UNEMPLOYMENT

HL Deb 20 June 1979 vol 400 cc964-84

2.47 p.m.

Lord SPENS rose to call attention to the unacceptably high level of unemployment; to the likelihood that this level will increase as the result of the world energy crisis and the introduction of significant technological innovations; and to urge Her Majesty's Government to make a long term study of the economic and social changes which may be required to resolve this problem; and to move for Papers. The noble Lord said: My Lords, I rise to call attention to the Motion standing in my name on the Order Paper. It is a great honour to be allowed by my noble friends on the Cross-Benches to introduce this debate. It is a subject which is causing very great concern to people in all walks of life; programmes have been produced about it on television and radio and there have been many references to it in the Press. I want to make clear that I am talking not about what effects last week's Budget may have on employment, but about the question which is in so many people's minds: what are the Government going to do about the huge increase in unemployment which may happen in the not too distant future?

I became interested in and concerned with this subject about a year ago, after reading a discussion paper entitled The Chips are Down, which was published in April 1978 by Earth Resources Research Limited. I made some notes then for a speech in the debate last July which was never delivered because of the lateness of the hour. Later, my noble friend Lord Kilmarnock tried to raise this question in a short debate but was never lucky in the ballot. I am delighted to see that he is here today. I know that he has flown back from Spain just in order to contribute to today's discussion. Those notes of mine are just as relevant today and I shall be making use of them. I believe, however, that the timing of today's debate is much better than last July, because we are at the start of a new Government's life and I want to talk about 1984—the year when the Government will have to go to the country again.

I am sure everyone agrees that 1,300,000 unemployed is totally unacceptable. The fact that unemployment more than doubled under the Labour Government must be one of the main reasons for their recent defeat. The huge increase was blamed on causes beyond the Government's control, while the efforts to reduce the level seemed to consist of expensive, short-term palliatives. Twenty years ago, 1 million unemployed would have been unthinkable—those were the days of full employment—yet there have been more than 1 million unemployed every month since August 1975.

A year ago, according to my notes, I would have started my speech as follows: I believe that by 1985 there are likely to be as many as 6 million unemployed, unless something radical is done about it", and I would have added: It does not matter whether I am 2 million out in my estimate. There will be revolution, and Parliament will be to blame". Today I will revise that figure downwards, because we have a fresh Government with the necessary power to get things done—I believe we have already seen the start of the use of that power in this sphere—and also because I bring my target date one year earlier, to 1984. I say now, therefore, that by 1984 there are likely to be as many as 3 million unemployed, unless something really radical is done about it.

The arguments I would have used a year ago to justify my statement of 6 million unemployed did not include, of course, anything about a world energy crisis. Indeed, we were told in the last Government's Green Paper on Energy Policy of February 1978 that, and I quote from Chapter 4, paragraph 5: We can expect to be at least self-sufficient and possibly net exporters of energy from 1980 onwards". That was published, of course, before Iran and before the breakdown of the American nuclear energy plant in Harrisburg.

We are all aware of the energy crisis today. I do not know whether the present crisis is short lived and whether Mr. Benn's prediction of self-sufficiency will now happen, but the cost of energy has already increased dramatically and this is not going to help reduce unemployment. I will return to this point later. My arguments, which I would have used last year, have nothing to do with the reduction in energy, nor with its increased costs. I hope that our new Government will not make use of the energy crisis as an excuse for any failure to deal with the real problem.

My arguments are two. First, there will be an expansion of the labour force by 2 million extra workers by 1982. Secondly, we have entered a new industrial revolution. As regards the first point, I have taken my figures from the 1978 review of the Manpower Services Commission. That review shows, in its Exhibit 9 on page 16, that by 1982 the total labour force will have increased from 24.3 million in 1977 to 26.9 million and that at least 1 million extra jobs will have to be found in order to keep the unemployment level down to not more than 1 million. Presumably the Commission supposes that the second million additional workers will become self-employed: 1 million extra jobs, plus 1 million extra self-employed within three years. Are we going to achieve that during what looks like the start of a world economic recession?

The Commission's review takes no account of the new industrial revolution in this country which we are already experiencing as a result of micro-electronics—the silicon chip. In fact, the review looked very complacently at this development, arguing that any changes would come gradually and would tend to increase jobs rather than reduce them. That view is in stark contrast to the views in a number of reports which I have read, seen or heard, all of which warn of an explosion in unemployment as a result of the new technology.

I am neither a scientist nor an engineer, and I am not going to try to describe in detail the silicon chip. Anyway, I have already been upstaged on this point by the extremely interesting and lucid maiden speech which was made yesterday by my noble friend Lord Miles. However, one can see an illustration of a computer chip on page 6 of the Department of Industry's 1978 pamphlet entitled Micro Electronics—The New Technology, and I quote from page 5 of that pamphlet: The first computer marketed in 1950 cost, in present day values, about £1 million and filled a room, whereas nowadays you can go out and buy a micro-computer with much greater capacity and 30,000 times smaller, for just £200. Reduction in cost … reduction in size … increase in performance and reliability … These are the factors behind the growth and impact of microelectronics".

That early discussion paper which I read last year had this to say: The reason that micro-processors are so devastating is that they have introduced flexibility into automation … The technology has developed to the point where it is often as flexible as the retraining of people". It was that statement which alerted me to the real significance of this new technology.

When I began my new researches into this subject I wrote to the Association of Scientific, Technical and Managerial Staffs, the union of Mr. Clive Jenkins, because I knew that they had been studying the problem. I received from their research officer an excellent discussion document entitled Technological Change and Collective Bargaining. It sets out the problem so well that I have placed a copy in the Library, and I recommend your Lordships to read it.

This document, like the other reports which I have read—and I want at this stage to acknowledge the help I have received from the BBC—makes the point that it is not only manufacturing industries which will be affected but the service industries even more. It calculates that 62 per cent. of all occupations are at risk from the new technology. It suggests that by 1985, some 3.8 million will be unemployed, and this figure will have increased by 1991 to over 5 million.

The earlier document which I mentioned said: What has to be faced over the next few years is that vast sections of the industrial and service sectors will be automated, and millions may lose their jobs". Why? Because machines, which are cheap and reliable, will take the place of typists, clerks, anyone involved with the reproduction, storage and communication of information, and other machines will take over the routine jobs in the factories. They will do jobs that are dangerous, unhealthy, dirty, unsocial and boring"— to quote from the ASTMS report.

Silicon chips do not belong to unions; they do not go on strike; they do not ask for more and more pay; they do not need holidays, nor heated offices, nor tea breaks; they are very reliable and do not make mistakes; they need very little space in which to function; they are very cheap; they use very little energy and they are here now, waiting to be brought into use. During the last few weeks no doubt your Lordships will have noticed the spate of advertisements in the Press for micro-computers. There was even one in my local newspaper in Kent last week.

To illustrate the progress that has been made in increasing the efficiency and cheapness of the micro-computer I want to quote from Professor McHale, Director of the Centre for Integrative Studies in New York: The time to do one particular multiplication sum takes a man one minute and the cost of a man doing 125 million such multiplications is £6¼ million. An earlier computer took one second to do the same sum and the cost of 125 million such multiplications was £6,400. But today, the micro-computer can do the sum in 0.3 microseconds and the cost of 125 million such multiplications is only £2". So, while the man-worked operation costs —6¼ million, the micro-computer can do the same job for £2.

Let me give your Lordships two personal examples. I have on my wrist a watch which I have had for 14 months and I only changed the battery last week. It shows the time, accurate to one second and gives me the day of the week and the day of the month; I can convert it into a stop-watch to read to one hundredth of a second and, while it is functioning in that capacity, I can take a lap time while the main stop-watch function still carries on. During the whole of that time, the time function is still continuing. It cost me less than £20 fourteen months ago.

My son now has his own small computer, not in the office but at home. It sits on a table and plugs into the mains with a 13-amp plug. In order to function it requires a programme to be inserted in a cassette. There are many standard programmes covering accounts, financial analysis, stock control, sales analysis, payrolls, addresses as well as—for lighter moments—intelligent games such as chess, for which I understand one can select the degree of skill to be used by the computer. The cost was about £600 and for another £600 he can buy a printer which will type out, as on a typewriter, anything which is in that computer. It is simple enough for my eight year old granddaughter, home from school for one week-end, to have become a competent user of the machine—not that she understands accounts yet hut she has mastered the language which has to be used to make the machine operate. Of course, my son can construct his own programmes for use in this computer once he has mastered the language. There, my Lords, is the office for the small businessman, at a cost of four months' salary of one clerk, and it will be far more reliable than any clerk receiving that small salary. There are more comprehensive machines at higher prices, but I believe that for under £8,000 a complete office system can be obtained today —and I mean today—needing perhaps one person to operate it part-time.

How quickly is this revolution going to take over? Here I think a distinction must be drawn between the automated machines for manufacturing industry and those affecting information processes. The latter are already available but the former require quite expensive equipment actually to carry out the processes which the "chip" will control with its brain. Moreover, this equipment will have to be designed to suit the particular process and cannot be bought "off the peg".

There is another factor which may retard too swift a transformation on the manufacturing side. One of my informants, a university professor, told me an astonishing fact—if it is indeed a fact because I still cannot quite believe it. He said that, whatever we have failed to learn philosophically or ethically, we have acquired more factual information in the last 15 years than in the whole previous history of humanity. If that is anywhere near to the truth it makes me—and, with very great respect, most of your Lordships —completely out of date, and of course that means most of top management. This must act as a retarding factor and the impetus for change will probably come either from competition or from pressures from the younger generation. I do not think that this argument applies to the information processes because they are already here. They can be seen and tried out; they are simple and can be operated from standard programmes. They are cheap, and cheapness and reliability are of course important.

Returning to the energy crisis, I believe that if this crisis is prolonged it may prove to be the incentive to speed up the developments in manufacturing industries because of the relatively small amount of energy required. It may also speed up the change- over in offices, because no heating is required in an automated office. My Lords, all that I have been saying leads me to the conclusion that we shall shortly be faced with a large and permanent job gap. In fact it is already here, to the extent of at least 1 million jobs. I believe that gap will widen until it has reached 3 million by 1984, and perhaps 5 million or more by 1990.

At this point I want to stress that I am an optimist. I believe that we can resolve this problem once we have accepted the fact that huge job gaps are here to stay. The problem then becomes a question of how to deal with the fact of a permanent job gap. The theories of Keynes and possibly those of Beveridge may have to be discarded and I believe that many of today's sacred cows may have to be slaughtered. I have only just received a copy of the report of the Supplementary Benefits Commission, which is out this afternoon, and which rejects the idea of a new Beveridge, but I think that is only because they have not got time to wait for the new Beveridge to come along. What in effect has to be brought about is a new social revolution, which I do not believe can be left just to the forces of the market to achieve. It is likely to happen too quickly for the market to absorb without very great distress. On the other hand, any plan to change society must not be restricted by today's dogma.

I do not pretend to know what the solution to this problem is, nor do I expect to hear it this afternoon. In researching this aspect of the problem I have been gratified to find that many others are searching for a solution, and therefore that a wealth of research is already available. I should like to mention the help I have received from a private think tank set up by an association of employment agencies and also from St. George's House in Windsor.

The theme which runs through this thinking about the future shape of our society seems to be that we should stop talking about employment and unemployment and talk rather in terms of occupation or activity. "Unemployment" has become a dirty word. There is a measure of condescension about it; it implies laziness or scrounging. Two years ago I used a phrase, which was picked up by a newspaper and quoted as one of its "Sayings of the Week". I repeat it now: Work is not natural for men and women. It is a burden that has come upon us from our civilisation". I believe that, but I also believe that what is natural is occupation, whether that includes a job, a profession, a calling or a hobby. I think that we will reach a solution to our problem if we begin to think in terms of occupations rather than jobs. This concept opens up the whole realm of self-employment, not only in terms of jobs but of crafts, arts and sports. Many more people should be encouraged to use their own skills or to learn new skills which they can apply without relying on others to give them the job opportunity, and they should be encouraged to work locally within their own local communities.

An apparent anomaly arises here. Although there is unacceptably high unemployment, which I think will increase dramatically and possibly disastrously, there are also very large numbers of unfilled vacancies for skilled workers. Time and time again I have heard employers complain that applicants for vacancies are just not sufficiently educated at school to be of any use to them. When that fact is linked to the recent employment protection legislation it means that employers prefer to retain their older employees, even beyond retirement age, rather than risk the expense of having to train youngsters whom they may not be able to get rid of if they prove unsatisfactory.

I believe that we have got to look afresh at the aims we want to achieve through education. Fifteen-year-olds must be taught how to set about getting a job, or encouraged to take up a skill. I am attracted to two suggestions that have been made to me. The first is that a person's education should not just cease at the age of 16 but that he or she should be entitled to another one or two years of adult education to be taken at any time within the next 20 years of his or her life. Secondly, that the BBC or ITV should be encouraged to run television courses, below the level of the Open University, to teach skills and trades to the youngsters who have not been able to find jobs on leaving school.

My Lords, I said that some of today's sacred cows might have to be slaughtered. Let me stick my neck right out and suggest as a first sacrifice the concept of married women taking jobs as employees. If they could be persuaded to stay at home, especially those with children, that would provide a temporary solution, because there are more than 7 million married women in the labour force.

A noble Baroness

What about married men?

Lord SPENS

My Lords, I am not saying that they should not be occupied, but just that they should not compete in the market for paid jobs. This is not so heretical a solution as might be supposed, because the office revolution is going to affect women far more than men. Another concept worth consideration is the idea of one family wage earner, the others in the family finding occupation other than in the labour market. Then, of course, earlier retirement may be a solution, especially for those of us who are out of date, and work-sharing. Whatever solution is selected is bound to cause an upheaval in the social life of our country. There will be much more leisure time, which itself requires careful thought and organisation. The noble Lord, Lord Miles, rather made his speech on that point yesterday.

Finance, taxation, pensions, social security will all have to be reviewed. More suitable educational opportunities and more mobility of labour may be needed. I was pleased to see the Secretary of State for the Environment saying in another place that his plans for the sales of council houses provided a framework for a social revolution. I hope that he will also look at our planning authorities, with their divided responsibilities, with a view to making them relax some of the restrictions on expansion and changes of use which inhibit small businesses. We want to see small craft businesses returning to the country communities and the encouragement of local entertainments to help occupy our increased leisure time.

My Lords, one great advantage that our country enjoys at present is a very large pool of brain power, despite the brain drain, which I hope we shall soon see reversed. I believe we have the flexibility of thinking—once we throw off political dogma—not only to work out the solution to this problem, but also to develop the infinite possibilities of the micro-electronic age, even though we are behind our competitors in making these new machines. We have always been good at improvisation and this may take us ahead of our competitors in developing the software which will bring these chips into more varied use than is at present happening. To do this we need imaginative leadership and determination. We have a new leader and a new Government and they have five years to show us that they can solve this problem. I believe that their chance of a second mandate from the electors will depend on how they tackle this very serious problem. I hope they will show us that they are already planning the steps which will bring about this social revolution, because if they fail they will not get a second chance and we may eventually come very close to Orwell's 1984. My Lords, I beg to move for Papers.

3.19 p.m.

Lord WALLACE of COSLANY

My Lords, I think the House is indebted to the noble Lord, Lord Spens, for the excellent speech he has made. In many respects I would agree with him, except that I cannot accept his somewhat sombre approach to the problems of the future. I think what this country needs, and what every man and woman in it needs, is faith; faith in themselves and faith in their country. I certainly cannot accept his "back to the kitchen sink" approach so far as the women are concerned, because, face it as we must, women have an equal right these days; they have got as much brains as men and in many cases a darned sight more. In any case, if I said otherwise I dare not go home tonight. But we are grateful to the noble Lord, Lord Spens, because he has drawn attention to a problem which is a human problem and also a problem which is prevalent throughout the world.

Unemployment forced upon an individual is unacceptable. To the man or woman affected it is a personal disaster, accentuated in a period of national depression, resulting in a helpless and hopeless search for work and a growing feeling of not being wanted. To the married man with a family there is the desperate anxiety of having let his family down and making ends meet. To the teenager it is a crushing setback to young ideals and ambitions with a succession of long inactive and hopeless days. I know full well what it means because I have been unemployed both in the inter-war depresion as a teenager, and later in middle age. Statistics, useful as they are, cannot indicate the depths of human experience, the heartache, the worry or the depth of despair. In this debate we are talking about people and not mere items in cold statistics, micro-chips or what have you.

In the Western World over the past Few years the total number unemployed has grown. Britain is not alone in Facing this Problem and, although the nations are getting together to correct and adjust causes, it is a Problem that cannot be solved in a short period of time. There is no short-term solution.

In Britain, thanks to measures taken by the Previous Government, there has been a slow but steady decline in the number of job vacancies. The total of 1,279,808 unemployed, as at 5th April last, represented a reduction of nearly 60,000 over the previous month. There is no doubt whatever that the special measures taken by the Labour Government had the effect of mitigating the worst effects of unemployed, particularly in training opportunities for youth. It is better to have youth in training than youth idling on the dole.

In our debate of 12th June on the Industrial Training Levy (Engineering) Order 1979, I asked the noble Earl, Lord Gowrie, to give a categorical assurance that the present Government would give support without restriction to the programmes of the Manpower Services Commission. The noble Earl, quite rightly, replied that he could not anticipate the Chancellor's Budget Statement.

What is now the position? Special employment measures will be cut back to the extent of over £170 million. The Special Temporary Employment Programme originally aimed at filling 30,000 to 35,000 jobs by March 1980 has been reduced to 12,000 to 14,000 places—a cut of £42.2 million. The Youth Opportunities Programme has been reduced by £25.2 million. The Training Opportunities Scheme has been cut by £22.3 million. Funding to industry training boards and similar bodies has been reduced by £9.8 million. The scheme of defraying costs of unemployed moving to areas of work will be cut £2.9 million. Even the small firms' employment subsidy has been cut.

Support, it is stated by the Government, will be confined to areas of high unemployment and greatest need, but that is small comfort to the unemployed on the wrong side of a defined area. Moreover, who will define the area? The reduction of training places is a retrograde step in view of the acknowledged need for skilled labour in this country. The actions taken will themselves increase the numbers unemployed, but other financial measures will have an even greater effect. Is this just the first instalment?

The cut in spending on goods and services could mean job losses of around 403,000 and another 137,000 due to cuts in subsidies, training and building programmes. The cut in the rate support grant could have an adverse cumulative effect going far beyond the immediate area of reduction such as roads, housing, schools et cetera. The Secretary of State for Employment admitted in the House yesterday that there will be an increase in unemployment. We face, in the not too distant future, the grim prospect of 2 million unemployed in Britain due to worldwide recession, the oil crisis and Government policies. I sincerely hope that I am wrong, but we must face the fact that the prospects are bleak.

The world energy crisis calls for international action. However, Britain, not without alternative fuel resources, can and must take action. To safeguard employment the needs of industry must come first so far as oil supplies are concerned. Strong positive action is needed and not mere wordy appeals. Conversion from oil to other sources of energy can and must take place. The extension of electrification on the railways is a case in point. We have plenty of coal. Why not bring back steam which is an attractive proposition to many of us who are still small boys at heart? Moreover, the tractor replaced the Shire horse, but the horses are coming back and they do not eat oil and incidentally they have a useful by-product for fertilizer.

Chance and conversion cannot be left entirely to private enterprise: there must be State direction of resources. The first call for North Sea oil should be for our home needs as far as it is possible to produce it. It is true that exports would suffer, but on the other hand imports could be reduced.

The noble Lord, Lord Spens, referred to the effect of significant technological changes on employment prospects. Unless we get down to an immediate programme of training and education geared to meet the challenge, Britain will be left behind and jobs will be scarce. In that connection I regret the cuts in industrial training already announced. Our system of education from secondary school to university must be geared to provide a greater volume of technical training than at present. In that connection I very much regret the article in the Guardian this morning where it says that 450 students who have been offered places will have their offers withdrawn, and the authority responsible has said: … that while appreciating that decisions about cuts in public expenditure were the responsibility of Ministers and that urgent cuts were painful, the £1.5 million cut in the council's budget would 'cause damage to the supply of skilled manpower and disarray in universities and polytechnics already suffering from cuts in their activities. It will also inevitably cause distress and disruption to many individual young men and women'". Is that just a sign of what is to come? There is no doubt that technological developments now and in the future will lead to profound shifts in employment patterns. Our present and future workforce must be prepared and trained for change. That particularly applies to young people between the ages of 16 and 18.

The previous Labour Government issued a consultative paper entitled A Better Start in Working Life. It is an important document dealing with the training of young workers It was intended that conclusions should be reached by autumn 1979. Can the Minister indicate to the House the prospects facing that document? Sweeping tax reductions at top level will not markedly increase production or reduce unemployment. Tax cuts at any level will not create jobs linked as they are today with rapidly increasing costs and rising prices.

The Motion calls on Her Majesty's Government to make a long term study of the economic and social changes which may be required …". I would substitute "immediate" for "long term". In that connection let there be a series of full and frank discussions with the TUC and the CBI on immediate and future problems of unemployment. Incidentally, I am very glad indeed that the Prime Minister has changed her mind and decided to meet TUC leaders earlier than intended. Although there will be critical comments made on the part of the TUC leaders, I know that they will be constructive. In this situation goodwill will be needed. Goodwill needs to be created. Also, possible changes in Government policy will have to be faced. Unemployment is a social evil. The opportunity to work and earn a decent standard of living is the right of every man and woman. Contrary to the belief of a minority, we in Britain are not a nation of "work-shies". We face a grim challenge. We can and we must meet that challenge. For the sake of the younger generation alone, we cannot afford to fail.

3.30 p.m.

Baroness SEEAR

My Lords, we must all be grateful to the noble Lord, Lord Spens, for introducing this debate this afternoon. I would certainly support his plea to the Government that they should undertake research into the implications of the pending changes to which his Motion draws attention, not least because at the present time we understand all too little about the situation and it is very easy to draw alarming conclusions, or, indeed, even over-optimistic conclusions, from the inadequate information we have at present. I would not wish to be either panic-ridden or complacent about the new developments which are forthcoming, which are both challenges and opportunities. It may be that the coming of the micro-processor will cause very large increases in unemployment. The kind of study which we ask the Government to undertake should enable us to ensure that these inventions can be introduced without the dire consequences which have been forecast.

On the other hand, do not let us lose sight of the fact that again and again technical developments of this kind have been seen as threats and have, in fact, turned out to bring very big advantages. As the noble Lord, Lord Spens, said, the micro-processor will take over mono- tonous, dull work of the kind that none of us in your Lordships' House would wish to undertake and which we must assume a very great many other people would not wish to undertake. If we can get a large amount of the world's dull work carried out very cheaply by the application of invention in this area, this is to be welcomed and is not something about which to be frightened.

There are, of course, forecasts which say that in fact the coming of the micro-processor will not have anything like the dire effects on unemployment which have been forecast in some quarters. At present there are differing views on this, and it is highly desirable that the Government should sponsor long-term research and discussions on it so that we can get our minds clear and lay our plans well in advance.

However, that connects very closely with our present problem of unemployment. I, for my part, in many ways see this debate—and I think that the noble Earl, Lord Gowrie, suggested this yesterday—as a continuation of what we were talking about yesterday. It is here that we must regret the inevitable and, indeed, accepted consequences—accepted by the Government, that is—of the monetarist programme which they have chosen to adopt, which, as the Chancellor of the Exchequer has said, inevitably means increases in unemployment. We, on these Benches, believe that it is neither desirable nor necessary that these changes should have been brought about in this way. We do not consider that it has been necessary to reduce the public sector borrowing requirement to the extent that the Government have done, with the inevitable loss of jobs. After all the pound is rising high, and we are not in the kind of danger in which we would have been five years ago if we had allowed the public sector borrowing requirement to stay somewhat higher than the Government propose and, with that, to have retained, for the time being at any rate —until new developments can take over—some of the jobs which inevitably will be lost.

We regret the use of unemployment in this way as a means of changing the direction of the economy, for a number of reasons. First, for the obvious human and social reasons of the suffering it causes to individuals who lose their jobs. I think that that is accepted on both sides of the House and it should certainly go without saying. We also regret—and we had an example of this from the noble Lord, Lord Spens, only this afternoon—that when unemployment figures rise, certain categories of people inevitably take the strain more than others. It is already well known, not only here but also in other countries with high unemployment, that the effect on women's employment is more serious than the effect on men's employment. I, for my part, do not accept—your Lordships' House would not expect me to accept—that when there is an unemployment problem it is reasonable to assume that that will be handled by women. They have as much right as anyone else to choose whether or not they will work. I am sure that in a more affluent society—and perhaps microprocessors can give us that more affluent society—the aim will be that more women will choose to spend more of their time in their own homes. However, that must be their choice and must not be forced upon them by policy.

On the subject of special groups affected by unemployment—which is a small area but one of the greatest importance—inevitably ethnic minorities are badly affected by rising unemployment. In this country we already have the very serious problem—it is numerically small, but it is undoubtedly serious—of the inability of school-leavers among the ethnic minorities to get jobs. If the unemployment position is to get worse, what that situation is likely to be like in 18 months' time I tremble to think.

However, the third reason why one bitterly regrets the use of unemployment as a means of economic strategy is that it makes it more difficult to do the very things that need to be done. At the heart of our unemployment problem is the fact that there is a clash between what we do in the short term with the issue of unemployment and what we need to do in order to get our employment policies on a proper keel, so that there is the chance of long-term full employment. I do not entirely accept what the noble Lord, Lord Wallace of Coslany, has just said in this regard. Some of the measures taken by the previous Government in the longer run would have made the employment question more, not less, difficult. It is not helpful to continue to encourage over-manning in already over-manned industries. That is the kind of thing which it is right to drop. On the other hand, there are a number of steps which need to be taken drastically and straight away if we are to get on top of this issue. In the short-run there are certain actions which we should be taking which in the longer run will help and not hinder; because we must solve this dilemma of the clash between dealing with the short-term situation and getting the long-term policy on sound lines.

Of course, this centres around—and know that noble Lords have already referred to it and I expect the noble Earl, Lord Gowrie, to speak about it later—the ridiculous and tragic situation of an acute shortage of skills, not just in certain parts of the country, but in very many parts of the country: a shortage of skilled man and woman power at a time when we have high unemployment. I beg the Government in their immediate policy for dealing with unemployment to focus on this issue of how we can get over the shortage of skilled labour while we have unemployment at its present level.

There are surely a number of things which can be done. I think that the noble Lord, Lord Wallace, suggested that we should look again at what can be done in the relationship between the schools and the employer, and whether it is not possible to take up ideas which were put forward but not fully developed over the last 12 months; that the beginnings of training and the beginnings of teaching and instruction for craft qualifications should start at school and be followed through afterwards in the place of employment; that this should become a regular part of the education system.

If we were doing this, then I believe it would be easy to encourage more people to stay on voluntarily at school—maybe there will have to be some financial encouragement—and while they are there, to be learning things, both academically and physically with their hands, which are marketable and useful and contribute to the production of skill. By "skill" I do not just mean the craft skills. I mean knowledge of one kind and another which can be applied in the market place where there is a great shortage of knowledge of this kind. This is one of the things we need to deal with, and to deal with fast. Also, not to reduce any opportunities for skilled training.

It is reasonable, however, to look at the ease or otherwise with which people can be encouraged to accept skilled jobs, or training for skilled jobs. Are we really doing all that we ought to be doing in finding out why people are not prepared to take training? I understand that there have been vacancies which have not been taken up for training in skill centres. This at a time when people are on the unemployment register. I am not suggesting a witch-hunt, but that it should not be too easy for people to turn down the opportunity of training; that it should not be too easy for people to put limitations on the kind of job they are prepared to take when work is there and they are unemployed. That perhaps will be helped to some extent by the changes that have taken place in taxation, although I would have wished that the level of people taken out of tax had in fact been higher, and more encouragement given by a bigger difference in what people can get when they are unemployed and what they can get when they are in employment.

There can be no doubt that unemployment figures have been kept higher by the fact that the incentive to return to work has been too low in the past, and I suspect is still too low even under the new provisions, which have not made all that much change at the lower level in order to give real encouragement to people to return to work. Since we now have as a Minister in the Treasury someone who is expert on the whole tax credit issue—because there is the way in which in the end we are going to get the difference between what you get in unemployment and what you get if you are in employment—is it too much to ask, as a means of encouraging people to get into jobs that are there, that that scheme should be looked at again. Once upon a time it was in the programme of a Conservative Government, not entirely on the lines that we on these Benches would like to see, but it is the only way in the long run in which you are going to make sure that there is a substantial difference in what people can get when they are out of employment and when they are in employment. It is a large area but it is a highly relevant area.

What of course really matters for the long run is that we should get a willingness to change and adapt, which we have not got at the present time. Many of our current policies encourage people not to adapt and not to change. If we are going to take advantage of the micro-processing revolution, if it is going to be a blessing and not a curse—and it could go either way—then we have to be prepared to give up doing the kind of things we have done in the past and to move into the new opportunities which are available in the future.

There will be a huge micro-processing industry in itself. We know at present —and this is why the NEB took steps to develop the industry—that we are not in front, where we ought to be, in the development of this industry. Surely this is the highest priority. It almost certainly needs to be done in conjunction with the member countries of the EEC if it is to be developed properly. We have to seize this opportunity and have with it the willingness to change.

As long as people hang on to the existing jobs—and this must be the criticism of the policy of the previous Government: encouraging them to stay in the job they are in but which has no future, rather than encouraging them to move into the jobs which have a future—then we shall lose the chance that this new technological revolution is going to give us. What we want to do is to be there in the front developing the new industry, taking advantage of it; and if we are there, if we get out of those industries in which value added is so very low and get into these new industries in which it is high, then from the benefits from the added value so created by getting into those activities in which we really can sell to good advantage, we can begin to finance that whole range of services, that whole range of craft activities, art activities, that so many people would like to take part in. Otherwise, the kind of job sharing which people are talking about will be the sharing of a lower and lower standard of living, and that is not going to be acceptable. We need not face that as the future. We shall face it unless we take real steps to encourage people—and it may be at very high cost—to move away from the industries which have a past but no future into the industries which we are afraid of because they have no past but undoubtedly have a future.