Unemployment

HL Deb 18 February 1987 vol 484 cc1116-73

4.12 p.m.

Debate resumed.

Baroness Hooper

My Lords, it may be for the convenience of the House if I inform your Lordships that the revised time for the end of this debate will now be 8.14 p.m.

The Lord Bishop of Manchester

My Lords, I now have the difficult task of bringing your Lordships' thoughts back to the important question of unemployment. We should all be very grateful indeed to the noble Lord, Lord McCarthy, for putting this Motion before us. I do not want to get involved in the argument about the statistics of unemployment, but the importance of statistics is very great in any field. Perhaps I may be permitted to say also that all governments need watching over the matter of statistics, whatever the field may be. It is very easy to be persuaded to make statistics which are less than favourable come out in a better light. One of the best features of British society is that we are served so well with statistics at present. Long may that continue.

The point about the causes of unemployment reminds me of the very well-known story—known, I am sure, to many of your Lordships—about the man who came back from church after listening to a sermon. When he was asked by his wife what the preacher was on about, after a long pause for reflection he said, "It was sin". In reply to his wife's question, "Well, what did he say about sin?" there was a further long pause, and then, "Well, he was agin it".

We can all be "agin" unemployment. That has been well illustrated by a leaflet which I found on my desk very recently. It was printed most beautifully on yellow paper advertising the Joining Hands Across Britain event to take place on Sunday 3rd May, on a bank holiday weekend. Many of you will know that the idea is that of a chain of hands running from Liverpool to London, and it will go through the city where I live, through Salford and Manchester.

Three aims for that event are described in the leaflet. First of all, it is to show that we do not accept present levels of unemployment; secondly, that we do indeed care about the unemployed; and, thirdly, that we support the necessary measures to deal with it. So far as the first two are concerned—the points about caring about the unemployed and not accepting present levels of unemployment—this is rather like sin. We can all be in favour of those aims.

Among the great and the good who are patrons of this event, presided over by no less a person than Jimmy Savile, I am delighted to see the name of the noble Lord, Lord Young, the Secretary of State, together with that of Norman Willis, general secretary of the Trade Union Congress. But I cannot believe that Lord Young and Norman Willis are in complete agreement about the measures that are needed to combat unemployment. I hope noble Lords will not form the impression that I am in any way knocking the event Joining Hands Across Britain, which I think it is splendid. I should be prepared to join hands with Lord Young and with Norman Willis at any time in order to show what we feel about this terrible human problem which faces our country at the present time and how seriously we view it.

We know that wherever there is long-term unemployment there are very serious consequences in physical and psychological health. Here, I should particularly like to mention the situation in schools, where people get very depressed about the prospects of carrying on with education when there are apparently no jobs or careers at the end of it. There is nothing wrong in disagreement about the methods of combating unemployment. After all, that is how progress is made. We need to illuminate different sides of the problem. We need to argue it out together. What is dangerous is if unemployment simply becomes a party political battle, with people scoring points off each other without looking at the longer-term issues behind unemployment. That is a matter which I should like to put in front of your Lordships now.

There is a real danger of "short-termism" over unemployment. We hear this phrase "short-termism" in regard to economic policies at the present time, with industrial and commercial firms, for example, being more interested in immediate profits than in long-term investment. There is a danger of short-termism also in consideration of unemployment. For example, there are those who tend towards the Right in the political spectrum who would put the weight of their endeavours to combat unemployment on the enterprise economy, to bring back jobs by the growth of enterprise. There are those who tend towards the Left who perhaps would put the emphasis on public expenditure producing jobs, especially in the construction industry. We have heard comments about that already in our debate this afternoon. Both sides are prepared to welcome the special measures which are taking quite a large number of young people out of the unemployed list, giving them something to do and helping them forward. Surely that is something which should be welcomed.

I would say that both those views have a part to play—those which concentrate on public expenditure and those concentrating on the enterprise economy. But that is not enough. Enterprise culture can be welcomed provided it is meeting real needs and not just the wants of those with money to spare, which may lead to the sucking in of expensive imports, to our detriment. Public expenditure is vital and should be welcomed also. I believe that it is far better to use any room provided by a favourable upturn in the economy not for tax cuts but in order to meet more directly the needs of the unemployed. That point was made in your Lordships' House by the most reverend Primate the Archbishop of Canterbury in the recent debate on the problems of our inner cities.

However, such remedies, whether one is looking at the enterprise culture or whether one is looking at public expenditure, all assume that the only way to meet unemployment is through growth and that there is a straight equation that growth means jobs. I think that such a proposition needs looking at very carefully in the kind of situation into which our Western industrial societies have been moving. I am not against growth. How can anybody be against economic growth when we need the benefits of economic growth in order to do many of the things that are needed in modern society today? However, some proportion of that growth ought to go to meet the needs of the wider world. It is a sad situation when we in Britain are so obsessed with our own problems that we do not look beyond our shores. We need growth, but the simple equation of growth with jobs is by no means proved. We need to look for much more radical remedies.

When the Minister replies I hope that he will give some attention to the question of how far the Government are participating in this kind of thinking and looking at the longer term prospects for a radical change in the way in which society is organised. I ask those on the Benches opposite the same question. How far are the political parties of which they are members taking part in that debate and not simply looking at what seem to be the most attractive ways of knocking the Government at the present time?

One can see that some of the reasons for the major changes in our society are brought about by technological advance. That hardly needs underlining in your Lordships' House because the point has been made so many times. In the Greater Manchester area, which was a great textile area—and indeed Manchester was the textile capital of the world at one time—one can see that as clearly as anywhere in the country. New machinery coming in has meant fewer and fewer operatives, and when one looks at the statistics it is quite amazing to see how much more production is being obtained by the use of fewer people.

Sometimes it is said, "All right, those are jobs lost from manufacturing industry, but what about the service industries? They will be taken up there". Will they? I think that that is by no means self-evident. Even in the service industries new technology has played its part in change. Do we really believe that we shall return to a situation in which, when we drive up to a petrol pump, some young attendant will leap out and see to our every need? I doubt it.

The Minister has given us an encouraging picture of the beginnings of a downturn in the unemployment figures, including those for the long-term unemployed. That is something that we should surely always welcome. However, I hope that he will guard against any charge of complacency by agreeing that unemployment is a fundamental problem and the downturn that we have seen is only scratching the surface. Sufficient jobs are simply not likely to come back in the traditional ways. I want to know what is being done to encourage radical and imaginative thinking as well as the research that is needed in order to discover how we can move to a very different organisation of our society.

We have been given the opportunity to do so, because one of the great benefits of technology is that the goods which are needed can be produced by fewer people. That should give us more space in order to move to the changes of which I am speaking. I believe that in many different quarters a lot of thinking is taking place about moving on to a new basis for our society, not only in this country but internationally.

Perhaps I may draw the attention of your Lordships to an important conference that was held in Manchester in March last year in which the churches in the West European network of churches got together to discuss the subject of work, unemployment and the churches. I am very glad to report that much of the work of organising this conference was done from the British end by the William Temple Foundation. It is perhaps significant that this foundation bears the name of that great Archbishop who, in the 1930s and during the last world war, gave so much of his time and attention to the theological, social and economic issues surrounding unemployment.

The conference attempted to look in detail and some depth at the changes that are taking place in society. I should like to give your Lordships just one example of the direction of its thinking. The conference report states that: the conference was concerned to explore the idea of a basic income which would be available as of right to all. This would, it was seen, reduce pressure on the supply side of the labour market and delink entitlement to benefit from previous labour market participation (the insurance principle). A non-taxable basic income, substantial enough to live on, would be guaranteed to everyone, married or unmarried, child or adult. Consequently all would be able to choose whether they wished to seek paid employment". Clearly there are very great difficulties in the way of such a proposal and Members of your Lordships House may feel that it is visionary—yet I believe that it is the kind of visionary thinking that is needed today if we are to meet the great challenge that faces us. The conference felt that it was not enough to continue with the present methods of dealing with unemployment. It considered that there were very great and increasing dangers of a divided society: on the one side those who had comparatively well-paid jobs and were reaping the benefits of technological change, and on the other those who were shut off from those benefits. It was thought immoral to persuade the low paid to price themselves into jobs in the kind of society that we have. Proposals such as a "personal benefit" or a "basic income" come out of that kind of thinking. Such proposals may be visionary, but who could have foreseen the kind of changes in working patterns that we know today compared with 40 years ago—for instance, the large number of women who are now involved in the labour market?

In the churches we should like to view technology as a gift from God. Obviously technology cuts both ways, and we need to take hold of change so that the undesirable effects are reduced and the desirable effects are spread as widely as possible. Surely it is the right of all to have the opportunity to participate economically in the life of the community. That is fundamental. Such an opportunity ought to be open to everyone. Our society is failing to do that at the present time. Conventional thinking about unemployment is leading to a great deal of pessimism, and we need to take a radically new look at what is happening.

4.26 p.m.

Baroness Lockwood

My Lords, I rise to support the Motion of my noble friend. I must, however, first of all express my apologies to the House and to the Secretary of State as I may not be in my place at the end of the debate. I am afraid that a long-standing appointment in Yorkshire means that I have soon to be on a train that will take me to an area where unemployment is perhaps a greater problem than it is in some parts of London and the South-East.

Those on the Benches opposite are continually telling us what a healthy state the economy is in. Even today the Minister mentioned something about the seventh successive year of growth and encouragement. That rosy view is not shared by many others and in particular it is not shared by the over 3 million unemployed people in the country. Nevertheless, even if their assertions are taken at face value, the Motion that we are debating today underlines the need to provide the necessary information on which one can base a reasoned judgment. As other noble Lords have already said, a reasoned judgment is necessary when so many figures, projections and options are being bandied about.

When one looks behind the facade of this so-called economic resurgence, what does one find? Let us take the areas of unemployment and employment. According to Social Trends 1987, on which most of my figures are based, for the year ending mid-1986 unemployment stood at 3½ million. In his introductory statement my noble friend made a reference to an adjusted figure of 3.1 million. Whichever figure one takes, the fact remains that the number is twice as many as it was in 1979 despite all the adjustments that have been made to the rules and to the compilation of the figures, as well as all the measures that have been introduced to try to alleviate the position of the unemployed.

I am not complaining about those measures, because it is much better to put a person into a job, no matter what kind of a job it is, than to leave that person unemployed. The figures are bland. We are talking about the minimum number of unemployed people. The figures do not contain, as the Minister said, those who have sought early retirement. He questioned whether the early retirers needed and were seeking a job. I could introduce him to many people who have retired early who are willing to work and who seek a job but cannot find one within the area in which they live.

Lord Young of Graffham

My Lords, will the noble Baroness please forgive me for intervening? Those people over the age of 50 who have retired with occupational pensions and who register each quarter to receive credits for pensions are of course included in the figures.

Baroness Lockwood

My Lords, there are even men over 60 who have retired early who would welcome a job until they receive a state pension. Of course there are also women who are seeking jobs. The Minister did not mention them. Many married women would willingly take up a job, but they cannot find a job within a reasonable geographical area. The figures do not include those who have been removed or persuaded to stop claiming benefit as a result of the introduction and the difficulties of Restart. The interview and the form are off-putting to many people, so we are talking about the minimum number of people.

If we look at the employment side, the Government will tell us—I was surprised that the Minister did not tell us today—that they have created 1 million new jobs. We are alway glad to hear that new jobs have been created. It is true that there has been an increase in the number of people in employment since 1983, which was when the growth began again. But between 1979 and 1983 there was a tremendous decline in the number of employed people. The Minister will not accept what the Guardian says, but I am sure he will accept what Social Trends says. According to Social Trends, the number of people in employment is still less than it was in 1979.

The nature of jobs has also changed. I join with the right reverend Prelate the Bishop of Manchester in saying that the problem goes even deeper than the statistics show. Between 1979 and 1985 there was a decline of 1.75 million manufacturing jobs. The growth in employment has been in the service sector. I am not one who pans the service sector. I agree that it is from within the service sector and the provision of services that any growth in jobs will come. But that growth can only take place if it can be sustained by a sound industrial and manufacturing base, because that is where we draw our major wealth from. Unfortunately that manufacturing base does not exist.

We should take seriously the fact that over the past decade the GDP of OECD countries, as a whole, grew by 12 per cent. more than that of the United Kingdom. The other change that has taken place is the number of part-time jobs. That is an interesting factor. Part-time jobs are necessary to married women. Married women have become incorporated in a formal way into the economy.

I have said this before, but between 1931 and 1985 the percentage of economically active married women has grown from 10 per cent. to 52 per cent. On the other hand, the number of employed men has declined. The economic activity rate of men in 1931 was 91 per cent., whereas in 1985 it was 74 per cent. The reasons for that decline in the economic activity rate are unemployment, earlier retirement and the growth of the number of young people in extended and higher education. The latter is something that we welcome.

We are dealing with a labour market that has a different composition. There is the greater involvement of women, and a greater involvement of the 16-plus in education and training, which is a good thing. We must however have firmly in our minds that that is a permanent feature of the labour market. It is not a short-term feature; it is a long-term feature. More women in the labour market is a permanent factor. I hope that a better educated element in the labour market is also a permanent feature.

Along with the changes in the structure of the labour force, there has been a change in the structure of available jobs. Unfortunately it is still true that we have a dual labour market. There are still men's jobs and women's jobs. That is breaking down slowly. It is breaking down too slowly but nevertheless it is breaking down. More women are going into a wider range of jobs. They are starting at the bottom, but they are beginning to work their way through a career. They provide more role models for the women who will come along through better and higher education. The kind of jobs that people are asked to do is changing. Technology, as the right reverend Prelate said, requires a different kind of labour. It means more brains and less brawn. That is welcome to women because women can claim to possess an equal proportion of brain to men.

We must still ensure that women are not exploited. Most of the million new jobs that have been created are part-time jobs. They have therefore gone to women. It is interesting to note that of all the countries within the EC, with the exception of Denmark, the United Kingdom has the highest level of female participation in the labour market. We also have the highest level of part-time employment for women. It is also interesting to note that we have the lowest level of female unemployment. Our Continental neighbours have a higher level of female unemployment. Those factors are related. The fact that we have a provision for part-time employment means that women are drawn in from unemployment. However, we must make sure that women are not exploited to this extent.

One of the tragedies about women's employment is that, particularly after they return to the labour market having had their first or second child, the employment which they take is invariably at a lower level than their former employment before they left to have their baby. This reflects the fact that part-time employment is in occupations which have low skills; consequently, it is low paid.

There is a contradiction here. It is a contradiction, on the one hand, between women becoming more involved in the total labour market, and, on the other hand, women becoming marginalised in part-time jobs that lead nowhere. I join with the right reverend Prelate in saying that this is where we need some fundamental rethinking. We need a complete restructuring of work and work opportunities so that we can accommodate an expanded labour force. That means a restructuring of much of our industry, a greater involvement in education among a wider group of the population and a greater proportion of our resources invested in industry and capital.

We need therefore to look at the whole problem of how we restructure in order to take advantage of our larger and increasingly educated labour market, exploiting it fully so as to ensure that all are given the opportunity for rewarding employment.

4.42 p.m.

Lord Boyd-Carpenter

My Lords, I find myself much in agreement with many of the remarks of the noble Baroness who has done the House and the debate a good service in drawing your Lordships' attention to the important part played by women in relation to the problem we are discussing. Before the war, the working wife was something of a rarity. Now she is of the normal pattern of society. As the father of one, I can fully understand that development and admire it. However, I thought that the noble Baroness was on the verge of going even further. She seemed about to indicate that one reason for that was the higher brain power of the female. While that observation might well command considerable approval in the highest levels of the Government, I am not sure that in your Lordships' House it will be universally accepted, although the admirable speech which the noble Baroness has made provides some support.

I think that noble Lords should bear in mind the tremendous shift of employment into the hands of women, coinciding with and helped by the shift—which some of us deplore and some of us do not deplore— from heavy industry, which tends to be a male prerogative, into service industries where the ladies are at least as capable and sometimes, as the noble Baroness suggested, more capable, of participating.

The noble Lord, Lord McCarthy, predictably devoted about two-thirds of his speech—as far as I could judge from the clock—to his interesting argument that the unemployment figures are being fiddled by my noble friend the Secretary of State. I thought that my noble friend dealt very effectively with those suggestions and I put only one further consideration before your Lordships. Let us assume that there is a Minister who desires deliberately to fiddle official figures, whether they be of unemployment or of anything else. I do not believe that the noble Lord has ever served in government. Those of us who have, know that it would be quite impossible for any Minister to persuade, induce or order his civil servants to participate in a fiddle of that kind. They simply would not do that. Even if the noble Lord, contrary to my own views, thinks that my noble friend the Secretary of State is, by nature, a person who would fiddle figures, I ask him to accept that, even if that ridiculous assumption were true, he would not be able to do so.

I cannot help recalling that once, when I was Minister of Pensions and National Insurance, an honourable Member in another place on the other side of the House accused me of having fixed the Government Actuary. It is with some pleasure that I still recall my reply. It was that I would be infinitely obliged if the honourable Member could tell me how to do it, because it would have been a very, very great achievement on my part of which I realised I was wholly incapable.

I shall not spend more time on the statistical battle I should however like to say a word or two about the substance of the matter with which your Lordships are rightly concerned, no one less so than my noble friend the Secretary of State. Those of us who have seen my noble friend in action in this House and outside know perfectly well that he cares about unemployment. Since holding office he has devoted his very considerable energies to seeking to mitigate its effects. I hope that noble Lords opposite, whether or not they agree with his methods, will accept that he is as sincere and determined as any of your Lordships in any part of the House in seeing to deal with this curse of our time.

Whether the precise figures are those which the noble Lord, Lord McCarthy, sought to trail before us or those given by my noble friend, I am sure that we can discuss the matter on the basis that they are far too high. The point of substance about which we are concerned is what should be done to get them down. This is where one comes not to a question of ends—we all accept the ends—but to a question of means. What are the most effective methods of doing it? When one looks at the problem one sees that it is very far from easy.

First, it has hardly been mentioned in this debate but it is surely highly relevant that unemployment at about our level exists throughout the free nations of Europe. As regards employment, this country has a higher percentage of its population in employment than any other European country except Denmark. It is therefore idle and a waste of time to suggest that the curse of unemployment in this country is the result of any policies pursued by Her Majesty's present advisers or, to be frank, by any of Her Majesty's previous advisers. This is certainly a Europe-wide curse, and to some extent it is a worldwide curse. If one is to look at it sensibly, one has to look at it on that basis.

Of course there are things which can be done. I am a little suspicous of those who talk of dramatic and vast reductions quickly made. But there is a good deal that can be done, and there are one or two suggestions that should be made. The first that I seek to stress is the desirability of stimulating both the giving of employment and the creation of wealth by substantial tax reductions. Using Mr. Gladstone's phrase, if one puts more money to fructify in the pockets of the people, if one increases the spending power available at all levels of our society, one increases the demand for goods. I know that noble Lords opposite will say that all this achieves is to suck in imports.

Let us analyse that. If it is really the case that the goods which we produce in this country are uncompetitive, even in the home market, with goods imported into this country, that is a very severe reflection on British industry at all levels: capital, management and labour. Moreover, it is an immensely depressing thought because if we are incapable of competing with foreign products in our own home market, what chance have we of competing overseas? Therefore, let us dismiss this possibility. Let us asume that British industry, given the chance, will compete, and compete successfully thereby providing more employment.

The whole argument from all sides is in favour of making more money available to create employment. Noble Lords opposite want this to be done through the Government. They want it done by government investment. I can only say that experience since the war of government investment does not create, certainly, in my mind, any undue enthusiasm for such investment. I suggest to your Lordships that investment is much more intelligently and effectively directed through the private sector.

The best way to stimulate the private sector is surely to increase the purchasing power in the hands of the citizen. The sensible way to increase such purchasing power without bringing back inflation is to reduce the level of taxation. If noble Lords care to analyse this matter, there is a further benefit. If taxation is reduced and the amount deducted from pay packets under the PAYE system is reduced, there is an increase in the net take-home pay given to every worker without his having to agitate to increase his nominal rate of wages thereby increasing the cost of production to his employer. By this means, you meet the understandable desire of everybody who is working to improve his standard of life while not pushing on with the dangerous tendency—the threat lying behind the point I mentioned about competition with the foreigner—towards increasing labour costs.

Lord Hooson

Would the noble Lord give way for a moment?

Lord Boyd-Carpenter

I will do so very quickly, because I am near to the end of my ration.

Lord Hooson

I should like to ask the noble Lord why, if his theory is right today, it did not work in the 1920s and the 1930s.

Lord Boyd-Carpenter

It would take hours to reply to that question. I shall simply say to the noble Lord that the situation in this country and vis-à-vis our foreign competitors is completely different from the situation in the 1920s and 1930s. The competition is different. We were a heavy industry country producing very large quantities of manufactured goods with a comparatively small service element. Comparison with the 1920s is no more helpful in this context than a comparison with the 1620s or the year 20 AD.

I come back to the theme that I was seeking to put; namely, that if we accept, as all sides of your Lordships' House seem to accept, that more money needs to be put into circulation, the best way to do so, I suggest, without any risk of inflationary consequences, is through substantial reduction in direct taxation. This would liberate funds to be spent by the citizen as the citizen thinks fit. Moreover, it is an encouragement for anyone contemplating an enterprise to know that he is going to be taxed less if he is successful. A person setting up a business has to forecast what he is going to make and what are the risks that he is not going to make anything. If it is made apparent to him that success will be reflected much more in his own net take-home earnings, he is given very substantial encouragement to go ahead with the project. Simultaneously, it will be clear to him that there is going to be more purchasing power in the hands of his possible customers.

Finally, the argument is, "Oh, but it should be government investment." The snag is that a great deal of modern investment is labour saving. This is induced by tax concessions, the introduction of labour-saving equipment, and by what I have already referred to as the dangerous tendency of the trade unions to increase wage costs. Therefore, if you stimulate investment, there is real risk that it will be more difficult to obtain employment because more labour-saving plant will be introduced. Your Lordships will no doubt recall the story of the man who was watching a bulldozer clear the way for a new road. He said sadly "Think of all the labour which could have been given if, instead of this bulldozer, you had lots of men with spades." To this the commentator added, "Yes, and think how many more you would have had if they had been equipped with salt spoons." It is the factor of much investment being labour-saving that I beg your Lordships to understand and to weigh.

Unemployment is an evil which all of us wish to see ended. Let us be quite clear about that matter and not seek to attribute any other motive to any among us. Where we differ, and differ legitimately, is over the best way of achieving it. I say, with humility, that the method my noble friend and his colleagues are trying to pursue is the most effective. It will not be immediately and dramatically effective, but there are already signs, on all the undisputed figures, that it is working. Let us give full support and build up the confidence which will help to make it a success.

Lord McCarthy

My Lords, before the noble Lord sits down, would he agree that it is not quite the case that unemployment is roughly the same in all countries? There are countries in OECD where the figure is less than 5 per cent. Britain is below the average and has the highest unemployment rate of all but two countries? The situation is not quite as the noble Lord says.

Lord Boyd-Carpenter

My Lords, I hope I made it clear that we were discussing the general European picture. Also, I hope that the noble Lord will recall that the figure I quoted—it is, I think the more important one—was not the unemployment figure but the very high level of employment in this country.

4.58 p.m.

Lord Bonham-Carter

My Lords, I hope your Lordships including the noble Lord, Lord Young, will forgive me for my discourtesy if I leave at 6.30 for a commitment which I undertook some time ago. It is always a pleasure to follow the noble Lord, Lord Boyd-Carpenter. I hope that he will forgive me if I do not follow him closely because I want to concentrate on a much narrower point in the ration of time at my disposal. I am always bewitched by the noble Lord's eloquence. I particularly enjoyed that moment in his speech when he almost convinced me of his belief that no government could be capable of fiddling anything at any time. Experience in recent months of Westland and of the Wright case makes one doubt that proposition slightly.

I do not wish however to engage in controversy about such matters or the merits of monetarism. After all monetarism is only the quantitative theory of money dressed up in a new uniform and a more Keynesian approach to economics which is not confined to countries in the situation of this country in the 1920s or 1930s but has a more universal relevance where the economy is not working at full power. The role of priming the pump is one which is relevant to economies of very different mixtures.

I want to draw the attention of noble Lords to the inadequacy of statistics in relation to unemployment among members of minority groups. In the debate initiated by the noble and learned Lord, Lord Scarman a week or so ago the problem of the inner cities was discussed. The noble and learned Lord drew our attention to the plight of large numbers of members of minority groups concentrated in those cities and warned of the dangers of failing to tackle the problems which they represented in their plight. Inner city problems are not confined to housing which was the matter most of us concentrated on in that debate. Inner city problems involve other matters, for example education and above all employment—or rather unemployment.

The massive unemployment among the groups about whom I am talking is a matter which should truly alarm us. In this sense I regard this debate as a kind of appendix to the debate initiated by the noble and learned Lord, Lord Scarman. But his debate had the advantage that we were provided by Faith in the City with evidence with a substantial factual basis on which we could base our discussions. Unfortunately in the case of this debate in respect of the ethnic minority groups, the statistics available to us are woefully inadequate. This derives from two unwise decisions which the Government took in 1981 and 1982: first, when they removed the ethnic question from the 1981 census; and, secondly, when the information which used to be collected at Jobcentres on ethnic unemployment was discontinued.

Lord Somers

My Lords, may I interrupt the noble Lord for one moment? He is very good to give way. I quite understand his feelings on this subject, but would he not agree that on a subject like this most certainly there is a good deal of strength in the old adage that charity begins at home?

Lord Bonham-Carter

My Lords, I very much regret that I do not follow the noble Lord's point.

Lord Somers

My Lords, it is merely that I should have thought that we should concentrate first of all on the state of employment in our own native population, and then most certainly get on to the other as well.

Lord Bonham-Carter

My Lords, is the noble Lord really suggesting that the citizens of this country who happen to have ancestors born in the Caribbean or in India are not equal citizens with the rest of us? If so, I must say that I profoundly disagree with him.

The result of the inadequacy of the statistical material at our disposal is that we have to depend for our information on the Policy Studies Institute Report for 1981 which shows that unemployment in this country among those of West Indian origin was double the average; among those of Indian origin 1½ times the average; and among those of Pakistan or Bangladeshi origin more than 1½ times. The Department of Employment Gazette of January 1987, based on the labour survey, confirms these figures. Overall unemployment among what they describe as non-whites—which is a word I always rather dislike; I do not think that most women would like to be called non-men—is 20 per cent.; among whites, 10 per cent. If you take the 16 to 24 age group, unemployment among non-whites was 33 per cent. and among whites 16 per cent.

If you look at the inner cities the figures are far more devastating. The Commission for Racial Equality assesses that in 1985 among the young black population in Sheffield 73 per cent. were unemployed. Most estimates put it at about 60 per cent. in the inner cities among the group between the ages of 16 and 25. That is a figure which is unacceptable, which is dangerous, and the long-term consequences of which cannot really be fully assessed.

The point I want to make is that these figures are not based on accurate information, and so I am profoundly grateful that the Government have decided to go back on their 1981 decision and that the ethnic question is being reintroduced into the census. I understand the Department of Employment has seen the error of its ways of 1982.

As I understand it, two different types of pilot monitoring schemes have been completed—a self-assessment one in Handsworth and two visual assessment ones elsewhere. But I gather that it has not been decided yet whether or not to publish the results of these pilot schemes in the first place; and, secondly, whether or not to go ahead with the scheme on a wider scale as a result of the pilot schemes. I hope that the Secretary of State will be able to reassure me that the pilot scheme results will be published, and that it is his intention to go ahead with a full scheme in due course.

It is extremely important that we should have accurate information so that we can devise policies to deal with this critical situation. Without that information we cannot act properly. I am delighted to say that the report of the Employment Committee which has been examining discrimination in employment in another place wholly supports the view that information is an essential prerequisite to the construction of proper policies.

In addition to this, one is happy that in January 1985 the Civil Service undertook to undertake monitoring of its workforce, and that in November 1986 the Ministry of Defence at last gave way and agreed to do so in the armed forces likewise. I must however say that the fashion in which the Ministry of Defence is going to undertake this exercise leaves a great deal to be desired. First, the story that it had to tell is a pretty sad one. It took the 1968 Act to make the army abolish official discrimination in recruitment. Secondly, the monitoring which the Ministry of Defence proposes to undertake stops at the point of entry. This, quite honestly, is not good enough. Equality of opportunity means more than being allowed to have your foot on the botton rung of a ladder. It ought to allow you to climb right up to the top of the ladder. Any monitoring process which does not actually follow through a man's career is inadequate.

I hope therefore that the Ministry of Defence will pay attention to the Employment Committee's report which makes this point clearly when it says: It is essential that monitoring should not only tell you about the number but also the grade of the employees within any firm which is undertaking an exercise of this sort". Many years ago when I was working with the Community Relations Commission I said that I hoped that we could get race relations rather higher on the agenda of government. I sometimes feel, 14 years later, that that hope has not been very successfully fulfilled. When I read the MoD's evidence to the Employment Committee I find myself slightly depressed.

The fact of the matter is that in the whole business of race relations it is impossible to tackle the problem effectively by individual ministries. It has to be coordinated. As the Department of Employment said in its evidence to the Employment Committee, the lead department is in fact the Home Office. But the Home Office has at all times been reluctant to accept its responsibilities for co-ordinating government policy as a whole in this field.

That is necessary because race relations do not affect only the Home Office; they affect the Department of Employment, the DHSS, the Department of Education and Science and the local authorities. The failure of attempts to deal with race relations has been greatly due to the fact that there has not been a co-ordinated government strategy. If the good intentions expressed in the Scarman debate are to mean anything, then I believe that the Home Office has to bite the bullet and has to take on the responsibility of co-ordinating government activities across the board in this field.

It has to see that monitoring is effective and that monitoring is carried out in the proper way. It has to produce policies which are co-ordinated between the departments, involving local authorities, so that a serious and co-ordinated attack can be brought to bear on this critical issue even, if necessary, in a year when there may be a general election.

Lord Young of Graffham

My Lords, the noble Lord, Lord Bonham-Carter, has made much of the change of mind, as he puts it, of my department. Perhaps I should confirm to him that in 1982 we had to stop, as compulsory registration became voluntary registration. and it was dealt with in unemployment offices and not Jobcentres.

We have been conscious of the lack of data. We have run pilot schemes against bitter opposition from Civil Service unions who have picketed and for reasons best known to themselves have done all they can to prevent such surveys taking place. Those problems are there and therefore we have no further plans in sight at the present time, although we are considering the position to see how we can carry out a survey without causing considerable dissension. The labour force survey is a good source of data, and I shall write to the noble Lord on that point.

5.10 p.m.

Lord Seebohm

My Lords, when I read the words of the Motion I had a feeling that the noble Lord, Lord McCarthy, was going to make a speech which perhaps might be more suitable for a party political broadcast. Listening to him for 21 minutes I knew I was right. I shall try to be as objective as possible. It is just as well that there are three Cross-Benchers speaking. We have the misfortune of having to make up our own minds. It is hard work at times, but your Lordships will never hear us on these Benches start by saying, "We believe on these Benches", as we hear from others every time we have a debate in the House. I shall try to get to the roots of the problem if I can.

I believe that the noble Lord, Lord Diamond, was completely wrong when he said that to look at what happens overseas is irrelevant, except for possibly 50 per cent. of our problem. It is relevant, and I think highly important, if we are considering cures for a problem, to look at its causes. I was surprised that only a few noble Lords—excluding the noble Lord, Lord McCarthy—made mention of the oil hikes.

I shall briefly mention these again. I had the good fortune last week to hear Dr. Nolling, who is a member of the Central Bank Policy Council in West Germany, talking to a meeting in London and comparing what has happened in Germany with what has happened in the United Kingdom. It was very illuminating.

In 1973 the first oil hike occurred. Unfortunately for the Labour Government it was just before they came to office. There was nothing they could do quickly to put the situation right. In two and a half years matters had disintegrated to a point where the IMF had to be called in to stop some of the rot. The situation in 1979 was reversed. The Labour Party went out at the time of the second oil hike and a Conservative Government came in. This was a far worse hike than the 1973 one. It caused for a short period practically a complete collapse of international trade. It hit this country harder than any other because we are so reliant on our exports and our international trade to survive. It hit us quicker and it hit us harder than any of the other. OECD countries.

The figures in Germany are fascinating. In 1973, just before the first oil hike, unemployment in Germany was 1.2 per cent. In 1975, after the oil hike had worked through, it was 4.7 per cent., nearly four times as high as in 1973. By 1979 they had managed to make some sort of adjustment and recovery and it was down to 3.7 per cent., only three times higher than in 1973. But in 1985 it had climbed again to 9.7 per cent. By last week the figures that Dr. Nolling brought from Germany showed over 10 per cent., and rising, compared to 11.3 per cent. here, and falling.

Dr. Nolling reckoned, as far as I could make out, that we calculate our unemployment figures similarly, and he pointed out that recently the Germans had taken 400,000 people in the long term out of the figures, yet they were still rising. This shows a great similarity between Germany and this country, and we are all facing the same international problem.

The other thing that Dr. Nolling said was that Germany has a north-south problem. That rang a bell in my mind. He said, "Perhaps you do not realise that the average in the north, in the manufacturing area, is now 13 per cent. unemployment and in places like Bremen it is 16 per cent.". Here we have exactly the same story, a steady falling away in employment in manufacturing industry.

I was glad to hear the noble Baroness, Lady Lockwood, say that the service industries were likely to be a great source of new employment. It is high time that we stopped talking so much about the difference between manufacturing and service industries. I have two or three simple examples that I have heard the noble Lord, Lord Young, give in the past. If there was not a growing hotel industry, what would happen to the Potteries? Firms in the Potteries would go bankrupt tomorrow. Is this manufacturing industry helping the service industry or is the service industry helping the manufacturing industry? I do not know.

What would happen to a great section of the electronics industry if it was not for banks, insurance companies, building societies and Big Bang in the City using all this electronic equipment? What would happen to the manufacturing industry making aeroplanes if it were not for the tourist industry? To talk about service industry and manufacturing industry in the way we do now is to my mind absolute nonsense.

Lord Graham of Edmonton

My Lords, does the noble Lord also accept that when we talk about expenditure by local government—and sometimes it is derided—a great deal of it goes to the private sector? For example, in Enfield, which I know, 85 per cent. of the expenditure of the housing department goes to the private sector.

Lord Seebohm

Yes, my Lords, I am coming to that later in my speech, which will not be long.

Dr. Nolling made some further interesting comments which are worth repeating. He said that we have to take demography very carefully into consideration. In spite of having created 500,000 more jobs in the last year or two years, nevertheless German unemployment is increasing. They had 2.6 million people known as guest workers from overseas and they have reduced that figure to 1.8 million, but still their unemployment is increasing. It does not seem to me that we can say that their situation is all that different from ours.

Dr. Nolling ended his talk by saying that 1987 starts with a cure for unemployment as far off as it ever was. He said more than that. He said: "If we can continue with a growth of 2.5 per cent. per annum, all I can say is that we shall have the same amount of unemployment in the year 2000 as we have today. We must get growth up to about 3.5 per cent., but that would only bring unemployment down slowly". We both have the same problems. I shall try now to say what I think must be done by the private sector, by the Government and internationally.

In the private sector we have to see that we maintain a very high energy input into innovation and research and development. I believe we should talk about R, D & D. From my years with the Design Council I believe that research, design and development is the order in which things have to be done. We are spending in this country only about half what Germany spends on these factors, if one takes away what we are spending on defence. We must have more union co-operation. The unions have done as much damage as anybody to prevent us improving our situation. We have to improve management enormously and industrial relations.

In the public sector I still think that the prime aim should be to get interest rates down, as I said in the debate the other day. I believe that in Germany they have got them down and that will help them fairly soon. In this country interest rates, real rates of 10 per cent., are preventing industrial investment. One can sit back and get 10 per cent. from the financial sector for doing nothing.

I believe we must also increase our medium- and short-term spending on the environment and, my old hobby-horse, housing. We must spend more on housing for every reason—not just for economic but for social reasons. I shall be glad to hear something about that from the Minister, if he has anything to say about it.

Finally, as regards international action, Dr. Nolling made a big point of this. The first thing is that somehow through international action we must get stability of exchange rates. The way they are moving is most disrupting, particularly in relation to the dollar and sterling, and also the hardening of the yen. We must help the Third World with their debt problem—that is one of the things that is holding up international trade as much as anything—and we must increase and indeed rationalise the use of the IMF and the World Bank. All these things need to be done and I believe that if we are all—not only ourselves but all the OECD countries, Japan and the United States as well—really committed to putting things right we could cure unemployment by the end of the century. I cannot repeat too often the fact that to my mind, the United Kingdom cannot do it alone. Therefore I have no reason to support the Motion.

Lord Molloy

My Lords, as regards the interesting figures that he gave for the steady rise of unemployment in Europe in the late 1970s, particulary in Germany, would the noble Lord not agree that there was one country where the reverse was true? In the last year of the last Labour Government unemployment was comng down. It came down for a few months under the Conservative Government and then suddenly, under the Conservatives, it started increasing dramatically. Ought we not perhaps to look at why that happened and what was the root cause of the fact that under Conservatism we have massive unemployment today?

Lord Seebohm

My Lords, the answer is very simple. In fact all countries managed to recover after the 1973 hike by fairly massive methods. Unemployment was going down everywhere, including Germany and here; but the 1979 hike, which, as I said, was absolutely drastic, had to work through. It did not come in the next morning: it worked through and in fact 18 months to two years later every country was in the same boat.

Noble Lords

Hear, Hear!

5.22 p.m.

Lord Carmichael of Kelvingrove

My Lords, I hope to speak very briefly today. A great deal has been said and I think when we read the debate in its entirety we shall all realise that we have gained a great deal from it. I am delighted we have been given this opportunity by my noble friend Lord McCarthy to discuss the question of the unemployment figures. I have noticed that later speakers have tended to go off the actual analysis of the figures, and I certainly do not intend to go into that.

I am grateful to the Minister for the answers and explanations he has given of the figures, because, like most people in the House, I believe we want accurate statistics. We have no objection at all to the improvement of statistics, but there is a cost in this. The cost was shown, to me at least, on Monday when I listened with considerable care and later read the reply which the Minister made to my noble friend Lord Dean of Beswick on the question of the York figures. 1 understood exactly what he was saying, but at the end of it all I had an uneasy feeling that his statement had not done any good for public confidence in political statements. There was a feeling at the end of it—perhaps the word is too brutal—that there was a juggling of the figures, perhaps coming at the end of a whole series of alterations to figures over the last few years.

So, when I look at the Scottish figures—and they are really all I want to speak about in the narrower sense—in the Scottish bulletin issued by the department and I see the figure of 350,000, I wonder what the figure really is referring to, following all the alterations made over the last year. The figure of unemployed is 13.9 per cent. of the working population. The only value in trying to trace back what the figure would have been under the old terms is to give us some comparison. Perhaps that statistic could be given by the Minister—

Lord Dean of Beswick

My Lords, would my noble friend forgive me? I am grateful to him for giving way and I will be very brief. I have made this point before and I make it again. It does not matter what one does with the figures. Is it not a fact that it does not create one extra job? That is what the argument is about—creating jobs, and not making it appear that there are more people in work that out of work, and so on. Is it not a fact that the alteration of the figures has no bearing at all on the creation of even one job?

Lord Carmichael of Kelvingrove

My Lords, my noble friend is absolutely correct of course. It does not create any new jobs but I think it is important to look back, if only to see where you have come from and where you have arrived. The comparisions are of some value, I believe. Certainly governments must find them of value. What I cannot understand at the moment is whether we are speaking of 11.1 per cent. or 13.72 per cent., which I believe were the figures given earlier by the Minister.

The noble Lord, Lord Diamond, is absolutely right: probably there is no absolutely correct or absolutely incorrect figure. What we hope for is that we can get some sort of consistency in comparisions. That was the point I wanted to make on the figures, and I hope that the Minister will read again carefully the statement that he made on Monday because, as I say, to be absolutely honest, I had an unfortunate feeling of uneasiness after he had made the statement.

Lord Young of Graffham

My Lords, if the noble Lord will forgive me, the discussion we had on Monday about the figures for York relate not at all to the number of people unemployed in York: only the percentage. The percentage of 10.1 per cent. was one which equated to the 13.3 per cent. which ignored the self-employed. The percentage on the OECD basis, which equates to 11.1 per cent. nationally would in my submission have brought the York figures down into single figures. It was simply that, and no more. I think it is very important that we should recognise that any changes I have made in the last year have related only to the percentage and to nothing else.

Lord Carmichael of Kelvingrove

My Lords, I did say that I had listened to the Minister's speech and had read it. I mentioned my own reaction and I believe that the reaction of those outside was much the same.

One of the things which I find comforting so far in this debate is that, unlike some of the earlier debates we have had on the subject of unemployment, no one has suggested today that there is a huge reservoir of work-shy people who do not want to work. That has not been raised at all, although there was a suggestion that people should look for work at any price, at any time and at any job.

In Scotland we have this very high figure of 350,000, added to in just the last couple of weeks by the announcement of the closing of the Caterpillar factory—a very important element in industrial Lanarkshire. This means that the figure will go up again. People in this part of the world, and particularly those who were proud to work in heavy industry, now feel that they are on the scrap-heap for ever.

However, those who are short-term employed and long-term unemployed, certainly in my own part of the world, are still seeking work. They are looking for work everywhere but there is just no work in the area. They have exhausted all the avenues such as the Jobcentres and everything else. They have used personal contacts, and they find that even that has not resulted in job opportunities. They have gone to friends of friends and they have chased up rumours of new opportunities in various places, but by and large these people have been unsuccessful.

In the last 18 months or so we have had two new hotels opened in Glasgow, and they advertised for staff. They got an enormous turnout of people looking for work. In fact I think the second hotel, after the experience of the first, found that the cheapest publicity it could get was by advertising in the newspapers pictures of young men, old men and women queueing for jobs.

I have no objection at all to what is said about the necessity of improving tourism, and indeed made a speech about it in the other place. Not only is there nothing wrong with tourism but I think that in a society where we hope there will be much constructive leisure in the future we shall have a great deal more tourism than we have had in the past, and everyone will get the opportunity to have a decent amount of leisure.

Many people are worried about the government training schemes. We all agree that we want as much training as possible, but there is an unfortunate feeling among young people, particularly those in the black spots such as parts of Glasgow and the West of Scotland, that they are being shunted on to a training scheme which will not give them anything at the end of it. I can see the argument for people being given work experience, though it is a very odd sort of phrase. But if at the end of the training there is nothing for people, disillusionment and hopelessness set in and perhaps more harm is done than would have been done if they had not had that experience.

There is great cynicism where I live about the Restart programme for those on the long-term register. As I understand it—and the Minister will correct me if I am wrong—if you have been long-term unemployed and go on a course of any kind, you are then off the long-term register until you have been unemployed for another long period—

Lord Young of Graffham

My Lords, I only respond to the invitation. If I may be allowed to correct that, if you were to go on a one-week Restart course you would go back on the register in exactly the same condition as before. If you go on a six-month full-time training course then you are of course no longer unemployed, but only a very small section of those going through Restart do that. If anyone gets a place on the community programme, he will go off the long-term register in the normal way. But by and large the vast majority of people are left untouched, unless they go into a Jobclub and find a job, and at that point they then go off the register.

Lord Carmichael of Kelvingrove

My Lords, I am grateful to the Minister for clearing that up, because it is certainly something that is misunderstood. Perhaps his department will be able to reassure people by clearing up that point.

My last point is on the whole question of retraining. In my old constituency there is a university which is having great problems. Without the staff cuts and the student grant cuts it could handle a great many more students. The same applies to Clyde University, which is primarily a technical university. The statistics—that has become a bad word today—show that we are falling far behind not just our European competitors but even the Far East. The Minister may have seen an article in today's Independent, which states that we no longer consider that places such as Taiwan are merely assembly points for relatively cheap electronic goods. Their throughput of highly skilled basic scientists is much greater than our own, so we have to do a great deal to catch up.

One of the tragedies about North Sea oil is that the money has all gone through our fingers. It would have been a great deal better to pour that wealth from the North Sea into training—even if there had been considerable wastage in the training schemes—than to spend the £20 billion per year that we are spending on unemployment, much of it coming from North Sea oil.

Unlike the noble Lord, Lord Diamond, I believe that things are so desperate that the Government must do a great deal of pump priming. At the end of the day there will need to be a combination of government and private enterprise, but the first step has to come from government. That is why in any of our discussions I have always said that we have to look at giving money to local authorities for house-building and for the infrastructure generally. I hope that when the Chancellor makes his Budget he will bear that in mind, instead of giving big tax reductions which some of the press see as a solution. I cannot see them as a solution and I hope that more money will go back into the community if there is any surplus available.

5.35 p.m.

The Earl of Gowrie

My Lords, I welcome the debate in the name of the noble Lord, Lord McCarthy, very much and therefore am grateful to him. But I am afraid also that old political suspicions die hard. I, too, am a little suspicious of the reasons which may have led the noble Lord to table this Motion at a time when our unemployment statistics show the largest half-year decline than at any point in the last dozen years.

I have spent five years of my working life, under two Conservative Administrations, in the present department of my noble friend Lord Young, the Department of Employment. That experience has taught me one thing. There is no area of our national life which people understand so little as employment or unemployment. Confusion reigns. By "people" I do not mean the man in the street, whoever he may be. I mean all of us—the man or woman in Parliament, in the communications industry, in the labour unions, in the churches, indeed in all our national institutions.

If you ask most people what is the greatest problem facing Britain today their answer is—or at least would have been until the onset of AIDS—unemployment. Yet if you rephrase the question and ask people what is the most serious question facing themselves or their families you usually hear very different answers. Unemployment as an issue in almost all the surveys of opinion that have been conducted scores low in the list of personal anxieties. Why the discrepancy! Trying to account for it may provide us with some of the answers to some of the questions which the debate has posed. Let me suggest just a few of them.

As a former minister, I can think of quite a few criticisms which it would be possible to level at the Government. Unemployment is not one of them. As my noble friend Lord Boyd-Carpenter reminded us, the United Kingdom has a large workforce. It is large and it is growing. About 65 per cent. of all people between the ages of 16 and 65 are in work. We therefore have more people registered as working than any of our European partners and competitors.

Germany was touched upon in an excellent speech by the noble Lord, Lord Seebohm. Germany is about the same size as ourselves. But it has overtaken us in material terms. It is now about twice as rich a head as we are, and yet in spite of that it has a workforce of about six or seven percentage points lower and an unemployment register only one or two percentage points lower.

It seems to me that these figures tell us something about the nature of employment in advanced economies. They tell us, for instance, that the high cost of labour keeps productivity high but also that it keeps unemployment high. They tell us something about this country as well. Given the decline of our share of manufacturing industry from 20 per cent. of the world's share in 1960 to about 8 per cent. now, though I am happy to say it is rising, we must be doing something right. If many of our jobs are part-time jobs I cannot see what is wrong in that. Leisure, leisure industries and leisure jobs are growing in all the advanced economies.

To take another country as an example, the USA has about the same proportion of people in work as we have, yet its unemployment register is well below ours. Unemployment is not perceived as a social or political problem by the mass of Americans, except in some rural and inner city areas.

Comparisons with the experience of an older generation are also misleading and add to the confusion. In the great depression of the early 1930s, about 3 million householders were out of work and therefore unemployment was synonymous with dire poverty. That is not usually so today. Households contain people who are in work and people who are out of work. I acknowledge that that may not give us very much comfort. There is the issue of morale, and particularly of male morale. Females are still more flexible in their attitudes to work, and female employment is consequently very high and has been growing in the manufacturing industries as well as in the more traditionally female service industries.

Then again, unemployment is synonymous today with relative poverty. The unemployed become less able, in an era of high wages, to enjoy the consumer goods and the high street shopping boom which go with high wages. I grew up in the 1950s, which was an era of full employment. We have just mourned the death of Lord Stockton. In recent years he has become for many people a symbol of a paternalistic and caring conservativism and also of full employment policies. But, as Prime Minister, Mr. Macmillan presided over a rather smaller workforce than we have now. Given the decline in our share of world trade since his time as Prime Minister, that seems to me to be amazing. Again, we must be doing some things right, and indeed rather well.

I yield to no one in my admiration for the late Lord Stockton. However, the machinery for the manipulation of the level of employment which was there for him to use simply is there no longer. Or perhaps that is not quite right; the machinery is there but it is dangerous machinery for us to use.

Let us consider cheaper credit, for instance. On the wireless this morning I listened to a pundit urging the Chancellor to use what was admitted to be his very prudent levels of public borrowing to lower interest rates rather than to reduce income taxes. The pundit said that lower income tax would increase spending on imports, whereas lower interest rates would increase business investment. That may be. However, it seems to me that lower interest rates mean cheaper credit and cheaper credit can also fuel consumer spending. If, on top of that, the Government were also to borrow more, inflation would pick up sharply and our present encouraging trends in the output of manufacturing and other industry would fly out of the window. So would the present encouraging trends in the number registering as unemployed.

I urge my right honourable friend to bring income taxes down and to help to bring interest rates down. However, he should do both steadily and persistently, rather like bringing a jumbo jet down to the runway. In that way, there may be a chance that it will fly again.

One thing which I believe we have learnt in recent years is that high levels of government borrowing are not an option which can be used to deal with unemployment. We did not learn that lesson from the Tories. We learnt if from the late Tony Crosland. We learnt it from Mr. Healey and from Mr. Callaghan when he was Prime Minister. It seems to me a pity that these two statesmen no longer remind their present colleagues that borrowing costs too much in other ways. However, happily there is evidence that the public realise that politicians who try to borrow and spend their way out of grave social difficulties simply compound those difficulties.

This has been the trouble where I come from, the Republic of Ireland. As a result, and by an historical irony, many of my countrymen are today swelling the unemployment and social security statistics of this nation. That should be taken into account when we debate British statistics.

The noble Lord, Lord McCarthy, made much of changes in the ways in which the statistics are compiled in order that the unemployment totals should appear to be reduced. I am no statistician. But I can tell him that I was responsible, within the Department of Employment, for initiating some of the changes. The main change in my day was the result of an efficiency exercise conducted by the noble Lord, Lord Rayner, which demonstrated the absurdity and the high cost of double registration. I am advised that the only change to have had any significant effect upon the figures was in the move from a registered count basis to a claimant count basis.

Statisticians are a numerate bunch. However, if they feel that their mystery is being tampered with, they are a vocal bunch. I can remember very little dissent within the department at our proposed changes. Indeed, the independent labour force survey, which was something of a benchmark for officials, put the total considerably lower than even the claimant count.

I know very few people, particularly in this part of the country, who have no experience of those who draw unemployment benefit and supplement it with paid work of some kind. I do not consider this an especially wicked thing to do. It can be argued that it lubricates the working of the economy with some cheap labour at least. However, it means that we should take all the statistics, both favourable and unfavourable to a particular point of view, into account.

I close by saying that of course unemployment is a very serious problem in this country. However, it is not a universal problem. It does not affect the generality of men and women in the way that it did in the 1930s. In those days even the well-off were affected (beneficially, if you like) by the low cost of labour. Indeed, the 1930s are rather in the context of employment an over-maligned decade because from about 1930 on the numbers of jobs were growing sharply. The reflation associated with Lord Keynes was possible and a good thing to do, given our then share of world markets and the tariff barriers that then existed. It must be said that those same tariff barriers would have created a major crisis in the 1940s if another crisis—the war—had not supervened.

Today, unemployment is an acute problem for certain groups of individuals. We must solve it. It is also a problem for certain regions of the country and we must solve that as well. We shall not solve the problem if we continue to misunderstand it.

My noble friend Lord Young has brought a great gust of common sense to his post, as well as his business experience and his experience at the MSC. He is the right man in the right job at the right time. He understands that where young people are concerned—and they are a group especially affected—employment is a matter of better education. The workplace has changed; manufacturing is more technical, more productive and less labour intensive. The service industry must also be more responsive to changing consumer tastes and requirements. My noble friend knows that in the end markets prevail and that the opportunities they offer must be seized. But he also knows, and has demonstrated, that great chunks of public money must be spent on helping individuals respond to the changes imposed by markets. It is a waste of money, it is throwing sand at the sea to try to prevent the changes from taking place.

The Government are also spending money on correcting regional imbalances. I am not convinced that this money is always so well spent. I prefer to see it spent buying people generously out of jobs in decline in the old industrial centres and on cleaning up those centres in environmental terms, rather than on bribing firms to set up in places where they might otherwise not freely choose.

Whether I am right or wrong on that matter, it is clear to all of us who support the Government that money is being spent to alleviate unemployment. None of us on this side of the House believes that the best way to solve the problem is to quadruple the budgets of local authorities, yet, stripped of its trimmings, that seems to me to be the dish that the party opposite have to offer the public. I find it incredible and indigestible. It does not advance the real job of this economy, which is to win back the share of world markets we have lost. That is the subject—not statistics—which should engage the attention and the talents of the noble Lord and of the whole House.

5.50 p.m.

Lord Hooson

My Lords, when the noble Earl, Lord Gowrie, began his speech I thought that we were going to listen to a confessional but as he went on it was quite obviously not to be so. I agreed very strongly with him on one point: the need for much lower interest rates and fixed interest rates possibly for risk capital, but otherwise, I had extreme doubts about many of the things that he said, and I will deal with them perhaps later in my speech.

Implicit in the Motion before the House is the charge against the Government that they have used and are using unemployment statistics to disguise the extent of the underemployment of British human resources and are failing to provide adequate long-term solutions to deal with what is on any view a grave problem.

It seems to me that government action affects the statistics in two particular ways: first, by frequent changes over recent years in the method of calculating the figure for aggregate unemployment so as to produce a rosier picture than would otherwise be so; and, secondly, spending funds on employment and training schemes in such a way and giving them such a direction as to maximise their short-term impact on employment figures, and not using those funds to create the maximum amount of proper jobs; that is, permanent hopes of employment.

If I may deal with the first matter, it has been variously estimated that in recent years the way of calculating a figure for aggregate unemployment has been changed between six and 19 times. It depends on whether one takes the Government's estimate or the Labour Party's estimate of how often it has been done. I simply pose the question: why should this be? It is disturbing. Of course unemployment can be interpreted in a narrow technical sense or broadly. By unemployment, I mean the measurement of those between school-leaving age and retirement who are willing and able to work but remain unemployed.

I accept that it may not be possible to have a high degree of accuracy in these figures for various reasons that have already been mentioned in the debate. What it is not too much to expect, however, is a meaningful and consistent method of achieving a figure for the aggregate national employment rate. Surely the sole or main purpose of having a statistic at all is to have a reliable and comparable indication of the extent to which our human resources are being wasted so that the situation can be analysed and appropriate remedies sought. It is enough for this purpose to have a general estimate but obtained by a consistent method so that the numbers can be compared. Even if the absolute statistics are inaccurate, a consistent time series allows a measurement of change which can be indicative of trends.

Lord Young of Graffham

My Lords, each month we publish a consistent time series going back to 1971. It is published by the Government statistical service, not by me.

Lord Hooson

My Lords, I realise that that is so, but the noble Lord knows perfectly well that in answers in this House, in speeches on television and so on, very misleading figures and non-comparable figures are given. Whereas changes are sometimes necessary to improve the system or to adjust to radical changes in the economy and the way in which it is organised, frequent change such as we have had—particularly when the effect has been a substantial downward revision of the estimated number of unemployed following a period of rising unemployment—is very suspicious.

If, for example, we calculated the number of unemployed today on the pre-November 1982 basis, it would work out at 3,676,000. Under the present system, it is 3,216,767; that is, there is a difference of very nearly 500,000 between two counting methods. It is fairly clear to every intelligent person that the changes in the method of counting unemployment have not been moving towards greater accuracy but have been excluding many people who are unemployed from the official statistics. That is the charge that is made against the Government.

I deal next with the second method used for a particular direction of funding for government training and job creation schemes. Were all the schemes set up by the Department of Employment and the Manpower Services Commission to disappear suddenly, it has been estimated that there would be an increase in unemployment figures of about 547,275. The schemes—this is their great merit, I should say—occupy people in at least doing something meaningful while they last. However, it is important to realise how the use of these schemes affects unemployment statistics. The schemes tend in the end not to create what people regard as proper jobs and have an effect on wage levels throughout the country and on employment opportunities elsewhere, because it has been estimated that in certain schemes for every 100 employed 50 lose their employment elsewhere.

We all know that the seasonal factors affect unemployment figures so the monthly comparisons, as the Minister said himself, are not very meaningful, and the Government appear almost to have accepted this. The Government claim rightly that no big increases in employment schemes places have taken place in recent months. This is right if it is taken on a month by month comparison. However, if we compare the figures today with the figures of last year, we find that there were increases of nearly 14,000 for August, 18,500 for September, nearly 10,500 for October, 18,000 for November and 22,803 for December. This is at a time when seasonally we know there are certain trends in the unemployment figures.

The fact that a large part of the fall in unemployment figures can be accounted for by expansion and development of employment and training schemes does not necessarily mean that the unemployment has not fallen. If the schemes are worth while, if they lead to increased output or improve the workforce and create new employment, then of course they should be encouraged. If on the other hand they are fairly short term in outlook and are not contributing too much to the prospects of our future prosperity as a country, they can be seen as another kind of fiddle of the statistics.

For example, it is undoubtedly established that the Youth Training Scheme is good for the employer, but is it really good for the participants, save in so far as they are doing something gainful and are occupied at the time they do the job? It was estimated that 24 per cent. of employer-based places were replacing jobs previously carried out by young people, and 7 per cent. were replacing adults. The training element is certainly not enough in these schemes.

I do not intend to go through each scheme except to say that it is my opinion that the long-term impact of these schemes on unemployment is likely to be small for a variety of reasons that are, I am sure, well known and have been rehearsed several times.

I now turn to the basic problem, the underlying reason for unemployment. Very often we hide away and shy away from the fact that the 1930s was a period of great unemployment. It changed. Why? It changed largely because of the war. It changed because there was a large amount of government expenditure during the war. It changed in the United States because Roosevelt brought in the New Deal. Gradually people got used not to theorising about employment and prospects but to doing something practical about it. The Government are in great danger of having far too theoretical a view of employment and private enterprise.

I happen to believe strongly in private enterprise. When I first became an MP I saw in my own area a remarkable couple who, starting from nothing, created industry. They had remarkable flair and they created industry. There are now thousands of jobs in that area. New skills have been established there partially because of their entrepreneurial skill but they always insisted to me how impossible it would have been without government investment as well. By a variety of grants government enabled them from time to time to expand and to build factories. Even recently when there was expenditure of £8 million on what is the largest purpose-built textile factory in the United Kingdom since the war, £4 million of that money came from government grants.

The Government are wrong to have this blinkered view of the value of public investment. What is needed is a partnership between entrepreneurial and managerial skills and public investment. That is why I am extremely dubious about the proposition that what would stimulate the economy of this country further is a reduction in the standard rate of income tax. I do not think it would. I should prefer to see that money directed sensibly at public investment. By that I do not mean public ownership. The great problem with most public ownership is that it is so badly managed. What we need is sensible public investment allied to entrepreneurial skills and individual flair. If we have that we shall begin to re-establish Britain as a manufacturing country.

What has been wrong with the Government's approach is their addiction to a theory and an addiction to the belief that all you have to do is to stimulate private enterprise and that will do in itself. It will not. We are a country of 55 million people. At the moment the amount of industrial training in the Youth Training Scheme is 14 per cent. Clerical training is not industrial training. The actual amount of industrial training is 14 per cent.

I believe that this is an entirely mistaken slant to the investment put in by the Government. It would be far better to have many more regional bodies stimulating the regions and priming the pump here and there. Together with fixed low interest rates for risk capital, this would bring out the best in the British people and bring about an industrial resurgence in this country. Unless we do that, service industries in themselves will never provide employment for a country of 55 million people.

6.3 p.m.

Lord Parry

My Lords, as often happens in this House a Motion that appears to be mechanical and concerned with the mechanisms of statistics and the way in which they are presented has turned out to be a humanistic question and has occupied the House at that level.

Impressive contributions have been made to the debate. I should like to make one quite categoric statement at the beginning of my own contribution. I do not believe that any government of this country, whatever political view they represent, will end unemployment in Great Britain by the end of this century of indeed by the end of the next. I happen to believe that our society is the product of a series of industrial revolutions. If noble Lords count them as I count them, we have had three. We have had a major agrarian revolution and the benefit that flowed from it. Industrial societies are founded on cheap and available fuel; they are founded on cheap and available indigenous labour; and they are founded on access to raw materials, which the great empire that we had gave us. Almost fortuitously we evolved as a trading nation, standing at the crossroads of water and land routes to Europe and the world. As a result we have enjoyed the standards of living that we have.

Now we find the cycle of industrial development moving from us, perhaps irrevocably, as it is moving from Western Europe. At this moment it is moving from Germany. Do your Lordships remember how we have been lectured in this House and in other places about the efficacy of the German system and how after the disruption of war the Germans were able to establish so rapidly an economy which found them a place in the post-war world and gave them great confidence in their ability both to represent themselves and to compete with other countries?

The Germans were extraordinarily fortunate to start as they did from a zero base; to start with everything to gain and little to lose. In this country we had defensive mechanisms built into our systems which were a part of it and indigenous to it. It is an old-fashioned belief, to which I certainly subscribed in my youth and heard beautifully put, that unemployment is not just an epidemic of the capitalist society but is endemic to the capitalist society. I do not think anyone would argue that in this House tonight.

It is sometimes surprising to hear it argued in this House that the free-reining capitalist system, with the private entrepreneur given his head without controls and freed from planning permission and so on, can somehow build an Arcadian society in which everything will be all right because really they know best. That has not been said in this debate.

We have heard powerful speeches in the debate. I listened with great interest to the speech of the noble Earl, Lord Gowrie, who is momentarily out of his place. I hope he will not consider that I am personalising the issue when I say that he is a very interesting example of the benefits that Britain's industrial society has given to the products of it. He is a brilliant young man and well placed. He became an academic and maximised his academic success. He became a professor of English literature at an incredibly young age. He became a politician and reached the Front Bench of his party. He was influential in his party's affairs and now he has gone, one supposes, to a better job. If you have those opportunities and you can maximise them by your intelligence, you are not frightened by unemployment. It does not come home to you with the violence that it does to someone who has never had any of those benefits.

I speak not in a political sense. I am trying to offer an apolitical representation. How do we measure the true nature of the problem? I happen to believe that a Secretary of State for Employment should count one unemployed person as his failure, because the preoccupation of his job is to get people into employment. When the noble Lord sees the mounting difficulties and when he tries various schemes, he must be frustrated as the House is frustrated from its varying points of view. When we come to consider the statistics, inevitably we argue whether one party would present the truth more honestly than the other. But the point is this. What is the nature of the problem in human terms and what can be done to eradicate it?

We have an indigenous problem in Wales that is 100 years old. The gradual decline of the heavy industrial base has left isolated communities. Those communities grew up with confidence. Public and private benevolence enriched the lives of the people who lived in them. People with the least original opportunity have found their way into this House to sit on the Woolsack, have been able to take positions in industry and commerce and have been able to dominate the environment. They were able to do so because of public and private benevolence properly placed. What has happened is the disintegration of our industrial society, leaving exposed pockets of social tragedy. We have been trying in our different ways to reconcile that.

I add only one comment to what the noble Lord, Lord Hooson, said in his splendid contribution. He pointed out that immediately after the war we were able to take certain actions. Why? It was because wartime Orders in Council were at the disposal of post-war Ministers who were able to bring intervention and direction at a time when they probably could not be avoided in order to place jobs where the people were. No one, certainly not I, will be arguing here tonight for a return to that sort of control, but let us put on record that the achievements of the immediate post-war Labour Government—the positive side, however, we argue about the rest—was to change a war-time economy into a potential peace-time economy so rapidly that it caught the imagination of the world.

There are Ministers here tonight—Conservative ex-Ministers, Conservative present Ministers and other ex-Ministers—who know that they were able to do that because, when the country is in a crisis, it puts in the hands of the people it trusts with power such orders as can make the quickest and most efficient movement of resources to the benefit of all the people.

In Wales people have been trying to do that. In the whole of my lifetime there have been Tory and Labour Governments in Wales. We have not had a Liberal Government lately and perhaps that party might represent more than the 23 per cent. that it does at the moment. You never know. We have had a concerted attempt from both public and private endeavour to rephase the economy of Wales, to take it through the difficulties of adjustment and to present a better opportunity for its people. But what has happened? We still have 31 per cent. unemployment in many areas. We still have 25 per cent. unemployment in far too many areas.

I apologise to the noble Lord, Lord Boyd-Carpenter, I was called from the Chamber and heard only the last part of his speech. I appreciate what he said. He would occasionally like to see emphasis on the number of people in employment. The Hungarians have a proverb which says that the only difference between an optimist and a pessimist is that the pessimist is better informed; but however one looks at it, the figure of 31 per cent. unemployed and 61 per cent. in employment represents a problem that we have failed to cure with all the methods that we have used.

I could give specific instances, but the Motion refers to the causes of unemployment and I want to give some of the causes in Wales. I happen to believe, because I am a biased witness—I acted and worked against the EC but I was on the losing side—that the policies of the EC as far as Wales is concerned have been directly detrimental in at least two major respects; that is, to those areas which have remained potentially industrial and to the agricultural economy surrounding them. There is no question but that the quota business of the EC has dealt a deadly blow to agriculture in Wales and the peripheral areas.

I am not going to delve too deeply into that because I have another point to make. One cannot move the country. The peripheral position of Wales in Britain and Europe adds to its problems and to the problems of whatever government seek to encounter them.

At the same time as the direct effects of the EC have occurred we have also had this curious aspect—a strike of capital. When there is a strike of the working force there is righteous indignation, but we have a good Tory and not a bad Secretary of State for Wales within the limits of his beliefs. I fought against him three times and he beat me three times, so I had a hand in his career. The Secretary of State for Wales rose up in indignation a year ago and said to the banks, "For Heaven's sake, give us a hand. When are you going to invest in Wales specifically? When are you going to give us the capital that we need to do the job?". That is reminiscent of what one well known Minister once said—"Give us the tools, and we will finish the job". It is capital that we need. Some of the banks took notice of what the Secretary of State said and what others were saying. There has been some investment development by the banks without which some of the policies could not have been effective.

We had the oil crisis. The noble Lord, Lord Seebohm, said that he was not going to make a political speech because he spoke from the Cross-Benches, but he made the most political speech of all. I believe he referred to the oil crisis. What did the oil crisis do for Wales? In the first place, immediately post-Suez, oil built a major European port on the Milford Haven estuary—arguably the largest single investment in the history of my country. In five years it was booming; in 15 years it was affecting and helping everything else; but 25 years later, as chairman of the Milford Docks Company I was seeking contracts to export scrap metal from those refineries, and the 25-year boom was over. The crisis that affected investment policies affected Wales doubly because one of our hopeful industries died and we did not have the capital to invest in others.

What about the failure of good initiatives—initiatives which decent people can support whatever the government who float them? What about the failure in Cardiff, for example, of the protected port? I believe the term is "free port". What about the zones which have been established around Wales, with hope and the best of intent, to focus capital and to maximise government help at the points where it is needed? Very little has been achieved. Anyone will tell you that, even the Minister who is responsible. It is most disappointing. We have these great, continuing problems that are in need of political remedies and political muscle.

Why do we argue about what percentage of this is reflected in that, or what particular group of people is actually unemployed? We do not need to do that. The people who have been unemployed for 15 years know. They do not need lectures. They know because their lives have been affected, as have the opportunities and hopes of their children. It is right for this House to focus upon those, just as it is right to say, yes, possibly we can find a solution. There are 61 per cent. of people in work, even if the others are unemployed. Let me say that.

The need for the development of positive, community-based programmes is what I want to focus upon as I reach the end of my remarks. The noble Lord, Lord Hooson, referred to a famous group of people. They began in Pimlico, came home to Wales and maximised what they were doing. I was a founder member of the Welsh Development Agency. It is a magnificent initiative. When the Conservative Government came to power they looked at it very seriously. They might have abolished it but they found it was doing an effective job and they have continually helped to support it. They now boast of its achievements, and rightly so.

I was chairman of the Welsh Tourist Board. When the Conservative Government came to power the first body they looked at in Wales was the tourist board. It was found by the examining officer to be an effective and cost-effective body. Last week the Secretary of State for Wales gave it more money so that it can do a better job in promoting Wales. I do not believe that this country can make its future out of tourism. I have said that many times in this House. I do not believe that the future lies in the service sector or that we can re-establish our heavy industrial base. You cannot go back in economics any more than you can in history, except for information.

I believe, and many noble Lords have said this, that what we need is a balanced, highly intelligent and sophisticated operation, bringing together the public and the private sectors. We cannot afford to have the bright young men of British industry growing up, going abroad representing this country, doing remarkably well in winning export orders and then criticising the workforce of this country when they are having drinks afterwards. That is doing terrible damage to the country whose goods they are selling. We cannot have that any more than we can afford to have obdurate, old-fashioned and out-of-sync trade union leaders taking a similar attitude and saying, "We know what's best". The brightest of young talent must be harnessed to this business of co-operating in maximising what we have left in the British economy. We have a lot left—but I have no further time.

6.20 p.m.

Lord Harris of High Cross

My Lords, I am delighted to follow the noble Lord, Lord Parry. I wish he had had time to continue. I find myself in exceptional agreement with his vigorous diagnosis of this problem, as I find myself in full accord with the sustained arguments of the noble Lord, Lord Boyd-Carpenter, the noble Earl, Lord Gowrie, and my noble friend Lord Seebohm.

I join others in thanking the noble Lord, Lord McCarthy, for this opportunity to discuss the measurement, the causes and the cures of unemployment. As a lifelong student of labour problems, the noble Lord is perhaps more qualified than any of us to throw fresh light on this modern scourge. I was all the more disappointed that, instead of illuminating the issue from his undoubted knowledge and scholarship, he preferred to try to bamboozle us with a negative and arid quibble about what might be dignified as the methodology of statistics.

Like the noble Lord, Lord Seebohm, I do not claim from the Cross-Benches that I have reached that blessed state of complete impartiality. My modest aim is to follow some other noble Lords in trying to offer a wider perspective to this debate. In what I think is an ambitious task, I shall rely chiefly on an impeccable source which even the noble Lord, Lord McCarthy will not at once dismiss as politically tainted. My prime witness is Mr. Francis Blanchard, since 1974 the Director-General of the International Labour Organisation—an organisation which I find that I have previously discounted too hastily as a promoter of much trade union mischief. Much of what he said will come as no surprise to the noble Lord, Lord Parry.

Mr. Blanchard's report to last year's ILO conference was significantly entitled The Changing World of Work: Major Issues Ahead. In a sentence it acknowledges that unemployment is a world-wide phenomenon which has precious little to do with the party political inventions that torment the minds of many occupants of the Labour Benches. The director-general opens his review with the words: Prolonged economic recession and major structural change darken the horizon". I did not notice that the horizon of the noble Lord, Lord McCarthy, was darkened by contact with any such realities. Mr. Blanchard's more thorough analysis of the causes included the following: the slowing down of world economic growth; demographic changes in population of working age; the increased participation of women in the labour force; the hangover of inflation; the energy crisis; and the changing patterns of international trade and protectionism. On top of all that turbulence there is the disrupting shift from labour-intensive industry to labour-saving high technology, and from manufacturing and agriculture to services and self-employment. I truly believe that any impartial student contemplating that catalogue of horrors might be forgiven for marvelling that across Europe 90 per cent. of the population are happily working away at rising standards of living.

If we recall the ILO's long record as champions of trade unionism and increased government regulation, we must surely be impressed that the director-general, Mr. Blanchard, now questions the relevance of that approach in today's circumstances. He even dares to discuss the view that there are, too many rigidities in the operation of the labour market due to high wage costs, a lack of mobility, restrictions on work force reductions, legislation on hours of work … and fixing of wages". To those who think they can spend their way into higher employment, as I believe the noble Lord, Lord Hooson, suggested, Mr. Blanchard echoes Mr. Callaghan by explaining, Keynsian demand-led policies … are likely to lead to higher inflation which can subsequently be diminished only at the cost of higher unemployment". That could be directly addressed to Labour's boast to have discovered an alternative economic strategy.

It is true that the director-general of the ILO, as an international civil servant, has to sprinkle the pages with a few weasel words and saving phrases. But his 67-page report, taken as a whole, reads mostly like an agenda for reform by the noble Lord, Lord Young, and his more radical Conservative colleagues, with not one crumb of comfort for the reactionary tendency on the Labour and Alliance Benches.

All the emphasis throughout that report is on market flexibility to adapt to change. Well ahead of Kenneth Clarke Mr. Blanchard raised the question of national wage setting and the advantages of local bargaining in the public services and profit-related pay in the private sector. In the final chapter on social protection, this veritable Daniel-come-to-judgment talks explicitly of the burden—I emphasise the word—of income redistribution on the productive sector of the economy and the danger of deficit financing for higher interest rates, lower investment and increased unemployment. He goes on to point out the effect of social benefits and the taxation of incomes on blunting incentives to work. He even ventures to hint at the tightening of the work test for benefits or making payment conditional upon community work, which I understand is a large part of the explanation of the lower statistics in Sweden.

I would particularly commend to the Opposition Benches the director-general's concluding appeal: to strike the right balance between the need for regulation to protect workers and the flexibility vital for the economic viability of enterprises. I regret that instead of contributing to such a necessary reappraisal in the best interests of the unemployed, the noble Lord, Lord McCarthy, and his friends devoted their ingenuity first to exaggerating the problem, then to laying the blame on Her Majesty's Government, and finally, with their trade union allies, resisting any changes that would improve the working of the labour market.

I believe that the official statistics of over 3 million unemployed are neither a measure of idle resources nor an indication of social hardship. They provide a treacherous guide for economic and financial policy. Inflammatory talk about the human scrap heap ignores the fact that 400,000 to 500,000 people leave the register every month; there are 5 to 6 million job changes every year; and at any time there are over 600,000 unfilled vacancies, mostly well to the north of Potters Bar.

If we look at the labour force survey which has been mentioned, we find that a third of the people claiming benefits are not looking for work; as many as 200,000 claimants were working part-time; and half a million were not looking for a job because they were either unfit for work, or too busy taking care of their home and family, or they had taken early retirement and were not wanting to work. I would even throw in for good measure—

The Lord Bishop of Manchester

My Lords, I am sorry to interrupt the noble Lord in this assault, but is he in fact denying that in areas of very high unemployment in, this country there are many young people who are looking for work who are disappointed, and that when vacancies are advertised, say, in the hotel trade, there are many who queue up for those jobs and do not get them? I do not understand.

Lord Harris of High Cross

My Lords, I would not deny for one moment that there are pockets, even large pockets, of considerable distress and real unemployment, and indeed hopelessness. The argument I have been making, if the right reverend Prelate will heed it, is that these figures, what the economists call "macro" or aggregate figures, of total unemployment are themselves composed of a whole variety of different elements which by no means correspond with the very gloomy picture which the right reverend Prelate has quite rightly pointed to in some areas. Indeed, I was going to risk the wrath of the right reverend Prelate by referring to an unofficial survey conducted by an organisation called ORC and Harris Poll which last year found that as many as 2 million out of the 3.2 million official total might fall into various categories of what could loosely be called voluntary unemployment. That includes half a million who are better off on benefits and a similar number who are living off redundancy pay or earnings from the black market economy. However, I believe that even if official statistics enormously exaggerate the true magnitude of unemployment, the residual number who are genuinely seeking work is high enough to challenge complacency. But even Professor Layard in his recent book How to Beat Unemployment conceded that wage pressure and easier benefit conditions aggravate the problem.

I reject Professor Layard's failed expedient of incomes policy and support the noble Earl, Lord Gowrie, in urging a more positive alternative to reducing benefits. It is for the Government to move faster in reducing tax on low incomes so as to sharpen the incentive for hundreds of thousands of people to choose work rather than life on the dole. I support that perhaps unfashionable view by reciting some figures which I invite the noble Lord to challenge if he finds them unsatisfactory.

Let us take a married man with two children who is capable of earning £180 a week (the average male adult earnings). If we allow that after tax and national insurance, his take-home pay is £146 and assume that he incurs work expenses, such as travel and so forth, of £10 and has a modest allowance of £30 for housing, his disposable income will be £106 a week. If, instead, he abandons the ambition to devote 40 hours of his week to this residual take-home pay and takes supplementary benefit, then his disposable income after housing costs will be as much as £90 a week. On those figures he would in fact be £16 a week better off.

It cannot be denied that that offers far too modest an inducement to many people, particularly those who do not have the opportunity of earning a wage as high as £180 a week. I believe that in this pantechnicon figure of 3 million there are hundreds of thousands of people who have voluntarily chosen to live on benefits even though it is against their own long-term interests, and it is a matter of the greatest urgency that we should reduce taxation and direct them toward the market.

Lord McCarthy

My Lords, I thank the noble Lord for giving way. I am not quite sure whether he is concluding that there should be higher wages or lower benefits.

Lord Harris of High Cross

My Lords, if the noble Lord will attend to the matter, I shall tell him and these are my last words. Before the war people with average earnings did not pay income tax. The honour of paying income tax was reserved for those with well above one and a half times average earnings. The whole tenor of my argument this evening is that although wages costs may be too high for the success of a business, net take-home pay is too low to animate and energise people to take jobs. The argument that we heard from the noble Earl, Lord Gowrie, was that we need to increase take-home pay, and from the noble Lord, Lord Boyd-Carpenter, that if we can reduce taxes there will be a smaller reason for trade unions and workers to press for increased gross earnings, because through reduced taxation people will be left with higher net incomes.

6.34 p.m.

Lord Ardwick

My Lords, I am very glad to follow the noble Lord, Lord Harris. I know that he is a humane man, but he is a scholar and he lives rather remote from the hard world of work in the North of England and in Wales. However, he repeated one of the cruellest phrases of the 1930s. The phrase "not genuinely seeking work" is one that those of us who lived through those times will always remember. It was used when the means test was imposed.

I am glad to follow the noble Lord for another reason: I can offer him a Dahrendorf for his Blanchard and the OECD for his ILO. Yesterday I was in Paris attending an OECD seminar where we discussed unemployment and looked at a report with the unpromising title of Labour Market Flexibility. The title itself is intimidating. It sounds as though one of the more extreme friends of the noble Lord, Lord Harris, had been suggesting that workers should be willing to work anywhere at anything at any price for any number of hours. However, it was not an economist's dream but a serious study headed by Ralf Dahrendorf, and some of its suggestions reminded me that over 20 years ago these ideas were part of a general political formulation. There has been a slight change in ideas now that inflation has come down.

Such suggestions were most notably advanced by Harold Wilson in his national plan for growth, with its propensity for inflation countered by an incomes policy and enriched by a government-supported technological revolution, and some kind of investment board. Even that idea was not original because it was based in some part on Harold Macmillan's NEDC and NIC. Unfortunately none of us was ready for the revolution in 1964. We had had too many years of full employment and a steady increase in the standard of living. Unions were sceptical and employers were cynical. The immediate problems of the pound and the balance of payments wrecked our plans and almost wrecked the Government.

In the first place we did not foresee the great crises of the 1970s, with the quadrupling of the price of oil, monetary instability and the beginning of mass unemployment throughout the Western world. Only in recent years have we begun to think seriously about this new and dangerous age and ask what can be done to make life safer, and what can be done to create jobs, as they have done so successfully in the USA.

The seminar came to two negative conclusions: the solution was not to be found simply in old-style Keynesian expansion nor was it to be found simply by allowing market forces to operate, because they meet too many immovable rigidities and create too much unacceptable inhumanity. In its conclusions this distinguished body recapitulates four objectives: to cope with unemployment and social problems; to facilitate economic adjustment; to encourage technological innovation; and to improve the quality of life. The basis of success must be macroeconomic policies promoting non-inflationary growth, without which all the structural measures are swimming against a heavy tide.

At this point I am reminded of Professor Sidney Pollard's contribution to that useful journal Catalyst, when he wrote that the reduction of inflation in Britain to around 5 per cent. by 1984 was associated with a disastrous rise in unemployment. I quote: Some of this was a worldwide phenomenon and cannot be laid at the door of the British Government, but if the French and German economies are any guide, the British level of unemployment should have been around 2-2½ million. Instead it settled around a level of 3¼ million according to official doctored figures corresponding to a real level of perhaps 3¾ million". His final conclusion was that: On these assumptions 1½ million willing workers owe their loss of jobs to the Government's particular battery of economic measures To come back to Mr. Dahrendorf, if we are to create viable and competitive structures in the OECD countries—for example, if we are to compete with Korea—the aim must be to sustain economic recovery and high growth. Traditional industry must undergo transformation. New industries will emerge and new or revised industrial regions will take the place of the old ones. What is required is a combination of wage moderation, reasonable employment protection and the incentive effect of sectoral and regional wage differentials. Again, that report warns that the failure of macroeconomic policies has created inflexibilities in the labour market.

In discussions with OECD officials concerned with unemployment and, above all, job creation, we were told that they believed two things were essential alongside non-inflationary growth. One was sufficient investment. The other was training. One of the fashionable ideas about investment today is that in order to increase resources for that purpose, and in order to atler the ratio between consumption and investment, one might persuade workers to accept, as part of their rewards, a stake in their employing company. That may provide resources, but for what kind of investment?

At the moment, incentives are for investment that pays off in the short term. Too many firms are judged by the price of their shares, which is based on current profitability. The Government's privatisation measures, which have multiplied the number of shareholders, have given them the idea that investment is something which entitles you to double your money overnight.

As for training, it has many problems. Seven or eight years ago a contributor to the Political Quarterly put it like this: What is already quite clear, though sometimes not appreciated, is that the new techniques will only eliminate the work done by the less able and the less skilled, offering new chances in areas requiring mental ability of a high order. I do not think that that is entirely true when I think of the way the beautiful printing profession with its exquisite craft has been deskilled by modern technology. But, when it works like that, how are we to develop that mental ability of a high order? How are we to provide the new chances?

In the early days of the high-tech revolution, Mr. Peter Walker suggested that we were heading for a new utopia—Athens without the slaves. Now we must ask, as the slaves are supplanted: what are we to do with the slaves? At last we see, the Government have seen and the noble Lord has seen, that mass training is essential. We have the youth training schemes that the Minister has inaugurated. I shall not say a word against them and their inadequacies because I do not wish to add to the despair and frustration of young people who cannot obtain a normal, permanent job with prospects. But these are early days. This is a large-scale experiment. It must lead to something much better, as the noble Lord suggested, with everyone staying at some kind of school until the age of 18.

Something more is needed. We need training for the already skilled and experienced workers, in new or deeper skills, to enable them to respond to new demands. This morning I heard on radio the director of manpower training defending some of his criticisms of our training systems and saying that he was referring to an inglorious past, not to a more hopeful present and future, if I understood him correctly. It was a little early in the morning. I had just returned from Paris.

I then read in today's Independent an article which I found horrifying. It was a report from Brussels headed: Britain's role as the poor man of the skilled world. Mr. Giles Merritt said: We in Britain have to start looking at unemployment from a different standpoint. It is not an Act of God, it's a lack of education. Let me quote one devastating sentence: The electronics revolution has revealed that we are in a dunce's class of our own when it comes to industrial training and high-tech education. A single West German electronics company, Siemens, will this year train as many people as will graduate with electronics skills in the whole of Britain. But the Americans and, God help us, the South-East Asians are putting all of us Europeans to shame. They are investing tens of millions of dollars more in education than we in Europe (other countries as well as Britain). In the 1990s, it will be they who create new jobs. The information technology sector in the United Kingdom is growing at half the world rate, due chiefly to the skills shortage. The writer suggests that we may end up without an electronics industry.

How do the Government respond to that? How do they reconcile the stinginess towards the universities with their hopes of a more dynamic economy? We will not return to the kind of full employment that we enjoyed a generation ago, but we could in time provide jobs for all. Let us not be beguiled by ideas of a leisured utopia. The leisured will be the unwilling leisured—the unskilled. It is all very well for William Morris to write of machines giving mastery over nature, and that the mass of people would have leisure enough to appreciate the pleasures of life. William Morris could always fill his hours of leisure by writing another poem, painting another picture or designing a new wallpaper. To enjoy leisure one needs not just a subsistence income and an absence of responsibilities; one needs education and a good deal of discretionary money.

One of our difficulties in coming to grips with current unemployment is that, unlike in the 1930s, it is invisible. We do not see it. The noble Earl, Lord Gowrie, said that he does not meet people for whom it is a personal worry, We do not meet them because we do not live in that kind of environment.

I should like to quote Mr. Ben Pimlott on the North-South divide. People have been arguing, reasonably, that there are features common to the North and the South, but we can divide them because there are more unemployed in the North than in the South. He said: The reality of modern unemployment is not dole queues or marching men"— as it was in the 1930s— but the scene that greets any visitor who steps off a train at Newcastle: a still-flourishing commercial and cosmopolitan city with boutiques and wine bars in every main street, a new underground system, a show-piece shopping centre, and a town hall like a modern cathedral. 'The Unemployed' are nowhere to be seen: scattered through a hundred council estates, sitting in clubs, or slumped in front of television sets. There are not two nations. There is one society, and one universal, creeping sickness".

6.48 p.m.

Lord Elliott of Morpeth

My Lords, I am pleased to follow the noble Lord, Lord Ardwick, in that I step off a train in Newcastle most weeks. I can confirm what he says about the wine bars, the boutiques and the town hall which looks like a cathedral. It is an efficient town hall. I hope that the noble Lord will find time to visit it. Although it is largely true that unemployment is invisible, I should like to return to that point and others that the noble Lord has made.

We have had a long debate and I speak towards the end of it. With others, I am most grateful to the noble Lord, Lord McCarthy, for having initiated it. I have listened to every speech with great interest. It began as a debate about statistics. The noble Lord opened up on that front. If I remember correctly, he did not reach the second and third bits of his Motion because, like us all, he was curtailed by time. As other noble Lords have said, we seem to have moved off the statistical part of the debate onto a general debate on unemployment and its causes.

Reverting to the beginning of the Motion, there can be little argument that it is highly desirable that, if possible, we should have accurate statistics on the causes of unemployment. I say in particular the "causes" because, I am not very interested in the method of assessing the unemployment levels. The causes are important.

As regards the final part of the noble Lord's Motion, I should have thought that the long-term consequences and the dangers to society which they certainly represent have been very much appreciated and faced by successive governments since the late 1950s. I believe that they are being faced very squarely indeed by the present Government.

In an outstanding contribution to the debate my noble friend Lord Gowrie referred to unemployment as not rating very highly in the consideration of many people. I think that that is probably true. Even in my part of the world, where unemployment is a bigger problem—and the noble Lord, Lord Parry, has the same problem—82 per cent. of the population is in employment. Without any question at all, those who are in employment, even in such areas as those of the noble Lord, Lord Parry, and my own, have a very high quality of life at this time. However, in certain ways those who are unemployed face a rather grim prospect. I suggest that if an unemployed person were questioned by a pollster he would put unemployment rather higher on the list than the rest of us.

There are unemployed people all over the country. Unemployment does not just occur in the areas which we are inclined to emphasise in debates such as this because of their particular problems. In a recent debate in this House on the so-called North-South divide, I listened with considerable interest to my noble friend Lord Sandford. He spoke in his capacity as chairman of the South-East Conference. I found his speech very educational because, in comparing the North-East of England with certain areas in Greater London, he emphasised that unemployment is a problem throughout the country. It may be greater in some parts of the country, but it occurs throughout.

As one who is fully aware of the problems of the North-East of England, I fully appreciate that, although our problem is greater, it is far from being confined to development areas alone. Here one comes back to the Motion. The causes in the North-East of England have been obvious, and if we are to stick to statistics—we have not done so in this debate—they could as regards my own area certainly be produced on causes.

Again it was interesting to hear my noble friend Lord Gowrie say that he grew up in the 1950s. The problem of unemployment has existed since the late 1950s. When I say that in speeches, it is interesting that people find it very difficult to believe. However, there was fairly full employment in the mid-1950s even in the North-East of England. It was towards the end of that decade that the storm clouds gathered and we had the causes of the present unemployment.

Of course, the causes were mainly contracting industry: coal, steel, shipbuilding. All of them were progressively employing fewer people month by month and year by year. In my region all of those causes have taken a tremendous toll. We need to look underneath regional unemployment statistics to appreciate the problem of unemployment in such areas as mine. What has been required in that area, and in the area of the noble Lord, Lord Parry, and in other similar areas, is nothing short of a minor industrial revolution. That is what has been required and that is what I believe is steadily being achieved.

In his contribution to the debate the right reverend Prelate the Bishop of Manchester suggested that unemployment should be taken out of party politics. That would be a very difficult thing to do. Up to a point one could answer the right reverend Prelate in this way. There is no question that in the past 30 years both major parties when in office have done their best with the problem. As was illustrated by my noble friend Lord Boyd-Carpenter in his most excellent contribution to our debate, our methods differ and they probably always will. However, both major parties have done their best. Again, as regards my own area, all governments have contributed to greatly improved road systems, greatly improved rail and air links and to our modern ports.

Each major party has had the opportunity to try its methods. Some years ago when I was a Member of another place I made a speech and as I did so I determined that it had been 35 years since the end of the Second World War and that each party had been in government for half that time—17½ years each—so each had had its opportunity. However, it is my contention in this debate that no government have shown a greater commitment to bring a great industrial area like the North-East into playing a full part in our future national well-being than the present Government.

In the recent Christmas Recess an official of a development agency which is doing extremely well gave me two main reasons for the considerable degree of success in his area. His first reason was the determination and the adaptability of the indigenuous population. Secondly he described the enthusiasm and on-going support of Ministers in all departments concerned as contributing to that area's success. On the third part of the Motion concerning the measurement of the consequences of government policy on unemployment, I quote a very important statistic—in my opinion the most important one of all. It is the current investment in training. In the North-East of England in 1986–87 the MSC will spend £76.2 million on training, of which £62.3 million will be spent on YTS training and £13.9 million on adult training.

In his opening speech the noble Lord, Lord McCarthy, suggested that the young people in training were being somewhat artificially removed from the unemployment statistics. All I can say is that I am delighted that they are.

Returning to the suggestion that unemployment is invisible in the North-East of England, I was once asked in another place by a south country colleague whether unemployment was visible in Newcastle. I had to say that it was becoming so. Its appearance could be no more distressing to any of us than when it is illustrated by bands of young people standing on the streets. Therefore I wholeheartedly welcome the coming of Easter this year when no one under the age of 18 years of age will stand unemployed on street corners unless he or she chooses to be so. I congratulate my noble friend very much on this achievement.

I recently opened a factory in the North-East of England. After the ceremony how good it was to hear the wholehearted praise of the management for the adaptability of the local labour force to a highly technical process. I have visited excellent new factories elsewhere in the North-East where again it is most encouraging to be told that in some cases ex-miners and ex-steelworkers are mastering modern skills. In the northern town of Consett there is a trading estate of considerable acreage which in 1980 had one empty advanced factory. Today there is only one vacant plot; the rest of the estate is filled with new modern factories, using highly technical methods of production. Again, how encouraging it is to know that the indigenous population has mastered these necessary new skills. What is more, quite a number of these new factories have attracted and are attracting venture capital.

The best investment for the future to help employment is natural investment—investment from the country as a whole; a belief through investment by the people of the country as a whole in an area which had a great industrial past and which can again contribute greatly to our national economic wellbeing.

7 p.m.

Lord Graham of Edmonton

My Lords, along with other noble Lords who have contributed to this debate I should like to acknowledge my indebtedness to the noble Lord, Lord McCarthy, who got the debate off to a splendid start, though it has been criticised, quite fairly. I have heard most of the speeches and I have not heard a bad speech. I do not intend to provide an exception now. Whether or not my intention works out is another matter!

The inference clearly is that those who have sat through most of the speeches are here because of their deep interest in this topic, but that does not include all Members of the House, with no disrespect to them. I am delighted to be the third in a trio who have made reference to the city of Newcastle-upon-Tyne. My noble friend Lord Ardwick quite fortuitiously, and fortunately for the noble Lord, Lord Elliott, gave him a first-class peg upon which to hang most of the points he wished to make fairly in the well-informed and humorous way he makes his points.

Your Lordships will appreciate that I am able to speak with comparable knowledge of Newcastle. But my experience is as the eldest of five children with a father who was unemployed and on a means test in the 1920s and 1930s. I have vivid memories of the unemployed. I cannot say whether or not unemployment was greater or lower than at the present time. But my suspicion is that if we had statistics it would have been greater as a percentage. The unemployed were certainly visible on every street corner. Ben Pimlott was quoted as saying that the fact is you do not see them now. In my view the lot of the unemployed now is infinitely better than the lot of the unemployed at that time. There is perhaps more hope in 1987 than there was in 1933, 1934 and 1935.

I do not go to Newcastle as often as the noble Lord, Lord Elliott—perhaps once or twice a year. I have relatives still living there. My sister lives in Newcastle and my brother lives in Carlisle. I have a great many friends there. The paradox is to see the enormous consumer expenditure which is generated in an area which, as the noble Lord, Lord Elliott, pointed out, has one of the higher levels of unemployment. This is one of the paradoxes that exists in our nation.

I do not subscribe to the view that people in the North have it bad and people in the South have it good. I was in Greenwich this morning on a jaunt that noble Lords here would understand. I received no reply from most of the houses I visited. Never mind unemployment: they were at work. I want to make the point that employment is one aspect of the quality of life. The quality of life is not merely whether or not you have a job, but it is the quality of the society in which you live, the ambience, the cleanliness of the streets and the kind of mental atmosphere in which you live.

A fact that has not been mentioned and that ought to be taken on board is the severe strain and distress which is felt not only by the man or woman out of work but by their husband or wife and their family. There is a worry that permeates and pervades a family in which there is someone who is unemployed. My colleague in another place, Alf Morris, when talking about the disabled said that you have not only a disabled man but a disabled family. The whole family in one way or another feels, smells and tastes the problems of disablement. This fact also applies to unemployment. My close family have not experienced this. But I am able to tell the House, as a Member of Parliament of comparatively recent vintage but nevertheless someone who lives in and knows the people of Enfield and Edmonton (and I am as involved in that community now as I ever was) that there are families and streets of houses in which unemployment is a fact of life. This was not so before.

There is a great swathe of unemployed people. In preparing myself for the debate I was looking at newspaper cuttings and I noticed information about one town, Calne in Wiltshire. This was virtually a one-industry town, where pork pies were made and bacon was cured. By the nature of the reorganisation of the business, this industry ceased to provide work. Illustrations were given of people who became unemployed in their 50s and early 60s. They were forcibly removed from employment and some of the stories which they told were heartrending.

I do not level at the Minister the charge that he is fiddling the figures. I say that sincerely. I believe that he and his department have been involved in the kind of exercise that I have seen going on not only in Enfield council but also in many others, when despite the number of people I know are looking for a house the housing waiting list does not seem to grow any bigger. In fact, it seems to decrease. In order to make sure that the figures do not look very bad, the officials in the housing department are asked to look again at what constitutes a homeless person or a person who is entitled to be on the list.

I think that is what the Government have been doing for the past two or three years or the whole period. They have been examining, sharpening, altering, adjusting; but I do not use the word "fiddle". They have been cleaning up what they consider to he a fair list of people who are unemployed. All noble Lords know the kind of changes which take place. I have a long list but I shall quote only one example. At one time when someone left school and did not have a job he was unemployed, but that is not so now. When a person leaves school there is an interim period. There may be a very good reason for that which no doubt the Minister will sustain. But in previous times you were either at school or in work, and if you were not in work you were unemployed. This is not so now.

The Minister may tell us that it is not as ominous as I am trying to make out and as my Front Bench is asserting, I believe successfully. I should like to quote an article from a newspaper; for the life of me the source of the quotation will not pass my lips because the Guardian has been mentioned more than once! The article sums up the genesis of the debate: This article is not about whether unemployment will come down over the next year or so, but about whether it will be seen to come down, increasingly the question which Ministers regard as more important. Despite the repeated refrain from Lord Young and others that 'there is no short cut to reducing unemployment', the government has in fact embarked on a number of measures whose timing and effects are designed to massage the published figures before the election. That is one man's view which I happen to share. But I have been wrong before. The Minister has a very difficult task. He has been given a brief. Quite frankly, that brief is that whenever the magic date looms large we must not go to the country with the registered, official, cleaned-up, sanitised total standing at more than 3 million. We know that the chairman of the Conservative Party said in 1983 that no one would be expected to vote for the Conservative Party and a government that went to the country with totals of unemployment higher than 3 million. He was right. I think the part of the exercise in which we are involved is taking off the regular, authorised, clean, respected unemployed, a number of groups which for one reason or another the Minister justifies; and I do not complain.

Lord Young of Graffham

My Lords, if the noble Lord will kindly give way, he mentions, as one of the "99 fiddles" I have perpetuated on a disbelieving society, that young people are not on the register. It would help the House to know the actual position. It is simply that when young people leave school they do not go on the unemployment register until 8th September. We believe that it is not in the interests of young people to go on benefit the day they leave school but that they should have a reasonable opportunity of actually looking for gainful employment.

Secondly, we have given a guarantee for the first time ever to each and every school leaver that they have a place on YTS. But, in case your Lordships think that we are deceiving anybody, I should point out that from June onwards we publish with the unemployment figures a total list of all people leaving school who are waiting to come on the register on 8th September. That is disclosed in full, because I would not wish to mislead anyone in your Lordships' House.

Lord Graham of Edmonton

My Lords, I am grateful to the Minister. He confirms what I said. A school leaver has a period in limbo, or in no man's land, when he is neither going to school nor registered as unemployed. That he has a special category, having been taken off the list and shown in other statistics, I do not deny.

I also do not deny that the Government are able to claim that they have presided over an increase in the officially-registered figure of something approaching two million. I know that the Government are not happy at the fact. I do not deny other things that have been said about countries in Europe and throughout the world having similar problems.

I blench however when people tell me that there are jobs to be got which are not being taken up. It must be so in some instances. I do not accept completely that there are 400,000 unemployed construction workers because the greatest shortage is in skills. What have the Government to say about their failure to provide skilled people to those industries able to employ skilled people? I do not mean this Minister. I mean this Government, the Cabinet and his party. I believe that they have let us down badly.

I enjoyed the speech of the noble Lord, Lord Boyd-Carpenter. When he told us that, given that the Chancellor might have £2 or £3 billion, or whatever, to spend, he would prefer it to be spent on reducing taxation because he believes that in that way employment would be created more easily—more easily, that is, than in some other way, for the task is not easy—we only have to ask whether that was the case when taxation was last reduced. There were reductions from 33 per cent. to 30 per cent., and from 30 per cent. to 29 per cent. But, looking at the figures, although the taxation levels came down, unemployment levels went up.

I gave an illustration when the noble Lord, Lord Seebohm, made his point. If local authorities were provided with the money to spend on proper jobs, there are tens of thousands of them to be done in the London borough of Enfield—on the streets, in the schools, in the hospitals, and in the building of houses. Those jobs would not be done by a centralised organisation; they would be done by a council. The council would be putting work into MK Electric who make switches. It would be putting work into the Enfield Timber Company. That is how I see it.

The final point I want to make in my one remaining minute is to thank the Minister most sincerely for a very full letter he sent to me in response to one that he received from an organisation in Edmonton that I hope he respects as highly as I do. This was an instance of damage being done to the community programme prospects.

The Minister has justified the position. But is it not possible to understand that while he is advised by civil servants and I am a politician who might be looking for a point to make, the case made by Jeanette Faherty, the agency manager of Network Projects Limited, is based upon providing work for people who are carrying out essential tasks under a community programme for disadvantaged and disabled groups in Edmonton. The noble Lord makes the point that, unfortunately, because there is not as high an unemployment ratio in that area as in other places, this community programme should be damaged.

I know that my time is up but I wanted to make the point. It is unfair that community programmes like those in Edmonton are being disadvantaged by the current policies of the Government. I hope that I might hear further from the Minister.

7.16 p.m.

The Earl of Halsbury

My Lords, in saying that it is a pleasure to follow the noble Lord, Lord Graham of Edmonton, I really ought to declare an interest because in the debate that follows he is to follow me. Since he will have the last word, I must be particularly careful not to offend him on this occasion.

I have to confess that I am somewhat disappointed by the course of the debate. After a rather heavy lunch at the Savoy as the guest of the noble Lord, Lord Gregson, in his capacity as president of the Parliamentary and Scientific Committee—an office I once held in years long gone by—I did, by a miracle of self-control, manage to remain awake during the statistical gobbledegook with which the noble Lord, Lord McCarthy, opened this debate.

As I have protested before at Question Time and on other occasions, I am really not interested, as a Cross-Bencher, in political parties throwing statistics at one another across the Floor of the House in order to score party political points. Noble Lords who have taken part in this debate are noblemen of many qualities and many professions; some journalists, some lawyers, some accountants, and so on.

I wonder how many of your Lordships have been, as I have been, a works manager in manufacturing industry? Any interventions? I had 800 men under my command; mine to hire, mine to fire. On one sad occasion I had to fire 200. Why? Because the Government of the day had upped the purchase tax on our product by 50 per cent., and sales had fallen off.

There was only one way that I could select those 200. Last in, first out. Of course there were always people in special circumstances who appealed, and I had to listen to those appeals. Someone's wife was pregnant. But then so was somebody else's. I had to harden my heart and say, "That is the rule. I am sorry". If your Lordships have not yourselves seen the pain in the eyes of the man you yourself have dismissed into the ranks of the unemployed, you do not qualify to know what you are talking about. That is the standpoint from which I address your Lordships' House tonight. For me, they are real men.

Lord Parry

Will the noble Earl accept that you do not have to be only a works manager in order to have to face that problem?

The Earl of Halsbury

You may be his brother, his sister, or anybody, but you see you have taken the responsibility for it.

I am interested in numbers and their distribution over categories. Overall percentages represent an innumerable number of pools of quite different characters. It is the characters of these pools that we have to learn and understand. We mask them if we talk merely in terms of overall percentages. One pool is formed by dead industries. Some of them have committed suicide. The British shipbuilding industry could come into that category. The London docks did very much the same at a time when the east coast docks—Felixstowe, Harwich, and so on—were welcoming the container revolution.

Then there are industries whose reserves are being depleted and exhausted—some coal mines, for example, or possibly tin mines in Cornwall. Then there is the overall turnover of people leaving one job, getting another and perhaps having a few weeks holiday in between. When I was young, the overall turnover of jobs in industry was 20 per cent. But this was a bimodal distribution—I am sure that, as a statistician, the noble Lord, Lord McCarthy, knows what I mean by modality—between stable and unstable labour. Many young women on assembly work will want a job in the factory next door to that where their boyfriends are employed so that they can talk to one another during the lunch hour. If they change their boyfriends, they change jobs and vice versa.

There are geographical aspects. A mining village was built where it was convenient 100 years ago to sink a pit shaft. Everybody has intermarried with everybody else. It is a substantial familial relationship, and if the mine shuts down because its reserves of coal are depleted, not only are the miners out of work but the butcher, the baker and the candlestick maker find that their living depends upon whatever the miners who are out of work can draw in the way of unemployment benefit to buy food.

One of the saddest aspects of industrial fluctuations is the transfer of the marginally employable to the ranks of the unemployable. There are always a certain number of people in employment who are only marginally employable. If you dismiss them into the ranks of the unemployed they become unemployable after a very short period. That is another of the pools. Then there are the problems of heavy industry to which the noble Lord, Lord Elliott of Morpeth, referred. Although his interests are on Tyneside, I must confess an interest on Teesside where I was a director of a big heavy engineering works for many years. Large-scale employment in heavy industry can be due to over-investment in years gone by.

We over-invested in steel-making plant after the war and there passed a period where for over 10 years, no new order for a blast furnace was placed. In the meantime, the Japanese had revolutionalised the design of blast furnaces, so that when the British Steel Corporation began to feel the need for new blast furnaces the only way the engineering industries of the North-East coast could obtain orders was by claiming that "Our Japanese are better than our competitors' Japanese". That was a sad state of affairs.

Under-investment can produce very heavy structural employment in heavy industry. At the moment we are in a dangerous situation over power generation. Last year the spinning reserve, as it is called—the stations that are warmed up ready to produce power and to be switched into the grid—was down to 10 per cent., which is generally regarded as much too low. I think it has fallen by considerably more this year. There ought to be two new nuclear power stations coming in more or less now. But there will be at least six months' delay due to the fact that an instability has developed in the control rods, which, although curable, will take time to cure. The best thing we could do for both the North-West and the North-East is to place two orders now for coal fired power stations to give work to Babcocks on the one hand and Northern Engineering Industries on the other. That would contribute to the solution.

I am not dealing with statistics. I am dealing with the reality behind the statistics and trying to find the remedies. Although fiscal policies and macroeconomics can each produce something towards the overall situation, every one of these pools has its own special problem which has to be tackled in its own special way. I am sure the Secretary of State will tell me that he is afraid he cannot order two coal-fired power stations. That is the job of the Central Electricity Generating Board. But there is a technique for managing this. One says to the chairmen, "It is only a hint, but remember who it comes from". I should like to sell that formula to the noble Lord together with a reminder that chairman are expendable.

I think my 10 minutes are well up. I have said what I had to say. I appeal to your Lordships not to throw figures about across the Floor of the House but to look at the realities underlying them. It has to be remembered that those realities are not homogenous; they are very diversified pools. They may add up to 11 per cent. when calculated one way, or 13 per cent. when calculated another. It really does not matter how one does the figure. The men who are looking for work are the same men however the figures are calculated.

7.26 p.m.

Lord Rochester

My Lords, I confess that when I came to consider closely the precise terms of the Motion that has been introduced by the noble Lord, Lord McCarthy, today, I had some misgivings. This was partly because I never look forward with pleasurable anticipation to discussing statistics, but it was also because, as the noble Earl, Lord Halsbury, has just reminded us, questioning, however justifiably, the accuracy of statistics relating to a subject as emotive as unemployment can so easily evoke the kind of pitched political battle to which we are accustomed at Question Time. We had an example most recently only last Monday, but in my experience it does not always enable the House to be seen at its best in general debate. I hasten to add that on the whole I do not think that has happened this afternoon and I for one have learned a great deal from a number of the speeches that have been made.

For my part I agree with noble Lords who have regretted that since 1979 there have been so many changes in the method adopted for calculating the number of people unemployed. I need not dwell long on this point as it has already been covered thoroughly enough. Suffice it to say that as I understand the position, the method used for calculating both the current official monthly claimant statistics and the annual labour force survey has now in each case moved closer to compliance with ILO and OECD recommended practice. Whatever the motivation may have been for the changes in the monthly claimant count, the number of people who are unemployed is now expressed as a percentage of the total working population. It nevertheless would appear that the unemployment measure provided by the labour force survey understates substantially the number of people in this country who wish to work, are in a position to start a job if one is available but who are excluded from the official figures because they have not actively looked for a job during a short period immediately prior to interview.

I should like to see more account taken of that point, but thereafter I hope that we can have a respite from further changes which have the effect of either increasing or decreasing the number of people who are counted as unemployed. We can then concentrate on the search for long-term remedies for unemployment—the vital task on which the noble Lord, Lord McCarthy, and I worked together under the chairmanship of my noble friend Lady Seear on the Select Committee, which reported to your Lordships nearly five years ago now.

The Motion calls attention also to the causes of unemployment. Here the first need is obviously to identify those causes. There are demographic trends, there is the price of oil, there are changing patterns of investment, the mis-match of supply and demand and the process of job change. There is also structural unemployment and there is the time-lag between the disruptive employment effects of changing technology and its job creation effects. However, in my view, of more importance in the long run than any of the other causes of unemployment has been our failure in the past to match the productivity of major international competitors such as Western Germany, the United States and Japan.

The Motion, I know, is concerned with the causes and consequences of unemployment rather than with remedies for it but, as the Select Committee unanimously concluded in its report—I quote from paragraph 7 of chapter 14— If there is to be any hope of obtaining and sustaining an acceptable level of employment, competitiveness is a sine qua non." I welcome the improvement that has recently taken place in our performance in this regard, but we still have a long way to go.

There is one other cause of unemployment on which I should like to dwell for a little longer because, from my own industrial experience, I can testify to its importance. In my view, we are not yet making adequate provision for education, and particularly for training, to supply the skills and adaptability needed to meet the demands of changing technology. I concede at once that progress is being made and I welcome the additional measures which the Secretary of State announced in the House three weeks ago, including the extension of the Job Training Scheme designed to meet the needs especially of those aged under 25 who have been out of work for six months or more. I do so subject to the essential proviso that the Manpower Services Commission can maintain the quality of training in each area.

I am glad, too, that this training is to take place on employers' premises, because in my experience employers are able to provide better and more realistic training than any which can be made available in other ways. Training, of course, is not employment but it is a necessary preliminary to fitting people to jobs. Indeed, nowadays we are constantly hearing of cases where jobs are available but people have not been trained to fill them and therefore the jobs cannot be done.

Two weeks ago as the Secretary of State well knows, the Manpower Services Commission, backed by the CBI launched a new project called local employer networks, aimed at helping to fill more than 200,000 skilled jobs throughout the country. I wish it every success but at the same time I recall that the MSC chairman, Mr. Bryan Nicholson, was reported last December to have sounded a warning that compulsory training levies might have to be reintroduced and statutory obligations reimposed on employers.

Only yesterday, in a speech at London University he was at it again in accusing employers of scandalously—I think I am correct in saying he employed that word—neglecting training for their workers. Mr. Nicholson is reported to have said that between one-half and three-quarters of the workforce would need some form of retraining in the next few years, just to keep pace with technology. He also said: One of the most common protests of employers, when they are reminded of the benefits of investing in training their workforce, is that training is expensive and that it results in many workers being sent away from their posts for sometimes long periods. He then posed the key question as to whether employers could afford not to make that investment; and I am sure he was right to do so.

The chairman of the Engineering Industry Training Board, Mr. Astley Whittall, has been no less outspoken in asserting recently that industry will have to devote far more attention to training and retraining the people who are already working within it.

With all this in mind, I would ask the Secretary of State, when he comes to reply to the debate, to assure me that he is keeping this matter under close review and that if in the opinion of people such as those I have just mentioned, who are best qualified to judge, voluntary industrial training and retraining arrangements are proving incapable in either quantity or quality of ending future skill shortages, he will not hesitate to reintroduce a statutory framework of some kind to remedy the situation.

I have sought to identify some of the causes of unemployment and I have elaborated on one of them in particular. I come finally to the last part of the Motion, which calls attention to the case for an assessment of the long-term consequences of failing to deal with the problem of unemployment.

There is need, first, to consider the effects, particularly of long-term unemployment on individuals and their families. The causal connection is sometimes difficult to establish with any precision, but I have no doubt that the consequences of unemployment for those afflicted by it often include increasing poverty, enforced idleness, loss of self-respect, poorer physical and mental health and impaired family relationships.

For the country the consequences of failing to solve our economic and industrial problems, including the alleviation of unemployment, are surely those so graphically conveyed to us by the late Lord Stockton when he spoke in this House two years ago of the ship of state slowly sinking. However, I also recall that he ended that speech on a more buoyant and positive note by calling on us to face our problems together.

I venture, in conclusion, to follow his example by suggesting that this Government can best reduce the levels of unemployment and cope with both its causes and its consequences by pursuing policies in the fields of, for example, taxation, investment, pay determination, education and, particularly in the context of this debate, job creation: schemes which take account of the need to unify rather than to divide the nation.

7.38 p.m.

Lord Bruce of Donington

My Lords, momentarily during the course of the remarks made by the noble Earl, Lord Halsbury, who I think will be back with us again presently, I wondered how many Members of the House would disappear on the grounds that they were not qualified by his standards. Apparently the qualification for debate, or even to discuss this matter seriously, is to have had responsibility for firing people yourself. I do not want to make much of a point of it but I would qualify for participation in the debate because at one time I was a managing director. Unlike the noble Earl, who was a works director, I declined to allow my works director to take responsibility for firing people. I preferred to take the responsibility myself.

The noble Earl also mentioned with some distaste that the debate was going to be about statistics. But after all, statistical accuracy in the presentation of figures was called for in the Motion, and it is therefore hardly surprising if your Lordships' House decided to take that literally and to debate the subject on the Order Paper. But I hasten to assure your Lordships that, although a professional accountant, I do not intend to weary the House with a debate about figures, save to say this.

I appreciate the sincerity of the noble Lord, Lord Young of Graffham, in disclaiming any evil intent behind the various alterations that have taken place in the figures of unemployment as they are presented from time to time. The point was reinforced by the noble Earl, Lord Gowrie, who paid a touching tribute to the stolidity, bravery and independence of his civil servants, who, he assured us, would not be party to anything of that kind, even though perhaps in a moment of weakness Ministers may nudge them slightly in that direction.

We on this side of the House accept all this, but it is, after all, a question of presentation and it is wellknown—and Members of the Government are not all that innocent—that there is a way of attracting publicity to the figures that you give. You always put in the most prominent and simple position those figures which you want the press to take up. The noble Lord will know perfectly well that, although he disclosed the most recent change in the percentage by way of a star over the column and a reference in the note, it was not exactly conspicuous from the press standpoint that the change had been made. I have the figures in front of me and I do not wish to detain the noble Lord—

Lord Young of Graffham

When the change was made some 10 or 11 months ago it was fully disclosed; it was subject to a statement, and every month thereafter we merely remind people of the change.

Lord Bruce of Donington

I am just referring to the fact that in the latest figures there is a little star and a note at the bottom, "See note A5". I shall not make very much of the point, except to say that "registered unemployed" is the term used in general circulation to represent a factual statement of unemployment at any given moment of time. That is what is understood. The press favourable to the Government, which constitutes the bulk of the press, does not bother to state "registered unemployed" or that the registered unemployed ought to be altered by this or that. It just puts the plain figures. Therefore the number on the register is of importance.

It is more particularly of importance, as my noble friend Lord Graham of Edmonton pointed out, when—if I may correctly state his remarks—the chairman of the Conservative Party said in the 1983 election: If unemployment is not below 3 million in five years' time I am not worth electing". That came from the chairman of the Conservative Party, the right honourable gentleman the Member for Chingford. It is quite obvious that members of the same Cabinet must take a remark of that kind seriously. I put it no higher than this, but if, fortuitously, the registered figure can go below 3 million you are not going to lose your chairman. Therefore, there is a slight incentive if the registered figure can be, albeit correctly, stated but quite fortuitously can fall below 3 million. The reputation of the noble Lord, Lord Young, is immediately vindicated and he is canonised thereafter by his right honourable friend the Member for Chingford.

In order to assure him that it is not merely a partisan comment that has been made—and we all know that the noble Lord, Lord Rochester, does not like partisanship at all except at election times—let me give the views of a very distinguished magazine which has followed the Prime Minister and supported her consistently ever since 1979 and, in fact, has said "ditto" to practically everything she has said, done or imagined—the Economist. The Economist last week said this, and it is important that we should have this from an independent source that is untainted by any association with Walworth Road and has no relatives on the Labour Front Bench or even on the Back-Benches. This is what the Economist said last week: The true unemployment total is really 4 million or more. Roughly 1 million have been hidden from the official count by statistical fix-ups and special employment measures". Tut, tut, my Lords! I did not say that myself; it is what the Economist said. It continued: By the end of 1986, fiddles and measures combined had removed up to 1 million from the count". This is not me, but we are bound to take it into account.

I implore the noble Lord to realise that there is a body of view in the country, independently represented and sometimes even in the Conservative Party itself, that thinks maybe not the whole truth and nothing but the truth is being forcibly fed to the people of the country by the Government, who tend, by and large, to put a slightly more optimistic view about the position.

In his reply the noble Lord, Lord Young of Graffham, will doubtless deal with the very rosy aspects of the economy which have emerged over the last two or three months. Mind you, my Lords, his reference dates will probably vary—"Compared with 1982, compared with 1981, compared with 1985, compared with the rest of Europe", whatever that may mean. But I venture to suggest that what he says will not contain particular reference to the 1979 position. I hope that the noble Lord in his reply, when he gives us some hope and faith as to the way in which the Government are going, will be able to tell us when manufacturing industry's product in this country is going to regain its 1979 level. Also, will he give the names of the countries in Europe, apart from France, which have not exceeded their 1979 levels of manufacturing production?

As the noble Lord will understand, we cannot all live on computer tapes, computer print-outs and video screens. Those are material things which have to be produced and consumed or imported as the case may be. We want to know when this vital factor in the employment of people in the United Kingdom—progress within manufacturing industry—is going to be such that it will reach the 1979 levels. It is now 4 per cent. below. Can the noble Lord tell us on what date in the future investment in manufacturing industry, which is 20 per cent. below what it was in 1979, will reach its 1979 figure? If he can give us that information, he need not trouble your Lordships' House with any more statistics. Any other material that he produces to show what a grand and glorious world his Government have introduced us into will be quite irrelevant.

The second part of the Motion deals with the causes of unemployment. My noble friend has already dealt with that in dealing, first, with the money supply argument and, secondly, with the various other arguments accepted within the financial policies of the Government. However, one of the excuses put forward by the Government—and also, I observe, by the noble Lord, Lord Seebohm,—is that, after all, it is the same all over. There are other countries in Europe in the same circumstances and no particular blame attaches to us because it is a common phenomenon. It is some heaven-like or hell-like visitation. Human agency could not possibly have prevented it.

I was very surprised that the noble Lord, Lord Seebohm, endeavoured to compare this country with Germany and to imply that the conditions were similar. He referred to the results as being approximately the same in terms of unemployment in both countries. The noble Lord himself in earlier debates has referred to Europe generally. Such arguments baffle me, because one thing we have had since 1979, which Europe has not had, is oil. The Exchequer has had £53 billion from oil. We have had an advantage that no other country in Europe has had. We have had an advantage on our balance of payments which no other country has had.

The Earl of Halsbury

My Lords, will the noble Lord give way? What about Italy?

Lord Bruce of Donington

Italy too! The United Kingdom has been in an extremely favourable position to have been able to deal with the problem. It has had advantages that no other country in Europe has had—bar Italy, as the noble Lord indicated. It has had all these billions of pounds, and yet it has done less than any other country.

I am not saying that all the responsibility for unemployment belongs to the Government. In any case, the Government have specifically disclaimed any responsibility at all for the economy. I shall return to that matter later. What surprises me is that after having made that argument, which is manifestly absurd, the Government proceed to the further argument that in any case the whole question of unemployment ought to be kept out of party politics. They imply that there is something essentially non-political about it.

I have a long memory. I remember all the posters in the 1979 general election with a pictorial representation of an unemployment queue and the label: Labour isn't working". The party opposite made that assertion the issue in the 1979 election: "Labour is the party of unemployment; we are the party of employment".

It is quite clear that the Government cannot and should not accept all the responsibility for all the unemployment that has occurred. But bearing in mind specifically the tremendous advantages that they have had, unlike practically any other country in the world, in terms of new oil resources, it is quite clear that they are responsible. They are responsible for a very large proportion of that problem. They pursued quite idiotic monetary policies in the later 1970s and the 1980s which decimated British industry.

In spite of all the advantages which the Government have had and which they have squandered wantonly, the damage sustained physically in terms of dereliction of factories, of rotting plants, of decaying infrastructure and of decline in merchant shipping has been greater in the last seven years than the damage inflicted on the United Kingdom in the Great War. The infliction of policies of deflation, of high interest rates and of high exchange rates are the factors which have caused unemployment in this country.

We have to deal with remedies, and I am well aware of the time available to me. One thing that is quite clear is that there must be an endeavour by both Government and private industry. Private industry cannot do it all on its own. The problem is to make capital available where labour is available to produce goods that are required by demand. In that I am afraid—if I may have the attention of the noble Lord for just a little while—there has been a failure of making capital available in order to promote enterprise.

As regards even the pet scheme of the Government which relates to small business enterprise, we have had Mr. Trippier, the Minister responsible for small firms, disclosing that barely 1 per cent. of City institutions' financial resources are used to back small but growing companies not quoted on the Stock Exchange. He believes that doubling the investment would create at least 10,000 jobs a year. He stated: Given that their total funds were estimated at £170 billion in 1983, and taking account of the 100 per cent. rise in the FT30 share index since 1983 this is a national disgrace". And so it is.

Under a co-ordinated government move we must have a combination of private and government funds in order to reinforce existing industries and, if necessary, to found new industries. That was the policy of the coalition government in 1944. It was the whole base of the full employment policy which was the official policy of all governments until the current Government were inflicted upon us. Until we make a conscious effort to make full employment our main objective, we shall not make a considerable impact on the total of the unemployed in this country. Neither shall we be able to give the unemployed people of our country, and indeed the millions of people in the lower income groups who are in real distress, that taste of freedom to which they are properly entitled.

7.59 p.m.

Lord Young of Graffham

My Lords, I am grateful to the noble Lord, Lord Bruce of Donington, and I shall, in the few short minutes left to me, try to look at where we have been in what has been a very good debate. The debate ranged widely, though perhaps not always very wisely, and it certainly ranged at length over one of the serious problems of our time.

The noble Lord, Lord Diamond, said I was wrong and that he instinctively knew that unemployment was 4 million. He also said that I was selective. If I am selective, then the basis of my selection is the same as that of the OECD and the ILO. The noble Lord said one thing, however, with which I am in total agreement: that confidence will be eroded by the Labour Party policies within six months. With that I can fully agree. The Yellow Book, which has been paraded, I am told is not costed, and as the noble Lord is a one-time Chief Secretary I think that should have some effect on confidence. No doubt the noble Lord will go and cost all the proposals therein and tell us what it really does come to.

I agree with the right reverend Prelate the Bishop of Manchester that we should join hands—indeed, we should join hands across your Lordships' House—in looking at the problem. I look to see the practical aspects of the demonstration of concern. We are all concerned about unemployment. I am slightly worried that this happens three or four days before local authority elections. I am sure that that is only a coincidence. It seems to me very important that all of us join hands and agree on what we can do about unemployment. One of the fundamental rethinkings that we should undertake as a society is to drop the innate pessimism that has been demonstated all too often this afternoon to the effect that there is no hope in the future, because there is hope and there is future, and it lies in our own hands.

The noble Baroness, Lady Lockwood, said that many married women would take up a job. We have already pointed out in the course of the debate that 44 per cent. of all women in society of working age work. We do very well. I am sorry that the noble Baroness is not present. I have not heard of any cases of a reduction in the register because of difficulties in interview and restart. I note that there has been a reduction in the register because of the many opportunities offered by Restart to people who have been out of work for a long time. My noble friend Lord Boyd-Carpenter recognised the more equal status of women. I am certainly in a position to recognise that equality. I am grateful to him for the character reference that he gave me.

I think it is very important that we should draw attention to our neighbours across the water, those of equal size; and that has happened once or twice in the debate. We should I think look carefully at the argument about lower taxes. Those who say that if we reduce taxes we will merely suck in imports and therefore help jobs in Cologne or wherever are really saying that as a society we can never afford to have better incomes and that, if our incomes ever increase, we would automatically suck in imports. I do not believe that for one second. I believe that we must become a wealthy society, and we must find ways of earning more.

The noble Lord, Lord Seebohm, if I may say so, made a great party political broadcast on behalf of the Cross-Benches. I think that it was very interesting to consider the reports now coming out of Germany and to note how similar our problems are. I never thought that the day would come when we in the United Kingdom would see that employment has been going down and, in Germany, going up; and the forecasts of both countries are that it may well not change in future. That was an extremely interesting article looking at what is happening now in Germany and elsewhere.

I fear that I found the pessimism of the noble Lord, Lord Carmichael, deeply unsettling and worrying. I should like to assure him that the consistent figures are published back to 1971. What worried me more was the feeling that somehow the world should go back to where it once was. There was not sufficient recognition that the old industries have gone and we must look forward to new ones. He drew attention, as did the noble Lord, Lord Ardwick, to an article in today's issue of the Independent which talked about vocational education and said how in Taiwan two-thirds of young people going through school—seven out of 10—have vocational education.

I remember clearly when in 1982, as chairman of the Manpower Services Commission, I introduced TVEI. The Opposition speaker for Education in the other place, a Mr. Kinnock, went round the country saying how this was going to produce factory fodder and that it should be resisted. Many local education authorities did this. If the truth were known, where we have harmed our prospects, and harmed them seriously, is by eliminating technical and vocational education from the school system, and doing this consistently for the past two decades. It is only now against great opposition that we are managing to bring this back into the school system and by 1993 it will be universal.

The noble Lord, Lord Ardwick, talked about electronics engineers. With Sir Keith Joseph when he was Secretary of State for Education, I took part in a great effort to change the number of electronics engineers in the country; and we will change it. However, it became apparent quickly that it takes nine years to affect the output of electronics engineers because we have one of the most narrow education systems in the Western world.

It is a particular pleasure to welcome back my noble friend Lord Gowrie. Time has passed very quickly since he was last with us. It was very good that he could draw on his five years' experience in government. He has slightly more responsibility than I do for many of the changes that we were discussing at length this afternoon. In particular, there was the change in 1982 to move from compulsory registration to voluntary registration. The sheer common sense expressed by my noble friend I hope will have settled all concerns in your Lordships' House about statistics.

But, alas, he was followed by the noble Lord, Lord Hooson, who said, not to mince words, that I manipulated the statistics to give—I quote his words—"a rosy picture". I resent that, and I deny the charge utterly. The noble Lord left out only, I suspect, that I was not bringing in the state of the moon in fixing the figures. If one were to accept but one-tenth of the noble Lord's charge, one would have to accept that all members of the government statistical services were in the pay of the Conservative Party and that their sole task was to manipulate and change figures. I should remind the House, as my noble friend Lord Gowrie reminded your Lordships, that the people who work out the figures are independent civil servants. They will know just as well as anyone how irritated we as Ministers get with their decisions, but their decisions are the ones that count.

The noble Lord, Lord Hooson's appreciation and understanding of statistics paled into insignificance with the fantasy world that he described in regard to the YTS. If the noble Lord has that concern about the YTS and thinks that it is as bad as he seems to, he should speak to his own leader in your Lordships' House who has given valuable service for a long time as chairman of an area manpower board and has much more responsibility than I do for the standards and quality of the YTS. It is the local area manpower boards that bring in these schemes.

The noble Lord, Lord Parry, I believe is very pessimistic to say that we will not return to full employment by the end of the 20th century but unbelievably pessimistic to refer to the end of the following century. Of course we must look to a society of change, and it will be a different society.

How much society has changed and the opportunities that exist was brought out clearly by the noble Lord, Lord Harris if High Cross, whom I never thought in my wildest dreams would stand up in your Lordships' House and praise to the skies the director-general of the ILO. That, I thought, was most improbable, until we heard what he had had to say. He said something that I would accept completely. The plea for the right balance between flexibility and protection of workers' rights is a battle that we have been fighting for the past 18 months in Europe; a recognition that, while protection is essential, in many cases the best protection that we can give a worker is his job.

There is a great deal that I should say. We heard at some length what I can only describe as a Newcastle mafia—my noble friend Lord Elliott of Morpeth suddenly joined, I find, by the noble Lord, Lord Graham of Edmonton. Both paid tribute to the changes that are occurring in the North-East. I think there was a recognition of the way in which those in the North-East are co-operating with government in the existing scheme. Indeed, there is a whole world of difference between many who live in the North-East and those who live in other northern parts of the country.

The noble Earl, Lord Halsbury, mentioned the responsibiliity which those running companies and works have to take. It is a responsibility that many take, and it is an unpleasant one. However, I think that it is a responsibility that many in your Lordships' House would know and perhaps share. He mentioned the decline of London docks and the rise of Felixstowe. He did not mention the part played by the Transport and General Workers' Union in that change. That I think is probably the most crucial factor today. There are many changes that should come about if we could allow flexibility in working practices. I have taken the hint he has given me about how to deal with chairmen of the CEGB. I am not sure what economic case there is for coal-fired power stations in the North-East and North-West. I must tell the noble Earl that it would be a very expensive investment as such.

I am grateful to the noble Lord, Lord Rochester, for the confirmation that the labour force survey follows the practices of the ILO. I should like to assure him that there have been no changes, certainly since unemployment changed direction, and only one change since I came into office. I assure him that the new job training scheme will be subject to quality standards and that those will be enforced by the Manpower Services Commission, whose chairman, I know, drew attention to training standards. I am not sure whether statutory bodies would be any the better. I am second to none in my admiration for the chairman but I am not sure that I would necessarily take his advice above that of individual employers. And certainly Mr. Astley Whittall is chairman of the statutory body already and we are talking about the existing one.

I should like to devote my very last minute or two, since I do not have enough time to talk about employment, to the noble Lord, Lord Bruce of Donington, who gave me a lecture on presentation. He told me that he accepts the integrity of the figures but that I should learn to present them better. Then the noble Lord turned around and talked to me about an article in the Economist. He said that the article criticised the Government. I think I can do no more than quote from this article but I should like not to quote selectively but just to finish off the paragraph that he quoted: Mrs Thatcher has begun to talk of a return to full employment. 'Smoke and mirrors' replies the Opposition. The true unemployment total is really 4 million or more. Roughly 1 million has been hidden from the official count by statistical fix-ups and special employment measures. Who is right? That is not the Economist saying that that is the case. It is the Economist saying that the noble Lord, Lord Bruce of Donington, is saying that. On presentation, my case rests.

Lord Bruce of Donington

My Lords, I am grateful to the noble Lord. Will he now read on to this: Government policy has affected unemployment figures in quite another way by changing the way the unemployed are counted. I could go on for some time, but the article then says: By the end of 1986 fiddles and measures combined had removed up to 1 million from the count". Does the noble Lord claim that that was taken out of context?

Lord Young of Graffham

My Lords, I think that we should let this unequal contest continue no further. The Economist is quoting the unemployment unit. Those who know the unemployment unit know that it sits on the opposite side of your Lordships' House and not on our side. What we are really looking at is different arguments put up by different bodies. That does not take us further but at least if I quoted a figure I would attribute the source.

Lord McCarthy

My Lords, I should like to thank the House in general and the speakers in particular for what I agree was a good debate. The discussion has been wide and has ranged far. I make it 19 speeches. Twelve for the Motion—at least, 12 friendly—and seven against—at least, less friendly. This is a judicious balance, although I am not saying that if we were unwise enough to empty the bars and vote we should get the same result. With that thought in mind, I beg leave to withdraw the Motion and make way for a discussion of the moral fibre of the tabloid press.

Motion for Papers, by leave, withdrawn.