UNEMPLOYED YOUNG PEOPLE

HL Deb 13 July 1977 vol 385 cc900-60

2.48 p.m.

Lord BELSTEAD rose to call attention to the problems of unemployed young people; and to move for Papers. The noble Lord said: My Lords, in the last three and a half years nearly a million people have been added to the register of those who are unemployed. Within that period, however, young people have suffered disproportionately. In June 1974 there were 5,400 school-leavers who did not have a job to go to; last month that figure, although it is inflated by a change in the school-leaving date, stood at 142,807, which is an increase of 2,644 per cent.

There is evidence that periods of unemployment for the young are lengthening, so their jobless figures are spiralling upwards, outstripping the general rate and leaving a sense of bewilderment not only among those who are actually suffering but also, I venture to suggest, among those who would be thought to be able to diagnose the problem and prescribe the cure. After all, what has always been the generally accepted cure for unemployment? It has surely always lain in reflation of the economy, and it was towards investment for reflation that the Government began to turn in November 1975 when the Chequers White Paper was published. Six months later, in his Budget speech of April of last year, the Chancellor of the Exchequer felt able to set a target of only 3 per cent. of people unemployed by the year 1979.

What has gone wrong? I think, in all fairness, that none of us, whatever Party we belong to or whatever political views we may hold, has ever quite faced up to the manpower consequences of increasing technology. Figures from the OECD show, without any doubt at all, that recently growth in manufacturing has been accompanied not by a decrease but by an increase in unemployment. One does not have to be an economist or technologist to see the reason why. Let me take a homely example from my own work, which is agriculture. In the past, I suppose that one of the most labour-intensive of all the arable operations was the growing of the sugar beet crop. Every plant had to be hoed by hand, and every beet always had to be pulled by hand. Today, from drilling to harvesting each operation is done by machines, many of them huge and each one always operated by a single person. Over the past 10 to 20 years the same situation has occurred in the retail and wholesale trades and on the factory floor.

Your Lordships may have noticed a report in the Financial Times of 4th July that Esso and Shell are planning to build two big petro-chemical plants in Scotland at a cost of over £400 million, and only 280 jobs will be created. Therefore, the problem of job disappearance through increasing technology, compounded by job disappearance in some industries—not least in television and radio manufacturing in this country and also in the textile industry—and, in the face of foreign competition, has confounded many of the forecasts. However, where I believe that the Government have been guilty of lack of foresight has been in assessing the spin-off effects of their own legislation. To my mind, Ministers have simply refused to recognise the existence of what my noble friend Lord Ferrers, with characteristic modesty, once announced in your Lordships' House as being "Ferrers' Law"—namely, that in politics whatever one sets out to achieve invariably has precisely the opposite effect. Therefore, over the past three years the Government have busied themselves with passing through Parliament Budgets which have increased taxation, and measures such as the Employment Protection Act and the Rent Act 1974, which may have appeared to them to have the merit of social justice, but which at a time of economic recession have been a disincentive to employment and have reduced the mobility of labour.

The fact of the matter is that on this subject over the past three years Ministers have indulged in statement, reassurance, prophecy and conjecture, and on every single occasion they have been proved wrong. Within the general problem there has been the appalling tidal wave of youth unemployment gathering in strength at three times the rate of general unemployment. It is a pretty ghastly thought that, if one takes young people as being under the age of 25, and not as normally understood in this country as being under the age of 19, 44 per cent. of young people are unemployed, although they comprise only 20 per cent. of the labour force. Once again I believe that the causes have been extremely difficult, but possible, to discern. They have been difficult because many people have genuinely believed that young people are simply choosey about the jobs they are prepared to do and are quite happy to be voluntarily unemployed. That theory hardly stands up against the efforts of the Careers Service who will be helping pupils to try to land a job for at least a year before they leave school and who will be putting them in the way of a job if one is only available. I think that theory totally disregards the fact that, of all people, young people simply cannot afford to be out of work for very long because they have the lowest entitlement to social benefits.

It has also been difficult to identify the causes of youth unemployment because the popular view has always been that it is recession and recession alone which is to blame. Certainly it is true that, for young people, the peaks are steeper and the troughs are deeper in the graph of cyclical unemployment. However, the sobering fact is that, whether it is in boom or in slump, the general trend of youth unemployment has been recently for ever upwards and, indeed, the National Youth Employment Council testifies that this is a trend which dates back to the early 1960s.

However, the rate of our youth figures is worse than in the other countries of the EEC. It is therefore fair for me to ask again whether or not there has been some factor which the Government could have discerned. I am not alone in being convinced that this factor exists and that it lies in the single word "incentives". At a time when it is obvious that the prospects for semi-skilled and unskilled jobs are pretty poor, encouragement for acquiring skills surely should be at a premium. Yet the penalty of taxation and the erosion of differentials positively discriminate against the extra education and training needed for a boy or girl to embark on a skilled job. As a result, it is necessary for the industrial training boards and the Training Services Agency to subsidise the engagement of apprentices.

Let the Government recollect, before it is too late, that youth and idealism go hand in hand; that a boy or girl really will be prepared to go into an apprenticeship or a low-paid start, provided the work which they are to do fulfils either their love of it or their ambition. However, if they know before they start that the rewards for their skilled training will be minimal, that promotion will rapidly place them in tax brackets higher than the whole of the rest of Europe, and that if they save and prosper they will qualify themselves not for a secure old age but for the payment of capital transfer tax and the threat of the wealth tax, then, even the idealism of youth will be dampened somewhat and the Government will be caught—as they are being caught at present—in a pincer movement between general unemployment for semi-skilled and unskilled work on the one flank, and very little incentive for people to go through the mill of obtaining skilled training on the other.

I hope that the Government will forgive me for taxing them with their responsibility, as I see it, for the present situation. I do so because the root causes of unemployment are of such terrible concern and so appalling for those who are concerned. It was Archbishop Temple who once wrote that the worst evil of unemployment is that unemployed people feel that they are not wanted. The reason he gave was that the man has no opportunity of service; he turns upon himself and becomes, according to his temperament, a contented loafer or an embittered self-seeker. It has not been sufficiently appreciated that this moral isolation is the heaviest burden and most corrosive poison associated with unemployment—not bodily hunger, but social futility. Over 30 years later we find the Heads of Government, when they met in London some weeks ago, putting the problems of unemployment of young people at the very top of the list of their agreed Communiqué after their meeting.

Two years ago the Government began to take action on this subject to try to mitigate the symptoms of the situation. They made available resources for what we call job creation and also for training schemes which today, I understand, are running at something in the region of £130 million a year. Inevitably these projects, introduced by a pretty vast injection of cash, have very suddenly had to be set up on something of an ad hoc basis. Last year, therefore, the Manpower Services Commission formed a Working Party, under the chairmanship of Mr. Geoffrey Holland, with the objective of setting these schemes for unemployed young people into a coherent forward programme. The Working Party reported in May and the Government accepted the recommendations on 29th June.

I point out, in passing, that one must look back and thank a noble Lord who is not in the Chamber today—my noble friend Lord Carr of Hadley—who left in his Employment and Training Act 1973 the structure which enabled the Manpower Services Commission to take that action a few months ago. It was the Employment and Training Act which provided the structure for the MSC with its two attendant agencies—the Training Services Agency and the Employment Services Agency—to support it. I am sure that the noble Lord, Lord Wallace of Coslany, who will reply to the debate, will say a good deal about the general strategy of the Holland Report which came out in May and which was accepted by the Government on 29th June. This is the first opportunity, in either House of Parliament, for the Government to do so in a debate.

I should like to take the opportunity to apologise to those noble Lords who are working on Sub-Committee C of the European Communities Committee and looking, I know, among other things, into this particular problem. This debate comes at a time when the deliberations of that Sub-Committee have still a few months to run. But, at this time of the year when youth unemployment is always at its peak, I would venture to suggest that this is the right moment to be debating the Holland Report. I am very grateful to the noble Baroness, Lady Seear, for putting her name down to speak in the debate this afternoon because she is also a member of the European Committee which I have mentioned.

In simple terms the Holland Committee made recommendations which, taken together, form a programme consisting of, in the Committee's own words, "two kinds of opportunity." These are courses designed to prepare young people for work and work experience schemes, each to be provided so that anyone can leave at any time in order to get a job. How are those twin objectives to be achieved? First, by integrating the various existing schemes so that, to be absolutely blunt, they make sense when looked at all together. Secondly, the number of training and work experience places will be doubled. Thirdly, no young person who is unemployed for nine months or more should ever be refused a programme place if he or she wants one. Finally, both the staff of the Careers Service and places in further education colleges will be increased.

Will it all work? Clearly, the Holland Report is a long stride in the right direction. I believe that the Working Party has gone as far towards the root of youth unemployment as it possibly can by appreciating that it is the quality and the relevance of training opportunities which are so absolutely essential. If the Government will forgive my assertion, as the jobless figures have escalated so over the past two years, Ministers have seemed to be preoccupied all the time with the quantity of opportunities which are being offered and have taken refuge in what has become a crisis programme, which has not been integrated at all.

But this report marks a new emphasis by planning for the individual boy or girl who is unemployed to land a job, and in this way the Holland Committee has faced the fact that, when the chips are down, the only way to cure unemployment is to provide more jobs. The Committee does not pretend that, of itself, its programme will do that; but, by planning for a different balance of opportunities in different localities of the country, by showing that certain schemes—such as the training workshops—can simply help a boy or girl to get on his or her feet again, by enabling others to improve their prospects on the various courses provided, by expanding the Careers Service and by showing that a boy or girl who is out of work needs a combination of education and training, to try to find out what each is capable of. The Committee has gone a long way towards its declared objective of creating opportunities which will lead at the earliest possible moment to a permanent job. It is to the credit of the Secretary of State for Employment that he has accepted the report in time for the expanded programme and the attendant training of those responsible for it to be ready to accept next year's school-leavers.

Clearly, this programme will have to be kept under fairly constant review, but already I think that there are one or two aspects which need to be reconsidered. Recently the House of Commons Expenditure Sub-Committee had this to say: It has been one of the failures of the Job Creation Programme that the special difficulties of women have not been sufficiently recognised". That is true. Only 24 per cent. of the places in the Job Creation Programme are at present filled by girls. This is at a time when more women than ever before in history are registering as being out of work. As a first step, I think that the Manpower Services Commission could look again at the Job Creation Programme Area Action Committees, as they are called, which number only two women among their 67 members. That is a ridiculous imbalance on any estimate.

I also ask that the MSC should reconsider the provision of 15,000 community service places under the programme. Although I realise that this will double the amount of community service being carried out in this cause, it was interesting that when the Holland Committee asked a sample survey of 3,000 young people whether they would be prepared to take part in community service, the answer was that 67 per cent. would and the idea was obviously more attractive to girls than it was to boys. My noble friend Lord Sandford, who has worked for some time with an organisation called Task Force North, will talk about community service in much more detail at the end of this debate. But I am certain that this provision can be expanded and should be expanded, not least because one must take on board the fact that the Holland Report proposes a total of only 130 training places every year, whereas this month the problem will be three times that size. If that means that there will be competitive entry to the Holland programme, we shall quickly have a hard core of young people who will feel totally and absolutely rejected. I am bound to say that, if that is the case, it may well be that it will be the voluntary organisations—and those organisations alone—that will be able to respond.

Your Lordships may have read an article published in The Times on 4th May in which my noble friend Lord Carr of Hadley made the point that to create more jobs rather than to save old ones which are uneconomic is really the only way to cure unemployment. One of the organisations which could provide new jobs is an organisation called Community Industry. That imaginative scheme, which was set up by the National Association of Youth Clubs when my noble friend Lord Carr was Secretary of State for Employment, takes on young people who are disadvantaged in one way or another. I know that it is feasible for Community Industry to expand its work but, as it is one of those organisations which makes a point of operating in areas of high unemployment, there is very often no job available for a boy or girl when his or her Community Industry course is finished. It would seem sensible to explore the possibility of this organisation becoming a more permanent employer, rather like the highly successful Enterprise Ulster, which has done so much in this area in Northern Ireland.

A further genuine job creation measure could be an extension of this year's Budget scheme, whereby, as your Lordships probably know, a £20 subsidy is paid to small businesses for taking on extra employees, provided that the business is already employing 50 people. The scheme is limited to the Special Development Areas. If it could be more generally applied, and to the very smallest businesses—because small firms have the advantage of being labour-intensive and able to respond quickly if they have the opportunity to do so—it could be very much to the advantage of all concerned. However, I am bound to say that it would need to be accompanied by a pretty fundamental change of heart by the Government towards small businesses, many of which have literally been battered into extinction by the effects of Government policies over the past three years.

Finally on this tack, I am uneasy, as I think may be other noble Lords who have read the report, about the length of time during which it would seem, from their statement of 29th June, that the Government are prepared to accept that a school-leaver can remain out of work. For instance, the youth employment subsidy is payable only when someone has been out of work for six months. I ask the noble Lord whether his right honourable friend will look at this point again. A period of six months is a period in which some boys and girls could be reduced to utter despair or even worse. This is something which needs reconsideration.

Again, the Government have already stated that school-leavers will not be offered places on the Holland programme until the following September. That was all very well in the days when the school leaving date was always in July, but it is no longer so. This year, for instance, 300,000 of the less able and unqualified school-leavers left school at the end of May. The acceptance date in September will leave many of them out of work for three months. Although I realise that it would be undesirable for the prospect of a programme place to deter some of them from getting out and getting a job, I am absolutely certain that careers officers could be responsible for putting young people forward for training places when they think that the right moment has arrived.

I should like to conclude by saying a few words about the position of the Education Service in all this. By 1980 it is reckoned—and it is quite a thought—that school-leavers will number 900,000; that is in the region of 200,000 more than the figure 10 years ago. It really is an incredible bulge in the school-leaving rate. Exactly 50 years ago, knowing that it would have severe post-War unemployment to face, the 1917 Departmental Committee on Juvenile Education after the War said: Can the conception of the juvenile as primarily a little wage-earner be replaced by the conception of the juvenile as primarily the workman and the citizen in training? Can it be established that the educational purpose is to be the dominating one, without as well as within the school doors during those formative years from 12 to 18? If not, clearly no remedies at all are possible in the absence of the will by which alone they could be rendered effective".

Those were wise words, because they rejected the idea that in some way education and training are entirely separate functions. Thus, as the Holland programme is a conscious effort to try to both train and educate young people who, often through no fault of their own, are out of work, so surely it is the responsibility of our schools and our colleges to prepare pupils for the chance of getting as good a job as possible and finding fulfilment in it once they have got it.

Your Lordships will know, from hard practical experience, that what we hear from all sides is very often complaints that young people taken on by employers are not very good these days, and those complaints come increasingly from industry. If those complaints reflect a belief that in some way today's younger generation are worth less than preceding generations, then may I just make the point that people have sometimes thought this before and invariably they have been proved wrong. A verse from A. P. Herbert's lines about the Battle of Britain pilots puts it in a nutshell: These are the boys of whom we said, They are not what their fathers were, They have no heart and little head, They slouch and do not cut their hair".

If, on the other hand, industry's complaints are a recognition that pupils have not been encouraged by an increasingly young teaching force to go into and to be prepared for work in productive industry, then I think that that is much nearer the truth. I must say that I believe that the Prime Minister's speech which he delivered at Oxford last October hit the nail on the head in this particular respect, when he said that schools must satisfy parents and industry that what they are doing meets the requirements and the needs of our children.

May I add four quick suggestions to that. First, at a time when the future general composition of the Schools Council is under consideration, I hope that the representation of industry and commerce on that Council will be looked at carefully, and will be in no way reduced. Secondly, surely it is high time that there was a mandatory training requirement for careers officers. It is quite a thought that the average case load of a careers officer today is 400. The numbers in the service are being strengthened at the moment; I think it is time that their training was strengthened also.

Thirdly, I hope that every opportunity will be taken to ensure that industry and education can try to understand better what each other is trying to do. The noble Lord, Lord Rochester, in his debate of some months ago, made that point very much better than I can. The CBI have already taken two valuable initiatives by publishing Understanding British Industry, and starting its Introduction to Industry scheme for teachers. However, as my noble friend Lord Carr said in Lord Rochester's debate on the 9th February, if industry does not do the job of changing the feelings of young people towards work in industry, then no one else can, and greater enthusiasm for two-way contacts of all kinds is, I think, absolutely essential in this respect. Lastly, in the words of the Prime Minister's Oxford speech: There is no virtue in producing socially well-adjusted members of society who are unemployed because they do not have the skills". And, my Lords, there is no future in having skills if there are no jobs for them to be used in.

Today the Government stand quite literally at the crossroads. Down one way lies chronic unemployment in a continuing stagnant economy; down the other can lie incentives to people to get work and to hold it, and the willingness of employers to make it available. Before the autumn comes the Government are going to have to decide which way they will go, and it they take the wrong road a whole generation of young people will not forgive them. My Lords, I beg to move for Papers.

3.15 p.m.

Lord ROCHESTER

My Lords, I am sure that the whole House will be grateful to the noble Lord, Lord Belstead, for having introduced this debate. It is timely, as he said, following the publication of the Holland Working Party Report and the statement by the Secretary of State for Employment in another place two weeks ago. I believe with him that these problems of unemployment have serious social implications. I think that for me this was highlighted most strongly by the phrase which has remained in my memory more than that of any other from this Holland Report, which was this: Unemployed young people are not failures. They are those whom others have so far failed". I think, too, that these problems are among those in the industrial field on which it is of great importance to seek the maximum amount of national consensus. I therefore should like to join with the noble Lord, Lord Belstead, in complimenting the Holland Working Party on its report and to say, speaking for my noble friends, that we are in broad agreement with the measures, so far as they go, that the Government have decided to take in implementing the recommendations of this report.

The noble Lord, Lord Belstead, seemed to me to analyse the problems admirably. He laid before your Lordships certain basic statistics to which I will not add, except perhaps in one or two particulars to draw out certain conclusions. Nor will I repeat the views that I endeavoured to express in the debate on unemployment generally initiated in this House four months ago by the noble Lord, Lord McCarthy. Instead I should simply like to concentrate on three main points. The first is that, if these problems are to be solved, then the overriding need is to conquer inflation, because it is only if we succeed in doing this that we shall succeed in creating the new jobs of which the noble Lord, Lord Belstead, spoke. This has been highlighted by recent events, culminating in the annual conferences last week of the unions of the miners and the Transport and General Workers.

I believe it is imperative that at the end of this month—when Phase 2 of the current agreement between the Government and the TUC expires—that increases in pay should not rise above those which now obtain. Indeed, should it regrettably transpire that no meaningful agreement can be reached on a third phase of incomes policy, then the Government must give a firm lead in the matter of wage settlements in the public sector, continue to limit the borrowing requirement in that sector, adhere to present cash limits, and go on controlling the supply of money. If, in such a situation, they were to act in that responsible way, then I believe that they would have the backing not only of the Liberal Party but of many ordinary people throughout the land.

In any event, certain unpalatable truths must, in my view, now be spelt out loudly and clearly, including the fact that, if as a nation we persist in seeking to maintain living standards that we have not earned, the price will eventually have to be paid in terms of even higher unemployment, and particularly among young people. For, as the Holland Report pointed out in Part I, paragraph 20: The key influence on youth unemployment is the level of total unemployment". The young people who will then mainly suffer will continue to be those with few or no qualifications, such as the unemployed 16- and 17-year-old coloured immigrants, many of them living in the hearts of our big cities, whose number, we are told, has trebled in the last four years.

With points like that in mind, I accept the conclusion of the Working Party that the problems of unemployed young people are too urgent for there to be time now to experiment with entirely novel concepts and approaches. Immediate action must therefore be taken, albeit on a more integrated basis, broadly within the framework of existing schemes, and funds should be allocated to each locality, as I think the Government agree, according to a formula related to the number of unemployed young people in the various areas.

Having said that, however, we on these Benches continue to doubt—this is my second main point—whether the Government are paying sufficient attention to the long-term implications of the structural problem. I am now persuaded by the argument of the Holland Working Party not only that young people should not be compelled to participate in this programme of opportunities but also that, if opportunities are to be provided for all between 16 and 18, that would lead to a waste of resources.

However, I am still unhappy—I think this will come as no surprise to the noble Lord, Lord Wallace of Coslany—about the apparent absence of any coherent framework, for example in the matter of the various payments that are relevant to the unemployment of young people. I refer to matters like the increases in employers' National Insurance contributions that now have to be paid, to redundancy payments under the Employment Protection Act, to which Lord Belstead referred, followed now by rebates to the £25 tax free allowance payable under the job release scheme and, especially, to the marked contrast between the uniform payment of £18 a week which is now to be paid to all young people taking part in this new programme and the negligible grant available to those who wish to proceed to full-time further education rather than take part in that programme.

On this matter I have a specific question for the noble Lord, Lord Wallace of Coslany, and I have given him notice of it. The Working Party noted the difficulties that might arise if the £18 allowance was not available to those young people who wished to move into full-time further education and they said they understood that education departments had this under review. May we be told what has been the outcome of that review or when we may expect to hear of it?

At least in Cheshire, where I live, this difference in treatment has already produced a feeling of inequity. Those taking part in the Government's new programme will now be able to go on presumably one day a week to the same college of further education while drawing this payment of £18 a week. School-leavers who are unemployed can attend for up to two or three days a week while drawing £9.50 supplementary allowance a week. Whereas, on the other hand, young people who elect to continue their further education on a full-time basis without a break may well get nothing at all. It seems that something needs to be done about this if we are to maintain the link between industry and education of which the noble Lord, Lord Belstead, was talking.

I hope that in the Government's longer-term thinking—and I am assuming of course that while on probation under the Lib-Lab pact they remain of good behaviour—they will pay special attention to two points which might well prove capable of being closely linked, and they are the encouragement of small businesses, to which reference has been made, and the need for young people—I stress this strongly—themselves to be involved so far as possible in decisions affecting them. I know of at least one large industrial organisation which believes that there are elements in its business which could be done more economically by small businesses than by itself. I surmise further that under the right conditions it would be willing to help in the setting up and running of such businesses and in giving them work to do. Are there any financial or other inducements that the Government might be prepared to offer which would facilitate the establishment of such joint ventures? Indeed, might not such small businesses in some cases eventually take the form of co-operatives or common ownership enterprises under the Government's Industrial Common Ownership Act which was passed in this House with all-Party agreement only a year ago?

Related to this may be the point made in Part IV of the Holland Report where the danger is recognised that the programme the Government are now going to implement could result simply in the provision of activities that older generations thought young people needed or ought to have instead of relevant opportunities which engage the active interest of unemployed young people. For this reason the Working Party themselves acknowledge the desirability of young people being able to participate in suitable ways in administering their proposed programme and they quoted as a precedent for that the success of that kind of approach in the old Coventry Fire State Act.

I recently attended a conference in Oxford on technology and I was most impressed by the representatives of the younger generation who were present. It was relevant for me to ask one of them what he thought members of the younger generation felt they most wanted as their main purpose at work. He replied in one word, which at the time rather surprised me, "activity". Surely ways should be sought in which unemployed young people can themselves play a more active part in trying to solve the problems we are discussing. Could it be that one way might lie in their being involved in setting up and running small businesses of the kind I have described, actively supported by their elders?

In debates of this kind it is very easy to rehearse old arguments and to score Party points. In my last remarks I have tried to approach the matter in a rather more imaginative way than that. It may be that the suggestions I have made will not stand up and that, on closer examination, they will prove impracticable. The point remains that we clearly owe it to these unemployed young people to do all we can to help them to formulate, and then to implement, their own ideas, if their commitment is to be gained to the action that needs to be taken in this field.

3.31 p.m.

The Earl of LONGFORD

My Lords, we all appreciate the deep understanding possessed by the noble Lord who has just addressed us, and we all agree with him in paying tribute to the noble Lord, Lord Belstead, who has introduced the debate in such a satisfactory way. The noble Lord inevitably delivered a few partisan remarks, but I will leave those to the Minister to deal with. I must give him something with which to wind up, and so I will not pursue that side of the noble Lord's argument. But I thought that the noble Lord, in setting out the whole matter, and the noble Lord, Lord Rochester, both addressed us in such a way as to leave us in no doubt—had we been in any doubt—about the gravity and grimness of the problem.

There must be quite a few Members of this House who share my occasional experience of looking to see where their names appear in the list of speakers, and feeling that our unique experience has not been recognised in quite the fashion that we hoped. We may find that we are the 25th of 27 speakers. But today I find myself in the rather rarer, and opposite, position of being elevated beyond my deserts. Looking around the House, and in particular at my own Labour Party Benches, I see many noble Lords and I cannot think why they are not speaking in the debate, for they are much more intimately in touch with youth and industry than I am. However, here I am in this exalted position, and I shall offer a few thoughts.

I was, for a time, chairman of the National Youth Employment Council, though it was a long time ago. It was soon after I resigned from the Government—which was also a long time ago—because they were not raising the school leaving age soon enough. I learned a great deal in my role as chairman, but I am afraid that it has now become rather irrelevant. Things have deteriorated sadly since I ceased to be chairman of the National Youth Employment Council. In those days there was very little youth unemployment, whereas now we realise that the problem is quite out of hand. I am not trying to draw any particular moral from that. I am merely explaining why my own knowledge of youth employment and unemployment is not quite so relevant today as it would have been six years ago.

On the other hand, I helped to found some years ago, and am now chairman of, the New Horizon Youth Centre, which is very much concerned with those young people who find it hardest to get work. I am also a patron of a society started in Brixton by West Indians, for West Indians, and members of this society find it even harder to get work than those who attend the New Horizon Youth Centre. So in that fairly direct, microcosmic (if that is the right word) sense I am in touch with youth unemployment.

I want to address a general question to the Minister. I have given him a little notice of it, though perhaps not as much as he should have had. I should like to know whether he is satisfied that these excellent proposals, which he is laying before us today, will do enough for disadvantaged young people. I am thinking of many white disadvantaged young people and many black disadvantaged young people—at any rate, disadvantaged young people. I am sure that we all agree that youth unemployment is the most serious feature, though by no means the only serious feature, of the current unemployment situation. It affects young people's attitudes towards work for the rest of their lives, and in many cases it is the first step towards a pattern of permanent deprivation. Youth unemployment today, at any rate in my first hand experience, is wrapped up with the ever worsening problem of youth homelessness. It is not surprising that many young people who are unable to obtain work in their home areas, move to our major cities—London, for example—where they are often confronted with both unemployment and homelessness. At our own centre in Central London, the majority of young people seem to come from Scotland, the North-East and the North-West of England and certain Midland areas, which have traditionally suffered high levels of unemployment. Some of these young people have been unemployed since leaving school. Naturally, one of the most common requests that we receive at the New Horizon is a request for work.

I am sure that all with whom I am associated in this field will join with me in giving a strong welcome to the latest Government initiative; I do not want there to be any mistake about that. But it is in no carping spirit that I must press on the Minister this general question, which I mentioned earlier; how does he propose to make sure that the steps he is taking will benefit those who are most in need of help? From our limited experience in New Horizon, for example— and of course the same experience could be multiplied in many places—we question whether those who, for instance, attend our centre and other such places, will in fact obtain the advantages that I am sure are intended for them by the Minister and those with whom he is working.

I am bound to tell the Minister that, up to now, young people who have come to London, and who have come to a place like ours do not seem to benefit from any of the existing schemes. I do not know whether the same is true if their homes are in London. Their poor work records, their illiteracy and their lack of accommodation are all factors which work against their getting a place in any training scheme. In the jobs which they acquire—in labouring, kitchen portering, or washing up—they are often exploited. The living quarters which they manage to obtain are usually very depressing, and general demoralisation sets in. Therefore, many, perhaps most, young people whom we tend to see give up the job and the housing, such as it is, together. I know that the Minister will agree that stopgap measures are all very well, but are valuable in the long run only if they lead to long-term employment; and there I seem to be echoing what was said by the last speaker.

This House is, of course, aware that youth unemployment falls hardest on ethnic minorities—West Indians, for example. I do not think that there are any precise figures available here, but it seems that youth unemployment among West Indians is twice as high as the national average and—it may be more than twice as high. Some years ago, I asked Questions in this House about the figures for unemployment among young West Indians. The Answers that I was given were no doubt honest and based on the best that the official world could provide, but they were laughed at in circles where the situation was well known. For those living with the problem it is perhaps almost impossible—and it is therefore impossible for those not living with the problem, or for the official world—to obtain the correct figures because so many young West Indians, for example, do not register. As a result, the various official bodies concerned cannot be expected to know the facts, let alone be in a position to help them.

Of course, the same is true, though not quite so true, of those in extreme situations among the white young people in central London. When I talk of the white young people, I do not mean that black young people are not welcome in our New Horizon Youth Centre: obviously not, though in fact those there are nearly all white. But whether they are white or black—irrespective of colour—the fact is that those in the most difficult positions are the most reluctant to go for help or even to take the preliminary step of registering themselves.

Now perhaps I may return for a moment to the West Indians. Their unemployment tends to be concentrated in particular geographical areas—in city centres, for example. Many of the disadvantages suffered by these black young people are, of course, of the same kind as those suffered by white young people: but all available evidence points to the fact that racial discrimination is a major factor in the disproportionately high youth unemployment among, for example, West Indians. The result, naturally, is a growing cynicism and an alienation which make it more and more difficult for even the best intentioned official people to help these young people through the conventional statutory agencies.

The question, therefore—and I come back to it in conclusion having raised it at the beginning—that I am pressing on the Government this afternoon, assuming that my account of things is more or less correct, is how the Government propose to take the special steps required, having regard to their new problems, to help those suffering from disadvantage. I say "special steps" deliberately because in what might be called free and fair competition the disadvantaged will tend, if previous experience is any guide, to be left out in the cold; they will be the losers. If there is a limited supply of job opportunities or training opportunities, they will not get them. All the disadvantaged require special steps—the ethnic minorities: the West Indians, for example, though they are not the only ethnic minorities. They require what I can only call extra special steps. I know well that the Minister will desire to deal with this problem in a humane and energetic spirit, and the same, I believe, is true of his colleagues. I hope that, when he winds up, he will be able to give us at least some hope and encouragement.

3.43 p.m.

The Lord Bishop of SHEFFIELD

My Lords, like others I should like to express my gratitude to the noble Lord, Lord Belstead, for his initiation of the debate here today on a subject which is crucial to the life of the nation. Perhaps it is as well to remind ourselves that this is not simply a national problem, but an international problem. We, however, are particularly concerned with our own situation, and, as I say, I am grateful to Lord Belstead for initiating this debate and for setting out the facts so clearly before us. He quoted from William Temple, I think from his book Christianity and Social Order, and he may remember that there William Temple describes unemployment as "the most hideous of our social evils". All unemployment is like that. It corrodes human dignity and it undermines self-respect, but especially, I believe, in that sector of it with which we are concerned today; namely, youth unemployment.

Most of your Lordships will be able to reflect upon the situation today as compared with the late 1920s and the early 1930s, when also the unemployment situation was one of the gravest of our national evils. Today we can say that the physical effects of unemployment are not so severe as they were in that earlier period. There is not the same grinding penury. But if from unemployment there is less physical suffering among young people, the psychological effects and the moral effects are just as great now as they have ever been. Gone is the excitement, for so many of our young school-leavers, of the first wage packet and the first job, the spark of ambition and all that helps them to make the exciting transition from school to work. All this has turned sour, and in its place is frustration, despair and alienation.

Unemployment conditions young people, defines their attitude to work and determines their attitude to society. The facts of the matter are not so well known as they ought to be, and I am glad that Lord Belstead has put the facts fairly, squarely and clearly before us in this debate this afternoon. He has emphasised that youth unemployment, as a percentage of the whole, is increasing quite alarmingly—especially, incidentally, among girls. Unemployed males under 19 compared with the total labour force increased from 6.5 per cent. in 1971 to a staggering 21.9 per cent. in 1976. Here is some indication of the scale of the increase.

Then, of course, the birthrate trends increase the number of young people coming on to the labour market and the situation is worsening. There will be 50,000 more school-leavers in 1981 than there were last year. Side by side with this, there goes the decline in the demand for manual workers. This has disproportionately affected young workers' jobs and traineeships. The dice are loaded against the young people at every turn. Public expenditure cuts make the situation worse, for recruiting is at a standstill. No longer are our young people a pool of cheap labour, and so the troubles that they suffer from in the labour market get increasingly worse.

I was glad that Lord Longford drew particular attention to the problem of unemployment among ethnic minority groups. What he said about the West Indians is very important indeed, but as he has said it I will not repeat it. Youth unemployment reflects and reinforces social depression and social deprivation. Manual and menial jobs are being taken by well-qualified people, thus pushing unskilled and unqualified people out of the market altogether.

Another factor which we should remember is that unemployment has a particular result for the disabled. The disabled find it more and more difficult, in a high-unemployment situation, to find any work for themselves. It is an extraordinary situation when you find teachers and young nurses unable to find work. I find myself over and over again sympathising with well-qualified, able young people who turn to me for references for job after job. I write in sincerity about their abilities and about their personal qualities, and still they go on applying for job after job. It is a gloomy picture, and it is not made brighter by the realisation that the right industrial strategy may well create employment problems rather than resolve them. Salvation is not likely to be found by an upturn in the economy; the problem will not go away when trade picks up.

Where, then, do we go from here? The welter of schemes, about which we have been hearing this afternoon, that the Government have introduced to fight the fires of youth unemployment have done something to alleviate the problem. There has been no other time when there were so many training schemes, job creation projects, employment subsidies, work experience programmes and the like. All this is good, and is a measure of our concern, but it is ad hoc. That is why I join with other speakers in welcoming the proposals of the Holland Report. Perhaps I may quote from some of the introductory remarks in that report, which help to pinpoint the situation and what the Holland Report recommends to deal with it: Behind the figures (of unemployed young people) lie hardship and waste. These young people are at a crucial stage in their personal development. More important than the large sums paid out to them in supplementary or unemployment benefit is the frustration accompanying unemployment. Unless some constructive alternative can be found, the motivation and abilities of a substantial proportion of the working population may be prejudiced for years to come. The time has now come to turn a major problem and cost into an opportunity and a benefit. The special measures so far taken by the Government and administered on their behalf by the Commission and the Department of Employment, piecemeal and temporary though they may have been, have shown that something better is possible. They have made a substantial contribution to safeguarding the future stock of scarce and essential industrial and commercial skills; many young people who would not otherwise have done so now have jobs; many … have acquired greater confidence and self-respect and a greater ability to cope with working life; and in many cases the community as a whole has benefited … In this report, we describe the deteriorating unemployment situation for young people. We review the measures that have been taken. We then propose that an essentially ad hoc approach should be replaced by a new programme of opportunities for yougn people, offering two or three times the present number of opportunities … It offers each young person an effective bridge to permanent employment and encourages and helps him or her to cross at the earliest opportunity …". It is good to hear that report and to hear that it has been accepted by the Government. But, good as it is, it is only a palliative; it does not grapple with the larger, longer-term problem: the fact that our economy does not need all of its members engaged in full-time production.

Society, then, has to find a way of creating some form of employment for all its members through new means. It has to find ways of satisfying growing numbers with something other than full-time employment. This calls for ingenuity to create employment but it also calls for a reorganisation of work, education, and leisure to accommodate a lower demand for labour. The immediate pressure of our present situation, the current economic recession and social malaise should not obscure or frustrate the necessity for longer-term thought.

I should like to agree with what was said by a previous speaker in pleading for the participation of young people themselves in policy making and in decision making. The current levels of youth unemployment imperil future generations of young people. It is vital, then, that new policies to meet the situation should be found, but also opportunities seized to allow young people to play a greater part in determining their own future lives in education, in employment and in leisure.

Finally, my Lords, I believe that we need a new social ethic, a new doctrine of work. It must be rooted in the fulfilment of the human potential; it must express our common inter-dependence; it must relate work and leisure; it must illuminate the contribution of one to the other; it must clarify the ends of economic activity and ensure that the means employed are consistent with it. Without a strong social ethic, there will be little progress in solving this problem. I am not pessimistic and I hope that your Lordships will be optimistic at the end of the day. As we strive for a just society, this debate is wrestling with an intractable problem. But problems are opportunities. This one calls for a united, costly endeavour—an endeavour that cannot be made without sacrifice from us all.

3.55 p.m.

Lord GISBOROUGH

My Lords, first I should like to acknowledge what is being done by all departments of the careers services in schools and in job centres with all the things that have been mentioned, like work experience, job creation and so on. Turning to my own county of Cleveland, we have no fewer than 6,000 young unemployed at the moment with only 200 vacancies, which speaks for itself. The main problem, as has been mentioned, is among the unskilled. It is found that most of those who take O-levels and A-levels can be found jobs within a matter of six months or so. Once, boys were the main problem, for girls could easily find jobs in shops and factories; but these jobs are now being taken by middle-aged women, and the girls are the main problem. There are five times more girls now unemployed in excess of six months than there were in 1974. In fact, 20 per cent. of the girls on the register have been unemployed for six months or over. Therefore, I should like to support the requests to the Minister already made as to what job creations can be added for girls; because, at the moment, most job creation schemes are designed for boys.

The job creation schemes have created anomalies in pay. I have had experience of this because a team came to work on my own land and they were put to work on footpaths, clearing scrub and other non-profit making work. These young chaps varied enormously, their output was not very high and they were totally inexperienced. They worked alongside foresters who had experience and who were trained. I should like to compare their wages and to take two examples. At the beginning of this year, an 18 year old had an agricultural wage of £31.20 if he worked full-time. The craftsman's wage was £33.64. But the lads from the job centre, without any experience at all, got £37.40, which was £4 more than the craftsmen. When it came to their supervisor, who also knew nothing about the job that he was doing, however hard he tried, the agricultural wage appointment Grade II was £45.10 and the supervisor's wage was £46.54. This created resentment among the full-time workers and must have caused some reluctance on the part of the job creation scheme members to become full-time workers in agriculture, if that was what they had in mind. I was interested to read in paragraph 3.46 of Young People and Work that many of these young people would happily work on schemes for rates of pay around the unemployment benefit rate. I gather that this is going to be so in the future; but it is a pity that this anomaly should have been allowed to occur in the, first place. Without it, many more boys could have been employed at a lesser rate.

My Lords, there are many contributory factors to unemployment. We none of us really know what they all are. Some schools are better than others, and the corollary of that is that some schools are worse than others. One comprehensive school close to my home in Cleveland has extremely good results. Very few boys leave there without jobs. That is because they have extremely effective work experience schemes in the school. In the 4th and 5th years they have two periods a week with films, facts and information on careers and when their boys and girls go out to be interviewed by employers, other things being equal, the employers choose boys and girls from that school.

Why is that? It is that this school prides itself on making a stand for the values that it considers count. First, the leadership is first-class; they insist on uniforms; they insist on honesty and on good manners; they insist on a hard day's work and they insist on discipline, even to the extent, in the last resort, of corporal punishment. The result of that is the achievements in sports and academic subjects in that school are phenomenal, and there are very few people who leave without jobs. How different for the permissive schools, and what bad luck for the children who find themselves at permissive schools, who leave without the self-discipline, and so on! Both those schools are in the State system.

Another factor related to unemployment and the young is pay. Sixteen-year-olds are welcomed into apprenticeship schemes; but 17-year-olds, having spent the extra year in school, have to be paid nearly the same amount as adults. Therefore it is a fact that employers tend to employ adults for the small additional amount of pay needed. That is rotten luck on the 17 year-old who has taken the extra year at school. These comparatively high adult rates for young chaps are probably unnecessary because most of them are living at home and only require pocket money. My own rather old-fashioned opinion is that it is not good for young people to have too much money. It is much better to learn at an early age how to live on a tight budget. Having a lot of money at an early age may encourage early marriage and that brings added problems.

In spite of all the efforts that are made for the young, it is a fact that employers find in a substantial number of cases (and this is mentioned in paragraph 1.15 of the report) that many young people do not bother to attend interviews. I have a lot of personal experience of this. Many young chaps who start work are keen for the first three weeks but then lose interest. They soon catch the bad habits of their elders. The 16-years-olds are led to think that they can have a good time and the attitude is, "Others are doing it, why shouldn't we?" They catch the spiritual malaise which is the cause of so much of our problems in the country.

There are many exceptions and lots of chaps work very hard. I am not talking about them. This spiritual malaise is a combination of media influence, the permissive society, depression through over-manning, some poor schools and many other influences. It has contributed to an attitude to work which pervades the country; it is an all-embracing problem and is probably the main problem in the country at the moment. An example of these problems is a local builder who employs a lot of joiners. Fifty per cent. of them will not work overtime because they are single and do not work overtime because of the tax system. That is something which it is within our power to alter. They want more money but they do not want more work.

There are other factors which cause unemployment. At all ages there are all the rules of redundancy, employee protection, higher wages, restrictive practices and over-manning. These are marvellous things for employees and obviously ensure that the employees are protected. But what about the employer? The employer just tries to avoid taking on more employees. There is another small builder at home who has a lot of work on his hands. I said to him: "Why do you not take on more people and expand?". He replied: "I have two brothers and we work together. If we take on more labour, we take on more problems". So he is not going to bother. In addition, his tax rate does not make it worthwhile. These various restrictions have led, as we know, to the closure of businesses, and have led to non-expansion of businesses. As far as the young are concerned, we see fewer errand boys, reduced staffs, more mechanisation, and so on; there is an increasing spiral of less labour wanted and more unemployment.

It is odd that while we have this situation of unemployment, there seems to be equally a lack of craftsmen. How often we find that we cannot find somebody to do a job! Perhaps a plumber is required or a washing machine repairer. It is a great omission in Young People and Work that there is no mention of the enthusiasm which should be instilled in young people in order to get them to learn a trade, become their own masters and be a one-man business. I believe that the one-man business may well be something which is coming back to this country, and that is all to the good. It is much better than these colossal firms which get bigger and bigger, so that people get lost within them.

One has seen this in the arts. One sees more and more one-man exhibitions, and people setting up to make jewellery, paint pictures, make pottery, and so on. There is a very good exhibition on at the moment. I wonder whether this should not be vastly encouraged on all sides to give people enthusiasm and a reason for learning a trade so that they can come to be their own masters.

I am slightly involved in the hotel trade and I must declare an interest. There are many vacancies for chefs, waiters and, in the house service, for girls. There is a great shortage of people who are prepared to work in hotels. I cannot speak for London, and in London there may well be low wages, bad conditions and so on. I am not able to speak about that, but from my experience in country hotels, I do not believe that conditions are very bad, nor that wages are very low. Many waiters can at the age of 17 earn between £50 and £60 a week, but for as many hours. It is hard work but it is good pay. These jobs are not dependent on high education or qualifications, but it appears that British people on the whole prefer to remain on the dole or to do anything rather than work in hotels. Only last week, we heard of the number of foreigners who work in hotels. It is an industry which is virtually run by foreigners.

Finally, returning to the question of malaise, I believe that there are not enough people making a stand for higher standards of work and for the self-discipline which I believe to be one of the centres of the problem. Until we have a new attitude to work, neither the country nor the unemployment situation will ever recover. Obviously, we have to produce better products and we have to produce them more cheaply. That, in itself, will cause more demand and more work will become available. Until these attitudes change, we shall continue to have unemployment.

I mentioned a comprehensive school which is making its contribution towards responsibility and high standards. The Government must give—must force—a lead in that way. The pendulum must sooner or later swing from permissive attitudes, the happy-go-lucky idea and wage chasing to high standards, and, with that, productivity and employment will rise. Either the situation will change by leadership, public understanding, public demand and change of views or, if we go on as we are, we shall continue with inflation and, I suggest, poverty and then perhaps dictatorship. Let the pendulum be swung by consensus and leadership: let us not have it forced on us by events.

4.9 p.m.

Lord MOTTISTONE

My Lords, I shall not detain your Lordships long. I am taking part in this debate because I believe that, of all the social problems of the day— and there are many—this is the most serious. In attending this debate, I had hoped to get some threads of thought which might encourage me to think that there was a reason for hope of a rather greater extent than I have so far gathered. I reflect very strongly the views which my noble friend Lord Gisborough has just been advancing. The facts and figures that he produced were much more detailed than I could have put forward, but they reflect exactly the knowledge and information that I have.

Though the right reverend Prelate indicated that we should be optimistic—and I am a great optimist so far as I ever can be—I confess that in this area I do not feel that to be the case. If one reads the Holland Report and its forecasts, which I hope will not be realised, the tendency is that there will be more rather than less unemployment for the young. I shall not belabour the point too much because many noble Lords have made it, but I suspect that the reason is the fact that, with increased automation in industry, there are potentially fewer jobs in the bigger firms.

Cheap labour has been abolished. I am not one to say that we should go back to cheap labour—do not, for heaven's sake! get me wrong on that point—but it is a fact that as recently as 20 years ago, let alone earlier than that, a young person would be taken on as an apprentice or in a totally unskilled job, perhaps, at a relatively low wage because a company could afford to do that then. Now when the young person has to be virtually paid the same as his senior, a company, if it has the option, will take on an older person, whether a man or a woman, because they have that extra bit of experience, and perhaps also that extra bit of stability. So it is all a matter of trends and biases which we have somehow to put right.

It seems to me that it would be wrong for us to look too much to the big companies. At this point I should like to add my tribute to this splendid Holland Report. I am happy to say that, after a bit of prodding, I was able to obtain from the noble Lord, Lord Wallace, the names of the authors; that is, some of the names. He was able to give me the names of those who were not in direct Government employ, but he was not able to give me the names of the people in Government Departments. I do not know whether that springs from tradition but, if so, I would suggest to your Lordships that it is a tradition we should seriously try to do away with. If you get a good report like this, let the credit go where it is deserved. Let us not hide our civil servants from praise—we may want to hide them from criticism—because I think it would be much healthier if the report could be more fully documented as to its authors. However, that is in parenthesis.

I think it is a very good report. It tries to set out the situation as clearly as possible. I think that the Manpower Services Commission has done a good job in trying to tackle the problem, but I do not believe that of itself it can do more than make a dent. Of course, a dent is a help, because if that means a job for even half a dozen people, that at least puts them in the position of starting life in a confident way, which otherwise they might not. But the problem is too big for the Commission to cope with alone. I feel it is much more fundamental, and should be tackled on the lines suggested by my noble friend Lord Gisborough and also by my noble friend Lord Belstead—incidentally, I should like to congratulate him at this point on having brought the matter to our attention today.

I think that more opportunity to help the situation probably lies with the small business. I do not think that big business will find itself able to take on more people. A report was made by a Mr. Bolton on small firms some five years ago. It contained many wise phrases which unfortunately have now been buried. Successive Governments have—to be kind to them—paid lip service to that report and its recommendations but, in practical terms, they have done very little. One of the main points arising from the Bolton Report was that it was not so much that Governments organised things against the small firms; it was that they overlooked them in formulating Government policies, because their purposes and reasons were not understood. Governments introduced various practices, whether it be taxation or a whole range of social and other policies, which militated against the small firms. That was mainly because the people in Government just did not understand the problems of small firms: they never thought of them.

Bolton said "For heaven's sake! think about the small businesses." But nothing has happened and I suspect that is because people in Government, whether they be sitting in this House, in another place or in the great corridors of Whitehall, have never run a small business and so it never occurs to them to think about what the problems of small businesses might be. Therefore, I think it would be very wise, not for just this Government but the next one—which hopefully will be of a different complexion (I cannot resist throwing that in)—to give a great deal of thought to three main areas where help might be given. First, I suggest that they might set up a suitably highly-priced team of people—I hate to suggest this and I am rather afraid that nothing will come of it, but I do not see any other way of doing this—with, as their terms of reference, instructions to study the Bolton Report and the Holland Report, to study the speech of my noble friend Lord Gisborough and to try to formulate what needs to be done. Because they are all of a pattern: they all say that the opportunities for people will come from the smaller organisations.

Let us think for a moment of the young person. He often goes into a big firm. It is wholly frustrating for him; he is full of enthusiasm when he starts, but he is among tens or even hundreds of people who totally submerge him, and perhaps even dehumanise him. That is no way to start on the great path of life. But if he goes into a small firm with perhaps half a dozen people or so, he will be one of the team almost immediately, and will be given, relatively speaking, a fair amount of responsibility from an early stage. Those are the kinds of things which, in my experience, young people look for. It would seem to me, therefore, that in that area we should concentrate our efforts in trying to create a society in which the businesses of the kind I am talking about generally flourish, so that young people can have a greater chance to start.

I had the great privilege at one stage of being the director of the Distributive Industry Training Board. We had responsive to us, though we did not collect a levy from them, 320,000 firms which employed fewer than 10 people. Some of them were two-man firms and that is really a bit small, because they do not have the resources to take on even one more person, however low paid. But there were a large number—one third—which employed between two and 10 people. That is 100,000 people, and if they were given encouragement to develop so that they would want to take on one more person, that would deal with 100,000 of the people we are talking about, according to the figures given to us by the Holland Report. I am talking about just one section of industry and commerce, about which I have a few figures in my head, but there are others; and they are a much better section to look at than the 14,000 or 15,000 firms which employ more than 10 people. If the latter took on one extra each—though some could take more—it would not have nearly the same impact.

I would suggest that is probably the direction to take so as to correct what I believe to be the deepest malaise of all. The noble Earl, Lord Longford, mentioned that there was a preponderance of racial elements in these unemployed young people. That, of course, is another dimension, and a very serious one in itself; but that factor, coupled with those people who have not that added disadvantage, makes me believe that a healthy life in this society will not be well-established until this problem is well and truly licked.

In conclusion, I should like to ask the Government—and I hope this is not too fast a ball for the noble Lord, Lord Wallace—what they are doing about paragraph 5.8 of the Holland Report. It was a fast ball to bowl at them, because paragraph 5.8a asks the Government to act by June, having published the Report in May. With the greatest respect to any Government, I think that is perhaps going a little fast. But there are other things in paragraph 5.8, and it would be interesting to know what action is being taken and what is proposed. I trust that with that kind of background the Government may be able to give us some kind of a lead, and a greater air of hope than I have so far gleaned from this debate.

4.20 p.m.

Lord SPENS

My Lords, I do not apologise for standing up at this moment, because I put my name down at least a week ago to speak in this debate and it became washed out in some way or other. I want to follow what the noble Lord, Lord Mottistone, has said, particularly in regard to the problem of small businesses, because I believe that that is the area in which the Government have the greatest opportunity of finding additional employment. But at the moment there are too many disincentives for small businesses, some of which have been mentioned by noble Lords. I want to take your Lordships through some of them. I do not think my list is at all exhaustive, but it is worth while considering for a moment some of the straws which I believe have broken the back of the camel of small businesses during these last few years.

We start off, of course, with the problems of PAYE and National Insurance contributions. Then, if a business has made any progress at all, it becomes involved in VAT. At present, there is a limit of £5,000 on turnover—it may go up to £7,500—which is a very small turnover in a year, with all the problems that VAT imposes on small businesses. If a small businessman has been reading some of the more sensational Press reports, he will have learned of the danger of customs and excise men coming upon him in the middle of the night, to search his office or his house, to find out whether he has been properly carrying out his VAT obligations. That is the beginning.

Then we have recently had a whole bunch of new laws which are individually quite reasonable, but which taken together are almost terrifying to the small businessman, and I shall list some of them. First, there is minimum wages and the small businessman does not know whether or not his business is involved in any agreement. Then, there is equal pay, which creates another problem for him, followed by employment protection, trades unions, closed shops and picketing, industrial tribunals, redundancy payments, racial discrimination legislation, sex discrimination legislation, Rent Acts and consumer credit.

I wonder how many of your Lordships have seen the booklet Do You Need a Licence? issued by the Office of Fair Trading, which lists on the front various employments and businesses which might need a licence. They include undertakers, vehicle hirers, tour operators, hearing aid suppliers, saddlers and harness-makers, tailors, accountants, car dealers, central heating firms, solicitors, printers, builders, carpet sellers, sellers of artists' materials, cycle shops, furniture shops, furriers, opticians, pest controllers, piano dealers and quite a lot more. If any of those business men open this booklet, the first thing they see under General Information is: There are six categories of licence and you may find that you need more than one. Please read the details carefully. Apart from any criminal penalties you may incur if you trade without a licence, or if your licence does not cover all your activities, you could suffer financial loss". What an incentive to any small business to expand!

That, however, is not the end of it. There is fair trading, the Price Commission and statistical reports. Almost as soon as you register a new company, you receive an obscure document from, I think, the Central Statistical Office asking for an enormous amount of information on what your business is about, how much turnover you expect and what it is all in aid of. That puts you off straight away. None of these has anything to do with a person's own business, but any one of them may seriously interfere with it, and the ordinary businessman does not have a clue about them or about how to avoid becoming caught by them.

Those are the disincentives which are, at the moment, preventing small businesses from expanding, and it is the small businesses which might provide the best opportunities for increased employment. They particularly affect unemployment among the young, because the small businessman is probably stuck with his present employees and will not take on any more—especially young employees, new to the job. He would much rather pay overtime to the men and women he already has.

What is the solution? Will these fears disappear with time? It will take a very long time for the small businessman to accept this burden of legislation which has recently been imposed upon him. But I believe that, if by some magical chance, the Government could remove some of the extra book work from small businesses, that would be a great solution; and, of course, that book work particularly involves PAYE and VAT.

My second point is that there is too much disincentive to the young to look for work. Work is not natural for men or women. It is a burden that has come upon us from our civilisation. I do not blame the young, who prefer the sun and romance of Torquay to looking for a dreary job in their own home town. Good luck to them! I wish I was young enough to go and join them. We have to make jobs more interesting and more lucrative than the joys of doing nothing and drawing unemployment benefit. The differentials must be made greater, with much less tax deducted. I believe that PAYE is one of the greatest disincentives ever invented.

My third point is about the longer term, and I want to remind your Lordships of what the noble Lord, Lord Fulton, said in a debate in this Chamber about a fortnight ago. If I may quote from Hansard of Tuesday, 5th July, at col. 210, he said: It has no doubt often occurred to many of your Lordships, as it has to me, that immunity from the need to seek election or re-election, which we in this House enjoy, should perhaps be balanced by a self-imposed obligation to look at our national problems in a context that stretches beyond the normal lifetime of a Parliament". In other words, we in this House should take a longer-term view of matters.

May I also quote very briefly from the report of the Central Policy Review Staff on Population and the Social Services. Paragraph 10.1 on page 28 deals with young people in the age range of 16 to 24 and says: By 1985 there will be over 1 million more in the 16 to 24 age group than in 1975". On page 31, under the heading "The Population of Working Age", paragraph 11.1 says: The increase in the 16 to 24 age group, taken together with lesser numbers entering the retirement group, results in an increase of over 1½ million in the 10 years to 1985 and a further increase of ½ million to 1991". Therefore we are faced, long term, with an increase of about 2 million in the working population, yet at the moment we cannot find jobs for many of our young people.

I believe that we must consider the problem. We are reaching the ceiling of human productivity, although there is no ceiling to mechanical productivity. Therefore we ought to be planning for a 3½-day week for all workers but a 6 to 7-day week for machines. Some trade unions are starting to move towards this goal, although I am not at all sure that they are doing it for the right reason. They must not hold back improvements in mechanical productivity. They must link these improvements to a shorter week for the human workers.

This, however, leaves the huge problem of how to occupy people who will not be working for half the week. There are already movements in that direction: leisure centres, perhaps competitively misnamed, the encouragement of sports and the various arts enterprises. I should like to see not a Minister for Sport and Drought but a Minister for Leisure to combine the arts, sports and those aspects of the environment which encourage people to do things for their own interest and entertainment. At the same time, however, the Government of the day should be encouraging a two-shift, 3½day week.

4.33 p.m.

Lord KAGAN

My Lords, noble Lords will forgive me for detaining the House at this late stage of the debate. Since I am a first-hand witness of rising unemployment in the textile industry in Yorkshire, I can give evidence regarding what it means when one person loses his job. Thirty other people do not sleep because they are afraid of what might happen to them. For the first time since I have been in Yorkshire—which is well over 25 years—I have noticed among people of the West Riding a distinct and grave doubt about our Parliamentary system and about whether the freedom which we enjoy is worth having.

If one does not have the right to work and the dignity of earning one's living by one's own skill, one loses interest in many of the other rights which democracy offers. This is a serious matter. Therefore unemployment, particularly among the young, is a matter not only for sympathetic concern, deep though it is and excellently as it has been explained to us by the right reverend Prelate the Bishop of Sheffield; it is a matter which concerns the defence of our very way of life. Unemployment should be treated as a defence item. In my view, Britian did not succumb to Hitler because of military superiority, but because British people at the time believed in the system. This is what is at risk if we allow unemployment, particularly among the young, to rise.

If they cannot find jobs, young people feel rejected by society and, in their turn, reject society, its rules and its morals. We must not forget that there are no such people as inactive young people. If they are in employment, they are usefully active in those channels which serve society. It is when they have no chance to be employed that they find their own channels of activity. As my noble friend Lord Longford knows so well, this is the root cause of the increase in crime. In my view, therefore, the opportunity to work and to be usefully and actively integrated into society should be treated as a defence item and not merely as a matter of economics and of conscience.

Fascism in Germany arose from the humiliation, the despair and the indignity of unemployment. What can be done about it? I believe we must consider introducing a shorter working week. It is an inescapable fact that modern technology means that we can create more and more material goods employing fewer and fewer people. Therefore there has to be a combined operation. The private sector must create jobs and wealth, and, above all, new technologies to provide the opportunities for creating those jobs; but it has to be done in conjunction with an expanding public sector. It is an inescapable fact that wealth has to be created by the private sector. We are fortunate that for a short time we shall have oil. I come back to my old hobbyhorse of a mistaken taxation policy which takes away industry's incentive and produces a weakness which does not allow the public sector to create the kind of opportunities to make society safe. I thank noble Lords for listening to me.

4.39 p.m.

Baroness SEEAR

My Lords, I apologise for not having been here at the beginning of the debate and, indeed, for joining it so very late in the day. I was, however, attending a meeting of the Department of Employment's Women's Consultative Committee, of which I am a very longstanding member and which meets only twice a year. Also I had been under the impression that the debate would last for rather longer than it has.

I believe that certain noble Lords are aware that the Social Policies Sub-Committee of the European Select Committee on European Documents has been considering the question of youth unemployment in relation to memoranda from the EEC on the question of youth unemployment and the transition from school to work. That investigation, which we have carried out as thoroughly as it is in our power to do, and which we have found of very great interest and concern, is now taking the form of a report which will be submitted to your Lordships' House and which I hope we shall have the opportunity to debate later in the year.

Noble Lords will no doubt agree that a matter of this importance cannot be dealt with and disposed of in one relatively short session. It will also be important to look at this issue in the context of the European Community because it is significant that this is a problem with all our partners. It is not just a United Kingdom problem; it is a European problem. When we have the opportunity to discuss the report in your Lordships' House we hope to be able to look at ways in which our membership of the EEC may in fact help us to deal with this intractable and extremely important issue. So this afternoon I should like to limit myself to certain aspects of today's subject and particularly to omit the wider EEC matters which will have to be discussed at a later date.

Although I have not heard all the speeches, I cannot doubt but that everyone has drawn attention to the increasing seriousness of this problem. Unemployment at any age level is a matter of great concern; unemployment among school-leavers can be a matter of personal disaster to a large number of youngsters who, if they do not obtain employment and indeed do not obtain suitable employ- ment, may well become a lost generation. I do not wish to speak in exaggerated terms but I believe that is a possibility. Those of us who remember the unemployment at the end of the 1920s and in the early 1930s will remember that it hit most cruelly and most bitterly the school-leavers. There are bitter stories of boys and girls leaving school who in time obtained jobs of a sort, if they were fortunate, only to find themselves on the labour market again three or four years later, without any skills and apparently without any future. Indeed, for that generation there were many whose only hope of recovery came in the bitter terms of rearmament in the middle 'thirties. Otherwise it would seem that they would have been a lost generation. We must all be determined—and I am sure we are all determined—that this shall not happen again.

I was interested to listen to the noble Lord, Lord Kagan, as he referred to unemployment in relation to Nazi Germany. I, too, remember in the early 1930s beggars coming day after day to the German household in which I lived, seeking something to eat, as the figures of unemployment rose ever more steeply. There could be no doubt among those of us who saw it that that was an important contributory factor to the success of Hitler in attracting men and women up and down the country.

So we cannot but be glad that proposals are being made in the Holland Report and that attention is being paid to this problem with some remedial measures. But while we welcome that, do not let us fool ourselves that this kind of approach will solve the problem. It goes far deeper than that. Of course, the Government have had to produce what are in fact palliatives, but there is indeed a danger that in attempting to provide short-term remedies for what is in fact a deep-seated problem we may make the ultimate cure of that deep-seated problem more and not less difficult. This problem impinges on a number of other policy areas of great importance, on economic policy and on educational policy. In both areas we could spend a great deal of time in discussion, but I wish merely to pick out one or two aspects of both economic policy and education policy which are relevant to the subject we are discussing today.

However, I should like to begin by saying that there are aspects of this problem which we do not fully understand. One of the matters for discussion in the EEC Committee, and a matter which we discussed when taking up this question when we visited officials in Brussels, is the extent to which youth unemployment can be seen as an aspect of cyclical unemployment, and, on the other hand, the extent to which it is really a facet of structural unemployment. Until quite recently many people have believed that it is simply an aspect of cyclical unemployment, and there are still some who believe that this is so. Of course, if that is one's analysis of the situation it is relatively easy to say that short-term measures while we are at the bottom of the trade cycle will deal with the immediate problem, and then as the economy recovers the problem will go away. I believe those of us who have studied it more closely are not convinced that this is the answer, but, on the other hand, we are certain that, however great the degree—and it may be greater or lesser and there can be considerable argument about this—there really is a structural element in this, and that an upturn in the economy will still leave a number of youngsters unemployed, although not, of course, as many. Therefore we have to deal with the structural problems in the economy and not simply rely on the cyclical upturn in order to carry one over this problem.

We need more investigation in this matter and do not let our enthusiasm for the Holland Committee short-term measures blind us to the fact that we must find out much more about the problem. Many people have only recently been converted to the idea—and this is true in Brussels as here—that we must look at it as an aspect of a structural unemployment problem which needs fundamental investigation and fundamental attack.

There is another aspect of this problem to which we do not know the answer. It is of a different order but very important in its way. We have a paradoxical situation, and I refer particularly to the NEDO report on the shortage of craftsmen in the engineering industry. There is no doubt that at the present time, both in general and among youngsters, there is the curious situation of high unemployment and shortage of labour. We must find out more as to the explanation of this paradox. The NEDO report makes it quite clear that there is an inability to recruit into apprenticeships, there is an inability to get people to complete their apprenticeships, and there is an inability to hold skilled men when their apprenticeships have been completed. It is an absurdity that we should be unable to recruit the people we need into the very sector of the economy in which above all we need to have them, while at the same time we have acute and serious unemployment, and I would urge the Government to pay very special attention to understanding this problem.

It is not for me this afternoon to report on the studies we have been doing in the Social Policy Committee, but there is an inability to explain why we have this paradox. Indeed, people who should be well informed are contradicting each other as to the extent and nature of the paradoxical situation of shortage of labour and high unemployment. The fact that we cannot explain this is surely a starting point for progress in getting to know the true nature of the problems with which we are dealing. But it certainly cannot be right that we cannot recruit labour in a number of areas—and areas which are important for the economy—while at the same time people are unable to get jobs and there is an acute shortage of work for the school-leavers. Both these things appear to be true. We cannot rest satisfied until we have explained how this can be and until we have taken steps to see that it does not continue.

Of course, we know that part of it is the problem of housing, and part of it is that the jobs are in one part of the country while the people are in another part of the country; but I do not believe that is the whole explanation. At least we ought to know, and at the present we do not know. When we say that there is both an economic and an educational aspect to this problem, I should like to pick on one or two particular facets of the economic problem for consideration this afternoon.

I have said that I believe there is a structural element in the nature of the unemployment we are facing at the present time. I do not believe, except as a temporary measure, that the creation of jobs for which there is no particular demand is a way to deal with unemployment. We must face the fact that there is a need for a restructuring of industry to get more people into the jobs where there is high value added—I have said this before and I shall, no doubt, say it again—and, out of the profitability of the high value added industries, to be able to pay for the services which are labour intensive and job creating. Until we start on that path, all that we are doing is merely temporising and patching up a situation which, if it stays as it is, will provide no long-term future.

I make a particular plea to look as soon as possible at the issue of the small employer. We, in this country, have a smaller proportion of small employers than any of our main competitors inside Europe. There is the curious situation that we have the highest concentration of people in the top level firms or the largest sized firms and the smallest proportion in really small firms. There can be no question that if we had a much healthier, "smaller employer" sector and if more small businesses were able to come into being, it would be an extremely effective way of mopping up, in aggregate, a considerable number of unemployed persons. It is often a very good way for youngsters to start, especially if they are in jobs in which there is a high element of skill and a great deal of personal supervision. Other highly successful economies, such as those of Germany and France, have a thriving small business sector and maybe we could, in the near future, do more than we are at present to see in what ways we could stimulate the recovery of the small sector along the lines of other countries which are successful in this regard. We are right at the bottom end of this aspect of the economy. It is a good way in which to get the school leavers into employment and to mop up the large numbers of unemployed. Therefore, I should particularly like to direct the Government's attention to the small employer, so as to see in what ways and how soon we can pay attention to this extremely important issue.

I turn to the question of education policy. It is a huge subject but it is obviously relevant to what we are discussing. A few months ago the Secretary of State for Education called for a great debate on education. I believe that we shall find some of the answer to our problem of youth unemployment combined with shortage of labour in the education system. I also believe that we must find ways—though I shall say no more about it this afternoon—in which, while youngsters are at school, they receive the benefit of what could be called work education. By that, I do not mean narrow training. After all, we have physical education and religious education, why should we not have work education? To ensure that this is done properly is a highly skilled task. At present, there is unemployment among teachers and it would be possible to create a corps of teachers who could develop the idea of work education so that, in the schools, properly guided by educationalists and not dominated by the immediate needs of the labour market—that is not what I am talking about—youngsters could receive education about work. I also believe that, once youngsters are in jobs, there should be far more effective day-time release to give both education and training, if we must make that distinction, which other countries do not make in the same way. Thus youngsters would be far better prepared to take the varying opportunities that arise.

It is undoubtedly true that unemployment is heaviest among those who know least; that is, among the unskilled. The more youngsters can be given the education and training to enable them to respond flexibly to the changes in the labour market, the more we shall be able to deal with our problem of youth unemployment. It is the people who lack both education and skilled training who are, at present, finding the greatest difficulty in getting employment and who will, unless we take steps now, continue to be dogged throughout their lives by the fact that they lack appropriate education and training.

4.55 p.m.

Lord SANDFORD

My Lords, I am very glad that the noble Baroness, Lady Seear, arrived just in time to join in the debate, despite her absence during the earlier stages. I am sure that we all welcomed her contribution. Our debate would have been the poorer without it and we all look forward to a further debate on this difficult subject in the European context in due course when we shall have the benefit of the work of the Select Committee of which she is chairman.

As the noble Baroness, Lady Seear, said, the young people of the United Kingdom are not alone in their jobless predicament. The United Kingdom shares with many other nations, especially the developed nations, our present predicament. Of course, it is wrong, as my noble friend Lord Belstead said, to blame Her Majesty's Government for the rise in oil prices and for the world recession. However, as one looks at all the facts, figures and indicators which show us what is happening in this situation, it is difficult to find a Government which has mismanaged the matter worse than our own. The noble Lord, Lord Spens, and the noble Baroness, Lady Seear, both gave us a telling indictment of the Government's handling in just one sector; namely, small businesses. However, we might have gone into a variety of other sectors, like the self-employed, and so on.

The matter about which I should criticise the Government most strongly is that they have failed to see, or if they have seen they have failed to get the public to see, the underlying causes to which the noble Baroness, Lady Seear, has just alluded. They are structural; they are not cyclical and they will not just go away. We have had too many false prophecies about our prospects. I shall not rehearse them all now because they were all rehearsed very fully in another place a few weeks ago, but they make sorry reading. We have had too many false hopes and expectations raised about the outcome. Instead, the Government should have been trying to brace us for our trials which, as the noble Baroness, Lady Seear, has just confirmed, are structural and not temporary. The Government have succumbed to the temptation to shun the difficult and unpopular decisions that have been called for. This has led in turn to them adopting remedies in fits and starts as they have responded to succeeding crises. They have succumbed, too, to internal pressures within their own Party and to gaining popularity, especially in the two 1974 Elections from which we have not yet recovered. That has led them to adopt the wrong remedies and to press on with their own divisive legislation.

It would have been useful this afternoon to have had—and I am surprised that we have not had it—some contribution from the trade unions. One should have thought that they would have felt involved in this matter. We can see that they have made no contribution to this debate, although there are plenty of trade union representatives in the Party opposite who, one should have thought, might have tried to make a contribution. I cannot help indicting the Party opposite for that omission. Having said all that, it is fortunate for the Government—more fortunate than they deserve—that they have to hand the services of the Manpower Services Commission set up by my noble friend Lord Carr of Hadley as a result of his initiative in January, 1974. They have responded as best they could to the various reactions of Her Majesty's Government. But, of course, it has been difficult for them, and that difficulty is described at paragraph 2.42 of the Holland Report: 2.42 Every scheme has been introduced on a temporary basis. This has inhibited employers and others, such as Colleges of Further Education, from making the provision they could make—and would like to make—if they could be sure that there was some commitment for at least two or three years ahead. 2.43 The schemes have been introduced piecemeal, and opportunities are somewhat erratically related to the needs of any particular locality. Different agencies administer different schemes. Different programmes are in danger of competing with each other for provision of facilities or premises … 2.44 To the individual young person, the scene has been confusing. Since the schemes have been introduced one after the other, there has been a natural tendency to take whatever opportunity presents itself, irrespective of the help it may give or where it may lead". That is the result of responding in fits and starts to crises as they turned up instead of taking a long-term look and admitting to the public that we are dealing with a long-term structural problem.

But now, at last, we have an excellent framework in the Holland Report. I would agree with my noble friend Lord Mottistone that it is a pity that we do not see in the report the names of all the authors, because they deserve considerable credit for what they have produced. Incidentally, I also agree with the remarks made by my noble friend Lord Gisborough about the standard rate of allowance. The standard rate of allowance which will apply to all these schemes has now been fixed at £18 a week. Although above the benefits which an unemployed youngster might receive, it is properly below the average unskilled manual wage, as I think it should be in such cases.

We now have an excellent framework. It is—and again I agree with the noble Baroness, Lady Seear—no more than a framework for alleviating the symptoms and perhaps solving some of the difficulties. However, at least it integrates the existing bits and pieces into a coherent and intelligible whole. The Government still have to get at the root causes—namely, inflation, and so on—and move towards a cure. That means tackling matters like over-manning; not trying to save old jobs but creating new ones, without which even the Holland framework of short-term remedies will not in the long term succeed.

But this framework needs filling with specific proposals and projects in particular places. For this one must address oneself particularly to the problems of the young jobless. But there are also other more fundamental job aspects to be dealt with. The young—that is, the 16 to 18-year-olds—and their problems are spread across the Kingdom, but they are largely also concentrated in those places which have the worst problems; that is, the inner cities. My belief is that the projects and proposals that are needed to fill this framework are those which aim to draw on experience so far gained under the Manpower Services Commission and to apply it particularly to the young jobless in the inner city.

The inner area studies, which have now resulted in the White Paper, Policy for the Inner Cities, and the Holland proposals which the Government have recently endorsed, between them provide the basis, the framework and the resources for imaginative schemes in the places which most need enlivening by the people who most need something worth while to do. I believe that it is the voluntary organisations that have the flexibility and the flair to exploit and develop this framework and to deploy these resources. By now many of them have acquired much of the experience needed to make schemes work in these difficult and decaying areas and among the communities depressed by such prolonged decline.

My noble friend Lord Belstead mentioned Task Force North, which is one of the largest voluntary bodies that has been working with the Manpower Services Commission and with which I am glad to be associated. That organisation is now ready to join forces with local authorities and other voluntary bodies to undertake schemes of rehabilitation in the inner cities in order to make better use of underused industrial and commercial premises, to improve the local environment and to help young people to gain experience of the disciplines of work. Thereby it will try to provide settings, conditions and a sense of confidence which will help to sustain the private enterprise and the small businesses which still exist in those areas; it will help such businesses to expand and will also help to attract more small businesses back into the area.

I know from my previous ministerial experience with what was called the Special Environmental Assistance Scheme (for short, Operation Eye-Sore), which was a temporary scheme we ran in 1973 for a much shorter and less serious phase of unemployment, that it would be wrong to be oversanguine about the possibilities here, with the much more severe unemployment but a much more thoroughy thought out scheme. These are areas to which all sorts of remedies and enormous resources have already been applied with singularly little success. So we must not go into this operation with false hopes.

However, I venture to think that the present predicament—the environmental predicament and employment predicament among the young and in the inner areas—is now so serious that a further sustained effort must be made. I believe that the policy frameworks we now have improve the chances of success. At any rate, we can now draw upon the experience of Task Force North and many other voluntary bodies working in the existing Manpower Services Commission programmes.

Part of that experience, and particularly the experience of all the youth organisations engaged in the training of young people for these programmes, strongly reinforces what my noble friend Lord Gisborough said about the need for all concerned to learn the gentle art of discipline. Those who are lucky enough to come from the kind of school he described will find that easy. But, alas! there are very many youngsters, now coming from schools which have lost the art, for whom this will be difficult. However, I am sure it is absolutely essential as part of the preparation for work.

So the situation now is that we have a White Paper which sets out the Government's policy for the inner areas; we have the Holland Report which sets out the framework for alleviating the unemployment of young people. In that context it is good that many of Britain's leading voluntary organisations are coming together to help mount a nationwide educational, training and work experience programme for young people living in the inner city and the ageing urban areas. Within the first 12 months or so it is hoped to accommodate several thousand young people who have left school and who are wholly or partially unemployed. We hope to be able to provide part-time practical educational opportunities for a considerable additional number of students at school, university or technical college.

The intention of the combined scheme, which hopefully will start this autumn, is to direct the energies of part of this vast pool of jobless young people towards helping with a problem which is becoming recognised by more and more people as one of the country's foremost social priorities; that is, the rescue of the inner city. The scheme is being designed to dovetail into both the MSC's existing job creation and work experience programmes and also to relate to this latest set of measures in the Holland Report. So it will include project-based work experience, training workshops and community service schemes. It is also intended to co-ordinate with evolving school-to-work policies which my noble friend Lord Belstead mentioned.

It is a scheme which must, of course, be run jointly with local authorities. It will, hopefully, call for sponsorship from existing local firms and will provide an operational framework within which a wide range of local environmental projects can be organised on a fairly large scale, and this is all building on previous experience. The work represents valid training in community service and experience in discipline and organisation, and so far as possible the local programmes will be planned also to provide valid interim training for some of the permanent jobs predominating in each locality.

I believe that it is important now to mount projects within these policies, and within this framework, in such a way as to produce results which can soon be felt and seen. This will give encouragement and hope to young jobless people and old run-down cities before both of them succumb irretrievably to despair and decay, as they will do if they are neglected very much longer. But, in addition to this, Her Majesty's Government must stop raising false hopes about the long-term underlying problem as though it will some day, somehow, fade away. It will not do that. It is long term and it is structural. What Her Majesty's Government must do, in addition, is to get us all, and especially the unions, to take up the long-term challenge of structural unemployment.

5.12 p.m.

Lord WALLACE of COSLANY

My Lords, first of all, may I thank the noble Lord, Lord Belstead, for raising this issue? It is true that he included a dash of Party political, as did his noble friend Lord Sandford. So far as the noble Lord, Lord Sandford, is concerned he complained about trade unions not being involved in the debate. May I award him a consolation prize? I have been a lifelong trade unionist and a trade unionist on principle, and unfortunately I have known some employers who, on principle, would not give me employment because of my membership of a trade union. So it is not a new problem.

Having said that, I would say that this debate is of such vital importance that I hope it will be readily publicised outside so that the people can see it. This Chamber, with all its defects—and I suppose that it has many—is the ideal place for this sort of debate, because, apart from two slight dashes of Party political, every speaker has concentrated on some positive contribution to the debate. For that I thank them.

Unfortunately, I have a very long speech, and I think that I should make it because the subject is of such tremendous importance that we really must continue to consider the problem. There are one or two points before I get on to the main speech. The noble Lord, Lord Belstead, said that only 25 per cent. of job creation places were for women and girls. I know that this is a very important and sore point. This is quite true. But in all the other measures—work experience in the community, industry training, et cetera—the percentage is only slightly less than 50 per cent. So, in the majority of cases, it is very nearly 50 per cent.

The noble Lord also said that the average case load of a careers officer was 400. I can give him the up-to-date figure: it is now 300. He raised an important point by suggesting and urging that careers officers should be allowed to decide whether a school leaver should be let into the Holland programme immediately instead of waiting for the qualifying period to elapse. It may well be that careers officers will be able to detect young persons who will have difficulty in finding a job, particularly in areas with special employment problems. The intention is to allow some exceptions to the qualifying period in these areas, though keeping them down to a very small proportion.

I agree with the noble Lord, Lord Sandford, that the Holland Report spoke critically of the Government's special measures in paragraphs 2.42 to 2.44. However, in fairness, I should draw attention to the fact that, in paragraph 2.14, it praises the Government and says: The range of these opportunities is now very wide and demonstrates that different people and organisations working together can produce large-scale results of a remarkable quality in a short time". So, having said one thing, we now give the other side to balance it.

I strongly agreed with the noble Lord, Lord Rochester, when he said that there was a need for young people to be involved in decisions which affect them. There are a large number of elderly people —not myself—who take the view that young people are always completely wrong and that there is nothing right about our modern generation. But my view is that they are far more mature than some of us were at their age and they should be allowed to take decisions. In fact, giving responsibility creates responsibility, and I entirely agree with the noble Lord.

On the difficult question of the education payment, I cannot give a very satisfactory answer. The noble Lord, Lord Rochester, rightly said that difficulties may arise for young people moving from an opportunity in the new programme to full-time further education. We share the concern about the disparity between the levels of education support and the allowances under the NSC programme, but because of constraints on Government expenditure, it is impossible at present to make any increase in the resources for financial assistance of young people undertaking further education. I know that that is not the answer that the noble Lord wanted, but he said that the matter was under review. I want to follow up that point later, if I may, probably in a letter or in some other way, because it is important.

Regarding the small firms, I give the noble Lord the information that the small firms employment subsidy is to operate from 1st July, 1977 to 31st December, 1977. Under this scheme, a subsidy of £20 a week will be paid to eligible manufacturing firms for up to 26 weeks in respect of each additional employee over and above the total number of employees on 29th March, 1977. To be eligible, firms must have had fewer than 50 employees on 29th March, 1977. This scheme applies to special development areas only, but I know that it will be watched with some considerable interest because, rightly, the position of small firms has frequently been raised in the debate today.

The noble Baroness, Lady Seear, made her usual deep thought-out and constructive contribution. I look forward, as do others, to a debate, possibly after the Recess, for we shall not be able to get it in before then because the report will not be ready. I think, if I may digress for a second, that the EEC subcommittee reports are of vital importance. So far as I am concerned, the more of them we have to debate in the Chamber the better. However, it is not within my prerogative to arrange the business of the House.

The noble Baroness and the right reverend Prelate the Bishop of Sheffield raised a memory when they spoke of the young and the 1920s depression. I happened to be one of those victims and I know the absolute despair one experienced at that time. One talks about the idealism of youth and certainly the young have tremendous ideals, but I know what a terribly shattering blow it is to one's idealism to go through that experience, and the greater the idealist the greater the blow. That is something that some of us remember and in some respects some of us have a sort of sensitivity scar, about it. Having had the experience however, I must frankly admit it is what one might call completely educational in one's approach to this problem.

The noble Earl, Lord Longford, and the noble Lord, Lord Rochester, referred to the disadvantaged West Indians. I think it would be advisable not to segregate these people into a separate problem; that I think would be wrong. We have the point very much in mind and in fact the MSC report Young People at Work draws attention to this problem, in paragraph 356, and suggests the appointment of a specialist staff to tackle it. This proposal will be considered further in the light of experience with the current action research specialist post founded by the MSC at Hammersmith, and this will be watched closely. I will refer to the disadvantaged a little later, but I do not think that at this stage we want to emphasise that aspect too much.

I have given the noble Lord, Lord Mottistone, so many answers that he has not appreciated that I hope he will understand and appreciate this one. He referred to paragraph 5.8 of the Holland Report. The Government have already accepted that paragraph so far as subparagraphs (a) and (b) are concerned; (c) is well in hand. The nucleus of the new MSC headquarters organisation has been set up and is urgently considering how the programme should be implemented. Subparagraph (d) is under consideration by the MSC and the pilot schemes will be in operation by the autumn. Therefore, the noble Lord will see that things are going ahead so far as paragraph 5.8 is concerned, and I am glad to give him that assurance.

As I indicated when referring to the 1920's, all unemployment is demoralising, damaging and wasteful. Unemployment among young people is especially tragic because, being denied the chance to take their place in the world of work, they are thrown into limbo at a crucial point in their transition to adulthood. Lack of a job is not just an economic deprivation; it is a social deprivation and one which is particularly felt by the young, who have still to find their feet in our society.

Our debate today takes place against a background of growing international concern about the disproportionate increase in unemployment among the young. We have heard various reasons advanced for the severity of this problem, but the cause is compounded by the worst international recession since the war, compounded in a way particularly damaging to those coming new to the job market or people who have relatively little work experience. Downswings in the economic cycle reduce job opportunities and create unemployment among all age groups. But adults can to some extent protect themselves against this contraction by sitting tight in their jobs. Young people leaving school are hit harder because they still have to win a place in the labour market. The disproportionate effects of cyclical downturns on young people have been seen before. In the past, the demand for young workers has shown a correspondingly quicker recovery when the economy has revived. It is now generally feared however that international economic recovery will not itself eliminate youth unemployment.

This recession has coincided with an increase in the numbers of young people leaving school each year. In 1976 there were 100,000 more school-leavers than in 1971. A further increase of 50,000 is forecast by 1981. The supply of jobs has dwindled while the number of young people looking for jobs has increased and will continue to do so. In the absence of any other difficulties, a very considerable economic upswing will be needed to restore the employment prospects of young people to the position which existed at the end of the 1960s.

The recent statistics of unemployment among school-leavers and young people under the age of 18 reflect this combination of cyclical and demographic factors. Last year in July there were about a quarter of a million young people registered as unemployed. Nearly 200,000 of these were school-leavers. The numbers will probably be very similar this year. The July figure is of course only part of the story. Unemployment among young people peaks with summer school-leaving and drops in the autumn and winter as young people find jobs. In January this year 48,000 school-leavers were still awaiting placing in their first jobs and a total of about 120,000 young people under 18 were registered as unemployed. By March the school-leavers figure had dropped to 31,000. Hence, 168,000 of our nearly 200,000 summer leavers had been fixed up. But the 31,000 left was a large and saddening number.

In looking at the problems of youth unemployment we must not make the mistake of thinking the figures represent a homogeneous group. Even in the good times some young people have difficulty finding work. In 1974, before the recent very severe problem developed, the National Youth Employment Council found evidence that there was considerable long-term unemployment among the handicapped, ex-offenders, the educationally sub-normal and the illiterate. And any youngster who lacked the mental alertness, manual dexterity and smart appearance to which employers attach importance was at a higher risk of experiencing a long spell of unemployment.

With the general decline in job prospects, long-term unemployment among the young is increasing and, since hard times cruelly bear down more on those who are already disadvantaged, those groups of disadvantaged young people are suffering particularly. We also see young people who are disadvantaged simply because they live in the wrong part of the country; in the development areas boys and girls who would even now get jobs if they lived elsewhere may remain unemployed for a substantial period. I say "boys and girls" advisedly. Girls, who used to fare better than boys, are suffering a relative deterioration in their job prospects. In January last year, boys were 58 per cent. of those unemployed under the age of 20. This year they were only 53 per cent. and long-term unemployment, though still more serious among boys, is growing more quickly among girls. I would suggest that here is the possibility of a developing serious social and moral problem because young boys roaming around the streets can take care of themselves but young girls are at risk wherever they go.

Despite what was generally said from the Opposition Front Bench, this is not Britain's problem alone, and the more that that is said, and understood, the better. A rapid and disproportionate growth in unemployment among young people has, as I indicated earlier, been a feature of most Western economies during the recession. And other countries face, as we do, the likelihood that other factors will prolong this unemployment into the period of economic recovery. International statistical comparisons are necessarily inexact because bases of collection differ, but a few figures outline the position. In January this year, 16 and 17 year olds registered at careers offices constituted 9 per cent. of our total unemployment. In the USA one in five teenagers is out of work. In the European Community, people under 25 form some 20 per cent. of the working population, but constitute some 35 per cent. of all those unemployed.

Therefore, this is an international problem, demanding international action as the Government have emphasised in the European Council, at the Economic Summit, and in the OECD. International co-operation can assist in two ways. Renewed international growth, lifting us out of the recession, is a prerequisite for falling unemployment. And shared experience of the special problems of youth unemployment, and our different approaches to them, will lead to a greater common ability to develop effective domestic measures. Ministers recognised this at OECD when, at the end of last month, they stated that special attention should be paid to unemployment among young workers, and instructed OECD to strengthen its exchange of experience and organise urgently a high-level conference for this purpose. With all our short-comings, at least we in Britain can say, facing this international problem in the USA, Western Europe, and elsewhere, that we have set an example by our action, as outlined in the measures taken by the Government, even though they are for a temporary solution.

The Government are saddened by the severe impact which the current high levels of unemployment are having upon young people. But I think we can, at the same time, be proud of the speed and breadth of our response. In May 1975 special provisions for young people consisted only of the Community Industry Scheme and a few short courses, still at the experimental stage, provided by the Training Services Agency. In May this year, the Manpower Services Commission report Young People and Work evaluated the following range of measures: incentive training grants; greatly expanded direct training by the TSA; work experience; job creation; an expanded community industry scheme; and employment subsidies. And it commented: … to have created this number of opportunities is a major achievement, not least since most of them have been brought into existence in the last two years. It also said: present programmes represent real achievements" [and] "these opportunities have been of a new kind which have attached and engaged young people and shown that they can help in a practical way those who have achieved little or nothing at school or in more traditional kinds of provision". My Lords, the essential conclusion of the MSC report was that the existing measures needed to be modified and brought together into a unified programme. It recommended an expansion to nearly 130,000 places, providing a total of 234,000 opportunities each year for young people and the Government accepted this conclusion and recommendation. The new programme will draw together, and build on, existing schemes for young people, integrating a series of measures for those in the 16 to 18 age group, which will provide them with a combination of training and work experience. This meets the criticism that existing provisions do not provide adequate training for young people. The aim is to improve the prospects of young people getting satisfactory permanent employment at the earliest possible moment. The programme will provide a maximum of 130,000 places with opportunities being given to over 230,000 young people a year; and we will review the size of the programme each year with the MSC against the prospects for youth unemployment.

I should like at this point to pay tribute to the efforts of the staff who developed, launched and carried forward the existing battery of measures and to the vital contribution made by employers, trade unions, local authorities, voluntary organisations, careers officers, schools, and further education colleges. The new programme is planned to reach full operation by September next year, and it will require a further generous contribution of the energy, initiative and care which was given so freely before.

The programme will cost about £160 million a year when it is fully operational. There are net savings in unemployment benefit, and so on, which reduce net costs to about 60 per cent. of the gross cost. Preparations for the new programme have begun. The Work Experience Programme will continue into the new programme, and to ease the transition, the Job Creation Programme will be extended for applications till the end of this year, after which applications under the new arrangements will be received. The new programme will require increased provision for education and training, and resources will be made available through it to meet the extra costs to the education service.

The Careers Service will also receive more support from central funds. Its officers are in the front line and are doing a very excellent job under very considerable pressure and stress. Initially, we have agreed an additional 170 unemployment specialist posts on top of the 320 previously announced, and we have added a 10 per cent. allowance for clerical support staff in respect of all these posts. All this will be under constant review. Both the Commission and Ministers considered carefully whether payment to young people under the new programme should take the form of an allowance, or a wage. As your Lordships know, it was decided that all young people on courses should be paid an allowance of £18 a week. This includes £2 for travel expenses, with a discretion to pay more in exceptional circumstances. This decision in favour of an allowance reflects the need for a common system of remuneration and the fact that all parts of the programme will provide training and work experience, rather than employment.

Some noble Lords, and others outside this Chamber, have expressed concern over the 12 month rule and the qualifying period before young people can join a scheme. The programme's main aim will be to provide unemployed young people with temporary opportunities which will improve their prospects of obtaining permanent jobs. In general, individual young people will not stay in a work experience project or training workshop for more than 12 months. However, in certain exceptional cases within areas of very high youth unemployment individuals with no permanent jobs to go to will be allowed to stay on beyond 12 months, and in general under the programme it will be possible for young people to move from one kind of opportunity to another. There must of course clearly be a normal limit to the length of stay in a particular course in order that the maximum number of people may benefit.

My Lords, we are determined that places on the programme should go to those most in need of help. The emphasis will be on the least qualified with the poorest employment prospects. We must also be very careful to ensure that the programme does not interfere with the normal flow of young people into permanent jobs. This is why places will go to those young people who have been unemployed for at least six weeks, and why summer school-leavers will be considered for places from September. The Government have made clear their firm intention that no summer or Easter school-leaver who is unemployed the following Easter will remain without the offer of a place. In addition to the places in further education colleges required by the MSC programme, resources will be made available to local education authorities to enable more school-leavers to continue their further education. This complementary education programme will provide an additional 10,000 places in further education, over and above present projections, by 1980–1981.

While the MSC programme is being developed, we shall continue the youth employment subsidy scheme till the end of March next year. To improve the provision for young people, we would urge employers to make fuller use of this scheme during that time. As I have already indicated, my Lords, this is not a problem related solely to Britain. Many other countries have a similar, if not an even more pressing, problem. My Lords, the Government will continue to press for the international action necessary to lift us out of the recession. We cannot tackle the cyclical component of unemployment on our own. But we have not fallen into the defeatist trap set by those who criticise so-called "half-measures" or "palliatives". This trap invites us, in effect, to do nothing because we cannot do everything. We have a programme of opportunities for young people: opportunities to train, opportunities to learn, opportunities to gain experience of work and to play a constructive role in our community. These opportunities add to our stock of skills, give young people self-confidence and enable them to compete more effectively with older workers. They are an index of our society's concern for the welfare of young people, and when I say "our society" I mean the whole community, because we all have a responsibility and a part to play in this effort.

My Lords, this has indeed been a very valuable, human and important debate. I frankly admit that a great deal more has to be done, particularly in the international field, to solve the general problem which is affecting many countries and many young people in those countries. We must try to find ways and means to solve the problem together and as nations. But let us face the fact that we have here proposals which have the support of the Government and which deserve the active, energetic support of the whole nation and of every man, woman and young person involved. I do not think the Opposition will disagree with me when I make that point. Something has been done and we should be proud of that, but, in the meantime, we must not be satisfied to sit back and do nothing further, because a great deal remains to be done.

5.43 p.m.

Lord BELSTEAD

My Lords, I should like to say that I am grateful to noble Lords who have taken part in this debate this afternoon, which has given us an opportunity to discuss the economic causes of the unemployment of young people and the human consequences—and they are shattering in so many cases —and to try to make some suggestions for the future. I should like to thank the noble Lord, Lord Wallace, for the very thorough speech which he has made in answer to the debate, and I should particularly like to thank him for giving me an answer on two points. The first is that I was very glad to hear that there will be some flexibility in the taking of school-leavers into the Holland programme places before September of each year; that September each year is not going to be an immutable rule. I hope that careers officers will be involved in these decisions, however. With regard to the small firms subsidy which the noble Lord mentioned, I was also very glad to hear that the position of small firms outside special development areas is something which will be kept under review, although I did not expect the Government to go any further on this occasion in that respect.

I hope that the Government really will take the suggestions which have been made from all sides of the House this afternoon and will consider them carefully, particularly suggestions for the creation of new, permanent jobs. The noble Lord is entitled to say that this is an international problem. The figures he gave showed that young people under the age of 25 in the OECD area are 20 per cent. of the workforce, but they represent 35 per cent. of the unemployed. In this country, those young people represent 44 per cent. of the unemployed, and the position really is a good deal worse in this country than it is internationally. I think that the one thing that we in this country must not forget is that all training places are not permanent jobs. The achievement of the Holland Report is that their programme makes the education and training of unemployed young people a practical preparation for a permanent job, but that is all. Therefore, the suggestions which have been made by your Lordships this afternoon —and, as I say, suggestions have come from all sides of the House—need to be looked at seriously. The noble Lord certainly indicated that this will be done.

There is just one suggestion which I cannot resist repeating, if I may, before we end, and that is the suggestion which has come from all Parties. It is that if you want somewhere that you can best start, it is with the very small businesses. They are an essential starting place. Lady Seear, Lord Spens and my noble friend Lord Mottistone represent three different parts of the House from which this suggestion has come, and I hope the Government will accept that it is a call which is not politically motivated. It is prompted in the knowledge that the small businesses are labour-intensive, that they can expand quickly and that they could do a great deal to bring employment back, particularly to some other inner city areas, about which my noble friend Lord Sandford spoke.

Finally, I should like to say that I suppose that towards the end of this year the House will be returning to this subject in the context of the work of the EEC Committee, Sub-Committee C; and before the noble Baroness, Lady Seear, came into the House this afternoon I sought to make my apologies that this debate had preceded the valuable work that is being done on that committee. Although we are talking about a long-term structural problem, we must hope that, if we are to have a debate much later on this year, by then the trend in the figures will have begun to show an improvement, because behind the unemployment figures lie waste and misery, which no society should tolerate. But, for that to happen, I must repeat before we finish, the Government have to rethink their taxation problems, so as to give people more incentive to work and employers more freedom to be able to offer jobs. The Holland Report gives a sound framework for preparing unemployed young people to get a job, but it is the responsibility of the Government to try to bring about a climate in which new jobs can be created within the context of a more hopeful economic future. My Lords, I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.