Orders of the Day — Unemployment

– in the House of Commons at 12:00 am on 17th November 1958.

Alert me about debates like this

Motion made, and Question proposed. That this House do now adjourn.—[Colonel J. H. Harrison.]

9.18 p.m.

Photo of Mr Victor Yates Mr Victor Yates , Birmingham, Ladywood

Tonight, I have the opportunity of raising the vital question of increasing unemployment in Birmingham and the Midlands generally. Recently, the House debated for two days the subject of unemployment, and you will recollect, Mr. Speaker, that apart from Wales, Scotland, Ireland and Lancashire, the various areas of the country had no opportunity of presenting their views.

I want to bring to the notice of the House the vital importance of this matter from the point of view of Birmingham, the heart of industrial England. It is important not only that we should consider what is happening in the so-called depressed areas, but in and around Birmingham. Certain measures could be taken even now to assist them and, ultimately, the whole country.

Unemployment in Birmingham and the Midlands area is worse today than at any period since the fuel crisis of 1947. In October of this year the number of unemployed in Birmingham and throughout the Midlands had doubled since October, 1957. It had risen from 5,752 to 11,126 in Birmingham and from 20,619 to 40,907 in the Midlands, which meant that the whole of the Midlands had an unemployment figure 5,000 in excess of that for the whole of Wales and more than half of Scotland.

I realise that in terms of percentages it is true that in Birmingham, not so very long ago, we had less than ½per cent. unemployed, but that figure has gone up to 1·9 per cent., and for the whole of the Midlands it is, of course, higher still. That raises important and fundamental matters.

Whereas we in the Midlands have been able to take into our industry unemployed from Wales, Scotland, Ireland, India and Pakistan, today we are facing a much more difficult situation. In Birmingham, there are 2,600 coloured workers unemployed, so it will be realised that it is difficult for us now to assist the country in that way, as we were able to do a short time ago.

I want to refer to the length of time of unemployment. It is rather alarming that the length of the period of unemployment of many of the workers has increased enormously, so that in the last year, again from October, 1957, to October, 1958, the number of unemployed who have been out of work for more than two months has increased in Birmingham from 1,778 to 4,750.

When one looks at the number of unemployed who have been unemployed for more than six months, the position is even more alarming, because in the past ten months that number has trebled in Birmingham from 566 to 1,692, and, of course, the figure is much higher in the Midlands.

I spoke the other day to a man in my my constituency who had been unemployed for two years. When we get high figures of men and women who have been unemployed for a long period—and I call six months a long period—it raises a good many problems. There is also concealed unemployment, that is, of people who are not registered, for example, married women. Many married women, of course, are not registered and are not counted as unemployed if they have left industry within the past year. Many hundreds of married women have left industry within the past year.

Many industries in the Midlands have gone on short time, and I and my colleagues, having met the Minister of Labour and the chamber of commerce and made investigation into this problem, are convinced that the unemployment percentage would be very much higher, and certainly above the average, if the employers, at the request of the trade unions, had not agreed to share the work. We have short-time working on a considerable and increasing scale.

I will mention some firms which have gone on to a four-day week or where part of the factory is on a four-day week. They include Fisher and Ludlow Ltd., Morris Commercial, Stewarts and Lloyds Ltd., B.S.A., Co. Ltd., the Rover Co. Ltd.—on the Land Rover—Morgans Drop Forgings, who have gone to a three-day week, Joseph Lucas Ltd., Bur Metals and others. The firm of A. E. Griffiths of Smethwick is reducing its staff for the first time since the war. The whole of the Black Country and the Midlands is disturbed at these tendencies. Only today I have been informed that the Metropolitan-Cammell Carriage and Wagon Co. at Saltley, in the Midlands, which produces railway rolling stock, has informed the shop stewards that it will have to carry out substantial redundancies in 1959.

Cannot something be done to prevent this? We appreciate that in Scotland, for instance, it is difficult to solve the problem without industry being taken to Scotland, but in Birmingham we have the machinery, the equipment and the capacity, and if action were taken now in an issue such as the production of railway rolling stock—which is a question of investment—surely it would be possible to prevent these redundancies from adding to the problem of Birmingham and the Midlands.

Why should the British cycle industry be brought to the serious pass in which it is today? I want to quote from a letter which I received, dated 11th November, from the British Cycle and Motor Cycle industries' Association, Ltd. This letter informs me of the grave position of the cycle industry—an industry which the Government could assist by taking action even now. I am informed that the Financial Secretary to the Treasury recently received a deputation from the British Cycle and Motor Cycle Industries' Association, Ltd., and questioned the deputation as to whether the removal of hire-purchase restrictions had benefited the cycle trade. The letter states: …We were able to say that the effect had been negligible. This is in line with the industry's long-held belief that the main impediment to cycle sales is the incidence of Purchase Tax rather than hire-purchase restrictions…The general situation in the cycle industry is still very grave, as is evidenced by the fact that in Birmingham between three and four thousand workpeople have been made redundant, and in Nottingham, the other main centre of cycle production, Raleigh Industries, Ltd., are working only a four-day week. Home deliveries of bicycles this year are likely to be the lowest recorded for twenty or thirty years, and the industry's production is now only a little over 50 per cent. of its peak in 1951 when four million units were produced. When I heard the President of the Board of Trade talk in the House the other day about the increasing confidence of employers, I could not help but think that he certainly could not include in his con- sideration the British cycle manufacturers.

That is a very serious position. Today, we have an industry working to only about half of its capacity. The Government could, and should, help it to compete in the export market and also give it a better opportunity to develop the home market, which would, ultimately, benefit the export market additionally.

For the first time since the war, such skilled workers as pattern makers are unemployed, and are accepting unskilled work, and though the trade unions in Birmingham are not in a panic, they are very disturbed and despondent, not only about the present position but about what the next year or two may hold for them.

In my maiden speech I referred to Birmingham as a city of a thousand trades. It has always been known as that, but it has now changed the pattern of its industry. Even since I made that speech, the city has changed its character. Although we have a very large variety of industries, our fortunes have been increasingly linked to the motor-car industry, and it would be fair to estimate that between 80,000 and 100,000 Birmingham workers are affected, directly or indirectly, by that industry.

That means that, perhaps, a quarter of a million of the population—the trade unions would put the figure higher—have come to depend to a large extent upon the prosperity of the motor-car industry. But even though it has been flourishing—and had it been otherwise, Birmingham's position would have been very grave—there are within its ranks 933 unemployed workers. That shows that not even the motor-car industry has been able to function to full capacity, and if it somehow fell down on the job in the next few months, Birmingham could be faced with, perhaps, the biggest unemployment problem of the century.

Therefore, not only is action necessary in the cycle industry and in other industries that are finding things extremely difficult—and Purchase Tax and the like add to their difficulties—but the motorcar industry should also be assisted to increase its productivity, reduce its cost of production per vehicle and so increase its exports.

That is the case I put to the House tonight. We are disturbed because the unemployment figure in Birmingham and the Midlands has doubled in a year, and because individual periods of unemployment for both men and for women have trebled in length in a year. This is a very important barometer. Birmingham is the centre of the greatest industrial activity, and the Government certainly ought to take some action to enable the city's industries to increase their productive capacity.

Photo of Sir Spencer Summers Sir Spencer Summers , Aylesbury

Could the hon. Gentleman say what action?

Photo of Mr Victor Yates Mr Victor Yates , Birmingham, Ladywood

I have mentioned the cycle industry. I do not think that the hon. Gentleman was here when I read a letter from the British Cycle and Motor Cycle Industries' Association Ltd. stating clearly—and it has been said in the House—that if Purchase Tax were removed the industry would be assisted. After all, we do not need to wait for the Budget to do this.

It is certainly difficult to say what can be done to assist the cotton industry in Lancashire and other industries in Scotland and Wales. Birmingham has been asked to transfer much of its industry. There are some industries in Birmingham which could function much more efficiently if they were allowed to continue without interruption, but Birmingham has been transferring some of its industry. I do not object to that process, but if we are to continue to transfer our industry it should be assisted, and I believe that Purchase Tax should be removed. I do not see why the cycle industry should have been brought to this sad state of affairs, in which a number of factories have been closed and from 3,000 to 4,000 men made redundant.

The same could be said about the motor car industry. It has done a remarkable job, but I believe that even in its prosperity we should do all we can to maintain it at full capacity. If we ignore the needs of an area regarded as prosperous, we do so at our own peril. Birmingham has contributed to the welfare of the country by its prosperity, but we are now facing a very difficult situation. I hope the Minister will be able to tell us that there are means, which the Government are considering, to enable Birmingham to become more prosperous. We should not have such a problem as, for example, 2,600 coloured workers unemployed and an increase in the numbers unemployed from 5,000 to 11,000. I have said nothing about the young persons involved. The figures which I have given include all workers, young and old. I mention this because I believe it is vital that the plight of the Midlands, and Birmingham in particular, should be understood, and action taken to assist not only my area but the whole of the country.

9.39 p.m.

Photo of Mr William Wheeldon Mr William Wheeldon , Birmingham Small Heath

The information and the figures given by my hon. Friend the Member for Birmingham, Ladywood (Mr. V. Yates) reflect the feelings and, indeed, the fears of many employees in Birmingham today. They also reflect the feelings of many of the employers, too.

It is not my intention, in the short time which I shall keep the House, to repeat what has been said by my hon. Friend, but I want, first, to draw attention to one of the aspects of unemployment in Birmingham that affects my own constituency more particularly. I do not think that that is a selfish way of dealing with it, for, after all, each of us should be concerned with those matters about which we know perhaps a little more than do other hon. Members, and which affect the people whom we represent.

My hon. Friend has already mentioned the Metropolitan-Cammell Carriage and Wagon Company. It will be known to hon. Members that this is an important company, important not only to Birmingham, but in relation to the country as a whole. From the extent, nature, and volume of its products, it can be said that it is a tremendous asset in the industrial make-up of our country. To a very substantial degree, its products go overseas, and I think that there is hardly a country in the world today which does not, in one form or another, use the well-known products of the MetropolitanCammell Carriage and Wagon Company.

Leaving this aside for a moment, I want to remind the Minister and the House that, apart from these products which are sold overseas, the remainder, or a large part of the remainder, of the company's products goes to British railways, and, that being so, the policy of the Government towards British Railways is an important thing for this company and its employees. The employment position at the company this year is—I will not say an alarming one, or even a bad one—certainly one which is not very bright. That position is deteriorating. and, from the evidence given to me by, the workmen and their trade union representatives, I believe that there is evidence for saying that next year the position of the company and of employment there will be much worse than it is this year.

Skilled men have been discharged, and are being discharged today. As my hon. Friend has pointed out, there is likely to be, in the opinion of the trade union representatives, considerable redundancy. I want to put this point to the Minister. Surely he, together with his colleagues in the Government, must be aware of the relationship between a company of this kind and Government policy towards British Railways? Can he tell us anything tonight to give the men at Metropolitan-Cammell's some hope that there will be, almost immediately, or, at any rate, in the near future, additional contracts, because it is upon these contracts that they will rely for an early diminution in the number of unemployed people in that area and attached to that company? From inquiries I have made, I find that they cannot go ahead unless they get this additional work from British Railways.

This company is important not only to the men whose livelihood is obtained from it, not only to Birmingham, but, surely, as I think the Minister will agree, to the country as a whole, because of its products which it sends overseas and because of the skill which is assembled in its works. I speak as one who, years ago, had considerable experience in engineering factories and I know that we cannot disperse skilled men such as are now employed at Metropolitan-Cammell's and hope to reassemble or get them back again easily.

Very often, and particularly nowadays, skilled men who have served long apprenticeships to engineering, once they have got out of a job of that kind, go into what we term semi-skilled, or indeed, in some cases unskilled work, and sometimes can earn as much as, and sometimes more than, they were getting as skilled men. I hope, therefore, that the Minister will be able to say something particularly on that point with reference to the work available to Metropolitan-Cammell's by way of contracts from British Railways.

In conclusion, I want to say a word about unemployment in general. Birmingham has, in a sense, been fortunate during the last thirty years. It has not experienced the high level of unemployment suffered in many other places. The reason for this probably lies in the diversification of our industries. The level of unemployment in Birmingham and the Midlands today is still comparatively low. We do not assert the contrary. Nevertheless, the fact that it is moving up now instils in the hearts of the people employed there the fear that, if this upward trend is taking place in a city like Birmingham, which has always had a comparatively good record of employment, much more serious things may be in store for the future.

According to my information, it is what I may call the basic sectors in the engineering industry which are now beginning to suffer unemployment. I refer to such trades as pattern making, foundry work and machine tool production. Anyone who has any connection with engineering knows that, without such things, it is no use asking for the completed product. These basic sectors are essential to our industrial life, and as unemployment rises there, that is an indication, a barometer, as it were, showing the general tendency in trade. It means that other workers will very soon join the queues of unemployed at the employment exchanges.

My hon. Friend the Member for Lady-wood did well to mention the fact that many people are on short time in Birmingham today. If this short-time working were translated into terms of unemployment, the figures would increase considerably. I do not pretend to be able to give an exact figure, and I do not know whether the Minister has an up-to-date figure, but I should say that unemployment would be increased, in those terms, by at least 20 per cent.

We bring this matter before the House tonight not only because we are concerned with Birmingham, with the prosperity of the workers there and with the welfare of their families. We do so because we are earnestly concerned with the state of the country as a whole. After all, Birmingham is the industrial heart of Britain. We often speak of the need to compete in the world's markets, of the need to keep abreast of countries like the United States, Germany and the U.S.S.R. Unless we have a continuing high level of production in places such as Birmingham, the whole nation will suffer.

I hope that the seriousness of the matter has found its reflection in the Minister's mind and that he will be able to say something tonight to reassure us that the policy of the Government is such that unemployment in Birmingham will decrease and that we shall have more work for our men and their families there.

9.50 p.m.

Photo of Mr John Stonehouse Mr John Stonehouse , Wednesbury

I should like to congratulate my hon. Friend the Member for Birmingham, Ladywood (Mr. V. Yates) on his initiative in bringing forward this subject. The West Midlands is a part of the country which is so often neglected when we talk about unemployment, because our figure for unemployment is less than that for the country as a whole. But the figure is serious and it is increasing. As has been said, the figure is two or three times higher in some areas than it was a year ago. Not only is full-time unemployment growing, but there is also a considerable amount of short time and concealed unemployment. If the recession grows a great number of employers will be unloading their surplus staff, and this will add to the figures at the employment exchanges.

When there is unemployment in the West Midlands the economic position of the country is very serious. The West Midlands normally is a prosperous part, developing a tremendous amount of exports for the prosperity of our country. If our men are unemployed in some of the key industries, then there is something seriously wrong with the economy of Great Britain. If one looks closely at the position, one finds this to be the case. Unemployment has been growing not only among unskilled men, but also among skilled men. The steel industries are now working at nearly 20 per cent. below capacity. Steel output is now much lower than it was a year ago.

A few weeks ago I went to my own employment exchange in Wednesbury and I was appalled to find so many men standing in the queue. I assume that most of them were unskilled men, but I found, to my surprise, that a great many of them were skilled men who had not known unemployment before. Some of the older men had not known unemployment for twenty or twenty-five years. These are men who should be in employment. They are not trying to shirk jobs. They are men who should be adding to the productive wealth of the country.

There are two reasons why unemployment is increasing. One is the recession, for which the Ministers must accept responsibility. They must accept responsibility for the lack of buoyancy in the economy. They must do their best to expand production by revitalising the economy. There is also the reason which has been making itself felt in many factories in my constituency, namely, the development of automative techniques. It is unfortunate that factories introducing automative equipment are not bringing the trade union representatives into closer consultation with them in these developments.

What happens so often is that men are turned on to the scrapheap without having due notice of the firm's development programmes. I believe that we are reaching the time when we must make it incumbent upon employers who are changing their production techniques in this way—and I appreciate that it takes several months to plan—to work out plans well in advance in consultation with the trade union so that men are not suddenly turned out of a job.

Only last Saturday I read in my local newspaper, the Wolverhampton Express and Star, an announcement that 14 more men will be sacked from the Prothero Steel Tube Co. Ltd., in Wednesbury. This firm is a subsidiary of Stewarts and Lloyds Ltd., which is now engaged on a very expensive advertising campaign. I am sorry that there are so few Conservative Members present. I believe that there is only one Conservative Member representing a constituency in the Midlands, which is a disgrace, considering the importance of the subject.

Photo of Mr William Yates Mr William Yates , The Wrekin

I am looking after their interests; it will be quite all right.

Photo of Mr John Stonehouse Mr John Stonehouse , Wednesbury

I congratulate the hon. Member on coming into the debate. He was a little late, but we are glad to see him. I only regret that more of his colleagues are not present to pay attention to the most valuable points which have been raised by my hon. Friends.

I wish this firm, Stewarts and Lloyds, would spend more of its energy in creating employment for its workers rather than turning them on to the scrapheap. This is what a spokesman of the firm said after those 14 men were sacked—and this is, I think. a prize statement: This is not redundancy. They are surplus to immediate requirements. We have got to do something to help these men who are being thrown on to the unemployment lists for the first time since the war, many of them for the first time in their careers, I beg the Parliamentary Secretary to speak to his right hon. Friends and make sure that more attention is given to dealing with the unemployment which is steadily growing more serious in Birmingham and the West Midlands.

9.56 p.m.

Photo of Mr John Hynd Mr John Hynd , Sheffield, Attercliffe

I do not want to take up much time in a debate begun by hon. Friends of mine from Birmingham about conditions in their city, but I should like to remind the Minister that this unemployment we are discussing is not a matter only for the Midlands. Indeed, one of my hon. Friends has already drawn attention to the wider aspects of the problem of unemployment, and I should like to take this opportunity of drawing the Minister's attention to the special position developing in Sheffield, which is part of the Midlands, the north Midlands.

I do not intend to go into the wider aspects of unemployment, its causes and cure, and so on, at the moment, but the Minister must be aware that, as distinct from the situation described by my hon. Friends who have spoken so far, the position in Sheffield, far from being below the national average, is above the national average. It provides one of the worst indices one can cite upon the problem.

As the Minister will know, from 1948, anyhow, until a few weeks ago Sheffield was one of the areas with the highest employment in the country. There were vacancies in Sheffield when there were no vacancies in other parts of the country. People were going to Sheffield because it was regarded as a place where there were more jobs available than in most other places.

Sheffield had been enjoying that position for many years since the war, but now suddenly we find that the steelworks are beginning to pay off workers, lay off shifts, close down furnaces, and that there is a tremendous amount of hidden unemployment caused by short-time working. On top of all this there has been a considerable running down of production as a result of the dismissal of many women workers who had been working in factories since the war. In total, the rate of this downward slide, the rapidity of the growth of the snowball of unemployment in Sheffield for the first time since the war, is infinitely greater than is apparent from the official figures.

It is not only steelworkers and the workers in allied industries who are feeling the impact of this—and not only feeling the impact, but resenting it, and resenting it very loudly. There are also small traders, shopkeepers in the east end of Sheffield, where most of the workers live, in my division and in the divisions of Brightside and Park, and the other east end areas. Until the present time, the small shopkeeper was having a better time from the business and income point of view than he had ever had in his life or at any time in the history of the country. That was since the end of the war, from 1946 to 1947, until the effects of the economic policy of this Government began to be felt.

Now we have this picture, not after six years of Socialism but after seven years of Conservatism. We have in Sheffield and in other cities a situation which the entire population of this country has felt, and many have believed for years, belonged to pre-war times.

It being Ten o'clock, the Motion for the Adjournment of the House lapsed without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]

Mr. Hynd:

We have been told over and over again on election platforms, "Do not talk about the inter-war years; that is all over and done with"; but it is not. Many of us have tried to persuade people that it is not over and done with. The reason why from 1946 to 1951—and afterwards, because the impetus carried on—the old days of unemployment and misery, slums, and the rest, were regarded as of the past was that in 1945 an entirely new policy was brought into being in this country. There was an entirely new approach, namely, to organise the economy of the country on the basis of creating full employment. That was why people began to accept it as inevitable.

Here is a complete denial of all the Government and all the Tory Party claims that full employment after the war was merely an accident of the circumstances of the post-war sellers' market. It was nothing of the kind. Full employment was created by the deliberate policy of the Government of those years. Now unemployment is being deliberately created as a result of the policy of this Government. That is now becoming crystal clear to hundreds of thousands, if not millions, of people who never saw it before, many of whom did not believe it when they were told.

There is the situation, and I should like the Government to tell us what they propose to do about it; particularly what they propose to do in cities such as Sheffield and Birmingham where the basic material of our economy—steel, and associated with it coal, and the byproducts of both these industries—is so important. Once this starts, it is extremely difficult to correct or to stop it. Now it is going on.

What do the Government propose to do about it? There are one or two things which perhaps the Minister will be able to tell us the Government can do to help here and there. For instance, we have learnt recently that two new strip mills are to be built, one in Scotland and one in Wales. Could the Minister tell us that consideration may be given to trying to hold the position in Sheffield, or to correct it in corners, by placing some of the orders for the erection of these new strip mills with the steel industry of Sheffield? We hope he will tell us that this will be done, even within the confines of this Government's policy. But even that would be only patchwork. The basis of all this is the question whether or not the Government intend seriously to try to do some- thing about the general organisation of the economy, and I want to make one final comment which is highly relevant.

In the steel companies in Sheffield and Birmingham unemployment is being created because there is a temporary recession in the demand for steel and people are drawing on stocks, we are told. The first reaction of the employers is to pay off the men, to cut down the shifts, to cut off overtime, to close down furnaces, to put men on the streets and leave them to the mercies of the employment exchanges. Yet these same companies are spending hundreds of thousands of pounds in trying to tell the people that if steel were again nationalised there would be a terrible state of affairs for the workers, when all this has happened since steel was denationalised.

The steel workers in Sheffield, Birmingham and elsewhere are now asking themselves what would be their position if steel were nationalised. They are looking at the position in the coal mines where again there is a serious position owing to the lack of demand and overstocking for the moment; but there the workers are not being paid off in batches to wait until the market wakes up. There the industry is organised in the national industry, and the men are looked after. The steel workers are beginning to think about their position.

I hope that the Minister will be able to tell us something about the patchwork efforts that he proposes and whether the Government intend to make any serious effort to correct the general slide which is taking the country into a position which could rapidly bring us back to the situation of the inter-war years, which we thought was over and done for.

10.5 p.m.

Photo of Brigadier Terence Clarke Brigadier Terence Clarke , Portsmouth West

The Opposition have made great play of the fact that they believe that the Government do not want full employment. I do not believe that to be true at all.

I want to talk about unemployment not in the parts of the country about which hon. Members opposite are worrying, but in Portsmouth, where we have more than the national average because of a certain amount of rundown in the Navy and the Army. A perfectly good depot at Hillsea is being abandoned. A wonderful thing happened. British Nylon Spinners wanted to come to the Portsmouth area. What did the Conservative Government say? It said, "No, you go to the Midlands and the North, where there are a lot of Socialists. We will not have you in Portsmouth."

I believe in private enterprise, and that a private firm spending private money should be allowed to go where it likes to set up its industry. If it wanted to go to Eastbourne and Bournemouth, I would say, No, there is no unemployment there. "However, Portsmouth has more than the national average of unemployment at present, and I see no reason why private enterprise should not take a factory there.

It may be said that there is more unemployment in Hull or Northern Ireland. From a Socialist point of view that may be a good argument why one should direct industry, but I do not believe that industry should be directed. There should be complete freedom for a firm to go where it likes. This firm regarded Portsmouth as suitable. Why should a Tory Government direct a good private enterprise firm to go elsewhere? If the Government's argument is carried to its logical conclusion, we shall get every factory directed to a place to which it does not want to go, and it may not be the best place for these industries. Who best understands where a factory should be situated to produce the goods that it is required to produce? It is the managing director, or the technical advisers of the firm.

I am surprised that a Tory Government should decide that the firm should go elsewhere. When I argued the case at the Board of Trade I was told that there was no direction of industry and that it merely told industries where they could not go. If that is not direction, I do not know what is. Will the Tory Government go back to being Tories once more and let factories go where they wish, especially when the city selected is one with unemployment above the national average?

Photo of Mr Arthur Bottomley Mr Arthur Bottomley , Rochester and Chatham

Is the hon. and gallant Gentleman not aware that the Government neglect dockyard towns altogether?

Photo of Brigadier Terence Clarke Brigadier Terence Clarke , Portsmouth West

I am not aware of that. If the right hon. Gentleman wants me to continue making a speech on dockyard towns I am prepared to talk for another ten minutes. I know that the right hon. Gentleman and I have equal interests in that respect, but there are other hon. Members who wish to speak. I do not mind how many dockyards are closed as long as Portsmouth is not closed.

10.10 p.m.

Photo of Mr Richard Winterbottom Mr Richard Winterbottom , Sheffield, Brightside

I shall not keep the House more than two minutes. The Parliamentary Secretary wishes to reply, and I wish to give him time to answer the questions which have been asked. Like other parts of the Midlands, Sheffield has a growing problem of unemployment, as was effectively explained by my hon. Friend the Member for Attercliffe (Mr. J. Hynd).

Unemployment cannot be cured by the easing of hire-purchase restrictions. One of the most important illustrations of the effect of growing unemployment in places like Sheffield is that Members of Parliament become inundated with problems of hire-purchase commitments which cannot be met because of unemployment. Last week there was some criticism in a Sheffield newspaper about a speech which I had made on this subject. It was said that I was politically biased.

Those who replied to that criticism, and who said that something must be done to get the wheels of industry running again, were not merely factory workers but were also the leaders of industry, who were concerned that their factories were not running to full capacity and that steel production was less than 75 per cent. capacity—which means chaos in Sheffield.

Unless the unemployment in the heavy industry belt of the Midlands decreases, the country is due for increasing unemployment to an extent far greater than is now the case. That is the argument which must be answered if the unemployed are to get any satisfaction.

10.12 p.m.

Photo of Mr William Yates Mr William Yates , The Wrekin

I very much regret that I was not present to hear the speech of the hon. Member for Birmingham, Ladywood (Mr. V. Yates), who has raised a very important subject which affects all the Midlands. However, the problem must be put into its perspective of the general trend of world trade. When I returned from the United States it was clear that that country was going through a form of recession which has since been reflected in Germany and other European countries.

When the tempo of world trade slows, not so much business is available. I do not agree that the responsibility must be laid at the door of the Government. This slowing down in trade is a general world tendency which the Government are doing their best to correct. So far, Great Britain has been extremely fortunate and has not suffered as have Germany and the United States.

As the United States is probably the one nation which appreciably helps to control world trade, and as it is known that steel production in the United States has now increased, that the general threat of unemployment there has ended and that business there is at a higher level of activity than before, I suggest that we are suffering, with a slight time lag, from the general world recession, and that it will not last.

Photo of Mr Victor Yates Mr Victor Yates , Birmingham, Ladywood

Not even in the cycle industry in Birmingham?

Photo of Mr William Yates Mr William Yates , The Wrekin

Everyone knows that the motor car industry in Birmingham has had an all-time record of production this year, as well as an all-time record for exports. The country is extremely grateful for that.

Unemployment in my area is between 2 and 3 per cent., a rate which was described by Sir Stafford Cripps and the Leader of the Opposition as tolerable in any balanced economy. There definitely are problems of increasing unemployment in other parts of the country, and certainly in some of the ports, but having watched the developments in the United States' economy I cannot honestly believe that this country will go into that form of recession. Even the Leader of the Opposition said that he did not think that there was any danger of a slump or recession next year.

Before hon. Members opposite start criticising the Tory Government, or moaning about unemployment and saying that the Tory Government brought it about, they should remember that the Government are not responsible but are doing all they can to reduce unemployment in all areas. I am sure that hon. Members opposite will hear a very good reply from the Government if they are patient.

10.16 p.m.

Photo of Hon. Richard Wood Hon. Richard Wood , Bridlington

It says a great deal for the Midlands that it has been able to act as a magnet and attract members from North and South to a consideration of its affairs.

I was in the Midlands and in Birmingham in late September, and I was made very well aware by the trade union representatives who talked with me of their concern at the problems to which the hon. Member for Birmingham, Lady-wood (Mr. V. Yates) has referred. They raised particularly the point which the hon. Member for Birmingham. Small Heath (Mr. Wheeldon) raised—the ugly appearance of unemployment in certain parts of the engineering industries, and I fully took their point.

As the hon. Member for Ladywood pointed out, the percentage unemployment has increased in the last year from 1 per cent. to 1·9 per cent. This rise gives not only him and his hon. Friends and trade unionist cause for concern, but also causes concern in the Ministry of Labour, because in its most literal sense any rise in unemployment is obviously the Ministry's concern. As my hon. Friend the Member for The Wrekin (Mr. W. Yates) pointed out, however, it is important to keep a sense of perspective in this matter. The first point to keep in mind is that unemployment in the Midlands is considerably below the national average of 2·3 per cent., and although many have been out of jobs for a long time nearly 6,000 of the year's increase of 20,000 on the unemployed register are temporarily stopped. The hon. Member for Ladywood very fairly made the point that the present figure is almost double the extremely low figure of a year ago

Having said that, I would add that I am well aware that the number who are registering as temporarily stopped on any day do not account for the whole volume of under-employment. It is quite true that short-time working in the Midlands generally has considerably increased during the last year, but it is interesting to note that the figures of short-time working show considerable variation, and whereas in vehicles—part of which industry the hon. Member for Ladywood mentioned—short-itime working has increased from 400 to 10,000 this year, in pottery it has decreased from 2,400 to 1,600. The increase in short-time working is not consistent throughout industry.

I fully appreciate the energy of the hon. Member for Ladywood and some of his friends in investigating the difficulties of unemployment facing his constituents and others in Birmingham and the Midlands, but he is not quite accurate in suggesting that this is the highest figure since the fuel crisis. Until September, 1956—except for the 1947 figure—unemployment was negligible. In the summer of 1956 the difficulties in the motor-car industry drove the unemployment figure above 3 per cent. but soon after it returned below the national average and has never since risen past it. That is the present position.

It is significant that between September and October of this year, when unemployment was increasing seasonally all over the country by 38,000, as my right hon. Friend announced, there was virtually no change in Birmingham. Indeed, there are various reasons why the seasonal increase in Birmingham would naturally be less than in other parts of the country.

The hon. Member for Lady wood and other hon. Members mentioned the problem of the employment of boys and girls leaving school, and this is naturally something which has very much exercised my mind over the last few months. In September, when I visited Birmingham, I was fortunate enough to attend a meeting at which the Lord Mayor took the chair and which was called to discuss the possibility of employment and training opportunities for the boys and girls in the Birmingham area who were leaving school.

I must apologise for giving some figures, but there are some extremely significant figures about the increase in the numbers of boys and girls looking for jobs and what has happened in the last two months. The boys and girls who had not previously been employed and who were registered as unemployed in August, 1958, in Birmingham had increased to 1,100 from 300 in August, 1957. In the Midlands as a whole the increase was from 2,100 to 3,700. These 3,700 boys and girls who were looking for jobs had not previously had jobs because presumably most of them were school-leavers in August, 1958.

The significant thing again, I think, is that between August and October, 1958, unemployment of boys and girls fell by about 90 per cent. both in Birmingham and the Midlands. In fact, the number of boys and girls who found their first job between August and October in 1957 in Birmingham were 240, and in 1958 there were more than 1,000. In the Midlands, the figures were 1,900 in 1957 and 3,300 in 1958. That gives me a certain amount of cause for hope, because I am bound to admit that I felt a certain amount of anxiety in the early autumn of this year that the placing of boys and girls leaving school might be an extremely slow job. I am sure that hon. Members would like to join with me in congratulating all those responsible for these encouraging results.

Photo of Mr Victor Yates Mr Victor Yates , Birmingham, Ladywood

I appreciate what the Minister says and I considered that point, but he will realise that in regard to the other unemployment there are still just over 2,000 vacancies for 10,000 unemployed, which is much more serious.

Photo of Hon. Richard Wood Hon. Richard Wood , Bridlington

I must hurry on, because I have various other points which I should like to make. I think that is so. I was just about to give the comparative vacancy figures in the Midlands for boys and girls, which, again, had been worrying me to a certain extent. There are 2,000 vacancies for 820 boys unemployed and 3,300 vacancies for 720 girls. Not only is the question of employment for boys and girls important, but I think all hon. Members will agree that the question of adequate facilities for their training is equally important. I have found at meetings that I have attended that in some cases employers are reluctant in a time of slow business activity to take on apprentices because they cannot see the point of doing so until industry begins to expand. I am certain that there are many other employers who are taking a far-sighted view, and I have tried to do what I can to encourage those employers who are not taking a far-sighted view to change their mind and to ask themselves whether they will need these boys and girls as trained, skilled workmen in about five years' time.

I am glad to have had the opportunity of reviewing the employment position in one of the most important industrial areas in Great Britain. I know the care which the hon. Member for Ladywood takes over these matters. He and a number of other hon. Members asked me what measures the Government are taking. The Government have recently announced a series of measures which they are taking. It is important for a moment or two to look at the causes of the unemployment of which hon. Members complain. I do not think it helps to overstate the case, as the hon. Member for Wednesbury (Mr. Stonehouse) did, and to pretend that the recession is the direct responsibility of the Government. I am perfectly prepared to accept that one of the causes of unemployment is the deflationary measures which the Government have taken, but it is very easy to criticise those deflationary measures and to ignore the consequences of doing nothing in the face of mounting inflation. I therefore think that hon. Members must face the consequences of doing nothing if they make these criticisms.

There has been a fall in demand and there have been changes in technique. There has been an increase in the number of school-leavers and, perhaps, extremely significant, whereas unemployment over the whole country has risen in the last year by 235,000, as my right hon. Friend said the other day, 180,000 men and women have during that year left the forces or have left defence production and a great many of them have been absorbed into the economy.

Let us not forget that at this time, when complaints are made of unemployment, the number in employment is still well above 23 million—almost as high as it has ever been in the past.

When I talked to employers at Birmingham and outside it I found, as the President of the Board of Trade suggested, that on the whole employers are not pessimistic about the future. I found a general confidence and belief that industrial activity would begin to quicken again. I therefore foresee that if business increases, although the number of school-leavers is growing larger, there will be a contracting problem of employment for them but an expanding problem of training, because apprenticeship- mindedness among both boys and girls is increasing, which in itself is an extremely good thing, and the pressure on the training places available is becoming very strong. This is a problem which, as I take every opportunity of saying, employers should tackle now or they will miss the opportunity and regret it when expansion comes.

10.29 p.m.

Photo of Mr Denis Howell Mr Denis Howell , Birmingham All Saints

I should like to follow the Minister, in the short time available to me, to mention the important question of school leavers. It is alarming that the number of unemployed among them this summer in Birmingham was reduced by 1,000 only because the Youth Employment Service touted—there is no other word for it—in one week to the extent of making 2,000 telephone calls imploring employers to take on young people. In that way they obtained 1,000 extra vacancies.

Photo of Mr Denis Howell Mr Denis Howell , Birmingham All Saints

That is not the way to start young people on their careers.

The reason I have risen to speak for this half-minute is to express the hope that the Minister will press on with his educational work in persuading industry to face this problem. National Service is coming to an end and vacancies in industry for youths at the age of 18 will not exist. The number of school leavers in the next few years will aggravate the situation, and throughout the country, and in Birmingham, in particular, a crisis will face us in the matter of youth employment unless both sides of industry and the Government pull together.

I very much hope that the Parliamentary Secretary will continue to implore his colleagues in industry to have proper apprenticeship schemes. I hope that the Minister will pay more attention to youth employment and look into the question of raising the school-leaving age to 16 as a counter to the ending of National Service—

The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.