Orders of the Day — The Economy

Part of the debate – in the House of Commons at 7:13 pm on 11 November 1981.

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Photo of Mr Michael Latham Mr Michael Latham , Melton 7:13, 11 November 1981

I do not consider myself qualified to follow the hon. Member for Motherwell (Dr. Bray). He is an expert economist and mathematician and knows all about exchange rates. I do not know such details and have to take his word that what he is saying is correct. Hon. Members obviously listened to him with great interest and quietly and properly as he made his serious points.

I shall initially direct my attention in the economic debate to the section of the Gracious Speech which deals with unemployment. I do that against a background of September and October unemployment in my constituency of 8·1 per cent. in the western parts, based on Loughborough, and 11·2 per cent. in the eastern parts, in and around Melton Mowbray. The total figure for Melton Mowbray was 1,521 out of work on 8 October. That figure included 56 school leavers. There were 78 job vacancies and only 50 people had been placed in employment during the previous month.

Many hon. Members have worse figures of unemployment in their constituencies, but that is no comfort. I say without hesitation that they are appalling figures. It is the first duty of any Government to create conditions to bring about a substantial and continuing fall in the number of people out of work. I believe that people understand that Britain is not alone in its difficulties and that unemployment is high throughout the industrialised world. Many people believe that the Government are right to stress that industry should be competitive and free from unnecessary restrictive practices and labour disputes. However, the people also look to their elected Government to put the reduction of the giant social evil of unemployment at the top of their political priorities

A figure of 3 million people out of work is completely intolerable. If Ministers accept that simple proposition, as I hope they do, it must follow that they will seek every avenue to improve opportunities for apprenticeships, to help young people into real jobs using real skills, to look again at schemes for job release and early retirement and generally to rationalise and increase all the current methods available to fight unemployment.

The Government must ensure that their response adequately measures up to the crisis of Britain's jobless. They must view with extreme disquiet the fact that tens of thousands of young people are coming off work experience schemes and going straight back on to the unemployment register. They must be concerned with the reports they are receiving from the careers services officers. I quote from the Melton careers officer, Jim Goddard, who refers to the "apathy of youngsters who feel that the YOP allowance is inadequate and that training and experience on the schemes leaves much to be desired. The 18 plus group in particular hesitate about accepting a YOP placement when they know that supplementary benefit will rise to £21·15 in November. New ideas are certainly cropping up, as I know from local experience. Leicestershire county council is to sponsor 76 engineering apprentices through the Leicester engineering training group. The Melton college of further education has told me that the provision on its courses is adequate for those with the necessary interests and aptitude. But the principal says: The danger is likely to be that in the December to January period, when they have finished their courses and, flushed with enthusiasm and new knowledge, they still will not be able to find permanent employment in the area. Why can such keen youngsters not be provided with a further course which might provide a higher level of skills? Why are there so many empty apprenticeship places in skilled engineering work? What will the Government, and Parliament do? We must build up a reservoir of skilled young people, training for real crafts in real jobs.

I turn to the subject of counter-cyclical action. I am very doubtful whether the recession is coming to an end. I fear that we are bound to see another wave of redundancies and de-stocking following the latest rise in interest rates. We do not need another round of deflationary action. Rather, we need more growth to generate more jobs and reduce the unemployment element of the PSBR. However, I accept that Treasury Ministers do not see it that way. They feel that they can make room for tax cuts only if they reduce Government spending still further.

I propose an alternative, and more modest, objective to a tax cuts policy. The Government should try to get the construction industry off the floor. It is one of our largest industries and has nearly 400,000 unemployed people—20 per cent. or more of the total currently out of work—let alone those in the supporting industries and professions which depend on it. The latest forecast from construction employers are gloomy and the private house building market has become totally stuck and dull. As the House knows, I speak from personal experience gained from being the director of a house building company and as one who has worked in that industry for many years.

I do not agree with hon. Members on both sides of the House who call for massive prestige projects such as the Channel Tunnel, Maplin, Stansted and so on. Such projects are highly dubious, in my view. They could make no contribution to the construction work load for many years. We should pursue a more limited and realistic objective. We should go for a major push on housing improvement.

Do Treasury Ministers realise that the 1976 housing conditions survey showed that 1·08 million dwellings in England and Wales lacked an inside toilet, and 800,000 had no bath or shower installed? How can such dreadful figures be tolerated? We can land men on the moon, build the most ingenious computers and microprocessors, but we cannot, in 1981, see that all our citizens' homes have inside toilets.

I ask the Treasury Ministers and those in the Department of the Environment to look again at departmental budgets to find the funds to deal with this housing scandal. Housing improvement is a particularly craft-intensive industry and it would soak up a great deal of unemployment.

Ministers should look again at the Housing Act that was passed by my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) in 1971. That Act raised the level and amount of grant dramatically, with a two-year time limit on the work. The effect of that Act was startling and immediate. In 1971, 197,000 improvement grants were approved in England and Wales. By 1973, that figure was 361,000. Under the previous Labour Government, that figure dropped to a total of 136,000 in 1979. Since 1979, the basis on which the figures were compiled has been changed so that a direct comparison cannot be made. However, under any possible calculation it is still well under 200,000.

In the interests of providing decent living standards for the population and reducing construction industry unemployment speedily, we should launch a strong Government-led campaign called "Project 1986". That project should aim at an annual level of improvement grants of 350,000 a year—the 1973 level. It should be introduced with the intention of providing an internal toilet and bathroom for every householder who requires one over the next five years. It should be financed by a mandatory 90 per cent. grant, plus the mandatory right to borrow the remaining 10 per cent. for those householders who want it, with a cut-off point at the end of 1986.

For the record, the 1971 Act cost £86 million over three years. Even if my proposal cost 10 times as much over five years—which is highly unlikely—it would be self-financing in its reduction of the PSBR. It would provide work for thousands of people in the building industry and have a major ripple effect on the related industries of bricks, cement, timber, builders' merchants and suppliers and the practices of surveyors and architects. It worked in 1971 and it could work again now.

To those who argue that there was serious overheating in construction in 1972 and 1973, I reply that that was because the then Government vastly expanded the credit base at a time when the industry was just beginning to revive anyway. Neither feature exists today. The Chancellor of the Exchequer regularly says that he wishes to keep the money supply under control. And there is no danger of overheating in the construction industry for the foreseeable future. Indeed, there is scarcely a flame, let alone any heat.

If Ministers launched such a campaign, with all the backing and determination that my right hon. Friend the Secretary of State for the Environment can provide, it would bring hope to literally millions of people who are living in squalid conditions and would help one of our major industries to get out of the recession. And the PSBR might actually be lower as a result.

Doubtless I shall be told that Project 1986 cannot be afforded, or that the grants have already been significantly increased. But let us look again at the current miserable figures—fewer than 200,000 improvements grants, compared with 361,000 in 1973. I say that we cannot ignore those bad housing conditions.

I do not favour a large new council house building programme, which would be a slow and ineffective use of scarce resources. But improvement work is quick and highly responsive to consumer demand.

To the doubters, I say that there is considerable danger that our thinking, as a Government, will get stuck in the trench warfare of recession. Victory in such battles of attrition is never certain, and the casualties are unnecessarily high. We should be looking for new ways to outflank the enemy.

The Gracious Speech refers to: the nation's concern at the growth of unemployment we must meet that concern To those who feel that all well be well if we go on as we are, or if we try to get down the PSBR by further deflation and cuts, I say that we are running out of time.

I know that the Government, as true Conservatives, will genuinely wish to respond to the nation's concern, which they have so properly described for us in the Gracious Speech. But the time to act is now.