HL Deb 09 November 1971 vol 325 cc244-57

My Lords, I beg to move the second Motion standing in my name on the Order Paper.

Moved, That a Select Committee be appointed to consider all Special Orders of the present Session; and that the Lords following, with the Chairman of Committees, be named of the Committee:

That the Committee have leave to report from time to time. (The Earl of Listowel.)

On Question, Motion agreed to.




3.5 p.m.

Debate resumed on the Motion moved on Tuesday last by Baroness Macleod of Borve—namely, That an humble Address be presented to Her Majesty as follows:

" Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."

LORD DELACOURT-SMITH rose to move, as an Amendment, to add at the end of the proposed Address:

" but humbly regret that the policies of Your Majesty's Government fail to provide the economic conditions necessary to ensure a better and more equitable standard of living for the people of this country and deplore the absence from the gracious Speech of specific proposals for dealing with the human tragedy of unemployment."

The noble Lord said: My Lords, I beg to move the Amendment standing in the name of my noble friend Lord Shackleton. Since, in so many respects, the Government are returning to the attitudes and policies of the 'twenties and 'thirties, it is perhaps not surprising that we are seeing the re-emergence of what was the greatest industrial and social evil of those years—mass unemployment. I believe that anybody, in whatever part of the House he sits, who remembers the pre-way years, with the demoralisation and the human degradation which long-continued, large-scale unemployment brought about, must want to reverse the trend which has been showing itself in the last 15 months.

The previous Government, in their determination to put the international economic position of this country on a firm footing, and to establish a sound balance of payments, had to follow policies which led to higher levels of unemployment than had previously generally prevailed since the war. But by June, 1970, the problem of securing a favourable balance of payments had been over-come. The new Government which then took office were not faced with an immediate crisis, as were their predecessors when they took office in 1964, and we should, in the middle of 1970, have been able to look forward to expansion and a progressive restoration of high levels of employment. But in fact the reverse has happened. Unemployment has risen at an alarming rate. Registered unemployed in the United Kingdom stood in the middle of October at some 930,000. compared with a June, 1970, figure of 580,000; 3.9 per cent. unemployment as opposed to 2.4 per cent. 15 or 16 months ago. For every five men registered as unemployed at the time of the General Election, there are now eight.

Of course these figures refer only to the registered unemployed. Research material, based on the 1966 Census, has led responsible people to suggest that probably 25 per cent. of unemployed men in good health do not register although unemployed; and that perhaps as many as 40 per cent. of women do not register, although they are without employment and would welcome the opportunity of being employed. I cannot say whether these figures are too high; if they are indeed broadly correct, they suggest a true figure of unemployment at the moment of about 1,250,000. But, certainly, they suggest that all the figures which we normally use—and we usually talk in terms of registered unemployed—understate, and certainly do not in any way overstate, the problem with which the country is faced.

One could spend a good deal of time examining the unemployment figures and looking at the differential effects. I think it is fairly clear that on the whole over this period men have been hit harder than women; older men, as is always the case when unemployment rises, have been hit harder than younger men; and unskilled men have been hit harder than skilled men. But it is a notable feature at the present time that white collar workers are badly hit and there appear to be some-thing like five unemployed men for each vacancy. Skilled workers, in, for example, engineering and the construction industry have been more hardly hit than has normally been the case, and we find in those fields, among skilled men, something like a ratio of four or five unemployed men to each vacancy. Further, of course, there is the regional aspect. Although the West Midlands, normally so prosperous, has been the hardest hit region of all and unemployment has almost doubled, there have been increases in this period above the national average rate of increase in a number of the former depressed areas. In Scotland and the North-West the figures of unemployed have risen over this period by more than the national average; and, of course, Northern Ire-land has the very grave figure of 10 per cent. registered unemployed among the male population.

But from all this picture there are per-haps two features which are of special seriousness and significance. The first is the emergence of a core of long-term unemployed. A third of those on the register—nearly 200,000 unemployed men —have been out of employment for more than six months. Of those, about a half —over 100,000—have been out for more than 12 months, and so have exhausted both earnings-related and flat rate unemployment benefit, and must rely on supplementary benefit. Many of these, of course, are older men, and the anxiety must arise in their minds about whether they will ever find a reasonably stable job again. At the other end of the scale, the position which I think is bound to give particular concern to all of us, is the position of the school-leavers and the young unemployed. The number of school-leavers unemployed in mid-October was just over 19,000. This was at least a drop of some 16,000 from the September figure, but it still stood at nearly twice the figure for the corresponding month of last year.

There is a drop in the total number of vacancies for young people, especially serious in the less prosperous regions; and if the figures as I have disinterred them from the records are correct, there appear to me to be, in Scotland, three young people unemployed for every two vacancies, and in the Northern region two for each vacancy. I do not think I need to emphasise how specially serious this situation is for every reason. The transition from school to work is always a difficult one, and I sometimes think that it is a pity that some of the attention which has been given to other aspects of our industrial life has not been given to that transition. But when the hopeful school-leaver—and the vast majority of them are hopeful and eager, however disenchanted they may appear on the surface—finds that, in addition to the other difficulties of making that transition, he has the reiterated rejection which arises for him in a period of high unemployment or an area of high unemployment, then I believe that the consequences can be serious and long-lasting.

My Lords, there is a reference of, I think, a rather oblique kind to this problem in the gracious Speech, which includes the expression:

"…my Government's first care will be to im:rease employment by strengthening the economy"—

I hope that noble Lords who arc to speak from the Government Benches are going to tell us in much greater detail than has so far been disclosed to us how this increase in employment is to be secured, and in particular whether the laudable intention which I have just quoted is going to be any more effective than the rather similar intention announced in the gracious Speech 15 months ago, when it was said:

" My Ministers attach the greatest importance to promoting full employment "—

and, later in the Speech:

" They will stimulate long-term growth in the less prosperous areas by increasing their economic attractions …".

In the period since then the Government have basically relied on the economic system to right itself, as the effects of cuts in taxation, made or promised, are gradually felt. Indeed, the Government have been systematically reducing their own power to influence the economy directly; and I hope that those noble Lords who are to speak for the Government will tell us, in the light of the experience of the last year and a quarter, what grounds there are for believing that the continuance of this course will achieve any of the nationally desired aims and, particularly, whether they will reduce unemployment.

My Lords, there are one or two areas of policy about which it is naturally necessary to ask sonic more detailed and specific questions. First of all, there is clearly the area of regional policy. I think it would not be unfair to say that action in that respect in the last 15 months has been largely negative. Investment grants have been abolished in favour of tax allowances, and I think the repercussions of that upon regional policy, as well as upon investment generally, are obvious. Secondly, the Government have announced that the regional employment premium is to end in 1974. Thirdly, they have relaxed controls over I.D.C.s and O.D.P.s in the more prosperous areas, which is inevitably likely to have an effect unfavourable to the less developing, the less prosperous and the less generally attractive areas of the country.

What, my Lords, has been done on the other side? I must confess that I can find very little. There have been some adjustments in boundaries here and there; and some spending on the infra-structure, to which the Party opposite have always attached a great deal of importance when talking about regional policy. We on these Benches do not believe that there is anything sacrosanct about any particular form of regional policy. We have always believed that there was the necessity for a wide and varied range of forms of action within the field of regional policy, and also the need to keep them under review to see how far they were in fact proving effective. But all the signs are of the with-drawal of action, the cancellation of action, and there is little if any sign of effective and purposeful action to replace that which is withdrawn or cancelled.

My Lords, in one of the very early debates following the General Election the Government were asked about the number of jobs which at that time were foreseen as arising in the development areas, and the noble Lord, Lord Sandford, replied at col. 269 of flaavard:

… 142,000 jobs are expected to arise in all the development areas over the next four years in authorised new industrial building and industrial buildings taken over."—[OFFICIAL REPORT, 8/7/70.]

That was part of the legacy of the last Government. I would ask the noble Lord whether he would be so good as to tell us what is the corresponding figure to-day. What is the corresponding figure of new jobs foreseen over, say, a four-year period at the present time?

Perhaps the Government will tell us what are their intentions with respect to the Upper Clyde—the Upper Clyde Shipyard and the Clyde area generally—for it seems that we have seen a hasty and unjustified decision which was based on a brief and unconvincing report, and which has had to be subjected to successive modification, not only in response to the intense opposition from the men in the yards themselves but also in response to widespread and deep opposition and anxiety expressed, as I understand it, by all shades of opinion in Scotland, particularly in the West of Scotland, but largely throughout Scotland as a whole.

May I turn from regional policies to other, more general, issues of Government economic policies? What are the prospects now of containing inflation? What are the Government policies for so doing? We all remember vividly the references made to this matter and the stance adopted by the Conservative Party in the run up to the General Election. At that time, prices during the preceding twelve-month period had risen by some-thing of the order of 6 per cent. We all recall the use which the present Prime Minister, in particular, made of the price increases. Six per cent. had been the rate of increase in the preceding twelve months at that time. Now let us look at the currently available figures: in the last twelve months prices have risen not by 6 per cent. but by 10 per cent. I do not think it can be said that the Govern-ment have so far been strikingly successful in this aspect of their economic and industrial policies. They have made no effort to work out policies with employers and trade unions; they have, in fact, deliberately repudiated any such attempts. They have snubbed the T.U.C. on two occasions when that body sought to initiate constructive discussions.

The main efforts of the Government appear to have been directed towards trying to put the blame on working people and on the trade unions and to encourage employers to resist wage demands for better living standards. This most noninterventionalist Government have been somewhat interventionist in that respect. But, here again, they do not seem to have been strikingly successful. Much of what they have been doing is having the effect of making the tabling of increased wage demands more and more inevitable; for as they reduce direct taxation, at the same time their policies on social services contributions and charges and their policies on food prices are raising the cost of living for working class families. It is true that they have been offering family in-come supplements and certain ranges of rebates, on a means-test basis, to the particularly poorer-off families. We are in fact moving, quite deliberately and by stages, from the Welfare State to the "Means-test State". I do not think that noble Lords opposite have any right to reject that description, having regard to what they have always said about the necessity for concentrating assistance where the need can be demonstrated to be greatest.

I think, too, that they ought to look at the incentive effect which some of these measures are having; for if one studies the figures there are considerable ranges of income, say, between £18 to £25 a week, where, if a family takes up all its entitlements, then as pay rises it is offset, virtually pound for pound, by reductions in the other entitlements which the family may claim. Even in the range above that, up to about £40 a week, there are some very strange disincentive effects emerging from Government policies. Possibly this is something which the noble Lord (perhaps I ought to say "my noble friend"), Lord Rothschild, and the Central Capability Unit may examine to see the repercussions of social measures upon industrial incentive and industrial morale.

My Lords, before I close, what about industrial relations generally? An essential element in industrial relations is to increase understanding between the two sides of industry. So far as the Industrial Relations Act is concerned it is I think fairly clear that the Government are facing a mssive campaign of non-co-operation from the trade union movement. I think that they have underestimated the opposition and the resentment to which that Act, and the frame of mind of which it is one expression, have given rise. I cannot say whether all the pressures which legislation puts on trade unions to register, even against the will and inclination of their members, will succeed. Many people prophesy confidently that it will succeed. In my judgment, for what it is worth, it will not succeed or, if it does, it will not succeed for a very long time.

There are other aspects of non-co-operation which are quite serious and 1 wonder whether the Secretary of State for Employment—a title which is getting more and more hollow every day—is really clear about his intentions and whether he really believes that he can go on merely allowing the divisisons on this subject to get wider and wider. It was he who said in April, 1970:

"…if we could get back to Tory policies the employment situation would be a great deal better than it is to-day."

I fear that his prophecy of improved industrial relations will be as false as his promises of lower unemployment.

My Lords, in all fields in which the Conservatives attacked the Labour Government and promised to do better, they have done worse. They have done worse in respect of prices; they have done worse in respect of days lost in industrial disputes; they have done far worse in creating a sense of division in industry deeper than has existed for many years; and they have done worst of all, immeasurably so, in respect of unemployment. I dare say that they will assure us that their policies, whatever the failures so far, are now about to begin to work. I want to ask in that connection and in that con-text: what priority do the Government attach to reducing unemployment? References by Ministers to "obsession with unemployment" do not create much confidence in their will to attack this evil. Does, for example, the desire to reduce unemployment take second place to the Government's declared efforts to keep down wages? Unless the Government can declare, and can carry through, urgent and effective measures, they will be under the suspicion that the present high level of unemployment not merely is the con-sequence of a lack of constructive policies but is tolerated as a substitute for constructive policies. I beg to move.

Amendment moved, to add to the proposed Address:

" but humbly regret that the policies of Your Majesty's Government fail to provide the economic conditions necessary to ensure a better and more equitable standard of living for the people of this country and deplore the absence from the gracious Speech of specific proposals for dealing with the human tragedy of unemployment."—(Lord DelacourtSmith.)


My Lords, the Government will no doubt be telling us that of recent months there have been certain wintry gleams of hope. The balance of payments—


My Lords, I am sorry to interrupt the noble Baroness but I think that the noble and learned Lord on the Woolsack has a duty to perform.


My Lords, I am grateful to the noble Lord, Lord Shackleton. The lapse was partly due to my taking notes and partly due to the speed with which the noble Baroness succeeded her predecessor. The original question was, That an humble Address be presented to Her Majesty, in the terms that appear on the Order Paper, since when an Amendment has been moved, in the terms which appear on the Order Paper, in the name of the noble Lord the Leader of the Opposition. 1 he Question that I have to put to the House is that the Amendment be agreed to.

3.30 p.m.

BARONESS SEEAR I apologise, my Lords, if I inadvertently caught the noble and learned Lord napping. My Lords, the Government, no doubt, will be telling us that there have in recent months been a few wintry gleams of hope. The balance of payments is improv

a rise in the unemployment rate in the last three months of no less than 5.7 per cent., but also—less immediately tragic but, in its own way, no less important—a fall in the production rate in the last three months of 0.3 per cent. and an increase in the productivity rate of only 0.3 per cent. This spells a degree of stagnation which we cannot afford to allow to continue.

Nor, my Lords, do I find that the proposals put forward from either side of your Lordsips' House and by the Parties represented there lead us to great cause for encouragement. Public works schemes of one kind and another we must have; and, of course, as a temporary measure they will give some assistance where assistance is badly needed. No doubt the economy can stand some degree of reflation, but in itself that will give us no permanent and continuing cure for our ills. Even the agreement to restrain voluntary price increases, welcome though it must be on both sides of your Lorlships-House and in the country, could in the long run be a delusion and a snare if it were to be accompanied by a decrease in investment. All we should then be doing, my Lords, would be eating the seed corn, and that is hardly a useful contribution to an economy that badly needs a big in-fusion of investment. Let us not forget that in the last year investment in the machine tool industry fell by no less than 40 per cent., and machine tools spell growth.

Indeed, my Lords, the real truth is that all these measures are designed to deal with symptoms; and when in power the Governments of both Parties have failed for far too long to tackle the radical problems that face the economy of this country. Until this is done, un-pleasant though many of the measures may be, politically unpopular though they may be, we shall not move, except temporarily, from the dreary situation in which we find ourselves. Let us not fool ourselves that entry into the Common Market, enthusiastically though it was supported by my colleagues and myself here, will in itself provide a cure. It will provide an opportunity, but unless that opportunity is seized the last state may well be worse than the first. The real truth of the matter is that for two generations now we have been grossly wasting the manpower of this country—not to mention the woman power; but that is another story with which I will deal on another day. It is quite ridiculous that a country at our stage of scientific and technical development should still employ so much of its manpower and womanpower in labour-intensive, low-growth industries. It is urgently necessary that we should face the fact that we need to move, and to move fast, into capital-intensive, high-growth rate industries, and that in the long run this is the only way in which we can hope to meet the expectations of rising standards of living —expectations, held throughout this country, which will not be fulfilled so long as we maintain our manpower in low-growth rate labour-intensive industry.

You may say to me, "What an extraordinary proposal to put forward when we are faced with unemployment figures on the scale which we see them today!" That is true, my Lords; but it does not alter the fact that it is in this direction that we need to move. I know some of the objections which will be raised. First, it will be said that any such move means that people have to be prepared to give up the kind of work they are doing and move into new types of occupation. That is true. But why need this be regarded as a catastrophe? If we make up our minds that this is the direction in which we have to go; if we are prepared really to invest generously in it and in the people who will have to be trained and re-trained to take up the opportunities which will arise in these industries, then the climate of opinion could be changed. This could be seen not as a disaster but as a great opportunity. It has happened. Some of your Lordships will remember the further education and training grants offered to Servicemen at the end of the last war. Again and again I, and no doubt some of your Lordships, had the good fortune to teach some of those ex-Servicemen under those conditions; again and again it was seen as an opportunity, a chance that they had previously missed. There are many men at present employed on low productivity jobs who, given such opportunities, would welcome them and, once they had got into the new growing science-based industries, would realise that these industries offer them a future which they could never hope to have in the kind of occupation in which they are now engaged.

Then it may be said that capitalinten-sive industries employ far fewer people. That is true, my Lords; but we have to look at a quite different pattern of employment from the pattern to which we have become accustomed. Capital-intensive industries often, though of course by no means always, form a continuous process industry. We have to accept that in the future we shall have a great deal more shift-working with increasingly short shifts. I have just been to a Swedish chemical works where the full working week for each individual is already only a 28-hour week worked on a shift basis. My Lords, 24 hours may be divided into three eight-hour shifts; or four six-hour shifts; or eight three-hour shifts; or indeed into 12 two-hour shifts. In capital-intensive industries, where labour costs represent a very low proportion of total costs, very high wages could be paid for very short hours of work; and here are future opportunities for real full employment and a high standard of living.

Then, your Lordships may say: "But you are emphasising the importance of growth, and in the best economic circles today scorn is being cast on the concept and the importance of growth." I would not claim to move in the best economic circles, but what right has this country, in which everyone, even the unemployed, are "haves" in comparison with the "have-nots" stretched across the world, to scorn the idea of growth? What right have we to say that growth is not important when two-thirds of the world remains hungry? I have just returned, as many of your Lordships will have done, from —I would not call it a developing country; it has not had the opportunity to develop—an underdeveloped country: no roads, no public services, one doctor for 55.000 people, women working manually from sunrise to sunset (whether it is the same for the men is another issue) with totally inadequate educational opportunities and totally inadequate diets. This is the picture over most of the globe.

Do we not need growth? It is in these developing countries that labourintensive industry should be found. We have no business to hang on to industries of this kind. We should be moving, because we are capable of doing so, to the capital-intensive state and gradually encouraging labour-intensive industries to develop in the countries in which at present there is no work at all. This is the pattern of the future. I have tried to focus not on the immediate issues of to-day which cloud our vision, although they are important. Sooner or later we have to go in the direction that I have indicated. Let it be sooner.