Unemployment

Part of the debate – in the House of Commons at 12:00 am on 25th April 1958.

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Photo of Mr Frederick Lee Mr Frederick Lee , Newton 12:00 am, 25th April 1958

I join with those hon. Members who have congratulated my hon. Friend the Member for Gateshead, East (Mr. Moody) both on his good fortune in the Ballot and on his good judgment in choosing for discussion such a truly vital subject at this.

On 24th February, in the unemployment debate, I argued the case for a number of things, such as the return to industrial building, licensing, the need for the Ministry of Labour to co-operate with both sides of industry on retraining, more especially among middle-aged people—as the hon. Member for East-leigh (Mr. D. Price) also mentioned. I also argued the general principle of taking jobs to the workless rather than compelling the workless to scramble round the country in search of work. That, in essence, is the principle of the distribution of industry policy that has been so successful. Because I then argued those points, I do not propose to go into detail on them now. Several hon. Members have already done so, and, if I may say so, I thought the standard of their contributions was very high indeed.

We are discussing unemployment against a background of figures that are now over a month old. I do not know whether the Minister of Labour will be able to give us further figures today, but those we have were issued as long ago as 17th March. They gave some of us cause for anxiety. When discussing this during the unemployment debate, the Minister pointed out that the January figures are generally about the peak. He said that it could well be that February, dependent on the weather, would be about the same as January—a little up or down—but that, in any event, by the time the March figures were available we should see an improvement because the seasonal peak would then have passed.

As we know, in the event, the figures issued on 17th March were 37,000-odd greater than those for January. We also know from the figures issued by the Minister that there was a big increase in short-time working and a decrease in overtime working. Therefore, when we look at those figures, and see that the seasonal peak has gone, when normally the figures should be declining but are not, there is reason for apprehension.

We in the North-West are extremely worried. We had an increase of over 7,000 unemployed between February and March, which gave us an overall figure of over 71,000. In his Halifax speech, the Prime Minister said: If the economic climate should change. we mast he ready to take the necessary remedial action. The main burden of the arguments advanced from this side of the House is that, in fact, though the economic climate has changed, we have, as yet, seen very little remedial action.

During the last week, the Trades Union Congress North-Western Regional Advisory Committee delivered to the General Council its report on the picture in the North-West. When we see that the opening words are: The trend in the North-West is towards depression in an aggravated form and we face the future with pessimism. I should have thought that the suggestion made by the hon. Member for Eastleigh that we should not take too gloomy a view, really does not meet the situation.

In that same document we read that there is depression in the textile, brick, dock and tanning industries, while in engineering it is reported that in Manchester, Stockport and Ashton-under-Lyne skilled men are now unable to obtain employment. Of the position on the Merseyside, the report says that there has been a tremendous increase in the number of unemployed, and particularly specifies the building and ship-repairing industries, and sea transport. The report also deals with the steel industry—deals, as a matter of fact, with a company in my constituency—and says that there is a reduction in activity which is causing serious concern amongst those employed in it.

That may not be a typical picture of the whole country, but when one hears, as one did in the unemployment debate, the Budget debates, and again today, voices from industrial areas all over the country telling of increased unemployment, reduced hours and that kind of thing, I suggest that it is just not enough for us to be told that we should not take too gloomy a view of the situation.

The strange position that we are in while we are discussing unemployment is that the natural way of curing it, that is, by stimulating the industrial effort of the nation, is not open to us at all. From the Budget debates, we know that those Ministers who are charged with the conduct of economic policy are unwilling to agree to any measures which have as their objective the very increase in industrial activity that is the only basic answer to the problem.

Indeed, whilst the Government are determined that our economy must run below capacity, the position of the Minister of Labour is bound to be most difficult. The only actions that are open to him in this set of circumstances are essentially first-aid operations to tide us along, and have no basic relevance at all to the main issue.

As I said on 24th February, even if we accomplished the impossible, even if we got all the unemployed and all the vacancies together at the same time, there would still be a very large number of unemployed. On the same date, the Minister pointed out that he could render great assistance—and gave us the figures at that time—if he were informed early enough, by employers, of pending redundancies. I agree with him that it is an important point, and I join with him in asking employers to keep the Ministry of Labour informed on these matters as early as they possibly can. On the other hand, the right hon. Gentleman's ability to do this depends on there being vacancies at all. If there are none, he cannot help. A placing policy, of itself, is not enough if the economic policy of the Government aims, by restrictive measures, at rendering the Minister's efforts abortive.

Last July, there were some 330,000 vacancies, but by February of this year the number was down to about 200,000. The Minister himself has often told us how, for instance, many thousands of ex-service men have been absorbed into industry without any great proportion remaining unemployed. That is very probably one of the reasons why the number of vacancies has dropped. The important point is that we cannot continue that kind of work unless the vacancies continue to occur. We know that the run-down in Service personnel is by no means complete, and that, if we were now starting the operation for placing ex-Service personnel in industry, and if the number of vacancies were what it is today, the right hon. Gentleman could not achieve the success he achieved earlier.

We are so often told that it is quite useless to employ people in jobs whose value is of little or diminishing importance to the country. We all see the need for new industries and the running down of those that have no future, as far as can be foreseen, but the fact remains that, while the latter are running down, Government policy makes the development of new ones very difficult.

This means in effect that the unemployed have not a choice of jobs of value to our economy but are compelled to scramble for any job available irrespective of its value to the national effort. This is particularly deplorable for young people, as it leads to all sorts of blind alley occupations which, if there were an adequate choice open to them, would not receive any consideration by the parents of such young school-leavers.

It is interesting to look in the Economic Survey at the distribution of labour during the past 12 months. During 1957 the numbers in the Armed Forces and the women's Services declined by 111,000, but, despite this, manufacturing industry personnel increased by only 2.000. In the last analysis it is those manufacturing industries upon which we must depend for our export effort. The number in the distributive trades increased by some 48,000. I am not trying to decry the importance of certain aspects of distribution, but comparing the numbers in distribution and those in manufacturing industries, I suggest that we are getting altogether out of balance in this matter. The numbers in professional and financial services increased by 27,000, while building and contracting lost 26,000. Agriculture, about which the hon. Member for Devon, North (Mr. J. Lindsay) was speaking, and fishing lost 29,000.

The picture as a whole is not a healthy one. It does not bear out the suggestion that we are getting a healthier distribution of labour. There are not now available the new types of industry upon which we must depend so heavily. It means that men who have served apprenticeships and become skilled in industry are unable to obtain work as skilled persons once they have lost their jobs in the industries in which they are skilled. They then become the equivalent of unskilled men, and the type of contribution they make to the national well-being must be judged against the fact that they are no longer in the ranks of skilled personnel. In saying this I am not thinking so much of the persons themselves as of the effect on the economy. Thus we see that the idea of a constructive redistribution of manpower is further away than ever.

We on this side of the House have often criticised what we have described as the blind credit squeeze because it does nothing 10 establish priorities in industry. What advice have the Government ever issued on the sort of new industries they think are the most appropriate for us to develop in view of our own skills and raw materials? I am thinking in terms of our share of the world market and the increasing need to concentrate upon the sort of products which could give us back a better place in world trade. I know, of course, that there is a difference of philosophy, a clash, if hon. Members like, between this side of the House and the Government on this question of the Government's interference in industrial matters, but surely we have now reached the point where even in Conservative quarters it must be agreed that the profit motive as a guiding principle is not always the best criterion of successful development in the industries which we feel are the most important. During this period when we have this slack in the economy I hope that the Government will increase their effort and suggest to both employers and the trade unions the type of development which they feel would be most beneficial to the nation in the long run.

I have complained on previous occasions about the Government's policy in running down both civil employment and the numbers in the Armed Forces at one and the same time. I think it is a most fantastic position. The obvious corollary to a run-down in the numbers on the one hand is to do one's utmost to enlarge them on the other, but despite the advice we have tried to give the Government, the Government have always insisted, at the very moment they run down the Forces, on exercising this pretty grim credit squeeze, which does not give an increase in civil production.

From our experience we know that the key to the employment of the general type of worker is to expand employment among the skilled ones. The ratio of unskilled in employment rises considerably with each skilled man employed, and, of course, the converse is also true. It is, therefore, a frightening fact that we now seem to be going into a period in which more skilled people are losing their jobs. I have said already that we have had reports from the Manchester area showing that, though we have there a diversity of industry, light, heavy and medium, skilled fitters are unable to obtain employment within industry, and that in the sorts of trades upon which we rely very heavily for our exports.

The hon. Member for Eastleigh, rightly, I thought, said that we ought to look at how we are going to expand certain types of industry in order that we can get back to a more viable economy. If the Government are accepting his advice—if, in other words, they agree that there are priorities in industry—I would ask them to bear in mind one or two considerations. We have been told that the real needs for depressing production really stem from the fears of a balance of payments crisis. Therefore, I should have thought that one of the questions we should have been looking at would have been how to expand that type of industrial production which has a comparatively small degree of imported raw materials within it.

I understand that the average import content of the whole of our exports is about 20 per cent. In engineering as a whole—I know that one is generalising, and that there are various facets of engineering—the import content is pretty low, about £12 to £100 in exports. Therefore, it is a significant point that if we can increase the production of that type of product which contains a relatively small import content it surely cannot be argued that that can possibly result in a run on sterling. My hon. Friend the Member for Gateshead, East comes from the building industry, and although this export argument does not apply to that industry the fact is that the import content of building is something like £9 to £100 production. I should like to know from the Government how it can possibly be thought that to expand this sort of activity in our industry can possibly result in sterling crises.

I must confess to the House that I was daring enough the other day to have a look at some of the speeches I used to make in this House. That is always a risky thing to do, I know. I did it for this reason. I thought I recalled that for many years one concentrated one's efforts here on trying to show to the workers that the greatest thing we could now accomplish would be vastly to increase our productivity. We all argued that from 1945 onwards. When I read again the speeches which I made only a comparatively short time ago and looked at them in the context of our Present policies, I really thought what confounded nonsense it must all have seemed.

Either that was nonsense or this is. I refuse to believe that whereas, up to two or three years ago, it was right and proper to ask for a maximum effort by every individual in industry, we have now, somehow, arrived at a situation where it is almost criminal to use up too much of the raw materials that we have to import.

The question that we are now discussing is how we shall rescue the nation from the successful efforts of the Government in damping down economic expansion and industrial production. The confusion which this great change must make in the minds of the workers—and, even more, the workless—can have the most dangerous consequences. I wonder what sort of response there would now be to appeals from trade unions for the more active participation of their members in the work of production committees. It may be that before long this is the sort of thing that we shall have to rely upon to a very large degree. It is therefore a great tragedy that at this time we should be unable to get the Government to agree to get rid of their restrictive policies towards industry. That is a terrible situation for any great industrial nation to find itself in.

It is quite true that as yet we have not mastered the technique of combining full employment with a balanced economy, and I am quite certain that there is no hope of achieving that by deliberately refusing to allow the nation to produce the maximum wealth of which it is capable. I should have thought that our industrial policies should contain certain basic principles. They should have within them the possibility of allowing man to appreciate the real dignity of production, employment, and industry—a conception, which one has tried to nurse in one's mind, of the British worker striding confidently into a new society in which manual drudgery gives place to scientific inventiveness in which the picture of a cringing wretch, fearful of unemployment, would become a nightmare of another age. We want to see it made possible for organised labour not only to accept but to demand a new dispensation, in which the petty restrictive practices of today will give place to broad expansionist policy.

But how can we hope for that while the Governments stick, leech-like, to turgid, unimaginative policies, which place a premium upon safety-first tactics? It is not by the continuation of that type of policy that the name of Britain can again become synonymous with industrial progress, and I hope that this debate will do something to impress upon the Government the need for a change from their policies, in order that we can again earn our way in the world and British industry can take its place with the industry of any other country in the world.