HL Deb 14 December 1966 vol 278 cc1658-66

3.7 p.m.

LORD BYERS rose to call attention to the increasing level of unemployment and the need for more adequate measures by the Government to assist manpower to move to the industries of prime importance where vacancies exist; and to move for Papers. The noble Lord said: My Lords, the purpose of this Motion, which I have put on the Order Paper on behalf of myself and my noble friends, is to call attention to the increasing unemployment in this country and to what we feel is the inadequacy of the machinery to achieve a useful redeployment of manpower to the places where it is most needed. The fact is that the operation of the selective employment tax, the wage freeze and the measures of July 20 designed to curtail consumer demand have resulted in a shake-out of manpower in a number of industries and in a number of regions. Where this has caused a reduction in over manned industries or firms, it is, of course, to be welcomed; but the other side of the policy—namely, the effective use of the displaced manpower itself—has not in our view really been tackled at all. In fact, what we have is the classic case of making men idle, which creates in them a sense of insecurity, and thereby we impose a discipline on the labour force through the fear of "the sack." This may appeal to a number of old-fashioned employers, but it does not appeal to us on these Benches.

I do not expect short-term miracles. This is not a short-term problem: it is going to take a long time to solve. But I think the first question for the Government should be: what is the advantage to the nation to have men idle when they could be doing useful work? The second question is: what is being done to persuade men to move to the industries of prime importance where vacancies still exist? Perhaps it might be more logical to pose a question earlier than that, and to ask the Government: do they know where these vacancies are? And what is the machinery which has been provided for filling the vacancies in the industries of prime importance?

The Sunday Times of November 27 reported, in the findings of its survey on the shake-out, that, of 50 men and women unemployed or on short time in mid-September, 31 were fully employed again ten weeks later; but the survey emphasised the fact that useful redeployment, if it is achieved at all, is achieved only by accident. The 31 people in employment after ten weeks have not gone into undermanned social services, or into export industries. Some have found similar work elsewhere; others have gone from basic export industries, like chemicals or cars, into fringe industries, or even—and this is odd enough when one considers selective employment tax—into retail work.

Again, there is no joy for the traditionally non-prosperous areas of the country. All the people in the South-East in this survey have found work, but only 2 out of 7 in Belfast have done so—and one of those had to go to Birkenhead to get a job. In the North-East, 3 out of 7 were still looking for work when the survey was completed. Of the 19 still out of work or on short time, 8 were skilled men and a number were semi-skilled men. As the survey pointed out, some of the moves are really quite bizarre. A former semi-skilled I.C.I. process worker in Doncaster is now a builder's labourer earning £7 a week less. A trainee manager has been "shaken out" into a porter's job. This is a pitiful waste of potential. One of my contacts in the Midlands tells me that an Irish car-body worker was offered through the labour exchange a job as a chef in an Indian restaurant. I do not know whether this has anything to do with Mr. Ray Gunter's "bed of nails", but I think he ought to look into the system.

If this survey is representative, it shows an appalling lack of grip of things by the Government. In saying this, I am not attacking the officials of the Ministry of Labour; on all sides I hear high praise for the efforts they make. But I doubt whether we have the right policy and I doubt that we have the machinery, and both those factors place a strain on the resources of the Ministry of Labour. The truth is that, as unemployment rises, the work of the labour exchanges must increase. It increases in recording unemployment and in paying out benefits. In fact, over a certain figure of unemployment, the employment service side of the industry must surely be swamped.

I should like to know whether the noble Earl can give us some indication of what are the latest unemployment figures. In November the rate was 2.3 per cent. giving a total unemployed figure of 541,000. But what is really worrying, as the editor of the Financial Tunes pointed out, is "the accelerated rise in the trend of wholly-unemployed adults", and this on a seasonally-adjusted basis. If we take this we find that the wholly unemployed adults rose by 46,000 in November to a total of wholly unemployed of 423,000. Adult unfilled vacancies, again adjusted seasonally, numbered 201,000. This is an odd situation which I think calls for comment. We have 423,000 adult wholly unemployed and, so far as my information goes, only 201.000 vacancies. The unemployment acceleration trend can clearly be seen in the last few months by the increases in the wholly unemployed: 13,000 in August, 26,000 in September, 33,000 in October, 46,000 in November; and I would think the figure is still rising.

It is bad enough to have people without work, but it is far worse when there does not appear to be sufficient being done to get them into useful employment. The most important aspects of the problem are, in my view, first, the improvement needed in the employment service itself, and, second, the availability of training and retraining schemes. On the employment service I come back to the fundamental problem of statistics. I would ask the noble Earl—and many of us have raised this matter in this House on numerous occasions—how up-to-date and how accurate are the statistics of unemployment and of vacancies? Without a first-class statistical service it is impossible to know what is the precise problem we are trying to solve. There has been widespread criticism from different bodies about the inadequacies of the statistical service. I understand that Mrs. Shirley Williams of the Ministry of Labour, is looking into the matter at the moment.

I bet I am right in saying that only one-quarter of the actual placing of people in employment comes through the labour exchanges. Why is this? It is a very low percentage, and I do not see how we can get a proper redeployment policy if we are in contact with only a quarter of the people who require work. It must be because the employment service does not give the results which industry needs. In my view, there are still far too few firms that are notifying the labour exchanges of the vacancies they have.


My Lords, did I understand the noble Lord to say that he supported the compulsory notification of vacancies?


I said nothing of the sort; but I was expecting that interruption. I do not believe we have yet reached the point where we have to compel employers to notify vacancies. We could get to that point. We used to have this argument; but it was bedevilled by being linked with the Control of Engagements Order and the direction of labour. We want to avoid this. I think we must appeal to the employers to notify the exchanges, because without that you cannot get the statistics correct on which you have to work—and I think the noble Lord will probably make one more interruption; but we will give him another five minutes for that.

I believe that, so far as this question of the employment exchange is concerned, there is a tremendous problem here between the employment service and the other side. I think I am right in saying that an experiment is now being carried out in Warrington to divide the responsibilities of the labour exchange work between pure administration and the reemployment service, I should have thought this would be quite a fruitful line to follow. I quite understand that there are difficulties with the fluctuating unemployment figures; nevertheless, I believe that if we intend to make long-term changes in the pattern of the use of manpower, we ought to have a highly professional, probably separate, service, dealing with it. It is a much bigger problem than the sort of problems we have been trying to tackle in the past.

Even if we assume that the vacancies in the industries of prime importance are identified—and this is a very big assumption indeed—what are the prospects of getting people to fill them, if it involves moving the men from one part of the country to another? I recognise that there are people who will not move even twenty miles to a new job; or, sometimes, even less. It is a great pity, but it is a fact. We do not want to direct them, or to take the powers to do so. Where people are willing to move to work, I query whether the present arrangements are satisfactory; and I would also ask whether they are well enough known. I think it is correct to say that between March, 1965, and March, 1966, only about 4,000 workers qualified for the numerous grants available from the Ministry of Labour for men who move their homes to take new jobs. For the last few years, there has been a steady figure of expenditure on these grants: it is about £366,000. The fact that it has not moved much makes me wonder whether the grants are adequate, or whether their existence is well enough known and whether something could not be done along those lines.

The other aspect that I want to deal with is that of training. This, again, is no short-term problem, but the dividends from a really imaginative approach to re-training men and women so as to improve their own standards and to benefit the country would be immense. I think that the British effort is, frankly, pitiful. We can cope at the moment only with between 12,000 and 15,000 trainees a year. I believe the Minister of Labour has announced that by 1968 we hope to get that figure to something like 20,000. I do not think that this is anything like adequate. Mr. John Ardill, writing in the Guardian about the North-East region said: If unemployment rises sharply this winter, there is no prospect of the shaken-out labour being retrained in the skills which are needed in the region. He added that the Government training service cannot cope with a crash programme of retraining the redundant workers. He said it was not geared to do this; that it does not aim to do this; and that if they tried to do so there would be strong opposition from the unions.

I have some information about the City of Birmingham and its training arrangements. So far as I can see, the City of Birmingham has only one Government retraining centre. This has 168 places, and at the moment there are still 10 vacancies. This is incredible. Do people know that these vacancies exist? Seven of these vacancies are for draughtsmen, people who are absolutely vital to many of our engineering and export industries. Three are for wood-cutting machinists. Only two other training centres exist in the whole of the West and East Midlands. One, at Long Eaton, in Derbyshire, with 257 places, is absolutely full; and one in Leicester, with 191 places, is absolutely full, too. When you think that the number of wholly unemployed in Birmingham is 9,945, these figures are pitiful compared with the need that exists.

I believe that we have something to learn from other countries. In the United States two major manpower training programmes have been running since 1962. In 1965 they had 18,000 trainees enrolled. They turned out 110,000 who completed the training, and on this they spent £100 million. Even for this country that amount would not be a great deal of money compared to the continuing benefit we might get from it.

One of the noticeable differences, I think, between the American and British training seems to relate to the sort of trainee being accepted. In Britain the emphasis is on finding the most suitable trainee, whereas in the United States there is more emphasis placed on reaching the unemployed and helping them to train themselves into skilled and semi-skilled workers. Where there is no hope of making a person skilled or semi-skilled, at least they try to help him to improve his basic standard of reading, writing and arithmetic. Generally speaking, 60 per cent. of trainees in the United States find useful jobs within a month of completing their training and most of them find work within a short time.

Apart from the institutional training programme there is, as the noble Lord knows, a great deal going on in on-the-job training there, and I wonder whether we in this country could not expand our facilities. We have made a small start, but I believe that real expansion may be made in on-the-job training under the supervision of the employers. In 1965, in the United States, training was provided for approximately 70,000 workers compared with 26,000 the year before, and it is this sort of expansion ratio that I believe we have to achieve. These programmes are run by contract between the Department of Labour and the employer, and sometimes they are sponsored by community organisations or training associations which enable small firms to take part.


My Lords, can the noble Lord, Lord Byers, relate that figure to the gross figure of unemployed in the United States?


My Lords, I was about to mention the fact that America has a much bigger figure of unemployment, but they are tackling this in a way that shows that rapid expansion can be achieved, and this is what I believe is important. I do not believe you can get very far merely by saying that if the Americans have 110,000 who completed training in one year, it is perfectly all right for Britain to have 15,000 or 20,000. What I say is that it is possible to get a very rapid increase in the expansion of training facilities, particularly, I think, through on-the-job training.


My Lords, to follow up the point which the noble Lord, Lord Byers, is making, I think that he is talking merely about Government training schemes. The noble Lord must recognise that there is a very wide and developing training scheme—in which the Government play their part—within industry, which is a true partnership between Government and industry.


My Lords, I have just referred to that, but I do not believe that in itself it is big enough yet. I am trying to show—I am not trying to make this point controversial—that it is possible to get a rapid expansion of these facilities. If we leave the expansion rate as it is, it will be a terribly long time before we are able to re-train something like 100,000 people or more a year, in order to get the benefit of having them working in the industries of prime importance.

To return for a moment to the employment service itself, I believe that our employment exchanges are geared to deal with only something like 300,000 to 400,000 people a year, and apparently we have 900 exchanges. We have only about 3,500 people engaged in the actual job of finding alternative employment for people, leaving out the question of training or re-training. I query whether this is an adequate manpower team. With the prospects of unemployment reaching a figure of 600,000 to 700,000, and not going down very rapidly next year, there is a grave danger that the employment exchange manpower will be swamped with the task of paying out benefit at the expense of finding people useful work in the industries which require them. I believe that this is an important aspect of the employment service, and I believe that the re-training facilities should be expanded and could be expanded. I am told that the Minister of Labour has something in mind in the way of using, perhaps, the Armed Forces for this purpose. It might be useful to explore this idea, and I am sure we can get this if we really want to.

The Minister of Labour said not long ago in another place that our future depends on what we do with this breathing space that we now have, and I think it would be a tragedy if we wasted this opportunity. There is far too much evidence that, due to lack of imagination and drive, we are going to miss out, and that we require a sense of urgency in this matter. An even worse tragedy would occur if the Government, after failing to cope with this problem, came to the conclusion, as did the Labour Government of 1945–50, that the only solution was direction of labour. This would be wrong, and in my view it is unnecessary. I do not believe that the Government have this in mind at the moment, and if we have a dynamic approach to this problem through an imaginative employment service policy, and real continuing redeployment, I believe that we can transform our use of manpower as a permanent feature of a really progressive economic policy.

My Lords, my noble friends and I have put down this Motion because we believe that men and women who are idle must be helped to find useful jobs. We believe that the arrangements for the manning up of industries of prime importance are inadequate. We believe that to waste this breathing space is politically indefensible. This is not a question of profit and loss in terms of cash or balance sheets or of balance of payments. The whole question of human dignity, too, is at stake. Unemployment is a terrible psychological shock at any age, and for the young people it can create hopelessness and leave them to drift, as we all know, into criminal channels. To the middle-aged it means failure in the midst of one's family surroundings, and that is a horrible psychological shock for anybody.

Whichever way one looks at it, it is cruel to have this unemployment, unless it is part of a pattern of re-adjustment, with a better future in view for the people who are temporarily involved. This is what we have to work for now. It is in the process of readjustment that I do not think the Government are doing enough. I am not in this debate going to deal with the whole question of the need for selective reflation in order to reduce unemployment. That is a subject in itself on which there are many noble Lords fully qualified to speak. But I believe there is a sense of urgency which has to be given to this programme. My Lords, I beg to move for Papers.