoption of socialist policies which place human need before profit, such as a massive expansion of socially useful jobs and services and a major reduction in working time, including a 35 hour week, longer holidays, earlier retirement and similar measures; and believes that this can only be achieved by public investment and ownership subject to democratic control, thus enabling the majority of people in communities and in regions, in workplaces and in national enterprises to plan a society of full employment.I am grateful for this opportunity, because I believe that the topic of unemployment has begun to be seen as something of a bore by the Government, and perhaps by some of their supporters. There is a danger that the view will begin to get around that the present disgraceful levels of unemployment are a permanent, God-given state of affairs. There is also a danger that unemployment will be seen and presented, especially by the Government and their supporters, as a local difficulty in one or two areas that can be massaged and marginally helped through certain schemes.
Although my own region in the north, to which I shall make several references, has the highest unemployment in Great Britain, I recognise that unemployment is not a local problem. Throughout the country there are similar problems, in some cases nearly as bad as those in the north.
It is interesting to read the document produced by the Library, last updated on 19 November, which lists unemployment by constituency in a league table. I note, for instance, that, according to the latest calculations, the highest unemployment in any British constituency is not in the north, the north-west or inner London, but in Birmingham, Small Heath. Another Birmingham constituency, Ladywood, has a fifth highest unemployment level. A number of Glasgow constituencies appear on the list: Maryhill, Central, Provan and Springburn. They come eighth, ninth, 10th and 11th, respectively. Sheffield, Central comes sixth.
Even London, which some regard as part of the prosperous south — the area that is, according to the Government, flowing with milk and honey—is well up in the first 30, with constituencies such as Bethnal Green and Stepney, Islington, North, Bow and Poplar, Vauxhall, Hackney, South and Shoreditch and Hackney, North and Stoke Newington. Inner London as a whole, which has a population of approximately 2.5 million—roughly the same as that of the entire northern region—had 175,000 unemployed at the last count. That is a rate of 14.4 per cent., nearly as high as the current northern rate.
Some will say that that appalling position is now being ameliorated by the creation of some new jobs. Occasionally, there are announcements of new inward 780 investment, even in regions as badly hit as mine. However, even today's announcement of new jobs from Nissan, some of which had already been announced as part of the phase 2 go-ahead given last year—I comment on that because I am sure that the Minister will; and, of course, every new job is more than welcome, and desperately needed — will bring the number of new jobs in my borough since 1980 to a total of slightly below 6.000. That compares with confirmed redundancies for the same period, according to the Department of Employment figures, of 22,938. Despite the inward investment, such as it is, and despite whatever new jobs have been created, there is a net loss of jobs in the borough of Sunderland of 16,000. That shows the scale of the problem with which we are faced.
In the Tyne and Wear area, of which Sunderland is a part, since 1979, when the Government were elected, until August 1987, the total number of confirmed redundancies was 98,784. With the recent closure that was announced at Huwoods, which made mining machinery, and the shipyard redundancies on the Tyne that have been announced, there will have been over 100,000 job losses. There is no sign that the problem is going away, and I am sure that the same difficulties prevail in many other parts of Britain.
The notion that the Government are trying to perpetrate — that we have a strengthening enterprise culture that relies on the private sector to provide jobs where the public sector has allegedly failed—is a myth. I could prove that with regard to my area, and 1 am sure that many other examples could be given from other parts of the country.
Our shipbuilding industry—the merchant building part of which is in public ownership — has contracted dreadfully, but at least there is some merchant shipbuilding left. The way in which the mining industry has contracted is appalling, but at least some of it is still left.
In my constituency, the failures of private enterprise are littered all around us. One of the major shipbuilding yards left in Britain, the Pallion yard, would not be there now were it not for my right hon. Friend the Member for Chesterfield (Mr. Benn), who, in a previous incarnation in 1975, faced with the collapse of Court Line Ltd. — a private enterprise company that had been milking its shipbuilding, repairing and marine engine interests to prop up a holiday company — took that yard arid other shipbuilding facilities into public ownership. That is the only reason why Pallion is still there now.
Plessey, which is a massive multinational company, is pulling out of Sunderland, killing off 3,500 jobs; that is the act of a ruthless multinational company. In the past couple of years a major private sector firm, Camrex Ltd., which had been in the area for 100 years and was a marine company, was bought out by a multinational company, Ruberoid plc, which then discovered that Canadian Pacific Ltd. had an insurance claim against Camrex, and deliberately bankrupted it, thus causing a massive loss of jobs to avoid a fairly dubious insurance claim.
Joplings foundry, which was another historic company in my constituency, was bought two years ago by an entrepreneur in the mould that Conservative Members praise to the hilt as an example of the new, dynamic enterprise culture, Mr. Andrew Cook. He said: I will buy this foundry and I can guarantee jobs and work." Within 781 days he closed it and offered employees work in another of his factories in Leeds. Within weeks of some of them going to Leeds, they were told that they were being sacked.
Any empirical analysis of the history of private enterprise in my area, and in many others, shows that one cannot have faith in the private sector and that, inadequate though it is in many ways, it is only public enterprise that has maintained jobs in the area.
§ Mr. Michael Fallon (Darlington)
Surely there is empirical evidence that at least 13 Japanese companies have moved into the north-east region that unemployment in the northern region has dropped by 25,000 over the past year and that self-employment has doubled over the past four years. Are those figures myths?
§ Mr. Clay
I will not be distracted and tempted into that sort of statistical debate. The hon. Gentleman represents a region that still has a total unemployment rate of 17 per cent. with nearly 200,000 people unemployed. I find it incredible that he has the audacity to claim that things are in some way looking up. I anticipated that such comments would be made by Conservative Members, so I have already said that one has only to look at the net job losses compared with the net gains to see that there is massive net loss overall.
§ Ms. Clare Short (Birmingham, Ladywood)
We all know that there has been a massive growth in self-employment. However, does my hon. Friend agree that the figures on the income of those who are self-employed show that the overwhelming bulk of them are on fantastically low incomes and that most have gone into self-employment through desperation rather than any great support for the enterprise economy that Conservative Members boast about?
§ Mr. Clay
I am grateful to my hon. Friend for making that point.
Another myth is the notion that most people who are self-employed are prosperous and expanding business people. However, my hon. Friends and I deal with the reality. On advice, people have taken some grant, such as an enterprise allowance, and put their redundancy money into an effort that often collapes within a year. I do not have the figures to hand, but recent parliamentary questions have shown that a remarkable percentage of the businesses that are set up fail within 12 months and many more fail within two years. It may be a moving target: at any given time, certain people are self-employed but, as with many other forms of employment such as the temporary schemes, they do not feel secure for the future.
I want to argue strongly that, even on the Government's figures, allowing for the 17, 18 or 19 fiddles that have been used since 1979 and the inadequate temporary schemes, many of those who are seen as being permanently and properly in work are in a position that leaves much to be desired. Many of those people live in permanent fear of losing their job. The figures I have given for the Tyne and Wear area show 100,000 redundancies. However, I cannot believe that that is, 100,000 separate individuals. Concealed within those figures there will be people — I can give examples — who have been made redundant two or three times. Many people do not know from week to week whether their jobs will be safe. That is not a satisfactory way for people to live their lives.
782 Another major problem concealed within the statistics is the large number of people, the gastarbeiters, from the north of England who are working away from home. Labour Members will be familiar with those who come to their surgeries and advice sessions and say, "I have finally found a job. It is low paid and it is not satisfactory but at least it is a job. I have had to move 200 miles and I could not even put a deposit on a house in the south of England or London even if I sold my home in Sunderland." More and more people are having to work away from home and cannot afford to take their families with them. That is a growing problem and it is an indictment of the Conservative party, which claims to be the party of the family.
Many young people seek work in London because of the misery in the area from which they come. There is still an illusion that the streets of London are paved with gold. That is a component of the London housing crisis and shows how unemployment in one area feeds the social problems of another. The London borough of Camden contains the station of King's Cross, St. Pancras and Euston and is a significant borough in that many young people arrive there from the north, Merseyside, Scotland and other areas looking for work. That borough spent £17 million this year alone on providing bed-and-breakfast accommodation. That is £17 million from a total housing budget of £66 million and a total revenue budget of £138 million. That is an extraordinary amount to spend on bedand-breakfast accommodation and is a classic example of how the London housing crisis is being fuelled by unemployment in other areas.
People in fear of losing their jobs because of bankruptcy, privatisation, takeover and rationalisation all form part of the figures the Government use to show how many people are in work. It is unreasonable and disgraceful that people should have to eke out their lives unable to make decisions about holidays, marriages, partnerships, buying homes or cars, buying consumer goods and furniture and supporting their children in higher education because the future of their employment is uncertain. Many working people in many areas are in that position.
Many of those who do not work not only face the problem of poverty but find that their health is affected. Recent surveys and statistical evidence have demonstrated that clearly. Richard Smith, the assistant editor of the British Medical Journal, detailed the link in a recent series of articles. He said:The unemployed tend to be more anxious, depressed, unhappy, dissatisfied, neurotic and worried, and they have lower confidence and sleep worse than the employed.K. A. Moser of City university studied the health of 6,000 unemployed men from 1971 to 1981. His figures show that, for every extra 100,000 unemployed men there will be 97 extra deaths among the men each year and 49 among their wives. If those calculations are correct, there have been many thousands of deaths as a result of unemployment since that time.
If my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) catches your eye, Mr. Speaker, I believe that she will speak about the temporary schemes. Therefore, I will not dwell on that for too long. However, I wish to comment on the notion that the community programme, youth training schemes and other Government schemes are some sort of solution. They are far from being a solution. I recall—I shall remember it 783 all my life—visiting Pallion Residents Enterprises in my constituency during the election campaign. It is a useful scheme. An old clothing factory has been rebuilt and it houses several training schemes, co-operatives and small businesses. I was asked questions by all of those who were working there on youth training schemes. It was the most extraordinary experience.
Those young people had no conception of what full-time permanent work meant. However much one tried to talk to them about policies that might some day, under a different Government, produce real long-term work for them, they showed no interest. They thought it was just pie-in-the-sky talk from politicians. They only wanted to ask questions about the different sorts of schemes. They asked what happened when one completed a scheme, how long it took to get on another scheme, what one scheme paid as opposed to another, how the different schemes could be improved, how they could move from YTS to the community programme and how that would affect their benefits. I was asked question after question and they were interested only in a world of schemes because that is what faces them as there are so few real jobs to be had.
§ Mr. Holt
Will the hon. Gentleman take on board the fact that, 10 days ago, I opened two YTS buildings in the north-east of England? The buildings had been operational for some time. In one, 100 per cent. job success has been achieved with those trained in the building industry. In the other, 92 per cent. have been successful elsewhere. To suggest that children in the north-east of England have no concept of full-time employment is to say that none has ever met a school teacher.
§ Mr. Clay
I made it clear that I was relating my experience which, sadly, is a familiar one. At least there is some improvement in that the hon. Gentleman is making such illustrations. This contrasts with his performance during the past few years, which involved continually taking newspapers from Buckinghamshire, where he used to live, to his constituency and telling people to apply for the jobs advertised in them.
§ Mr. Speaker
The hon. Member for Langbaurgh (Mr Holt) intervened. I think that the hon. Member for 784 Sunderland, North (Mr. Clay) disagreed with what he said. It is for the hon. Member for Langbaurgh to seek to take part in the debate later.
§ Mr. Clay
Thank you, Mr. Speaker.
The hon. Member for Langbaurgh (Mr. Holt) once insulted Norman Lansbury a bus cleaner and a personal friend of mine, whom I had known for years when I lived in that constituency. The hon. Gentleman asked what a bus cleaner was doing as chair of a planning committee. Norman Lansbury did not have the opportunity to answer that point here, so the hon. Gentleman was lucky to be allowed one intervention.
§ Mr. Clay
One of the obscenities of such high unemployment is that many people are overworking. I am not one of those who always calls for work, as though work were a virtue, a necessity and a perfect way of life. I recognise that work literally kills — the health and safety statistics are appalling — and that many of the deaths and serious accidents are caused by the stress and fatigue resulting from overwork as well as many other factors. I recognise that a great deal of work is dirty, dangerous, boring, repetitive and tiresome. That is why it is absurd that many people are unemployed whereas many others are overworking. The simple and logical action is to redistribute the work.
As examples of overwork, I cite the disgraceful and tragic position of Northumbria ambulance drivers recently. Of the 78 drivers in the reorganised Sunderland and Washington division of the Northumbria ambulance service, two have died from heart disease in the past 18 months and four have left because of coronary-related diseases and are permanently sick. This happened because the ambulance drivers suffered appalling stress. That is a tragedy not only for them but for all those in the National Health Service who depend on the ambulances. Why do not the authorities shorten their hours? Why not have more ambulance men and a better service? it is estimated that, in the Northumbria ambulance service as a whole, there is a 22 per cent. rate of illness or vacancy related to stress.
What is the position with nurses, especially in some specialties? There are nurses who work for agencies contracted to the NHS as well as working their straight NHS contracts. There are nurses working double shifts. But, at the same time, there are people who would queue up for jobs as nurses if the wages were not so appalling, thanks to the Government. Part of the appalling crisis of the NHS is the obscenity of understaffing while those nurses who are working work hours that cannot conceivably be safe for them, let alone for their patients.
§ Mr. Clay
The hon. Gentleman should try to catch your eye later, Mr. Speaker.
The problems illustrated in the NHS apply to many types of shiftwork and to much of the public services. I remember, having worked in public transport, the ludicrous hours worked, with people starting work one week at half past 4 or 5 o'clock in the morning, driving through rush hour traffic in cities or rural areas, then 785 starting work another week at 2 o'clock in the afternoon, with their body clocks wrecked. This applies to many workers. It is ludicrous that in a modern society the people who work such shifts do not have their hours of work dramatically reduced.
§ Mr. Clay
That is why the present position in the coal industry is so important and why it is essential that Arthur Scargill succeeds in his campaign to be re-elected as president of the NUM. Essentially, he is fighting on that front and saying that it is ludicrous that miners should be asked to work longer shifts and a six-day week when, more than any other group, they should be talking about shorter shifts and a four-day week.
It is obscene that hon. Members on either side of the House — although, of course, it comes from Conservative Members—should pooh-pooh any of these suggestions when they have goodness knows how many months holiday a year. They do not even start until half past 2 in the afternoon, so they can go moonlighting in the morning, and work one of the shortest weeks in society. It is a central hypocrisy of society that the people who make the legislation can pay so little attention to the hours and conditions of others.
It is ironic that people in this country, which has the highest unemployment, work longer hours than any similar countries. Some interesting points about the length of time worked emerge from the International Labour Organisation statistics for the last year for which figures are available. The average working week of full-time employees in the United Kingdom was 42.8 hours in 1985, which includes overtime. The figures in other countries were: Canada 32.5 hours; United States 34.9 hours; Belgium 33.3 hours; and Spain — which, until recently, was regarded as one of the poorer countries of Europe —39.1 hours, nearly three hours less than in the United Kingdom. Even in West Germany, the allegedly hardworking industrious Germans put in an average week of 40.7 hours—more than two hours less than in the United Kingdom. In Australia it was 34.5 hours and in New Zealand 39.2 hours. There is not a significant country, whether the United States, or in Australasia, or western Europe, that compares with Britain.
One clear way to start to reduce unemployment in this country is to reduce working hours. It is a matter not just of reducing the working week but of providing longer holidays, earlier retirement on proper pay, and sabbaticals. Why can only a few people — usually the allegedly "well-educated", "professional" people — say that every five or even every 10 years they need a year out to think about things, to recharge their batteries, to go in a new direction and to reflect? Why should not those who work with their hands, get dirty, who risk their lives, go through the sweats—
§ Mrs. Kellett-Bowman
On a point of order, Mr. Speaker. The hon. Gentleman has already been speaking for half an hour in a short debate. Would it not be fair if he gave way to others?
§ Mr. Speaker
I have no authority to curtail speeches. However, this is a half-day debate and I am sure that the hon. Gentleman will bear in mind that many hon. Members, on both sides of the House, wish to take part.
§ Mr. Clay
Why should not all workers in our society have time off on pay — especially as we have high unemployment? A training programme that allowed people to take a year out on full pay at any time in their life to contemplate a different occupation or search for a new career would be a training programme that was worth looking at.
We can look to the European labour movement not only for examples of shorter hours but for examples of how to achieve them. As someone who was once naive enough to believe that the labour movement in West Germany was moderate, tame and employer-oriented, I was interested to learn that, as a result of a successful strike in 1984, IG Metall, the German steel and engineering worker's union managed to reduce its members' working week from 40 hours to 38½ hours and thus to create 100,000 jobs. Since then, the union has negotiated a 37-hour working week, which puts them well ahead of us. Nevertheless, it is preparing to launch another big offensive in the new year to achieve a 35-hour week. On the union's calculations, that will create another 100,000 jobs, which the union desperately needs.
One has only to look at recent press reports—for example, in The Guardian last Friday and in The Observer on Sunday—to discover the action that is being taken by German workers to protect jobs. The workers at a steel mill in Rheinhausen, which the Krupp company is attempting to close, are taking action. It is interesting to note that at Rheinhausen, in Duisburg, the steel complex of the Ruhr, steel jobs have been reduced from 58,000 to 40,000. The workers are saying, "That is enough." The steel industry in this country, and in many others, has been slashed to a much greater extent than that. Unfortunately, we have yet to see resistance such as the steelworkers in the Ruhr are putting up. The Guardian article states:Throughout the Ruhr, steelmen, supported by miners, teachers, postal workers and public service employees, blocked motorway access routes, occupied bridges across the Rhine, and set up road blocks, to demonstrate that the closure of the Krupp mill, with the loss of 6,000 jobs, would spell the beginning of the 'slow death of the Ruhr'.In Rheinhausen, Duisberg, and in seven other cities, shops, pubs, and cafes remained closed, schoolchildren were given the day off, post deliveries were scrapped and policemen helped to guide demonstrators and onlookers through the road blocks in an unprecedented display of solidarity.This comes from the moderate German working class.Mr. Frank Kwasny, a welder, said his trade union would not allow 'workers to be divided, as they were in Britain. We will stand together.' The Krupp management and political leaders have been somewhat taken aback by the unprecedented radicalism of the protesters, who earlier this week stormed the Villa Hugel, in Essen, the mansion that was once the home of the Krupp steel barons. About 60 protesters stormed into Hamburg stock exchange … throwing eggs and tomatoes, before traders repulsed them with a fire extinguisher, a spokesman said.We have some lessons to learn from the German working class, and not for the first time. The Deutsche Gewerkschaftsbund, the West German equivalent of the TUC, calculates in a very useful pamphlet called "Arbeit für Alle", which means work for everyone, that a 35-hour week throughout West Germany would create 1.4 million jobs. West Germany's working week is already two hours shorter than ours and its experience tells us about the number of jobs that could be created—not just by a shorter working week. If we had a shorter working week of 35 hours or thereabouts, reductions in hours for shift workers, earlier retirement on reasonable pay for those in 787 the most strenuous jobs and sabbaticals, we would reduce unemployment. That package of measures alone could reduce real unemployment by more than half.
§ Mr. Eric S. Heffer (Liverpool, Walton)
On a point of order, Mr. Speaker. Hon. Members are complaining that my hon. Friend is going on for too long. It is his debate, and if he wanted to, he could speak for the entire time allowed and hon. Members could do nothing about it. He is perfectly entitled to do that.
§ Mr. Speaker
That is absolutely correct, but I hope that the hon. Member for Sunderland, North (Mr. Clay) will bear in mind that many of his own colleagues wish to participate.
§ Mr. Skinner
My hon. Friend has referred to the number of hours worked in West Germany and to the possibility of even fewer hours being worked. Will he bear in mind that, although the West Germans work fewer hours than the British, West Germany has a balance of payments surplus of nearly $40 billion. The Labour party members who draw up the manifesto have not paid enough attention recently to reducing the number of hours worked, which would appeal to those in work and to those outside in the dole queue waiting for a job. I am pleased that my hon. Friend is drawing attention to that.
§ Mrs. Kellett-Bowman
Opposition Members have shown that they do not especially wish to speak. Perhaps you will take that into account when calling Conservative Members, Mr. Speaker.
§ Mr. Clay
My hon. Friend the Member for Bolsover referred to the extraordinary fact that, although the Germans work fewer hours, they have a massive balance of trade surplus. That was the point that I was coming to. I do not wish to dwell on it, It may be a subject for another debate and it has been discussed in the house before. It is extraordinary that, only a few weeks ago, some were arguing that popular capitalism and increased share ownership represented the answer to everything. They thought that the future looked rosy, but then came the crash that many people had expected. The slide in the dollar has made it more difficult for British companies to 788 export. All shipbuilding prices around the world are quoted in dollars, with the result that there has been a loss of competitiveness of about 25 per cent. for what is left of British shipbuilding since black Monday. That has affected my constituency and others.
Interest rates, oil prices and the pound are going up and down. When the pound goes up, it is good news for some and bad for others; when it goes down, it is good news for some and bad for others. The more that process continues, the more it demonstrates the instability of the system, which makes it quite impossible for enterprise to plan and for people to be secure. The final irony is that, according to today's edition of The Daily Telegraph, that great successful sector the City of London is predicting the loss of 50,000 jobs in the City as the result of the stock exchange crash. That figure was cited in The Daily Telegraph today. How much longer will this go on? That is the reality of the enterprise culture.
Many other things could be done to reduce unemployment. It would be useful for regions such as mine to have development agencies to cut through the bureaucracy facing what little investment there is at the moment. It would be useful if civil servants were dispersed more fairly round the country. It would he useful to have more generous and sensible Government grants. On that point, I take the opportunity to ask the Minister to comment on a piece in the Financial Times on 1 December this year headedBritain plans to limit regional aid".That will not be very helpful. The article says:The new discretionary policy will be much more to the liking of the Treasury.I am sure that if it will be more to the Treasury's liking it will mean less opportunity to create jobs in regions such as mine. I ask the Minister to come clean about the predictions in the Financial Times.
There are many policies which could produce more jobs in this country, but they depend on not leaving things to the private sector and the casino economy of the City. For example, it would make absolute sense to deal with the problem of acid rain, about which the Opposition have campaigned for so long. In September 1986, The Engineer calculated that if three flue gas de-acidification plants were manufactured in the United Kingdom, 30,000 man years' work would be created over a decade. Depending how one does the sums, that means about 3,000 jobs over 10 years. But that extraordinary opportunity is going begging due to the Government's lack of will.
So much needs to be done in our localities. A Government who consign so many people to full-time leisure through unemployment should allow local authorities to provide facilities. I compliment the much-maligned local authority in Liverpool which has built new leisure centres and swimming pools as well as housing. Instead of providing jobs in hypermarkets, which are springing up everywhere and competing with one another to sell consumer goods, we should build leisure complexes, libraries, and so on, so that jobs are created in socially useful ways. Nurseries are also desperately needed. I recently attended the opening of a dial-a-ride service in my constituency. That is part of the community programme. Why are the drivers of minibuses, which provide such a marvellous service for the disabled, not regarded as doing real jobs because they are on the community programme? It is ridiculous to change the drivers every few years. Those jobs should be permanent employment for trained people. 789 Public transport could be extended in many ways to get over the ridiculous congestion on the roads and the waste of precious resources. We need more rapid transit systems —not the yuppie expressway specials being built in the London docklands and threatened in other places, but the type of system that we have in Tyne and Wear and for which people in Manchester and elsewhere are asking.
I make no apology for saying that I do not regard many of our traditional industries as sunset industries. With regard to shipbuilding, for instance, the shipping market analysts Detnorske Veritas recently calculated that 250 million tonnes would need to be built in the next decade to replace old and inefficient tonnage and that further expansion of world trade would probably require a further 150 million tonnes. That is 400 million tonnes in the next decade. If the Government would give British Shipbuilders enough assistance to obtain even 1 per cent. of that total, the remaining merchant ship yards in Britain would be employed beyond their present capacity and could be expanded. We also need new coal-fired power stations as the basis of a sane energy policy. I could give many more examples.
Before Conservative Members start asking the usual question, I will spend a couple of minutes explaining where the money is to come from. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) has pointed out many times, when people start asking where the money is to come from, the real question is, "Where did the money go?" A Government who have allowed more than £70,000 million in capital to be transferred overseas since 1979 have a nerve asking the Opposition to explain themselves. I need not dwell on the wealth from North sea oil that has also been squandered. According to the July White Paper, which is available in the Library, in the last four years this country's net contribution to the Common Market has been £4,400 million. If we have that kind of money to spend on aid, we could do better than giving it to inefficient farmers. We should give it to the people of Ethiopia and Bangladesh and set up trading relationships with them which will benefit the British working class as well as those underdeveloped countries.
We live in an economic system in which the City of London can allegedly raise £5 billion for a private project to get people across the channel half an hour quicker. Why cannot the same amount be raised to build hospitals and schools and to create the work that we need? Whatever the various arguments about defence and weapons, whether nuclear or conventional, every million pounds spent on public transport, social services, teaching and other socially useful activities creates more jobs than if it is spent on conventional weapons, let alone nuclear weapons. Scrapping Trident is thus another way to create a great many jobs. We could then provide proper conversion programmes so that people at Swan Hunter and Barrow are not thrown out of work but have jobs which make full use of their skills in a socially useful way.
§ Mr. Bob Cryer (Bradford, South)
It is interesting that the Government are prepared to hive off jobs in public enterprise but when it comes to defence, which they and their Back Benchers regard as so important, they retain public ownership. They have not decided to sell off the Army to Securicor—
§ Mr. Clay
Again, my hon. Friend made the point more effectively than J could. As every Opposition Member knows, at whatever level one pitches it, the amount given away in tax handouts year after year to the very rich and super-rich would go a long way to fund the expansion of work and a return to full employment.
Above all, we must ask ourselves the following question. On recent figures—there is little dispute about this—more than half the money sloshing around in the City of London casino comes in one way or another from pension funds — deferred wages and salaries deducted week by week and month by month from working people's pay. Why have those people no democratic say in what happens to their pension funds? The simplest way to institute widespread public ownership would be to give those people the right to say that their contributions should not be invested in South Africa or in Californian real estate, or in oil when the contributors are coal miners, but in activities that will create jobs and develop industry in this country and in useful projects abroad. That can be achieved only if there is the will to take control of those financial institutions and to give people the democratic right to plan the use of their own money.
Finally, while we are considering where the money is to come from, we must consider the cost of unemployment. The unemployment unit, a highly reputable and reliable organisation, has calculated the cost of keeping people out of work. For the three constituencies in the borough of Sunderland, the cost is £161 million per year — £48 million in Houghton and Washington, £62 million in Sunderland, North, and £51 million in Sunderland, South. That is the cost of keeping people unemployed in terms of lost taxation, lost insurance contributions and the cost of benefits paid. That total of £161 million is more than the net revenue spending of the borough of Sunderland in a year. We are paying more to keep people unemployed than we are spending on education, social services and all the other things that the council has to do. That is the clearest evidence of the obscenity of maintaining people unemployed and then having the audacity to ask where the money will come from to do something about the situation.
It is perfectly possible to return to full employment. It is a question of the will and the policies and it comes down to an old Socialist philosophy. Humankind can put men on the moon, can carry out heart and lung transplants and can at least play around with the notion of star wars, SDI, and go to such advanced frontiers of technology. Why not use that technology to organise human relationships in a way that will ensure that people do not die of overwork and underwork and to create a society of full employment?
Britain's unemployment is the most appalling indictment of the Government and the capitalist system they stand for. The clearest illustration of the need for Socialism is the obscene situation of a world in crisis, millions starving and a mountain of misery at the dole queues while others are dying and becoming sick from overwork. It would be simple to organise society if it were not for the class interests represented by Conservative Members. If that were done, all the things that I have mentioned would be a miserable memory of the past.
§ The Minister for Employment (Mr. John Cope)
The hon. Member for Sunderland, North (Mr. Clay) has done the House a service by using his good fortune in the ballot to express his concern, which the Government share, about unemployment. However, he has exposed both his own and his party's prescriptions for dealing with it and we think that they are gravely mistaken. The hon. Gentleman's speech was wide-ranging and I would not earn the thanks of the House if I followed up all the points that he raised.
Unemployment is now firmly established on a downward trend. By October, it had fallen for 16 months in succession and by almost 500,000 — the largest sustained fall on record—to its lowest level for nearly five years. In the year to October the United Kingdom's unemployment rate fell by more than that of any other major industrialised country. It is now lower than the rate in France or in Belgium, and since June unemployment has fallen in every region of the country. Over the last six months it has been falling at the record rate of over 50,000 per month. The reason for that is that jobs are being created.
§ Mr. Max Madden (Bradford, West)
If the firm downward trend about which the Minister speaks continues, how long will it take to reach the unemployment total of 1979?
§ Mr. Cope
As the hon. Gentleman knows, we do not forecast unemployment and I do not propose to follow him down that road. If he does not like the unemployment figures, I shall give him the employment figures. Since March 1983 total jobs have increased by well over 1.3 million and that is more than in the whole of the rest of the European Community. This is the longest period of continuous employment growth in almost 30 years. What is more, this growth is gathering pace. The rate of increase in jobs has strengthened in each of the last five quarters. Last year alone the number of jobs grew by well over one third of a million. Those are real productive jobs created by customers, jobs that customers think are useful. Those are not Government-created jobs for which the hon. Gentleman's motion calls.
In his motion and in his speech the hon. Member for Sunderland, North spoke about socially useful jobs. He seemed to think that keeping the peace and the defence of Britain were not socially useful jobs. I entirely reject that idea. Unlike most of their critics, the Government have always known that unemployment could only be tackled through the creation of new jobs in the wealth-creating sector of the economy. We also knew, and know now, that new jobs would be forthcoming only if the economic climate favoured rather than penalised the process of wealth creation. To that end we have consistently pursued policies to stimulate and encourage enterprise. By these methods we can give more positive help in job finding to the long-term unemployed.
§ Mr. Holt
My hon. Friend talks about finding jobs. Does he agree that it was on my initiative that the joblink scheme was started? As a consequence, many people throughout Britain found employment. More important, from that little acorn the Government have now taken the scheme on board on a more permanent and proper basis. 792 They have taken up the advertising of jobs on television. Oracle television is shortly to take this up first of all in the Tyne-Tees area and then nationwide.
§ Mr. Cope
The scheme to which my hon. Friend refers was good and very helpful.
We have brought inflation down to levels not seen since the 1960s, have brought public spending firmly under control, and have reduced public borrowing to historically low levels. At the same time we have been able to improve incentives through the reduction and simplification of taxes. We have introduced a whole range of measures to promote the growth of small firms and of self-employment, which we welcome, because such small firms have created many of the new jobs.
§ Mr. Chris Mullin (Sunderland, South)
The Minister mentions the range of measures that the Government have introduced to help small firms. May I draw his attention to the case of Mrs. Eleanor Dalkin in my constituency, which is adjacent to the constituency of my hon. Friend the Member for Sunderland, North (Mr. Clay)? She is a model of the kind of enterprise that your Government allege they are determined to create.
§ Mr. Mullin
Thank you, Mr. Deputy Speaker. I meant the Minister's Government. Mrs. Dalkin set up a factory in January and now employs 44 people. On a technicality she has been denied regional employment grant. In nine months she created employment for 44 people in a town where the unemployment rate is about 21 per cent. She was denied aid under the range of measures about which the Minister speaks.
§ Mr. Cope
I cannot respond precisely to the case that the hon. Gentleman mentions, but if he writes to me about the grant I shall certainly look into the matter. The lady that he mentions makes my point about the creation of jobs in small businesses. If she managed to create 44 jobs in nine months, she is doing very well. If she has been able to do it without a Government grant, so much the better.
The Government's policies have been successful and we have emerged from the world recession of the early 1980s into well over six years of continuous economic growth. In that time we have grown faster than any of our major European competitors, although, as the House knows, we previously languished at the bottom of the growth league during the 1960s and the 1970s. This year our growth is expected to outstrip that of all other major industrialised countries. Industrial production is at its highest ever level. Since 1980 manufacturing productivity has grown faster than that of any other major country. In the third quarter of this year it was nearly 7 per cent. higher than in the previous year.
Government policies and their effects have improved employment. The success of our policies and the sustained fall in unemployment have made both possible and necessary the development of our policies. That is why we shall concentrate more on, for example, training the longterm unemployed in new skills. At the same time, it also becomes easier to make sure that benefit goes to those who qualify and not to those who do not.
The Government recognise that unemployed people often need special help to compete for the jobs that are increasingly becoming available. This is especially the case 793 with the long-term unemployed, who have to cope with a combination of disadvantages, such as deteriorating skills, loss of motivation in looking for work and sometimes resistance from employers. That is why my Department has developed a comprehensive range of measures specifically aimed at the long-term unemployed. This year, my Department and the Manpower Services Commission are spending over £3 billion and providing more than a million opportunities on over 30 employment training and enterprise measures. This represents a comprehensive package of measures offering positive and practical help towards employment.
Of that sum, about £1.5 billion is being spent on schemes to help the long-term unemployed. Of this, we are spending, for example, £1 billion this year on the community programme, which has provided work experience for more than a million long-term unemployed people since its introduction in 1982. About 60 per cent. of the participants in the community programme go into a job under a year after leaving the programme. Under the restart programme, more than 2.3 million long-term unemployed people have been interviewed to assess the best means of helping them back on to the road to employment, but my right hon. Friend the Secretary of State has announced today a development of the restart programme.
From next April, we shall issue a questionnaire to all those claimants invited for their six-monthly restart interviews. The questionnaire will have two purposes. First, it aims to enhance the restart programme for the very many people who are genuinely unemployed and available for work. Currently, restart interviewers have, in a very brief space of time, to establish a rapport with the claimant, find out something about his or her qualifications, training and recent job-seeking efforts, identify a suitable employment or training opportunity and, in addition, seek to persuade the claimant to take it. By giving the interviewer the head start of knowing something more before the interview about those whom he or she is seeing, this questionnaire should enable more time to be spent on identifying the best opportunity available. The second purpose of the questionnaire is to enable a check to be made to ensure that claimants continue to satisfy the fundamental condition for receipt of benefit —that they are available for work. This new procedure will be launched in a small number of offices in February next year, before its national introduction at the end of April.
Another way in which we help the long-term unemployed is through our network of more than a thousand job clubs which give their members help and facilities for intensive job-hunting. Some 135,000 people will be helped through job clubs this year and about 60 per cent. of all those leaving job clubs will go into jobs. We have also introduced the ambitious new job training scheme to help long-term unemployed people gain the skills and qualifications needed to compete on the labour market—a massive investment in reskilling Britain.
However, it is time to take these programmes a stage further. The task ahead is to help long-term unemployed people in a more coherent way and our priority must be to help them meet the challenge of the steadily improving labour market through the provision of worthwhile training. That is why my right hon. Friend the Secretary 794 of State announced on 18 November that our present programmes for unemployed adults are to be brought together into a new training programme. From September next year, the new programme will offer up to 12 months' training to those who have been out of work for six months or more. By building on existing programmes, including the community programme and the new job training scheme, the new programme will be able to take us forward into the 1990s with a flexible and relevant range of training opportunities.
First and foremost, the new programme will be a training programme. It will include practical experience with employers and on projects. It will be tailored closely to the needs of individual praticipants as well as to those of the economy. The emphasis will be very much on practical training, ranging from basic working skills, including numeracy and literacy, to training at technician level. The new programme is all about quality training which will significantly improve the number of people moving on to permanent jobs when they leave.
Existing measures have helped to ensure that, in spite of all their difficulties, which we recognise, the long-term unemployed have shared fully in the benefits of an expanding labour market. In the year to October, the total number of people unemployed for more than a year fell by a record 169,000 to the lowest level for nearly four years. It is very pleasing to see that our hard work in helping the long-term unemployed is bearing fruit in this way. I am confident that this success will continue with the new programme we are introducing next year.
The fall in unemployment has also enabled us to see more clearly whether someone really qualifies for benefit and whether he or she is available for work. The House will know that the law on this subject has remained the same for very many years and it was last re-enacted by the Labour Government in 1975. When unemployment is high or rising, it is more difficult to detect cheating and to identify those who are not really looking for work, but now, particularly in the areas where the job market is strongest, we can do better. Until 1982, those on benefit had to register at jobcentres. Since then, a special form has been signed by claimants. At first, it was a simple declaration, but that was criticised, among others, by the Public Accounts Committee of this House and, as a result, a more elaborate questionnaire was introduced for new claimants to fill in. The House will wish to know that my right hon. Friend the Secretary of State has today replied to a question from my hon. Friend the Member for Bristol, North-West (Mr. Stern), giving details of changes in the procedure.
From 1 February next year, we are introducing a revised questionaire for all new claimants, asking for more information about the work that they are seeking and the steps that they are taking to find it. The new form seeks more information on such subjects as claimants' qualifications and experience and on the type of work being sought by them. We also intend to supplement the revised questionnaire as soon as possible after 1 February by providing new claimants, in areas of buoyant labour demand, with information about occupations in which jobs are immediately available. We see this as a particularly important means of bringing directly to the attention of more newly unemployed people the expanding job opportunities now available in many places.
§ Mr. Holt
Is my hon. Friend aware that recently, in the north-east of England, many people who were drawing benefit and working for private contractors have been fined? Will the Government consider fining those who cheat directly by being employees and those who cheat indirectly by acting as employers in this way?
§ Mr. Skinner
It is clear to Opposition Members that the Minister's announcement is another turn of the screw against people who do not have a job and are not likely to get one in the place where they live. As the hon. Member for Langbaurgh (Mr. Holt) put forward a novel suggestion about those who are supposedly moonlighting, why does the Minister not apply that to those Tory Members who have four, five or six directorships, work in the law courts in the morning and turn up for Parliament only when it suits them? Some of them come in for only half the time. If that suggestion is applied to people at the lower end of the income scale, why should it not also be applied to Tory Members?
§ Ms. Short
Following the intervention made by the hon. Member for Langbaurgh (Mr. Holt), I have been approached in my advice bureau by many people who have been driven down to the dole office by their employers to sign on because they are paying such low wages that people cannot survive on them. Mass fiddling is being pushed on to people by employers. I agree with the hon. Member for Langbaurgh. If people are to be penalised, such employers should be penalised too.
§ Mr. Cope
I should be interested in the hon. Lady's evidence of such fraud and cheating. I should be grateful for further particulars if she will supply them.
I have talked about improvements in unemployment generally. I also want to say something about Sunderland and the north-east. I originally came from the midlands. I now live near Bristol. As it happens, I have always had relations in the north-east. I have at least some idea of the economic and social strains that have been imposed on the hon. Gentleman's region by the decline, in real terms and in employment terms, of the great industries that have employed many people for over a century. I have also seen something of the efforts of successive Governments to help the region, even way back since the days of my noble Friend Lord Hailsham.
People talk in an oversimplified way of the differences between north and south. In fact, as we know, the situation is more patchy than that. The hon. Gentleman made that point. Of course, some regions are worse hit than others. Everybody recognises that fact and nobody is complacent about it. But we cannot help the north, however we define it, by holding back the south. We are helping the north-east. Financial asistance by our 796 Department, the Department of Trade and Industry and the Department of the Environment exceeded £1 billion in the last financial year, 1986–87.
Let me talk about Sunderland in particular. The hon. Gentleman will be aware that unemployment in his constituency fell by nearly 1,300 in the past year. In the Sunderland travel-to-work area there was a fall of over 3,400. Of course, unemployment remains too high, but we have been encouraged by that fall, and there are positive signs that it can and will continue. As has already been said, we are encouraging enterprise in Sunderland. Three local enterprise agencies operate in Sunderland.
§ Mr. Clay
I give the Minister one example of how the figures have gone down. An employer in Sunderland advertised work in the Sunderland Echo. Twenty people applied for and were given work. After a week, the employer said, "I cannot actually pay you what I told you I would pay you at the beginning of the week. From now on, you go and sign on. If you do not sign on, I shall not continue to employ you." In other words, the employer said, "If you do not fiddle, I shall sack you."
I regret that I cannot write to the Minister about the matter because, for obvious reasons, none of the 20 employees is prepared to give his or her name. That is an illustration of how the Minister is getting unemployment figures down.
§ Mr. Cope
That is not an illustration of how we are getting unemployment figures down; it is an illustration of how unemployment figures are staying up. The hon. Gentleman said that they stayed on the dole. The unemployment figures relating to the 20 to whom he referred have not come down. I should like to have further particulars. I cannot follow up an individual accusation of that kind unless I have particulars. I understand the hon. Gentleman's difficulty, but he must understand that it is also my difficulty.
Over 1,100 unemployed people in the south Tyne region are currently using the enterprise allowance scheme, which the hon. Gentleman mentioned, to solve their unemployment problem by setting up in business and creating their own jobs. Of course we know that not all businesses succeed, but two thirds or so do succeed, and they also employ other people.
An advanced electronics company is running projects and encouraging innovation and enterprise in information technology. In another project, the innovative factory for new technology is establishing a commercial factory unit on the same lines. It has initial backing from both national and local government and, incidentally, from the European Community. Local companies, too, are expanding. Grove Coles Cranes of Sunderland is investing £5 million. Freemans, the mail order firm, is creating new jobs in Washington. English Estates recently announced record levels of inquiries for factory space in its region.
The hon. Gentleman referred to inward and outward investment. One of the encouraging signs for the country as a whole as well as for the north-east is the way in which foreign firms have seen the potential in Britain. and particularly in the north-east. No fewer than 16 Japanese companies have invested in the north-east. That is part of a large total that has been invested in this country by overseas companies. That is an excellent sign of other people's confidence in the British economy.
§ Mr. Michael Grylls (Surrey, North-West)
I am carefully following what my hon. Friend has been saying about some growing companies. I refer to British companies rather than inward investment companies. Is he satisfied that banks are giving enough support to new businesses or existing businesses that wish to grow, possibly through the loan guarantee scheme, which could help them? If he is not satisfied, will he speak to the banks and establish whether they can give special help in difficult areas such as the north-east?
§ Mr. Cope
It always pays people to shop around the different banks if they are having trouble getting support from one bank. Bank managers vary in their responses to individual schemes. I regularly talk to regional and central banks to encourage them in the direction that my hon. Friend would wish them to follow.
Among the foreign companies to which I have talked, Komatsu recently announced an increase in employment at its Birtley earthmoving machinery plant. Of course, as the hon. Gentleman mentioned, Nissan is the biggest employer. It recently launched a night shift, bringing its total work force in Sunderland to over 1,000. There is more good news today, which I am glad to say that the hon. Member for Sunderland, North also welcomed. Today, my noble Friend the Secretary of State for Trade and Industry and the chairman of Nissan, Mr. Ishihara, signed heads of agreement for the expansion of Nissan's Sunderland plant to produce a second model of a small passenger car. It is a £216 million investment, involving about 1,000 extra jobs at the Sunderland site, plus 400 associated jobs by 1992. It is expected to produce an extra 100,000 cars a year, 60 per cent. of which will be for export. The cars will initially have a 60 per cent. local content, rising to 80 per cent. in 18 months. That is welcome news to us and, indeed, to the hon. Gentleman.
There is much encouraging news about, but, as I said, no one can be complacent. No one owes Britain a living. The problems that we are discussing will always need constant vigilance. We have to remain competitive. The hon. Gentleman touched on that matter and recognised the importance of competitiveness in the shipbuilding industry in his constituency. He recognised that we need to compete on world markets. That brings me to the last point I wish to raise which is about the effect of wage settlements on jobs.
Excessive wage growth, by pricing our goods out of international markets, destroys jobs. It undoubtedly contributed to the high level of unemployment in recent years. When we took office, settlements of 20 per cent. were not uncommon and inflation and unit wage costs were heading towards 20 per cent. or more. Since then, the situation has been transformed. Changes in attitudes towards pay bargaining have been a key factor in that transformation. I am glad to say that bargaining has become more realistic, less confrontational and more flexible. There is a greater awareness of the link between pay and jobs. But the problem has not completely disappeared. Earnings growth is currently 7.75 per cent., almost double the inflation rate. More importantly, it is well in excess of our major competitors. We cannot depend on productivity growth, good as that has been, continuing to absorb such high increases in real earnings. There are still too many pay bargainers who do not accept that pay increases must be earned, must be justified by efficiency and market considerations of performance, and must be 798 affordable. That is the central difficulty of the job of spreading ideas which the hon. Gentleman advanced, attractive as they are in many ways. Until pay increases are earned, growth in earnings and unit wage costs will threaten competitiveness, and that is still one of the most serious risks to jobs in Britain.
In his motion and in his speech, the hon. Member for Sunderland, North argued for greater public investment and public ownership, but lasting reductions in unemployment cannot be obtained by injecting huge extra sums of taxpayers' money into infrastructure spending or local authority make-work schemes. The Socialist policies for which the hon. Gentleman's motion calls are a recipe for economic disaster on any basis. If Opposition Members cannot see that, they should look at France, where not so long ago such a policy was tried and failed. Instead, we looked to the private, wealth-creating sector of the economy as the engine that would generate lasting jobs. We have been, and we are being, proved right in our prescription.
§ Ms. Clare Short (Birmingham, Ladywood)
I congratulate my hon. Friend the Member for Sunderland, North (Mr. Clay) on his luck in winning this opportunity to debate the serious problem of unemployment. His motion refers to the British economy as a casino economy. It is rarely understood by the public that we also have a casino House of Commons. The opportunity to raise motions, questions and private Members' Bills depends on a raffle in which most hon. Members, like people in all casinos, lose.
We are lucky that this afternoon my hon. Friend had the opportunity to introduce a very important motion and to make such a wide-ranging and important speech in which he analysed the real underlying problem of the British economy. His speech contrasts sharply with that of the Minister which concentrated on statistical boasts about the health of the British economy, which largely depended on the manipulation of unemployment statistics and statistics for the numbers of new jobs that have become available. Today, he announced a further ratchet in the pressures on those who are unemployed to be forced into low-paid jobs and compulsory work schemes. The Government claim to believe in freedom of choice, yet they are offering those who have no freedom to work compulsory make-work schemes which will not strengthen our economy or give people freedom or a decent income.
I do not intend to speak on all the issues raised by the motion, as my hon. Friend has already spoken so well. In the limited time available, I wish to put on record the serious criticism of Opposition Members and of many groups in society of the new adult training scheme that was announced by the Secretary of State on 18 November. It is our view that the scheme is unacceptable and will not work. I shall go into more detail about the range of forces in society that are opposed to the scheme, and I shall ask the Minister to think again about those proposals, which will only damage the interests of the unemployed. A new alliance in Britain is saying that we will not co-operate in the scheme, and we ask the Government to offer something better to the unemployed.
I want to put into context the seriousness of the way in which the Government are manipulating make-work schemes to cut wage levels in Britain. There is a real contrast between the way in which the Government and 799 Government supporters constantly crow about the health and vibrance of the British economy, and the experiences of Opposition Members who represent areas where unemployment is horrendously high and where those who can get work all too often work for incredibly low wages which mean that getting a job is hardly an escape from the poverty of unemployment.
Throughout our constituencies, we see the seediness, the decline in housing, the holes in the road and the uncollected rubbish Our economy is becoming a slum economy with high unemployment, low wages and poor quality public services. In my lifetime it has never been so bad, and I am sincerely shocked that it is so bad, yet Conservative Members boast that our economy is healthy and prosperous.
We must ask ourselves whether Conservative Members are being dishonest, whether they see what we see and pretend that it is not happening, or whether they live in a completely different world from ours and that of our constituents. I suspect that at times they are being dishonest, but that they spend most of their lives mixing with people who have done enormously well out of the Thatcherite intervention in the British economy.
There is no doubt that the best paid 20 per cent. in the British economy have never been better off. Their taxes have been cut and their incomes have gone up. Profits have gone up and people working in the City are doing very well. Britain imports more champagne than any other developed economy. There is a group of people who have done enormously well out of Thatcherism. However, there is an enormous group of people that goes beyond the 4 or 5 million unemployed. The figure was understated by 18 or 19 fiddles in the way in which unemployment figures are collected.
In Britain there are now 9 million people who are low paid, according to the Council of Europe decency threshold, which is an income of less than £126 per week. The proportion of poor and low-paid people working in our economy has grown and continues to grow. Those people face either unemployment or the poverty trap. That is the reality of the economy for most people who live in Britain. The slum economy, with low pay, low investment and poor training, is an unjust and unequal economy, which is also incredibly inefficient. When labour is very cheap and can be hired and fired, it is not worth investing and training. By constant pressure to cut wages, Britain is seeking to compete with the poorest countries of the world, a competition which we will never win and which bodes ill for the future of our economy.
The increase in poverty and poverty wages is partly a consequence of the massive growth in unemployment deliberately engineered by the Government to cut wage levels, but the Government have also taken a series of steps to push down the wages of the lowest paid. They include the Wages Act 1986 which reduced the protection of those people protected by wages councils, the abolition of the fair wages resolution and section 11 of the Employment Protection Act 1975, and the privatisation of public services. For cleaners, dinner ladies and low-paid workers in the public services, privatisation meant simply a cut in wages and fewer people doing the work. It is a wage-cutting measure that leads not to increased efficiency, but to poorly paid people being paid even less. Employers have been subsidised on condition that they pay workers low wages, such as with the young workers scheme, and the deliberate use of special employment measures to lever 800 down the wage expectations of the unemployed and the conditions that people can expect when they are in employment.
In regard to the youth training scheme, if the Government had continued to pay the rates that were paid before 1979, they would currently be paying more than £40 a week. We are now about to move from a position in which young people can choose to go on such a scheme, and because they have so few options and opportunities, they have massively chosen to go on the scheme, whatever its deficiencies. A minute number of people have refused a place, but still the Government are removing benefit entitlement from young people so that they are forced on to the scheme. The Government claim that people should have freedom of choice, but they are removing young people's right to shop around for a scheme which might lead them to a chance of a real job. Young people are being compelled while being paid ever less.
It is not that the Government are simply being nasty and vindictive, although they are being both; they are pursuing a strategy which entails using schemes to lever wage levels down. If they allow the supplementary benefit minimum to be the alternative for young people, they cannot cut the YTS allowance any further. That minimum is therefore to be reduced so that YTS allowances can be cut still further.
The Government tried this before when the right hon. Member for Chingford (Mr. Tebbit) was Secretary of State for Employment. We had a White Paper which said that YTS was to be made compulsory and that young people would be paid £15 a week. It caused uproar in all parts of society, including employers, who were not anxious to have conscripted and underpaid young people charging around their workplaces.
The Government had to back off. They have waited, made things worse, given young people less choice, and now they think that they can get away with it. They are taking powers in the Social Security Bill and the Employment Bill, both of which are in Committee, to force young people on to schemes, however inadequate they may be, irrespective of whether they provide training. They are removing from young people who cannot get a job the one option that they now enjoy—to study up to 21 hours a week and retain benefit. When anxious parents come to me asking about the future and telling me that their child has been offered only a place on a scheme but that the overwhelming majority do not get a job at 1 he end of it I tell them about the 21 hours' study option. 1t is crucial for poor parents that the student should have some income to enable him or her to gain qualifications and skills. That option is to be wiped out, however, because the Government are so determined to push down young people's wages.
§ Mrs. Alice Mahon (Halifax)
I am a member of the Committee which is considering the Social Security Bill. Is my hon. Friend aware that Opposition Members made a plea from the heart that benefit should not be withdrawn from young people who have been brought up in local authority care, and have experienced trauma and do not settle easily, and that the Minister turned us down? It is well known in social services circles that such children have difficulty settling, but the Minister would not make an exception for them.
§ Ms. Short
I had heard about that. It is worrying. I recently watched a television programme which showed 801 children under 16 and young people aged between 16 and 18 in the United States who live on the streets through prostitution or the sale of drugs. Many have grown up in care and been victims of sexual abuse. I fear that such conditions may apply here as a result of such a decision.
The Minister referred to the Secretary of State's announcement of 18 December. It outlined plans for a new compulsory work scheme for the adult unemployed. Such a scheme exists in the United States. It is called workfare. The intention is to force people to work for their benefits.
The Government have now announced the introduction of workfare to the United Kingdom. They are combining the budgets of the community programme and the job training scheme, which was introduced before the general election to try to encourage the unemployment figures to decline in the run-up to the election. It flopped because the offer was so bad. It was effectively an offer of work experience for benefit.
We are now offered a massively increased 600,000-place scheme which pays a few pounds—the exact amount has not been announced — on top of benefit. The Department of Health and Social Security tables make it clear that the cost of going to work—the bus fare, more expensive food at the workplace and different clothes—is £7 a week. It therefore costs £7 a week to be no better off.
The Government propose to pay a few pounds a week more than benefit for full-time work. The harm is not restricted to those people being denied choice; they will be used to compete with people in work and thus to drag down their wages. The Minister has announced more compulsion today. We have the Minister's new questionnaire, restart, the new availability for work test and powers which are to be taken in the Employment Bill. The latter provides that, once the scheme is running—if the Government get away with it—it will be designated as a training scheme and that anybody who refuses to apply, refuses a place or leaves because he thinks it is inadequate will have benefit cut for six months. We are now talking about compulsory schemes for the adult unemployed. The Government will then boast that long-term unemployment has declined.
I can tell the Government that they cannot have such a scheme. They could not have had the schemes that they have already established without the co-operation of the trade union movement, local authorities and voluntary organisations. Their co-operation will not be forthcoming for the proposed scheme. On 8 December, there was a meeting of representatives of a powerful new alliance, which The Guardian called the new triple alliance, of trade unions, voluntary organisations and local authorities. They came to the House of Commons to ask the Government to think again and to say that they would not co-operate.
I hope that the Minister is listening, because this is an important message. The trade unions represented were the Transport and General Workers Union—in the person of Ron Todd, its general secretary and a Manpower Services Commissioner—the National Union of Public Employees, the Union of Shop, Distributive and Allied Workers, the General, Municipal, Boilermakers and Allied Trades Union, the Technical, Administrative and Supervisory Section, the Society of Civil and Public Servants, which organises those who work for the Civil 802 Service who will be used to compel people to take a place on the scheme, and the National and Local Government Officers Association. They have previously co-operated with authorised schemes but will now refuse to do so.
For local authorities, we had John Pearman, the leader of Wakefield council, who is the representative of local education authorities on the Manpower Services Commission, and representatives of the Confederation of Scottish Local Authorities, Rochdale, which runs one of the largest schemes in the country, Manchester and the Association of London Authorities.
The representatives of voluntary organisations were led by Rev. Roger Clarke, who represents voluntary organisations on the MSC's advisory group on special measures. He said:It appals us that we are being cast in the role of workhouse managers herding unemployed people through training schemes … We shall play no part in a scheme that would take away fundamental human rights and involve us in conscription.Those groups have rejected the Minister's new scheme and say that there are five basic principles which must be complied with if any new scheme is to receive their cooperation. First, it must be entirely voluntary. Secondly, there should be real training so that people go away at the end with skills that are relevant to their future employment prospects. Thirdly, those concerned must have employee status so that they are protected by health and safety and equal opportunities legislation. Fourthly, they must be paid the rate for the job—not benefit-plus—and, finally, projects must have trade union approval.
If the five conditions are not forthcoming in the new scheme, the Government will not have the co-operation of the coalition, which means that they will not have the scheme. The coalition stated:Our aim is to protect the interests of the unemployed. It is totally unacceptable that they should be forced to work for their benefits and be used to drive down wage levels for those in work. The success of Government training schemes has depended on the co-operation of trade unions, voluntary sector and local authorities. Such co-operation will not be forthcoming for the Government's new scheme. We are asking all groups currently involved in running schemes to support the Charter.The charter is a document that incorporates the five principles to which I have referred. The coalition's statement continued:We are asking the Government to think again before the publication of the White Paper.The Government boast of a healthy economy but we see a slum economy with increasing impoverishment and low pay. We know that conditions within the economy will become worse without some intervention. The Government have been able to obscure the destruction of our manufacturing base by using North sea oil revenues, but those revenues are now in decline and there is the prospect of a balance of payments crisis and the deflation that will inevitably follow from that. We know that the Government's privatisation programme will come to an end when they have sold off everything that can be privatised. There will then be a gap in Government revenues and pressure for even further public expenditure cuts. This will lead to further impoverishment of our society and loss of employment.
The Government's free market economy does not work. It is not a glamorous economy. The Government's policy is creating poverty and a lack of hope and choice for our people. We ask the Government to think again. 803 The Opposition say in all seriousness that the Government will not be able to implement the scheme that has recently been announced unless they are willing to listen to the new alliance and redesign their scheme so that it meets minimum standards.
The real answers to the problems of the British economy lie in Socialist intervention, planning and use of the massive resources of our economy. After all, we are about the 20th richest country in the world. Unfortunately, the Government are increasingly delivering poverty to our people. The Japanese economy is not run on Socialist lines but within it there is room for planning and Government intervention. The Government's obsessive and prejudiced belief in free-market economics is doing enormous damage to the British people and to the future of the British economy. We reject the Government's economic policy and we hope that they will think again about the scheme that they intend to introduce, which in its present form would lead to more poverty and more compulsion for the unemployed.
§ Sir Fergus Montgomery (Altrincham and Sale)
I congratulate the hon. Member for Sunderland, North (Mr. Clay) on initiating the debate. That is about the only thing on which I can congratulate him. I realise that this is a short debate, so I promise that I shall not detain the House for long. In what is a short debate the hon. Gentleman spoke for 50 minutes. His speech seemed to last a great deal longer than that for those who had to listen to it. I feel that a weekend with the hon. Gentleman must be rather like a month in the country.
The hon. Member for Sunderland, North represents a north-east constituency.
§ Sir Fergus Montgomery
I was talking about the hon. Member for Sunderland, North, not the hon. Member for Liverpool, Walton (Mr. Heffer).
§ Sir Fergus Montgomery
I shall not give way. I am talking about the hon. Member for Sunderland, North.
§ Mr. Heffer
My hon. Friend the Member for Sunderland, North could have talked for four hours if he had wished to do so.
§ Sir Fergus Montgomery
The hon. Gentleman must make his own speech. It seems that he is anxious to speak. As I have said, the hon. Member for Sunderland, North spoke for 50 minutes.
§ Sir Fergus Montgomery
I shall take my time. I can speak until 7 o'clock if I choose to do so.
The hon. Member for Sunderland, North represents a north-east constituency, and I was born in that area. One of the differences between us is that the hon. Gentleman went to a public school. He went to Bedford and I went to Jarrow grammar school. I make that point because we are always being told by Opposition Members that we on the Government Benches know nothing about the state education system.
As I have said, I disagreed with just about everything that the hon. Member for Sunderland, North said. I 804 disagreed too with the hon. Member for Birmingham, Ladywood (Ms. Short). If their speeches reflect the philosophy of the Labour party, it comes as no surprise to me that the Labour party was so thoroughly defeated in the general election.
§ Mr. Heffer
The trouble is that that philosophy was not put forward. If it had been offered to the people, we would have won.
§ Sir Fergus Montgomery
Labour Members seem to have conveniently short memories. They seem to forget that it was under the previous Labour Government that we had the worst economic crisis that any of us could remember. That was the position in 1976, when the Labour Government had to go running—
§ Mrs. Mahon
On a point of order, Mr. Deputy Speaker. I should like to know whether we are still debating unemployment. We seem to have moved on to something else. I am rather confused.
§ Mr. Deputy Speaker
I have not heard anything yet from the hon. Member for Altrincham and Sale (Sir F. Montgomery) that has been out of order. I am listening carefully.
§ Sir Fergus Montgomery
Thank you, Mr. Deputy Speaker. I do need your protection occasionally.
In 1976, the Labour Government led us into an awful crisis and they had to be rescued by the International Monetary Fund. That is a matter of fact.
§ Sir Fergus Montgomery
The hon. Member for Sunderland, North talked about unemployment, and the chances are that I know more about that than he does. As I have said, I was born in the north-east. In fact, I was born on Tyneside. When I was a child, my father, like thousands of others in that area, was out of work.
§ Sir Fergus Montgomery
That is so, but no one can pretend that the unemployment on Tyneside in 1932 and 1933 can be compared with the unemployment of today. There was a grinding, abject poverty in the 1930s. I never want to see those days return. My father had 21 shillings on which to keep his family. My right hon. Friend the Member for Chingford (Mr. Tebbit) made a speech when he was Secretary of State for Employment in which he recalled that his father was out of work during the depression. He told us that his father got on his bike and went to look for work, and that was ridiculed by the Opposition. My father got on a bike and looked for work. There can be nothing worse for an individual than to want to work and yet be unable to find work. I hope that the days that I lived through on Tyneside when I was a child will never return. Anyone who pretends that conditions now are the same as those that applied during the 1930s is not living in the modern world.
It is rather unfortunate that the hon. Members for Sunderland, North and Ladywood should have made speeches of gloom when it is reported in the Daily Mail today—
§ Sir Fergus Montgomery
It is a good newspaper. If the hon. Gentleman read it occasionally, he might learn something. The Daily Mail reports:Unemployment has fallen to its lowest for more than six years as orders pour in to factories. The number of people out of work is understood to have dropped by about 60,000 last month to just about 2,500,000 on a seasonally adjusted basis. This 17th successive monthly fall means unemployment is down by around 550,000 since June last year—the biggest sustained reduction on record.A CBI survey produces a much brighter and more optimistic picture than that which is being painted by Labour Members. Part of it states:New productivity figures due on Thursday will further reinforce Mrs. Thatcher's claim that sound finance and enterprise have produced a higher standard of living than this country has ever known.That is very different from the story that the hon. Member for Ladywood was presenting us with and preaching not so long ago.
§ Sir Fergus Montgomery
I ask the hon. Gentleman to look around the country. It may not be found in Jarrow, but what about Newcastle, Manchester and Liverpool? The hon. Gentleman should look at what is happening in the shops in those areas. He should have regard to retail sales in those areas and the general standard of living, which is something of which I would not have dreamt when I was young.
§ Sir Fergus Montgomery
No, but the ones who are there are jolly good.
It ill behoves Labour Members to attack the Government on their employment record. Unemployment did not appear suddenly in 1979. It has been rising remorselessly in the United Kingdom since the 1960s. It rose throughout the 1960s when there was over-manning, which was hidden unemployment.
§ Sir Fergus Montgomery
It is not tripe. The hon. Gentleman knows that it is not. During the 1960s there were people in employment who were not needed. As a result, firms became uncompetitive and consequently more and more jobs were lost. We had pay rises that were not earned and a bad record of strikes.
§ Sir Fergus Montgomery
If the hon. Gentleman wishes to participate in the debate, I suggest that he makes his own speech.
The combination of over-manning, unearned pay rises and a bad record of strikes made Britain uncompetitive and helped to create higher unemployment. Nobody disputes that unemployment is much worse in the north than in the south. I was born in the north and I represent a constituency in the north. One has to bear in mind that in the north we have the old basic industries of coal, steel and shipbuilding. All of those industries are in decline throughout the world. They are in decline in the United States but there all the coalfields, steelworks and shipyards are not concentrated in the same area but are spotted around. In this country they are all concentrated in the north. Therefore, we see the problem much more starkly than in other countries.
Of course, we have been through difficult times and I do not think that anyone disputes that. Despite what has 806 been said from the Opposition Benches, I believe that things are improving because of the policies pursued by the Government. For once we have a Prime Minister who has stuck to what she believed was right. Other Prime Ministers may have started off on the right road —[Interruption.] My right hon. Friend has won three successive general elections which is quite a record
§ Sir Fergus Montgomery
It was a substantially higher percentage than the Labour party got. The hon. Lady conveniently forgets that we now have a three-party system. It is unlikely that at a future election any party will get 50 per cent. of the vote. So, if I were her, I would not be too smart because, in the unlikely event that we ever get another Labour Government, I doubt whether they will get 42 per cent. of the vote. Certainly the Labour vote has been declining.
§ Ms. Short
Yes, we have a divided opposition. That is why the Government party is in power. But it is important for the Tory party to understand that the support it has had in the three general elections of 42 per cent., 43 per cent., and 42 per cent., means that a majority of the people is opposed to it. For example, in the last 13 years of Tory rule Labour in opposition got a higher vote than that.
§ Sir Fergus Montgomery
I shall not continue with that, except to ask the hon. Lady to check the figures. I think that not one party that has won a general election since the war has scored more than than 50 per cent. The nearest were the Conservatives in 1955 and 1959 when they got 49 per cent. Things are improving because of the policies being pursued by the Government. We have a Prime Minister who has stuck to what she believed to be right.
§ Mr. Deputy Speaker
Order. Sedentary interventions do not help the progress of the debate. We could do with fewer of them.
§ Sir Fergus Montgomery
We now see the benefit of the sensible policies. We have seen a sustained improvement in the economy. We also have to bear in mind that we need a level of pay which enables workers to be priced into jobs, which is the important point, instead of being priced out of jobs. We need pay rates which ensure that British industry can hold its own against major competitors.
I hope that the unemployment figures which are due out on Thursday will show the 17th successive monthly fall. That is good news. I just wish that there were a few more cheerful faces on the Opposition side. I am afraid that good news is not good news to the Opposition. They thrive on gloom and doom.
The unemployment figures for September showed that there were fewer unemployed school leavers than at any time since 1974. That was particularly welcome. There is nothing worse for any young person than to start adult life on the dole.
It is also good news that we are doing better at reducing unemployment than most of our competitors. I think I am right in saying that the rate of unemployment has fallen by 1.5 per cent. in the last year, whereas in Germany, France and Italy the rates have increased. The employed labour force for the United Kingdom rose substantially 807 between March 1983 and June 1987. If I am wrong, I am sure I will be corrected, but I think that we have a higher percentage of people of employable age working than any other country in the European Community.
Of course, there are still problems. The Government must never be complacent. I am particularly worried about the man who is made redundant in his late fifties. That is a terrible tragedy. I said earlier that I felt sorry for young people who started their working life on the dole. I have always believed that, as the economy improved, that problem would disappear, but the problem does not disappear for the man in his late fifties. For him and his family this is the most awful problem. I hope that the Government have not forgotten the plight of people in that category.
In the last general election campaign we were told by the leader of the Labour party that the Tories could not and would not reduce Britain's dole queue. Yet again the right hon. Gentleman has been proved wrong because the dole queue is being reduced. Long-term unemployment has shown a record fall and unemployment has fallen in every region. That is good news. The Government alone cannot do it all. We hear the cry all the time that the Government must do this or the Government must do that. The Government are not the only source of responsiblity. Certainly we have to have policies that help. We must continue to have policies which reduce taxation and reward success, and which ensure that inflation does not get out of hand again.
Above all, we have to heed the lesson that we must be competitive. We have to ensure that productivity is high and that pay increases are earned. We have to listen to what our customers say. Nobody will buy British simply because it is British. People will buy the goods we produce only if the price, the quality and the order date are right. That is why I am glad that the number of strikes has dropped drastically since the Government took office.
I want to pay tribute to the way in which the Government have tackled the economy and, through their successful policies, have reduced the number of unemployed. I hope that in the months ahead we shall see the number of unemployed further reduced.
§ Mrs. Alice Mahon (Halifax)
I want to respond briefly to the hon. Member for Altrincham and Sale (Sir F. Montgomery) on his claim about real jobs. In preparation for the debate I studied the jobs that have gone in manufacturing in my constituency during the last 15 months when we have had an upturn in the economy. I found that over 500 jobs had gone in very good firms that have been in Halifax since I was born. For instance, 176 jobs have gone at Rowntree Mackintosh; 75 jobs have gone in textiles; and over 100 jobs have gone in machine tool engineering. Those were real jobs that paid real wages and had real training elements.
Most Conservative Members view unemployment simply as a statistic. Its effects upon communities and individuals are ignored. I have heard nothing about its effects upon family life and upon communities. There has been much crowing about the fact that the number of strikes is down and that people are working for lower wages but nothing about the real problems facing the unemployed.
I challenge what the Minister said about inflation. If he considers the people who are trying to exist on social 808 security benefits he will find that inflation affects them differently. The things on which they need to spend their total disposable income, such as rent, rates, mortgages, transport, bus fares, prescriptions and energy costs, have risen far more than the rate of inflation to which the Minister referred.
We are told that the unemployment figures are coming down month by month. I have an unemployment unit bulletin which shows 19 changes. I draw attention to just one. It is estimated that the Government's new test of availability for work will in 12 months get rid of 95,000 people from the dole statistics; after two years 120,000 will disappear from the statistics. Those people will still exist after they have been harassed off the dole queue. They are still living human beings. No amount of fiddling with figures will remove the misery that is brought about when benefit is withdrawn.
I do not accept that anyone believes the Government's suspect figures. The figures are a joke. If I was marking work in a classroom and was presented with the Government's figures I would include the words "Must try harder." I do not believe that Conservative Members are convinced about the unemployment figures. One statistic within the Government's figures has not changed and every time Conservative Members consider that statistic, they should be ashamed. That statistic is the number of long-term jobless young. That number has remained untouched. There are still more than 1 million young people in that category. I challenge Conservative Members to say that I am wrong. Forty per cent. of the long-term unemployed in my constituency are young people and that represents nearly 2,000 young people.
Yesterday afternoon I watched "Weekend World". I hope that the Minister watched that programme as well. It dealt specifically with the young unemployed. An ex-Tory Member of Parliament introduced the programme and referred to how this under-class was forging a new culture with values set apart from the rest of us. They no longer forge the links that will bind them to our society, such as buying a house or owning a car or beginning family life as we know it; they are totally excluded from doing so because of their jobless status. They do not have any stake in our society and therefore they see no reason to abide by rules in a society which rejects them.
In the programme young men and women spoke openly about robbing replacing buying. It was even more worrying that older people condoned that attitude. Those older people had been living on benefit and had direct experience of eking out a desperate level of existence. Their message on behalf of the young was clear: if millions of people are left jobless and in deprivation, the social fabric will be threatened. There will be no family bond because young men and women cannot afford to cohabit on benefits. The conclusion was that the Government's policies are eating into and destroying family life among that under-class.
Much has been written and spoken about the effects of unemployment on health. "The Health Divide" — an update of the Black report—was published earlier this year. The Government tried to suppress those reports. I am sure that hon. Members will remember the Black report published in 1980. The then Minister for Health published only 250 copies of the report because he did not want people to know what was happening. There was also a disgraceful episode this year when "The Health Divide" concluded that the health gap between those in work and 809 those out of work had widened. The press conference called to announce the publication of that report was cancelled. Indeed, an attempt was made to silence the people who had drawn it up. "The Health Divide" revealed the obscene difference between different classes in our society and the way in which the unemployed suffer.
Dr. David Player, the outgoing director general of the Health Education Council, stated in the foreword to "The Health Divide":Such iniquity is inexcusable in a democratic society which prides itself on being humane.Unemployment is literally killing people, as the report highlights.
I know that Conservative Members will refer to the so-called upturn in the economy. As I have said, the number of young long-term unemployed has not been touched. In the main, the new jobs have been for the well qualified and the experienced. There is not much opportunity for the young long-term unemployed unless they enter the low-paid, spiv economy. I have had some experience of those jobs in Halifax and I want to draw the attention of the House to two particular cases that I researched last week.
We have been told that the future for Halifax lies in tourism. However, I must tell hon. Members that the recorded rainfall in Halifax is very high and I advise them to bring umbrellas if they come. We are told that the future lies in tourism rather than in well paid, highly skilled jobs in machine tools and textiles. I investigated one job in tourism last week, which was paying 86p an hour. Another was paying £1 an hour for an 18-year-old working shifts and weekends in the kitchen of a hotel that had been given a handout of £150,000 to encourage tourism in the area. Those cases must be investigated. Young people are not being paid properly from the grants.
§ Mrs. Mahon
The local Member is objecting very loudly.
We have also been given the sop of business in the community to compensate for the loss of manufacturing in Halifax. Business in the community has worthy aims and if there was real investment—
§ Mr. Ian Bruce
Will the hon. Lady give way? Mrs. Mahon: No, I will not give way. Mr. Ian Brucerose—
§ Mrs. Mahon
Sit down. I said no.
Business in the community has been offered as a sop for real investment in manufacturing, which the Government have deliberately starved of investment. Business in the community would be welcome as the icing on the cake, but it will not be a panacea for the loss of 10,000 jobs in manufacturing. It is mainly about enhancing tourism and, by definition, that means low-paid, low-skilled jobs.
The future looks grim for manufacturing towns such as Halifax. Poor pay and poor conditions are on offer with the low-paid jobs. It is relevant to talk about low pay when we are discussing unemployment, especially in light of what my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) said about the enforcement of the new job training scheme. I want to draw attention to west Yorkshire, the region that I represent, and the way in which wages have fallen relative to the British average. The 810 region is now bottom of the pay league and I do not like the fact that Halifax is recorded at the bottom of the league. Just under one fifth of full-time male workers in the region are low-paid and that is double the figure in 1979. Some 60 per cent. of full-time women workers are low-paid and I believe that that is also double the 1979 figure. More than 80 per cent. of part-timers fall within the low-paid category and in my constituency part-time work is on the increase at the expense of full-time jobs.
In the Yorkshire and Humberside region there was a fall of 167,000 in jobs between 1979 and 1986. There has been an increase of 55,000 in part-timers. I concede that in the year ended December 1986 the number of jobs picked up a bit throughout the region. However, during the same period, there was an increase of 17,000 in the number of part-timers.
§ Mr. Ian Bruce
Is the hon. Lady familiar with the fact that in her constituency a company called Sinclair—run by Clive Sinclair—set up a factory which employed 250 people under the Labour Government? It was promised all sorts of grants by the Labour Government, but it took the Department of Trade and Industry a year to make a decision. It decided to turn the company down and 250 people were made redundant.
§ Mrs. Mahon
I want to draw the hon. Gentleman's attention to the fact that the Department of Trade and Industry has been messing about with another company seeking grants. That company has threatened to move to another town. I also draw his attention to the fact that under this Government we have lost assisted area status and we are now like the hole in the middle of the doughnut. We have also lost urban aid since the Government came to power. In return for the thousands of jobs that have been lost, we have Government schemes and low pay.
§ Mrs. Mahon
No, I want to carry on.
There are 2,500 people on training schemes in Halifax. More than 50 per cent. of those on youth training schemes in west Yorkshire do not progress to a job and 28 per cent. go back on the dole. We are living with the effects of this Government's policies. The young long-term unemployed have good reason to reject slave labour conditions. They should seriously question whether they should work from seven in the morning until seven in the evening on such allowances. I think that there would be something wrong with young people who did not object to such exploitation, and I am glad that such objections are being made.
Conservative Members have a choice. They can begin, even at this late stage, to reject the disastrous policies that have wiped out manufacturing in many parts of the country. Manufacturing is how the nation became great: it is how we earned our living in the world markets. We are now becoming the warehouse of the world, because the Government's policies are sucking in imports while our people languish on the dole. The Government are trying to batter unemployed people into submission by reducing benefits and conscripting them into schemes that will not lead anywhere—certainly not to jobs. That will breed a desperate sense of injustice and lead to a search for alternative forms of funding, such as a further explosion in crime.
The Government should be ashamed. They are the party of law and order, and they have presided over the 811 biggest explosion in crime since the war. They should be tackling the economy, and investing in manuacturing to create real jobs. The National Health Service is crying out for jobs, as my hon. Friend the Member for Sunderland, North (Mr. Clay) pointed out. The Government should put money back into the Health Service, and to ensure that there are enough nurses so that wards need not be closed, instead of trying to create another scheme that is all about controlling the young and keeping the dole figures down. They should be trying to destroy the seedbed of poverty, rather than increase it.
Conservative Members always use the argument that the taxpayer will have to pay. But the taxpayer is already paying — for more prisons and expensive punitive institutions to house the young. Society will pay dearly for ignoring a growing group who will undermine our way of life if they continue to be rejected. It is a moral affront deliberately to deny the principle of citizenship, which is to guarantee a certain minimum social position for everyone, including the under-class that we are creating.
The hardening of attitudes that I have observed since I became a Member of Parliament, and the law and order approach adopted by the Government towards the young unemployed, will simply breed a generation growing up to accept models of crime as the answer to the problem of survival. The unemployed are the victims of Thatcherite policies. The Prime Minister has no place for them, but the Government ignore them at their peril.
§ 6.2 pm
§ Mr. Anthony Coombs (Wyre Forest)
If any debate has demonstrated how out of touch, anachronistic and even other-worldly the Labour party has become, it is this one. No wonder Labour has not been able to win an election since 1974.
The motion is not a strategy for jobs; it is the economics of the dinosaur. For a start, it takes no account of the achievements of a competitive economy over the past seven years. There has been a drop of 480,000 in unemployment in the past year, and a record 24.3 million people are in work. There has been a drop in youth unemployment to less than the European average, and a record number of self-employed people and business starts. That must be evidence of a dynamic and responsive economy.
The Opposition not only ignore the results of surveys, both regional and national, which show an unparalleled optimism and enterprise in the economy. They ignore, consistently, the basic reality that applies whether a person lives in the west or the east, in an agrarian or industrial economy, or even—as Mr. Gorbachev is beginning to learn — in a Communist state. If we want to increase employment and improve standards of living, we must have profitable firms investing in products and services that are sold at a price and in a quantity that people want.
Worst of all, Labour Members' fetish with macroeconomic policy has blinded us too often in the past to the micro-economic steps that are necessary to improve the supply side of the economy, which in turn will improve jobs. Surely it should be as plain as a pikestaff to anyone but the most ideologically obtuse Member that state interference, central direction, high taxation, high borrowing and the general fiscal irresponsibility that we saw before 1979 produced nothing short of a disaster. Restrictive practices meant that productivity was going up at only two thirds of the OECD average. It is now rising 812 faster than anywhere in the world apart from Japan. Punitive taxation meant that the share of profits as a proportion of gross national product fell from 18 per cent. in 1966 to only 5 per cent. in 1979. It is now at its best level for 20 years.
Irresponsible borrowing by the Government —9 per cent. of gross domestic product in 1975—not only kept interest rates high, but ensured that the rate of return on investment in the United Kingdom was the lowest in the OECD countries. Probably most tragic of all for the unemployed, inflation not only damaged the long-term prospects of the unemployed, but ensured that unit labour costs rose nearly three times as fast as those of our competitors, and, as a result, damaged the competitiveness and job-creating potential of the economy.
Those policies were simply not sustainable. If we want to be the sick man of Europe, and if we want our economy to be run by the International Monetary Fund, we should follow precisely the interventionist policies put forward by the Labour party this afternoon. That lesson must be—and has been—learnt not only by Britain, but by the Russians, the Indians, the Mexicans and the French We want jobs to be created and productivity, investment, profits and competitiveness to be improved, and that is what is happening now in the British economy.
I do not rely only on figures. Let us take the west midlands, which was and still is the centre of Britain's manufacturing industry. As we all admit, it as much as anywhere else suffered from the restructuring that has happened throughout the world. During the past month, unemployment in Kidderminster, in my constituency, has fallen by nearly a tenth to the best level for 15 years. In the past two months, there have been 47 applications for industrial premises of 10,000 sq ft or more. The chamber of commerce recently carried out a survey, which was updated after 19 October. The survey found that of firms surveyed — they were the largest employers — no fewer that 87 per cent. expected to increase exports; 88 per cent. expected profits to increase or to remain the same, and half of them expectd them to increase; and, most important of all, 64 per cent. expected to increase their labour force in the next six months. Only 8 per cent. expected it to fall.
§ Ms. Short
There is no doubt that, because of a combination of schemes, a pre-election boom and other factors, there has been some improvement in the economy. However, in the core of Birmingham, six constituencies —300,000 people—are living with unemployment of 20 per cent. That is the scale of the problem. Since 1979, the hon. Gentleman's Government have destroyed 2 million manufacturing jobs, and we are nowhere near replacing them. Perhaps the hon. Gentleman is luckier in Kidderminster, but in the centre of the west midlands the position is still very bad.
§ Mr. Coombs
The hon. lady will be pleased to know that I shall be dealing with Birmingham next.
The survey of Birmingham and the west midlands by the chamber of commerce shows precisely the same trends. Figures produced by Birmingham city council show that unemployment in the west midlands fell last year by 60,000, which is nearly a sixth, and that the number of people in employment in the west midlands rose by 14,000 in the first half of the year. Most significant of all, although 7,000 of that increase were in service industries, 7,000 were in manufacturing industry. That optimism is 813 reflected on all sides in the west midlands. The convention centre, which is funded partly by the public sector, partly by the private sector and partly by European funds, represents £110 million of investment in a so-called depressed area, and it will create 2,000 jobs.
§ Mr. Coombs
I am very pleased to hear it.
The economic development association of east Birmingham — a venture created by the chamber of commerce, the CBI and the city council—will produce jobs. Last week we heard that the London—Edinburgh trust will spend £250 million in the centre of Birmingham backing its judgment of the economic health of the region.
This employment growth is dependent not on pumppriming—it is not at all dependent on restrictions on the working week—or public ownership but on improved competitiveness, increasing investment, increasing profits and increasing confidence, which is deep rooted and will last. Yesterday, on television John Egan predicted that profits and output of Jaguar would increase this year, next year and in 1989. The European economic assessment predicts that growth in the United Kingdom will be 2.6 per cent. next year, which is double the European average, and this is the seventh successive year that that has happened.
That is a picture of confidence and progress in employment creation. As the Minister said, there is no room for complacency and there are three sectors in which we should be doing more. There is no doubt that through their youth and adult training programme, which costs £3,100 million per year, the Government are doing an unprecedented amount. The private sector is not investing enough in training. It invests £2,000 million per year, which represents 0.15 per cent. of turnover, compared with 2 per cent. or 3 per cent. in West Germany and Japan respectively.
I am certain that the local employment network schemes that the Government have recently set up will have a beneficial effect, but as the recent consultative document on vocational and educational training shows, some small and medium-sized firms find the labyrinth of different funding and types of scheme difficult to penetrate. We must improve access for them in that regard.
With regard to further and higher education, the Government have an excellent record in improving access to higher education as a percentage of the age group. However, it is still too difficult for people who want to retrain throughout their careers. It has been estimated by the OECD that over the next 20 or 25 years such will be the pace of technological change that people will have to change significantly the way in which they do their jobs three or four times throughout their working lives.
All firms in the west midlands are unanimous in believing that we must continue to cut taxation: first, because it is an engine of growth; secondly, because it gives an incentive for employers to give jobs through higher consumption and higher spending — national insurance contributions should be reduced to facilitate that; thirdly, because it provides an incentive to work for staff who otherwise would not have one.
I recently opened an employment centre in my constituency and a consultant there said that 50 per cent. 814 of people would be £10 better off per week in work rather than out of it—having taken all benefits into account—yet they will not accept the jobs that are offered to them.
We should reduce taxes at the top end so that revenues increase. People in the top 5 per cent. of the population will then spend a higher proportion of the tax take than if they were taxed at very high levels.
In taking these measures, we shall continue to restore the enterprise economy for the benefit of all sections of society. Equally, as sure as God made little apples, if we accept the Labour party's strategy we shall be walking backwards into the future and we shall condemn Britain to the low living standards and high unemployment levels that appertained and will appertain in east European countries.
§ Mr. Matthew Taylor (Truro)
Nobody is more pleased than I when men and women find work. However, there are still many reservations in the Liberal party about the figures that the Minister has presented. They will continue until the Government stop economising with the truth and include the estimated 826,000 economically active job seekers who are ineligible for benefit. The Government should include those who have been switched to invalidity and sickness benefits, or the older unemployed who receive the long-term rate of supplementary benefit, but who would still like to work.
Since 1982 the unemployment figures have become less representative of those who are unemployed. Thanks to the restart scheme there has been a dramatic increase in the number of claimants who have switched to sickness, invalidity and long-term rate benefits. It is interesting that the Minister has today announced a new development of restart—a questionnaire to check availability for work. We all know about the effects of that infamous availability for work test. It has reduced the number of claimants entering the register, not always because they are not looking for work but because they cannot understand the forms, cannot fill them in or because of the confusion that has arisen from them. The people who are likely to be excluded are those who find it most difficult to find work but who are most in need of help.
When all those points are taken into account, the restart and availability test has resulted, according to the unemployment unit, in approximately 10,150 unemployed people per month disappearing from the figures.
But there is no value in simply bandying unemployment figures. The debate is taking place at the end of 1987, as our thoughts are turning towards 1988. There could not be a better moment to reassess the economy and the unemployment position, not least because the Chancellor is beginning to consider his next Budget.
The Sunday Times yesterday suggested that there is tremendous tension in the Treasury over what to do. One view is in favour of massive tax cuts and reform, but, according to the Sunday Times, senior Treasury officials believe that tax reduction must be accompanied by substantial cuts in Government borrowing if they are not to lead to stronger inflationary pressures and a bigger balance of payments deficit. In other words, the Chancellor is feeding imports and risking inflation in a consumer boom that is still doing too little to tackle the basic needs of the economy for the next century.
Nor is our continuing growth certain, despite the Minister describing unemployment as being on an 815 established downward trend. The Chancellor predicts 2.5 per cent., growth for next year, but that is open to doubt, given the continuing stock market instability, a still limp United States policy on its budget-trade deficit—witness the most recent figures — and a continuing lack of international co-operation.
Even if growth reaches 2.5 per cent. it is most uncertain that current reductions in unemployment figures will be maintained. The National Institute of Economic and Social Research predicts that unemployment will decline only fractionally by the end of 1988, assuming a 2–5 per cent. growth rate. According to the National Institute Economic Review, which predicted a growth in output of 2.4 per cent. for next year, that rate of growth will slow to 1.5 per cent. in the last three months, with the same sluggish pace maintained in 1989.
Given that prediction, not only will the fall in unemployment slow next year, but, without new initiatives, the number of jobless will begin to rise again.
We know that tax cuts and unemployment affect some rather differently than others.
The Minister mentioned employment figures and excessive wage growth. Perhaps hon. Members will forgive me for talking about my part of the country. Cornwall is always included with Devon when the unemployment figures are produced. Therefore, Cornwall is seen as an area of prosperity. A closer look shows how unrepresentative that can be. For example, the gross domestic product per person in Cornwall is only half of that in London and 60 per cent. of that in Devon. We are thankful that employment in Cornwall is looking better but it still comes high in the poverty league. In a recent report of the Low Pay Unit one of its wages rights advisers said:I was stunned at how low paid people in Cornwall are. We knew they were not well paid down there, particularly young workers. But we have had reports from a number of people working in garages for really low money, and from one woman who was getting just 50 pence an hour. The situation in Cornwall stands out quite a way.Indeed it does. The fact is that 40 per cent. of workers in Cornwall are low-paid compared to 25 per cent. elsewhere in Britain.
Too many of the jobs created in Cornwall remain seasonal or part-time. They are not bread-winning jobs but follow the national trend of an increase in part-time work. For example, Tesco's in Truro closed down one site to move to another and the jobs changed overnight. They changed through sackings and then re-employment from full-time bread-winning jobs to part-time low-wage shop work. It often employed young people working part-time for a short period to earn pin money. That is a tragedy. It is reflected in the national figures. Employment in agriculture is down, as is employment in energy and water supply. Employment in manufacturing reduced by a full 130,000 between March 1986 and 1987. Employment in construction is up slightly but the real boom is in service industries with a 351,000 increase. The jobs created are not bread-winning jobs. Even in my county where pay is 17 per cent. below the national average the jobs do not match up to that.
Too little account is taken of particular needs. A good example is the fishing industry, where Government policy of conservation too often penalises local fishermen. They cannot sail away as the others do who arrive, fish out the quota and then leave.
There are possible solutions to that. We should be investing in long-term prospects for full-time, well-paid 816 employment and concentrating on the role of the Government in areas such as infrastructure. We should enable local government to take more local initiatives and encourage manufacturers and service industries to move into their areas and we should help local small businesses to set up and grow. That is why the development agencies are so important and why they must continue and their role be enhanced. New agencies should be financed in more of the English regions. Not all poverty — the Government should be reminded of this on every possible occasion — takes place in the inner cities where the schemes are being expanded. Many people in my area feel that once again they have been forgotten by Government initiatives and policy.
It is possible to create long-term jobs by reducing costs caused by poor infrastructure. We should increase skills and increase value-added, particularly through local manufacturing and an increase in quality. It is possible to reduce those costs by concentrating Government effort on infrastructure in roads, rail, housing and advanced digital communication, none of which need add to the import boom. By concentrating on these things we can avoid the problems suffered by customers as well as businesses in such areas.
We need to cut back on the red tape and the bureaucracy where appropriate, particularly for small busineses. That can be done by decreasing the national insurance contribution by 25 per cent. for employers in assisted areas and areas of high unemployment. I hope — this is even more important — to see an industrial version of the agricultural advisory service for small businesses, particularly in areas affecting information, legal problems and accounting.
§ Mr. Patrick McLoughlin (Derbyshire, West)
I am interested in what the hon. Gentleman said about cutting red tape. It is very easy for Opposition Members to say such things. Will he give us an example of some of the red tape and forms he would like to see cut out? My hon. Friend the Minister and his predecessor have made great efforts to reduce the burden of form-filling for small businesses. Will the hon. Gentleman tell us to which forms he is referring?
§ Mr. Taylor
One thing that could be done immediately would be to increase the VAT threshold. That. would remove a great deal of red tape from many small businesses just starting up.
None of the initiatives I have mentioned will work unless we increase skills. It is common knowledge that the United Kingdom has fewer graduates than its many competitors and we do not have the know-how in industrial skills. The youth training scheme will be a success only if we are able to enhance it in terms of quality and choice. Forcing young people on to courses they do not want does not help them and it will not help the other people who are willing participants and want to make the best possible use of the course. That can be seen in schools with the problem of 16-year-olds who do not want to be on certain courses but are forced to be there and who disrupt the course for others. That should not be inflicted on YTS trainees. But at least the youth training scheme is, at last, being improved in terms of quality and job training.
We need training investment schemes. Companies who invest properly in training should be helped. To provide variety we should encourage companies to make that vital 817 investment in our young people. It is sad that as the number of unemployed people decreases through statistical juggling a real effort to decrease unemployment through expanding further and higher education is not being made as it should. Instead, we are seeing a division between the privileged and the rest. We must see an increase in the numbers in further and higher education if we are to invest in the future. We should double the number by the year 2000 and beyond.
As the infrastructure is put in place and the skills increased, we can concentrate on increasing value added and quality. It makes no sense in Cornwall to export our raw fish and vegetables to Brittany for processing. We should be doing that ourselves and keeping the benefits of doing so. Indeed, Brittany's example is valuable. We recently held a conference, "Cornwall — The Way Ahead", in which we were told about the success of Brittany. I am delighted that English China Clays, local authorities and many other bodies are co-operating to take that initiative forward.
The conference looked at ways of increasing our prosperity and at developing more and better jobs. The experience of Britanny was our model for discussion. It had a free rein from the French Government to develop local initiative. Local power was decentralised. It was given the basic infrastructure investment on which to build. At that conference all views from across the political spectrum were represented and there was a common theme. First, there is the need to develop infrastructure, particularly the A30 through Cornwall. That applies to so many other areas in the country. Secondly, we discussed skills with science parks proposed for St. Austell drawing on the china clay industry and for Camborne drawing on the school of mines. It is that development of skills and the jobs that come with them that is vital across the country, particularly in areas so often written off as peripheral and which suffer high unemployment. Above all, there was an emphasis on the ability to take local initiatives and develop quality and value added.
All sides of the conference agreed on the need to draw together clear ideas and opportunities to a single development agency, large enough to attract support but small enough and decentralised enough to respond to local needs. That is why I believe that the model of development agencies throughout Britain is vital to our economic development. Simply singling out inner cities as flavour of the month will not do.
The speaker from Brittany who addressed us recommended that we draw up a short list of our needs, a few brief points out of the many hundreds we could think of that Cornwall should aim to achieve. I believe that the Government would do well to take on board a similar principle, especially the Chancellor as he looks towards his next Budget. First, we should tackle infrastructure as the main priority of central Government. It is the basis of a competitive economy and is a more adequate response to balance of payments fears than tax cuts will ever be. Secondly, we should expand education and quality of training alongside that so that we are not neglecting the next generation and the generation after that who will have to pay the bill for the Government's neglect. The Government are spending the revenues from North sea oil and privatisation. Those revenues will not be there for future generations to use. They should be used to rebuild 818 a fractured infrastructure and a decimated manufacturing base. Thirdly, we should free local people to take more local initiatives through decentralised government and independent development agencies.
That will give a sustainable increase in employment in all the regions which tax cuts and a consumer boom will not. They will be a far better use of the revenues which we have now but may not have in the future. The Chancellor should grasp the opportunity before we slide, once again, into the decline which is already staring at us on the near horizon.
§ Mr. James Cran (Beverley)
My speech will be much shorter than normal because of the length of some of the speeches through which I have had to sit and which have prevented many Conservative Members from speaking. Although it will not come as a surprise to the hon. Member for Sunderland, North (Mr. Clay) that I disagree with his motion, I should like to congratulate him, as would most Conservative Members, on having taken the trouble and the time of the House to underline the "devastating effect" of unemployment. I do not disagree with him on that point. The hon. Member for Halifax (Mrs. Mahon) said that to Conservative Members unemployment was just a statistic. That was offensive and it is not the case.
I am not, as some Labour Members would say, some southern banker who has not seen unemployment. I know Sunderland, North rather well because I operated as a CBI director there. I well remember at least 20 managing directors in the constituency who said in conversation to me, "If only my work force would try to moderate their pay claims, I would be able to preserve jobs in my company." [Interruption.] I got that from the horse's mouth, and the Opposition did not. If that is what 20 managing directors say, perhaps the unemployment about which the hon. Member for Sunderland, North complained would have been lower.
I direct the attention of the hon. Member for Sunderland, North to Consett. I saw what happened when the ironworks closed and, of course, that was devastating for Consett's economy. Labour Members who pontificate on this subject should visit Consett. I should be the last person to say that it was perfect, but the enterprise now being developed there would never have been believed in 1978. It is outstanding. I know the west midlands at first hand. The absence of regional policy devastated that region and created unemployment. So there are two sides to the coin. I heard about neither from the Opposition.
Another point was noticeable by its absence in Labour Members' comments. If I were trying to adduce one reason for the unemployment in the northern region and in Sunderland, North, it would be the contribution of the work force and the trade unions. I saw the 20, 30 and even— I know that the Opposition do not like to hear this, but they will — 40 per cent. wage claims submitted to companies in the northern region and in Sunderland, North. As we have been told, they were non-competitive companies and could not afford to meet such claims. But would the Opposition listen to them? No, they would not; nor did the work force. That is why unemployment increased until soon after the Conservative Government took power.
I do not blame the work force for what happened. My view is — [Interruption.] If the hon. Member for Blyth Valley (Mr. Campbell) would listen, he might, for once, 819 learn something. Perhaps he would like to make a point in his own time? No. Weak management contributed more to the downfall of some companies than the work forces.
§ Mr. Cran
I shall not. I gave the hon. Member for Blyth Valley (Mr. Campbell) the opportunity to intervene, but he did not take it.
There were far too many managers—[Interruption.] I am hitting home on a few points, which is why the Opposition are getting excited. Far too many managers in the northern region and in Sunderland, North adopted the "Easy live and quick die" philosophy of Sir Walter Scott. They said, "We shall not fight the excessive pay increases this year because there are too many other things to do. We shall fight them next year." But next year never came, until the Conservatives were elected in 1979. That is when a Chancellor, a Prime Minister and a Government made the industrial community and the work force address the economic facts of life.
It is clear that the Opposition have not done their homework. If they had, they would see that unit labour costs in the United Kingdom were sky-high, out of all proportion to those of any of our major competitors. Against such a background, can one wonder why unemployment occurred? I have given the reasons.
§ Mr. McLoughlin
We have heard all the talk from the Opposition about unemployment, but is it not a fact that no Labour Government have ever seen unemployment fall? They were all elected on a ticket of reducing unemployment, yet all left office with higher unemployment than when they entered it.
§ Mr. Cran
I have given way already. I want to continue my speech, and other hon. Members want to contribute in the debate. Perhaps I shall give way once in Standing Committee on the Employment Bill.
Our international competitive position was disastrous, and the Labour Government's actions had a great deal to do with that. As has been made clear, the position now has been reversed. The environment is totally different. I see moderate trade unions, for which I and the industrial community are grateful. I see a hard-working and reasonable work force.
§ Mr. Cran
It is not insulting; it is a fact. If the hon. Lady cannot recognise facts, that is her problem.
I see also far tougher management than I have seen before in my life. Those factors and Government policy have resulted in what the Opposition do not like to see —an economic miracle, the like of which I have never before seen in my lifetime — [Interruption.] The Opposition will not put me off my stride. Northern Members of Parliament are numbered not just among the Opposition. I too am a northern Member and I find that in the past year unemployment in every constituency on Humberside has fallen, in some dramatically. If I had time, I should take another time phase to show what is happening. If the Opposition would like to meet me outside, I shall show them the statistics.
820 The Opposition should remember that Humberside, where I operate, is also in the north of England, and industry there is extremely bullish. If only the Opposition, like the Government, would leave industry alone to get on with its job, I guarantee that it would continue to create the resources which all of us would like to distribute. Leave industry alone and it will do the work. That is what the Government are doing.
There are four ways in which we could help to continue to alleviate unemployment. First, I believe passionately that regional policy has failed the regions of the United Kingdom. Essentially, all that it has done is to provide a temporary jobs lifeboat. Over the past 20 or 30 years, no real enterprise culture has grown up in the regions. When a recession comes along, all the branch factories close down and unemployment is created. I hope that the Government are intent on doing what I understand them to say that they will do, which is to take a radical view of regional policy.
Secondly, we need to accelerate the deregulation of small businesses. I feel strongly that small businesses would employ far more people if they did not have e to put up with the burden of endless regulations, relating not only to people but, I regret to say, to the statistics for which the Government continue to ask.
Thirdly, I echo the point made by my hon. Friend the Member for Wyre Forest (Mr. Coombs) about employers taking a bigger role in training. I would go so far as to say that, given present levels of corporate profitability, it is quite obscene that so few companies are prepared to put their hands in their pockets and pay for their own training. Too many companies are willing to poach from some company up the road. That must end, and I hope that a strong message will go out from the House of Commons to that effect.
Finally, I see dangerous signs for unit labour costs in the United Kingdom. Unless we contain our unit labour costs, unemployment will increase again to the levels that we have experienced—as sure as night follows day and spring follows winter. I hope that the Government will send out a strong message to the CBI, the chambers of commerce and the TUC to contain, and to continue to contain, unit labour costs.
§ Mr. Eric S. Heffer (Liverpool, Walton)
First, I congratulate my hon. Friend the Member for Sunderland, North (Mr. Clay) on tabling this motion. Incidentally, I regret that a motion of this kind was not tabled by our Front Bench; it should have been. The motion clearly sums up the character of unemployment and the way in which we should deal with it. During our debates on unemployment, I hear much argument about the so-called nitty-gritty—about immediate questions such as whether we should have schemes to take youngsters off the dole —but I rarely hear about the nature of the system that creates unemployment. My hon. Friend has drawn attention to that very subject in his motion.
I do not argue with hon. Members who say that unemployment is bound to go down for a period. Of course it will go down—just as it will rise again later as long as this system is in existence. The very nature of the economic system under which we live leads to booms and slumps; after a slump there is inevitably another boom. [Interruption.] If the hon. Member for Dorset, South (Mr. Bruce) would keep his mouth shut for a few moments, he 821 might learn something — as the hon. Member for Beverley (Mr. Cran) said to my hon. Friend the Member for Blyth Valley (Mr. Campbell) a few moments ago.
As a young working man studying economics in the evenings, I read Adam Smith and Ricardo — all the bourgeois economists — as well as Marx and others. Having studied the various economic systems, I concluded that the capitalist system was bound to lead to unemployment and poverty for masses of workers and that it was bound to lead to some people getting extremely rich. In this society, the rich have got richer and the poor are getting poorer. There is no question about that at all. No matter how Conservative Members argue, that is what is happening, and for once the statistics prove it beyond doubt.
I have heard today the argument that all that is wrong is that the workers have demanded high wages. I heard that when I was an apprentice joiner at 14 years of age. I remember hearing that the slump of those days was the fault of the workers who had demanded higher wages and better conditions of employment and that if they had accepted low wages, everything would have been all right and we would have had full employment. That was in the 1930s, and matters improved only relatively. It was the war, and nothing else but the war, that got rid of unemployment. I will tell hon. Members a story that amazed me at the time. [Interruption.] Conservative Members had better remember that during the war years some of us fought for a different type of society and for full employment. That was what we demanded when we came back and we began to get it under the Labour Government. When I came back—
§ Mr. Heffer
The hon. Gentleman had better behave himself. I should like to say, Madam Deputy Speaker, that I have never seen so much hooliganism in the House as has come from young Conservative Members since the last election. It is absolutely disgraceful. The reason for that is that they are now ideologically so sectarian that they cannot understand that there is a better society worth working for—rather than the society being bolstered by the right hon. Member for Finchley (Mrs. Thatcher).
§ Mr. Heffer
No, I will not give way. I know that the hon. Gentleman does not like it, but, if the cap fits, he must wear it.
Let me explain something that I learnt when I came back from the war. I was a building worker, so I know about unemployment and work. I discovered that a labourer, who had been unemployed for nine years, never stopped working. He would work through his break and his lunch hour. He worked the whole time. When I said to him, "You don't have to work like a madman", he said, "I was out of work for nine years. 1 walked up and down this country seeking employment and could not get a job. Now that I am back out of the forces and I have a job, I intend to keep it." Conservative Members do not seem to understand that that is the nature of our capitalist society.
I am not going to make a long speech. In all the arguments that we hear about the immediate action that 822 the Government can take, we are playing with the real issue — whether we are going to allow this type of society to remain and continue with an economic system that will create unemployment, even though there will be booms at times. That is the issue. If Conservative Members are serious about unemployment and are as worried about it as we are, they must bear that in mind.
I do not deny that some Conservative Members are worried about unemployment in their constituencies. The great Macmillan, who wrote "The Middle Way", accepted the concepts of Keynes because he was so concerned about unemployment and realised that there had to be Government intervention in economic affairs. Conservative Members today have even forgotten what Macmillan said. His ideas have been thrown out the window and described as creeping Socialism. In fact, they were an attempt to bring decent conditions of employment and a decent society to this country. If Conservative Members are seriously concerned about unemployment, let them give the matter a little more deep thought than they have so far.
The growth of technology clearly means that fewer workers will be employed. If increased wealth is then produced, the question that immediately arises is how to redistribute that wealth and ensure that more people are employed. That can be achieved only by reorganising society in an intelligent manner, not by putting profit before the interests of the mass of the people. [HON. MEMBERS: "Like Russia."] I have never been an ardent supporter of the internal system in the Soviet Union, but we could learn an important lesson from the Russians. There has not been a rise in the standard of living for all the people there, because in my opinion they have not had sufficient democracy; but democracy, combined with their planning, could have led to a decent society. What is wrong in the Soviet Union is not the planning, but the lack of democracy. Our democracy, with the right kind of democratic planning, could bring about full employment. [Interruption.] Conservative Members may laugh, but, unless we take the action proposed in my hon. Friend's motion, unemployment will be even worse that it is now. There is one single reason for that. The stock market has begun to crash. That is a sign of the nature of the crisis in the system—a crisis that will not be overcome as simply as some people suppose.
The answer is what my hon. Friend the Member for Sunderland, North has proposed: a genuine, democratic, Socialist answer. That is what I believe in and that is what my forefathers in the movement believed in. That is the answer to unemployment, poverty and misery. It is far better to fight for that solution than for the selfishness represented by the Conservative party.
§ Mr. David Martin (Portsmouth, South)
I in no way wish to impugn the sincerity and passion of the hon. Member for Liverpool, Walton (Mr. Heffer), but I disagree fundamentally with a great deal of what he has said. His prescription is that Socialism has never been tried in this country and that no Government have ever tried the system that he believes would work.
The trouble with the hon. Gentleman's solution, as with the motion proposed by his hon. Friend the Member for Sunderland, North (Mr. Clay), is that it is a Utopian dream of human nature which simply does not exist. The Opposition have made many indictments of the 823 Government's actions, as though unemployment and all the evils of society were the fault of the Government, but what they are really indicting is human nature. Their Utopian system reminds me of the words of Colin Francis:
The hon. Member for Walton will never see a society like that however long he lives because no one, least of all a Conservative Government, will implement the prescription that he proposes. Moreover, no Labour Government will have the chance to do so because since 1974 the electorate has consistently rejected any such notion and will continue to do so for as long as the prescription set out in the motion is on offer.
- "I am going where there are rivers of wine
- The mountains bread and honey
- Where kings and queens do mind the swine
- And the poor have all the money."
I wish to contribute something more positive than the litany of woe that we have heard from the Opposition, who have concentrated on industrial decline and the loss of certain markets and certain types of job. The ceaseless talk about the slum economy, as described by the hon. Member for Birmingham, Ladywood (Ms. Short) and others, means that new opportunities for economic expansion and employment are likely to be missed.
My own constituency has experience of this. Many jobs in Portsmouth disappeared when the dockyard became Her Majesty's naval base. Instead of throwing up their hands in horror like the hon. Member for Halifax (Mrs. Mahon) in an attitude of doom and gloom, the people of Portsmouth thought about what could be done to attract new jobs and to encourage people to retrain in new skills. Thousands of people who thought that they might never work again have found new employment in and around the area.
§ Mr. Ian Bruce
I hope that my hon. Friend will make it clear that the hon. Member for Halifax (Mrs. Mahon) is in no way typical of the people of Halifax. They are hard-working, industrious people and have reduced unemployment in the area to under 12 per cent. What she says in the House —
§ Madam Deputy Speaker (Miss Betty Boothroyd)
Order. The hon. Member is making a speech, not an intervention. Mr. Martin.
§ Mr. Martin
I shall not follow my hon. Friend down that path, as I wish the enterprise and initiative of the people of Portsmouth to have a hearing in the House as well.
The Opposition spoke of the evils of international business, but this country did not begin the trend to internationalisation of business or the change in the ratio between manufacturing and service jobs. We could not possibly stand against the international realities that gave rise to those features. The hon. Member for Sunderland, North produced the bogies of international financiers and businesses which provide jobs and then suddenly withdraw. The number of jobs provided in this country by those who have been encouraged to come here by increasingly free markets and free trade is legion. The habits and conditions of employment that they have brought have created many jobs in my constituency and in the constituencies of Labour as well as Conservative Members.
It is true that the proportion of jobs in manufacturing industry has fallen while the proportion of jobs in the 824 service industries has risen, but the same has been true in Germany, where the proportion has fallen from 17 per cent. to 13 per cent.—
§ Question, That the Question be now put, put and agreed to.
§ Question put accordingly:—
§ The House divided: Ayes 173, Noes 308.827
|Division No. 109]||[6.58 pm|
|Abbott, Ms Diane||George, Bruce|
|Adams, Allen (Paisley N)||Godman, Dr Norman A.|
|Allen, Graham||Golding, Mrs Llin|
|Anderson, Donald||Gordon, Ms Mildred|
|Archer, Rt Hon Peter||Gould, Bryan|
|Armstrong, Ms Hilary||Grant, Bernie (Tottenham)|
|Ashley, Rt Hon Jack||Griffiths, Nigel (Edinburgh S)|
|Ashton, Joe||Grocott, Bruce|
|Banks, Tony (Newham NW)||Hardy, Peter|
|Barnes, Harry (Derbyshire NE)||Haynes, Frank|
|Battle, John||Heffer, Eric S.|
|Beckett, Margaret||Hinchliffe, David|
|Benn, Rt Hon Tony||Hogg, N. (C'nauld & Kilsyth)|
|Bennett, A. F. (D'nt'n & R'dish)||Home Robertson, John|
|Bermingham, Gerald||Howarth, George (Knowsley N)|
|Boateng, Paul||Hoyle, Doug|
|Bradley, Keith||Hughes, John (Coventry NE)|
|Bray, Dr Jeremy||Hughes, Roy (Newport E)|
|Brown, Nicholas (Newcastle E)||Hughes, Sean (Knowsley S)|
|Buchan, Norman||Ingram, Adam|
|Caborn, Richard||Janner, Greville|
|Campbell, Ron (Blyth Valley)||John, Brynmor|
|Campbell-Savours, D. N.||Jones, Barry (Alyn & Deeside)|
|Clark, Dr David (S Shields)||Kinnock, Rt Hon Neil|
|Clarke, Tom (Monklands W)||Lambie, David|
|Clay, Bob||Lamond, James|
|Clelland, David||Leighton, Ron|
|Clwyd, Mrs Ann||Lestor, Miss Joan (Eccles)|
|Coleman, Donald||Litherland, Robert|
|Cook, Frank (Stockton N)||Livingstone, Ken|
|Corbett, Robin||Lofthouse, Geoffrey|
|Corbyn, Jeremy||McAllion, John|
|Cousins, Jim||McAvoy, Tom|
|Cox, Tom||McCartney, Ian|
|Cryer, Bob||Macdonald, Calum|
|Cummings, J.||McFall, John|
|Cunliffe, Lawrence||McKay, Allen (Penistone)|
|Cunningham, Dr John||McLeish, Henry|
|Darling, Alastair||McWilliam, John|
|Davies, Rt Hon Denzil (Llanelli)||Madden, Max|
|Davies, Ron (Caerphilly)||Mahon, Mrs Alice|
|Davis, Terry (B'ham Hodge H'I)||Marek, Dr John|
|Dewar, Donald||Marshall, David (Shettleston)|
|Dixon, Don||Marshall, Jim (Leicester S)|
|Dobson, Frank||Martlew, Eric|
|Doran, Frank||Meacher, Michael|
|Douglas, Dick||Meale, Alan|
|Dunnachie, James||Michael, Alun|
|Dunwoody, Hon Mrs Gwyneth||Michie, Bill (Sheffield Heeley)|
|Eadie, Alexander||Millan, Rt Hon Bruce|
|Eastham, Ken||Mitchell, Austin (G't Grimsby)|
|Evans, John (St Helens N)||Moonie, Dr Lewis|
|Ewing, Harry (Falkirk E)||Morley, Elliott|
|Ewing, Mrs Margaret (Moray)||Morris, Rt Hon A (W'shawe)|
|Fatchett, Derek||Morris, Rt Hon J (Aberavon)|
|Field, Frank (Birkenhead)||Mowlam, Mrs Marjorie|
|Fields, Terry (L'pool B G'n)||Mullin, Chris|
|Fisher, Mark||Murphy, Paul|
|Flannery, Martin||Nellist, Dave|
|Flynn, Paul||O'Neill, Martin|
|Foster, Derek||Parry, Robert|
|Fyfe, Mrs Maria||Pendry, Tom|
|Galbraith, Samuel||Pike. Peter|
|Garrett, John (Norwich South)||Powell, Ray (Ogmore)|
|Garrett, Ted (Wallsend)||Prescott, John|
|Primarolo, Ms Dawn||Stott, Roger|
|Radice, Giles||Strang, Gavin|
|Randall, Stuart||Taylor, Mrs Ann (Dewsbury)|
|Redmond, Martin||Thomas, Dafydd Elis|
|Reid, John||Thompson, Jack (Wansbeck)|
|Roberts, Allan (Bootle)||Turner, Dennis|
|Robinson, Geoffrey||Wall, Pat|
|Rogers, Allan||Walley, Ms Joan|
|Rooker, Jeff||Wardell, Gareth (Gower)|
|Ross, Ernie (Dundee W)||Wareing, Robert N.|
|Rowlands, Ted||Welsh, Andrew (Angus E)|
|Ruddock, Ms Joan||Welsh, Michael (Doncaster N)|
|Sedgemore, Brian||Wigley, Dafydd|
|Sheerman, Barry||Williams, Rt Hon A. J.|
|Sheldon, Rt Hon Robert||Williams, Alan W. (Carm'then)|
|Shore, Rt Hon Peter||Winnick, David|
|Short, Clare||Wise, Mrs Audrey|
|Skinner, Dennis||Worthington, Anthony|
|Smith, Andrew (Oxford E)||Young, David (Bolton SE)|
|Smith, C. (Isl'ton & F'bury)|
|Snape, Peter||Tellers for the Ayes:|
|Soley, Clive||Mr. Harry Cohen and|
|Spearing, Nigel||Mr. Eddie Loyden.|
|Adley, Robert||Clark, Hon Alan (Plym'th S'n)|
|Alison, Rt Hon Michael||Clark, Dr Michael (Rochford)|
|Allason, Rupert||Clark, Sir W. (Croydon S)|
|Alton, David||Clarke, Rt Hon K. (Rushcliffe)|
|Amess, David||Coombs, Anthony (Wyre F'rest)|
|Amos, Alan||Coombs, Simon (Swindon)|
|Arbuthnot, James||Cope, John|
|Arnold, Jacques (Gravesham)||Cormack, Patrick|
|Aspinwall, Jack||Couchman, James|
|Atkins, Robert||Cran, James|
|Atkinson, David||Critchley, Julian|
|Baker, Rt Hon K. (Mole Valley)||Currie, Mrs Edwina|
|Baker, Nicholas (Dorset N)||Davies, Q. (Stamf'd & Spald'g)|
|Banks, Robert (Harrogate)||Davis, David (Boothferry)|
|Batiste, Spencer||Day, Stephen|
|Beaumont-Dark, Anthony||Devlin, Tim|
|Bendall, Vivian||Dickens, Geoffrey|
|Bennett, Nicholas (Pembroke)||Dicks, Terry|
|Bevan, David Gilroy||Dorrell, Stephen|
|Biggs-Davison, Sir John||Douglas-Hamilton, Lord James|
|Blaker, Rt Hon Sir Peter||Dover, Den|
|Bonsor, Sir Nicholas||Dunn, Bob|
|Boswell, Tim||Emery, Sir Peter|
|Bottomley, Peter||Evans, David (Welwyn Hatf'd)|
|Bottomley, Mrs Virginia||Evennett, David|
|Bowden, A (Brighton K'pto'n)||Fallon, Michael|
|Bowden, Gerald (Dulwich)||Farr, Sir John|
|Bowis, John||Fenner, Dame Peggy|
|Boyson, Rt Hon Dr Sir Rhodes||Finsberg, Sir Geoffrey|
|Braine, Rt Hon Sir Bernard||Fookes, Miss Janet|
|Brandon-Bravo, Martin||Forman, Nigel|
|Brazier, Julian||Forth, Eric|
|Bright, Graham||Fowler, Rt Hon Norman|
|Brittan, Rt Hon Leon||Fox, Sir Marcus|
|Brooke, Hon Peter||Freeman, Roger|
|Brown, Michael (Brigg & Cl't's)||French, Douglas|
|Browne, John (Winchester)||Gale, Roger|
|Bruce, Ian (Dorset South)||Gardiner, George|
|Buchanan-Smith, Rt Hon Alick||Gill, Christopher|
|Budgen, Nicholas||Glyn, Dr Alan|
|Burns, Simon||Goodhart, Sir Philip|
|Burt, Alistair||Goodlad, Alastair|
|Butcher, John||Goodson-Wickes, Dr Charles|
|Butler, Chris||Gorman, Mrs Teresa|
|Butterfill, John||Gorst, John|
|Carlisle, John, (Luton N)||Gow, Ian|
|Carrington, Matthew||Gower, Sir Raymond|
|Carttiss, Michael||Grant, Sir Anthony (CambsSW)|
|Cartwright, John||Greenway, Harry (Ealing N)|
|Cash, William||Greenway, John (Rydale)|
|Channon, Rt Hon Paul||Gregory, Conal|
|Chapman, Sydney||Griffiths, Sir Eldon (Bury St E')|
|Chope, Christopher||Griffiths, Peter (Portsmouth N)|
|Churchill, Mr||Grist, Ian|
|Ground, Patrick||Meyer, Sir Anthony|
|Grylls, Michael||Miller, Hal|
|Hamilton, Hon A. (Epsom)||Mills, Iain|
|Hamilton, Neil (Tatton)||Mitchell, Andrew (Gedling)|
|Hampson, Dr Keith||Mitchell, David (Hants NW)|
|Hanley, Jeremy||Moate, Roger|
|Hannam, John||Montgomery, Sir Fergus|
|Hargreaves, A. (B'ham H'll Gr')||Morris, M (N'hampton S)|
|Hargreaves, Ken (Hyndburn)||Morrison, Hon C. (Devizes)|
|Harris, David||Moss, Malcolm|
|Haselhurst, Alan||Moynihan, Hon C.|
|Hawkins, Christopher||Mudd, David|
|Hayes, Jerry||Needham, Richard|
|Hayward, Robert||Nelson, Anthony|
|Heathcoat-Amory, David||Neubert, Michael|
|Heddle, John||Nicholls, Patrick|
|Heseltine, Rt Hon Michael||Nicholson, David (Taunton)|
|Higgins, Rt Hon Terence L.||Nicholson, Miss E. (Devon W)|
|Hind, Kenneth||Onslow, Cranley|
|Hogg, Hon Douglas (Gr'th'm)||Owen, Rt Hon Dr David|
|Hordern, Sir Peter||Page, Richard|
|Howard, Michael||Paice, James|
|Howarth, Alan (Strat'd-on-A)||Parkinson, Rt Hon Cecil|
|Howarth, G. (Cannock & B'wd)||Patnick, Irvine|
|Howell, Rt Hon David (G'dford)||Patten, John (Oxford W)|
|Howells, Geraint||Pattie, Rt Hon Sir Geoffrey|
|Hughes, Robert G. (Harrow W)||Pawsey, James|
|Hughes, Simon (Southwark)||Peacock, Mrs Elizabeth|
|Hunt, David (Wirral W)||Porter, Barry (Wirral S)|
|Hunt, John (Ravensbourne)||Porter, David (Waveney)|
|Irvine, Michael||Portillo, Michael|
|Irving, Charles||Powell, William (Corby)|
|Jack, Michael||Price, Sir David|
|Jackson, Robert||Raffan, Keith|
|Janman, Timothy||Raison, Rt Hon Timothy|
|Jessel, Toby||Rathbone, Tim|
|Johnson Smith, Sir Geoffrey||Redwood, John|
|Jones, Gwilym (Cardiff N)||Rhodes James, Robert|
|Jones, Robert B (Herts W)||Rhys Williams, Sir Brandon|
|Kellett-Bowman, Mrs Elaine||Riddick, Graham|
|Key, Robert||Ridley, Rt Hon Nicholas|
|King, Roger (B'ham N'thfield)||Ridsdale, Sir Julian|
|Kirkhope, Timothy||Roberts, Wyn (Conwy)|
|Knapman, Roger||Roe, Mrs Marion|
|Knight, Greg (Derby North)||Rossi, Sir Hugh|
|Knight, Dame Jill (Edgbaston)||Rost, Peter|
|Knowles, Michael||Rowe, Andrew|
|Knox, David||Rumbold, Mrs Angela|
|Lamont, Rt Hon Norman||Ryder, Richard|
|Lang, Ian||Sackville, Hon Tom|
|Latham, Michael||Sayeed, Jonathan|
|Lawrence, Ivan||Shaw, David (Dover)|
|Lee, John (Pendle)||Shaw, Sir Giles (Pudsey)|
|Leigh, Edward (Gainsbor'gh)||Shelton, William (Streatham)|
|Lennox-Boyd, Hon Mark||Shephard, Mrs G. (Norfolk SW)|
|Lester, Jim (Broxtowe)||Shepherd, Colin (Hereford)|
|Lilley, Peter||Shepherd, Richard (Aldridge)|
|Lloyd, Sir Ian (Havant)||Shersby, Michael|
|Lloyd, Peter (Fareham)||Skeet, Sir Trevor|
|Lord, Michael||Smith, Sir Dudley (Warwick)|
|Luce, Rt Hon Richard||Smith, Tim (Beaconsfield)|
|Lyell, Sir Nicholas||Soames, Hon Nicholas|
|MacKay, Andrew (E Berkshire)||Speed, Keith|
|Maclean, David||Speller, Tony|
|McLoughlin, Patrick||Spicer, Jim (Dorset W)|
|McNair-Wilson, M. (Newbury)||Spicer, Michael (S Worcs)|
|McNair-Wilson, P. (New Forest)||Squire, Robin|
|Major, Rt Hon John||Stanbrook, Ivor|
|Malins, Humfrey||Steel, Rt Hon David|
|Mans, Keith||Steen, Anthony|
|Maples, John||Stern, Michael|
|Marland, Paul||Stevens, Lewis|
|Marlow, Tony||Stewart, Andrew (Sherwood)|
|Marshall, Michael (Arundel)||Stewart, Ian (Hertfordshire N)|
|Martin, David (Portsmouth S)||Stradling Thomas, Sir John|
|Mates, Michael||Sumberg, David|
|Maude, Hon Francis||Summerson, Hugo|
|Mawhinney, Dr Brian||Tapsell, Sir Peter|
|Maxwell-Hyslop, Robin||Taylor, Ian (Esher)|
|Mayhew, Rt Hon Sir Patrick||Taylor, John M (Solihull)|
|Taylor, Matthew (Truro)||Waller, Gary|
|Taylor, Teddy (S'end E)||Walters, Dennis|
|Tebbit, Rt Hon Norman||Ward, John|
|Temple-Morris, Peter||Warren, Kenneth|
|Thatcher, Rt Hon Margaret||Watts, John|
|Thompson, Patrick (Norwich N)||Wells, Bowen|
|Thorne, Neil||Wheeler, John|
|Thornton, Malcolm||Whitney, Ray|
|Thurnham, Peter||Widdecombe, Miss Ann|
|Townend, John (Bridlington)||Wilkinson, John|
|Townsend, Cyril D. (B'heath)||Wilshire, David|
|Tracey, Richard||Winterton, Mrs Ann|
|Tredinnick, David||Winterton, Nicholas|
|Trippier, David||Wolfson, Mark|
|Twinn, Dr Ian||Wood, Timothy|
|Vaughan, Sir Gerard||Yeo, Tim|
|Waddington, Rt Hon David||Young, Sir George (Acton)|
|Wakeham, Rt Hon John||Younger, Rt Hon George|
|Waldegrave, Hon William|
|Walden, George||Tellers for the Noes:|
|Walker, Bill (T'side North)||Mr. Tony Durant and|
|Wallace, James||Mr. David Lightbown.|
§ Question accordingly negatived.