Employment Policy

HL Deb 15 January 1986 vol 469 cc1104-37

5.21 p.m.

Lord Jacques rose to call attention to the importance to the nation of full employment and to the case for an annual employment budget which, inter alia, analyses unemployment and indicates what the Government are doing about it and what co-operation they need from both sides of industry; and to move for Papers.

The noble Lord said: My Lords, I rise to move the Motion standing in my name on the Order Paper. I am one who has always taken the view that one of the greatest needs of our country is full employment. I regard the demoralisation associated with unemployment as inconsistent with a civilised society. It is a special problem and one which ought to have special attention because of its importance.

In addition unemployment is a terrific waste. That was shown in the first 25 years after the last war. We had full employment; and we had the greatest increase in our standard of living in our history. That shows the amount of waste there would have been had we had a good deal of our resources lying idle. By employing the whole of our resources we were able not only to increase our standard of living to the highest in our history, but we were also able to initiate the welfare state. We initiated the welfare state during full employment because then people were paying taxes instead of drawing benefits. It is advisable that we should bear in mind that the welfare state has only existed under two sets of conditions: first, under full employment; and, secondly, under great subsidy from North Sea oil. Unless we take steps to get back to full employment—or something like full employment—before the oil runs out, we shall have the very greatest difficulty in maintaining a welfare state.

Because of the importance of the problem I have suggested that there should be an annual employment budget—an annual budget on employment policy. I have used the term "budget" because I want not only a review of what has happened in the previous year, but I want a project of what the Government intend in the subsequent year. For that reason I have used the term "budget"; but I should not mind if the term "report" were used, provided I got what I wanted.

I would expect such a report or budget to analyse employment and unemployment in various ways, according to the nature of the goods and services produced, and according to the region of the country in which they were produced. I would expect the analysis to be for the preceding and succeeding year. I would expect it to deal specifically with changes in structure which were giving rise to employment; and associated with that, to say what the Government had done in retraining and what they intended to do in the subsequent year.

That brings me to the whole question of training. I would expect such a budget or report to have a very important section dealing with training. The fact is that all research shows that so far as our leading competitors are concerned they are well ahead of us in training, and that it is one of the principal reasons why their productivity is greater.

I should like to see a long-term, very definite scheme of training at a very high level. I think that it should be the first priority of every polytechnic to encourage the exercise of the skills which are required in industry, especially in local industry, and to prepare the students for examination on a national basis. I do not want training which does not have the discipline of an examination. I want an examination and a national certificate which are acceptable to employers and for which employers are prepared to pay a premium when they employ the person concerned. Unless that is done in this definite way the training will not be as good as it ought to be.

We want training not only in the skills associated with industry, but training in management. I would say that every one of our universities in an industrial area should offer a postgraduate diploma in management, even if it is only a one-year course. I would say that a number of selected universities—probably half a dozen throughout the United Kingdom—should offer a three-year degree course in management. We have to get down to management, which is not as good as it should be. We have to take steps to make our management better.

After a section dealing with training I should like to see one dealing with industrial relations. We know as a fact that some of our competitors are able to have far better industrial relations than we have. Rather than confrontation we have to seek co-operation between the two sides of industry. There has to be partnership. An annual budget or an annual report on employment would tell us what progress had been made during the past year in improving industrial relations and what was expected in the coming year. For example, it would tell us what progress has been made in getting consultation between the two sides of industry in each of the firms; what kind of machinery we are setting up. Nothing would be laid down in statute. Let them do this in their own way, as long as they do it.

Arising out of that position, the report would tell us what progress has been made regarding flexibility of labour. Flexibility of labour is of exceptional importance in management. It would tell us what progress has been made in conciliation, where the parties do not agree and ultimately adopt arbitration rather than industrial action. We can get these matters through partnership. It is the duty of every Government to foster partnership in industry.

Next, I should like to see a section of the report dealing with new ideas to meet new problems that have arisen. For example, in a period of unemployment the workers seek reductions in hours. The employer very often resists reductions in hours because such reductions will increase his costs. Both have a very reasonable point of view. However, what is sometimes overlooked by both sides is that reduced hours will facilitate a two-shift system. If we have a two-shift system working on the same plant, we can save more than it costs to have the reduced hours. In other words, we must look for ways and means of employing more labour in relation to the same amount of capital.

Next, I would expect there to be a paragraph on rates of interest and the way in which rates of interest during the previous year have affected employment. I would want to know what action the Government have taken to try and get control of the rate of interest if it were causing unemployment, and what they expect the rate of interest to be during the next year and its effect upon employment. I would also expect a section dealing with the planned maintenance of the infrastructure of our country; how that will affect employment in the following year; and how it has affected employment in the past year.

Moreover, I would expect a section in the budget or report dealing with the exchange rate and the way in which in the past year the exchange rate has affected our imports and exports and, therefore, affected employment, and what the prospects are for the subsequent year. I would expect that analysis to deal with imports and exports in respect of each of the important nations with which we trade.

Finally, I would expect another section dealing with the inhibitions which are necessary in connection with international trade. In the last analysis we shall achieve full employment in the Western world only in so far as we are able adequately to control economic forces. We shall never achieve full employment if we allow economic forces to have full rein. There must be some control. It is best that that control should be on an international basis with international agreement. However, in so far as it cannot be by international agreement, it is sometimes necessary for sovereign states to take action in protection of the employment of their people.

I believe that the time will come when we shall have to take more action than we are taking now to protect the employment of our people. I accept immediately that once we start restricting international trade and reducing competition, we increase our costs. However, I also point out that if we are using the whole of our resources, we reduce our costs. Consequently, one compensates for the other. At present, for example, by agreement with other states we limit their imports to us of such things as textiles and motor cars. I should like to see a section in the report or budget dealing with what happened in the past year and what will happen in the future—in the next year—in relation to those agreements which protect the employment of our people.

In conclusion, I would say that this subject is of such great importance that it deserves an occasion once a year when the attention of Parliament and the media is focused upon it—indeed, when the attention of the whole nation is focused upon it—until we are able to resolve it to a far greater extent than we have up to now. My Lords, I beg to move for Papers.

5.34 p.m.

Lord Rochester

My Lords, I am sure that the whole House will wish me to congratulate the noble Lord, Lord Jacques, on having introduced the Motion. We have had many debates on employment and unemployment, but the noble Lord's rather novel approach—if I may put it that way—to the subject is most welcome and, as always, we admire the forthright way in which the noble Lord always speaks.

As I understand it, the basic concept underlying the Motion of the noble Lord, Lord Jacques, is that it is desirable to return to as full a state of employment as is compatible with a viable economy, and that the Government should be prepared periodically to indicate in a businesslike manner the various ways in which they are making progress towards that goal. I am happy to subscribe to that general principle.

In his speech, the noble Lord referred specifically to training as a means of improving employment prospects, and I should like to develop that theme. In a recent report which was commissioned jointly by the Manpower Services Commission and the National Economic Development Office, the authors wrote: We formed the impression that training managers themselves tended not to view their activities as being the cutting edge of the competitiveness of their firm—and nor do senior executives". Furthermore, to judge from this report, training is often not seen as an investment leading to identifiable income. Indeed, many companies are apparently not even aware of the volume of their expenditure on training. To quote again from the report: More than a few of the training managers and personnel directors we interviewed told us that it was better that the full costs of their firm's training should not be made known to the board, because if it were, the board might wish to reduce it". The authors put forward a number of proposals aimed at stimulating investment in training, including improved tax incentives for both companies and individuals, and a statutory requirement that companies should disclose in their annual reports how much they were spending on training.

The report concluded that there must be a positive will to change and that this would require clear leadership both from senior members of the business community and from government at the highest levels. If such leadership were not forthcoming, the authors saw no alternative to legislation to give statutory backing to some of the components of the strategy which they advocated. As regards this matter I do not think that we can afford to wait that long.

Ever since under the Education and Training Act 1981 the number of industrial training boards was reduced from 24 to, I think, seven, leaving training arrangements to be organised on a voluntary basis, I have been troubled by the absence of adequate national training standards. In my view the problem will not be solved without the imposition on companies of a training levy, remission of the levy to employers being made conditional on training conforming to certain specified criteria which should be framed so as to encourage an approach to training of an organic, problem-solving kind which focuses on objectives and on achievements. I do not, for my part, see how, without some such arrangement, we can as a nation either remain internationally competitive or achieve a substantial improvement in the employment position.

The noble Lord, Lord Young, may not agree with me but I feel entitled to ask him to say, when he replies to the debate, whether the Government are themselves satisfied with the current state of industrial training, particularly for adults, in updating their skills and knowledge to keep pace with new technology and, as the noble Lord, Lord Jacques, suggested, in the management of people and of change. If the Government are not so satisfied—and I am not here thinking of projects such as those with which the noble Lord, Lord Young, has been associated in such a distinguished way; I am not thinking of projects such as the Youth Training Scheme or the Community Programme, which mainly affect young people—I would ask what additional action, if the Government are not satisfied with the position in the area of adult training, they propose to take to remedy the situation.

Another matter which is highly relevant to this debate is the relationship between employment levels and pay determination. Here, too, I should like to refer to a report published last year by the Institute of Personnel Management, entitled, Pay and Unemployment. It has special relevance to that part of the Motion of the noble Lord, Lord Jacques, which calls for an indication of what co-operation the Government need from both sides of industry in tackling the problem of unemployment.

The view of the IPM is that the National Economic Development Council, whose meetings are attended by representatives of government, employers and trade unions, could promote a greater awareness among all sectors of the economy of the effects which reduced labour costs and increased productivity could have on job creation. The institute considers that if the movement out of recession is to be anything other than fragile, then employers and employees must agree effective output-related productivity deals, but the benefits of improved productivity should not be used solely to raise the real earnings of those in work. As the report of the institute puts it: Rather they should be shared between increased profits, dividends, wages and capital investment on the one hand, and the reduction of unit costs and prices on the other, with the specific aim of contributing to job creation. The Government are rightly concerned that currently increases in pay are greatly in excess of the rate of inflation, yet they give no indication that the National Economic Development Council has an educative role to play in spreading, however informally, knowledge and understanding of the Government's own attitude towards pay and the implications of pay levels for employment.

One does not have to be a supporter of formalised incomes policies—the Institute of Personnel Management is not—to recognise the contribution which a national pay forum of this kind could make in seeking to promote realistic expectations regarding increases in pay and helping to avoid, in the words of the institute, The worst excesses of high unemployment, inflation, and uncompetitive costs. Again I would ask the noble Lord, Lord Young, when he comes to reply, to comment specifically on this proposal as a means of withstanding political and economic change by maintaining continuity of policy, and in the long term increasing job opportunities and—a point rightly stressed by the noble Lord, Lord Jacques—also improving industrial relations in this country.

There is one other matter which I should briefly mention as a potential long-term contributor to the creation of more jobs because of the effect that it would have in improving this country's industrial performance. It is that companies should do more than they now appear to be doing to promote employee involvement. Because I have tabled an Unstarred Question on this subject so that it can be debated adequately, I shall say no more now than that, to judge from the latest relevant analysis, and indeed from statements recently made, as the noble Lord, Lord Young, will know, by the responsible Minister, the situation in this regard is, to say the least, disappointing.

I do not wish to end on a despondent note. It is only through co-operation between government, employers and employees that this complex problem of unemployment will be alleviated. In conclusion, therefore, I express the hope that in his reply the noble Lord the Secretary of State will respond as constructively as he can to the Motion before us.

5.47 p.m.

Lord Dean of Beswick

My Lords, may I also first congratulate my noble friend and colleague on this side of the House for introducing this subject for debate. It is well realised that it is the most important social problem that the country is facing at present. I was interested to hear some of my noble friend's proposals regarding measures for training on a mandatory basis, and that type of thing. I agree with the previous speaker too that it was a false economy for the Government to have butchered the original list of training boards, as they did, on the so-called premise of cutting public expenditure.

While I am all in favour of the Government's training schemes, and I think they are absolutely necessary, I do not think they will very much alter the present situation. Specialised training is needed more in certain industries today than a broad-based, two-year training programme, which could in some respects, if there was an upswing, produce an imbalance of youngsters available.

I should like to put a specific point to the Secretary of State regarding training at present and in the future, and concerning some persistent rumours. The disappointing unemployment figures are showing little, if any, decrease, and I think in a statement that the noble Lord, Lord Young, issued on 9th January, he ended by saying: Next month will see the usual January seasonal increase, but overall in the last six months there has been little change in the level of unemployment and it still appears that the trend is broadly flat". Those words do not accord with what the Chancellor of the Exchequer keeps saying. He keeps saying that things are improving so profoundly that we are on the way to a substantial recovery, but once again there has had to be an intervention and an increase in the bank rate with the adverse effect that that will have on industry. The Chancellor of the Exchequer appears to be wrong almost as persistently and as regularly as some of the weather men in their predictions.

People are getting a little sick and tired of hearing the Chancellor of the Exchequer and the Secretary of State for Industry when the report of a Select Committee of noble Lords was rubbished before anybody had a chance to have a look at it. People are getting a little tired of that type of behaviour and are asking for objective answers to some of these problems.

There are rumours persisting. One of the Cabinet Ministers was asked the other night whether it was true, because of the appalling and persistent unemployment trends, that the Government are considering doubling places on the Government training schemes. If that is true I hope it is not being done just as a cosmetic exercise to prepare the electorate for the forthcoming general election. If that was the reason—and after the election the same Government were in office and the present policies were pursued—it would mean that a tremendous number of people from the most disadvantaged groups (some of whom are the long-term unemployed, the size of which group is growing menacingly all the time) would be kidded and deceived disgracefully by the Government. This is worse than anything I have known in my lifetime, if that is the objective of that exercise. I ask Lord Young: Do the Government have this in mind and, if so, will he give us adequate reasons for doing it and assure us that it is not just an election gimmick?

This is the second debate that my noble friend Lord Jacques has initiated on this subject of unemployment during my short period in this House. The same points are being put persistently by some of us, that the Government's policies are wrong, that they have to change tack and that public money will have to be used. But the Government keep saying "no". Without going into detail I see that the CBI, which one could class as an organisation which supports the Government, was calling not for tax cuts yesterday (if there is any money available when the Budget is presented) but to plough the money back into industry and job creation. The CBI talked in terms of £1,000 million immediately. Some of us have held that view for a long time. Unemployment debates here and in another place become rather repetitive, because all that alters are the figures and they are still dangerously edging upwards.

Many noble Lords will remember, and I am sure the Secretary of State does, that just before Christmas a number of questions were raised regarding manufacturing industry. The Government were asked what percentage of new jobs—which the Government were, I am sure, entitled to announce and draw some comfort from—were in manufacturing industries. I believe the question was put by my noble colleague Lord Hatch. The figures were given by the Minister; I believe it was the noble Lord, Lord Trefgarne. Of the 628,000 jobs he quoted, just over 600,000 created no wealth because most of them were in the service industries and others were self employed. The total over that period in what I might call real jobs in manufacturing industries was just over 20,000. I submit that that is not a performance from which the Government can draw any comfort if they are talking about us once again becoming a wealth-producing nation.

The Government have the solution in their hands. I listened carefully to what my noble friend Lord Jacques said and I agreed with most of the proposals he made. But if they were implemented they would have no immediate effect on unemployment. He outlined a good strategy, but there is urgency about this. I find it odd because there could be substantial reductions in unemployment without using Government money, by letting some people use their own money that the Government are holding for them. I have a Question down for next week, asking the Government how much money they are now holding in capital receipts for local authorities from the sale of their own capital assets. The last time this was quoted the figure was £6 billion. The Chancellor of the Exchequer is so interested in cutting unemployment that he reduced the figure that was allowed to be drawn from the totals, and the interest of 40 per cent. was halved to 20 per cent. That only serves to exacerbate unemployment in building. Not only that; I understand that the figures are considerably more. They have grown because of the interest and the sales.

I read in one of the more responsible papers—and it was stated quite definitely—that there were strong rumours that while the Chancellor of the Exchequer was drawing together his autumn Statement he wanted to reduce still further that 20 per cent. to 15 per cent. but he was told by the new Secretary of State for the Environment, Mr. Kenneth Baker, that he would not support that and that it would be a nonsense.

That is a huge sum of money available that could be put into an industry that would take people off the dole queue quicker than could be done by any other industry. I am referring to the building industry. This debate is not about building, but that is the industry that successive governments have used as a regulator when they have wanted to cut public expenditure. They have just turned the tap down a bit, but the first people to feel the draught are always the building industry workers. However, they would be the first to feel the benefit and would start to train more apprentices.

I was discussing last night in this building with the chairman of one of our largest building companies what a realistic figure might be and what he considered the industry could cope with if money was made available. He said that within a month or two he thought we could increase this figure by a 2 per cent. load, then build on it and aggregate it. He is not suggesting, nor am I suggesting, that we should suddenly make up to £6 billion available and push it into the building industry because that would have a disastrous effect of overheating. If the Government were serious about reducing unemployment and discussed with the representatives of local authorities and the building industry what could realistically be done, I believe that a substantial number of those half a million building trade workers could quickly be taken off the dole and put back into necessary work. This would not only get unemployment down, but it would form an investment for the nation.

There is to be a debate shortly in your Lordships' House on the Duke of Edinburgh's commission on housing. I do not want to impinge on that debate or to pre-empt it, but the report only underlines all the other reports on the nation's stock of housing and public buildings and what has been said by other people. In total almost all the groups are non-politically motivated and they say that this is a necessary investment required for the health and the future of the nation. I suggest that if the Government are serious in their intention of getting unemployment down in real terms, they should enter into those discussions, put some money in and, I am sure, achieve the results.

It is sad to see what this nation has come to in manufacturing terms—I was a shop floor engineer. It led the world in the Industrial Revolution and just before and just after the war. In my own industry of general engineering there have been more jobs lost than in mining and steelworking put together. I believe I am right in thinking that the intake of apprentices to become skilled engineers in general engineering, which was always the biggest employer of apprentices, is down to one-fifth of what it was some 10 or 15 years ago. If that is not getting rid your seed corn in the worst possible way, I do not know what is.

I close in this way. I believe that the Secretary of State is sincere and serious about wanting to see those figures reduced. Will he have a little talk with his colleague in the Cabinet, the Chancellor of the Exchequer, and tell him to start giving some realistic prediction based on facts and come down from cloud-cuckooland?

6.1 p.m.

Lord Mellish

My Lords, this is the second time that I have the privilege of speaking in this House, and it is on a matter in which I am very interested and concerned. I am obliged to my noble friend Lord Jacques for raising it. What he said about full employment strikes at the hearts of all of us, at the heart of any man or woman in this country who is dissatisfied with the present level of unemployment. It cannot be allowed to continue. It is a disgrace; it is a slur to humanity. Let us be quite frank. There are no simple solutions. I wish there were. If there were simple solutions, the previous Labour Government would have found them, this Government would have found them—must have found them. One question that has to be asked—and we must try to answer it—is: what has caused the situation? What has created the position where even today a figure of something like 3 million unemployed is almost taken for granted in certain circles. Why should this be so?

I have lived on this earth for three score years and ten and I have seen some dramatic changes. I lived through the recession of the 1930s, not understanding much about that because I was a bit too young. Half my life has been spent in the political world and the other half has been spent in the trade union world; so I know a bit about industrial relations and I know a bit about politics. And then, of course, towards the end of the 1930s we saw the complete revolution of demand due to the coming war with Hitler and his cronies, and all that flowed from that. After the effects of the war, we saw this tremendous situation of consumer demand and full employment. We just did not have enough people.

That was the position right up to the early 1960s. What has happened since then? There has been a dramatic change in my whole existence. I never dreamt that I would see it. Take the dock industry, where I was born and lived. In the whole of the inner London area, the dock industry, with its thousands and thousands of decent men, is no longer there. It has been shut down. Why? I gave the reasons in my maiden speech. It was, of course, due to the economic factors, to the demand, to pressures from abroad, changes in work, changes in methods of loading and discharging ships. The truth is that London was completely uneconomic and unviable. We could not compete and therefore it was shut down.

I have been reading about this nonsense that is going on in the other place these days. I remember that throughout the whole period of the docks nobody ever discussed the industry. I was the only one who kept getting up and arguing about how it was that this great industry had shut down. However, there it was; it did shut down. This is relevant to part of what my noble friend Lord Jacques has said. What I am worried about—and I am proud of what is being done in the community, on youth, on the youth training scheme and the rest—is this. Does anybody care about ex-dockers? They did not leave that industry because they wanted to do so. It was taken away from them for the economic reasons I have given, and not because of bad management. Let me say at once that it was not because of bad management. It just was not a viable proposition, and thousands lost their jobs.

I want to ask the Employment Secretary what we are doing to train those who were dock workers and who knew how to load and discharge ships but who do not have the slightest idea of what is supposed to be done inside a factory, if there are any factories. What are we doing about adult training, for example? I get worried about that.

It is appropriate, in view of today's debate, that there was published this morning a number of reports. One of them, I noticed, is from Prince Philip. Some people regard his intervention in the world of industry and politics and what-have-you as an impertinence. I am not one of those who believe that to be so. I think it shows him to be highly intelligent and, whether or not one agrees with his views, at least one can admire the guts he has to say some of the things that he has said. One of the things he said was: Industry had suffered from an old-fashioned view that it was a rat race and involved working on a production line and living and working in uncomfortable surroundings". That is the impression that people outside get, particularly of manufacturing industries. It is one which in my view is among the most important aspects of the challenge to industry to provide more employment. This important aspect is the conditions under which people work.

If one looks back, it seems only yesteryear that it was taken for granted that in the leather industry men worked in the cold, in the wet and in dirt. I had a great knowledge of the leather industry in my own constituency. One could not believe it. They worked in nearly a foot of water. It was incredible. Conditions of employment must be changed.

Prince Philip also said—and it is right: We're also suffering to an extent from an unintentional fall-out of Marxism which blames all the world's ills on capitalism. Capitalism is represented by industry, so industry is seen as being antisocial". That is what the Prince said. And how right he is! This is the impression that has got about. If you work in a dirty job, somehow you are rather different; you are a bit menial. I can only ask the Government—and I do not know what future plans they have, if there are such things as plans for resolving problems of this kind—to take seriously the fact that Prince Philip has, I think, put his finger on it. The presentation of the case, the argument of manufacturing industry, in particular, as to how to attract people is conditioned on the way in which conditions of work are put over.

The CBI (and my noble friend Lord Dean referred to them) issued their report this morning. It is intriguing what they have said. They have asked that the Government should provide £1 billion for job creation measures and at least the same amount from the private sector. That is what they said. They said that this should create up to 330,000 jobs within two years. That brings me on to what I think is a fundamental point. Let us get this straight. Let us cut out all the party political jargon. We live in a mixed economy. We live in a society where a vast part of industry is private enterprise, and you have got to get private enterprise to work, to improve conditions and to provide the jobs. What can the Government do? I do not suggest they should pour in money, throw in money and say, "There it is". That is not the answer. We have to ask ourselves what we can do to ensure that private enterprise picks it up and spends its own money, as well as Government money, in providing jobs.

To be modest—although I have never been modest, for I found years ago that if I was not my own PR man nobody else would be—I like to think we can look back and say that we have an example here. I do not know why borough councils have not been brought in where you have derelict land. Why not encourage the purchase of that land and then make it available for development to private enterprise? We have done it on a vast scale. The Government—let us be fair and pay tribute here; we have had this argument before, but I had better get away from party politics—to their credit found £42 million in one year for us to buy land that was derelict. The moment we got that money and got the whole of that derelict land, we changed it. Today, we have a situation where in the Millwall docks, for example, where at the height of the dock industry there were 1,700 people working, there are now nearly 7,000. Not one part of it belongs to the Government. It belongs to private enterprise; because once it saw the land was available, once it saw that road access was there, once it saw that there was a possibility and a potential there, private enterprise was shrewd enough to see it as a good investment and it stepped in with its own money.

If we can do it in that small way, why cannot it be done on a much larger scale? For example, why can we not ensure some action over those local authorities which have acres and acres of land which are derelict? If I go into a diatribe about local authorities and their inactivity I really could take up a lot of the time of the House. However, the truth of it is that people are crying out for leverage to be given for these sorts of people to do a job of work. In the docks, for example, I understand a public inquiry is going on and so I must be careful what I say. The inquiry will decide on the compulsory purchase of all the land in the Royal group of docks.

Perhaps I may say that I am so impressed by what is now being said and done, because from the moment compulsory purchase order procedures were applied for, the PLA (they owned the land) said, "All right, we will sell." So they have sold two-thirds of the land as a result of the CPO procedure. That is very good and I am delighted to hear it. Let me say to the Minister that you can never, never regenerate unless you own. You must in the first instance own the land and provide the facilities—the roads, the sewers, the drains and everything possible on access. You must make certain that everything in the whole area is ready for this development, and then—and only then—will private enterprise come in.

I see that the corporation's director of operations was asking for land at Becton, Canning Town, George V Dock, and the Royal Albert Dock. He went on to say that the corporation has the ability to prepare land for development and make it available for private sector investment within an acceptable timescale. He added: The only effective way in which this regeneration can be brought about in dockland is by bringing forward cleared, accessed and serviced parcels of land so that private investment can be attracted. That is the key, my Lords, and I am saying to the noble Lord, Lord Jacques, who raised this matter, that I am obliged to him for giving us the opportunity to discuss it; but let us all be realists. As I said at the beginning of my speech, there are no simple solutions: if there were, we would have found them. If people really believe that by pouring money into certain things they will find a solution, I am afraid they are wrong. It might work for a short time but we have to change the image of our nation and in particular we have to change the image of what is now called the "manufacturing industry outlook".

Conditions of work have to be improved. The noble Lord referred to industrial relations. I am all for sending management on courses but I think the time has well come when we might send some trade union officials there too. It only seems yesterday that I was appointed at the ripe old age of 21 to be a union official by Ernest Bevin, and I remember him talking to a very large crowd of trade union officials. He said things then that I wish Mr. Arthur Scargill could hear me saying now. I remember him saying some simple things. For example: Never pull men out on strike: any fool can do that. It is getting them back to work that matters. Another thing he said, which is to me very elementary and very simple, was this: Don't ever negotiate with a firm unless you know what the financial position of the firm is. How right that is! If you are going to go in and argue with the firm and they have no money, you are wasting your time. I care about public relations and industrial relations. First of all, find out if they have any money, and if they have a few bob go in and "do 'em". But if they have not—for goodness sake!—that is another matter. And of course with state-owned industry this brings special problems because in many cases the boards are not answerable and they have to go back to the Government to get the final decision. So I would ask your Lordships not to raise the subject of state-owned industry.

However, may I say again to the noble Lord, Lord Jacques, first of all, "Thank you for raising the matter." It is a very important one and I hope very much we shall see what I call the realistic approach to this matter. I hope that the Minister will have something more to say when he comes to reply, as the noble Lord, Lord Rochester, pointed out quite rightly. I support every part of youth training. We are living today in an entirely different world from the one in which I have lived for the past 70 years. It is entirely different, and different demands are made. Adults today have to be trained in a different way. There has to be a different approach; and the idea that somehow Government itself, of its own volition, by pumping in money can provide work is not on.

What the Government have to do is to pump in money and make sure that private enterprise pick it up and also spend their own money in going ahead, because if you do not have that you have got to have an entirely different system. You have to abolish capitalism and bring in something else. But, my Lords, nobody here is advancing that theory—or are they? If they are, then let them say so. If you have a capitalist system you have to try and make it work, and the only way you make it work is by incentives.

6.15 p.m.

Lord Oram

My Lords, we are all grateful to my noble friend Lord Jacques for raising this subject and for doing so in that crisp, no nonsense style with which we are familiar and which we appreciate so much from him.

As the noble Lord, Lord Rochester, reminded the House, we have had a number of opportunities recently of discussing the problem of unemployment, whether at Question Time or in debate. The case of the Government, such as it is, is now well known and we shall no doubt hear it again this evening. The policies of the Opposition parties are also well known. What distinguishes my noble friend's Motion and his speech is the freshness and originality of what he had to say, together with the wording of his Motion, asking for an employment budget and subsequent Government action based upon the budget.

I hope that I may claim some credit for prompting this debate because it may have arisen in my noble friend's mind following some correspondence which I had with him a few months ago about the writings on employment policy of an American economist, John Pierson, whose ideas are claiming increasing attention in the United States.

The essence of John Pierson's proposal is that the starting point should be, as in the case of my noble friend's Motion, an annual commitment by the President of the United States and by Congress to the provision of jobs for all those able and willing to work, and that there should be a previously agreed series of economic and fiscal regulators which would automatically come into effect in the event that consumer expenditure either proved to be too little or excessively large to achieve that level and that pattern of employment which was proposed in the budget statement.

As I understand my noble friend, he has basically that same idea in mind although of course he speaks, as we all do, within the context of the British machinery of government rather than the American. But my noble friend, it seems to me, is saying in effect that the Government's approach to the unemployment problem is exactly the wrong way round; and I entirely agree with him in that proposition. The Government set themselves the wrong targets and the wrong priorities. They place their concern for levels of employment at the wrong end of the continuum of economic policy. They concern themselves primarily with inflation and, as a consequence of that, with money supply, taxation, the level of wages and the balance of payments.

All these things are of immense importance and quite rightly they are the concern of the Government. However, the level of employment—full employment or otherwise—is not regarded as an objective, as the other elements of economic policy are so regarded. It is regarded as the residual consequence of all the other elements. Therefore employment or unemployment is something with which the Government cannot directly concern themselves except at the edges of the problem, as with the youth training scheme or the community programme. I echo what has been said by the noble Lord, Lord Rochester, and by my noble friend Lord Dean of Beswick about those schemes.

That approach of the Government, to my mind, is putting the cart before the horse. The level of employment should not be the residual consequence of other factors: it should be the driving force and the motivator of economic policy, as well as being the raison d'être of the other elements of economic policy.

There are strong economic and social reasons for the pursuit of full employment, as my noble friends Lord Jacques and Lord Mellish have so clearly indicated. However, that should be pursued as the main objective and not merely as a by-product of what happens in the pursuit of other things.

Without full employment, there is what the economists are now calling the output gap which, as I understand it, means the difference between what is being produced in present conditions, in the conditions of mass unemployment, and what could, and should, be produced if all were productively employed. The gap between what is being done and what it is possible to do represents an enormous waste of resources. It is a waste of resources which partly causes, and certainly prevents us from curing, many of the economic and social evils which plague our society today: inflation itself; unbalanced budgets; high interest rates; industrial unrest; balance of payments problems; and not least—a subject of so much debate these days—social deprivation on a major scale; the erosion of the man-made infrastructure of society and of the natural environment in the countryside.

How then, if we follow my noble friend's reasoning about an employment budget, could it be implemented? As I see it, there would in effect be two budgets. There would be the manpower budget, or as the great Ernest Bevin once called it the human budget, and the normal financial budget; and that financial budget should be geared to the requirements of the manpower budget. The Department of Employment and the Employment Minister would be a force in the machinery of government as powerful as the Treasury and the Chancellor of the Exchequer. That may appeal to the noble Lord when he replies to the debate.

The manpower budget would be as detailed and as fully prepared as the financial budget is today. It would, as my noble friend Lord Jacques explained, take into review all the skilled and unskilled labour available throughout the economy and would compare it with the industrial and commercial needs of society. There would be identified gaps between the two and mismatches; and the manpower budget would indicate the changes in the pattern of labour deployment that needed to be brought about.

There would in my judgment be an annual Employment Bill which would be subject to as much parliamentary scrutiny and argument as the present Finance Bill, and the two would form an integrated whole with fiscal measures appropriate for the achievement of the manpower objectives. For this purpose, the Chancellor should have at his disposal an armoury of previously agreed regulators, including public works, which could be called into action in response to signals from the employment situation as it develops over the ensuing year.

That as I see it is a sketch of the role of government as envisaged by my noble friend. But, quite rightly, he goes on in his Motion to point to the need for co-operation from both sides of industry. On that theme, we do not need reminding that one of the root problems affecting the economy today is, and has been for all too long, the frequent confrontation between employees and employers. The cause of that confrontation, with increasing frequency, is not so much wage demands and disputes over wages, but the determination by the workforce to protect their jobs, and that is a very understandable determination. We saw it last year on a very large scale in the mining industry, and we see it today on a lesser but vital scale in the Gartcosh dispute.

It is the protection of jobs which is in the workers' minds. All the time that unemployment is at its present intolerable level, fear of life on the dole will be a major cause of restrictive practices and of strikes, and that will constantly stand in the way of that increased efficiency and competitiveness for which Ministers are for ever asking and for which they are quite right to ask.

But if the Government were seen to be giving priority to the proposition of jobs for all as their primary objective, I believe that it would remove one of the chief obstacles to harmony in industry and to moderation in wage demands. But more important, it would, I believe, restore to those millions of our citizens who are at present wasting in the dole queues one of what I regard as the most basic of human rights—the right to have a job in which to express yourself and to earn your living.

6.16 p.m.

Lord Roberthall

My Lords, like all the other speakers we have heard so far, I think we should welcome the initiative of the noble Lord, Lord Jacques, in introducing another debate on unemployment. We have had a good many, and we shall have a good many more. That is because it is the most important and difficult subject that we have before us.

When I first read the Motion before us tonight, I did not realise how ambitious the noble Lord was being. It seemed to me that to produce the kind of budget that he has in mind you would need another enormous Government department. We saw that once when the noble Lord, Lord Wilson of Rievaulx, set up the Ministry of Production, and we know what happened to that. But I also thought that this was not really a question of the machinery of government, which I at first thought was what the noble Lord was advocating. The structure for having an employment budget is in existence already. We enjoyed it, or suffered from it, in this country, if you like to put it in that way, over the whole period from 1947 to 1975–76.

That was because the Government were pledged in the 1944 White Paper to the policy that they accepted responsibility for maintaining a high and stable level of employment. For many years, governments honoured that pledge, maybe because in those days it was thought that it would be political suicide to let unemployment rise. But I also think that there was a sort of agreement on both sides in the country that that was the most important economic objective at which to aim.

The Budgets that Chancellors of the Exchequer introduced during that period were the sort of employment Budgets which the noble Lord has in mind today. The state of the economy was examined and the constraints on it provided by the balance of payments and, to some extent, increasingly as time went on, by inflation, were set against the target of maintaining the level of employment. That is what the Chancellor set out to do, and for a number of years I had the honour of helping to write the speeches on that subject.

What has changed is not that the machinery has gone to pieces but that the objectives have gone to pieces. The noble Lord, Lord Oram, has already said in the course of his remarks the kind of things that I was going to say on the subject, but I should like to say a little more on it. It is very difficult to know what is the Government's economic policy at present, because they have changed it a number of times. It used to concentrate on sterling M3. Then it concentrated on the public sector borrowing requirement. Now, as I understand it, it concentrates on exchange rates. It is certainly said a good deal at present that what we really require is a reduction in the real wage rates. One can understand this being put forward by a Government who are so keen on the market, because it is said that if there is a surplus of anything one can always clear the market by reducing its price.

When I was a young economist in about 1930 the argument among economists was on this very point. That very remedy was being put forward by a group of economists centred mainly at the London School of Economics. Other economists, of whom I was one, were accepting the views put forward by Lord Keynes. From then onwards the views of Lord Keynes were more generally accepted and took shape in the form of the 1944 White Paper which governments endeavoured to follow for the period which have I mentioned.

We had a Budget which was a review of the economy, but it was considered from the point of view of the target of maintaining the level of employment. As we all know, that led gradually but with an accelerating rate to the growth of inflation at a rate that became alarming. This Government then came in pledged to put the control of inflation at the head of their policy. They had some success for a while. They have brought the inflation rate down to about 5 per cent., and as long as the exchange rate is high inflation may even go a little below that. The trouble is that we have shifted our priorities. We are looking at the matter primarily from the point of view of inflation.

I should like to mention what I think is the view now that it ought to be by a lowering of the price of wages that we solve the problem. As I said, this was a controversial view but was accepted. Lord Keynes said that what applies to a single commodity in the market does not apply to the whole number of commodities which constitute the national income. There, the condition for full employment is that all who receive incomes will spend them either on consumption or on investment. If they change what economists call their liquidity preference—their desire to hold money rather than buy goods—there will be a deficiency of demand. That led to the policy which was adopted by so many governments of using the Budget as a kind of balancing force. If there was a deficiency of demand, you inserted some; if there was too much and you were having a boom, you took some out.

We are back now to this controversy of the 1930s which for a long time we thought had been solved by Keynes. The difficulty now is that the country is divided on the question of putting some kind of stimulus into the economy, which could not do very much at first. This is one of the policies on which the Alliance and the Labour Party tend to agree. One needs to put some stimulus into the economy, because while there is a real deficiency of demand the problem will not be solved. This is very important, and it is very important to the noble Lord, Lord Young, who is to reply to the debate tonight. We have a great respect for the noble Lord, Lord Young—if he does not mind that being said from this side. Anybody who knows anything about him would not say that his heart is not in his job and that he does not feel very much for unemployment. Whatever tears may come from other places, the tears of the noble Lord are never crocodile tears. If what is wrong is a deficiency of demand and not high wages, his labours will come to nothing.

We admire very much his concern for the long-term unemployed. The noble Lord is in a very difficult position, because there never were long-term unemployed in the period to which I have referred. All school-leavers could get a job quite easily. If there is a heavy load of unemployment which is going to hang around our necks, whatever the noble Lord does he will be dragged back. The noble Lord trains them (and it is an admirable thing to train them) but if there are not jobs for them all when they come to look for jobs they will feed into the pool of the long-term unemployed, which, as I say, we never had before—the 1,400,000 who have been out of work—and he will not be able to get them back into work so long as the underlying conditions are so serious. The pool will not stabilise until those coming on to the labour market and not getting jobs every year equal in number the ones who are leaving at the other end.

It is important that we should be able to make up our minds between these two alternative views. Needless to say, I believe that there is a deficiency of demand and I believe that the methods that were adopted in the period to which I referred were basically the right ones. There are great difficulties, of which the principal one, the one which caused the collapse of the old policy, was the accelerating rate of inflation. This was due in my opinion to the failure of the incomes policies. We ought now to look at it in terms of never having full employment again until we succeed in conquering the problem of incomes policy. The result is that the country is now deeply divided in a way it never was before. Both Conservative and Labour governments at one time were agreed on the importance of a high level of employment. If they were not agreed on it, the country was agreed on it and so they had to conceal it. What we ought to be addressing our minds to is how to give a stimulus without getting back to inflationary conditions. The Government are not telling us how to do that. They are not offering any hope to anyone. They are saying, "You will get lower wages and perhaps you will get full employment".

My time is up. I shall leave it at that except to say that these divisions in the country are doing a lot of harm and it must be a bleak outlook if we have a period where there is one fundamental economic policy from a government who, in the end, are turned out by the electorate, so that we get another fundamentally different policy—with each preparing a much more difficult situation for the one who follows.

6.40 p.m.

Baroness Lockwood

My Lords, I, too, should like to thank my noble friend Lord Jacques for introducing this debate and for the way in which he introduced it.

I think that whatever may be our differences on policy and on methods there can be little disagreement among us about the importance to the nation of improving the unemployment situation. Both my noble friends Lord Jacques and Lord Oram referred to the enormous waste of human resources when we have such a high level of unemployment. My noble friend Lord Jacques referred to the demoralisation of those involved—those who are unemployed—and the lack of confidence and self-respect which becomes a feature of unemployment. On those matters I think we are all agreed and are all concerned.

My noble friend went on to call for an annual employment budget which could analyse employment and unemployment trends, examine the action of the Government and look at the co-operation that would be needed from the two sides of industry. He listed a number of very pertinent components to this budget. My noble friend Lord Oram expanded on the advantages of having such a budget. I support this because I think it would enable us to have an overall view of the problems and be able to monitor progress and what needs to be done.

This evening, however, I should like to deal with two aspects of the problem as I see it. First, I should like to look at some of the features of the employment and unemployment situations and, secondly, I should like to consider in, I hope, a positive way some of the possible remedies. If we look at the Government's approach to employment policies, a cornerstone of that policy is to encourage more flexibility in the labour market. I think it would be true to say that nobody is more keen on this than the noble Lord the Secretary of State. Consequently, he takes some pride in telling us of the number of jobs that have been created.

According to the November issue of the Department of Employment Gazette about 670,000 more people were in employment in March last than in the March of the previous year. I think we need to look a little more carefully at the problems behind this and at the situation here. This growth has come in the service industries—solely in the service industries. I would not complain about that if there was not a decline in employment in other industries; for instance, that same Department of Employment Gazette tells us that there has been a decline in employment in the manufacturing sector and in the construction industry. The construction industry is very important, as my noble friend Lord Dean said.

The increase is, of course, almost wholly in part-time work. In the statistics a part-time worker equals a whole employment unit. The increase is largely among women. In fact, between June 1984 and June 1985 there was a decline in male employment. Again, I do not complain about the increase in the number of women in the labour market, nor about the fact that they are involved in part-time employment. I do not complain about that on principle because, like the Minister, I see a need for a more flexible labour market.

Having said that, my agreement with the Minister ends. I think his concept of a flexible labour market and his reasons for wanting a flexible labour market are quite different from mine. I suspect that the Minister's concern is to reduce labour costs. He finds that this is difficult to do through an almost entirely full-time labour market and that it is easier to work through part-time workers. The fact that it is easier to work through part-timers is perhaps a cause for reflection and one that should be an incentive to my trade union friends to do more recruiting among part-time workers.

However, my reason for supporting flexibility is to assist those who need part-time work—parents, women in particular, who should be enabled to combine parental responsibility with an outside job in the labour market. My concept of a flexible labour market combines full-time and part-time employment and includes job sharing. It also includes the same pro rata rate of pay for the job: in other words, both full and part-time workers would receive the same rates of pay. Often that does not happen, and there is evidence to prove this. It would include pro rata holiday and sick pay entitlement. It would include pro rata entitlement to entry into a pension scheme and it would include the same opportunities for training and for promotion. In other words, the part-time employee would be fully integrated into the labour market.

The present situation is entirely different. There was a recent review of part-time workers, which only gives the position in 1982 (and since then the number of part-time workers has increased considerably) but the report indicated that at that time 35 per cent. of part-time women employees had earnings too low to require national insurance contributions. This means that there is no security for them if they become unemployed and that there is no eligibility for them to enter a community scheme. Very often there is no eligibility for entering a pension scheme and certainly no career prospects. Therefore, the growth of flexibility and position of part-time employment in this country is entirely different from the way in which I should like to see it develop. I think that it is an unacceptable trend. An annual employment budget would, I hope, be capable of exposing some of those problems and pointing to possible remedies.

I move now to my second concern, which follows on from my first concern—that is, having an expanding and a more efficient labour market. This means more investment, both by Government organisations and by private organisations, in new technological processes in both the service and the manufacturing sectors.

Like most of the speakers so far, I think it is important for the Government to help stimulate this process of expansion, and, like the noble Lord, Lord Rochester, I accept what has been done under the YTS scheme, under the Community Programme Scheme, and under the various schemes to assist and encourage the growth of small firms. All these might be good so far as they go, but they are no substitute for the kind of approach about which the noble Lord, Lord Oram, was talking, or, if I may say so, the kind of approach that the CBI were recommending in the report which was published this morning. The CBI list three priorities, and the first and overriding priority that they have is a package of measures to reduce unemployment and to stimulate more employment. What the CBI have said in their report today is what they have been saying on a number of occasions in the past and what other organisations have been saying. One hopes that, having had this said time and again, the Government will begin to take note of it and give some priority to being much more positive in their approach.

However, I think there is also another problem which is related to this. Nineteen eighty-six is Industry Year, which is encouraging us to become more industry-oriented in this country. It might have been better if we had called it "British Industry Year" and become more oriented not only toward the culture of industry but toward buying the products of British industry. If your Lordships will forgive me, I think we might start here in this House—or at least in your Lordships' car park, where, if we look round carefully—and it is no better in another place—we shall see that it pays no tribute to British industry. Neither is it an indication of our loyalty and our faith in British industry. I think that both the manufacturing and the service sectors need to do something about the growing trend away from British goods: manufacturing industry by improving the quality control within the manufacturing process, and service industry by providing the services that consumers require.

I can give a very vivid, personal illustration of this situation. Over the Christmas period, which is one of goodwill, gifts and so on, we decided to have a new kitchen in our home. We looked round for a British firm that could provide us with the kitchen units and fortunately we found one or two—and very good units they were providing, too—but when we looked more closely, we found that all the companies which we considered were providing electrical equipment which came from abroad. Not one of them, apart from the electricity board, was putting forward British electrical goods.

I think that that is absolutely outrageous. It is just not good enough. When we asked the firms, "Why are you not providing British equipment and suggesting British equipment?" they replied, "Well, the quality is not as good and the servicing is not as good." So, if one could perhaps use the phraseology of an impeccable source: it really is time that we got our finger out.

Only last night I received the latest information sheet from the Think British Campaign, which indicated the number of areas where imports were overtaking British goods. It indicated that, if all the 20,000 million or so households in the United Kingdom switched £3 per week in their expenditure from imported to British goods, thereby reducing the average weekly expenditure on imports from £28 to £25 per household per week, 350,000 jobs could be created in two years. I think that we ought to take issues like this very seriously indeed. It is a threefold responsibility: for all of us in our capacity as consumers and for those of us who also have a capacity as managers or as employees. I think that this problem falls very squarely within the terms of the debate this evening.

6.55 p.m.

Lord Kagan

My Lords, my noble friend Lord Jacques called for a budget and an analysis. It is a timely call and we do require a fundamental analysis, but it is also a fact that the number of jobs that we are seeking for full employment are not there and that they are not going to be there. In 1964 Britain still had 14 million manual workers. In 1973 the number in manufacturing industry had been reduced to 7½ million workers; in 1980 it was 6½ million; and in 1985 it was 5.35 million. Yet this declining number of people produced approximately the same quantity of goods right through those years. In fact, in 1985, with a labour force which was 20 per cent. less, we produced 4 per cent. more in quantity than we did in 1980.

This trend is consistent, relentless and accelerating. No political dogma or theology and no manifesto resolutions will change that. One has to be careful not to dodge that essential fact. The answer to unemployment is not the dole; but it is not jobs as we are discussing them. The answer to unemployment is activity—useful activity. This can only be created by an economy such as the Japanese, the Swiss or the German economy. We must not say that it cannot be done. They have done it. The Japanese have done it, though they have no coal and no oil. The Swiss have done it, though they have no raw materials whatsoever. So it is in our power to do it if we want to. And we must not want to squander our resources on disagreeing with each other rather than getting on with the job. I was very much impressed with the courage of my noble friend Lord Mellish who made that point, and who has the stature to do it.

The future worker, the future wealth creator and the future taxpayer will be the robot and the computer. We cannot avoid it, and it is not a bad thing, because if that creates the wealth, then we can promote the social services and undertake other activities such as the complete renewal of the infrastructure, new roads and new sewers. But this cannot come from an impoverished economy and from an artificial finding of jobs.

In my own town of Huddersfield I can point to a factory which is now making 18 per cent. more goods with 22 per cent. of the labour force that they had five years ago. This is fact, and this we have to face.

In order to achieve the kind of economy that will give us the wealth to create the jobs that we are talking about we need to be advanced in technology and in science. That is where the great opportunity and danger is. Although once upon a time we had the lead, we are slipping back slowly. A great deal depends on education, and education has to be encouraged and funded on as high a priority as defence. In the long term that is where the impetus will lie. There is no market in the world for second rate technology or for science which is not up to date. In this field only four-minute milers will do, not four-minute-and-10-second milers.

We live and survive by exports, and we have to encourage them. It has been suggested that restrictions on imports may help. Trade barriers are not an option open to England any more than air-conditioning is an option open to a hotel with open windows. We live by buying and selling.

I can only repeat that we do not need to search for the means to do this. We should take a look at the Swiss, the Japanese and the Germans to see what they have done. If we fail to do that, perhaps noble Lords on both sides of the House should buy Gibbon's Decline and Fall of the Roman Empire and console themselves by reading it.

7.2 p.m.

Lord McCarthy

My Lords, the task of somebody on this side of the House in replying to a debate of this kind, I suppose, should be discharged in three ways. The first is to thank the proposer of the Motion, which I do most heartily, and I congratulate the noble Lord, Lord Jacques, as my noble friend Lord Oram said, on putting the case in his usual crisp, no-nonsense way. The second is to summarise, as I see it, the nub of the case that has been put from this side of the House; and I shall do that in a moment. The third is to reply to those who have opposed the Motion—and here I am in a difficulty because nobody has actually opposed it.

I agree with what the noble Lord, Lord Rochester, said about the relationship between pay and employment. I agree with what my noble friend Lord Dean said about the need for urgent action; with what the noble Lord, Lord Mellish, said about the need for a realistic partnership between private industry and the state; and with what my noble friend Lord Oram said as he developed and explained the original idea of the noble Lord, Lord Jacques. I agree with the noble Lord, Lord Roberthall, that once upon a time we had an early de facto version of an incomes policy. I agree with the noble Baroness, Lady Lockwood, that there is a case for more flexibility and more protection, particularly for part-time workers; and I agree with the last speaker that everybody is much better off for reading Gibbon's Decline and Fall of the Roman Empire. But none of them opposed the Motion. Therefore I have to imagine what the opposition to the Motion will be.

Of course there may be no opposition. The noble Lord who speaks for the Department of Employment may get up in a little while and tell us that the Government will have a national employment budget and do all the things that the noble Lord, Lord Jacques, wants done. But I am not sure, and I have to try to anticipate. First of all, what is the central focus of what is being said? It is that there should be an annual employment budget; that it would have three central advantages; and that it would focus the minds of everybody (Ministers, civil servants, trade unionists and employers) on the importance of the employment objective and put it back into the centre of politics. Secondly, it would enable us to spell out a series of targets to measure our progress towards that objective. Thirdly—and I thought that these were the most interesting aspects which the noble Lord, Lord Jacques, did not have enough time to develop—it would emphasise the link between employment and other policies; between employment and training, which the noble Lord mentioned, management education, industrial democracy, partnership in industry, and even such things as the rate of interest and the rate of sterling.

What can be said against all that? It seems to me that there are only two things, and to some extent they have been said in other places by Government spokesmen. The first is that it has never been done, despite what the noble Lord, Lord Roberthall, says, in the way suggested by the noble Lord, Lord Jacques, and it certainly has not been done in any way for some time. It was not even done, it might be said—and indeed it has been said from the other side from time to time—by the last Labour Government.

Secondly—and I suppose that in a way this relates to the first point—it could not be done now because employment is such an imprecise thing. It is such a difficult thing to anticipate. It depends on so many other things that to issue targets of the sort that the noble Lord, Lord Jacques, suggests, is a waste of time. That was the view put forward in the Government's blue paper, Employment: The Challenge to the Nation, on page 4, when the Treasury said that employment levels are not pre-ordained. They depend upon: our enterprise, our adaptability, our control of inflation, our productivity, our wage moderation, our competitiveness". I do not think that either of those arguments stands up. On the first, it is true that the Labour Government of 1974 to 1979 did not offer systematic overall estimates of the kind that would be involved in the acceptance of this Motion, but they gave estimates from time to time. They also stressed their determination to avoid using unemployment as a central instrument of policy. Because they declared this intention, and because they acted upon it, they had to have another policy—and here one goes back to what the noble Lord, Lord Roberthall, was saying—for dealing with the problem of inflation. That policy was an incomes policy. It was an incomes policy, rather than an unemployment policy, that was used by the previous Government to reduce the rate of price and wage increases in the years between 1975 and 1978, and they were successful.

Because they were successful in doing that, they were able as a deliberate act of policy in 1977 to see a reduction in the rate of unemployment (an increase in the level of employment) which was repeated in broad terms in 1978. It may be said by the other side that that policy ran into difficulties in 1979. I do not deny that. What I am saying is that the policy of the late Labour Government was not to use unemployment as an instrument of policy to reduce inflation. The central difference between us, and the central issue which the Government would have to accept if they accepted the Motion of the noble Lord tonight, is that unemployment should not be used as an instrument of policy. It is because this Government have used unemployment as an instrument of policy that, while the level of inflation has gone down significantly in the past two years, the level of unemployment has inexorably risen and is likely to remain, if not above, at least at the present level for the next two years.

The second difference that is directly relevant to this debate is that from time to time a Labour Government did give estimates of where they thought the level of employment would be—not only estimates of the level of employment, such as the ones that Mr. Healey gave in his Budget Statements in 1975 and 1977, but also estimates of the impact or likely impact of the measures that the Government themselves took. This is where the noble Lord, Lord Young, could help us tonight. Even if he says that he cannot agree to an employment Budget of the kind that my noble friend Lord Jacques suggests because unemployment is an imprecise thing, surely, the Government could do much more than they do to tell us the anticipated consequences of their own measures.

I realise that the Government do something to tell us about the consequences of some of their measures. In particular, they tell us what they think is going to be the employment effect of the job creation programme and the youth training scheme. That is fine. But they do not say what they consider to be the employment consequences of the Budget changes. The Chancellor did not tell us in the last Budget what he thought would be the employment consequences of the change in national insurance contributions. All kinds of unofficial organisations speculated on what would be the consequences of those changes. But the Government left us in the dark. We do not really know what the Government expect to be the likely consequences of those changes of policy relating to national insurance contributions and others introduced in the Budget. I believe that the Government could go some way in meeting the measures and the ideas that have received considerable support in the House this evening if they were prepared to do so.

The Government could also tell us what they think about the general feeling among all independent forecasters—for example, the London Business School, the National Institute, the Institute of Fiscal Studies and the CBI—about the fact that tax cuts are about one-fifth or one-sixth as job creative as public expenditure and that they have less effect on the retail price index and less effect on the balance of payments. Do the Government think that this is so? Or do the Government maintain that tax cuts of the kind that the Chancellor is toying with are every bit as job creative as selective public expenditure? If they think so, then what are the likely employment consequences of cuts in public expenditure as against cuts in taxation from the Government's point of view? We have not been given authoritative responses and arguments about these things.

Finally, there were two questions that I asked the Leader of the House on the last ocasion that the subject of unemployment was discussed in this House to which we have not received any answers. It is inherent in the kind of approach that my noble friend Lord Jacques has made today that we should expect to get answers of that sort. I should like therefore to put those questions once more back again at the Secretary of State. The House will know that it is part of the Government's policy to argue—this has been mentioned by speakers from the other side tonight—that what we have to do is to get the level of wages down. It is sometimes not clear whether what we have to get down is the level of real wages or the rate of increase in money wages. The rate of increase in money wages has been coming down for a long time, and the rate of increase in employment has been going up for a long time. The Government therefore tend to fall back on the argument about real wages.

I asked the Leader of the House, at col. 283 of the Official Report for 13th November: Suppose the Government still believe that if we can get the level of wages down we can get the level of employment up. Suppose they do not dispute my assertion that the level of wages was falling until the last two years, and that it is almost certainly going to rise next year". This is the crux of the question that I should like to put to the Secretary of State. I quote again: In his opinion, what is the level of pay increases that the Government would like to see in the next two years if the level of employment is, first, to be stabilised or, secondly, reduced? What is the relationship that the Government consider exists between the level of wages and the level of employment? If there were an employment Budget, that would have to be stated. Even without an employment Budget, it could be stated to us tonight.

Or let us take the last set of measures which the Chancellor of the Exchequer gave in his Autumn Statement on 12th November. Once again, we were not told what the employment consequences of those measures were. Once again, there were many speculations by unofficial organisations about whether the Autumn Statement was inflationary or deflationary, whether it created employment or whether it did not.

In an effort to find out, at col. 281 of the Official Report for the same day, I asked the Leader of the House. I quote again: I should like the Leader of the House to tell me: what is the net job worth of the additions in public expenditure which were announced last night? —that is to say, in the Autumn Statement. I hope the Leader of the House can tell us that. This £4.5 billion increase seems to be not an increase on last year, but an increase in previously announced targets". I was saying that we did not really know which it was. I added: Half of it seems to be going either in social security payments because inflation was wrongly forecast or because the Government underestimated the cost of the miners' strike. But, never mind, let us not worry about the details". My noble friend Lord Jacques would say, of course, that we should worry. I said: Can the Government tell us whether there will be a single additional worker employed in the National Health Service or in local government or in repairing houses as a result of the increases in previously announced targets which the Government announced yesterday?". This is the essence of what is being suggested. What my noble friend Lord Jacques is asking for, in a sense, is another bit of open government. What he is asking for is an end to subterfuge, an end to pretence, an end to talking about employment rather than unemployment, an end to stressing the number of new jobs rather than the old, abandoned long-term unemployed, a return to an attempt on the part of the Government to take responsibility for the level of employment and to spell out what are the consequences of their own policies on the level of employment. It was King John, Shakespeare tells us, who said: How oft the sight of means to do ill deeds makes ill deeds done". What we are suggesting here is that the converse is true in politics, that the realisation that there is a means to do both good deeds and bad deeds, spelt out and quantified, so far as this can be done, may help to change both policies and attitudes, even the policies and attitudes of those who say, "There is no alternative".

The Duke of Norfolk

My Lords, before the noble Lords sits down, if it is in order I would very much like to ask if he really believes that it is the policy of the Government to try to get wages down. I would suggest that it is the policy of the Government to try to get costs down. I took the greatest exception when the noble Lord said earlier in his speech that the Government were using unemployment as a means of dealing with inflation. I have often heard the noble Lord speak. I cannot make a speech now. I have not been able to be here. I really believe, however, that it is quite wrong to suggest that the Government wish to get wages down. The Government want to get costs down. The need for this is illustrated in our country by the way in which Jimmy Reid caused the Clyde shipping to go wrong and by the way Jack Dash transferred the docks to Rotterdam by trying to perpetuate out-of-date means of employment.

Lord McCarthy

My Lords, the noble Duke asks me these questions, and I must therefore be allowed to answer them as briefly as I can. If the noble Duke will look at a review by Treasury officials on the relationship between employment and wages which was published by the Government he will see that there the Chancellor argues that there is a relationship between the rate of increase in money wages and real wages and the rate of increase in employment. Also, the noble Duke will find that quite recently. In another place, the Minister of State for Employment said that if only the level of wages had not risen as fast as it did over the last few years we could now have a million more people in employment. This is what the Government said. It is not so much a cut in wages that is asked for as a reduction in the rate of increase in wages and in particular a reduction in real wages. That is Government policy.

7.21 p.m.

The Secretary of State for Employment (Lord Young of Graffham)

My Lords, before I address the subject of this debate today may I join my noble friend in saying that I reject utterly any statement that this Government would use unemployment as an instrument of policy. Nothing could be further from the thought of any member of the Government, nor I believe in any Government of a civilised society.

The noble Lord, Lord McCarthy, quoted from a Treasury report. That report—on which I shall comment later—makes a very real but utterly different point from that of the noble Lord. It is simply that the more those of us in employment pay ourselves above the rate of inflation, or whatever, without unit costs going down, the more we shall encourage the increase in the number of those who are unemployed.

But apart from that one single point I very much welcome this debate. There is no issue in our land today more important than the creation of jobs. There is no problem more urgent than that of unemployment. But whatever our differences as to means, the objective of achieving the highest possible level of employment has been common ground between all political parties and all economic philosophies for 40 years or more. Perhaps I could say to the noble Lord, Lord Roberthall, it is common ground today that where we differ—and I suspect differ fundamentally—is the means under which we can achieve the highest possible level of employment.

I take that phrase because it is part of and included in Lord Beveridge's 1944 White Paper on employment policy. I chose those words deliberately because I should like to quote two further sentences from the same Paper: Employment cannot be created by Act of Parliament or by Government action alone. Without a rising standard of industrial efficiency we cannot achieve a high level of employment combined with a rising standard of living". There could be no clearer statement of the link between employment and competitiveness. The message of the 1944 White Paper is every bit as relevant now as it was then. Lord Beveridge was writing about an economy weakened and distorted by five years of war. In the 1980s we face the problems of an economy weakened and distorted by decades of inflation and high wage settlements but low productivity.

We have suffered precisely because of our failure to heed the simple message that Lord Beveridge spelled out in his White paper. We have paid the price. The price, as Lord Beveridge predicted, was paid in unemployment. It is all there in those two sentences. We cannot remind ourselves too often of that simple truth. That is why I welcome this debate. It has not been a long debate but it has ranged widely and, as befits the subject, it has been both thoughtful and thought provoking.

I am grateful to the noble Lord, Lord Jacques, for his Motion, but I hope that he will not think me discourteous if I say that, as I read his Motion, I had a sinking feeling when I came to the words "annual employment budget". The noble Lord, Lord Oram, said that the Government get things back to front. The more I heard from the noble Lord, and the more I too began to think back—and as your Lordships may know I try to avoid nostalgia; indeed, I believe it to be one of the most debilitating features of our national character—the words "annual employment budget" remind me irresistibly of the 1960s, the heyday of centralised economic planning, and the attempt to achieve economic growth by Government decree and artificial consensus.

That was the era of the 1965 National Plan. What memories that brings back. I remind the noble Lord, Lord Roberthall, not of the noble Lord, Lord Wilson, but of the late Lord George-Brown, of the Department of Economic Affairs. That plan embraced every detail of economic life but was rendered meaningless by the tide of economic events before the printers' ink was dry. Some of your Lordships will recall that the National Plan identified a gap of 200,000 people between the demand for and a likely supply of labour; in other words, a shortage of 200,000 people. In the 18 months between the middle of 1965 and January 1967 unemployment rose by more than 300,000 and the manpower gap was quickly forgotten.

No one, except possibly the noble Lord, Lord McCarthy, seriously imagines that we could return to that brave old world. The proposal of the noble Lord, Lord Jacques, is, I understand, much more modest. The noble Lord rightly emphasised the need for training; and I agree with him. I hope that the youth training scheme and the work that we are doing throughout the field of training shows how much the Government agree with him.

The noble Lord rightly emphasised the need for partnership. I agree again because that very self-same youth training scheme was designed by the unions and the employers together. The noble Lord rightly emphasised the need for good industrial relations. Once again I need hardly remind the noble Lord and your Lordships' House that in the first 11 months of 1985 we experienced the lowest number of industrial disputes in any year since 1936. That shows that there is a new spirit spreading throughout the land.

The noble Lord, Lord Rochester, referred to the report financed partly by and authored partly by the Manpower Services Commission and by Neddy on competence and composition, and the difficulty we have in making employers accept the sheer economic sense of training. The noble Lord asked me whether I was satisfied with the current level of adult training. I am not, and neither are the Government. What we must do is find the best way and the best method of increasing it.

The noble Lord, Lord Mellish, shared in that concern, and quite rightly so. But I suspect that one of the areas which needs most attention is the validating bodies themselves. I live in considerable hope that before many months are out we shall be doing more towards bringing in a consensus and reorganisation in all the vocational qualifications in this country which will give employers a standard of acceptance of the ability of individuals and which will bring order out of what has been a slightly unordered system. I hope that through that and through Industry Year and many other measures which the Government are trying, we shall begin to see a more professional attitude adopted.

In his proposal the noble Lord, Lord Jacques, uses the word "budget". I can only take that, in the employment field, to be a plan. I simply want to make the point that economic and employment growth depends upon the enterprise and the energy of individuals. Jobs are simply not created by Government but by people.

The noble Lord, Lord Kagan, said that we should look at the Swiss, the Japanese or the Germans. I would rather look at the United States of America and in particular at the State of Massachusetts which contained many of the so-called "sunset industries". I met some of their legislators only this week and they have brought their rate of unemployment down from 11 per cent. to 3.6 per cent. They brought it down by policies which relied on enterprise and the ability of individuals to go out and create the wealth which the nation requires.

If the 'sixties and the 'seventies taught us nothing else, they surely taught us the folly of the economic philosophy once memorably summarised in the phrase, "the man in Whitehall knows best". I must say to the noble Lord, Lord Jacques, that I fear that he may be making the same mistake which the governments of the 'sixties and 'seventies made. What the economy needs is not more planning or more bureaucracy, but freedom from the constraints of unnecessary regulations and controls. That is the way in which to create jobs. I am not suggesting—far from it—that the Government have no role to play. Indeed, there is already in one sense an employment budget, and that is my own department's expenditure on measures to help the unemployed and to improve the operation of the labour market.

We shall be spending more than £2 billion this year on employment and training measures. Across the whole range of our programmes we are currently helping a total of 670,000 people. I can assure the noble Lord, Lord Jacques, that no one is more convinced than I of the importance of ensuring that we have a trained and educated workforce. That is why we are spending the best part of £1 billion next year on the youth training scheme.

However, more than that, we are promoting other initiatives through local schools and colleges and through employers. The technical and vocational education initiative will cover more than 100,000 young people in projects to improve their preparation for the world of work and their motivation at school at a cost of some £250 million. One very clear benefit of the initiative has now become apparent. It has encouraged young people to stay on at school. In 12 of the 14 projects which began in 1983 the staying-on rate has been far higher than average—in some cases considerably higher.

Finally, the Manpower Services Commission is working with local education authorities to ensure that non-advanced further education is more responsive to employers' needs. Of course it is also the Government's responsibility to stimulate enterprise and initiative by removing the obstacles to the growth of business and employment—obstacles which I must confess have only been created by Governments themselves over the decades. We shall shortly be introducing a Bill in another place to reform the wages council system so that young people are no longer priced out of jobs by statutory wage fixing. Our drive to reduce the burden of regulations and controls which discourage new businesses and sap entrepreneurial energies will he continued in a second White Paper which I hope will be published during the first half of this year.

However, more than that, we are taking steps directly to encourage the creation of jobs where there is the greatest scope for employment growth: in small firms and in self-employment. In particular, we are spending some £111 million in this financial year in helping up to 65,000 people—all of them unemployed—to create their own jobs through the enterprise allowance scheme. In the next financial year that figure should rise to some 80,000.

Finally, we are directly helping those who are likely to find it hardest to get back into work—those who have been unemployed for 12 months or more. By June of this year we will have expanded the community programme to provide temporary jobs which will benefit some 300,000 people a year at an annual cost of about £1 billion.

I am grateful this evening for the knowledge that the noble Lord, Lord Dean of Beswick, is an avid reader of my press releases. I would suggest to the noble Lord that he sticks to them and does not listen to Members of the Opposition who tell us that the Government are about to double this particular programme or that particular programme. It is very tempting to listen to Members of the Opposition advising the Government as to what the future Budget should cover.

As regards considering and helping those who have been out of work for a long time, we started only at the beginning of last week a series of pilot schemes to give an entirely new form of help to the long-term unemployed. We are inviting those who have been out of work for a year or more to come into their Jobcentre for an in-depth counselling interview to assess their potential and to identify jobs or training opportunities from which they might benefit. Above all else, we must ensure that those who have been out of work for a long time do not lose touch with the world of work altogether. What we are saying is, "To us you are not a statistic. You are a person with needs. You are a person with ambitions. Let us see what we can do to help". Our experience with jobclubs shows what can be achieved if unemployed people are given just the opportunity, just the chance, to regain a belief in their own capabilities.

We are experimenting with an entirely new job start allowance of £20 a week for the long-term unemployed to take jobs with gross earnings of less than £80 a week. The aim is to give unemployed people, particularly those with a high benefit entitlement, a financial incentive to take some of the job vacancies which are already available. We have had some of the drearily predictable responses from some quarters that this is forcing people into low paid jobs. Perhaps the critics should explain to the long-term unemployed why life on the dole is so much better than a foothold on the employment ladder.

In looking at the whole matter, it is clear that the Government's primary responsibility is to create the economic climate in which enterprise can flourish and new jobs can be created. That means, above all else, controlling inflation. Average inflation in 1983 and 1984 was under 5 per cent. At the end of next year it should be below 4 per cent. As a result of our success in keeping inflation under control, we are now set to enter a sixth year of continuous economic growth at an average rate so far of 3 per cent. per annum.

The growth in GDP has been matched by growth in employment. It is no good the noble Lord. Lord McCarthy, saying that we should not talk about employment. The only way in which to reduce unemployment is to get employment up. The latest figures show—and they were released this morning—that the employed labour force of this country increased by 31,000 in the third quarter of 1985. That was a slightly lower increase than in the previous quarter. However, the employed labour force now stands at over 23.7 million, the highest since the summer of 1981. Since the spring of 1983, the number of people in work has increased more than in the rest of the European Community in the same period.

There are now some 709,000 more jobs than there were in the spring of 1983. There are more people working in services than ever before: over half a million new service jobs have been created since 1983. Of course, there are fewer people employed in manufacturing. However, as I hope I made clear to your Lordships' House when we debated before Christmas the report of the Select Committee, the health of the economy cannot be judged only by the number of people who work in what we classify as manufacturing industries. Employment in manufacturing has been falling in this country since 1966 and has decreased in all Western industrialised nations.

I believe that the majority of people in employment in the service industries would not appreciate the remarks this evening of the noble Lord, Lord Dean of Beswick, that their jobs are not real and that their jobs do not create wealth. As some noble Lords have pointed out, there are indeed more people working part-time. Surely that should not be a cause for complaint. There is nothing wrong with part-time jobs particularly if the alternative is no job at all. There are many people who welcome the chance to work part-time.

Perhaps I may assure the noble Baroness, Lady Lockwood, who was such an eminent chairman (or should I say "chairwoman"?) of the Equal Opportunities Commission, that a recently published survey showed that only 11 per cent. of women employed part-time—I stress, only 11 per cent., my Lords—would have preferred longer hours, and indeed 31 per cent. of full timers would have preferred shorter hours. For new forms of employment call for new patterns of working. Clocking on at eight in the morning and off at five in the evening five days a week may seem inevitable and natural to those who grew up in the post-war decades, but, as the traditional smokestack industries decline, as office work is revolutionised by new technology, as the service sector itself expands, the nature of work is bound to change.

I should like to quote one more set of statistics. The number of people in the labour force has grown rapidly since we came to office. It rose by over half a million in 1984 alone—the largest rise in a single year since figures began to be collected. This has added to the challenge we all face as a nation. Over the next few years there will be more growth, but we expect it to be at the slower rate of abut 150,000 a year up to the end of the decade.

The prospects for employment are nothing like as gloomy as some noble Lords have suggested. The OECD project the United Kingdom to have the highest employment growth among European countries in 1986. The CBI forecasts imply that by the end of this year one million new jobs will have been created since the spring of 1983. And the growth in jobs seems now to be having a positive effect on the level of unemployment. Unemployment rose in December and will rise again in January, as it does each year, but it fell in the preceding three months and there is every reason to hope that the upward trend in the seasonally-adjusted level of unemployment has now been halted.

The noble Lord, Lord McCarthy, spoke about forecasts. In this country it is more akin to going to a lawyer for the opinion you want. You can go to the forecasting authority and get almost any forecast you want. Indeed, in the first annual report that was issued during my time as Chairman of the Manpower Services Commission we even produced an average of forecasts. Cambridge showed unemployment being enormously high; Liverpool showed it being extremely low; all the others were in the middle. If you averaged them through you got somewhere.

However, I do not believe that any of these forecasts are particularly valid. I recall that the Manpower Services Commission, when it was in the business of making forecasts, made one in 1978 and saw the level of forecasts up to the early 1980s as varying between 900,000 and 1.3 million. The world changes faster than the forecasters. Even if we got those forecasts, it seemed to me that we would be in danger if we actually acted on them.

The noble Lord, Lord Jacques, spoke of co-operation from both sides of industry. Here we approach the heart of the matter. Competitiveness depends above all on the attitudes and the efforts of employers and the attitudes and efforts of employees. It depends on a willingness to abandon restrictive practices and to root out inefficient working methods. It depends on the acceptance of new technology and a willingness to learn new ways of working.

It depends upon producing the right goods and services at the right time and at the right price. It depends upon maintaining standards of quality. That is where we will, "Buy British". It depends also on employers investing in training on the same scale as their competitors overseas. And it depends on trade unions showing the same realism and farsightedness as their counterparts in other countries.

Above all, my Lords, it depends upon controlling costs. Not, as the noble Lord, Lord Roberthall, or the noble Lord, Lord McCarthy, opposite say we wish to do, by reducing real wages, but by reducing real unit costs. It is unit labour costs in this country which rose by 6½ per cent. in the year to June 1985. That was 6½ per cent.; well above the rate of inflation. But in the United States of America unit labour costs rose by 1¼ per cent., well beneath the rate of inflation, and in West Germany and Japan unit labour costs actually fell.

The price of this is inflation. The price of this increase is paid by the unemployed. The most valuable thing employers and trade unions could do to help the unemployed would be to give them a seat at the bargaining table, metaphorically speaking, and that they should help to reduce the level of pay settlements.

That is the co-operation the unemployed need. That is the "employment budget" they need—not a return to the bureaucratic devices which have failed us in the past, which the noble Lord, Lord Rochester, advocates in different forms through industrial training boards and others. Above all they need the rest of us—employers and employed, the unions, the CBI and the Government—to learn and to apply the lessons set out so clearly by Lord Beveridge 40 years ago: the lesson that jobs are created in only one way—by competing successfully in the world market for goods and services.

Lord McCarthy

My Lords, before the noble Lord sits down, I have asked him two questions for the second time. Will he tell me when he is going to answer those questions? Maybe he could answer now the third question. In the light of the intervention from the noble Duke, the Duke of Norfolk, is it not true that it is Government policy to bring about a reduction in unit costs by a fall in real wages?

Lord Young of Graffham

No, my Lords, it most certainly is not. It is the Government who are pointing out time and time again that unless we reduce unit costs we shall not maintain employment in this country and generate the wealth of this nation. We can reduce unit costs in a number of ways. One is by increasing efficiency, by competitiveness, and by ensuring that we do not give ourselves unnecessary wage increases.

If we are talking of employment, that is the one lesson which the Government wish to bring home. Far from reducing real wages, in the last four years wages have consistently gone up at about 2½ per cent. over the rate of inflation. The employed each year get better, better, and better off. It is the unemployed who increase.

7.47 p.m.

Lord Jacques

My Lords, I should first like to thank everybody who has taken part in the debate. It has been a worthwhile debate, although I am disappointed with the reply of the Minister. We do not get anywhere. We are getting the same kind of reply as we always get.

I would make only two points. Research in comparing productivity in this country with our competitors does not show that our wages are too high. It shows that our management is not good enough and that our training is totally inadequate. They are the things to be looked at, not wages.

The second point I would make is that the Minister accused me of going back to the 1960s. If, by doing that, I got the same measure of full employment as we had in 1960, I should be an extremely happy man. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.