HL Deb 16 July 1986 vol 478 cc897-901

2.42 p.m.

Lord Dean of Beswick

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows: To ask Her Majesty's Government when they expect a reversal of the present underlying trends in unemployment.

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

My Lords, in common with previous governments, I do not believe that forecasting unemployment levels is useful. If jobs are to be created, it is essential that our goods and services compete effectively on price, quality and delivery.

Lord Dean of Beswick

My Lords, I am grateful for that reply from the noble Lord the Secretary of State, but I find very little comfort in it. May I ask the Secretary of State whether he can tell us what are the latest figures available to him and whether they show a further diminution in our manufacturing base? If they do, does this not, in conjunction with the fall in the price of oil to less than nine dollars a barrel, bode ill for our economic future?

Lord Young of Graffham

My Lords, the noble Lord, Lord Dean of Beswick, alas will have to contain himself until tomorrow when the next unemployment figures and employment figures are announced. We have seen a constant decline in the number of people employed in manufacturing industry since 1966. That has been proceeding at a fairly constant rate. It acceler-ated during 1980–81; and it is now back to that steady rate. It is a phenomenon which is seen all over the industrialised world.

Lord Bruce of Donington

My Lords, can the noble Lord give the House some indication as to whether the figures that will be announced tomorrow will contain yet a further statistical adjustment?

Lord Young of Graffham

No, my Lords. I can give no indication of what the figures to be released tomorrow will contain. Patience is a virtue.

Lord Gisborough

My Lords, in regard to unemployment in the North-East, which is very large, is my noble friend aware that, in spite of all the efforts for training schemes there, firms are still having to advertise nationally to find people with the skills that they need? Does this not show that there is a still greater need to integrate the skills which are being taught to the industrial needs so that some improvement can be made?

Lord Young of Graffham

My Lords, we have made considerable advances over the past four or five years in the provision of skills training for those who leave school; hopefully, in the acquisition of usable skills for those in school; and in taking great strides towards retraining adults. Nevertheless, this puzzling phenomenon of shortage of people even in areas of high unemployment persists and it is something to which I am giving great attention.

Lord Avebury

My Lords, although the decline in the price of oil is beneficial to employment change both in reducing other costs of manufacturing industry and also in causing the pound to fall, thereby increasing our export competitiveness, can the noble Lord tell the House what the Treasury's economic model says about the changes in employment resulting from each dollar per barrel fall in the price of oil?

Lord Young of Graffham

My Lords, the initial reaction of the Treasury to the fall in the price of oil was that its first effects would be bad for employment—and we have seen considerable losses of employment in the North Sea industry and in the energy-producing industries. But it is thought that in the second half of this year and next year we will see a growth in employment. I am not aware that the Treasury has a model which is capable of looking at unemployment or at employment effects per dollar fall in the price of oil. I shall certainly make inquiries. I suspect that the whole future price of oil is so uncertain that it would be profitless to work out such models.

Lord Cledwyn of Penrhos

My Lords, does the noble Lord agree that unemployment remains the major problem facing this country at the present time? Leaving out all considerations of party politics, will he recall the recommendations of the committee chaired by the noble Lord, Lord Aldington, and the practical recommendations of the committee chaired by the noble Baroness, Lady Seear? Is he aware that the Government have taken no notice of any of those practical recommendations? Will he tell the House why, and whether the Government are still considering those two outstanding reports?

Lord Young of Graffham

My Lords, it is absolutely true to say that employment and unemployment are the major preoccupations of the Government of the United Kingdom, as they are of the Governments of France, Germany, Italy, Spain and all the other countries in Europe. The aggregate is some 16 million people who are out of work. We must look at that as a very real and very serious problem. The Select Committee of your Lordships' House headed by my noble friend Lord Aldington was the subject of a debate in this House and the Government's response was, I think, freely explored at that time. I do not think I could actually do more in the course of an answer.

Lord Bauer

My Lords, does my noble friend recognise that neither the policies mentioned here today, nor the adoption of the recommendations of the Aldington Committee, nor changes in the price of oil, nor increased rates of growth, will much reduce unemployment without more labour-intensive patterns of consumption and production, which require major reforms in the labour market, in the housing market and in social security arrangements?

Lord Young of Graffham

My Lords, I would agree with my noble friend. My principal source of concern, looking at the future of employment in manufacturing industry, is the simple fact that we appear to be giving ourselves 7½ per cent. pay increases in the past year, when, if you look at the tax and price index, the rise in pay to maintain living standards should have been no more than one halfpenny in the pound.

Baroness Seear

My Lords, would the Secretary of State reconsider the Government's attitude towards adult training? While the Government have put a great deal of money into the training of school leavers and the YTS, there is a tendency (is there not?) for the Government to say that a great deal of the burden of adult training should be borne by employers. Would it not be appropriate that more government money should go into adult training, having regard to the fact that while employers will train and should train their own labour force, it is improbable that they will be prepared to train for other people's labour forces?

Lord Young of Graffham

My Lords, I am grateful to the noble Baroness, Lady Seear. The unfortunate truth is that too many employers have trained for the benefit of other people; because what we have seen are a few employers training and many other employers, I suspect, poaching trained staff. That is a very real problem. It has been the preoccupation not only of this Government but of all governments. We are looking urgently at the position. I believe we have made signal advances in the training systems of this country, but no one will pretend they are perfect. What we are trying to do, within the confines of the adult training strategy, is to bring home the sheer economic need for a better trained workforce. I have hopes that that message is beginning to get home.

Lord Mellish

My Lords, is it not economic madness to expend almost the whole of our North Sea oil reserves—something like £3 billion a year—keeping people on unemployment benefit? Is it not absolutely mad that such money should be paid to people for doing nothing? Could there not be a reversal of that policy?

Lord Young of Graffham

My Lords, I keep hearing about different ways in which North Sea revenues are spent. Perhaps I may remind your Lordships that in 1979 the net overseas investments of the United Kingdom represented £8 billion, and at the time of the budget the figure was £79 billion. A considerable amount no doubt came out of profits generated in the United Kingdom, including oil reserves. We must not hypothecate oil revenues but get people back to work; and in order to do that we must see that industry is competitive, we must design and sell goods for markets that want them. Until we do that no wands waved by any government can get people back to work.

Lord Maude of Stratford-upon-Avon

My Lords, if we are talking about jobs for the future, is not the real problem of this country still the fact that the rate of innovation is far too low and that outside the defence field the amount devoted to research and development is much less than is urgently necessary?

Lord Young of Graffham

My Lords, it is true that we are a conservative nation (with a small "c" for the comfort of noble Lords opposite) and we appear to resent change too much. It is true that we have won far more Nobel prizes than any other nation of our size, but I suspect that we have not won any prizes for the proper marketing and development of the many inventions which have originated in this country. That should be a source of regret to us all.

Lord Blyton

My Lords, is the Minister aware that at the last election the Conservative manifesto said, "There will be secure jobs for all"; yet we now have the highest unemployment that I have known ever since I came out of the Navy in 1919?

Lord Young of Graffham

My Lords, I do not think it serves any useful purpose to debate at what point in the history of our nation we have had the highest level of unemployment. What we should be doing is looking forward to an increased level of employment and to the creation of secure jobs for the future. No amount of platitudes and no amount of words will help us unless we create the jobs ourselves.

Lord Blyton

My Lords, has the noble Lord been on Tyneside?

Lord Moyne

My Lords, could not employment most rapidly be increased by providing additional funds to the Housing Corporation, earmarked for building for letting in areas of high employment, so that people could move from areas of low employment, while at the same time creating employment in the building industry?

Lord Young of Graffham

My Lords, house prices in the southern half of this country are a source of concern to many and so is the question of the availability of planning permission. We must have planning permission for land before we can build houses. It is not a matter for central government; it is very much a matter for local government, at a local level, as to whether or not planning permission is granted. That is the area to which we should address these questions.

Lord Stallard

My Lords, with regard to the first reply which the noble Lord made to my noble friend Lord Dean, in which he mentioned the dangers of forecasting, does he recall that a few weeks ago, in reply to a similar Question from me, he in fact forecast that there would be an improvement by Christmas in the unemployment situation? The noble Lord repeated that forecast a few days ago in a speech outside the House. Is he now saying that we should ignore that forecast because he has realised the dangers of it?

Lord Young of Graffham

My Lords, I shall repeat for the fifth or sixth time the forecast which I made. It was that by Christmas, when we have the figures, we shall see the numbers of the long-term unemployed come down. At no time have I ever expressed any forecast about the level of unemployment itself.

If we look at unemployment, the source of concern for all of us surely must be those who have been out of work for more than a year. Of all those who lose their jobs, on average one in four are back in work within a month; one in two are back in work within a quarter; two-thirds are back in work within six months; but at the end of a year two out of 10 are still looking for work. That is why we have the restart programme and that is why we are concentrating our efforts on those who have been out of work for over a year. I made the forecast—and I stand by it—that when we see the figures for Christmas I hope very much we shall see that they are down.

Lord Underhill

My Lords, does the answer of the Secretary of State on the availability of land mean that he is ignoring the fact that there are great housing problems in the Midlands, the North, and Scotland? A vast amount of infrastructure is required. Is he ignoring that factor?

Lord Young of Graffham

No, my Lords, I was simply answering the question put to me—which is actually a very good habit. The subjects we are now getting on to are a very long way indeed from the Question on the Order Paper.