4.25 pm
The Secretary of State for Employment (Mr. Norman Tebbit)
I beg to move,
That this House, greatly concerned about the difficulties facing those who cannot find jobs, supports the Government's policies which are helping to make British industry more competitive and which therefore offer the best prospects of a permanent improvement in job opportunities for people in this country.
Mr. Speaker
I have selected the amendment in the name of the right hon. Gentleman the Leader of the Opposition for the main debate.
Mr. Tebbit
The Government were clear that the House would wish to have this early opportunity to discuss the employment situation.
There can be no doubt that we stand on common ground in our attitude to and in our feelings about the plight of those individuals, the people who make up the unemployed, those sad statistics, and their families. None of us can have any doubts or differences about the problems which unemployment can bring, even though there is now, of course, a comprehensive safety net of the sort which did not exist in the past.
Nor can there be any disagreement that the 3 million unemployed in this country represent a tragic waste of our human resources—something which none of us can contemplate with other than deep regret. We all want to improve employment prospects for our people and we all have every reason to do so.
Regrettably we can agree across the Floor of the House on not much more than that. Indeed, apart from the fact of 3 million unemployed, the Opposition are hardly willing to agree the facts. So in an effort to extend that common ground let us try to establish some facts.
Are the Opposition today ready to deny that there is a world recession and that that has been brought about by the succession of oil price rises? Do they believe that we can insulate ourselves from the impact of that recession?
I must say that if the Opposition line is, as it has so often been recently, that it is solely Government policies that have brought unemployment to its present level, they will have to explain how it is that President Mitterrand 's France has 2 million unemployed or West Germany 1.7 million—their highest figures since the early post-war years.
Mr. D. N. Campbell-Savours (Workington)
It is not Mitterrand 's France; it was d'Estaing 's France. Mitterrand has been in office months only.
Mr. Tebbit
The hon. Gentleman is anxious, as always, to push the blame on to somebody else. President Mitterrand 's France and Germany have, in addition, conscripts in the army which, of course, takes them out of the labour market. Germany has almost a quarter of a million conscripts; France has well over 200,000. Germany's foreign labour force fell by half a million between 1973 and 1978.
Indeed, in Germany, Holland and Sweden unemployment has increased by about 50 per cent. in the past year, and in the last few months unemployment has been rising faster there than in Britain. Surely not even Opposition Members can argue that those rises stem from the policy of this Government.
[column 903]Mr. Donald Stewart (Western Isles)
If, as the right hon. Gentleman claimed, the effect of Government policies on unemployment is minimal, does he agree that the Saatchi and Saatchi posters before the election were completely dishonest?
Mr. Tebbit
No. What I am saying is that no one can pretend that the increase in unemployment in Britain in the midst of a world recession is solely the Government's responsibility.
During the first 32 months of the present Government's time in office oil prices have risen from about $15 to about $34 a barrel. During the equivalent period the Labour Government suffered a rise of about $2 a barrel. I have the figures here. The world economic position was very different then compared with what it is now.
Any Government are affected by events outside the country. In recent months there has been an extremely large increase in unemployment in other countries. It is a common problem.
Mr. Geoffrey Robinson (Coventry, North-West)
Does the Secretary of State know of any set of forecasts for unemployment in countries comparable to ours showing unemployment rising to 3 million-plus? Does he think that any other Government in Europe would allow those figures to be attained?
Mr. Tebbit
I do not speak for the forward policies of other Governments in Europe. I am speaking for what is actually happening in Europe, not for the forward policies of other Governments. Whatever their policies are, they all face extremely rapid rises in unemployment. The sole exception at present, perhaps, is Japan, which has done extremely well. [An Hon. Member: “What about Austria?” ] I shall give the figures for Austria, and I shall give the figures for France, which has managed to suppress the rise in its rate of unemployment for the moment, but has an increase in its unit labour costs of no less than 13 per cent.—with all that that implies for the future.
Mr. Frank Hooley (Sheffield, Heeley)
rose——
Mr. Tebbit
I shall not give way to the hon. Gentleman. I have already given way sufficiently.
We had other long-lasting and deep-seated problems which some of our major competitors did not fully share. [An Hon. Member: “Rubbish” .] I should be obliged if the hon. Gentleman would listen to what I have to say and then decide on the merits of the case instead of on his own blind prejudice.
Mr. Peter Shore (Stepney and Poplar)
The Secretary of State was on a very important point when he spoke about the effect of oil prices. Nobody would deny that they are very important. The right hon. Gentleman pointed out that they had doubled in 1979–80, and we accept that, but he denied, implicitly or explicitly, that they had risen in previous years. Will he confirm that oil prices rose by four times between 1973 and 1974, and, furthermore, that his right hon. Friends in Opposition never drew attention to that in any economic debate?
The Prime Minister (Mrs Margaret Thatcher)
We did so many times.
Mr. Tebbit
If the right hon. Gentleman checks the figures, he will find that the price of a barrel of oil——
Dr. John Cunningham (Whitehaven)
Oil prices rose by four times.
[column 904]Mr. Tebbit
I wish that the hon. Gentleman would not act as a juvenile parrot. I heard the right hon. Gentleman's question, and I am answering it. There is no need for it to be parroted by the hon. Gentleman. I am telling the right hon. Gentleman,, in the intervals between the hon. Gentleman's discourtesy, that the price of a barrel of oil was $9.60 when the Labour Government came into office. Thirty-two months later—the same span as this Government have had in office—it had risen by about $2. In the equivalent period of the present Government's time in office the price has risen from less than $15 to about $34 a barrel.
Mr. Shore
What the right hon. Gentleman is saying is absurd. It is torturing figures to the point of lunacy. It is true that in the period that the right hon. Gentleman is describing, beginning in March 1974, the price rose in that way, but the Labour Government came to power three months after the quadrupling of oil prices. The right hon. Gentleman must address his mind fairly to that fact.
Mr. Tebbit
The right hon. Gentleman is fond of using statistics for his Government's period in office, and I am giving him figures for the same period.
Who, even among the Opposition, would deny that much of our industry when the present Government came to office was and had been for some time, as had our commerce and our local and national Government, both inefficient and overmanned? It is possible to take examples from where one will. I ask hon. Members to read again the Central Policy Review Staff report on the motor industry, to look at how manning levels have now fallen in the steel industry, and to ask whether it would not have been better had those manning levels been achieved five years, three years or even two years earlier—and, in particular, achieved without a damaging and needless steel strike.
I ask hon. Members to ask managers throughout the country what has been happening to the efficiency of their firms. Indeed, if hon. Members want to see what problems still exist, they should take an independent view and read what Paul Routledge said in The Times yesterday. Referring to what is going on in British Telecom, he quoted the chairman on a catalogue of labour inefficiency as follows:
“Out of date methods of work; ‘over 40 per cent. of field supervisors’ time is spent on paperwork’.
Inter-union arguments on operating computer terminal … Timewasting in putting in telephones.”
All those matters, which are, regrettably, typical of the overmanning and inefficiency which have characterised much of British industry in the past, have been largely rooted out now in the private sector, but we still, unhappily, have a long way to go in much of the public sector.
Mr. John Golding (Newcastle-under-Lyme)
Does the right hon. Gentleman understand that the increase in productivity in British Telecom since 1970 has exceeded that of almost any other industry? It is certainly higher than anything achieved in the private sector.
Mr. Tebbit
I quote again:
“staff levels and wages grew by 18 per cent in 1979–80 and by 31 per cent. in 1980–81, ‘far outstripping growth’” .
That makes it very difficult to achieve increasing levels of productivity.
When the recession struck Britian, we had hardly begun to face the stored-up problems of years of poor industrial [column 905]performance: years of stunted and inadequate growth in productivity and years of excessive growth in wages compared with productivity—that is, years of uncontrolled increases in unit labour costs.
I have quoted the figures before, and no doubt I shall do so again. I despair of the Opposition's understanding them, but at least they might remember them.
Between 1970 and 1980 money incomes rose by 345 per cent. and output by 17 per cent. Prices rose by 188 per cent. and unemployment rose by 193 per cent. That could qualify for the description of a dismal decade.
Mr. Michael Foot (Ebbw Vale)
Ask the right hon. Member for Sidcup (Mr. Heath) about those figures.
Mr. Tebbit
The right hon. Gentleman may choose to use different figures, but those are the figures published by the Central Statistical Office. [Interruption.] Does the right hon. Gentleman want to dispute the basis of official statistics that were issued when he was in Government? He does not. The right hon. Gentleman has a new system. He disputes the official figures issued by Conservative governments, not those issued by Labour Governments.
For more than five years of that decade, let me emphasise, we enjoyed, if that is the word, the policies of Tweedledum Foot and Tweedledee Williams. Between them, ably assisted by the right hon. Member for Bristol, South-East (Mr. Benn) although, to be fair, hampered from time to time by the happy and sometimes successful partnership of the IMF and the right hon. Member for Leeds, East (Mr. Healey), they left our industry set up to be the fall guys of the world as the recession bit.
Unemployment was still falling as a consequence of the policies of the IMF years, but inflation was already being stoked up again. Inevitably, as the recession struck, unemployment rose, exacerbated by our lack of competitiveness. Through that decade of decline, each recessionary trough was marked by a new peak of unemployment.
None of this should have come as a surprise, because what was happening was clear all the way through. There are those who still believe that we could have fudged our way through this recession, as we have with others, and let the British disease run its course until the sick man of Europe became the pauper of Europe.
For the Conservative Government that is not an option. It would perhaps have been easier to tackle these accumulated problems without the added difficulties of the recession. But we had no choice. The recession was there and the old problems had to be met. Without tackling the old problems of poor product design, poor marketing, slow delivery, unnecessarily high costs and inflexible use of manpower——
Mr. Foot
indicated dissent.
Mr. Tebbit
Does the right hon. Gentleman think that those problems did not exist or that they should not be tackled?
Mr. Foot
The right hon. Gentleman is not fit to answer for any Government; not even this Government.
Mr. Tebbit
Although that may be the view of the right hon. Gentleman, it was not the view of the electorate. What is more, having lost 25 members of his party in the last two years, he should keep quiet.
Dr. David Owen (Plymouth, Devonport)
Is the right hon. Gentleman aware that he has been speaking for 15 [column 906]minutes and that we have not yet had a constructive proposal about the serious problem of unemployment? We have had a long catalogue of scapegoating and party politics. When will the right hon. Gentleman address himself to the real problem?
Mr. Tebbit
The right hon. Gentleman must be fully aware that attempting to deal with problems without first going into their background is most unwise. If he, as a doctor, treated his patients without first diagnosing their problems, then I can see why he came to the House of Commons.
There is little doubt that there can be no prospects of a recovery which would lead to new, better paid, more secure and more productive jobs unless we tackle the problems that I have listed. Some of the problems are undoubtedly on the manpower front. They have to be tackled. Would British Steel be the better if it returned to the manning levels of 1979? Would British Leyland's chance of survival be enhanced by going back to the overmanning of three or five years ago?
We have removed some of the barriers to progress to that end. The Employment Act 1980, the new initiatives on reforming training, the Government's support for training in new technologies, and our moves to get more realistic wages for young people have helped to that end. We have improved the incentives for entrepreneurs by creating new schemes of encouragement and help for small businesses. It is managers and work forces who will take advantage, and are taking advantage, of the chances and the incentives to improve the performance of their firms.
It is in the interests of Opposition Members to claim that the economy is heading downhill. They enjoy it, they love it, they sit and giggle at it, but it is clear that the trough of the recession was passed in the second quarter of last year. In the three months to November, industrial output rose by 1½ per cent. and manufacturing output by 1 per cent. Perhaps most important of all; output per man hour in manufacturing rose by 8 per cent. between the fourth quarter of 1980 and the third quarter of 1981. Output per head rose by 10 per cent. over the same period.
At last, we have begun to gain on our competitors in terms of unit labour costs. At last, we have seen a year in which our unit labour costs rose less than 4 per cent. against over 5 per cent. for our main competitors. In Germany it was 4 per cent., in Japan it was 6 per cent. and in France it was 13 per cent. If 13 per cent. in France is not good news for any motor manufacturer other than Renault and the other French companies, I do not know what is.
At last, after years of decline, our international competitiveness is being regained. The gains are showing through in, for example, an increase of more than 20 per cent. in engineering export orders in the second half of last year. No one outside the Opposition pretends that there is an instant solution to the problems. Equally, it is only the Opposition who resolutely refuse to give any weight or credence to the indicators—the measurements—of what is going on in the economy and the extent to which they are pointing to and recording a recovery from the trough of recession.
Obviously, output is one measure, but, perhaps of critical importance to unemployment, the figures for shorttime working are falling and the figures for overtime working are rising. This month, for the third month running, we have seen figures for unfilled vacancies [column 907]higher than those for the same month a year earlier. The numbers of vacancies notified to the jobcentres and to my Department have been rising since April 1981. That trend line of vacancies has always led the unemployment figures, both up and down, and after some hesitation it now seems to be established on a firm upward trend.
Mr. J. Enoch Powell (Down, South)
If the right hon. Gentleman is leaving the topic of competitiveness, I wonder whether he would address himself to a problem that worries many people. We have a persistent and massive surplus on our trading account. That being so, the effect of an increase in our international competitiveness must be an increase rather than a decrease in unemployment.
Mr. Tebbit
That is not necessarily so. As the right hon. Gentleman rightly hinted, the effect would be an upward pressure on sterling. That would have a favourable effect on the inflation rate and perhaps allow us to have lower interest rates than would otherwise be possible. That could then begin a benign spiral of holding down costs and might allow us to live better rather than worse as we have been doing in recent years.
Mr. John Grant (Islington, Central)
rose——
Mr. Tebbit
I should get on.
Amidst the tragedy of 3 million unemployed we can now see, unless we are blinded by prejudice or spite, the hopeful signs for the longer term health of the economy upon which job security and job creation can be built. But there is no instant solution. Who could seriously suggest that the problems of 30 years could be solved in 30 months? I shall leave it to my right hon. Friend the Secretary of State for Industry to detail the measures——
Mr. John Grant
rose——
Mr. Tebbit
This is a short debate and I really should get on.
I shall leave it to my right hon. Friend the Secretary of State for Industry to detail the measures that he is undertaking to help industry. They include aid for the traditional industries—steel, motor cars and shipbuilding—and for the new: data processing, information technology and the like. Unlike the handouts of previous times, which merely insulated inefficient and overmanned businesses from the need to change, the aid today is linked to measures to bring them into viability and independence.
For many businesses, with or without Government aid, the choice has been stark. As markets contracted in the world recession, they had to shed labour both to meet shrinking order books and to increase efficiency because the happier option of expanding production without taking on new labour was not available. Businesses that did not run the risk—the risk often became the reality—of collapse with the loss of every job in the firm. So the great shake-out of labour, aimed at and talked about so often in the past, happened. It happened not at a time of our choice, but at a moment dictated by events.
Alongside these weaknesses in our economy and alongside the world recession we, in common with our predecessors, faced a third factor—demographic change, the total population of working age increased by nearly 900,000 in the five years to 1980 and will increase by [column 908]about 1 million in the five years to 1985. In the second half of the 1980s, the demographic factors, in that sense, become more favourable. By the early 1990s, our population of working age will fall back to the level of the mid-1970s. At present, however, we need 200,000 new jobs a year merely to keep pace with demographic change. In particular, we face a bulge in the number of 16-year-old school leavers coming on to the job market. The numbers reaching school leaving age peaked in 1980–81 at about 920,000—about 180,000 above the level of a decade earlier. Happily for the job market, the number is now declining again but only slowly initially. That is why, in examining what the Government can do to ease the shocks and pains of the inevitable but long overdue adjustments in our economy, it was the plight of young school leavers that caused me most concern.
As a result, the lion's share of the £4,500 million expenditure over three years on special employment and training measures will go to young school leavers. There is in any experience, however unhappy, the prospect of gaining some advantage. In dealing with the crisis of unemployment, I have taken the opportunity to improve our standards of industrial training. It is common ground between us that in industrial training we have fallen behind our competitors abroad. Far too many of our youngsters entering the work force have lacked any training at all. Our apprenticeship system may have been admirably suited to the first half of the twentieth century, but it certainly is not suited to the last quarter.
By welding together our special measures programme to meet the problems of unemployment and our training programme to meet the competition of better trained work forces abroad, we have set out to meet that challenge. The House should not underestimate the scale and scope of these programmes. It is all very well for the SDP in its amendment to call for a two-year programme of training for young school leavers. What stopped the right hon. Members for Crosby (Mrs. Williams) and Plymouth, Devonport (Dr. Owen) from implementing even a one-year scheme when they were in office? Was it the Lib-Lab pact? Was it the then Secretary of State for Employment? Did they not possess the weight to take it through the Cabinet? Were they unable to obtain the credit from the IMF to take it through? Whatever the reason, they did not invent it until they got into Opposition and after they had left the Labour Party.
Today, there is also in being the community enterprise programme, and that has been increased to 30,000 places.
Mr. John Grant
It should be doubled.
Mr. Tebbit
No doubt. Everyone would like double everything—double wages, double jobs, double all. That is the SDP programme.—[Interruption.] I do not believe that the hon. Gentleman seriously thinks that I am frightened of him. Some fishes are too small for serious fishermen.
The job release scheme is being extended from 1 February to men of 62. For the disabled, it is already 60. The young workers scheme is also in operation. There has been a good response from industry. This can open up jobs to youngsters willing to take realistic wages. I hope that it will not only be employers who promote this scheme to would-be workers but that youngsters of 16 will go to employers and point out that they can be paid £40 a week at a wage cost to employers of only £25. [column 909]
The youth opportunities programme is a continuing success. I freeely give credit to the previous Administration for the inception of the scheme. The number of youngsters seeking places speaks for its success. At the latest count, about 240,000 people were benefiting from the scheme. In all, more than 1 million young people have benefited. It is right that the House should congratulate the Manpower Services Commission, the employers, the voluntary services, education departments, the local authorities and all the others who have helped to operate the scheme. [An Hon. Member: “And the trade unions” .] And the trade unions. Indeed, everyone who has been concerned. The trade unions are, of course, included within the MSC, which is a tripartite body.
The Christmas undertaking was all but achieved, and 280,000 of this year's unemployed summer school leavers have been taken into the YOP. Only 15,000 youngsters could not be offered places by Christmas. I hope that support will be extended and increased this year and next as the YOP fills the gap until the youth training scheme is in full operation from September 1983. Indeed, in 1982–83, I hope that 100,000 of the YOP opportunities will be 12-month enhanced quality places approaching or even reaching the YTS standard.
Alongside these measures, we shall continue to offer support to apprentice training, although this will be increasingly orientated to late twentieth century style apprenticeships and to other adult training schemes. I have mentioned the Department of Industry's spending of £3 billion an my Department's plans to spend £1.5 billion a year on these programmes by 1983–84.
Contrary to what is implied by the economic illiteracy of Labour's “Plan for Expansion” , to which the Opposition amendment refers, unlimited spending out of limited resources is a recipe for economic disaster, not recovery. There are no short cuts. Our industry and commerce must provide the goods and services that the customer wants at a price that he can afford. If not, someone else will. Jobs will be created in Germany and Japan and lost here in Britain. [An Hon. Member: That has already happened.” ] That is the problem. Over the last 10 years and beyond we have lost against these growing economies. Like it or not—the Opposition generally dislike it—there is a growing mood of realism which, even if not too widely evident in the upper echelons of some unions, is evident among their members. Restrictive practices are being removed. Pay claims are being related to what employers can afford—and settlements certainly are.
Pay is far from being the sole cause of inflation, but excessive labour costs feeding through into prices are a major cause of job losses. Cleaning up the mess of the winter of discontent—honouring the Labour Party's commitments to the Clegg commission—left a rate of wage settlements approaching 20 per cent. in 1980. By the end of the 1980–81 pay round, it was down to about 9 per cent. [Interruption.] We honoured the Clegg commission recommendations, we said we would. It was set up as the only answer to the mess into which the previous Government had got themselves during the winter of discontent.
The CBI figures suggest that settlements are now running at about 6 per cent. to 7 per cent. That is the common sense of managements and work forces showing through. Together with an outstanding good record in strikes—the figures to be published later today show that [column 910]in 1981 the number of days lost was less than one-third of the average over the last 10 years—these real advances have shown through in terms of increased productivity, increased competitiveness, increasing export success and an increasingly firm foundation for future expansion.
Nothing in life is certain.
Mr. Clinton Davis (Hackney, Central)
Will the Secretary of State give way?
Mr. Tebbit
I suspect that this is certain.
Mr. Davis
Amidst the “Tebbits” of information that the right hon. Gentleman drops from time to time, can he say whether the Government accept any responsibility at all for the 3 million unemployed?
Mr. Tebbit
I accept, and the Government accept, responsibility for some of the consequences of getting the economy back into a shape in which it can compete across the world. The House must ask whose responsibility it is when overmanning is tackled and cured. Is unemployment the responsibility of those who tackle the problem or of those who allowed it to build up? The common sense of management and work forces is now showing through.
Nothing in life is certain. Nothing can be taken for granted. All the gains could be thrown away in the mistaken belief—in the persistent heresy—that forcing demand into the system at a time when inflation is still too high, when Government borrowing and taxation are too high, can do other than bring the shortest term relief at the expense of the longest term disaster.
I began by referring to the common ground of our concern for the plight of the unemployed and our determination to beat the problem of mass unemployment, but from there the common ground disappears.
Both the amendments—the amendment that you, Mr. Speaker, have chosen from the old Labour Party, led, if that is not to overstate the case, by the right hon. Member for Ebbw Vale (Mr. Foot), and the amendment from the new Labour Party led by … led by—Somebody help me. Who is it led by? Come on, give me a hint. According to the amendment on the Order Paper today it seems to be led by the rather shy right hon. Member for Crosby. Both parties have retreated straight back to their common ground of spending resources that they know we do not have. They do not even know how much they want to spend.
Yesterday the right hon. Member for Chesterfield (Mr. Varley) was asked by Mr. Ian Ross of ITN how much reflation he wanted. The right hon. Gentleman said “Oh, I am talking in terms of billions.” We guessed that, but of how many billions was he talking? Was it £1 billion, £2 billion, £3 billion, £4 billion or £5 billion? Has the right hon. Gentleman become another arithmophobic?
Memories, particularly political memories, are short. Blessed, selective amnesia can strike the House in the same spot time and again. I bet that the right hon. Member for Crosby has forgotten that in The Times of 2 February 1977 she said that we were seeing the increase of unemployment throughout the industrialised world and that it was a problem for which we still had no real answer. That is, until today. Today she has found it.
As the House considers the motion and the amendments, I invite hon. Members to recollect that the Government have been in office for 32 months and will be in office for much longer yet. I invite hon. Members to [column 911]cast their minds back to events 32 months after the Labour Government took office in February 1974. That takes us to October 1976.
I am sorry that the right hon. Member for Leeds, East is not in his seat because he would remember his conversion to monetarism on 28 September on the occasion of his U-turn on M4. Of course, he had started to believe when in his July Budget he cut £1 billion off expenditure and raised national insurance contributions by £1 billion. That was when he said that the long-awaited economic miracle was in our grasp. Fumbled again. In September he had just raised MLR to 13 per cent., sterling was tumbling out of control and he had to apply to the IMF for aid—for a loan of £2.3 billion.
By 25 October sterling was down to $1.57. The right hon. Gentleman had raised MLR to 15 per cent. on 7 October. All that was in pursuit of a sound Socialist economy. By 15 December he had introduced a Budget of £2.5 billion, cutting foreign aid, cutting housing, cutting education and social services and putting up prices. The right hon. Member for Cardiff, South-East (Mr. Callaghan) then said “Pessimism is overdone.” That is true. It was. When the right hon. Gentleman and the then Chancellor were monetarists on dog leads from the IMF things went fairly well, but as soon as they broke free the troubles, culminating in the winter of discontent, were upon them.
There is no sensible alternative to our policies. There could be a return to the Socialist planning policies that brought the Labour Government to their humiliating plight after 32 months in office—policies that left us a nation in debt, industries overmanned and uncompetitive and inflation stoked up to go through the roof. Those policies were supported by members of the SDP in Government, even in the last vote of confidence, and endorsed when they stood for election as Labour candidates in the days when the right hon. Member for Crosby still said that the right hon. Member for Bristol, South-East was a moderate. What comfort can there be for the unemployed in going back to those policies? There can be none whatsoever.
The Government have combined firmness of purpose and steadfastness in pursuing the long-term objectives of more, better and secure jobs based on the ability to meet and defeat our competitors. We have taken that view with a determination to fund and operate special employment and training measures to help people damaged by the toll of unemployment. I am happy to say that, under that dismal toll of unemployment, the signs are that the economy is growing and that the returns for the efforts and hardships are coming through.
Mr. Dennis Skinner (Bolsover)
Rubbish.
Mr. Tebbit
The hon. Member for Bolsover, (Mr. Skinner) might not be able to read the figures, but the Employment Gazette publishes graphs so he can see the way that the figures are moving up.
To throw that away in a wave of self indulgence, mistaking it for constructive help, would be madness—economic madness. It would be a disaster for both the 12.7 per cent. unemployed and the 87.3 per cent. employed alike. What is more, I remind a few of my hon. Friends, it would also be electoral madness for them, as it was for the Labour Party in 1979. [column 912]
I repeat that no-one can guarantee success in these affairs. Much progress has been made. We know well that any improvement in unemployment must lag behind the gains in productivity, the gains in competitiveness and the increased flow of jobs on to the register which we have seen. It would be folly to throw all that away in repeating a failed Socialist experiment, even with the Labour SDP, in the mistaken belief that the softer option is the better option.
Above all, it would be a cruel and heartless deception of those who have been hardest hit by the mutual follies of Governments—yes, Governments—industry, commerce, unions, workers, management, and all of us in the past. There can be no turning back now. Let us have the courage to take these policies through the rest of the way to success.
5.10 pm
Mr. Eric G. Varley (Chesterfield)
I beg to move, to leave out from “House” to the end of the Question, and to add instead thereof,
“appalled at the toll of unemployed people, which now exceeds 3 millions, and is among the highest proportionately in Western Europe, calls upon Her Majesty's Government to institute a programme of capital investment in civil engineering works, house construction and improvement and energy conservation, to make employment subsidies available for jobs for the long-term unemployed and to initiate a proper two year skill training scheme for school leavers and a re-training programme for those with obsolete skills; deplores the official Opposition's unrealistic and ill-considered policies which take no account of their impact on inflation; and urges Her Majesty's Government to include fiscal and incomes policies among the means for curbing inflationary pressures instead of relying on high interest rates and lengthening dole queues.”
When I was elected to the House in 1964, I never believed that I would take part in a debate about 3 million unemployed. We expected something better from Her Majesty's Secretary of State for Employment. We have just listened to a thoroughly nasty speech. When it exuded sympathy, it was at best unconvincing and at worst positively repulsive. It was full of the lame excuses that we have come to expect from the Conservative Party. It contained some selective statistics about oil prices, but the right hon. Gentleman failed to remind the House that for the whole of the period during which the Government have been in office they have had North Sea oil, to the full value of the British economy. That has been a tremendous boost, and it was not available when oil prices quadrupled under the Labour Government.
When the Secretary of State dealt with what he called the realities of the situation, he showed himself in his true colours. He insulted not only the Opposition—we can take that from the right hon. Gentleman—but some of his right hon. and hon. Friends, and particularly his right hon. Friend the Member for Sidcup (Mr. Heath) and his Administration. No one would believe now, listening to what the right hon. Gentleman said, that that Administration included the present Prime Minister. The Prime Minister's appointment of the Secretary of State to his present position is an insult to the unemployed.
Mr. Geoffrey Dickens (Huddersfield, West)
Rubbish.
Mr. Varley
The Secretary of State is the wrong man in the wrong place at the wrong time. Looking at his qualities, it is impossible to imagine that he will have a distinguished career as Secretary of State for Employment, [column 913]but it is certain that he will go down in history—it is his unenviable fate, for which he will be remembered—as the Minister who presided over 3 million unemployed. Judging from what he said this afternoon, he actually blames them for it. Overmanning is a subject about which the right hon. Gentleman talks from time to time—it is necessary to reduce overmanning—but why does he not occasionally, instead of running down British industry, point out that there are some superb successes? That has always been the case.
There is no part of the country or no type of worker that is immune to the Government's destructive policies. Practically every family in the land now has some direct or indirect experience of unemployment. Its tentacles stretch from Scotland to the South-East, infecting the country in areas which never knew it, even in the worst days of the 1930s.
In previous recessions, unemployment increased in different parts of the country in a manner that maintained the ratio between the regions. The present Government's unique achievement is that they are spreading unemployment more evenly than ever before across the face of our country. As one might expect, the areas in which unemployment has always bitten deep and which have never fully shared in national prosperity, have been very hard hit by the present slump, but regions that have never known serious unemployment before now shiver in the grip of it. The picture is both appalling and instructive.
Mr. Dickens
What would the Labour Party do about it?
Mr. Varley
In Northern Ireland, for every 100 people who were without jobs under the Labour Government, there are now 186. In Scotland the figure is 197. A similar picture is to be seen in the South-West and in Wales, where the figure is 209. In East Anglia there are now 224 unemployed for every 100 when Labour left office. In the North-West the figure is 225. In Yorkshire and Humberside the figure is 243.
Those figures are terrifying enough, but I come to areas which, until now, have always known prosperity. In the South-East—an area represented by the Secretary of State for Employment and the Prime Minister among others—for every 100 people unemployed when Labour left office the number now seeking work is 252. The same is true in the East Midlands. Now we come to the Government's extraordinary achievement. In the West Midlands, for every 100 unemployed when the Prime Minister walked into Downing Street, there are now 297. It has taken the right hon. Lady to bring the percentage of unemployed in the West Midlands to the same level as in Scotland. It takes a special sort of incompetence to turn the West Midlands into a depressed area.
The Prime Minister waffles on about the paramount importance of competitiveness, but it is her special achievement that the most competitive industries have suffered, along with the less competitive. All have suffered—industries with high wages, industries with low wages, industries with high prices, industries with low prices, industries which are heavily unionised and industries which are thinly unionised. The Thatcher blight has hit them all. It has hit metal manufacturing and textiles, engineering and footwear, distribution, both wholesale and retail, local government and the building industry. Nobody has escaped. Companies have fallen like ninepins. [column 914]
the Department of Trade has recently confessed that last year the number of company liquidations reached an all-time level. Small firms, damaged as never before under the present Government are laying off workers, as are large factories. Yet the Prime Minister, in her new year message, had the nerve to say:
“We must do something to help small businesses develop and grow, because that is where the new jobs come from.”
At Question Time yesterday the Prime Minister filibustered and answered only two or three main questions. She force-fed the House with statistics which were irrelevant, inaccurate and misleading. She made great claims about the number of vacancies— “vacancies up” , she said—but she was very careful not to give figures, and she was very careful to choose a base date that suited her. In fact, when Labour left office, there were five unemployed for every job vacancy, and heaven knows that was bad enough. Today there are not five unemployed workers chasing every vacancy, but 25. That is the triumph over which the Prime Minister was crowing yesterday.
Mr. Clinton Davis
Is my right hon. Friend aware that in the area of East London that I represent nearly 1,300 youngsters are chasing 22 jobs? Presumably the Secretary of State would regard that as a triumph.
Mr. Varley
My hon. Friend is right. The figures are available for individual areas. The entire country is a depressed area. The South-East and the West Midlands have been reduced to a level that previously would have attracted development area status. An even more devastating fact, which the Prime Minister concealed when addressing the House yesterday, is that production in manufacturing industry has fallen by 15.4 per cent. In looking around her for some body or someone else to blame for these intolerable unemployment figures, the Prime Minister tried to make something of the fact that the population of those who had reached working age had been rising.
It is the Government's special achievement that the number of workers in employment has been falling. Even though unemployment rose under Labour, the number of workers in employment rose as well. When the Labour Government left office the employed population stood at 25,120,000. In June 1981, the latest period for which figures are available to me, it had declined to 23,418,000. Bearing in mind the other figures that are available, I am sure that it is worse now.
The Prime Minister tries to minimise the grim significance of the figures by saying that some people are losing jobs but others are getting them all the time. She makes it sound like a conveyor belt. I have heard Conservative Members use that sort of analogy outside the House. The number of people who have been out of work for more than a year has more than doubled in 12 months. The number is now 874,000. The long-term unemployed, in the jargon of the Department of Employment, are not travelling merrily along the conveyor belt. They are imprisoned in a lift that is soaring upwards out of control.
There are others. There are those who cannot be thrown out of a job, because they have never had a job. There are those who find, when they leave school, that the community has no use for their talents and ideals. Bright-eyed youngsters are given the impression that once their formal education is over society has no use for them. It is among young people that the toll is worst—for every 100 [column 915]unemployed when the Labour Government left office the number is now a terrifying 404. All that the Secretary of State can offer those young people is that by the end of 1983 they will be eligible for his new training scheme, with its princely recompense of £15 a week. What is more, any young boy or girl who has the impertinence to turn down that unrivalled opportunity will be punished by being made to forfeit supplementary benefit.
That is not the only form of blackmail in which the Secretary of State is indulging. He has come up with a new scheme, which is being tried out in selected parts of the country. My hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) has informed me that it is being conducted in his constituency and in other areas. The unemployed are being ordered to fill in a new, long questionnaire in which they are required to answer detailed personal questions—my hon. Friend has provided me with a copy of the form—and told that if they refuse to comply they will forfeit their unemployment benefit. That is the penalty for refusing to co-operate in the Tebbit inquisition. When questioned on this today the Department of Employment was unable to point to any parliamentary authority authorising the questionnaire or the withholding of benefit. Perhaps the Secretary of State will investigate this, as it is a matter of great interest to the House.
Mr. Tebbit
I think that it is a long-established practice that if people are not available for work, which is what the form asks, they do not receive benefit.
Mr. Varley
That may be a long-standing practice, but this is certainly a new one. I assume that the questionnaire was approved by the Secretary of State before it was sent to selected offices in the Northern region, Yorkshire and Humberside and South-East London. It arises out of the Rayner report and is a new exercise involving long and detailed personal questions, some of which, of course, relate to whether the person is available for employment. People are being told by local offices that if they do not fill in the form, which is not required by the vast majority of offices, they will lose their unemployment benefit. If the Secretary of State does not know about this, perhaps he will take the matter on board and report to the House in due course.
Mr. Tim Renton (Mid-Sussex)
rose——
Mr. Varley
The debate has already been truncated. If I give way to the hon. Gentleman, I shall not be able to give way again.
Mr. Renton
That is an extraordinary statement. With regard to the new training initiative, is not the right hon. Gentleman showing his normal characteristic attitude, which is that if he finds a gold bar in the street he tries to make it look like a wooden leg? Would he really recommend that parents should advise their children to take home £18 per week in supplementary benefit rather than a training allowance of £15 per week? Is it not significant that when the right hon. Gentleman was Secretary of State all that he did was to produce Green Papers about training, whereas my right hon. Friend has gone ahead and is bringing in a scheme?
Mr. Varley
The Secretary of State is taking an initiative that was launched by the Manpower Services Commission, but he is likely to spoil it by the level of [column 916]allowances offered. An allowance of £15 a week will be regarded as derisory. I wanted a proper training scheme for young people. In view of the facts that I have outlined, it is now more urgent than ever. When the youth opportunities programme was introduced by the Labour Government, 70 per cent. of those going through the scheme found a job. The proportion is now less than 30 per cent., and goodness knows what it will be under the new scheme. The Opposition are in favour of training, but it must be proper training, with a proper rate of payment. I hope that the Secretary of State will do something about the questionnaire to which I referred.
The unemployment benefit, which the Secretary of State may find it necessary to cut in selected areas as a result of the Raynor report, has been shown to be less in real value than it was in 1971. Under the Conservatives, the real value of unemployment benefit has fallen to its lowest level since that time. Soon, as in the 1930s, it will be possible to distinguish the children of the long-term unemployed by their physical appearance from those whose more fortunate fathers were able to hang on to their jobs. In the face of the damage that they have inflicted on the country, instead of taking action to improve the situation the Government are trying to talk their way out of it.
The Secretary of State referred to the international statistics. Has he seen the reports in today's newspapers about the Common Market? On the Brian Walden show he said that before the end of the Government's term of office unemployment would begin to fall and people would flock back to support the Conservative Party. That is not the Common Market's view, which is that:
“when the next General Election is due—3,600,000 people will be out of work in Britain” .
but, according to the same statisticians, it will be falling in West Germany and in France. [interruption.] The right hon. Gentleman had better join the club if he wishes to become an anti-Marketeer.
No weekend is complete these days without another effusion of complacency from the Chief Secretary to the Treasury, the Pangloss of the Conservative Administration, but it is the Prime Minister who doles out the most liberal doses of syrup. Not only does she not fool the people, however—she does not even fool her own colleagues. The right hon. Member for Lowestoft (Mr. Prior), who was sacked as Secretary of State for Employment and sent away to Northern Ireland for daring to tell the truth, is perhaps a good example. I wonder who he had in mind when he said at the weekend:
“Nor is it any use simply proclaiming that the only solution to inflation is to set oneself flint-faced against any request for extra Government spending.”
Whoever the Secretary of State for Northern Ireland had in mind, tomorrow the Prime Minister will be holding a crisis Cabinet.
The Prime Minister
No.
Mr. Varley
The right hon. Lady says that it is not a crisis Cabinet. I can only say that it should be, because we have a crisis of unemployment. The country will be interested to know that instead of taking unemployment seriously the Prime Minister has decided to laugh about it. I thought that she cared. There will be no point in that Cabinet meeting unless the top item on the agenda is how to tackle unemployment.
The Prime Minister will say that our proposals to deal with unemployment will cost a great deal of money, but [column 917]unemployment is costing a great deal of money. Unemployment is costing about £13 billion per year. The nation is spending more and more on financing unemployment. It is spending more on unemployment than on the National Health Service. It is spending more on unemployment than on education. It is spending more on unemployment than on the rate support grant, and the precious revenues from North Sea oil are being squandered to finance unemployment.
That £13 billion could be used as a fund to finance longterm, secure jobs. Public money can be used to finance worthwhile public investments. Only this week British Aerospace, unveiled its new Jetstream Aeroplane at the Scottish Aviation factory at Prestwick. Orders are already coming in. Without public ownership and public investment, that factory would have been closed long ago.
I do not know whether any of my hon. Friends heard the Secretary of State on the radio this morning lavishly extolling the merits of Smith's Dock Ltd., the shipyard on Teesside, and the showpiece vessel that it has just launched. Smith's dock is part of the nationalised British Shipbuilders. It would not exist today had British Shipbuilders not been nationalised by the Labour Government. It would have disappeared ages ago.
It is particularly rich that the Secretary of State, of all people, should lavish praise on that company, because as a Back Bencher in the last Parliament he spent 58 sittings in the Standing Committee on the Aircraft and Shipbuilding Industries Bill doing his worst to try to kill that measure. If the right hon. Gentleman had his way today, there would be no Smith's dock, no showpiece vessel, no aerospace factory in Scotland and no Jetstream. What was done there can, should and must be done elsewhere.
A fraction of the money being frittered away unproductively on unemployment could be used to provide about 100,000 jobs for building workers to build homes for our homeless, because there will be a colossal housing problem in a few years' time. The Prime Minister, the Secretary of State and the Cabinet know that.
The disaster threatening some of our older cities, with their crumbling sewage systems, could be put right by creating jobs in the construction and material industries. Instead of picking on the nationalised industries and using them as their scapegoat, the Government should use their potential to get the British economy moving again. Local Authorities, which are taking such a hammering from the Government, could be used to provide massive support for customers in the private sector. I do not know about Conservative Members but private firms in my constituency tell me they are kept going by orders from the public sector.
The right hon. Lady says that she cares about unemployment——
Mr. Richard Needham (Chippenham)
rose——
Mr. Varley
I should like to give way, but I must proceed, because of the shortage of time.
The right hon. Lady says that she cares about unemployment. If so, she must cast aside her dogma and obstinacy. Instead of telling us that she cares, she must take action to prove that she cares, but I fear that that is too much to ask of her and her colleagues.
The Secretary of State said that there was no alternative. I do not know how that went down with the [column 918]right hon. Member for Chesham and Amersham (Sir I. Gilmour), the former Lord Privy Seal. This is a no plan, no hope Government, who in their first Queen's Speech in May 1979 promised to
“create a climate in which commerce and industry can flourish … and increased employment in all parts of the United Kingdom” —[Official Report, 15 May 1979; Vol. 967, c. 48.]
What a shoddy deception those words have turned out to be. I wonder what St. Francis would have said about 3 million unemployed. It is richly ironic that in the month when the number of registered unemployment has topped 3 million, the Tory Party has provided a new contract for Saatchi and Saatchi. At least this time they will not have to recruit the Hendon Young Conservatives to pose as a phoney dole queue for them.
The Government have failed. They have failed on inflation, which is higher now than when they came to office. They have failed on production, which is lower now than when they came into office. They have failed on humanity. They are ready to see unemployment soar above even this week's criminal figure. It is time that they went. It is time that the Prime Minister went. Sooner or later the country will get rid of her.