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Orders of the Day — Redeployment

– in the House of Commons at 12:00 am on 24th October 1966.

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4.10 p.m.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

We are today discussing the subject of redeployment. It is almost inevitable that hon. Members on both sides will use proportions and global figures whether of unemployed or seasonally adjusted unemployed, but I think that one thing on which all hon. Members will agree is that whatever the national rate of unemployment may or may not be at any one time we all recognise that for the unemployed man the rate for that man is 100 per cent., and I hope that no one will accuse any other hon. Member of forgetting this if we go into the larger and not purely personal issues.

This debate comes at a time when the unemployment figures have leapt up so that the wholly unemployed at the moment number 375,000—roughly. There are a further 60,000 who feature in the unemployed return because they were not at work on the Monday of the count—being on short time. But the wholly unemployed represent an increase of no fewer than 50,000 adults in one month, and this is the background against which this debates takes place.

We on the Opposition benches have three main charges to make against the Government in this situation. I will summarise them before trying to sustain them by argument. First, we charge the Government that because of misjudgments, bias, blindness, naivety, dogmatism, dithering and double talk they have never established the first essential of Government, general control of the pace of the economy. They have consistently taken the wrong action at the wrong time, and, in particular, the Prime Minister's deflationary package of 20th July was far more fierce and will be far more damaging than it need have been had he acted months, weeks, or even days earlier, and acted on his own initiative instead of under pressures that he and the Government had allowed to build up.

Our second charge is that we charge the Prime Minister personally with a complete failure of planning. He is constantly harking back to his speech at Scarborough, the speech in which he envisaged retraining on a vast scale. What has he done about it—what have the Government done about it—since they have been in power?

And the third charge we make against the Government, and particularly against the Prime Minister, is that we charge them with glib and unjustified claims and assertions that the savage stop of 20th July, the last so far of a long list of restrictions, taxes and controls, will bring about redeployment of labour in favour of exports and other national purposes. We believe these claims to be cant, thoroughly unjustified and bogus. We want to hear this afternoon from the Minister of Labour the evidence which justifies the Prime Minister and himself in asserting that rising numbers of unemployed will quickly fill vacancies in exports and other priority enterprises.

Any Opposition faced with an incompetent Government, systematically breaking pledges by which they won power, a Government living from day to day on panic measures, have the right to probe and the duty to censure. But we have an added right which comes from having warned the Government and the country of the cost that would have to be paid for Socialist policies.

As my right hon. Friend the Leader of the Opposition said during the General Election campaign, "Vote Labour, pay later". He made plain his view that unemployment would rise this year, and not just for seasonal reasons, but because the Government had lost control of the economy in a roaring inflation. The Prime Minister blandly denied any such expectation.

We told the Government that we would not criticise them if, by acting in time, they caused short-term unemployment—people moving from job to job—to rise within limits. I spelled this out on behalf of the Opposition six months ago in the debate on 22nd April. But the Government did not act in time. So their deflation had to be far fiercer than it need have been, and the penalty will be a far larger number of unemployed out of work for far longer than need have been necessary.

Before I turn to justify these charges and to state our policies I should like to give body to two phrases which are very easy on the tongue—"keeping the pace of the economy under control" and "getting the level of demand right". We believe that there should be constant movement from declining firms and industries to expanding firms and industries. That is why we recognise that in a healthy economy there should be at any time some purely job-changing unemployment on this account lasting anything from a few days to a few weeks. To achieve this healthy movement from decline to expansion the Government must keep the level of demand right—admittedly, a very difficult task.

We believe that the level of demand is likely to be about right when the number of jobs vacant bears a close relationship to the number of unemployed available for work. We surely do confuse ourselves and the country by counting in among the unemployed, just as if they were available for work, those who are probably more welfare cases than able-bodied people ready and able to do a job. The Ministry of Labour's Press release of 26th January this year described 180,000–180,000—unemployed as being likely to have difficulty irrespective of the local employment situation in obtaining work on account of serious personal handicaps. Now I am not, obviously, presuming to criticise the individuals concerned. There may be a very good case for increasing our rehabilitation work, there may be a very good case for increasing our welfare work. All I am arguing is that by including those 180,000 in the unemployed, and comparing the monthly figure of unemployed with vacancies, we deceive ourselves as to the real state of the economy.

Now I come to argue our first charge. There is all the difference in the world between stopping overheating in the economy and engineering a deep and lasting recession. Because the Government fumbled the first, stopping overheating, they may well have achieved the second—engineered a deep and lasting recession. The Government seem to have learned absolutely nothing from observing our successes and failures in handling the pace of the economy. The lesson is very easy to state, though admittedly very hard to apply. The lesson can be conveyed with nursery simplicity—a stitch in time saves nine. Despite our warnings, despite, no doubt, the warnings of friends and advisers of the Government at home and abroad, the Government never effectively got the balance between demand and supply right.

The right hon. Gentleman the Chancellor of the Exchequer acted a large number of times. On this side of the House, we have added them up often, and they come to 26 instalments of attempted deflation. But either each action was wrong, or the timing was wrong, or the effect was cancelled by the double talk of the right hon. Gentleman the Prime Minister or by the expansionism of the then First Secretary. I agree that the Chancellor and the Government have not been helped by the continuing drop in the working week.

I hope that the right hon. Gentleman the Minister of Labour will not lecture the country to the effect that it is all their fault. It is no alibi to blame the unions for pressing claims or managements for conceding them, when the Government allow demand to remain far beyond production, enlarge their own programme the whole while and give way consistently to pay claims within their own sector.

The taxes, the restrictions and the controls were piled on and were ineffective. Unemployment went down and vacancies went up. But, instead of seeing the danger signal, the Prime Minister dithered and denied any need to act. Then what we had feared and what we had warned against happened. The Prime Minister kept on denying the need to act until his blindness caused such damage to sterling that he had to act. But no plans had been prepared. The Prime Minister came to the House and threatened the country, like Lear, with measures which had not even been worked out. They were to be defined in detail within a fortnight, then within a week, and, in that week, more sterling was withdrawn while the Prime Minister was in Moscow.

Then the sledgehammer of 20th July fell, brutally and savagely. Suddenly, all the cumulative effect of the half-hearted, half-baked, abortive attempts at deflation came home to roost. We know now that the Prime Minister used his sledgehammer on a dying boom. Seasonally adjusted unemployment turned up in May/June, before the measures of 20th July. The Government acted effectively too late and, therefore, had to be far more fierce than if they had acted effectively earlier, as my right hon. Friend and the Opposition had warned.

The sledgehammer hit our main export and growth sectors. Motor cars, for instance, seemed to have been picked out for quite special punishment. Petrol went up by 6d. in November, 1964. Car licences went up in April, 1965. Hire-purchase deposits went up in June, 1965, and again in July, 1966, when petrol went up again and Purchase Tax was increased.

The savage stop of 20th July may have been forced on the Government by their own series of blunders and their own failure to act much less fiercely, because effectively, and earlier. But now the Government claim that such a stop redeploys labour towards the export and the priority industries.

I come to our second charge, which is: what is the evidence for that assertion? When he was in opposition, the Prime Minister used to assert effectively that cutting production at home raised unit costs and damaged exports. Recently, there was an authoritative article in The Times by Mr. Reid, of Glasgow University, in which he explained why deflation will not bring labour redeployment. He said that it is because most firms retain their skilled manpower, because expanding industries are hit as well as others, because vacancies do not match the men and women available, and for a number of other reasons. If that is true in normal times, how much more it is true in times of a freeze which prevents expanding firms attracting key labour from firms that are declining.

On 20th July, the Prime Minister spoke of large unsatisfied demands for labour, particularly in our export industries. Did he assume that the vacancies would remain unaltered while the available unemployed rose to meet them? The vacancies have shrunk by 33 per cent. since the sledgehammer blow of 20th July, coming after so many previous cumulative attacks on enterprise. Had the Government acted effectively earlier and, because earlier, not had to be so fierce in their stop, unemployment would have risen far less than it will rise now and vacancies would have fallen less than they have fallen and will fall now.

On top of all that, there is the perverted lunacy of the Selective Employment Tax, throwing part-timers, disabled and elderly out of work who cannot conceivably move into export production. The Government have got the country into a straitjacket and into a rapidly escalating recession simultaneously, all for the lack of early, effective action. Yet they did half-heartedly try to deflate earlier, though, during the election, they boasted of their failure to raise unemployment. On 20th July, the Prime Minister even half-confessed to my right hon. Friend the Leader of the Opposition that the Government were surprised that unemployment had not risen.

Photo of David Winnick David Winnick , Croydon South

I find some difficulty in understanding the right hon. Gentleman's argument. On 22nd April, the right hon. Gentleman is reported as saying: … the industrial vacanies reported by the Government are desperately understated, because so many employers, knowing the hopelessness of getting extra labour of the skills they want, do not even register their vacancies."—[OFFICIAL REPORT, 22nd April, 1966; Vol. 727, c. 220.] Then the right hon. Gentleman complained that it is unfortunately true——

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. Interventions must be brief.

Photo of David Winnick David Winnick , Croydon South

I was about to conclude by saying that he ended with the remark that it was wrong that we had only an unemployment rate of 1·3.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

The hon. Gentleman will perhaps read what I am saying. I am saying that I said on 22nd April that both the vacancies and the unemployment rates misrepresent the true position. I spelled out in more detail today the misrepresentation in the unemployment rate.

Our second charge is that, although the Government had half-heartedly attempted to deflate and, therefore, to raise unemployment, the Prime Minister had not seen to it that there was any contingency planning for a rise in unemployment; for, quite clearly, there has been none.

Redeployment and retraining were central themes of that remarkable speech by the Prime Minister three years ago in Scarborough. Why has nothing significant been done about them? It was my right hon. Friend the Member for Grantham (Mr. Godber) who established the Manpower Research Unit at the Ministry of Labour. It was his predecessor who set in hand the doubling of the Government training centres. It was a Tory Government who put the Industrial Training Act on the Statute Book.

To what was the Prime Minister referring at Brighton a fortnight ago, when he spoke of a "vast expansion in industrial training" and took credit for it to the Socialist Government? To what was the right hon. Gentleman the Minister of Labour referring in his party political broadcast at the end of September, when he spoke of "a great new exercise in training and retraining"? All that the Government have done is to start building to increase the output of Government training centres from 11,000 a year, as left under construction by us, to 15,000 per annum. Will the right hon. Gentleman tell us whether union objections are still preventing G.T.C.s from being built in the North-West, on the Tyne and in Scotland? Incidentally, I notice that the Prime Minister said in one of his speeches that the Government are opening new G.T.C.s in place of those closed down by the Tories. The last Labour Government reduced G.T.C.s from 80 in 1947 to 23 in 1951. It was the last Labour Government which dismantled the Government training centres.

There has been no evidence whatever of contigency planning for a rise of unemployment. It was only this month that the right hon. Gentleman the Minister of Housing and Local Government opened talks with the local authority associations about the housing implications of redeployment. So far as I know, the industrial training boards have not been asked to do or plan anything in particular about redeployment. One would at least have expected some effort to learn from the positive Swedish system, which implies no interference with private enterprise but provides substantial mobility and training grants, housing help, weekly vacancy gazettes, and ambitious sheltered workshop programmes and special help for different special groups.

Sweden has nothing useful to teach us on avoiding inflation, but much to teach us on co-operation between efficient management and willing, flexible labour, and much to teach us on easing the redeployment of labour.

The third charge is that the Prime Minister and the right hon. Gentleman are guilty of eyewash in pretending that "purposive redeployment" toward exports and other national priorities will result from this stop. The Chancellor said in Washington: They"— he was referring to the unemployed— will not be hurt. The Government will help them to play their full part in the deployment of labour arising from the restructuring of industry. What restructuring of industry?

On 20th July the Prime Minister said: Action is needed to redeploy resources according to national priorities. What action is being taken? That is what we want to hear this afternoon. The Lord President of the Council pledges an even spread of unemployment between London and the regions. How is he able to make such a pledge, or is it just meaningless?

But even from the random workings of the clumsy panic package some good things have emerged and we welcome them. At Rovers, for instance, a union which had previously refused to work a night shift has changed its attitude and a night shift is working. No doubt other firms are finding it possible to do extra shifts, and we welcome this.

I believe that school leavers have not been as badly hurt as might have been feared, although there is some reason to think that the age group immediately above them has been pruned to allow the brightest of the last school leavers to find work.

The sad fact is that the Ministry of Labour—and perhaps even the Minister himself—is not being able to concentrate on this priority task. One newspaper said: A Ministry of Labour representative in the Midlands was saying that all this could not have come at a worse time for Ministry of Labour services because they were all exceptionally preoccupied with the teething troubles of the Selective Employment Tax. Even if this distraction were withdrawn, the Ministry could not hope to retrain all the unemployed without suitable skills, nor, indeed, as the Minister said in answer to a Question, do many of the unemployed want to be retrained. And even if they are retrained, there are often shop-floor objections to dilutees.

It really is bunkum for the Prime Minister to talk about redeployment according to national priorities when the freeze makes redeployment harder and when no machinery or retraining provision has been made for it. In a period of freeze, skilled men cannot be attracted by higher earnings offered by expanding firms. Of course, we know that the freeze is unnecessary. The purposes which it serves could have been achieved by the 20th July deflationary package. The freeze was called "bonus" by the Chancellor when speaking to bankers in Europe, but we have the freeze, and it is another obstacle to the effective redeployment of labour.

For any effective redeployment, housing will be needed, but housing is a shambles—fewer than promised, and dearer than ever.

Even the Redundancy Payments Act may get in the way of redeployment in various ways that are emerging. We supported that Act, just as we supported the wage related unemployment benefits legislation, but for a number of detailed reasons there may come a time when we shall have to reconsider the implications of redundancy payments on discouraging the release of men who are needed by the economy, and hastening the release of men who, simply because they are elderly, have accumulated a redundancy nest-egg, and who will not find other work easily.

I come now to the key question. What are the jobs that are available? They are mostly in the service industries, in local government, in municipal services, in central government services—including clerks to administer the Selective Employment Tax—and in the nationalised industries. The only sure growth under this Government is in the Civil Service. The Prime Minister said that public expenditure was to be cut, yet such unemployed as do find jobs are, in most cases, going on to the taxpayers' payroll. Skilled men are much in demand, but relatively few of them are being released, and the Selective Employment Tax is making redundant part-timers, disabled, and elderly, who are no use at all for the vacancies in priority industries.

On 13th October the Financial Times said: There are some very sensitive people at the top of the tree, and that goes as high as the Prime Minister. So said the man at the Ministry of Labour. Why? Because what really is happening is the precise opposite of what the Government claim. There is no redeployment into export business, no shake-out into more efficient industries. There is simply unemployment, cushioned by higher unemployment pay. That was said by one of the right hon. Gentlemen's own staff. Meanwhile, unrecorded by the leaping unemployment figures, the brain drain of vital technicians, technologists and craftsmen goes on at an increasing pace.

Nor is there any evidence yet that the regions are being spared, as the Lord President promised. As well as the Midlands its seems that the biggest beating is being taken by Yorkshire, Humber-side, Scotland, Wales, the North-West, and Northern Ireland——

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Yes, and the South-West.

The key question affecting the willingness of firms to release skilled men, and of men to retrain, is the likely length of the deflation. On 20th October the main story in The Times was that senior Ministers were starting to discuss at what point it would be necessary to pull out of the dive. I hope that the right hon. Gentleman will tell us the result of those discussions, because upon the likely length of this recession will depend the willingness of firms to release skilled labour when it is wanted by other firms and the willingness of men to be retrained.

So we face a recession, rising unemployment, and, against all Keynesian teaching, rising taxation, all because the Govern- ment's economic policies have collapsed. We have lost our economic independence, and the Government cannot get their expenditure under control.

What can be done, at least to make the best use of the labour released? For a quick-acting increase of training, G.T.C.s take far too long to prepare, and industrial training boards have their own priorities. The best way of getting quick retraining on any large scale would surely be to sub-contract retraining to firms which have their own training departments, and to invite them, by the aid of grants if necessary, outside the development districts where grants are now limited, to put on a second shift of retraining with instructors provided where possible from their own localities. That would get quick results. Most retraining occurs spontaneously, but this extra would help match the men available to the skills needed. I recognise, of course, that the Minister would have to overcome some union objections. Then, we want maximum information about jobs available, about training available, and about grants and facilities available. There is room for a much more vigorous policy to promote geographic and occupational mobility as in Sweden.

Next, what is to be done about the brutal effects of this late and savage deflation on industrial investment? The latest C.B.I. survey—and C.B.I. surveys have been shown to be pretty accurate—leads to the expectation that the dip will be half as much again as in 1958 and 1962—perhaps 20 per cent. of industrial investment, much more general and much steeper than in previous deflations. So many mistakes made by the Government are reinforcing the break in confidence that lies behind the C.B.I. report—the Selective Employment Tax; the liquidity squeeze; the false optimism engendered by the surcharge; the huge extra £1,000 million in taxation on industry, and the price squeeze.

It is not enough, as the Prime Minister and the Chancellor have hinted, just to increase grants, although that is urgent; businessmen must be convinced that the demand will be there to justify the extra investment. Businessmen must be convinced that the Government will not continue to be hostile to profits. What is the point of risking effort and money in extra investment in order to make extra profit, if that will simply lead to higher taxation and no increase in profit at the end of the day? Artificially to hold down prices only cuts profits and, therefore, investment, inflates demand and sucks in imports. The only growth in investment will be in nationalised industries—that sector of the economy which is least subject to the efficiency disciplines of the market.

But these suggestions are mere palliatives for the negative policy of the Government. We would prefer a positive policy based on market forces. We would aim to keep the level of demand right. We would put management on its toes and stimulate investment by tax incentives and declaring for Europe, by the Government using their powers and skill as a client and employer, by cutting Government expenditure and by reforming trade union law.

Our basic problem is not the level of earnings per hour or per week; it is the level of output per hour and per week. This can be dealt with only by good, firm, fair management, operating without the legalised obstructions of outdated trade union privileges.

Photo of David Winnick David Winnick , Croydon South

Can the right hon. Gentleman say precisely what he means by trade union reform? Does he believe that the trade unions have a right to be recognised?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

I thought that the hon. Member was on that point. If he will take the trouble to get from the N.E.D.C. its papers on obstructions put forward by trade unions at the Prime Minister's Productivity Conference he will see a number of home truths expressed by the Government themselves.

Some say that restrictive labour practices will become worse in this recession. Some say that full employment—as opposed to overfull employment—would make restrictive labour practices worse. The fact is that 20 years of over-full employment have not withered restrictive labour practices. They respond to good management, to competition and to a reform of trade union laws. That would be our policy. But it is not that of the Government.

So we want to know how they propose to get retraining quick for those who are unemployed and who want it. We want to know what they propose to do about housing and how they will stimulate industrial investment. We want to know how they will tackle restrictive labour practices and whether, even now, they will ask for an interim report from the Royal Commission on trade unions. To encourage public enterprise with no market discipline and discourage private enterprise and to deflate, is to get the worst of all worlds.

Having acted too late to moderate their own inflationary boom the Government may not now be able to prevent the downswing from doing us lasting damage. They seem to have no strategy, but to be operating day to day on a hand-to-mouth basis.

We are near the end of what the Prime Minister called "make-or-break year". We are now at the beginning of what may be the worst recession since the war. We have endured the cumulative collapse of the Government's whole economic policy. The Government have been taken by surprise, not once but many times. They have never seemed to have any contingency plans prepared, and now the fig leaf with which the Treasury Bench cover the nakedness and the bankruptcy of their policy is the hocus-pocus of their so-called purposive redeployment. Let the right hon. Gentleman tell us what purposive, strategic redeployment, of the sort the Prime Minister claims to aim at, is going on. Let him tell us the facts and the prospects without humbug—and without evasion.

4.45 p.m.

Photo of Mr Raymond Gunter Mr Raymond Gunter , Southwark

As the right hon. Member for Leeds, North-East (Sir K. Joseph) said at the outset, this debate is about redeployment. I want to deal with the various questions that he has raised, in different forms, but I say to him immediately that I enjoyed his speech, though in parts it had little relationship to the purpose of the debate.

I say sincerely—it is not humbug—that I hope that we shall not have a lot of scratching about as to what happened in 1961 or 1962. It can be done. It can be done very easily. For every set of figures adduced from that side we can adduce from this side a set of figures that would destroy the right hon. Gentleman's whole argument. This is a debate about redeployment, and I want to give the facts as I see them, since the right hon. Gentleman has asked for them.

But before I come to the main theme of my speech I would say that we are facing a situation which must be seen against the background of the July measures—measures which had to be taken to deal with the immediate crisis. The right hon. Gentleman knows as well as anybody in this House what the situation was in the labour field. It was there to be seen. He referred to it in his speech at Blackpool. Earnings were rising much more rapidly than productivity. Costs and prices were under pressure. There were serious shortages of manpower, which had their effect in delaying the delivery of goods against export orders. Firms were hanging on to their skilled labour. There was labour hoarding.

I have spoken before—and I have got into trouble over it—about the perils of a state of affairs in which we, as a nation, chose to take out of the economy more than we were prepared to put into it. It was precisely because we had ignored those perils for so long—not only since 1964—that the action we took in July was necessary. We had to take action to make a direct and immediate impact on our balance of payments. I am glad—and I am sure that the whole House will be glad—that there is an improvement in this field. But we also needed to deal with the problem of internal demand, and to check inflation.

Nobody can pretend that the July measures were other than tough and harsh. They had to be, because of the situation we faced. Nobody pretended that they could be carried through—at least I never did—without an increase in unemployment. This was made clear by my right hon. Friends the Prime Minister and the Chancellor of the Exchequer.

When we discuss the current problems of redeployment this is the background that we have to keep in mind. If the sole problem had been to secure a redeployment of labour, to secure the transfer of workers from one job to another without any increase in the level of unemployment, the approach might well have been different. But those measures have given us a breathing space—and I agree with the right hon. Gentleman that it is only a breathing space—an opportunity which, if we take it, can enable us to reshape our economy and to make it more competitive.

That was one object of the July measures, and our future depends on what we do with this breathing space. If we do not use it to secure a more efficient use of our manpower as well as of our other resources; if, at the end of the period, we find ourselves back where we were before the July measures, with manpower shortages holding up exports and technological advance on the one hand, and under-use of labour through faulty management and restrictive labour practices on the other; if we find ourselves still in the mood of the past, then the period will have been wasted and we shall not then be thinking in terms of redeployment and transitional unemployment. We shall be thinking in terms of something else.

Nobody likes even temporary unemployment, but it has to be accepted that an increased measure of unemployment was inherent in those measures. We are in a better position to meet it than we were. The right hon. Gentleman and I will argue about the degree of that improvement, but if he reflects on what has happened not only in the last two years in the Ministry of Labour, but in the preparatory work in the years before that, he will see that we are in a better position to assist workers who are unemployed between jobs, and to help to place them in alternative work.

I refer—I understand the reservations of the right hon. Gentleman—to the Redundancy Payments Act and the earnings related benefits, to the steps which we have taken to improve the whole training effort of industry, to the expansion of Government training centres and, perhaps as important as anything but long-term in its results, the improvement in the employment service itself. My point at the moment is that while people are unemployed there is better provision for them than in the past and the Ministry of Labour services have been improved to help make the most, in the national interest, of the movements of workers which are taking place.

Before I go on to describe what the Ministry is trying to do in some of the areas most important for our redeployment policies, I would like to take a short look at the general unemployment situation as it appears in the more recent statistics.

The right hon. Gentleman reminded us that the total register of unemployed for October was 437,000, a rate of 1·9 per cent., but he made the point that 63,000 out of this total were not wholly unemployed but temporarily stopped. The majority of those concerned are men and women on short-time working in the motor vehicle and component industries, some of them as we know, being affected by the strike of car delivery drivers.

The right hon. Gentleman very fairly drew attention to school leavers. Although the trend of unemployment is up, we may take some satisfaction—perhaps not too much—from the fact that, in August, 36,000 school leavers were registered as unemployed and by this month the number was down to 7,500. Of course, to state a fact which will be recurring in my speech, I do not feel complacent about this or any other set of figures, but at least bringing school leavers into jobs has gone on at a fairly brisk rate.

What of the underlying level of unemployment at present and the likely future trend? The seasonally adjusted rate for the wholly unemployed, excluding the school leavers, was 1·6 per cent. As the House knows, the increase in this group between September and October was 33,000 above the normal seasonal increase and, considered together with previous months' figures, there is clearly a strongly running upward trend. While I do not think that it would be helpful for me to indulge in the hazardous occupation of forecasting future levels of unemployment, there is certain to be a continuing rise, at least into the new year.

I should like to refer to the remark of my right hon. Friend the Prime Minister, which has been variously interpreted, when he referred to the future level of unemployment and suggested that 2 per cent. might be an acceptable limit. I would point out that the Prime Minister was here referring to the unemployment level after redeployment had taken effect: he was not referring to the winter peak of unemployment in January or February of 1967—[HON. MEMBERS: "Oh."] Hon. Gentlemen should read the facts.

I would also re-emphasise that the measures which the Prime Minister an- nounced in July were drastic measures to deal with a grave situation. They were intended to take effect quickly, and this they have done. Inevitably, they have had a very sharp impact indeed on a number of industries and on a number of individuals. The first impact was bound to be severe and the House cannot be surprised that the level of unemployment is rising. It is my concern to see that, as far as is humanly possible, individual hardship is reduced to a minimum; my Ministry is doing this to the best of its ability in various ways.

As the circumstances of different localities and the incidence of redundancies will affect the results of our activities in particular places, I should like, even at the risk of trespassing upon the time of the House, to turn to some of the areas which have been affected by major redundancies. This course will enable me to bring out more clearly some of the problems and some of the methods which we are adopting to deal with them.

Public attention has been largely focussed on the redundancy at B.M.C.'s plants in the Midlands and elsewhere as a test of our redeployment policy and our ability to handle its effects. The great bulk of the redundancy notices do not take effect until 4th November. I suggest to the right hon. Gentleman that a much clearer picture of what is actually happening may emerge after that date, but I would like the House to take a look at what has happened so far.

The British Motor Corporation gave us advance warning of its intentions, so that we were able to organise our services in reasonable time for the two most important parts of the immediate task. We approached all firms of any size in the areas of redundancy and further afield and asked them to let us have information of all current suitable vacancies which might not already have been notified to the exchanges.

The House will understand—the right hon. Gentleman has, on two occasions to my knowledge, drawn attention to this fact—that when labour is hard to get some employers cease notifying all their vacancies to us, because they know that their chances of getting the labour they need from any source are pretty small, and other employers have not been using the exchanges at all.

For these reasons, we should not fall into the trap of assuming that the prospects of alternative employment for redundant workers in any area can be neatly measured by comparing the number of notified unfilled vacancies with the number of registered unemployed. But to return to my point—so far, the replies which we have had to these special approaches have yielded a useful addition. There have been 2,000 extra opportunities in the Midlands which it has been possible to offer to the. redundant men.

The other part of the job has been to organise employment teams in the factories. In Birmingham, for example, although the redundancies do not take effect until 4th November, the Ministry's officers started interviewing men under warning notice of redundancy at all plants in the area on 4th October. This process will continue as long as circumstances require. Teams of officers from the Ministry have been interviewing workers late into the evening and, where necessary, also on the night shift at the plants.

In many cases, the outcome of these interviews has been that immediate submissions have been made to employers. In others, the men concerned at this stage want only to discuss the possibilities with the interviewing officers and think things over before making up their minds. But the Ministry's services remain at their disposal until they are satisfactorily resettled.

These are not the only facilities that are available to the men. The teams in the factories have direct links with the full range of the Ministry's services. In appropriate cases appointments can be made for the men who wish it—though they will be small in number—with the Ministry's Professional and Executive and Commercial Registers or with the Occupational Guidance Unit. Experienced officers have been brought in to supplement the teams in the redundancy areas and have been given special briefing.

I turn to the results. What have been the results so far, remembering—and I must emphasise this—that most of the redundancy notices do not expire until 4th November? Let me say here that I have no intention during this debate of striking any note of complacency, nor should I be so foolish as to suggest to the House that, on the basis of some general statistics, we can confidently tell everybody involved to banish their concern. My object is rather that, by giving some of the facts which appear to me to be most relevant to the situation, we might be helped in the House to have a constructive and reasoned debate about this matter of redeployment, which is so crucial to the nation's advance and to the welfare of so many of our people. If I may say so to the right hon. Gentleman, the part of his speech which I enjoyed most was when he turned to the constructive possibilities of the industrial training boards, about which I shall have more to say.

What, then, are the results? When we took stock of the position last week—I am talking about all the B.M.C. redundancy areas—our teams had interviewed and registered about 6,200 of the 9,800 workers who had been announced as being redundant. Of these, over 2,800 have been submitted to other jobs. Altogether, 440 of the workers are registered as unemployed, of whom 405 are at Bathgate, in Scotland, and the rest are in Llanelli, in South Wales.

This brings me to the point that prospects of satisfactory resettlement vary considerably according to the parts of the country in which the redundancy occurs. In Scotland, at Bathgate, and in Wales, at Llanelli, the reabsorption of unskilled workers at any rate will not be easy. In Oxford, we have a rather special situation, because that is one of the least industrialised of the B.M.C. areas, with comparatively little alternative work in manufacturing industry. Elsewhere in the Midlands, where the greater part of the B.M.C. redundancy is occurring, the prospects of reabsorbing all the redundant men are, of course, good, though no one would pretend that many of them are likely to find equally highly-paid work.

If I may go into the situation, as it varies in different parts of the country, in rather greater detail, I would say this: in the Bathgate area, where most of the workers redundant are semi- or unskilled, employers generally are showing great caution about taking on more labour at present. Suitable unskilled vacancies are scarce. Nevertheless, of the 718 workers who have left work, 372 have been submitted to jobs and 141 have already been placed or are known to have found work. A total of 405 are still registered as unemployed. But this figure shows a decrease of nearly 100 since the previous week.

Photo of Mr Patrick Wolrige-Gordon Mr Patrick Wolrige-Gordon , Aberdeenshire East

What proportion of these men have gone into service industries and what proportion into other forms of manufacture?

Photo of Mr Raymond Gunter Mr Raymond Gunter , Southwark

I could not say precisely at the moment, but will find out for the hon. Member.

In Llanelli, 143 part-time women workers have actually left work. But altogether 255 men and women have been registered, of whom 26 are under submission to other jobs and 10 have been placed or are known to have found work; 35 are registered as unemployed. These may be small figures but—and let us be quite frank—the situation in Llanelli gives us some anxiety because though there are 500 to 600 unfilled vacancies in the area, the bulk of them are in skilled jobs and coalmining and unsuitable for many of the B.M.C. workers.

In Oxford, although the redundancy does not take effect till 4th November, we have already interviewed over 1,200 of the 1,600 or so workers to whom notice has been given. Of these, 508 are under submission to jobs, of whom 113 have been placed or are known to have found other work. As I have said, alternative employment in manufacturing industry in the immediate area is comparatively scarce. In the travel-to-work area around Oxford there are about 8,000 unfilled vacancies for men, more than a quarter of which are for unskilled workers. About half of these vacancies are in manufacturing and about half in service and other industries. I want to tell the House that here redeployment may take a little time and some of the workers may have to leave the immediate Oxford area, but, basically, in the travel-to-work area, the situation is reasonably hopeful for rational employment.

In the West Midlands, demand for labour in a wide variety of industries and occupations remains buoyant with over 13,000 unfilled vacancies for men and over 7,000 for women; a little less than half of them are in manufacturing including engineering, metal goods, electrical goods, chemicals, marine engineering and many others. In this area 2,050 workers have been given notice out of a total estimated redundancy of between 5,000 and 6,000. Over 3,400 of these have been interviewed by my officers, and of them over 1,400 are under submission to other jobs and 220 have been placed or are known to have found work. None is, of course, so far registered as unemployed.

Before I leave mention of particular areas, I should also refer to the redundancy position at Rootes Pressings, Linwood. On 19th October, 557 workers were told that they would be made redundant, 128 of them being skilled workers. The Ministry has finished interviewing men at the factory. Unemployment in the area is comparatively low. Special approaches have been made to firms in the locality, and in the wider travel-to-work area there are about 1,400 notified vacancies, of which over 1,000 are in semi- and unskilled occupations. The prospects of reabsorption are reasonably good.

In assessing the probable outcome of our practical redeployment measures it would be unwise to draw too much on past history. But the House will recall the redundancies in the aircraft industry in 1965. There was much doubt expressed—in my view justifiably expressed—about the outcome of the redeployment in that instance. Yet within quite a short time practically all the redundant workers were reabsorbed—the considerable majority, to judge by those who came within the sphere of my offices, in manufacturing industry of importance to the economy.

From the very early results coming in to me—I am a little diffident about drawing too many conclusions—rather the same sort of thing seems to be beginning to happen in the areas of B.M.C. redundancy in England—though I accept that the general level of unemployment is running rather higher than it was a year ago.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

Could the Minister give a little more information about the redeployment of the aviation workers? This is one practical example which we have had in the last two years. Is it not a fact that most of the highly skilled workers are redeployed in American industry, not in British exports industry?

Photo of Mr Raymond Gunter Mr Raymond Gunter , Southwark

I do not agree that that is so of the majority. It is certainly true that some of them are.

May I come back to B.M.C. There are one or two special features in the B.M.C. redundancy situation, particularly as it affects the Midlands, to which I should like to refer before I pass on. First, in the past there have been lay-offs and redundancy there, and it has become widely thought by other employers that it is no use offering redundant B.M.C. men jobs because within a matter of weeks or months they will be back with B.M.C. On this occasion, however, it is clear that the cut-back in the B.M.C. labour force is of a rather longer term and will persist even when production for the home market starts to pick up again.

Secondly—and this is providing something of a headache—the car worker is used to high wages, which other employers do not offer for work of corresponding skill. Initially, therefore, he tends to be dissatisfied with the jobs we offer and declines to be submitted, though he may take our advice later. Then, too, because he has been on high wages, the car worker is well cushioned by recent legislation. He may receive a substantial redundancy payment, and after two weeks may well attract the maximum earnings-related supplement to unemployment benefit. Such a man, with a wife and three children, for example, would receive over £16 per week in tax-free benefit, which is an income quite comparable with the net wages he would be likely to draw from alternative unskilled or semi-skilled work. This same feature does, however, encourage men interested in G.T.C. training to apply for it.

Some workers are deterred from registering, or from seriously considering other jobs at this stage, in the hope that they will be retained by B.M.C., for instance, because some workers have had their notices withdrawn to replace non-redundant workers who have left voluntarily, though more of these workers may leave now that it has been announced that short-time working will continue even after 4th November, 1966.

I thought it well to mention some of these special features of the situation since they obviously bear somewhat on the speed with which redeployment takes place in the Midlands.

Taking a general look at this movement which is arising from B.M.C. and other redundancies, can we say that the redeployment is benefiting the economy as a whole by releasing workers to jobs of economic importance in other spheres? And can we be sure, in particular, that the results are not likely to be inconsistent with the Government's aims, particularly in the all-important export field?

On this point I cannot say—while the bulk of the B.M.C. redundancies does not develop until 4th November—that the actual redeployment is taking the direction we would wish to see. That is why I would have wished this debate to have taken place after 4th November, by which time we would have formed a picture of what was emerging. Nor can I say that the broad picture is already equally hopeful for all the areas affected. It is encouraging that first reports from the Midlands indicate that about 60 per cent. of the workers are going into manufacturing industries. Beyond that, I hope I have successfully conveyed to the House that we have tackled the job from the earliest possible moment with energy and resource and that a good start has been made.

What are we doing, within the limits open to us, to help ensure that redeployment takes place to the national advantage? There are, of course, limits to what we can do. We do not have compulsory direction of labour in this country. Nor would hon. Members want it. Nor are employers compelled to engage workers through the employment exchanges. Nor are workers seeking work forbidden to take advantage of Press advertisements, personal contacts and the services of independent employment agencies. Whatever is said about past or future Ministers of Labour, it is important to recognise the limits within which the Ministry of Labour works. I do not question for a moment that in a democratic society like our own there are bound to be such limits. But it means—if hon. Members accept that this is right, as I believe they will—that hon. Members cannot expect unconditional, watertight answers to questions about the action the Government are taking to control redeployment so as to serve exclusively a given definition of the national interest. I cannot give the answer. I do not have the authority to direct men to go even to the jobs I want them to take.

But what we have power and right to do we can and are doing. We are in close touch with the production departments at national and regional level with a view to assessing the labour requirements of firms according to national economic priorities. We are doing all we can to make sure that the information on which our local officers are working is as up-to-date as possible.

They cannot then use this information to compel workers to accept particular jobs. But they can, and do, draw the attention of those seeking employment to vacancies at firms whose activities are of special economic importance—whether, for instance, because of their exporting efforts or their work in regard to such criteria as import substitution, technological innovation or increased productivity.

I ask the House to remember during the debate that my powers in this matter are persuasive and that an Englishman still has the right to choose whether he goes to this or that job.

Photo of Miss Joan Quennell Miss Joan Quennell , Petersfield

Has the right hon. Gentleman used his persuasive powers on his right hon. Friend the Secretary of State for Education and Science to effect the closest possible liaison between the two State Departments so that the facilities for retraining inherent in the technical and further education colleges may be utilised for the training of unemployed men?

Photo of Mr Raymond Gunter Mr Raymond Gunter , Southwark

I will be coming to the question of training. I assure the hon. Lady that there is the closest liaison and that we are at present thinking out methods to do what I believe is in her mind.

I was glad that the right hon. Gentleman gave priority to the subject of training. No hon. Member underestimates the importance which training must have, both in any short-term redeployment operation and in the longer-term context of manpower planning. But it is important that we should have some balanced thinking on this topic.

I say this because in certain newspapers and T.V. programmes in recent weeks there have been some very shrill and highly exicted comments about what we should be doing to develop our training effort. Comparisons have been made, for instance, between Swedish practice and British practice leading on to suggestions that the Government's industrial training efforts should be multiplied 40 times. This sort of suggestion shows a complete misunderstanding of the real situation.

As I see it, that situation may be summarised as follows: the broad responsibility for apprentice training in this country belongs to industry. Industry is also responsible for the vast area of training which comes under the heading of semiskilled. The remaining broad area of need is adult retraining, working up to the skilled crafts level.

While we may expect industry to devote growing attention to this it is in this area, not in the whole area of industrial training, that the Government can best make their contribution. Over the whole area—industry as well as Government—a great deal is being done. There are tangible signs of progress being made. The Industrial Training Act, 1964, introduced by the Conservative Administration in 1963, is a good Act, and upon it we base great hopes of getting the skilled manpower we want. We all made a conscious effort—we all did, because we agreed with the Act—to direct a major element of industrial training along this path, and we were right to do so.

One cannot at the same time, having concentrated on that, become too closely involved in a comparison with Sweden. There is inevitably the greatest need for Government training centres, but no hon. Members should start to argue in this debate that G.T.C.s can, even if we multiply them 40 times, be a substitute for the great work that is emerging from the Conservative Act of 1964.

Following the setting up of the industrial training boards, a good deal of progress has already been made towards improving the quality and quantity of industrial training. We shall have to take care—I should like to hear the observations of the right hon. Gentleman—for the one concern in my mind about the boards is that with the good old British trait they may tend to become institutionalised. They will forever have to be kicked, if I may say that, in the best sense of the word. There will always have to be drive from the Minister of Labour whoever he may be so that they do not simply become institutions, just another part of the set pattern of British industry. We need to experiment in industrial training and to innovate as well as to increase our efforts.

But do not let us underestimate the important part which the boards are already playing in promoting and assisting the industrial training which is so crucial to our economic survival in a highly competitive world. I will have more to say about their activities in a moment. But I will, first, say something about the Government's contribution, about which, I thought, the right hon. Gentleman was a little unfair.

As I have said, the Government themselves make a contribution towards easing shortages of skilled manpower by means of courses of accelerated vocational training for adults at Government training centres. There are at present 32 of these centres, having a total of 6,200 training places. They teach about 40 different trades, although not all trades are taught at any one centre. The contribution which the centres make to the nation's stock of skilled manpower is, of course, small in absolute numbers. It does no more than attempt to fill in some of the gaps. Nevertheless, the part which Government training centres play should not be underrated.

Here I join issue a little with the right hon. Gentleman. It is all very well to say that they were run down substantially immediately after the war. Most of those centres were established for wartime purposes only. For goodness' sake, do not let us start holding inquests, but I had better put the facts right. In 1963, there were 13 whereas there were about 31 in 1950 or 1951, if I remember aright.

Photo of Mr Raymond Gunter Mr Raymond Gunter , Southwark

I think that the right hon. Gentleman is wrong there. We could go into the history of how they were shut down and what happened about them but I shall not.

By the end of next year there will be 38 centres, with 8,000 training places and capable of turning out about 15,000 trained men annually. I am already considering a further programme of substantial expansion for subsequent years. But there is a limit to the pace at which we can expand these specialised facilities without risking damage to the quality of the training given. After all, most courses last only six months and during that time we endeavour to equip a man with the basic skills which he might otherwise have acquired through a time-served apprenticeship.

One of the most fruitful things about the centres is not only the training they are giving these men, but the lessons they are giving to the trade unions and industry on what can be done, if one instructs a youngster or retrains a man properly in six months. The teaching is highly concentrated and must employ specialised techniques. There is only a limited number of people in this country who understand the organisation of training of this type and it is not possible to make sudden rapid increases in the amount of training of this kind.

Reading some newspapers and listening to some T.V. programmes one would think that millions of workers were all scrambling to get into the training centres. This is not true. Experience in previous redundancies, for example, in coal mining, is that only a small proportion of the workers affected are suitable for, and want, the kind of training offered at Government training centres. Experience to date of current redundancies in the motor car industry indicates no change in the pattern. Nevertheless, I am examining very urgently whether the capacity of existing training centres can be further expanded in the short term, perhaps by making more intensive use of space and by bringing forward some of the additional classes that were planned for next year.

I warn the House that, in general, we are already pushing ahead with expansion of the training centres as fast as we can and, therefore, no sudden and dramatic increase in their capacity can be expected. I will, however, explore all the possibilities and put in additional classes wherever possible.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

How many vacant training places are there in the training centres now, and how many of them are in Scotland?

Photo of Mr Raymond Gunter Mr Raymond Gunter , Southwark

In general, we run them at about 85 per cent. of capacity. But do not think that they are always 15 per cent. empty. This margin is needed, for instance, to deal with men who sometimes do not turn up and we regard 85 per cent. effective use as a reasonable figure.

The Government, through my Department, also make a direct contribution to the redeployment of labour through the industrial rehabilitation service, which was mentioned by the right hon. Gentleman. Our industrial rehabilitation units cater primarily for the disabled. By finding out the best uses that can be made of residual abilities, the units are able to advise the employment service about the kind of work for which individuals with a disability are best suited. The units thus play a valuable social and economic role in redeployment of the disabled. They have a high success rate there. But they also have a contribution to make, perhaps increasingly, in helping to resettle anyone who, even though not disabled, finds difficulty in changing his employment. For example, we all know that when redundancies come along the older worker has most difficulty in finding alternative employment. It is my hope that increasingly our industrial rehabilitation units will be able to offer their services in this way, thus enabling my placing officers to submit older workers for job commensurate with their abilities. There are at present 17 industrial rehabilitation units. Four more will be in operation by the end of next year.

I want to return to the subject of the industrial training boards. They are in their early days; the oldest have not been operating for much more than two years. They have a great deal of basic work to do in formulating a systematic general approach to training in their industries. Moreover, while the boards are concerned with training at all levels and for all ages, they have concentrated to begin with on their biggest task, the training of new entrants into their industries.

Nevertheless, a number of boards are already making grants towards the cost of adult training carried out by employers, and in the older boards we already have machinery to hand to assist in the problems of adult training now. Much of industry has yet to be covered by training boards, but, fortunately, we have boards covering many of the important manufacturing industries, particularly engineering, which is the most important industry of all from the point of view of redeployment and training.

We can, therefore—here I take up a point made by the right hon. Gentleman—look to the boards for help in this question, though not particularly for help at the level of craft training, which is normally done in the Government training centres. Accelerated adult training of this kind requires a very special technique, and it is not normally carried out in industry. But the great bulk of men and women becoming redundant will, if they require training at all in order to take up new employment, require training at the level which is commonly, if sometimes rather unhappily, called semi-skilled training.

This is the sort of training which industry normally has to provide for adults who are changing their employment, and we can look to industry, with help and guidance from the training boards, to develop any additional facilities which may be required.

I am urgently pursuing, with the industrial training boards, the question of an early and substantial increase in facilities for off-the-job adult retraining. Where facilities of this kind are provided under agreed arrangements, the training boards can already receive a financial contribution from my Ministry towards the current costs of the places provided. To help give a further stimulus towards the provision of adult retraining places in the next 12 months, I am now considering, with the boards, whether any additional Government assistance is called for during this period. In particular, discussions have been going on with the chairman and officials of the Engineering Industry Training Board, and the ideas I have put to them are receiving urgent attention and consideration. I shall make a further statement to the House a soon as possible.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

My right hon. Friend knows well my concern with Bathgate. On the question of the accelerated adult training scheme, are the grants payable to other firms in the area which convince the Minister that they can carry out sensible schemes for men going to particular jobs?

Photo of Mr Raymond Gunter Mr Raymond Gunter , Southwark

This is the very thing I am talking about. We are discussing this now with the engineering board, in particular.

I have been talking primarily about training undertaken by firms with financial assistance from the Government made available through the machinery of the training boards. This, of course, does not exclude direct training undertaken by the boards themselves. It is often overlooked that some of the boards have already set up their own off-the-job training centres. The Construction Board has a centre at Bircham Newton, in Norfolk, for the training of plant operators, and the Shipbuilding Board's centre at Southampton for first-year training of boat building apprentices is due to open shortly.

I have made clear that, if any boards feel that they can assist in the retraining of adults by opening centres of their own and, perhaps, by using premises which employers are able to release at the present time, this would be a most helpful contribution. I would propose that any financial assistance which may be given through the training boards to individual firms would also be available towards any provision of training places by the boards themselves.

I have not set out in this speech to cover every conceivable facet of redeployment but, rather, I have sought to concentrate on two main points.

Photo of Sir John Hall Sir John Hall , Wycombe

I apologise for interrupting, but the Minister seems to be coming to his peroration without having mentioned housing. Does not he agree that any attempt to redeploy labour outside its own area is doomed to failure unless there is a very considerable and immediate increase in housing in the areas of labour shortage?

Photo of Mr Raymond Gunter Mr Raymond Gunter , Southwark

I take the point at once, and my hon. Friend the Parliamentary Secretary will be dealing with the question of housing. But, again, let us not get it out of proportion. The contribution which can be made in that field, when set against the whole background, cannot cover such a great percentage of the individuals concerned, important though it is.

I have sought to concentrate on the two main points of the problem which appear to me at the moment to be most critical, that is, the way my Ministry is tackling the major redundancies which are occurring and the broad subject of industrial training. Other points, I am sure, will be raised in what I hope will be a constructive debate. We at the Ministry of Labour will pay the closest attention to any suggestions which may be forthcoming. My hon. Friend the Parliamentary Secretary will address her remarks, I know, to many of the points which are raised.

In facing up to the current problems of redeployment, I do not for one moment imagine that the Ministry of Labour has an absolute monopoly of knowledge and experience about the way forward. But, as the House knows, we have played a part in dealing with situations like this more than once in the post-war years. We have devoted considerable efforts within the last 18 months to two years to improving our basic employment services, and we are still experimenting in a purposeful way with new procedures, new patterns of organisation and new specialised services which, I hope, will fit the Ministry more than ever in the past to aiding that redeployment of our manpower which is one of our basic economic needs.

Here—I know that there are hon. and right hon. Gentlemen on the Opposition Front Bench who will join with me—I pay tribute to the staff of the Ministry of Labour. [HON. MEMBERS: "Hear, hear."] For one reason and another, they have been working under very considerable pressures for some time, but I am confident that, whatever these pressures may be in the coming months of unemployment and redeployment, they will do their utmost to provide a humane and imaginative service to all those men and women who need their help in finding fresh work.

I am, however, very ready to accept that, in meeting the nation's needs in this and coming years, the work of the Ministry of Labour along with that of other organisations of national importance may need to undergo adjustments and improvements in both the short and the long term. It is against that background that I have tried to set out, with modesty, I hope, and without attempting to raise any false hopes, what we are doing in the current situation, and it is in this spirit that I shall follow the course of today's debate.

5.37 p.m.

Photo of Mr Geoffrey Lloyd Mr Geoffrey Lloyd , Sutton Coldfield

The Minister of Labour, as one would expect, have given us a competent and sympathetic account of the services which his Ministry is providing in this difficult national situation, and in this he has carried with him the muted sympathy of the House. But when he asked quite suddenly, and almost surprisingly, in the middle of his speech, whether the policies of the Government would redound to the benefit of the economy and whether the upshot of it all would be an increase in our country's export potential, these great questions rolling out in his fine voice, the answer came back in surprisingly muted and unconfident terms.

It is my purpose to try to assist the House by making a short analysis, in the context of the right hon. Gentleman's speech, of the situation in the Birmingham and Midlands area, where, by common consent, the problems, though they may not be the fiercest, are the greatest and on the largest scale.

Earlier in his speech, the right hon. Gentleman said that we were dealing with a human problem. I can join him there and say, together with, I am sure, hon. Members opposite whom I see in their places today, that, having spent the weekend in communication with my constituents in Birmingham, particularly those in the motor car industry, that I know only too well that it is a human problem.

It is just as well that we should realise that, although Birmingham and the Midlands have had the reputation of affluence—which, indeed, is deserved—the men on the shop floor are very, very worried. One man said to me, "I have been getting, on and off, £30 a week for work in four 10-hour shifts, with one week on days and one week on nights, and now I find myself down to £16."

Some people may say in other parts of the country that he is still well off, and maybe he is. But he will reply, "Having got used to my standard of living it is very hard when it has to come down." Most of us will have great sympathy with that because one of our great objectives is to get an increasingly affluent working class, of course with increased productivity This situation falls very hardly on the wives, with all their problems of housekeeping. As they say themselves, no one can plan any more. If anyone thinks that the problem of confidence is confined to the board room they should talk again to the car workers of Birmingham. One thing is clear. If the Minister's audience today had been car workers instead of right hon. and hon. Members, there would have been nothing like the quiet atmosphere of this Chamber.

Perhaps I may mention, although I know that hon. Members opposite do not approve, the fact that Birmingham Corporation, now under Tory control, has offered 10 to 15 per cent. of its council houses for sale to individuals. The offer was made in July and was a great success. There were 8,000 applications. But, of course, each application has to be examined individually and the tale today is very different. Applicants say, "We want to do it, but with short time and possible unemployment we cannot think of it now."

I want to refer to the broader aspects of redeployment, with special reference to the Midlands. Admittedly, the great bulk of the redundancies will not take place until 1st November, but what is the information that we have from people who are probably knowledgeable, apart from the Ministry? The trade unions take the line that the majority of vacancies in the Birmingham area are in the service industries. Certainly, the municipal bus services, the Midland Red—which circulates throughout the Midlands—the Post Office and certain other municipal services have vacancies. But is this really what the Government intended when they brought in the July package? Not according to what the right hon. Gentleman said today. Admittedly, the right hon. Gentleman told us that, of the 12,000 to 13,000 vacancies available in the Midland area, about half were in manufacturing industry. Perhaps the hon. Lady will correct me if I am wrong.

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

That is correct. About 40 per cent. of current placements have already been made in manufacturing industry.

Photo of Mr Geoffrey Lloyd Mr Geoffrey Lloyd , Sutton Coldfield

The point I wish to make is that, in manufacturing industry, the overwhelming demand is for skilled men, for tool rig men. But these are just the ones who are not becoming redundant in the motor industry. I would be very surprised if the redundant men from the motor industry were taken into Birmingham industries with anything like such a high export component as the motor industry itself has. In any case, whether this be so or not in the distant future, it will take much more prolonged training than the Government seem to have any idea about at present. This is the advice that I get from industrialists in Birmingham, and I think that they are right.

Granted, for a moment, that the Government were right in their general objectives in the July package, are we sure that the measures they took, particularly with regard to our greatest export industry, were correct in detail? The Minister says that the measures were harsh and tough and were meant to be. That is so, but they were also very hurried. Some people say that they were panic measures, but do not let us go as far as that. Let us perhaps just use the words of the hon. Member for Ebbw Vale (Mr. Foot) who said, in talking about whether there could have been any advance planning, How could it be when none of the originators knew on July 10 what drastic deflationary measures they were to embark upon on July 20? In other words, the Midlands car industry and this country at the moment are under the lash of measures which Ministers concocted within 10 days. No doubt it was easy for the planners in the Treasury, the Board of Trade and the Department of Economic Affairs to say to themselves, "This will be the effect of such-and-such an alteration in Purchase Tax and hire purchase." If so, the Government should tell us why the car industry alone was singled out to have the deposit rates raised to 40 per cent. when the highest rate effective in other products was put at only 33⅓ per cent. What was the reason for that difference? Has it been justified by subsequent events?

The Government may, indeed, have foreseen that result, but did they look further into the circumstances of the industry? Did they fully take into account that, while the assembly firms are all over the country, the component firms—the infrastructure of the industry—are practically all in the Midlands and that, therefore, the lash of these economic measures would be concentrated there. Further, did they realise what they were doing, having regard to the normal autumn circumstances of the motor industry and the normal business and financial relationships built up over the years to meet the problem?

One of the great problems of the industry is that the public want to buy their cars in the spring and, naturally, both workers and manufacturers want to provide relatively stable production and employment if they can. Thus, in recent years, in the ordinary course of private enterprise, there has grown up a system whereby big distributors order hundreds of cars at this time of the year. I am told in Birmingham that a big main distributor would order anything from 400 to 600 cars. I believe that there are other distributors who buy as many as 1,000. It is a function they perform. They enable production and employment to continue. They hold the stocks and can give immediate delivery to the public when the sun shines and the public want to buy.

I will give an easy example, that of 1,000 cars at the figure—a low one, of course—of £500 a car and a total of £500,000. Naturally, a firm of distributors could not be expected to finance such an operation out of its normal cash flow, particularly when business is bad. That is normal work for the banks, which usually have no difficulty in giving credit for this kind of operation. But not this year.

Thus, on top of everything else the industry has had to put up with from the Government, this great support of the industry built up by private enterprise over the years has been slashed to pieces by the other side of the Government's operation—the credit squeeze. Were these wise men, during those 10 days, aware of what would be the effect not only of the hire-purchase controls, but of the effect of the bank squeeze on this important operation to sustain production during the autumn period? It is this kind of question to which we should have an answer.

We have heard from the right hon. Gentleman a routine defence of his Ministry and he had some success in explaining what it is doing to help. But it was a very inadequate defence of Government policy as a whole. He made a very inadequate defence of the Government's policy as a whole. It is known by the country that the Government concocted this policy in 10 days in a panic. They would be wise to look at the details of what they then did to see whether they cannot mitigate the consequences.

This applies particularly to the Minister of Labour and the Parliamentary Secretary, who will reply to the debate. If they could mitigate, in some way, either the bank measures or the hire-purchase measures—the hire-purchase requirements on the motor industry are higher than on any other industry—they would do something to help solve their own problems. At present, they are giving themselves a very great problem, and with all the services that they have told us about this afternoon, they have no chance of solving it. But if they modified their measures and if the process could take place more gradually, there would be very much less human suffering and very much more economic sense.

5.51 p.m.

Photo of Mr Lewis Carter-Jones Mr Lewis Carter-Jones , Eccles

I should like to spend a short time on the methods by which we could possibly retrain some of the people who now find themselves in difficulty. I should like, too, to call upon my experience in technical education and education generally.

Before I do this, may I draw the attention of the House to the fact, that, with many other industrialised West European nations, we are supposed to be a society faced with technical change. We invest in new plant, new techniques and new methods—and we have been doing this for a long time. I wonder whether Parliament—not Ministers, not the Cabinet, but Parliament—ought not to accept part of the responsibility for the difficulties which we now face about industrial training.

I should be the first to agree that the 1963 Industrial Training Act was a well-worthwhile piece of legislation. It was progressive. But notice that it came in 1963. It came late—all too late in the day for a dynamic technical society. We have known about the difficulties of change for a long time, but we have made no provisions to meet them, and perhaps if there is to be recrimination today it should be upon each and every one of us. It may well be that there are honourable exceptions, but in the end we all have to take responsibility for the difficulties which we now face in respect of training.

It was once said that man is the only animal that can laugh and cry because man is the only animal that knows the difference between things as they are and things as they could be. Could not things be very much better in training and retraining? In the end, all of us have a responsibility in this field. If we are left with human beings as our greatest raw material asset, ought we not to use it more effectively?

It is possible from time to time to speed up the process of training, and I should like to refer to one particular technique. Perhaps I may be allowed to make reference to a scheme which has been described briefly this afternoon by the Minister—accelerated training. This has probably been the most misused description of a form of training that we have ever heard. Accelerated training was first of all advanced in Switzerland. It is a highly disciplined form of training.

I hope that the Ministry do not start trying to impose this type of training upon everybody who wants it. For training, it is essential to have volunteers. The Minister was correct in saying that. But not all volunteers are suitable material for receiving training under an accelerated training scheme, because such a scheme presupposes that the person has the skill, the maturity, the initiative and the physical well-being to carry out such a course. To allow someone to go into accelerated training without first of all finding out whether he is suitable would be folly and cruel indeed. It seems that the Ministry intend to reconsider the possibility of accelerated training. If so, I sincerely hope that they keep in mind what I have said and do not confuse ordinary training with accelerated training. I hope that they will bear this clearly in mind.

The next point which I make is that we have not a good register of what are our future needs in terms of skills. Everybody claims that this has been done and that has been done, this survey has been undertaken and that survey has been undertaken. But an observation in the editorial of the Industrial Training International of last month was particularly valid. It said that we have not an econometric model which will indicate our future needs. The journal did well to warn of the difficulties which we face in training someone for a skill for which there is no real demand.

If this happened it would not be for the first time, but the number of cases should be kept to an absolute minimum, and this requires more knowledge of future development than any which we possess. I should like the Minister to indicate what action is proposed by the Ministry in respect of future possibilities for new trades. This is essential. We are lagging behind other Western European countries in the analysis which we are making of future needs.

Having said this, I would add that there is no need to run away from giving people basic training in any particular trade or craft which can be applied to other trades at a future date. If the economy were to get fully under way and if all the technical "know-how" were applied, the rate of development would be so vast and rapid that within the lifetime of any one man he might need to be trained or retrained four, five or even six times. This may sound an exaggeration, but if the restrictions are removed, for example if other countries apply rapidly all the technical "know-how" which they already possess, then skills will become redundant far more quickly than anything we have ever experienced before.

Perhaps an appeal should be made to accept the concept of basic training in technical skills for all people. I do not mean the basic tasks, but the basic training which would give an apprentice or a man being retrained an appreciation of measurement, of the handling of materials, and this type of thing. In this field the industrial training board, in its first-year scheme, is doing a first-class job, because it has clearly shown that with basic training it is possible to establish modules of learning which can be changed to suit the individual's needs as he progresses in time through his apprenticeship and through his period in industry. It would not be beyond the bounds of possibility for people to retrain at 40, 45 and 50.

Some hon. Members may well smile, but I am delighted to say that I have an ex-student of mine who decided at the age of 49 that he wanted to take a full-time degree at Oxford. He had been a capstan lathe operator. He took a first-class degree in English at honours level.

Perhaps the difficulties facing people in retraining and in advanced education are sometimes too great. I say with my tongue in my cheek that perhaps the Minister could loosen the purse strings of the Treasury somewhat so that people could advance beyond the normal skills and training required for crafts and into the technologies. Retraining would be more readily accepted by ambitions people, by people anxious to advance, if the lines of communication to further progress were clearly marked out for them, and only the Ministry of Labour, the Ministry of Education and the Treasury can highlight what progress is possible.

The right hon. Member for Leeds, North-East (Sir K. Joseph) spoke of the use of existing training centres within certain factories and firms. He took his theme straight out of the Economist of last week, which spoke of the possibilities of flexibility of retraining and of people belonging to different firms attending retraining schools within the one firm. I do not always agree with the Economist, but on this occasion I felt that at least its heart was in the right place, for it was argued that if the Government could encourage the training boards to speed up this work, it would be possible to increase the amount of knowledge and skill possessed by our people.

I doubt whether the Minister would say that he was a pessimist, but when he said everything that could be done was being done, it seemed to me that he and his Ministry believed that to be so. However, those of us who have been working in training for a long time cannot help feeling that the whole process could be speeded up. In the end, the industrial training given by instructors requires the skill of the instructors, the men who will pass on the knowledge. In the interim it would not be a bad idea to use every resource available. That might not provide the best of training, but it certainly would offer hope to those who are now wondering about their future.

6.4 p.m.

Photo of Mr John Page Mr John Page , Harrow West

I congratulate the Minister of Labour on his honesty this afternoon in accepting, on behalf of the Government, that they have full responsibility for the present situation in industry. Many of his hon. Friends and even some of his right hon. Friends have been trying to shuffle responsibility elsewhere, and in those I would include the hon. Member for Oxford (Mr. Luard), who is reported in the Oxford Mail as having said: The difficulties facing B.M.C. are not the Government's making, but due entirely to mismanagement by B.M.C. themselves. The hon. Gentleman said that The Government would have to make sure that the same sort of troubles did not happen again. There might be a need for increased control of the motor industry, but he did not think there were any plans for its nationalisation as a whole. That was in striking contradistinction to the right hon. Gentleman's statement this afternoon.

The Minister gave a most interesting survey of the excellent services being provided by his Ministry to try to help people who have been sacked and I am confident that he gives his officers the fullest backing and I know that much of their work has been extremely successful. But he gave no answers to the strategic questions, the vital one being how any of the people declared redundant and who have to change jobs are to get into export industries, into the manufacturing industries and other industries of special value to the country, which has always been stated to be the Government's aim.

The right hon. Gentleman bent over backwards to point out that he had no power and little influence to bring about the redeployment of redundant people into positions which he would regard as valuable. He told us that of those who were employed in the West Midlands motor car industry 60 per cent. were likely to get other jobs in manufacturing industry in the area, but that means that 40 per cent. will probably be going to service industries. It can be seen, therefore, that by the measures of 20th July 40 per cent. of the people who were wholly employed in the country's largest exporting industry are to be redeployed in non-export employments.

The figures for the West Midlands area were the best example which the right hon. Gentleman could give and in Scotland and Oxford there are graver diffi- culties, although the right hon. Gentleman is "reasonably hopeful of rational redeployment", which is not a very confident statement by a leading Minister in the battle that the Government's declared policy will be effective.

Before making two suggestions for immediately improving the position, I want to draw attention to one aspect of redundancy and short-time working which is causing concern to many people not actively engaged in the motor car or other high-earning industries. This concerns the rules surrounding the payment of unemployment benefit during short-time working. I accept that these rules have stood for a number of years, but my right hon. Friends are not to blame for the present situation, because massive unemployment and massive short-time working were never the declared policy of a Conservative Government.

The present rule concerning the payment of unemployment benefit to people on short time is known as the continuity rule, that is, an employee has to be laid off for two or more days in any six of consecutive working in order to be able to draw unemployment benefit. Saturday working counts if Saturday is considered to be a usual workday in a factory, but my inquiries show that in many motor car companies where Saturday is not usually a line day there is still considered to be a notional six days' working week.

Putting that on one side for the moment, one finds a position in which the rules covering unemployment benefit for short-time working are being twisted by management, pressed by trade unions, in order to produce results which I do not believe were originally intended.

Take the five-day working week factory rather than the notional six. If the workers in the factory are put on a four-day week, and were they to work from Monday to Thursday of each week, with Friday as a "lay-off" day, they would not be entitled to any unemployment benefit. However, the pattern is now being altered, and it is becoming a tradition that when a four-day week is being worked, the week worked is from Monday until Thursday in the first week and from Tuesday until Friday in the second week. Thus, in six consecutive working days, Monday until Friday, plus the following Monday, the man is laid off for two of those days. He therefore becomes entitled to two days' unemployment benefit in every fortnight.

Far be it from me to appear to be insensitive to the discomforts of people when they are on short time, but the Minister, when speaking of the unemployed, redundant motor industry worker, said that they might be offered other jobs, municipal and otherwise, with a wage of about £16 a week. This is similar to their unemployment benefit. Consider the position of the £30-a-week worker, working a four-day week. His pay for the four-day week would be approximately £24. If he receives this for that four-day week and the working pattern is altered, it will be found that he receives something like another 30s. in unemployment benefit.

Is it really reasonable that many people living on fixed incomes, many men earning less than £24 a week, should be asked to contribute from their own taxation towards the paying of unemployment benefit to men who may be receiving a basic wage, of £24, for four days? I consider it to be quite unreasonable. It is causing a lot of suspicion of "feather-bedding" of redundant workers among people who work for much lower wages than those paid in the motor and engineering industry.

The poignard really is turned in their wounds when these people discover that the companies are acting as the unpaid agents of the Ministry of Labour in the paying out of unemployment benefit to men earning large incomes and working a four-day week, who have been able to claim the money by what I will call the unemployment benefit "fiddle". It is extraordinary to think that a man receives in his pay packet four days' pay for highly-paid work, plus—and I do not know if it is in the same packet, I expect that the Truck Act has something to say about that—his unemployment benefit and that the whole procedure is laid on by the company concerned.

This seems to be ridiculous. If we are to enter a phase of substantial short time, or unemployment, I ask the Minister and my hon. and right hon. Friends to consider whether the time has not arrived to state that unemployment benefit cannot be paid to short-time workers with a minimum short-time wage over a figure of, say, £20 or £22 a week. Otherwise, if this goes on, as it may over the winter and into next summer, and possibly into the winter following, there may be a resentment among people who do not work in the motor industry, and similar highly paid industries, who will consider that they are being unfairly treated in comparison with these men.

The real way in which redeployment could satisfactorily take place would be for industries vital to greater productivity, and perhaps to increased exports, to be given encouragement. What the Prime Minister and the Chancellor ought to have done in the 20th July measures was to reintroduce investment allowances for capital investment in industry in the most attractive form possible.

This would mean that even though there might be a decline in our orders for manufacturing industry it would still be worth while for it to continue with its capital improvement programme, upon which our future prosperity and that of the machine tool and computer industry depends. The results of the C.B.I. survey, published on Friday, show the steepest decline in proposed industrial investment since its four-monthly inquiries began in 1958. This is particularly serious for the future and it is the kind of loss of investment, the loss of future productive ability, which cannot ever be made up. I beg the right hon. Gentleman to consider seriously what he can do to improve industrial investment.

The next point which I offer to the Minister I have already offered to my right and right hon. Friends a few years ago, but unfortunately, it was not taken up. It is that greater power should be used by the Government, in their position as a purchaser, and that they should place orders only with those companies which satisfy them that they are carrying out sufficient modernisation, employing proper industrial training techniques, using modern equipment and that a proportion of their manufactures is exported, directly or indirectly.

Central and local government together are responsible for the buying of over 40 per cent. of the goods and services produced by British industry. We should make better use of this purchasing power. There are precedents in the United States, where there are things called manufacturing capability certificates. Government orders are placed only with firms which equip themselves properly and are tooled up to a certain degree of efficiency.

Finally, I should like to quote to the Minister an extract from a speech of a distinguished overseas industrialist who was visiting this country last week. He said: The British people cannot read the writing on the wall until their backs are against it. I have always resented the thought that the wall and the last ditch are the traditional places for the British people. I believe that the writing is on the wall and that it says, "Labour must go". I think that the people can read it and that very shortly they will be demanding that Labour must go with such clamour that the Government will have to accede to the request.

6.21 p.m.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

I will not pursue the labyrinthine argument of the hon. Member for Harrow, West (Mr. John Page) about the intricacies of our social security system other than to comment on his rather unfortunate choice of words. He talked of the discomfiture of people rendered unemployed.

Photo of Mr John Page Mr John Page , Harrow West

I spoke of the discomfiture of people on short-time working.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

I accept the hon. Gentleman's qualification. But he talked of "featherbedding" by their fellow workers of people on short time. I have lived through the experience which he attempted to describe, and if anyone had suggested to me or any of my fellow workers that I was merely experiencing discomfiture or was being "feather-bedded", I should have used language which would have put me out of order immediately. The hon. Gentleman should have a word with the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd), who, having had some experience of negotiating with engineering workers, might teach him a thing or two about what short-time working and unemployment really means.

The hon. Gentleman said that my right hon. Friend the Minister of Labour said that he and the Government accept full responsibility for the present situation. I recall that my right hon. Friend said something like that, a characteristically generous gesture, but that does not mean that it is accepted by all of us on this side of the House. I was very disappointed when my right hon. Friend, during his tour round the distressed areas, for some reason left out my constituency of Doncaster about which much was said during the Recess and which has not been exempted from the difficult situation which we are experiencing.

We had 600 workers made redundant at I.C.I. Fibres and 300 workers made redundant at International Harvesters. There are one or other two small pockets of unemployment. Perhaps I may be forgiven if I say a few words about this matter. I said to a mass meeting of workers in my constituency, without in any way trying to mitigate the effect of the Government's measures, that the blame for those redundancies lay fairly and squarely with the companies. I have letters from the local trade union officials at I.C.I. dated as early as March this year, before the General Election, expressing their deep apprehension about the situation existing in that factory. It would appear that, in anticipation of an upsurge in demand for nylon yarn, the company advertised for and proceeded to enrol from the start of the year additional workers at a time when it did not have work or jobs to give them. As recently as April, this company was advertising for labour when there were men idle in the factory who were told that orders were anticipated and that employment would be found for them.

What happened is common knowledge. About 1,000 workers were made redundant by LCI., 600 of them in my constituency. The excuse given by the local management in the printed paper which it distributed was that this redundancy arose from the demands of the Selective Employment Tax. How daft can one get? Everyone knows that I.C.I. Fibres will qualify for a whacking great rebate and that it is in its interest to retain workers.

Photo of Mr Geoffrey Lloyd Mr Geoffrey Lloyd , Sutton Coldfield

Perhaps it had in mind the customers whom it was hoping would buy and thought that the demand would be much less.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

The nonsensical character of this was expressed in a television appearance by the chairman of the company, who said that the reason was the figure given in the Government's National Plan as a forecast of the expansion in nylon yarn demand in 1966. As I recall it, one of the criticisms of the Opposition about the National Plan was that the figures in it were provided by industry, and presumably because I.C.I. Fibres is the principal manufacturer of nylon yarn it had partial responsibility for the figure in the National Plan. So who is to blame?

It was significant that the Sunday Times, not long afterwards, pointed out that there were other nylon yarn manufacturers who had not experienced the need to make people redundant because they had said in 1965 that they anticipated that the demand for nylon yarn would be stagnant in 1966. In other words, there was clearly a blunder in the forward planning and forecasting of I.C.I. Fibres, and this was subsequently pointed out by the city editor of the Daily Mail, who said that this was I.C.I.'s "biggest clanger", and apparently the bigger the concern the bigger the clanger it drops.

I turn to the other concern in my constituency at which large redundancies were experienced, International Harvesters. Three hundred men were made redundant. This was forecast as early as February this year. Before this year's General Election I met in the House the principal directors of this international company based in the United States to discuss the dangerous situation developing in the factory. I was given assurances which in the event did not materialise. The company forecast an upsurge in orders which did not materialise. Eighty per cent. of this company's products go in exports. Obviously it is a company which we do not want to redeploy people out of but into.

The company has been frank and honest in saying that the need for redundancies arises not from Government action but from its own inability to secure orders for that factory.

Photo of Mr Peter Mills Mr Peter Mills , Torrington

Would not the hon. Gentleman agree that one of this firm's troubles is that, due to the shortage of credit facilities, the farmers have not been able to buy the agricultural machinery which normally they would buy?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

I wish that hon. Members would listen. I said that 80 per cent. of this company's products were exported. If the hon. Gentleman suggests that sending tractors to Norfolk is exporting, then he can have it his own way. The hon. Gentleman smiles, but the factories to which I refer have their main lines of production in earth-moving machinery which is in considerable demand at present.

I grow apprehensive about the Government's control of the economy and of industry when an increasing number of companies have a majority of their share capital in the hands of American holders or are directly controlled by United States based parent companies, as is the case here. This is a large international organisation, based in the United States, with manufacturing subsidiaries in a host of countries.

Early in December last, year, the Sunday Times carried an announcement that United States companies such as this one had been given an instruction by the United States Government to cut down on their overseas activities. This was for a particular reason. The Vietnam war may seem very remote from the subject that we are discussing, but it is closely linked with the redundancies we are experiencing.

The British subsidiaries of the international organisation to which I have referred are experiencing difficulties because the United States Government, in response to the demands of the Vietnam war, has had to reduce its overseas aid to certain under-developed countries. Overseas aid was often channelled into orders to companies such as this, but it has been made abundantly clear that when United States aid is being given to an underdeveloped country it is expected that American industry will feel the benefits first. It is because the parent company in Chicago is on short time that much of the work that might have been diverted from the central sales organisation to its European subsidiaries has now been turned back to the American factories.

The experience in my constituency does not arise, it seems to me, from the actions of the Government. That is not to diminish the consequences of the Government's actions, but I am getting a little sick and tired of hearing, day in and day out, in the House of Commons and elsewhere, private industry and private enterprise pass the buck to the Government for their own failures and weaknesses. [Interruption.] That view is obviously shared by a great many British people, as reflected in the public opinion polls.

I am the last to deny the need for redeployment, for getting some people out of jobs where they are not making the most useful contribution to our economy, jobs which do not have the right priority, and getting them into other jobs. It is equally obvious to me that we cannot get people into the important jobs unless we first get them out of the unimportant or less important jobs.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

We have heard much in this debate about unnecessary and unprofitable jobs. Would the hon. Member care to specify some of the industries or jobs from which he thinks that people should go?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

Well—[Laughter.] Before hon. Members opposite giggle, they should wait for the reply. One of the largest industries in the county, partly as a consequence of legislation passed by the previous Tory Government, is the gambling industry. I would like to see a lot of people redeployed from it, certainly from some of the seaside entertainment industries, and so on, and perhaps some people winkled out of boardrooms and given useful jobs. Despite the streams of crocodile tears poured out by hon. Members opposite, there are those who have not one job but two or three, or possibly sometimes as many as a dozen, none of which they do properly.

I accept the need for some redeployment. The question is how we should effect it. I am prompted by the giggles of hon. Member opposite to pursue something on which my right hon. Friend the Minister turned his back. He said that we should not look backwards and that there should be no recrimination about the past. We have had buckets of crocodile tears from the benches opposite for the poor unemployed. The right hon. Member for Leeds, North-East (Sir K. Joseph), in opening the debate for the Opposition, talked about the callousness of the Government. The real, cynical callousness is that people who have enjoyed the luxury of idleness and have never experienced the hardship of unemployment should presume to lecture us and the nation about it.

The hon. Member for Harrow, West said that the Tory Government never planned unemployment. It is a fact that for all the unemployment that we have now, which I regret a great deal more than hon. Members opposite, because I have experienced what it means to be unemployed, in at least half of the 13 years that preceded 1964, in aggregate the total figure of unemployment was far in excess of what we are discussing now.

Hon. Members opposite talk about not planning unemployment, but was not that the aim of the Beeching Plan? Did that simply happen, or was it not the consequence of a deliberate decision on the part of the then Government to make scores of thousands of railwaymen unemployed? In my constituency of Don-caster, 1,500 of them lost their jobs from the railway workshops in three years. It was the same Government who took the conscious and deliberate decision to move the Ford factory from Doncaster—the only motor car industry in the Yorkshire and Humberside regions—and relocate it at Halewood, a decision with which I do not quarrel. None the less, the consequence was that 2,000 workers in my constituency were made redundant.

So do not let hon. Members opposite talk about not having planned unemployment. There was no squawk of concern from hon. Members opposite about the workers from Ford's or British Railways. Their concern has been lost in the mists of the past, on which they prefer to turn their backs.

I want to say how I feel that we should bring about redeployment. We could fiddle around with the Selective Employment Tax. I share the concern of hon. Members, on both sides, who feel that we could use this in a positive and discriminating way to help people who would otherwise find it difficult to obtain jobs by giving them a tiny margin of priority. There are difficulties with the redundancy payments scheme, which is tending to ossify the labour force and to make it stagnate, taking some of the fluidity and mobility from it because of the reluctance of workers to sacrifice accumulated redundancy payment rights.

I feel that something could be done here if my right hon. Friend would try to persuade industrialists and trade unionists to abandon the old-fashioned—as it is now—concept of last-in, first-out and, perhaps, to give priority to those workers who want to be made redundant. This certainly would take a lot of sting out of the present situation. The very wise decision of the recent Labour Party conference to urge upon Parliament a policy of profit-sharing would also help to cushion the blow while bringing about the same effect.

I know from experience the plight of the worker who finds himself working only four days instead of a full week. I understand that one of the complaints today is that most workers do not want a mere five days but want as much overtime as they can get. In those circumstances, the fellow who is working only four days instead of five will before long start saying, "This is not much use to me and my wife" and will start to look for another job. In this way, instead of being directed from a job to go elsewhere, he will find his own job.

The real answer, I think, lies in the provisions of the Government's White Paper on Prices and Incomes. During the orgy of Government bashing at the Tory conference at Blackpool, the right hon. Member for Enfield, West (Mr. Iain Macleod) had something to say about the Government attempting to turn chemical workers into coal miners. I assumed that the right hon. Gentleman might be referring to the situation in my constituency, where we have an industrial area in the heart of what is probably the most important coalfield in Britain, the productive efforts of which suffer from a severe shortage of labour.

One could understand if the Government said that it was in the national interest that the demand for labour in industrial terms should be squeezed so that people could be pushed into coal mining, and this might bring about the desired effect. I assume that when the right hon. Member for Enfield, West was criticising this he was doing so on practical grounds. I would criticise it not on practical grounds but on moral grounds, and would say that instead of applying the whip of unemployment to drive people from one industry into another the Government should resort to the more positive way of making wages and conditions in the undermanned industry comparable in terms of attraction with those of the industry from which they want people to be squeezed.

That is the way to do it. That was the way outlined in the White Paper when, referring to the exceptional pay increases that were permissible, it said that where it was essential in the national interest to secure a change in the distribution of manpower or to prevent change which would otherwise take place, a pay increase would be both necessary and effective for this purpose. I accept that entirely, and I would say that if we cannot persuade men to go down the coal mines to get the coal which the nation needs the wrong way to try to do it is to drive them down. That is the way, whether we like it or not, of concealed direction of labour. I would like to see them lured down, if they are to go down, by making the wages and conditions in that industry comparable with those of the other industries where men to be displaced are at present employed.

The right hon. Gentleman may refer to this as a reversion to the laws of supply and demand. Whilst we and the Government have talked of that, I think it would have been better if we had not talked of it in relation to finding new and additional jobs under the Steel Board for my Lord Melchett and people like that who are, presumably, being offered very handsome market prices for that particular class of labour.

In my own constituency of Doncaster, the Labour Government are seen to do this, but the constituency is not enamoured of it. In fact, it astonishes me that we find reflected in the opinion polls the figures we do.

This is a point which the Government should be persuaded to look at very carefully in the present circumstances. I accept the need for the standstill, but throughout this debate this afternoon there seems to have been a curious ambiguity in so far as we seem to have confused two entirely different subjects, the question of the redeployment of our manpower so that it is used more effectively, and the weaknesses of the economy generally. If it is to be the case that the two are so closely inter-related as all this, it would appear that far from the location and redistribution of manpower being planned here in Whitehall and Westminster, perhaps we ought to go to consult the foreign bankers to see where they would like them, because it would appear to many of us in the House that they are the people who are really dictating the pace and pattern of the economy.

I would urge, then, my right hon. Friend and the Government as a whole to think of the bleak Christmas which will confront many of the people, not only those who are on short time and unemployed now, but those to whom he made reference this afternoon who will swell those two categories, and to put into action as a matter of tremendous urgency steps which would start the necessary upswing in the economy and give those workers some glimmer of hope that they will not have to endure the very bleak Christmas which at present faces them.

6.43 p.m.

Photo of Mr Gwynfor Evans Mr Gwynfor Evans , Carmarthen

Bad as the employment situation is in England, it is far worse in Wales. It is always worse in Wales. It was worse in Wales in the inter-war years. It has been worse in Wales during the post-war years as well, and now the situation in Wales is worse than that in any single English region and twice as bad as that in England as a whole. The percentage of unemployed workers in Wales today—and this is before the winter has come—has reached 3·5.

Now, it has reached this despite the fact that we have suffered very greatly from migration, migration which has depopulated the greater part of our country. Even last year, 1965, about 9,000 workers had to leave Wales to find employment elsewhere. If it were not for this migration the unemployment figures in Wales today would be far worse, as, indeed, they would be in Scotland, which, I think, during the last two years, has seen 80,000 people leaving.

If we include the people who have had to leave, if those people had been able to stay in their country and to work in their country, there would not in Wales today be 35,000 unemployed, as now, but about 70,000 or 80,000. That would be a more realistic figure. This is because we have not seen development there. It may astonish the House to learn this, but it is a fact that whereas, in 1954, we had in Wales 671,000 male employees, last year, in 1965, the figure was 670,000; that is, 11 years later there were fewer male employees in Wales than there were 11 years before.

This situation today must be considered in the light of the now famous statement which the Prime Minister made in the House in introducing the policy which is being discussed today. He told the House that he thought the House would find 1·5 per cent. to 2 per cent. unemployment not unacceptable. I take it that that figure implied that anything over 2 per cent., would be unacceptable and would not be tolerated. In fact, at the time the statement was made, the figure in Wales was already over 2 per cent., and that was being tolerated without difficulty. So that there are, in fact, two standards. There is one standard for England, and another and lower standard for Wales.

Photo of Mr Gwynfor Evans Mr Gwynfor Evans , Carmarthen

Deliberately to create unemployment in Wales now, in this situation, on top of what existed there already, for we have not known expansion there, is, I think, unforgivable. For the Government to call this policy redeployment is politics at its most cynical. They knew very well that in Wales, at any rate, there was no alternative employment for the people who were to be redeployed. They were to be redeployed, in fact, on to the dole. For many Welshmen the shake-out from industry has meant a shake-out from Wales.

If the Government want a shake-out in this way the unemployment queues will be even longer than they are, and they are long today. Come to my own County of Carmarthen. In some areas, Ammanford, for instance, there is 8 per cent. unemployment. In Llanelli, there are nearly 7 per cent. unemployed. The unemployed queues there are very long even now, and we ought to look at this in human terms—as hon. Members opposite have said, in terms of the suffering of the people, of famliies, in their home life and in community life generally.

The measures which the Government have taken to combat the situation with which they were faced a few months ago may have made sense in the English context, but for Wales they made no sense at all. The need for Wales is not to contract, but to expand. We have no expansion there. We have not seen development there. We want planned development there—planned development; and I say to the Government, for heaven's sake speed up production in Wales and a development plan. We read a lot about planning, but we see nothing of it in our country.

The kind of planning we need is the kind which any Government in Wales itself, if we had a Government in Wales, would have produced years ago and implemented, a plan which would require investment, heavy investment, adequate investment—in our communications system, for instance, in our roads and in our railways. We cannot hope for development in our country without spending money on this as a top priority. Therefore I say, let the Government act in Wales with the sense of responsibility which the Welsh people would show if they had control of their own life.

6.48 p.m.

Photo of Mr Don Concannon Mr Don Concannon , Mansfield

Anticipating this debate today I thought that mostly hon. Members would be talking about the constituencies which would be affected by redeployment. I hope to show, possibly, the other side of the coin. I myself am not long out of industry. In fact, three weeks before the General Election I was on the shop floor, though most of my time I spent nearly half a mile under the shop floor.

My constituency itself is not affected by redeployment. Indeed, my constituents are more worried about the reabsorption of labour. We hope—my local labour exchange is hoping—to benefit somewhat from this redeployment, because it is obvious that if there is redeployment from some places there must be a receiver for the redeployed somewhere along the line.

The best way, I think, in which one can explain this is to read a few figures which I have received from my own local employment exchange. During the four weeks ended 13th June there were 1,262 vacancies at my local employment exchange. Of these, 899 were in the basic industry of coal mining. For the four weeks ended 6th July, there were 1,354 vacancies, 962 of which were in the coal industry. For the four weeks ended 3rd August, there were 1,269 vacancies, 924 of which were in the coal industry. For the five weeks ended 7th September, there were 1,427 vacancies, and over 1,052 were in the coal industry.

The latest figures which I have, to 5th October, show that there were 1,247 vacancies, 941 of which were in the coal industry. Those figures are for the Mansfield Employment Exchange, which only covers a very small portion of the East Midlands coalfield, and if I were to say that the East Midlands coalfield has vacancies for over 3,000 men I would not be exaggerating.

The profits from that coalfield last year were £13,785,000, or, after interest, a matter of £9·4 million. It was the only division of the Coal Board to show a working profit. Before any of my hon. Friends get on to me about that, I ought to make it clear that I am not claiming that the miners in that area are better than they are anywhere else in the country, because anyone who knows the mining industry knows that it is the geological conditions which control productivity to a great extent.

My own area of Edwinstone made a profit of 16s. 7d. a ton in 1965–66. They mined a total of 10,466,000 tons, making a profit of £8,663,000. All that was done with a relative shortage of labour, and I am assured by all at area and divisional level that, if we had been fully manned, the profit would have been far greater than that shown in the Report.

Redeployment is not new in the coal industry. In 1948, we employed 718,800, and by the end of March, 1966, there were 436,200 employed. Last year, under the new terms, 41,043 men were shaken out of the industry. I am not sure whether I am included in that figure or whether I shall appear in next year's. The point is that a big shake-out has been taking place in the coal industry for a considerable time. In fact, some of our members have been shaken out so much that it is a wonder they are not suffering from shell-shock.

The policy of the N.C.B. is to redeploy from the unprofitable areas and short-life pits to the more profitable parts of the country, which means the East Midlands and Yorkshire. We instigated what was known as a transfer scheme as long ago as April, 1962. Today, it would be called a redeployment scheme. By March, 1966, over 7,000 men had used the scheme, but it must be remembered that when men are redeployed, one has to redeploy their families as well.

During 1965–66, 36,000 men in the industry were redeployed between collieries, and 2,000 were transferred between divisions, from the northern coalfields to the East Midlands or Yorkshire fields. Last year, 55 mines closed or merged, and a total of 21,000 miners were affected. However, by the end of March this year, there were 1,100 still unemployed. By 1970, it is estimated that redeployment in the coal industry will have reached a total figure of 120,000.

We have fought a continuing battle for five or six years between manpower and production in the East Midlands. As we have lost manpower, we have tried to keep up the rate of production. To do that, we have had to automate and mechanise to a great extent, and I should say that this is where good management relations have played a vital part. To cite only one case, in one district of a mine we were running short of labour and had to decide to automate or mechanise. In consultation with two union officials, the manager got broad agreement that we should automate. To the man's credit he turned to the union officials and said, "Right. Get on with it and phase it how you want to." I wish there were more management representatives like that round the country.

We have heard mention today of Bevercotes. That is a prototype colliery which is running on a skeleton staff at the moment for development purposes. It is a wholly automated mine, but, as I have already explained, with collieries in its immediate vicinity already short of labour, when Bevercotes is at last ready to start coal production there will be a manpower shortage. We have to have redeployment before Bevercotes can start. The way in which the N.U.M. and the N.C.B. are facing the problem is one which I recommend not only to the rest of industry and the unions, but to the Government, although the Government have played a great part in it.

I concede at once that there is no necessity for training in the industry. Even so, the industry has its own training schools and training regulations and does its own training.

It is laid down in the N.C.B./N.U.M. agreement that redeployment in the coal industry must begin before the old job disappears. That is a basic priority of the agreement. We have teams of industrial relations officers visiting divisions from the receiving divisions, which are those of the East Midlands and Yorkshire. They go round answering questions and interviewing men, discussing such matters as housing, jobs, pay, working conditions, schools, social needs and social activities in the areas where they are hoping to redeploy men.

When the debate was opened today, there was great play on housing, obviously. One of the first considerations in any redeployment scheme is the housing situation. Since 1952, the Coal Industry Housing Association—because we have our own housing association to deal with the problem—has built 24,000 houses. Last year, the association completed 1,029 houses, with another 700 under construction. In addition, local authorities build for the National Coal Board under contract, and last year they completed 987 houses, and there were another 13,000 at various stages of construction or under negotiation. In my own area, the Coal Industry Housing Association is now a larger housing authority than Mansfield Borough Council.

In my constituency, new houses have been standing empty for a considerable time waiting for men to be redeployed or for anyone to take advantage of the scheme. When men are redeployed from older areas in Scotland, the Northern counties and Wales—we have a few redeployed from Wales, and I am sorry if it happens that way—it is obvious that the rents which they have been paying for older houses are considerably lower than those in the East Midlands. In its wisdom, the Coal Board pays a differential in respect of rents over the first year, and that is gradually phased out over the next three years.

In addition, all removal expenses are paid from as far away as Scotland or Wales to the East Midlands, plus a grant of £100 to cover the essential fittings of a new house, such as lino and curtains. If there is no house available, the miner is asked to take lodgings in the community. He has a free lodging allowance, plus a settling-in allowance, and his fare home once a month until a house is completed. Any other liabilities such as rent, storage of furniture, and so on, are taken into account.

Possibly the only drawback of this redeployment scheme is the wages. Often it is not possible for a man to command a job which is as highly paid as the one he has left in his own coalfield when he comes to the East Midlands. In that respect, the Coal Board and the N.U.M. have a protected earnings agreement under which, for a maximum period of two years, depending on length of service, his wages are protected to a certain extent.

There are also further aids to redeployment. Under the latest scheme, an industrial relations officer visits families in those areas. He invites them to come down to the new areas to look at the houses, at the location, at the jobs, at the schools for the children, and at the social amenities before committing themselves to removal, and all this at the Board's expense.

Since 1962, 7,000 families have moved into Yorkshire or the Midlands at the rate of more than 100 a month, and having checked this at the weekend, I find that the rate has accelerated.

By 1970 the programme will have cost the Board £80 million. The Coal Industry Act of 1965 provides for a Government contribution of £30 million to the Coal Board on a £ for £ basis. Thus, as this will cost more than £30 million, the Board will have to find £50 million.

This is a good example of how to redeploy or shake-out. I do not claim that this system is perfect, because it has its own built-in defects, but I think that it provides the rest of the country, industry, and unions, with a lesson in industrial, and, what to me is more important, human, relations.

Some of our basic industries have been shaken out before. One has only to mention the railways, the mines, and the cotton industry. What I object to is the atti-ture of some employers towards some of their employees. They seem to think of them as pawns in a gigantic chess-game. The time is ripe for a change of attitude.

From my experience, which is relatively short, I know that managements and unions have an in-built defensive mechanism. I think that this is because over the years they have always been on the defensive. They are too busy watching each other to think about anything else. There should be a movement towards the centre between the two. In the best of relationships there is bound to be a point of conflict. We should aim to make this point of conflict as small as possible.

My attitude towards redeployment is that it is a matter for settlement between managements and unions. If the firms or managements are willing to tackle this problem in the way the N.C.B. and N.U.M. have done, they should be allowed to do so. The Board and the N.U.M. have shown that it can be done, but this is the only redundancy scheme that I have seen in operation.

In this day and age, with our experience, redeployment should be as painless as possible. It should be properly planned, and there should be proper agreement for the protection of all, including the employees. It is surely not beyond the big firms to have some forward planning of their employment needs. Redeployment should be gradual, with no one losing his job until another one is offered. Firms should be responsible for these men until they are found other jobs. I know that this will not solve the immediate problem, but if we had had a system like this about five years ago, we would not have the problems which are facing us now. Unions and managements should work together for this type of agreement.

I am not suggesting that this type of agreement is the answer to today's problem. All I am suggesting to managements, to unions, and to the Government, is that this is the type of thinking, and type of planning, which should be taking place by people on both sides to deal with this human problem of redeployment.

7.3 p.m.

Photo of Mr Patrick Wolrige-Gordon Mr Patrick Wolrige-Gordon , Aberdeenshire East

We have just listened to an informed and useful speech from the hon. Member for Mansfield (Mr. Con-cannon) about the coal industry and the practical measures which have been taken to meet the problems of redeployment. I shall not follow the hon. Member on that subject of which he obviously has so much knowledge, except to say that I hope his hon. Friends will bear in mind the needs of the East Midlands coal industry when considering their next step after their redeployment at the next General Election.

When the Prime Minister announced in July the most serious policy of restriction ever imposed upon the British people, he said that he would not think a 2 per cent. rate of unemployment unacceptable. It reminded me of his predecessor, the late Mr. Gaitskell, who apparently thought the same about 3 per cent. It was that suggestion which first made me suspect, as apparently the starry-eyed hon. Gentlemen opposite have not suspected until now, that when in power a Labour Government were not averse to some measure of unemployment. I think that I know the reason. Unemployment makes men easier to control.

There is no doubt in my mind that control of all the economic and financial aspects of this country's life is the Government's main target. In their defence it must be said that they really believe that given control they can manage the economy. What they fail to take into account is that they will manage it so badly that we will risk losing all the fruits of those recent 13 wonderful years.

That is certainly the fear in Scotland. Last month unemployment rose by 6,636 to a total of 67,282. The hard core of wholly unemployed increased in the same month by 5,322 to a total of 61,090. I deeply regret having to tell the Prime Minister that the percentage rate in Scotland is now more than his acceptable figure. I also ought to point out that when he says that 2 per cent. is an acceptable figure in England it is one which we have had in Scotland for too long. Moreover, there are few in our country who do not believe that worse is to follow.

That is why the Prime Minister's treatment of those most concerned about the situation has been so desperately unsatisfactory. The right hon. Gentleman is quoted as having said earlier this year that the Government would not try to solve their problems by unemployment. But that is exactly what he has done, and the impression that he has given, sadly, is that he does not really care. The right hon. Gentleman has, of course, wrapped the issue up in a half-truth. He has called it redeployment. That is the word on the Order Paper, but from Scotland's point of view—and, I suspect, from the point of view of many other parts of the country—we are discussing no such thing. We are discussing unemployment.

We have already had the Selective Employment Tax, designed, apparently, to shake out those in the service industries into the manufacturing industries. We now have the squeeze, designed, apparently, to shake out those in manufacturing industries back into the service industries. In Scotland, there is nowhere else for them to go, and according to my information a redeployed worker from the car industry there, at best, is being offered a job as an ambulance driver or a postman. This is why redeployment to us is such a hollow mockery. We knew that it would mean unemployment, and it was absurd, if not dishonest, of the Government even to suggest that redeployment was possible without unemployment, and I believe massive unemployment, coming first. That is what has produced the pressure towards work-sharing all along the line.

There is another point about redeployment which the Prime Minister seems to have forgotten. It is an easy enough word to say, but it is not such an easy thing for a man to undertake. Let us consider, for example, the problem of housing. A skilled worker in many parts of our country is liable to have to wait anything from seven to eight years before getting a house. He cannot afford to move even for three miles if it means moving across the boundary into the area of another local authority. At last he may get a house; then he finds that he is expected to accept redeployment. What about his family? What about his home? He gets no assurance of a new one. This is the kind of practical issue for which the Government seem to have made no provision at all.

I hope that they will. I hope that one of the by-products of this sorry chapter in British history will be an inter-changeability and flexibility in housing, making it easier for men to move as they wish while avoiding the heartbreak and damage of divided homes. But it has not happened yet, and for the homeless redeployed or the home-occupying unemployed the Government are in the dock. They have made no adequate provision for them. They have made no adequate provision for retraining, either. All they have made adequate provision for are massive restrictions. They have offered neither good reasons nor satisfactory alternatives for those restrictions. They have given no thought to positive ideas or to an aim which would give to Britain in general and industry in particular a reason for doing better in future than has been done in the past.

They have not even provided Socialism. There is not much "brotherhood of man" about this. The saddest aspect of the whole thing is that a party built on a passionate care and concern for the working man should seem to care about him no longer. Instead, it is control, control, control, all along the way, and it gets worse the further Left we go. There is no thought of how to summon from agriculture the extra output with which that great industry alone could help to vanquish the balance of payments problem. There is no idea of inspiring industry to make the extra effort that has to be made.

The Government seem completely to have forgotten the value of example. In debating economic policy I have been surprised to find how many hon. Members opposite seem to think that figures are all-important. I certainly do not think that they are. The financial situation is a useful mirror for the nation, but it is not the nation itself. I fear that the Government have forgotten what produces exports, what produces quality work. What reduces the import bill in the last resort is not money, or exhortation, or planning, but people. If the Government want to lead our people they have to do two things. They have to tell them where they are going and they have to set such an example as will enable them to get there.

As it is, they have called for wage restraint and asked us in Parliament for no such restraint. They have called for price restraint and by their enormous increases in taxation have made price rises inevitable. They have called for economies in the manning of industries and have expanded their own Ministries and the Civil Service. They have called for an honest day's work and been proven dishonest themselves. Who wants to follow such a record? No wonder such a Government, like an inadequate teacher, have had to resort to a big stick. A big stick will never work in a freedom-loving Britain. I beg the Government to change their attitude, and to realise the need to provide a purpose and to make our people want to put more into their work, without necessarily expecting an increase in profits or pay packets for doing so.

If they did that I believe that our people would respond, and that we should find our country able to pull away easily from difficulties which need not exist if everybody did his full share.

7.15 p.m.

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

We can all agree that the staffs of the Ministry of Labour throughout the country are doing an excellent job. I believe that we can all agree that the Redundancy Payments Act and the earnings-related benefits have been extremely successful and have mitigated much of the hardship. We can also agree with the Minister that juvenile unemployment is not nearly as serious as many of us had feared, and that the figures that he gave, of 7,500 in relation to the 36,000 in August, are satisfactory.

Although I do not accept the politics of much of the last speech, I agree that we have to face the fact that there is a grave problem in the development areas, such as Bathgate and Linwood, and that it is no good hiding it. The Minister announced that there are 405 declared redundant who still cannot get work at all, at Bathgate. I find it a very shattering experience to talk to people whom I have known for 15 or 20 years and who have not been without work since the 1930s but are without work now. For our generation this is a very important aspect of the problem. In London people of good will tend to regard unemployment as an evil abstract, but when I have faced unemployed people—all of whom have been extremely courteous to me—I have found it a shattering experience.

Nevertheless, I thought that within the Minister's speech there was a gleam of light. In my view, there was a major announcement in it. I want to get straight precisely what he said. Perhaps the Parliamentary Secretary will confirm or deny my understanding, but I understood my right hon. Friend to say that from now on grants would be available to any firm which was prepared to undertake accelerated adult retraining, for specific jobs at the end of the period of retraining.

I ask the Parliamentary Secretary on whose initiative these grants will be given. Who will take the initiative in approaching a firm in an area where there are redundancies, saying, "This is the money that is available to you. What sensible, concrete plans can you put forward to encourage such a scheme? For what jobs can you retrain?" This relates to Bathgate. If I am right in my understanding of my right hon. Friend's announcement, there an; some great firms—some brought in by the last Government and some by this—which I suspect will be willing to take advantage of this kind of scheme. The question is, "Who is to act as the catalyst?"

I have been fortunate enough to be given an Adjournment debate on Bathgate, and since there are other hon. Members who wish to speak I will cease to comment on that and resume my discussion on it next Monday evening on the Adjournment.

The purpose of my intervention is to challenge a much wider subject. I refer to the whole mechanism by which the Government deal with a redundancy crisis. What I am unhappy about more than anything else is the machinery of Government for tackling the problem of redeployment. I am thinking not only of Bathgate but of Liverpool, Doncaster and anywhere else where the situation looks serious and looks like getting out of hand, especially in development areas.

The Bathgate experience has been very revealing. I make no claim to be any more virtuous than other hon. Members, but I have been in contact with 13 different Government Departments on the question of unemployment in the Bathgate area. I have been to see seven Ministers. What strikes me is the separation of these Ministries, and the separated Ministers. This applies to both parties. I seem to remember the right hon. Member for Wallasey (Mr. Marples) complaining about precisely this question. I suspected that he was right at the time; now I know that he was right.

One finds oneself in the position of some messenger of the gods—like Mercury—trekking from one Department to another. What has struck me is that as a Member of Parliament with a problem on his hands I am able to bring quite a lot of new information to the Ministers concerned, from each other, to their colleagues.

I want to know why the Ministry of Technology is not represented tonight—the Ministry which is responsible for the motor industry. A member of the Scottish Office is here, and they have been represented all day. This is excellent, but where is the Ministry of Technology? This is a question which must be answered. It is a very unsatisfactory position. One goes to one Minister and he spends perhaps one-fifteenth of his time on the problem which one takes to him and some of his civil servants spend, perhaps, one-tenth of their day on the problem. In the next Ministry, the Minister and his civil servants might spend, perhaps, one-twentieth of their time on Bathgate and the same on Liverpool. This is no way to conduct government in the present circumstances.

Therefore, what I am suggesting is that when a problem of this kind arises, the Government should set up a small "task force" of perhaps two politicians and four or five civil servants, a manageable organisation, to look at a situation which impinges on many different Ministries. I shall be specific on this point.

In relation to Scotland—not just Bathgate—many of us have thought that the Selective Employment Tax should be used as an instrument of regional development. Hon. Members on both sides have argued along these lines. This concerns the Treasury and the Ministry of Labour directly, and the Scottish Office, the Ministry of Technology and certain other Ministries, such as the Board of Trade, indirectly. We were concerned in our difficulties about variations in credit and the relationship with the banks; perhaps the seasonal alteration of Purchase Tax Regulations and hire purchase Regulations to level out the position in the motor vehicle industry. Some kind of E.C.G.D. to ration credit in the development areas. The point here is that these are a practical basis for serious proposals.

This concerns directly the Treasury, the Board of Trade and the D.E.A. and, indirectly, the Ministry of Labour, the Ministry of Technology and the Scottish Office. But if they are all operating separately, not very much is done. The same applies to a vital matter concerning the problem in my constituency, which is the E.F.T.A. Agreements with the commercial vehicles industry. I expect that my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) has probably had experience of the same thing—we have both seen Sir George Harriman about this—and in this problem the various Ministries involved are the Foreign Office, the Board of Trade and the Treasury and, indirectly, the D.E.A., the Ministry of Technology, and various other Departments.

However, this problem, if it is to be tackled meaningfully, must be considered as a whole. It is directly relevant to the employment situation which we are discussing. The machinery of government does not provide adequate means whereby complex problems may be faced up to. The same thing applies to proposals for the rephasing of public works, which are eminently practical and sensible. The Scottish Development Department is involved, as is the Board of Trade and the Treasury, yet they operate separately; not least, Ministers being far too separated. If it is a remedy—many people think that it is a sensible remedy—that certain projects are brought forward, such as some at Livingston, which is known to the hon. Member for Edinburgh, West (Mr. Stodart), one must have some kind of "togetherness": there must be a small unit which can take decisions fairly quickly—the "economic task force" to deal with unexpected redundancies.

In all these difficulties, there has been far too much delay. I would say to my hon. Friend that, in these circumstances, I should be very tempted to invoke the help of the Parliamentary Commissioner, when he is appointed, with his access to the secret files in Whitehall and the Scottish Office. These would be very revealing. I am not blaming a particular Minister, but I think that there has been far too much delay all around in dealing with these urgent problems.

I would give one other example from the Bathgate situation. It was absolute sense to argue that, while the assembly lines were otherwise silent, there was a case for tied aid. We talk a great deal in the House about aid to India and other countries in Asia which want precisely the kind of vehicles made in Bathgate, for instance, mini-tractors. While those assembly lines are silent, our aid does not expand. I am not arguing for expanding aid, but I am saying that this should at least be taken into consideration. If aid were related to under-utilised capacity in this country, there would be far more of it.

I have pursued this at length. I have a letter from the Secretary of the International Monetary Fund, M. Pierre-Paul Schweitzer, who says that he thinks it worth discussing and that the World Bank also thinks so. But when one goes round the Ministries, people "pass the buck". The Overseas Development Department and the Foreign Office all think that it is worth discussing. We should have a small unit "task force" to discuss it—in depth.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Is the hon. Gentleman not in fact arguing that the tying of aid to underdeveloped resources initiated by my right hon. Friend the Member for Barnet (Mr. Maudling) to the tune of £10 million should be started again?

Photo of Mr Tam Dalyell Mr Tam Dalyell , West Lothian

In all these discussions, I have given great credit to the right hon. Member for Barnet (Mr. Maudling), who was good enough to give a hearing to four Scottish M.P.s, including me, before he did it. On that occasion, he gave £3 million of extra aid in the form of steel equipment to India, £2 million-worth of sugar refining equipment made in Glasgow to Pakistan, £2 million-worth of railway equipment to East Africa and a couple of ships from the North-East to Ghana. If this imaginative approach applies in the present situation, I am concerned that the machinery of government is not adequate to tackle it. Therefore, we are at fault and we should try to put these things right.

I come finally to the question of contingency planning, of which there has been far too little. Although the Government have a great deal to their credit—I am one of those who supported the Government in most of their actions—we have, perhaps, in certain matters been rather improvident. We could from now on at any rate, say to ourselves, "If employment prospects get bad in a particular area"—I am not arguing solely for my own—"such-and-such an action plan will go into operation." This is contingency planning.

This is absolutely sensible and practical. Such a contingency plan may be in terms of stockpiling aid, or public works, or certain fiscal measures. All these could be done but the plans should be there and there should be no element of uncertainty. There is no doubt that the uncertainty in Scotland, in the Northwest, in Northern Ireland, and in the South-West of England has caused a great deal of the human misery which exists there. This is avoidable.

Finally, because others want to speak, I return to my first major point. Would my hon. Friend make it absolutely clear, would she spell out that her right hon. Friend said that from now on there would be 100 per cent. grants to firms receiving and training people for whom they have specific jobs? If this has been the announcement this afternoon, something concrete, something important, has come from this debate and we can look forward to a better system in the future.

7.28 p.m.

Photo of Mr Richard Hornby Mr Richard Hornby , Tonbridge

I am glad that the hon. Member for West Lothian (Mr. Dalyell) dealt with the machinery of government and decisionmaking in this sphere. If there is one thing which I believe is really important about the problem of redeployment, it is that we should realise that this will not be a temporary phenomenon. This is not only the result of the July measures, although it is one of the results: it is something which we have to see as a fact with which we shall be living not just for weeks but for months and years ahead if we are to achieve the growth rate which everyone say we want.

If we are to go quickly for the introduction of new products and be willing to scrap what has become out of date, we must realise that problems of redeployment will be with us all the time, within individual industries and between industries. It is, therefore, high time that we devoted ourselves to the techniques of handling these problems.

I am glad that the hon. Member for Mansfield (Mr. Concannon) referred to the way in which the National Coal Board has been tackling this problem. Although it has been a big problem in scale for the Board, it is a simpler problem than in some cases because it has involved redeployment within a single industry and has involved the use of the same skills. In this debate we are considering wider problems than that, but we are also considering the same problem as that to which the hon. Member referred.

The fact is—and I am grateful to the Minister of Labour for bringing this out—that the right hon. Gentleman and his colleagues have accepted that we are likely to be living with an unemployment rate of about 2 per cent. and that in the peak winter months it may be more than that. At least we are getting on to a factual basis in looking at this problem.

If hon. Members look at the last Report of the Confederation of British Industries—the last Industrial Trends Survey released on 20th October—they will see recorded a sharp downturn in production. If they look at the reasons given for that downturn they will see that, whereas 75 per cent. of those who replied to the questionnaires said that the downturn in demand was the critical factor, 25 per cent. of them said, even in October, that their problem was still shortage of skilled labour. We must bear this in mind all the time.

I am sure that hon. Members read in the Sunday Times yesterday the short survey published by that newspaper. Many examples of reluctance to move and also reluctance to train were revealed by that survey, and I am sure that that is within the experience of all hon. Members. The problem before the Government and the House is, how can we take new initiatives which are likely to ease the problems of redeployment to make people more willing and more able to move, and by doing so enable British industry to run rather faster and more competitively without overheating as frequently as has happened in the past?

May I turn to the question of training. The hon. Member for West Lothian is right in saying that many of these problems are linked. One may bring out the best of ideas concerning training programmes, but everything will be frustrated if the man's wife cannot find a house for the family or if there is a school problem. He will be reluctant to move and will prefer to sweat it out where he is rather than move to an industry and area which is crying aloud for more labour. I entirely agree with the hon. Member about the need to bring the Ministries and others involved closer together. There is plenty of information about techniques on which we can draw.

We need not think only about what has happened in this country. The United States has been redeploying labour right across that continent throughout the present century. We have the example of what is happening at the moment in the Common Market countries—in the coal industry, the steel industry and many other industries—where the problems of migrant labour and their families are intensified by nationalism to a far greater extent than anything which we are likely to find between England and Wales or England and Scotland, if some hon. Members will forgive that remark.

I return to the question of training and how we can enable people to train in the skills which are needed. What are the facilities which we have? First, may I say a word about the Government training centres—some 30 of them in number, moving up to 38, with some 15,000 places a year, covering about 40 trades or skills. There are three or four comments and suggestions which I should like to make to the Parliamentary Secretary. First, I accept what the Minister of Labour said earlier—that the Government training centres cannot do the whole job of training or even the whole job of retraining, and the latter is their more specific purpose.

I believe that the number of these centres is probably on the low side for a labour force of 24 million to 25 million, bearing in mind also that if the number is limited to 30 or so, there is a considerable problem of movement and of boarding for the man who wishes to go to a centre. If these centres are not too far apart, then we shall go some way towards overcoming the reluctance of men to go to them and use them.

Secondly, I suggest that there is a need for a regular review of the 40 or so trades which are covered in these centres. Skills are perpetually changing if the needs of the economy are perpetually changing and new industries are coming forward as older industries are dying. I suspect that there is a need for a closer look at what is being taught and at the courses being provided in these centres than is sometimes taken. I do not ask the hon. Lady to give the details at the end of the debate, but I shall be grateful to have them some time, for it would be interesting to know to what extent this list of 40 courses has recently been revised, how many newcomers we have had in the last two or three years and how many have gone off the list. If the answer is virtually a nil return, then I suspect that something is wrong.

I would make a comment which is related closely to some remarks of the hon. Member for West Lothian. What is the machinery for finding out precisely what we need and what we shall need? One has to train not merely for immediate needs but for one year, two years or even further ahead, because it is the industries which see their chance to get off to a quick start on the development of new techniques which will win export markets. The Japanese have an extremely sophisticated system of market research and of examining the areas and the markets into which they think they can move quickly, and of then trying to equip themselves for this purpose.

In the Ministry's pamphlet, the training centres commend themselves on the agreeably small size of class—figures of 8 and 16 are mentioned in some cases. Presumably this is the most that can be taught in many of these subjects, but I wonder—if there is a need for expansion, as I believe there is—whether there are not means of teaching rather more on some of these courses.

It would be interesting to know, because it reflects on the efficiency of selection methods for these courses, what is the failure rate of the people who start the courses and what percentage complete the courses successfully. If that figure is not right, there is room for improvement in the techniques of selection and the way in which we fill the courses.

May I comment on the grants which are made to firms in development areas for training within their own organisations. I think that I am right in saying that there are 400 firms taking part in the scheme, which enables them to draw £5 per man per week for this purpose. First, I think that the figure of 400 firms is rather low, bearing in mind the extent of the areas which the development districts cover, and there may be room for expansion, although we must be certain that the firms concerned can do the job properly. Secondly, is it necessary to confine this scheme to the development districts? There are plenty of fully developed areas where the need for skilled labour is even greater than that in the development areas. Surely if this scheme is working and is making a contribution, there is everything to be said, particularly at a time like the present, for extending the scheme to the whole country. I think that that makes sense. And what a chance was missed, if Selective Employment Tax had to be introduced, when the Government did not gear S.E.T. to training rather than to giving an overall premium to manufacturing industry. Much better results would have accrued. With regard to the industrial training boards, although what is hoped for and intended is right, progress has been slow and I hope that more will be done.

I am sure that much more needs to be done to examine the length of apprenticeship courses. This is a delicate subject with many trade unions, and I am convinced that much of the work covered in apprenticeship schemes could be done in a considerably shorter time. Bearing in mind what is said about time spent eating dinners in the legal profession, we must see if we can speed up these processes. It would be interesting to know what negotiations, if any, are taking place with trade unions on this issue and what, if any objections they have put forward.

Photo of Mr John Mackintosh Mr John Mackintosh , Berwickshire and East Lothian

From the tenor of the hon. Gentleman's remarks, I take it that he believes that the trade unions are the only bodies which are antagonistic towards shortening the period of apprenticeship schemes. Is he aware that, for example, the construction industry, which employs 1¼ million men, was in the forefront of this movement and that the trade unions concerned battled against the employers to get the time shortened to four years, which is now the position?

Photo of Mr Richard Hornby Mr Richard Hornby , Tonbridge

When one comes across industrial problems of this kind one usually finds that the problems seldom lie totally on one side. Wherever the problem may lie in this respect of apprenticeship, much could be done to the advantage of the nation if what I have suggested were achieved. While on the question of trade unions, I hope that progress will be made in dealing with obstructions which have occurred in regard to the employment of people trained in Government training centres. I hope we can be told that such obstructions as have occurred are yielding to pressure from the Government.

I have concentrated my remarks on the subject of training. I believe that, as in the 30s, when Keynesian economics attempted to show how great developments could made with advantage to the nation at a time of slack in the economy, so now, finding ourselves with a 2 per cent. rate of unemployment—and, I believe, with the necessity of having to learn to live with that rate of unemployment for a lifetime—let us bend our energies to see how we can redeploy labour as fast and as humanely as possible.

7.44 p.m.

Photo of Mr Donald Chapman Mr Donald Chapman , Birmingham, Northfield

I agree with the hon. Member for Tonbridge (Mr. Hornby) that we will probably have to live with this problem for quite a time if we are to bring industry up to date. The example which has created this debate—the example of redeployment from B.M.C. and other parts of the motor industry—has, however, caused me to doubt whether this is the kind of redeployment that, in the long term, is good for the economy.

I have some grave reservations about what is going on in the West Midlands and B.M.C. and, in putting them to the House, I hope that hon. Members will bear with me because I am about to make what, for me, is not an easy speech. I am not in the habit of being a rebel and I do not like criticising my own Government. However, I have some hard things to say about the way in which they are dealing with the B.M.C. situation and about the present long-term lack of ideas—for I cannot say that there are many ideas—in connection with this whole process.

From my point of view, the most important figure given by my right hon. Friend the Minister earlier was that about 60 per cent. of those being sacked by B.M.C. were going into manufacturing industry. This means that one must ask the all-important question: is this 60 per cent. redeployment into manufacturing industry away from B.M.C. in the long-term interest of the economy as a whole? To put it another way: is this a better place for that 60 per cent.; and is the whole operation worth while as an immediate and long-term measure—even though it means taking the other 40 per cent. with them, but presumably redeploying them into less worth while new occupations? This is the problem with which I wish to deal. It is to question whether this exercise is really worth while and to ask whether these people should have been displaced from B.M.C.

I have in mind the fact that we have been here before in the motor industry. During my 15 years in the House I recall that we were here in 1953, in 1956–57 and again in 1961. Are we here again in 1966? Is it just another of those squeezes like the others, in which the motor industry bears the brunt of a general squeeze which the Government try to rationalise after having taken the main decision? I suspect that this is the more likely case.

Let us consider the B.M.C. situation and ask whether it is a good thing—this is the basic issue—that B.M.C. should shed this labour. One factor concerning the B.M.C. situation which I understand to be in the mind of the Government is that they say, "Consider its position. It is not exporting as rapidly and vigorously as other motor car manufacturers. It is rather too dependent on the home market, so that when a knock comes it takes the position much more severely than the other motor car manufacturers". The Government therefore continue, "We are afraid that this may somewhat be its own fault".

It is interesting to study the figures, particularly when some were issued today by the Economist Intelligence Unit. Having considered them, it appears that there is not much in this argument. The figures are that B.M.C. exports about 35 per cent. of its total output. Fords export 42 per cent., Vauxhalls 41 per cent. and Rootes 32 per cent. They are all in the 32 per cent. to 42 per cent. of capacity range. I believe that if B.M.C. had been among the best instead of in the middle it might have exported another 50,000 cars a year, which would not have made all that much difference to the present redundancy situation. This shows that the figures do not bear out the argument. All power to the Government in urging B.M.C. to export more, but they certainly should not say that they are doing badly, or that only because they are doing badly are they feeling the effects of a smaller home market.

We are next told that B.M.C. has been overstocking labour and should be getting rid of some of its force. I have checked this statement time and again, have been to see Sir George Harriman on two occasions and have discussed the subject further with him. The first question I put to Sir George was whether it was true that B.M.C. had too much labour. He replied, "No, it is not. If we had not had the July measures of the Government, in addition to the other measures earlier in the year"—referring to the clearing banks being told to withhold credit—"we would have needed all the labour we had". As far as I can gather, there is no truth in the statement that B.M.C. has got itself overfat, so to speak, on labour and must shed some of it.

I go even further and say that one cannot blame B.M.C. if it was going on fairly confidently with its capacity of more than 1 million cars—nearly half the productive capacity of the industry—towards the target of the National Plan. The National Plan is for output to go up by 36 per cent. by 1970. One could not blame B.M.C. for aiming above 700,000 to 900,000 to full capacity output of just over 1 million and having the labour in hand to do that. I do not believe that B.M.C. was overstocked with labour, given the proper assumptions on which it was supposed to be working. Those two points are really non-starters and B.M.C. does not deserve a knock for them.

I think, however, that it was in the wrong in not seeing the signs earlier in the year and drawing in its horns as did some other motor car firms. It has no new models and it is rather dependent on the small car and small van market, which inevitably takes the knock when hire-purchase restrictions are imposed. B.M.C. has some blame for the situation that now arises in its failure to look ahead adequately, but the two other factors mentioned are not proper criticisms of the management.

It is a good thing to look at the other side of the coin and examine whether B.M.C. actually should be slimmed in this way. I have the gravest doubts about this when I examine the position. First, the Minister says that 60 per cent. of the men are going into other manufacturing employment in Birmingham. I doubt whether the final figure will be like that, because the early leavers from B.M.C. will get all the best productive jobs. When it comes to the end of the queue, the last few of the 5,000 or 6,000 in Birmingham will nearly all go to jobs as bus drivers, or in Post Office, transport, or as distribution workers, which we are supposed to be trying to slim anyway.

I suspect that the final figure will be more like 50 per cent. It is not a good thing, in the long run, to envisage half of these people in other occupations for the medium and long term. This would mean that B.M.C. would be running at about 75 per cent. of its capacity. It can produce over 1 million cars and it will be producing about 750,000. This is not in the long run interest of our export drive. It will put up unit costs, and hamper the sense of drive and vigour in the whole of its approach to the export market.

Surely we have learned from the example of our foreign competitors that one has to take export market improvement along in a general impetus in motor car manufacturing? This is how Germany keeps its position. Its home market has expanded rapidly till Germany is producing nearly twice as many cars as we are now, much to our shame, and taking exports along with that in a great ride ahead along the path of expansion. This is the only way we can do it in the future.

Moreover, costs in the export market are already causing difficulty to motor car manufacturers. Rising unit costs will hamper our export drive in the future. Therefore, although I agree with my hon. Friend the Parliamentary Secretary that the July measures had to be taken I beg her to express to the Government at least some doubt on whether we can properly and happily envisage medium-and long-term redevelopment away from B.M.C. on this scale.

My guess is that half the men who have been redeployed should be—I do not only say will be—needed back in B.M.C. within 18 months, in the long-term interest of B.M.C, of the motor car industry, and of the export drive of this country. Otherwise, the firm will not get near capacity and will not be able to compete adequately in the export market.

Therefore, I have grave doubts about present policy. Having said that the Government had to take some emergency measures in July, I hope that as soon as possible we shall get the hire-purchase restrictions down from their extravagant level of a 40 per cent. deposit and two years to pay. We have not had restrictions of this magnitude for 10 years. They are much too high and will unduly restrict the industry and harm its future.

Secondly, I join with my hon. Friend the Member for West Lothian (Mr. Dalyell), who talked about co-ordination among Government Departments. B.M.C. alone provides over £200 million worth of exports. The Ministry of Overseas Development has a team of economists, living in the Caribbean, examining development plans there and finding out how part of our aid can help the area forward. Although we can provide a team of economists for this marginal part of our economic activity—in the giving of aid—we do not yet seem to have a team of economists either studying B.M.C., which provides £200 million worth of exports, or the exports of the motor car industry and its future, when it provides a total of over £500 million of exports.

It is not purposive planning to rush into restrictions of this kind, to rationalise them afterwards, and to try to make a misfortune into a virtue. It is worse to fail to take steps so far—although I hope that pressure by my hon. Friends and I will change this—to put economists on the job of making long-term studies of B.M.C. and the industry in the medium and long-term future so that we know where it is going, what labour resources it should have and its export potential.

This is what must now come out of this terrible situation, because otherwise shall be back on the old roundabout—1953, 1956, 1961 and 1966, those times of squeeze of the motor industry—and we shall be waiting for the next one. I beg my hon. Friend the Parliamentary Secretary to realise that, as my hon. Friend the Member for West Lothian said, the problem is scattered through too many Government Departments now and it is so important to our whole economy that somebody must be firmly in charge. The situation must be fully studied and the industry must know what its future will be.

I also hope that we can get the 40 per cent. deposit down to 20 per cent., which is the best step to take now. We have gone much too high. The cut is too extravagant whatever the position; and I hope that an announcement will be made fairly soon, because uncertainty can be just as bad to the motor industry as severity. If we now go through a period of uncertainty as to whether the Government will give way and reduce hire-purchase restrictions the situation could get worse, because more people will say, "I shall wait a bit longer still to buy a new car in the hope that some restrictions may be lifted." Therefore, whatever the decision, I hope that an announcement will be made fairly soon.

During the course of studies by economists of a Government Department which I hope will now take a long-ranging look at the future of the industry, there should be an attempt to fashion something more delicate than the controls we have. Why should we knock the bottom out of the motor car market every time we squeeze the economy and put the livelihood of car workers in doubt, if not in jeopardy? The industry always take the brunt of every squeeze.

I am astonished that we apply restrictions right across the board in this way, requiring a 40 per cent. down payment and two years to pay on the hire purchase of a car which costs £500 or more. We must know that this deters very many people immediately from buying. Buying a car is not like buying a washing machine or spin dryer for £20. When the price is £500 or £600, restrictions of that enormity bring enormous chaos in their train.

On the general issue, I hope that we shall have no more of these stop-goes, not even a Labour version of stop-go. I hope that we shall go ahead now, saying to ourselves that we have had this pause for once, and that it shall never happen again like this.

8.0 p.m.

Photo of Mr David Steel Mr David Steel , Roxburghshire, Selkirkshire and Peeblesshire

I shall return to some of the points made by the hon. Member for Birmingham, Northfield (Mr. Chapman) in a few minutes. I begin by reminding the House of what the Prime Minister said on 20th July. … there are still large unsatisfied demands for labour, particularly in our export industries, and … any labour released, redeployed or shaken out from other employment by the measures which I have announced today will be readily absorbed.… We believe, therefore, that it will be possible to have a very big redeployment without a marked increase in unemployment."—[OFFICIAL REPORT, 20th July, 1966, Vol. 732, c. 646.] That statement seems to have been overtaken by the views expressed by the Minister of Labour today, that he saw the 2 per cent. as not being the winter peak and he saw a continuing rise in unemployment well into the new year—a slightly different statement.

What worries me about the situation is that unemployment seems to exist mainly among the unskilled and semiskilled whereas vacancies and opportunities appear to be very largely in skilled occupations. For proof of this—I do not think that there has been any change in the situation—one can go back to the last recession and examine the situation in December 1961 at a time when we had a high level of unemployment. There were still two vacancies for every unemployed electrical and electronics worker and three jobs for every two unemployed engineering workers. I do not believe that there are figures showing that the situation is not the same today.

This is why we have tried to concentrate in this debate very much on the question of retraining opportunities. Even when the 38 Government training centres are completed, if the unemployment level is still at about 500,000, they will have places for only 2½ per cent. of the unemployed. I am certain that there ought to be a very much greater programme of Government training centres, although this opinion seemed not to be shared by the Minister of Labour in his opening speech. Not only is it essential to have an increase in the number of places, but there must be an increase in the number of opportunities used both by employers in taking up the places and by trade unions in accepting in new employment those who go through training in Government training centres.

The Minister of Labour—not enough has been made of this in the debate today—ought to use his influence in the Government to see that the nonsense of the Selective Employment Tax is removed in the next Finance Bill. This is essential for several reasons. Even if the tax were itself justified and were sensible, it is taking up the time of Ministry of Labour officials throughout the country when they ought to be engaged on many of the constructive tasks which have been put before them by hon. Members opposite in their speeches today.

It cannot be sense for the Government, on the one hand, to be paying people 7s. 6d. a head to keep labour while, on the other hand, they are trying to encourage a shake-out in certain parts of industry. If the object of the 7s. 6d. payment be to encourage exporting industries, it would be far more in the national interest to do it in the form of greater investment incentives rather than by paying people to hoard labour.

Photo of Mr Hugh Gray Mr Hugh Gray , Yarmouth

Am I not right in thinking that the hon. Gentleman and Members of his party did not previously oppose the Selective Employment Tax entirely but thought that it should be used more selectively, particularly for promoting development in areas such as East Anglia?

Photo of Mr David Steel Mr David Steel , Roxburghshire, Selkirkshire and Peeblesshire

We opposed the Selective Employment Tax. The hon. Gentleman ought to remember that we voted against the Government on it on every conceivable occasion. What we said we would accept was a payroll tax regionally varied to promote regional policies. There was no question in that of 7s. 6d. or anything like it for particular industries. We did not get a payroll tax, and it is wrong to call the Selective Employment Tax a payroll tax. It is nothing of the sort.

I turn now to another matter which has received only passing attention so far, namely, housing. Here, I am not referring only to the unfortunate downturn in the house-building programme. From my experience as an ordinary Member of Parliament dealing with housing cases, I know that the Government must look very closely at the whole machinery for offering people houses if we are ever to talk sensibly about mobility of labour. For one thing, the squeeze has an immediate effect on mortgages, and it becomes impossible for house owners to consider moving away to other parts of the country.

I am concerned also about the lack of any coherent national policy in housing allocation by local authorities. In my constituency I have eleven housing authorities and, as far as I know, no two of them operate the same kind of allocation policies. I dealt with one case involving a local authority, not, I am glad to say, in my constituency, the case of a constituent of mine who had taken a job in another part of the country but who could not get a house and was having to travel outrageous distances each day. He asked me to help him and the other Member for the other constituency concerned tried to help as well. Yet here was a local authority which would not allow this man to apply for a house or even go on the list until he had been resident in the burgh for five years.

There cannot be effective redeployment or mobility of labour if we do not have a fairly standard procedure for council house letting. In particular, we should attach to the qualification of having a job as much, if not more, importance than we do to any residential qualification over a number of years. I hope, therefore, that the Parliamentary Secretary will deal a little more fully with the problems of housing.

I come now to a point made by the hon. Member for Northfield. In the 1956 recession in the motor car industry to which he referred, there were about 6,000 redundant car workers, and by 1958 60 per cent. of these were back in the motor car industry. The hon. Gentleman says that this is what should happen, and it should happen again now. If he is right, this whole exercise of creating unemployment is totally pointless. If he is wrong—I myself think that he is wrong—what steps are the Government taking to make sure that this does not happen and the labour does not go back eventually to the place out of which it has been dragged?

I cannot agree with the hon. Member for Northfield in his view, though I respect what he says as his constituency gives him first-hand experience of the matter, which I have not. But I have recently spoken to an employee of B.M.C. in Scotland who has been declared redundant. Previously, he had been a tractor man used to working on his own very efficiently. He was declared redundant from the farm where he was working and he went into B.M.C.—presumably, the sort of thing which the Government at that time were encouraging. Now, because he was one of the last in, he is one of the first out. When asked whether he was sorry about losing his job, he said that he could not really be sorry because he found, when he was in the firm, that six men—he and five others—were doing a job which he could have done himself. The hon. Member for West Lothian (Mr. Dalyell)—I am sorry that he has just gone out—has himself been delivering a few home truths during the past few weeks to both unions and management in his own constituency.

I think that there was room for a shake-out in the motor industry, but it is most unfortunate that it has happened in this sudden, dramatic and large way. It would have been better if the Government had taken steps over the years to encourage high efficiency in management and labour. The motor car industry has had far too soft a home market for some years. It has been protected not only by the usual tariffs but also by the surcharge which we have had during the past couple of years. The industry has grown exceedingly inefficient in its working ways, and it would have been better if, over a period, we had had a gradual weeding out of labour and a blowing open of our home market to much more competition. I suspect that that proposition does not find favour with the hon. Member for Northfield.

Photo of Mr Donald Chapman Mr Donald Chapman , Birmingham, Northfield

The hon. Gentleman can make his criticisms, but it is a little extravagant to say of an industry that has doubled its exports in ten years that it is in some way not doing its job.

Photo of Mr David Steel Mr David Steel , Roxburghshire, Selkirkshire and Peeblesshire

The hon. Gentleman must be fair. I did not say that the industry was not doing its job. I said that it was hoarding labour. I believe that the Government are right on that. I should like to know what steps they are taking to ensure that we do not revert in a year or two's time to the situation that we have had in the past.

In the Second Reading debate on the Prices and Incomes Bill I uttered a criticism of the Government that the original declaration of intent on productivity, prices and incomes had been forgotten in favour of a policy on prices and incomes only, the productivity part of it having disappeared from Government policy. We all admire the Fauley productivity agreement. There has been a great development of capital investment there, and at the same time there has been a shakeout of 1,000 employees, from 3,500 to 2,500. This is what the Government should be encouraging at every level of industry. However, we cannot find any part of Government policy that is concerned with encouraging the spread of plant productivity bargaining. The Minister will know that I have a case in my constituency where, far from encouraging productivity, the effect of the wages freeze is to hold up some productivity agreements that are in process of being implemented and are proving successful.

Photo of Mr Raymond Gunter Mr Raymond Gunter , Southwark

I am following the hon. Member's argument with great joy because there is so much truth in it. I am inclined to agree with one of my hon. Friends who has just spoken. What the hon. Gentleman is, in effect, saying is that there has been some appalling manpower planning by B.M.C. over the past few years. I do not entirely disagree with him. However, I should like to have the Liberal Party attitude on this. He asks what the Government are doing. Does the Liberal Party now say that the Government should take power to enforce a certain formula for manpower planning in private enterprise?

Photo of Mr David Steel Mr David Steel , Roxburghshire, Selkirkshire and Peeblesshire

No. I have outlined one or two suggestions, such as the matter of the tariffs and the surcharge, which come within the Government's power. But I believe that the Government should encourage productivity agreements of this kind. They should have a unit to encourage and advise firms on how to set about obtaining such agreements. The Government have done the reverse. At the moment they are sitting on productivity agreements.

I do not want to mention any particular firm—I am in correspondence with the Minister on this—but I have been dealing with the example of a firm which has half implemented a productivity bargain, which has resulted already in half the firm producing 30 per cent. more and reducing unit costs and giving a slightly higher wage to the employees and also increasing exports. The firm has been doing what the Government want. Yet it has been told that it must not go on doing this in the second half of the period because of the wages freeze.

The most serious criticism of the Government, apart from the fact that they have set back the process of encouraging plant bargaining, is that mentioned by the hon. Member for West Lothian, that they have unfortunately revived memories of the 'thirties and have, therefore, brought out all the old and in some ways quite understandable protective attitudes in the trade unions and to some extent in individual firms. This represents real damage that the present policies have inflicted on the country. We were just getting to the point, particularly with the younger generation coming forward, where the old attitudes could be shaken off, fears removed and the past forgotten. Unfortunately, even though we had not got into a situation anything like as bad as the 'thirties, these fears have been revived.

There is a final attitude in the Government's policies that I deplore. They constantly produce figures—to be fair, the Minister did not do so today, but the Prime Minister did so the other day at Question time—from the days when the Tories were in power and say that they at least are not as bad as the Tories were. The Government were not returned with a majority of 100 in March to show the country that they were marginally better than the Tories in regard to unemployment. The right hon. Member for Leeds, North-East (Sir K. Joseph) was wrong when he said in his speech that the country was now paying the price for Socialist policies. I believe that the country is now paying the price for Tory policies at the hand of a Labour Government.

While I do not want to go too wide and off the subject of redeployment, the Minister indicated that the Government had to take serious steps to meet a grave crisis and called on the people to support him. I believe that the people are prepared to go a long way to support a Government of whatever party in time of national crisis. What they are not prepared to do is to follow exhortations and injunctions from the Government when the Government's own house is not in order. They are not prepared to make great sacrifices so that the Government can spend their resources buying up islands in the Indian Ocean and plastering them with concrete. That is not a useful part of the Government's programme.

Many of the points that I wanted to make have been made more effectively by other speakers. I would just say to the Government in conclusion that in recent weeks they have resisted pressures to bring back hanging or to bring back the birch, but they have done something far worse for which we must vote against them tonight, and that is that they have brought back Selwyn.

8.16 p.m.

Photo of Mr Chris Price Mr Chris Price , Birmingham, Perry Barr

The right hon. Member for Leeds, North-East (Sir K. Joseph), in opening the debate, laid about him left and right and attacked the whole Government policy. But if we look at the question of redeployment seriously, I think that we must look at it far more selectively and far more industry by industry.

Coming from Birmingham, I want to say something about the motor industry. I shall not detain the House unduly, because it has recently heard a very erudite explanation of many of the industry's difficulties, with a great deal of which I very much agree.

What we must examine first is some of the virtues of redeployment that we have heard from the Government Front Bench. I am sure that everybody accepts now that we have been stumbling into some of these virtues. They are very much concocted after the event. However, I think it is fair to look at some of the alleged virtues that are coming out of the redeployment in the motor industry and see just how true they are, because we are already getting some argument about it in this debate.

The first thing that we are getting argument about is the problem of overmanning in the industry. The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) says that there is overmanning. My hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) says that perhaps 40 or 50—I believe even 60—per cent. of the workers who have been made redundant will be back in B.M.C. in six months, a year or 18 months. But whoever is right—whether it is the Ministry or my hon. Friend the Member for Northfield—I am sure that all opinions are based far too much on hunch.

As far as I can see, nobody, particularly in the Government—I am very pleased to see that the Minister of Technology has joined us, because I think that his Ministry is very relevant here—has done a real study to prove that the motor industry is over-manned to the extent that many people say it is.

One virtue that can be admitted out of the measures of 20th July is that they have given the motor industry—and others—a jerk out of which a great deal of good could come. They have given the motor industry an opportunity to put things right. But it is "pie in the sky" to think that these measures by themselves, including the sacking of 40,000 workers, will somehow solve all the over-manning problems of the industry, because they will not, although, if the B.M.C. management and the unions really face it, there is now the opportunity to get rid of a certain amount of over-manning.

Again, another virtue of redeployment is held to be that of reforming managerial techniques. I agree that there is a great deal wrong with the managerial techniques in the motor industry and B.M.C.—for example, the way in which the redundancies were announced, including the fact that it is to be 4th November for wage earners and 1st January for staff who are being made redundant. If one examines many things like that, one sees that a great number of improvements could be made, and now there is an opportunity to make them.

But I wish that I had more confidence that those concerned, in particular in the Government, had anything like the sort of comprehensive and down-to-earth approach in tackling these problems that they should have. We hear much from the Government—and I welcome it—about a completely new special relationship now growing between the Ministries responsible and industries, in particular, big firms like B.M.C, and we are given to understand on many occasions that this new relationship—in this case between the Ministry of Technology and the motor firms—can produce a tremendous revolution, particularly in management methods.

I have a feeling that there is rather more talk than action here. But the present situation is an opportunity to translate that talk into action. I would have a great deal more confidence about this special relationship with the motor industry if it were not one of the very few large slices of British industry which still has not got a "little Neddy" making a detailed examination into its working. Such examinations are going on in practically every other sector of industry. The July measures have produced an opportunity to do something in terms of management. But in themselves they have solved nothing.

Again, we have been told that they help the export drive and that if only B.M.C. could change its ratio of domestic sales to exported vehicles, it would help itself greatly. We are told that in some way the redundancies and the squeeze will assist a change in that ratio.

I have always regarded that view as a myth perpetrated by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) in 1961. It is the view that in some way one can stimulate exports by depressing home demand. It has not been put forward quite so positively by the present Government but it illustrates what I mean when I say that we must consider these things industry by industry. It happens that this is a time when, even if the motor industry were in tip-top shape in terms of the home market, it would have the greatest difficulty in stimulating exports.

We are particularly badly shut out of the Common Market and the industry is finding it very difficult to hold prices. The profit margin it gets on its exports is very fine indeed. The danger is that, by depressing home demand and increasing unit costs, the industry can no longer hold prices. So far from stimulating exports, there is a danger that the industry will be squeezed out of some of the toeholds in the export market that it has already.

So, again, there may be the opportunity to stimulate exports, employing a special relationship with the Ministry of Technology and with the active encouragement of the Government. But by itself the idea does not hold good that, having created redundancy in the industry, one can sit back and watch managements improve, over-manning disappear and exports being stimulated. Exactly the opposite may happen. This situation may give the industry a far bigger knock than anyone imagines, and it may take a great deal longer for it to recover. To that extent our exports, so far from benefiting, will suffer. I would add my plea that something be done to end the uncertainty and to allow a certain amount of planning to go on—indeed, the sort of planning that B.M.C. has to do. The firm has to be able to make reasonably accurate forecasts as to when an upturn in the home market could come.

It is also the sort of planning that a B.M.C. worker has to do about his own future. My right hon. Friend says that the situation in Birmingham is different from what it was on the three previous occasions of redundancy and that somehow redundant workers know that they will not be going back to the motor industry. That is not my impression. Car workers are considerably cushioned now with wage-related unemployment benefit and redundancy payments and are able to wait for some time in making up their minds whether to go for other jobs or hang on in the hope of going back to B.M.C.

What sort of planning can be done by potential employers? As we have heard from the Government, employers in Birmingham have in the past been chary of employing redundant motor workers because they may lose them again in six or nine months or a year. We need to be able to plan this sort of thing as well and at the moment the Government are silent on the issue. We are given time scales about the wage freeze and the period of severe restraint. In terms of the general squeeze—and I appreciate that this is a matter for the Treasury rather than the Ministry of Labour—it is almost impossible to make any sort of plans and this is hitting the car industry particularly badly.

I therefore want to add my plea tonight for at least some amelioration in the percentage of hire-purchase deposit that is now required. This is the sticking matter and this is what is depressing the car industry far more seriously than anybody in the Government realises. Even if the Government believe that it is too early for a general loosening of the hire-purchase deposit regulations, I would like them now actively to start considering a method by which for very expensive items like cars hire-purchase deposits could be lowered from 40 to 30, or 25, or even 20 per cent., without reducing the deposit right across the board. I know what pressure there is in the Treasury not to relax anything, but if the determination not to relax anything is applied as a doctrine the car industry might suffer very seriously.

The real difficulty about redeployment in the West Midlands is the absurd wage structure by which wages range between £15 and £40 a week. This is what makes it difficult to redeploy downwards, especially in terms of the wage-related unemployment benefit. I welcomed the introduction of wage-related unemployment benefit because I thought that it was a significant step forward in social security in the basically Liberal position, but as a Socialist Member of Parliament for Birmingham I am very conscious that a tremendous amount of thinking needs to be done in the Government about a wage policy in general, because it is very difficult to perform any economic exercise when there is an area containing such violent disparities in wages.

I want to sum up with a hope and with a warning to the Government. The measures of 20th July have presented the motor industry especially with enormous opportunities such as have never been offered before to solve some of the basic chronic problems, but far more purposeful and deliberate action by the Government, through the Ministry of Technology and the Department of Economic Affairs and the National Economic Development Council, will be needed to get the solution, and I do not believe that it has come yet.

Many of my hon. Friends share my view that the squeeze has been applied far more stringently to the motor industry than anyone thought would be the case when it was being applied, and it is, therefore, doubly important now to think seriously about how the squeeze can be alleviated, looking at the British industrial structure industry by industry to make sure that the squeeze does not do untold and irremediable harm to important industries. For industries like the motor industry this is not a matter which can be blithely passed over with the Government saying, "We will look at this next spring".

The Government's attitude towards the squeeze seems to be, "We will not think about these things until next spring, when we can start talking about relaxation". If the motor industry is to suffer the full effects of the Government's measures right through this winter, it will come out in such an unhappy and mangled state that we may not be able to think in terms of recovery next year or even the year after, and its recovery may take far longer than anyone is now suggesting.

Finally, I make the plea for the Government to consider the true extent of what the industry might suffer if the squeeze goes on and to think of having some selective relaxation in the hire-purchase deposit regulations in order to alleviate the position.

8.35 p.m.

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

Following the speeches of two hon. Gentlemen opposite representing Birmingham constituencies castigating the Government of behalf of their constituents, I am sure that the House will understand how deeply I feel, representing as I do a constituency in Northern Ireland. In Birmingham, the unemployment rate is between 1 per cent. and 2 per cent. but in Northern Ireland, which is a marginal area, much more vulnerable to measures such as the Government have been taking over the past few months, the unemployment rate is now over 6 per cent.

There are 4,000 more unemployed persons in Northern Ireland this past month than there were in the same month last year. Unemployment has jumped by 1,000 since September. I can understand why hon. Gentlemen opposite sound confused by Labour's policies. If the hon. Gentleman the Member for Birmingham, Perry Barr (Mr. Christopher Price) had listened as I did, during the years 1961–62–63, to debates when right hon. Gentlemen opposite, including the Prime Minister, the Foreign Secretary and the Chancellor of the Exchequer, poured scorn on the Conservative Government for falling behind in the European produc- tivity stakes and for the way in which the then Government were handling the economy, and how they stated that they would increase productivity, he would understand why the public, and even hon. Gentlemen opposite, are surprised at the effects of the steps taken by the Government.

They poured scorn on the Conservative Government because our gross national product was rising at a slower rate than those of France, Italy or Germany. Now our gross national product is falling and workers are being laid off.

Photo of Mr Hugh Gray Mr Hugh Gray , Yarmouth

Would the hon. Member tell us what past Governments did for areas like Northern Ireland and East Anglia?

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

As a result of the policies of the last Conservative Government the unemployment rate in Northern Ireland was brought down from 11 per cent. or 12 per cent. to 5 per cent. Now it is on the way up again. My right hon. and learned Friend the Member for The Wirral (Mr. Selwyn Lloyd) was castigated by right hon. Gentlemen on the Front Bench opposite who said that his credit squeeze was totally misconceived. Now we have a credit squeeze plus. No wonder the country is confused. We have plenty of stick, but insufficient carrot.

I agree with what hon. Gentlemen opposite have said about unit costs of production rising. The Financial Times, The Times, the Sunday Times are full of articles about the effects on investment. The C.B.I, report, which came out last week and to which reference has been made, said that investment was suffering. Why is this? It is because there is no confidence in industry. Industry does not know where Britain is going. The motor industry has been cited frequently in this debate. The industry finds production falling and unit costs rising. The aircraft industry in my constituency has been seriously hit by Government policies. Instead of trying to manufacture aircraft in Britain, the Government are importing more and placing hundreds of millions of £s worth of orders in the United States. Is this the way to balance our overseas payments?

Manufacture can only be based on a buoyant home market. The Government are using a great big stick and saying to industry, "You must redeploy" and expecting that industry will redeploy in some mysterious direction. The Government do not say into which industries the men being laid off in the motor car industry are to go to, or to which industries those laid off in the aircraft industry will turn. What are these mysterious export industries into which the Government wish to redeploy men? The only way to secure proper redeployment of our labour force, and I agree that redeployment is something which must continue all the time in advancing and changing countries, is to encourage the market, to encourage manufacturers.

If manufacturers are successful and sell more of their goods at home, they reduce their unit costs, bring in mechanisation—they can afford to—attract greater investment and raise wages and salaries. This draws in to the successful industries workers from the industries which are less successful.

But that is not happening under this Government. Instead, we have continuous stop-go. The effect, not only of the credit squeeze but of high interest rates, is seriously hampering one industry in my constituency, the directors of which I was speaking to only a week or two ago. It is one of the largest rope works in the United Kingdom. It is trying to export ropes to South America, but is facing very strong competition from Portugal and continental countries. It has to finance these exports, but has to pay 7 or 8 per cent. for the money required to do so. Its foreign competitors who also have to finance their exports can receive loans at half the interest rate which this firm has to pay.

This is a very marginal business. A difference of 1 or 2 per cent. in the interest rate can make all the difference between winning and losing an export market and working at a profit or loss. The Government's policies are making it well-nigh impossible to exploit the export markets which are available for this company.

Instead of pursuing this stop-go policy, the Government would do well to turn their mind to broader issues. Why is our balance of payments in such bad straits? Why have we continuously had periods of credit squeeze—in 1951, 1952, 1956, 1961, and now another in 1966? We are told by Government after Government that it is because Britain must not devalue. It is true that we have a reserve currency. But why are we so vulnerable with a reserve currency? Why do we continuously have to step on the brake in order to readjust the balance between exports and imports? It is because we do not have sufficient reserves for sterling to act properly as a reserve currency and to be used internationally, with the dollar, to finance world trade.

A simple solution to this problem has been suggested by Jacques Reuff, the economist who advises to General de Gaulle. An alternative, the Stamp plan, has been put forward. This would increase world liquidity—the amount of money available in the world—and would help other countries to buy the cars, aircraft and other goods which we are ready and willing to export. Why should not the Stamp plan or the Reuff plan be accepted? Why should we stick to the ancient valuation of gold which was fixed in 1934? Why should not we review this? Why should we not increase the value of gold in the way that the value of all other commodities has increased by 50 or 100 per cent.? Overnight, we should double the reserves of this country and the reserves of France and other countries which hold gold.

Some people suggest that this might be unwise, and that it would be better to accept the Stamp plan and to print money. Unfortunately, countries do not have sufficient confidence in printed money. But by revaluing gold, or having some other form of international currency, we should create the liquidity necessary to finance trade which would obviate the necessity of repeatedly squeezing the British economy in the way that has been done since the end of the war.

There is undoubtedly the need in under-developed areas like Africa, South America and the Far East for the consumer goods which we are producing. The effective demand is not there, but it can be created. I believe that the President of the Board of Trade made sympathetic noises in Australia when he was questioned about this. Here is one way in which Britain can avoid the problems of continuous credit squeeze.

I suggest that the Government should pay more attention to increasing trade and should not be as very afraid as they are of inflation. What matters in a modern free society is not that we inflate so much, but that we do not inflate any more rapidly than other countries are doing. So that industrialists take the right investment decisions, it is necessary that they have hope that effective consumer demand will increase. This presupposes inflation, admittedly—perhaps controlled inflation—but a certain amount of inflation to give buoyancy to the market, so that money will be saved by those in the community who are disposed to saving and investing in productive industry.

This continuous stepping on the brake is not only holding up productivity in Britain, but is doing the same in many European countries. They are all experiencing these high interest rates and credit squeeze. If prosperity is to increase in Britain and Europe and throughout the world, we should be rather less afraid of inflation. We should take the bull by the horns.

We should accept that if trade is to increase, it must be financed. The world must have greater liquidity. We must go ahead and set our sights on higher productivity, so that development areas such as the one which I represent, with the shipbuilding industry in Belfast, will be given the orders which it needs for new boats to carry this trade instead of facing, as is reported in the Press today, a fall in the demand for ships—a fall which reflects the fall in the profits of shipping companies throughout the world—and so that we can build the motor cars and make the other goods which are needed throughout the world. That is the way to deal with the problem and not the way in which the Government are trying to deal with it.

8.47 p.m.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

There have been times during this debate when I thought that the House of Commons had entered cloud-cuckoo-land. I say that because I have heard a number of speeches which have gone into the question of training and retraining as if we were discussing seriously the best way to deal with redeployment. The fact is that we are discussing in the context of a very serious economic situation and squeeze, which is leading to the development of high-level unemployment.

When Mr. Victor Feather, Assistant General Secretary of the Trades Union Congress, said that the term "redeployment" in the present context has a very hollow ring, I think that he was speaking the truth and speaking on behalf of all those workers who are at the moment thrown on to the streets.

All my adult life I have been involved in the fight for full employment. I come from Merseyside. That is why I would like briefly to deal with hon. Members opposite. Today, they have got up with their hands on their hearts and they have talked with great crocodile tears streaming down their faces about the serious plight of the motor car workers and the others who are unemployed, as if they had the answer to the problem. Right through the Tory years, both since the war and before the war, areas like Merseyside have continually suffered deep unemployment, but I never expected ever to get up in this House and have to make a speech which concerned itself with the growth of unemployment under a Labour Government.

My criticism of our Government is not that they are pursuing a Socialist policy; it is not that they have Socialist answers to the economic problems; but that they are influenced by and following basically Tory policies. This is my criticism of our Government. Of course, it can rightly be said that we have the Redundancy Payments Act; we have the wage-related unemployment benefits; we also have a certain amount of cushioning in the under-developed areas. This is true. This is good. This is what we fought for and believe in, but we also have the growth in unemployment in these areas.

Let me give some of the facts in relation to this. We have had a lot of talk about the motor car industry today, as though the motor car industry were the only industry with a problem, and as though it were in that industry unemployment is developing. Well, on Merseyside the facts are that the Ford Motor Company is not putting its workers off, and in fact it is talking in terms of taking on 2,000 more workers in the near future. But what do we find? We find that in one month that there has been a growth in unemployment on Merseyside—of 2,911. That means that we have a percentage of our working population unemployed of 2·9 per cent. This has developed in one month because of the policy which, unfortunately, the Government are pursuing at the present moment.

Let me quote what the Chancellor of the Exchequer on 1st March—a very important, very interesting quotation. He said: I preface my remarks by reminding the House that in the early days of the Government's life we had to determine what our general policy should be to overcome the grave deficit in the balance of payments. On previous occasions, and notably in 1961 … the chosen course of the then Government was that of a violent and sudden deflation of the economy. It worked, but at a heavy cost. He went on to say: Clearly, the nation did not elect a new Government in 1964 to return to these old and discredited recipes."—[OFFICIAL REPORT, 1st March, 1966; Vol. 725, c. 1104–5.] That is what the Chancellor of the Exchequer said on 1st March before the General Election.

Let me quote now what I fought the General Election on, because I think the country can remember, and I think the Government ought to be reminded of it. We issued a document, "Time for Decision". What did we say in "Time for Decision"? We said on page 5: But in the pursuit of solvency and the defence of the pound, which were our overriding aims, the new Government was determined not to repeat Conservative Stop-Go. It went on: Whatever the pressures, it would not jettison the four central objectives of its policy". Let me quote No. 3 of the central objectives of the Government's policy. It was: To maintain full employment and a high level of investment in productive industry, while damping down the overheated economy. I and my hon. Friends fought the election on that. I believed in that policy then, and I believe in it now.

I cannot understand why we should be in the position where we adopt basically, though not entirely, the policies with which the Conservative Party at each stage of an economic crisis has attempted to solve the problem. I would not mind if there had not been alternative policies presented, but there were alternative policies. Many times in this House and elsewhere hon. Members have urged the Government to take a different line. We are asking them now to take a different line.

I hope that they are not going to take the advice of The Times, which said on Friday: The fact that the freeze is working should be a source of satisfaction rather than regret—not that anyone wants a state of 'stop' for its own sake, but because the sooner the economy is brought under control the sooner expansion can begin again. It is a source of "satisfaction" that extra workers are now unemployed. I read the report of a recent speech by Mr. O'Brien, who said that we must not shrink from the measures that we have taken and the medicine that we have doled out to ourselves. Those were the terms of his speech. Is he on the dole? Will he suffer unemployment? Is there any possibility that he will have to forgo giving his children Christmas presents? Will he experience the indignity of signing on at an unemployment exchange? Who is doling out what to whom? That is not the way for a Labour Government to advance.

The truth is that, unfortunately, we have been pressurised into this by the bankers. We were told by the Chancellor at the Labour Party conference that to suggest that it was a bankers' ramp was utterly ridiculous. That is what he said on one day. On the following day, we find an interesting article in The Guardian reporting a conversation between William Davis and Mr. Pierre-Paul Schweitzer, Managing Director of the International Monetary Fund. Mr. Schweitzer was reported as saying: We never force a policy on anybody. Your Government knows as well and probably much better than we what's good for the United Kingdom. When we put all this money at your disposal, we just agreed with your Government on what was our common view of desirable policies in the United Kingdom. There was no force. They merely agreed after discussions, which means that we were told, "Either you agree, or you do not get the money." That is the situation.

An Hon. Member:

That is fair enough. No Government have to borrow.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

The hon. Gentleman says that that is fair enough. Does he like our policies in this country to be determined by bankers and by the International Monetary Fund? The hon. Gentleman may like it, but I do not. I do not think that it is the solution to the problem, nor do the people of this country.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

My hon. Friend has just come into the Chamber, whereas I have been sitting here all day. I promised the Front Bench that I would sit down at 9 o'clock, and I have no intention of allowing myself to be interrupted by anybody.

What can we do? We have made very clear, in a Motion that was put down on the Order Paper today, the sort of policies that we ought to follow. First, we must genuinely control prices. I am surprised at the C.B.I. raising its hands in horror over laundry prices. This is an example of bolting the door after the horse has gone, because laundry prices went up a month ago. I wrote letter after letter to various Departments at the time raising the whole question of laundry prices.

What about introducing some selective import controls? What about stopping the flow of unnecessary capital, some of which has been used to build skyscrapers in New York, and some of which has assisted the Australian economy—a country where the people already have a higher standard of living than we do? Above all, what about making certain that there are some drastic cuts in our arms expenditure? That is how we should be proceeding, and I appeal to my right hon. Friends on the Front Bench to realise it is not too late.

We do not have to continue with this deflationary policy. We can turn it back right now, and I ask the Government to do that before it is too late, and before their whole economic policy ends in utter disaster.

9.1 p.m.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I have some sympathy with the hon. Member for Liverpool, Walton (Mr. Heffer) in his complaints against his Government that the economic policy in which he believed has been jettisoned.

The reason for this debate is that the party opposite held out a mirage over 13 years. Hon. Gentlemen persuaded themselves, and then they persuaded the people—they even persuaded the right hon. Gentleman the Minister of Labour—that it was possible to run the British economy on full employment, with ever-increasing wages, and without any need for cutbacks and deflation, without the balance of payments getting into trouble—an oasis of cool, clear water surrounded by the palm trees of full employment. They believe it, but it did not work. They won two elections on it. For two years they tried to make it work, and now it is forgotten and gone— … boundless and bareThe love and level sands stretch far away. How can the Labour Party stomach this new conversion? The hon. Member for Walton was right. Many hon. Gentlemen opposite have made it clear that they are extremely unhappy. During the election the Prime Minister said: These are the issues:"— he was talking about the issues at the election— Whether the grave economic difficulties the Tories left us with are to be put right by methods which maintain full employment, or whether, as the Tories keep hinting, by methods involving cutting demand, unleashing deflation, and causing unemployment and short-time working. The unemployment figure is now 437,000. On that fateful day, 20th July, the Government turned to unemployment as the sanction; Keir Hardie turned in his grave.

The Minister of Labour, speaking at the Brigton conference a few weeks ago, said: I do not think it is in the best interests of this Conference that we should go on record as saying it 'expresses its grave concern at the sharp growth in unemployment throughout the country.' I understand the fears, but actually it is not true at this moment. Why on earth should we give sustenance to the Tories and the Tory newspapers at this time I do not know.The facts of the situation at the moment are, as most of you know, that there was an increase of 26,000 at the last count. At the next count it went up by 97,000.

During the debate on 22nd April the right hon. Gentleman said: All I know from my industrial life is that once one starts on the path of deflation, as it were, very often nobody is able to control it in the end, and it just gathers pace."—[OFFICIAL REPORT, 22nd April, 1966; Vol. 727, c. 236.] The Minister has changed his tune in the last six months. I ask the Government how far they will go. Hon. Members on both sides of the House are becoming alarmed in case the situation has got out of control. We would like to hear from the Government about their plans. When are they going to start to take action? At what level? Lord Shawcross thinks that unemployment will reach 1½ million. Do the Government agree? Is that their intention? We should like a detailed forecast and an idea of some of the plans.

But the worst insult is to call this redeployment. All my hon. Friends, and nearly all hon. Members who have spoken from the Government benches, have said that it is not redeployment but unemployment—unemployment for economic reasons, to placate the foreign bankers, if one likes to call it that; but perhaps to atone for the past failures of the Government would be a more accurate description of what has come about. I thought that the Minister was at his weakest this afternoon in explaining the economic justification for deflation. He said that we had an opportunity to reshape our economy through the breathing space which we had been given. I do not think that he had ever thought about reshaping our economy. I think that this breathing space came as a nasty breath of fresh air to him. He did not expect it and was not ready for it.

He had no strategy and no contingency plans ready for such a situation. If, during the 13 years of Tory Government, a Tory had made a speech on the question of unemployment with so little constructive content and so few plans mentioned in it, he would have been torn to pieces by the party opposite. As my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd) said, he would probably have been lynched if the car workers, or the unemployed themselves, had been listening. Although in length his speech was quite astonishing, in content it was very disappointing. What the party opposite have done is to tear up the bible of Socialism and use the pages to paper over the fact that they have no redeployment policy at all.

Let us consider the development areas. On 20th July, the Prime Minister said that all the necessary steps had been taken to exempt development areas from the effects of the squeeze. Yet we were told today by the Minister that B.M.C. workers at Bathgate and Llanelly—both in development areas—have worse than usual prospects of re-absorption. My hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) described the effects of this policy in Scotland; my hon. Friend the Member for Belfast, East (Mr. McMaster), with his usual force, described the effect on Belfast, where the unemployment is already 6 per cent., and the hon. Member for Carmarthen (Mr. Gwynfor Evans) described the effect on Wales. These are the areas which will suffer first. It is quite clear that the redeployment plans do not include any provision for protecting development areas.

If we had a proper plan for redevelopment, we would expect an exodus from the declining and old-fashioned industries. In fact, however, many of those industries are nationalised, and so immune from the pressures of the squeeze to a far greater extent than are most private industries. There is no evidence that the declining industries have been declaring surplus workers redundant. If anything, the evidence is that there has been slightly the reverse effect. The Minister has admitted that he has had precious few applications for retraining from the railways or the coal mines. It seems that there is no distinct movement of workers from the declining industries.

Secondly, we would expect there to be a movement of workers into the modern technological industries—what the Prime Minister calls the technological spearhead—and into the export industries. Yet what three industries are losing people quickest? There is the motor car industry—which has been referred to by right hon. Friend the Member for Sutton Coldfield, in a most important contribution, and by many other hon. Members—the aircraft industry, which is surely the most modern technical industry that we could mention, and the chemical industry, in which I.C.I. has been discharging workers. The technological spearhead is being blunted.

What we are short of is skilled men. Many of my hon. Friends, in particular my hon. Friend the Member for Ton- bridge (Mr. Hornby), referred to the acute shortage of skilled labour. The C.B.I. circular which has been referred to today says that 52 per cent. of firms responding to the questionnaire blamed shortage of skilled labour as a reason for not being able to increase their output. Yet it is not the skilled men who are moving: it is the unskilled and the semi-skilled. So the redeployment policy seems to be getting into a greater and greater mess the more one considers it.

Thirdly, the movement of displaced workers seems to be into the services, these despised professions, which the Government spent all summer trying to damage with their Selective Employment Tax. The Minister said that 40 per cent. of the displaced workers in the East Midlands appeared to have gone into service industries. The Sunday Times yesterday had this little piece of information in "Insight": Of the 21 who are redeployed, two light bulb testers in a manufacturing industry in Newcastle have now joined Rowntree's, the cocoa and chocolate manufacturers, one mine worker in South Wales has become a council labourer at a loss of about £10 a week; an unskilled process worker for I.C.I. in South Wales went to the Royal Ordnance Factory at Glascoed with a drop in wages and two women in Manchester transferred from manufacturing industry to a pickle factory. Is that the sort of redeployment which the Minister wants? Is that his idea of an expanding, purposive dynamic society?

My hon. Friend the Member for Harrow, West (Mr. John Page) was quite right on this subject, as was the hon. Member for Birmingham, Northfield (Mr. Chapman), who made a speech which deserves the study of all hon. Members.

Where does the Selective Employment Tax fit into this? The Minister of Labour has been at great pains since he has been Minister to try to lift himself above the political struggle.

He said in the Queen's Speech debate this year: … but I find more and more that the longer one is Minister of Labour the less political one becomes …"—[OFFICIAL REPORT, 22nd April, 1966; Vol. 727, c. 249.] He is like some amiable animal who only eats grass and does nobody any harm at all: he hurts nobody. But the Chancellor led him astray. He led him into a bog—the bog of the Selective Employment Tax —and there he wallowed all summer. It made him ill. He had to leave us, and we were very worried and very sad that he was not with us. We were very relieved when he came back, although I noticed that he did not come back before the Selective Employment Payments Bill was through the House. But it stopped him getting on with his redeployment policy. He was busy dividing the sheep from the goats and dividing premises with main roads, and other things. His staff was busy administering the tax when they should have been preparing a redeployment policy.

I should like to outline some of the features which a redeployment policy should have. I would like first of all to pay tribute to the speech of the hon. Member for Mansfield (Mr. Concannon), who described a positive and successful redeployment policy as carried out by the Coal Board. There was much in that speech which could be of national application. But what I want to emphasise is that it was a positive policy, whereas we have had from the Government nothing but a negative policy. This is a very big subject indeed. One could mention many facets of redeployment which are important.

I believe that we need a better interrelation of the financial grants and the sources of finance. We certainly need more information. We need to know which class of labour is short, which skills are short, which are in surplus, what the actual need for retraining is in terms of numbers, trades, areas and skills. We want much more central planning. For a party which is said to hoist its colours to the mast of planning, it is extraordinary that they should have come into this situation with no central plan on how to deal with the unemployed. There has been insufficient effort in retraining.

In the Common Market each member State contributes its per capita share to the mobility of labour fund. It then gets back from the fund what it has in fact spent in hard cash. It is rather like putting on the price of a ticket for a party the fact that drink is included. It encourages the individual to have his full share or more of anything that may be on offer, and this is the sort of idea which we must get into our mobility of labour policy. I wish that we were members of the Common Market so that this same stimulus applied to us to spend more on mobility.

There are two comments which I should make briefly on this matter. First, we should have full transferability of pension rights. This is in everybody's manifesto and in the programmes of all political parties, and yet it never seems to be quite achieved. I hope that the Government will press on with it faster than before. Secondly, we should make more use of our mobility grants—grants to help people to move house. It is surprising that in the five years from 1953 only about 10,000 people took advantage of these grants at a cost of just over £500,000, which is a derisory sum. I do not believe that these grants are well known enough or that enough information is publicised about them, and I hope that more pressure will be exerted in that direction.

We can do more still to develop employment exchanges. I pay tribute to what has already been done by the employment exchanges and what the Minister has done; he has already instituted some good reforms in the employment exchanges. But they must be more positive. They must go into declining industries before men are made redundant in order to begin trying to find openings for them and to arrange retraining. They have to feed information back to the centre as to which skills are needed and which are in surplus and which retraining courses will be needed. They must give advice on the kind of retraining which will have to take place and keep in close touch with the retraining authorities. I am not being critical, for they are already moving in this direction, but they must act much more in the form of a careers advisory service than in the old form of a labour exchange. I am sure that the Minister is aware of this, and I hope that we shall make further progress on this important road.

My next comment concerns housing. My hon. Friend the Member for Aberdeenshire, East underlined the essential need for housing. One cannot move to a new job and a new district unless there is a new house into which one can move. The failure of the Government's housing drive, catastrophic though it is for the nation as a whole, will be fatal to the Government's mobility of labour problems. The present Leader of the House is an expert in psychological warfare. He has beaten a psychological retreat from the collapse in the housing figures, and I am sorry that the right hon. Member for Rossendale (Mr. Greenwood) has been nominated the fall guy, because housing will be the biggest of the Government's failures.

It is not only the number of houses that matter, although it is important that there should be enough; the level of rents also matters. A man with a council house or a rent-restricted house in the North or in the West is possibly paying £2, £3 or even £4 a week less in rent than he would have to pay if he moved to the Midlands, London or some other part of the country, and he knows that it is worth £2, £3 or £4 a week for him to sit tight. What is worse, the Government have frozen this pattern by means of the Rent Act in such a way that they will get no nearer a slightly more equal distribution of rents throughout the country.

The worst problem of all is that the majority of the low rents tend to be in the development regions of the British Isles. For example, the average rent which people pay for a council house in the city of Glasgow is 18s. 2d. a week. For any man seeking a new job, moving out of the centre of the city or moving to some other part of the country, there 's the problem that he has to jump from a rent of 18s. 2d. a week to a rent of possibly £4 or £5 a week. This is an enormous disincentive which the Government must start tackling. What are their plans to aid the mobility of labour? Do they intend to take a leaf out of the Coal Board's book and subsidise the gap in rents, about which the hon. Member for Mansfield was telling us? Do they intend to earmark special houses for redeployed workers or build houses for them? I have not heard anything about their plans, and this is clearly one of the big impediments to mobility. Can we be told just what the Government's policy is, if they have a policy at all, on this matter?

I come to retraining. The Government inherited capacity in Government training centres for 11,000 people a year, and they now have capacity for about 15,000 people a year. My hon. Friend the Member for Bath (Sir E. Brown) tabled a Question to which he received a Written Reply today. My hon. Friend asked: … the Minister of Labour how many places in Government training centres will be provided in the years 1967 to 1969. He received the reply: There are at present some 6,200 places in 32 centres. The current expansion programme provides for a total of about 8,000 places in 38 centres by the end of 1967. The last sentence of the reply was to have read: Plans for expansion in subsequent years are under urgent consideration. But I notice on the circulated document containing the Written Answer that that was crossed out and, in its place, these words were inserted: Plans are being made for expansion in subsequent years. Obviously the Parliamentary Secretary, whose name is attached to the Written Reply, did not think that the first answer was quite strong enough. I assure her that my hon. Friends and I do not think that the second answer is quite strong enough either. Is it really true that the Government are content to stick at 16,000 places by the end of 1967, and are there no plans for building more centres to provide more places for 1968 and 1969? Is this the limit of the planning the Government have done?

It is not as if we have reached saturation point in G.T.C.s. I appreciate the danger of citing the Swedish comparison, but that appears to illustrate that they have about 15 times the G.T.C. places per head of the population than we have. I am not suggesting that we should go nearly that far, but we did expect the Government to come forward today and at least say, "Our plans are to expand the G.T.C.s by so many thousand places for 1968 and an additional number of places for 1969". But to just say Plans are being made for expansion in subsequent years. is not good enough.

Will the Parliamentary Secretary say what the Government are doing about trade union obstruction and resistance? We have been told that this is serious in the North-East and North-West, and it is obviously something that is holding up the policy for redeployment. I trust that the hon. Lady will not evade the question. We need a categorical answer about how the Government are tackling these obstructions so that displaced workers in all regions can have the benefit of learning a new skill and having a new chance in life.

The right hon. Gentleman the Minister knew that he was going to need a massive retraining programme. On Second Reading of the Industrial Training Bill in 1963 he quoted a National Economic Development Council Report and agreed that 100,000 adults would have to be retrained each year in future. That was the view to which he subscribed. Why has he not made faster progress in producing those 100,000 places which will be needed?

My hon. Friends have suggested that the £5 grant given to firms training trainees in the development districts should be extended to the whole country. This is surely a correct reform to make at this time, remembering that it is not only a question of the development districts but of training labour wherever we can and however we can. It is therefore right to extend the grant to the whole country. Secondly, my right hon. Friend mentioned shift work in training. During the war shift work was encouraged in most of the training centres. The cost of the machinery, the machine tools, particularly in engineering, is quite a large capital item, and one can use these twice as much and even retrain twice as many people in the same workshops if this is done. I hope that the Government will seriously consider that suggestion, because it might well lead to a rapid crash development programme in our retraining operations.

When one looks at the whole range of in-firm training and industry training board training one is not aware that any crash action is being taken to increase the number of training places, despite the growing shadow of unemployment which looms over us all. What can we do in a hurry? Even if we exonerate the right hon. Gentleman for not having seen that the Prime Minister was going to change economic policy and turn it on its head on 20th July, why can he not put forward plans for increasing the number of retraining places in firms in the very near future? The industrial training boards will take far too long to achieve anything to help us this winter. Therefore we must look to short-term measures, to crash action programmes, in order to get something done, and I am still waiting to hear what the Government propose for this.

I now turn to the financial implications. If a £20-a-week-man, who is about the average, with two children, becomes unemployed his income drops to £12 a week, a fall of £8 a week. I believe that if he receives retraining he gets £13 10s. per week, a drop of £6 10s., and that £13 10s. compares with the £21 a week that he would receive in Sweden. We must consider whether these figures are adequate, remembering that these people have hire-purchase burdens, family commitments and probably more expenses than the man who remains in employment, owing to their looking for new work, leaving home and so on.

At the same time, we provide redundancy pay which varies from nothing for the newest employee to many hundreds of £s for those who have been a long time in one business. This is entirely haphazard in its incidence. Out of ten redundant men, three may get nothing and three may get many hundreds of £s, with the others in between. The redundancy pay is no help to the new starters, who may be just as much in need and suffer just as much as the others. I wonder if the priorities are right.

On the other side of the coin, unemployment benefit is supposed to be an insurance. Over the past ten years the contributions into the Fund have totalled £660 million, whereas we have only paid out £260 million, so the State has made a profit on unemployment pay of about £400 million. Redundancy pay, on the other hand, is paid directly by the employers into a fund, and we want to know what will happen about this. It seems that there is a certain disincentive on employers to make men redundant, to redeploy, when they have to pay a proportion of the cost of redundancy pay directly. There is enough evidence to suggest that all is not well and logical and rational here. There is strong ground for the Government to make a review of the whole financial arrangements for their redeployment policy to try to find the most rational basis to carry it out.

The Government deliberately created unemployment. They call it redeployment. But they have no plans for a positive redeployment policy of the type that the Coal Board has brought into effect. The wrong people are being shaken out from the wrong industries. Training facilities are inadequate and the finance for the whole operation is in a muddle. There are ways in which one can shake people out on a slightly more rational basis, ways which my right hon. Friend has urged on the House and the country. One can stiffen competition. Why did the Labour Party vote against the Resale Prices Bill in a vital Division? Why have they not made the steel companies compete in the twilight which remains to them before nationalisation? Why have they not avoided nationalisation of the docks, land and steel? How can this help the competitive nature of the British economy? Why have they not made more effort to get into Europe? Perhaps we shall be told one of these days what happened last weekend at Chequers.

A competition policy is something one must watch continuously and pursue continously. This is the way to force inefficient firms to be efficient and to shake out labour, if I may borrow the Prime Minister's phrase, which should not be where it is. The Government should attack artificial restrictions on the use of labour such as the demarcations practised by the craft unions, a big source of inefficient employment, and they should attack overmanning and restrictive practices, an even bigger source still. They should tax inefficiency in their tax laws. As for the Selective Employment Tax, the biggest fiscal farce ever perpetrated on the country, it was a step plumb in the wrong direction.

I have shown what would be a better way to create redeployment, but, of course, to get mobility of labour accepted, one must create in men's minds confidence that the arrangements will be there to look after them. Because this Government have not created confidence among businessmen, among employees or even among those who watch us from abroad, they are failing the nation, and for that reason we shall divide the House at the end of this debate.

9.32 p.m.

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

This has been an interesting and searching debate, and I intend to begin rather peacefully by dealing with some of the points of information requested by hon. Members on both sides of the House.

The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) asked about Government training centres in Scotland. There are now eight Government training centres in Scotland and, when his party left office, there was precisely one. In addition, there are at present 893 training places, but by the end of next year there will be a further 216 places. There are at the moment 772 people in training, and in consequence there are 121 places which can be taken up by those coming forward for training. The most recent figure of people from the B.M.C. redundancy who have applied for training is 20.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

I hope that the hon. Lady will——

Hon. Members:

Oh.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. If the hon. Lady gives way, there is no need for noise about it.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Will the hon. Lady say how many of the extra between one and eight training centres in Scotland were under construction at the time when her Government came to power?

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

If the right hon. Gentleman will give me a chance, I shall come to that point, too, which has been made more than once by the party opposite.

I turn next to the points made with regard to training by my hon. Friend the Member for Eccles (Mr. Carter-Jones) and the hon. Member for Tonbridge (Mr. Hornby) in their extremely thoughtful speeches, which, if I may say so, deserve a little attention in answer. I take, first, the question of housing, raised also by the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel).

The House will be aware that my right hon. Friend the Minister for Housing and Local Government has recently held talks with the local authority associations. It will be interested to know that they have supported his Department in the aim of making clear to authorities that, as far as possible, a residential qualification shall not be treated as the sole require- ment for housing. They have been offered a good deal of co-operation in this matter. I understand that my right hon. Friend is now pressing those local authorities which lay down qualifications to review them and reduce or eliminate them wherever possible.

The Secretaries of State for Scotland and Wales have agreed to take similar action in their own countries. In addition, building by the Scottish Special Housing Association, which is being increased, is to be principally devoted to the support of industry.

The House will be interested also in this further point. At present, local authorities build only about one-third of the total stock of housing in this country, so that something needs to be done also in the private ownership sector. What families in this sector of housing most need is easier facilities for getting mortgages. The House will be interested to know that the decision has been made by the Government that the categories of people to whom local authorities may make loans for house purchase are now to include workers moving to a new district.

I turn to the further questions with regard to training. I was asked about planning for future needs. It might be worth pointing to a recent example of a study made by the Government of future manpower needs. I refer to the Report of the Sir Willis Jackson Committee in relation to needs for scientific and technological manpower. The Manpower Research Unit of the Ministry is engaged on a statistical survey of the likely demands for labour by occupation and industry over the whole economy, special surveys of electronics, machine tools, retail distribution and the printing industry, and, in addition, an examination of trends in office employment and 20 skilled occupations. We hope that this work will be the basis for the long-term planning of future training needs.

I turn to the short-term considerations of the matter. It might be advisable to remind the House that we are rapidly moving into years in which the net increase in the labour force will be very small, and in five years' time, when the school-leaving age is increased, there will be no net increase in the labour force but a reduction. It means that the training of those already in employment is of crucial importance.

I turn to answer one or two points made and questions asked by the hon. Member for Tonbridge. First, he asked whether courses were continually adapted to the needs of our changing industry. Yes, they are. The courses are reconstructed in terms of content all the time. To give a recent example, the course in instrument maintenance has been readapted to consider automatic machines and tape control machinery, so that the men on that course will be very much up to date. We are introducing four new courses, including one in the electronics field, but the final details are being discussed with industry.

With regard to the point about the size of classes, some expansion may be possible. There are two difficulties about it. One is that at the moment we are mostly recruiting on the trickle pattern. We do not start block classes, because that means a longer waiting time, and therefore the instructor has to give individual attention because the men are at different stages in their training in most cases. However, we will look into further expansion and, in particular, into block classes. Indeed, we are doing it.

I should make a slightly wider remark on the whole question of training, and that is that the blockage is not in terms of money or space. The crucial difficulty is in terms of trained instructors and managers. The limitation comes primarily from the number of experienced men available for this work. The failure rate amounts to only 10 per cent., and this includes those who failed at the initial stage by not showing themselves in the first three weeks of assessment capable of continuing the course.

I turn to the development areas. A great deal of training is already starting there as a result of the financial and direct assistance offered by the Minister of Labour. To give an example, during the past year 12,000 men in Scotland have been retrained under this financial scheme alone. Applications for the scheme are steadily increasing. Applications for direct training assistance, by which we mean the free provision of trained instructors by the Ministry of Labour, are coming forward much more slowly in spite of many efforts by the Ministry to publicise it. It may be that what we say tonight will persuade firms in the development districts to take advantage of schemes already in existence. I would stress that some firms are not taking full advantage of them.

Lastly, I must say a word about the industrial training boards. I shall come back to what the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and the right hon. Member for Leeds, North-East (Sir K. Joseph) had to say about the Government training centres. One speaker said that possibly the industry training boards were moving slowly. It is fair to say that some are moving very fast indeed.

A point was made about the length of apprenticeships. With support from both sides of industry, a number of the boards are bringing forward basic training programmes involving a considerable drop in the length and period of apprenticeships. I was also asked about co-operation from the trade unions. One of the important trade unions, which, up to now, has been rather reluctant about accepting trainees, has agreed to give full co-operation to the Ministry in placing them.

There is no other difficulty at national level, but I would be unwise to suggest that there were not still difficulties at local level, which arise for an obvious reason—because men who suspect that there is any possibility of time-served apprentices or time-served men losing their positions to men who come out of training centres will be reluctant to accept them. Consequently, one must always balance the factor of upgrading and upskilling industry against the factor of the confidence inspired by being able to place a good man quickly and readily in a skilled job.

I want to turn now to one or two other points made in the debate. First, I want to say something about the question raised by the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) and my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) about the car industry redundancies. First and foremost, there are a number of complications in the situation which were rather glossed over by the right hon. Member for Leeds, North-East when he quoted the Financial Times.

Incidentally, perhaps other hon. Members found, as I did, that this quotation seemed like a quotation from a member of the Ministry of Labour staff, so it may enlighten them if I point out that the first sentence was indeed such a quotation and that all that followed was the conclusion of the author of the article. But that was not the impression I got until I picked up a copy of the paper. What else did it say? I make no comment on it, but will merely read what it said. The whole scene is, in fact, very much befogged by the existence of, for example, the car delivery drivers strike. It says that there is a doubt about the management and goes on: it looks as if B.M.C. was over-optimistic about sales in its spring forecasts as it might now, in its autumn prognostications, be more than necessarily gloomy". The right hon. Gentleman did not quote that sentence and I do not blame him, for it does not exactly support his case.

What else have we to look at carefully in the situation in the Midlands? One point is that the 2·1 per cent. figure, which is the latest regional figure for the West Midlands, in which the redundancies are concentrated, hides the fact that more than half the total in the figure are temporarily laid off as a result of the car delivery strike and its consequences. The true figure of Midlands unemployment, excepting the short time lay-offs, is only 1 per cent. It was, therefore, not surprising that the article went on to say: it looks as if the Ministry's optimistic forecast of finding work for most of the redundant will come true. It is not the Government saying that now—it is the Financial Times.

Having said that, it would be wrong to overlook the point made by my hon. Friend the Member for Northfield. It is true that the car industry, by its nature, has had many seasonal ups and downs. This is, in part, reflected by the interesting fact that more than half the workers laid off by B.M.C. alone have had less than two years' service with the industry. They are men who have gone into it in the recent excellent years. Some of them had left the industry in earlier years when the party opposite was in power and came back again in 1964 for a new boom period. [Laughter.] I am sorry that hon. Members opposite who, presumably, have their eyes open occasionally, have apparently not seen a number of interviews with redundant workers on television recently. They included interviews with men who have been in and out of the industry not once or twice, but in some cases three times.

In part, of course, it is the problem of exactly how to plan for an industry of this kind, which has not been particularly successful in the past under hon. Members opposite. A further difficulty is how to look at the structure of the industry in order to raise the proportion of exports. I point out to hon. Members on both sides of the House that those firms which export the highest proportion are those which have been least affected by redundancy and some of them, like Leylands, export a very high proportion of their total output.

I turn from that to another matter raised in the debate, the Selective Employment Tax. This tax has been accused of many things. I want to read something said by my right hon. Friend when moving the Second Reading of the Bill which brought in the tax. He said: The tax is intended to have both short and long-term effects. In the short term, its main purpose is to raise additional revenue in order to restrain consumer demand and thereby improve our balance of payments position; but to do this in a way that will help to redress the tax balance between the manufacturing and service sectors of the economy.In the longer term it has the additional aim of making more manpower available for manufacturing industry by encouraging economy in the use of labour in the services."—[OFFICIAL REPORT, 23rd June, 1966; Vol. 730, c. 932–3.] In our Ministry we are making a study of the effects of the Selective Employment Tax—[Laughter.] When hon. Members opposite have finished enjoying themselves, and getting over the effects of a good dinner, they may want to listen to a serious argument.

The impression which we so far have of the tax is that its effect on disabled workers has been very slight—the figures of unemployment among disabled workers last month were the lowest for any September in 10 years. Secondly, the evidence so far is that there is some effect on part-time workers, but that it is more severe in terms of recruitment than in terms of the declaration of the redundancy of part-time workers.

My right hon. Friend the Chancellor of the Exchequer said when introducing it that we would need to watch the effects of the tax and that we could not know what they would be until the tax had had time to operate. Those right hon. Gentlemen opposite with experience of a tax system—there seem to be few of them—will know perfectly well that it is extremely difficult to predict the precise effects in any detail of any individual tax. We are, therefore, getting the fullest information and we are so far of the impression that the effects of the tax are very much less than hon. Members opposite, for propaganda reasons, are declaring.

I turn from that to two other matters, first, to the regional position. The right hon. Gentleman the Member for Leeds, North-East made great play about this, but if hon. Members opposite are interested in the facts they are about to get them. Most of the regions are in a considerably stronger position in relation to the country as a whole than they were in earlier periods of economic stringency under right hon. Gentlemen opposite. This is largely due to the vigorous efforts made by my right hon. Friend the President of the Board of Trade to persuade industries to expand outside the most congested and prosperous parts of the country, coupled with limits on the growth of office and other employment in those same areas.

Unemployment in the North-West, for instance, is now below the national average. In 1962 and 1963 it was between one-quarter and one-third more. The hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) made great play about the figures for Scotland, but the figure for Scotland is 3 per cent. compared with 3·9 per cent. in 1962, 4·1 in 1963 and 3·2 in 1964.

In the Northern Region unemployment was twice the national average in 1962–63. It was 4·3 per cent. and 4·4 per cent. respectively. The current figure is 2·9 per cent. I am concerned about one area in which the position is less satisfactory. In Wales, the reorganisation of the steel industry, coupled with the run-down in the pits, has led to a deterioration in the relative position there, due largely to the fact that so many jobs are dependent upon these two industries.

The Ministry of Labour, together with the other Ministries concerned, will certainly look closely at the Welsh position. I want to make it clear that already, in the first eight months of this year, the number of new factories authorised for Wales exceeded the total authorised in 1961–62–63 combined.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

To take the Scottish figures as an example, these surely reflect two facts. The first is, as we have heard in this debate, that 80,000 people have left Scotland to seek employment elsewhere. Secondly, the factories were begun under a Tory Government, and completed since the Socialists came into power. They were initiated by my right hon. Friend the Leader of the Opposition.

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

One can argue as one wishes, but the only way in which one can effectively argue is in terms of the cold figures as given for the years in which a particular Government is in power. It is still harder, and no one will pretend differently, for a man laid off in Scotland or Wales or the North-East to find another job offering good wages, than it is in London, the South-West, or the Midlands.

I take issue with the right hon. Gentleman the Member for Sutton Coldfield (Mr. Geoffrey Lloyd) when he said that the Midlands was feeling the lash more than anywhere else. The prospects are better than before in the regions, not least for young people. It takes some time to alter the industrial imbalance of Britain.

May I now turn to my hon. Friends on the benches on this side of the House. I share their hatred of unemployment, especially unemployment that keeps a man or woman who is willing and able to work out of a job for months on end. Obviously, a change of job may take a few weeks to bring about, and the Government's redundancy pay legislation and the wage-related unemployment benefit are intended to cushion the financial effects of making such a change. The House will be interested to know that while the number of those unemployed for less than eight weeks rose by 63,000 between June and September, and that the number unemployed for over eight weeks rose by only 7,700.

The crux of the question is that it has been clear for many years, as my right hon. Friend said, that all of us have to get to grips with our economic difficulties, with inflation, rising costs and with the balance of payments deficit. My right hon. Friend the Foreign Secretary, then the First Secretary of State, tried for a year and a half to get voluntary restraint from both sides of industry to enable our costs to be held in support of the pressure of demand. Heaven knows how he tried. He did achieve some success in terms of getting a considerable measure of support from both sides of industry, but the pressure of demand was such that incomes, as we all know, rose faster than output last year.

We would have liked to have avoided a squeeze, but the only alternative to that squeeze was to hold down the level of demand voluntarily. Those who attacked the Government's July measures must be clear about what they would have done instead. There are no easy answers. It would be against the best interests of our people to try to buy time again, to mortgage our future as I believe the Conservative Administration did in 1963 and 1964. As the Daily Mirror said this morning: The Government have taken the hard way and the courageous way to deal with Britain's present crisis. Let me turn, finally, to the Opposition. I find their point of view difficult to understand because it is at variance with their own recent statements. The right hon. Gentleman the Member for Leeds, North-East, who, admittedly, often seems very much more aware of the national interest than some of his colleagues, told the House in a debate on 22nd April: We shall not attack the Government provided, and provided only, that the increase in unemployment which they are seeking is limited to the short-term unemployed who are, in fact, only shifting and redeploying from job to job. If the long-term unemployment figure rises, we shall certainly wish to attack the Government because we shall claim they have misjudged the medicine which the country needs."—[OFFICIAL REPORT, 22nd April, 1966; Vol. 727, c. 224.] He has gone on to say that again in this debate and he has said it to the Conservative Party conference.

Another view was quoted by another very distinguished right hon. Member opposite who said through the medium of a company with which he is concerned: The managers believe that although 1967 will be a critical year in economic terms not only for Britain but also for other countries it will be nothing like as serious or long lasting as the 1921–31 crisis in prospect. The deflationary measures although severe and painful in Britain should lay a much stronger and healthier foundation for several years of renewed prosperity once such measures have been allowed to do their work thoroughly and have a sufficient length of time". I am quoting from the gentleman who is chairman of the Conservative Party.

Are the Opposition attacking the Government for the way in which they have managed redeployment, for I have shown that the rise in unemployment is virtually entirely in short-term unemployment? My right hon. Friend has indicated the improvements made in the Ministry's employment services and the extension of Government training centres and training through the industrial training boards now in hand. He has also mentioned the special financial assistance and direct assistance available to development areas, improved training allowances and increased help to workers who have been transferred.

The Times rightly said this morning that all this sounds and is impressive. But may I remind hon. Members opposite that this has been done against the history of a sustained rundown in the Ministry of Labour facilities during most of the years in which they were in office. I am amazed at the extraordinary capacity of the hon. Member for Cirencester and Tewkesbury to refer to Government training centres in this context.

What is the position? In 1951, there were 23 Government training centres with 3,840 places. The figure fell steadily every single year until by 1960, after nine years of Conservative government there were 15 centres with 2,615 places. By 1963, there were 13 centres with 2,500 places.

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

We are told that there was no need. In 1962 and 1963 unemployment was between 2 and 2½ per cent. At that stage, the then Government had only 13 centres with 2,500 places. Since they left office, the number has gone up from 3,074 places to 5,795 in two years, and it is to go up by a further one-third next year. The Opposition have the cheek to claim that these are paper plans and suggest——

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

The right hon. Gentleman knows that the hon. Lady does not wish to give way.

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

I have given way before, but I have no intention of giving way at this moment.

We cannot—[Interruption.]

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. Those who have not listened to the debate might listen to the peroration.

Photo of Mrs Shirley Williams Mrs Shirley Williams , Hitchin

Since there is one minute left, I will conclude by repeating what I have said.

In 1963, the national unemployment rate was 2·5 and there were 2,500 Government training places. In 1964, when the Opposition left office, there were 3,074 places. I do not believe that they have any grounds at all for trying to suggest that they left us with a basis of full and adequate employment.

Question put, That this House do now adjourn:—

The House divided: Ayes 234, Noes 328.

Division No. 177.]AYES[10.0 p.m.
Alison, Michael (Barkston Ash)Fletcher-Cooke, CharlesLloyd, Rt. Hn. Geofrrey (Sut'nC'dfield)
Allason, James (Hemel Hempstead)Forrest, GeorgeLloyd, Ian (P'tsm'th, Langstone)
Astor, JohnFortescue, TimLloyd, Rt. Hn. Selwyn (Wirral)
Atkins, Humphrey (M't'n & M'd'n)Foster, Sir JohnLongden, Gilbert
Awdry, DanielGalbraith, Hn. T. G.Loveys, W. H.
Baker, W. H. K.Gibson-Watt, DavidMcAdden, Sir Stephen
Barber, Rt. Hn. AnthonyGilmour, Ian (Norfolk, C.)MacArthur, Ian
Batsford, BrianGilmour, Sir John (Fife, E.)Maclean, Sir Fitzroy
Beamish, Col. Sir TuftonGlover, Sir DouglasMacleod, Rt. Hn. Ian
Bell, RonaldGlyn, Sir RichardMcMaster, Stanley
Bennett, Sir Frederic (Torquay)Godber, Rt. Hn. J. B.Macmillan, Maurice (Farnham)
Bennett, Dr. Reginald (Gos. & Fhm)Goodhart, PhilipMaddan, Martin
Berry, Hn. AnthonyGoodhew, VictorMaginnis, John E.
Biffen, JohnCower, RaymondMarpies, Rt. Hn. Ernest
Biggs-Davison, JohnGrant, AnthonyMarten, Neil
Birch, Rt. Hn. NigelGrant-Ferris, R.Mathew, Robert
Black, Sir CyrilGresham Cooke, R.Maude, Angus
Blaker, PeterGrieve, PercyMawby, Ray
Body, RichardGriffiths, Eldon (Bury St. Edmunds)Maxwell-Hyslop, R. J.
Bossom, Sir CliveGurden, HaroldMaydon, Lt.-Cmdr. S. L. C.
Boyd-Carpenter, Rt. Hn. JohnHall, John (Wycombe)Mills, Peter (Torrington)
Boyle, Rt. Hn. Sir EdwardHall-Davis, A. G. F.Mills, Stratton (Belfast, N.)
Braine, BernardHamilton, Michael (Salisbury)Miscampbell, Norman
Brinton, Sir TattonHarris, Frederic (Croydon, N. W.)Mitchell, David (Basingstoke)
Bromley-Davenport, Lt.-Col. Sir WalterHarris, Reader (Heston)Monro, Hector
Brown, Sir Edward (Bath)Harrison, Brian (Maldon)More, Jasper
Bruce-Gardyne, J.Harrison, Col. Sir Harwood (Eye)Morgan, G. (Denbigh)
Bryan, PaulHarvey, Sir Arthur VereMorrison, Charles (Devizes)
Buchanan-Smith, Alick (Angus, N&M)Hastings, StephenMott-Radclytfe, Sir Charles
Bullus, Sir EricHawkins, PaulMunro-Lucas-Tooth, Sir Hugh
Burden, F. A.Hay, JohnMurton, Oscar
Campbell, GordonHeald, Rt. Hn. Sir LionelNabarro, Sir Gerald
Carlisle, MarkHeath, Rt. Hn. EdwardNeave, Airey
Carr, Rt. Hn. RobertHeseltine, MichaelNicholls, Sir Harmar
Cary, Sir RobertHiggins, Terence L.Noble, Rt. Hn. Michael
Chichester-Clark, R.Hiley, JosephNott, John
Clark, HenryHill, J. E. B.Onslow, Cranley
Clegg, WalterHirst, GeoffreyOrr, Capt. L. P. S.
Cooke, RobertHobson, Rt. Hn. Sir JohnOrr-Ewing, Sir Ian
Cooper-Key, Sir NeillHogg, Rt. Hn. QuintinOsborn, John (Hallam)
Cordle, JohnHolland, PhilipOsborne, Sir Cyril (Louth)
Corfield, F. V.Hooson, EmlynPage, Graham (Crosby)
Costain, A. P.Hordern, PeterPage, John (Harrow, W.)
Craddock, Sir Beresford (Spelthorne)Hornby, RichardPardoe, John
Crosthwaite-Eyre, Sir OliverHowell, David (Guildford)Pearson, Sir Frank (Clitheroe)
Crouch, DavidHunt, JohnPeel, John
Crowder, F. P.Hutchison, Michael Clark
Cunningham, Sir KnoxIremonger, T. L.Percival, Ian
Dance, JamesIrvine, Bryant Godman (Rye)Peyton, John
Davidson, James (Aberdeenshire, W.)Jennings, J. C. (Burton)Pike, Miss Mervyn
Dean, Paul (Somerset, N.)Johnson Smith, G. (E. Grinstead)Pink, R. Bonner
Deedes, Rt. Hn. W. F. (Ashford)Jones, Arthur (Northants, S.)Pounder, Rafton
Dodds-Parker, DouglasJopling, MichaelPowell, Rt. Hn. J. Enoch
Doughty, CharlesJoseph, Rt. Hn. Sir KeithPrice, David (Eastleigh) Prior, J. M. L.
Douglas-Home, Rt. Hn. Sir AlecKaberry, Sir DonaldQuennell, Miss J. M.
Drayson, G. B.Kerby, Capt. HenryRamsden, Rt. Hn. James
du Cann, Rt. Hn. EdwardKimball, MarcusRawlinson Rt. Hn. Sir David
Eden, Sir JohnKing, Evelyn (Dorset, S.)Rees-Davies, W. R.
Elliot, Capt. Walter (Carshalton)Kirk, Peter
Errington, Sir EricKitson, TimothyRenton, Rt. Hn Sir David
Eyre, ReginaldKnight Mrs. JillRidley, Hn. Nicholas
Farr, JohnLegge-Bourke, Sir HarryRidsdale, Julian
Lewis, Kenneth (Rutland)Rippon, Rt. Hn. Geoffrey
Fisher, Nigel
Rodgers, Sir John (Sevenoaks)Tapsell, PeterWebster, David
Roots, WilliamTaylor, Edward M. (G'gow, Cathcart)Wells, John (Maidstone)
Rossi, Hugh (Hornsey)Taylor, Frank (Moss Side)Whitelaw, William
Royle, AnthonyTeeling, Sir WilliamWills, Sir Gerald (Bridgwater)
Russell, Sir RonaldTemple, John M.Wilson, Geoffrey (Truro)
Sandys, Rt. Hn. D.Thatcher, Mrs. MargaretWinstanley, Dr. M. P.
Scott, NicholasThorpe, JeremyWolrige-Gordon, Patrick
Sharples, RichardTilney, JohnWood, Rt. Hn. Richard
Shaw, Michael (Sc'b'gh & Whitby)Turton, Rt. Hn. R. H.Woodnutt, Mark
Sinclair, Sir Georgevan Straubenzee, W. R.Worsley, Marcus
Smith, JohnVaughan-Morgan, Rt. Hn. Sir JohnWylie, N. R.
Stainton, KeithVickers, Dame JoanYounger, Hn. George
Steel, David (Roxburgh)Wainwright, Richard (Colne Valley)
Stodart, AnthonyWalker, Peter (Worcester)TELLERS FOR THE AYES
Stoddart-Scott, Col. Sir M. (Ripon)Walker-Smith, Rt. Hn. Sir DerekMr. Francis Pym and
Summers, Sir SpencerWall, PatrickMr. R. W. Elliott.
Talbot, John E.Weatherill, Bernard
NOES
Abse, LeoDavies, Ednyfed Hudson (Conway)Heffer, Eric S.
Albu, AustenDavies, Harold (Leek)Henig, Stanley
Allaun, Frank (Salford, E.)Davies, Ifor (Gower)Herbison, Rt. Hn. Margaret
Alldritt, WalterDavies, Robert (Cambridge)Hilton, W. S.
Allen, ScholefieldDelargy, HughHobden, Dennis (Brighton, K'town)
Anderson, DonaldDell, EdmundHooley, Frank
Archer, PeterDewar, DonaldHorner, John
Armstrong, ErnestDiamond, Rt. Hn. JohnHoughton, Rt. Hon. Douglas
Ashley, JackDickens, JamesHowarth, Harry (Wellingborough)
Atkins, Ronald (Preston, N.)Dobson, RayHowarth, Robert (Bolton, E.)
Atkinson, Norman (Tottenham)Doig, PeterHowell, Denis (Small Heath)
Bacon, Rt. Hn. AliceDriberg, TomHowie, W.
Barnes, MichaelDunn, James A.Hoy, James
Barnett, JoelDunnett, JackHughes, Rt. Hn. Cledwyn (Anglesey)
Baxter, WilliamDunwoody, Mrs. Gwyneth (Exeter)Hughes, Emrys (Ayrshire, S.)
Beaney, AlanDunwoody, Dr. John (F'th & C'b'e)Hughes Hector (Aberdeen, N.)
Bellenger, Rt. Hn. F. J.Eadie, AlexHughes, Roy (Newport)
Bence, CyrilEdwards, Rt. Hn. Ness (Caerphilly)Hunter, Adam
Benn, Rt. Hn. Anthony WedgwoodEdwards, Robert (Bilston)Hynd, John
Bennett, James (G'gow, Bridgeton)Edwards, William (Merioneth)Irvine, A. J. (Edge Hill)
Bidwell, SydneyEllis, JohnJanner, Sir Barnett
Binns, JohnEnglish, MichaelJay, Rt. Hn. Douglas
Bishop, E. S.Ennals, DavidJeger, George (Goole)
Blackburn, F.Ensor, DavidJeger, Mrs. Lena (H'b'n & St. P'cras, S.)
Blenkinsop, ArthurEvans, Albert (Islington, S. W.)Jenkins, Hugh (Putney)
Boardman, H.Evans, Ioan L. (Birm'h'm, Yardley)Jenkins, Rt. Hn. Roy (Stechford)
Booth, AlbertFaulds, AndrewJohnson, Carol (Lewisham, S.)
Boston, TerenceFernyhough, E.Johnson, James (K'ston-on-Hull, W.)
Bottomley, Rt. Hn. ArthurFinch, HaroldJones, Dan (Burnley)
Bowden, Rt. Hn. HerbertFitch, Alan (Wigan)Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Boyden, JamesFletcher, Raymond (likeston)Jones, J. Idwal (Wrexham)
Braddock, Mrs. E. M.Fletcher, Ted (Darlington)Kelley, Richard
Bradley, TomFloud, BernardKenyon, Clifford
Bray, Dr. JeremyFoot, Sir Dingle (Ipswich)Kerr, Mrs. Anne (R'ter & Chatham)
Brooks, EdwinFoot, Michael (Ebbw Vale)Kerr, Dr. David (W'worth, Central)
Broughton, Dr. A. D. D.Ford, BertKerr, Russell (Feltham)
Brown, Rt. Hn. George (Belper)Forrester, JohnLeadbitter, Ted
Brown, Hugh D. (G'gow, Provan)Fowler, GerryLedger, Ron
Brown, Bob (N'c'tle-upon-Tyne, W.)Fraser, John (Norwood)Lee, Rt. Hn. Jennie (Cannock)
Brown, R. W. (Shoreditch & F'bury)Fraser, Rt. Hn. Tom (Hamilton)Lee, Rt. Hn. Frederick (Newton)
Buchan, NormanGalpern Sir MyerLee, John (Reading)
Buchanan, Richard (G'gow, Sp'burn)Gardner TonyLestor, Miss Joan
Butler, Herbert (Hackney, C.)Garrett W. ELever, Harold (Cheetham)
Butler, Mrs. Joyce (Wood Green)Garrow, AlexLever, L. M. (Ardwick)
Callaghan, Rt. Hn. JamesGinsburg, DavidLewis, Ron (Carlisle)
Cant, R. B.Gordon Walker, Rt. Hn. P. C.Lipton, Marcus
Carmichael, NeilGourlay, HarryLomas, Kenneth
Carter-Jones, LewisGray, Dr. Hugh (Yarmouth)Loughlin, Charles
Castle, Rt. Hn. BarbaraGreenwood, Rt. Hn. AnthonyLuard, Evan
Chapman, DonaldGregory, ArnoldLyon, Alexander W. (York)
Coe, DenisGriffiths, David (Rother Valley)Lyons, Edward (Bradford, E.)
Coleman, DonaldGriffiths, Rt. Hn. James (Llanelly)Mabon, Dr. J. Dickson
Concannon, J. D.Griffiths, Will (Exchange)McBride, Neil
Conian, BernardGunter, Rt. Hn. R. J.McCann, John
Corbet, Mrs. FredaHale, Leslie (Oldham, W.)MacColl, James
Craddock, George (Bradford, S.)Hamilton, James (Bothwell)MacDermot, Niall
Crawshaw, RichardHamilton, William (Fife, W.)Macdonald, A. H.
Cronin, JohnHamling, WilliamMcGuire, Michael
Crosland, Rt. Hn. AnthonyHannan, WilliamMcKay, Mrs. Margaret
Crossman, Rt. Hn. RichardHarper, JosephMackenzie, Gregor (Rutherglen)
Cullen, Mrs. AliceHarrison, Walter (Wakefield)Mackie, John
Dalyell, TamHart, Mrs. JudithMackintosh, John P.
Davidson, Arthur (Accrington)Haseldine, NormanMaclennan, Robert
Davies, Dr. Ernest (Stretford)Hazell, BertMcMillan, Tom (Glasgow, C.)
Davies, G. Elfed (Rhondda, E.)Healey, Rt. Hn. DenisMcNamara J. Kevin
MacPherson, MalcolmPavitt, LaurenceSnow, Julian
Mahon, Peter (Preston, S.)Pearson, Arthur (Pontypridd)Spriggs, Leslie
Mahon, Simon (Bootle)Peart, Rt. Hn. FredSteele, Thomas (Dunbartonshire, W.)
Mallalieu, J. P. W. (Huddersfield, E.)Pentland, NormanStewart, Rt. Hn. Michael
Manuel, ArchiePerry, Ernest G. (Battersea, S.)Strauss, Rt. Hn. G. R,
Mapp, CharlesPerry, George H. (Nottingham, S.)Summerskill, Hn. Dr. Shirley
Marquand, DavidPrentice, Rt. Hn. R. E.Swain, Thomas
Marsh, Rt. Hn. RichardPrice, Christopher (Perry Barr)Symonds, J. B.
Mason, RoyPrice, Thomas (Westhoughton)Taverne, Dick
Maxwell, RobertPrice, Willian (Rugby)Thomas, Iorwerth (Rhondda, W.)
Mayhem, ChristopherProbert, ArthurThomson, Rt. Hn. George
Mellish, RobertPursey, Cmdr. HarryThornton, Ernest
Mendelson, J. J.Randall, HarryTinn, James
Mikardo, IanRankin, JohnTomney, Frank
Millan, BruceRedhead, EdwardTuck, Raphael
Miller, Dr. M. S.Rees, MsriynUrwin, T. W.
Milne, Edward (Blyth)Reynolds, G. W.Varley, Eric G.
Mitchell, R. C. (S'th'pton, Test)Rhodes, GeoffreyWainwright, Edwin (Dearne Valley)
Molloy, WilliamRoberts, Albert (Normanton)Walker, Harold (Doncaster)
Moonman, EricRoberts, Goronwy (Caernarvon)Wallace, George
Morgan, Elystan (Cardiganshire)Roberts, Gwilym (Bedfordshire, S.)Watkins, David (Consett)
Morris, Charles R. (Openshaw)Robertson, John (Paisley)Watkins, Tudor (Brecon & Radnor)
Morris, John (Aberavon)Robinson, Rt. Hn. Kenneth (St. P'c'as)Weitzman, David
Moyle, RolandRobinson, W. O. J. (Walth'stow, E.)Wellbeloved, James
Mulley, Rt. Hn. FrederickRodgers, William (Stockton)Wells, William (Walsall, N.)
Murray, AlbertRoebuck, RoyWhitaker, Ben
Neal, HaroldRogers, George (Kensington, N.)White, Mrs. Eirene
Nawens, StanRose, PaulWigg, Rt. Hn. George
Noel-Baker, Rt. Hn. Philip (Derby, S.)Ross, Rt. Hn. WilliamWilkins, W. A.
Norwood, ChristopherRowland, Christopher (Meriden)Willey, Rt. Hn. Frederick
Oakes, GordonRowlands, E. (Cardiff, N.)Williams, Alan (Swansea, W.)
Ogden, EricRyan, JohnWilliams, Alan Lee (Hornchurch)
O'Malley, BrianShaw, Arnold (Ilford, S.)Williams, Mrs. Shirley (Hitchin)
Orbach, MauriceSheldon, RobertWillis, George (Edinburgh, E.)
Orme, StanleyShinwell, Rt. Hn. E.Wilson, Rt. Hn. Harold (Huyton)
Oswald, ThomasShore, Peter (Stepney)Wilson, William (Coventry, S.)
Owen, Dr. David (Plymouth, S'tn)Short, Rt. Hn. Edward (N'c'tle-u-Tyne)Winnick, David
Owen, Will (Morpeth)Short, Mrs. Renée (W'hampton, N. E.)Winterbottom, R. E.
Padley, WalterSilkin, Rt. Hn. John (Deptford)Woof, Robert
Page, Derek (King's Lynn)Silkin, S. C. (Dulwich)Wyatt, Woodrow
Palmer, ArthurSilverman, Julius (Aston)Yates, Victor
Pannell, Rt. Hn. CharlesSilverman, Sydney (Nelson)Zilliacus, K.
Park, TrevorSkeffington, ArthurTELLERS FOR THE NOES:
Parkin, Ben (Paddington, N.)Slater, JosephMr. Charles Grey and
Parkyn, Brian (Bedford)Small, WilliamMr. William Whitlock.