I beg to move
That this House deplores the rise in unemployment by over 150,000 above that for the same month last year, and calls upon Her Majesty's Government to introduce new and relevant policies which will produce a speedy reduction from this totally unacceptable level.
The House has debated unemployment on many occasions in recent years, and in those debates a great deal of anxiety has been expressed about the regions and pressure has been put upon the Government to deal with special problems. The level of unemployment was, as I said myself in a debate on the subject last year, a great cause of concern to the last Government, and we were not satisfied with the progress that we ourselves made. But in recent months the situation has altogether changed. It is more serious in Scotland and the regions, but the problem is by no means confined now to those areas, and forecasts indicate that we might reach a level of 1 million unemployed during this coming winter. In addition, there is a general lack of business confidence and policy statements by Ministers suggest that they regard unemployment as an essential part of their strategy.
This debate therefore is not one of a past series but is the first in a new series in which unemployment is emerging for the first time since the war as a major political issue which threatens to develop into a national crisis. It is not a quantitative but a qualitative change that has taken place, and the Opposition Motion calls for new and relevant policies to deal with it.
I remind the House of the basic facts of the situation as they have emerged. The total number of people out of work in the United Kingdom on 5th April was 815,819, or 3·4 per cent. of all employees. The figures of the wholly unemployed—that is to say, excluding school leavers—who are the real hard core of unemployment, on a properly seasonally adjusted basis reveal the trend more dramatically. If we leave out Northern Ireland, the figure of basic unemployment has been increasing at an accelerating pace since the beginning of the year. From January to February it rose by 10,000; from February to March it rose by 23,000; from March to April by 48,000. Jobs have thus been disappearing at the rate of 2,000 per working day. The total now stands at 704,000, which is 3·1 per cent. nationally compared with 561,000, or 2·4 per cent., in June last year.
The position in the regions is even more serious. In the South-East unemployment is still 1·9 per cent., but in the Northern region it is nearly 5·2 per cent. In Scotland it is 5·3 per cent. and in Northern Ireland it is 7·2 per cent. These over all figures conceal pockets of rising unemployment all over the country, and I give one example from the Midlands. Coventry now has 3·5 per cent. out of work, an increase of about 20 per cent. in 12 months in an area where vacancies have halved.
There is another aspect which gives special cause for concern. This, of course, is the problem of male unemployment. In Britain today one man in 20 is out of work. In Scotland and the North, it is one in 13; in Northern Ireland it is nearly one in 10. According to the Sunday Times, Britain is now the industrial nation with the highest percentage of male unemployment in the world, having overtaken the United States, where 4·3 per cent. of the men are out of jobs.
The age structure of the unemployed is, of course, yet another problem. About half of them are over 40 and the over-40s form a much higher proportion of those who have been out of work for over six months. In Scotland nearly two-thirds and in England and Wales nearly 80 per cent. of those who have been out of work for over six months are over 40.
Is my right hon. Friend aware that doctors are finding evidence of indirect effects of unemployment among their patients? For when they advise men of 50 years of age or so suffering from chest complaints that they should ask their employers for an inside job, their patients refuse because they are afraid that they will be laid off altogether.
My hon. Friend points to an important aspect. Indeed it works both ways. Men who are older are reductant to confide to their employers their state of health, while men who are older and who lose their jobs suffer from consequences which affect their health still further.
Vacancies are also down. The lowest figure of vacancies reached under the last Government was 150,000. It is now only just above 130,000. Between March and April, instead of the usual seasonal increase of about 6,000, the figure of increase was only 359—and that was the first increase since September.
The general picture is one of sharply rising unemployment and falling vacancies, especially affecting older male workers, who are the hardest hit in the regions, but it is beginning to cause anxiety throughout the country as more people face long periods out of work. One need only look at a simple list of published redundancies—those which have appeared in the newspapers. The Transport and General Workers' Union has given me a list which it has been compiling—this one since December. It shows 80,000 redundancies announced in the Press during that period. Since the latest unemployment figures were published, more and more redundancies have been announced and the number being notified to Government Departments is 50 per cent. above last year's level. During last week alone, a further 12,500 redundancies were declared, spread throughout the country.
While my right hon. Friend is on this important part of his speech and is quoting figures, may I draw his attention to the fact that in Scotland, particularly in North Lanarkshire, there are virtually no vacancies for school-leavers and the emphasis on increasing unemployment is amongst these young persons? Is not this a tragedy? Will he bear this factor in mind in delivering his excellent address?
I am grateful to my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey). He may be lucky in catching your eye, Mr. Speaker. I hope that he is. But I hope that if I omit a point which an hon. Member thinks of importance he will not try to insert it in my speech but will try to catch your eye instead, for otherwise I shall find myself occupying the rôle of an impressario presenting the speeches of others.
Of course, it is not confined to manual and skilled workers. According to The Times, 70,000 men and women in professional executive positions were recently declared redundant. Among graduates, according to a report for the C.B.I., there will be a 15 per cent. to 20 per cent. cut back in graduate employment this year.
Another aspect which will need watching is the effect of rising unemployment on race relations. An independent survey conducted in London recently showed that 22 per cent. of West Indians between 16 and 24 were out of work, a figure which included school leavers. A survey in Bradford showed that immigrants and their families accounted for nearly a quarter of the unemployed, although less than 10 per cent. of the work force. I warn the Government that, if the psychology of fear gets a grip on Britain the consequences will be hard to predict.
My right hon. Friend the Member for Kilmarnock (Mr. Ross) and other Members will be dealing with the situation in Scotland and other parts of the country, but I believe I have said enough to carry the House with me in saying that unemployment has already reached quite unacceptable proportions in Britain today. It is very hard to assess the full cost of unemployment, but the Government are always warning us about wasteful public expenditure, and there is nothing more wasteful than maintaining such a large body of men and women paid to do nothing in an economy which is short of production. At the present rate, 16 million working days a month are lost by unemployment, which totally dwarfs figures lost in industrial disputes.
I turn now from the regions and special aspects to some of the problem industries particularly affected. I begin with steel, because many hon. Members representing steel constituencies wish to speak. Last month, 2,600 redundancies were announced, affecting five works, and 7,255 at a further ten works were announced this month, including the loss of over 4,000 jobs at Irlam, which would have been phased out in 1976 but are now to be brought forward to 1973.
There is no question that the Government bear a heavy share of responsibility for the present situation in the steel industry. The Secretary of State virtually sought to take over the managerial responsibility for its investment programme, running into many thousands of millions of £s, to provide new integrated steel works.
Although we welcome the confirmation of Spencer which was announced a year ago, as was made clear today by one of my hon. Friends, we are still awaiting the confirmation of the Ravenscraig authorisation and the other plants in the steel industry's development plan. By halving the 14 per cent. price increase, the Government have accentuated the financial problems of the B.S.C. and are subsidising the steel-using industries like motor cars, which are at the same time being rebuked for settling wage claims at what the Government regard as an excessive level.
In addition, the statement of the Secretary of State earlier this week, with the remaining uncertainty about hiving off and the absurd Ministerial welcome for private steel investment and the slow rate of general economic growth have all contributed to the phasing and severity of steel redundancies.
Another example is shipbuilding. Yesterday, we read in the newspapers that in the first quarter of this year only ten merchant ships were ordered as compared with 49 in the same quarter of the previous year. Yet it is at this very moment that the Minister for Industry has chosen to dismantle the Government's support programme announced in the debate last week. Even the new credit limit of £700 million, which in any case is provided by the banks, is widely thought to be insufficient.
In the coal industry, just one example is very reminiscent of all that was said about smokeless fuel last year. We read in the paper that a £6 million smokeless fuel plant due to be built in the Swansea Valley has been cancelled because of the withdrawal of the investment grant worth £2 million which it would have attracted.
In the aircraft industry, 30,000 or 40,000 jobs have been put at risk by the Government's gross mishandling of Rolls-Royce, which they are now desperately trying to retrieve, but which, even if they succeed, has gravely affected confidence in British products.
In Shorts, we read on Tuesday that a fifth of the labour force is to be dismissed to allow the company, according to The Times, to operate
…on a basis suited to a commercial company.
And this is in Northern Ireland, where one of the social costs of unemployment appears in the Defence Vote—paying for troops to maintain civil peace.
In machine tools, at a time of Government disengagement, orders for the home market are 20 per cent. less than last year. In engineering, net new orders fell by 11 per cent., according to figures published yesterday.
As for chemicals, in March, Sir Peter Allen of I.C.I. announced a cut of 25 per cent. in his investment programme. It would be interesting to the House and relevant to this debate to quote his reasons:
The high cost of borrowing and the low rate of economic growth were the principal factors.
It is significant that he chose those reasons and not the ones normally advanced by Ministers.
Why has this level of unemployment risen? Is it because of the balance of payments? Certainly not. Last year's surplus was the biggest we have ever had, and this year the forecast is still for another very substantial surplus. Is it because the rate of unemployment is beyond the control of the Government? This is an argument which is beginning to bubble out of Ministerial statements, but it is wholly false and cannot be justified. To quote the O.E.C.D. Report of last December:
A major recession would not longer be a deus ex machina, but only could result from miscalculation or a deliberate act of Government.
Is it because Ministers do not care about the level of unemployment? It is no part of my argument that, in a personal sense, they are less kindly as people
in their approach to unemployment. But it is politically true that Conservative Members tend not to be elected from areas of high unemployment, and that Cabinet Ministers who represent the salubrious suburbs of Bexley and Barnet, Finchley and Mitcham, might not have the same experience as my hon. Friends in confronting the problems of unemployment. And the Secretary of State for Wales who looks after the principality from the security of a seat at Hendon, South may be in a different position from one who did so from Llanelli or Cardiff. But undoubtedly the Conservative Party thought unemployment important enough politically to be mentioned in three out of four election addresses sent by their candidates last summer, if Dr. Butler's recent book on the last election is correct.
The charge against them is not that they do not care: it is a much more serious charge. It is that unemployment is now seen by the Cabinet as a main instrument of economic policy. That is the charge which we make in this debate. The Daily Telegraph City Editor—not exactly, by nature or appointment, a supporter of this side of the House—wrote of the Prime Minister last week:
He is ready for a million-plus jobless.
The following day, the same City Editor wrote of the Chancellor:
Dining at the Press Club last night, Mr. Barber, Chancellor of the Exchequer, unflinchingly faced the prospect of rising unemployment—in the near term.
Indeed, in that speech—I have checked the actual words—the Chancellor said that his aim was "to slow down and later stop"—unemployment? No—"to slow down and later stop the rise in unemployment." This can only mean higher unemployment and the maintenance of it at a new and higher level.
Only the Secretary of State for Trade and Industry, who is, I believe, to speak in the debate, appears to be out of step. Exactly a week ago, The Guardian had a major headline on the front page:
Davies Joins in Pressure for Wage Freeze.
Other Ministers, the paper said, reported to include the Secretary of State for Trade and Industry, had made it known that unless the present policy of encouraging the de-escalation of wage
settlements produces tangible results, there will be no alternative but a freeze. I do not know whether that is true. Perhaps the Secretary of State will say. Does he disagree with the Prime Minister? If not, that must be the first inaccurate leak which has appeared from his Department since he took office last August.
What is the Government's case about unemployment? The answer, of course, is that their case is contained in the wording of their Amendment, which represents a distillation of all the speeches which we have heard claiming excessive pay settlements. But is this really true? It certainly is not the reason they were giving for unemployment before the election.
The Secretary of State for Employment will remember that we both took part in two debates on unemployment last year. I refreshed my memory of what he said almost exactly a year ago, on 6th May:
The remaining main component in demand is domestic consumption, and this will almost certainly be the key to the question of unemployment in the next year.
Now comes the part of his remarks to which I want to draw attention:
On the one hand, we have the wage explosion pushing up demand and, therefore, tending to reduce unemployment. On the other, we have the price explosion mopping up demand and thereby tending to maintain or increase unemployment. Which of these will win? The price explosion is of nuclear dimensions. So far this year prices have been rising at an annual rate of 7 per cent., if not a bit more.
Later he said:
Will the price explosion or the wage explosion win in influencing the overall level of demand?"—[OFFICIAL REPORT, 6th May, 1970; Vol. 801, c. 425–6.]
In Opposition the right hon. Gentleman was arguing a totally different case from that to which he is committed in his Amendment today. Prices in the last 12 months have risen, not by 7 per cent., but by 8·8 per cent. In price terms, that amounts to a hydrogen bomb explosion. The Prime Minister has worked the amazing miracle of getting the £ in your pocked down from £1 to 94p without devaluation. He has achieved that in less than 10 months in office. And many of the prices rises which have caused this situation stem directly from Government policy and the policies of the Chancellor of the Exchequer.
I recently quoted in the House what was said in the Conservative manifesto on this subject.
Wages started chasing prices up in a desperate and understandable attempt to improve living standards.
That was the Conservative view when seeking to win votes. The words are almost identical with what was said by Vic Feather on this subject last weekend at a conference in Eastbourne:
Soaring prices are bound to lead to wage claims: no one willingly accepts a lowering of his standards of living.
That was the manifesto on which the Conservatives got themselves to power in the summer of 1970. Vic Feather was quite right when, in Scotland last week, he said:
The root of the trouble is not wages. It is the lack of growth in the economy. If the economy was growing at 5 per cent. instead of at less than 3 per cent., prices would not be rising at their present rate, the soaring cost of living would be checked, and people would be working instead of being on the dole…there would be more confidence on the part of industry. There would be investment in modern equipment and the extension in factories
The fact is that the Government are deliberately gearing the economy down to a lower level of productive potential. This is not "stagflation"—a word invented by Iain Macleod—but a Government-sponsored recession with serious long-term consequences. One of these will certainly be to create an atmosphere of fear that we shall see the wholesale reintroduction of restrictive practices in industry to protect workers against loss of their jobs. Anything the Government may think they can achieve through the Industrial Relations Bill to keep restrictive practices out will be more than cancelled out by the consequences of the policies they are pursuing.
It is part of the pattern of Government that they should blame the previous Government for allegedly encouraging wage claims towards the end of 1969. It is true to say that that was the time when the incomes policy moved from a statutory to a voluntary basis. But at that time Ministers opposed a statutory incomes policy, and if we had retained that statutory incomes policy from the autumn of 1969 until the summer of 1970, the pent-up demand of nine more months would, when followed by the incoming Government with their total abandonment of this policy, have led to far greater wage explosions than the one which now confronts us.
I believe that the right hon. Gentleman's memory is playing him tricks. The previous Government did not give up the statutory incomes policy. Shortly before Christmas, 1969, the then Labour Government forced the House to approve the incomes policy White Paper for 1970 which kept certain statutory powers, much against the wish of many of their backbenchers.
The right hon. Gentleman, who follows these matters more closely than I—my recollection comes from Cabinet discussions on the matter—[HON MEMBERS: "Oh."]—will know that we brought forward a White Paper at the end of 1969. I am saying that if it had been possible to maintain a statutory policy up to the summer and this had then been abandoned in the summer, the pent-up demand would have led to a far more difficult situation than the one the right hon. Gentleman claims confronted him when he came to power.
But in the White Paper the then Government said that wage increases in 1970 must not exceed 2½ to 4 per cent. They retained powers of investigation during that period in order, so they told the country, that they could see that they did not exceed that level. In fact, in the first part of 1970, they averaged 12 per cent.
The right hon. Gentleman did not hear what I said. I was talking about a statutory as against a voluntary policy. [HON. MEMBERS: "No."] We will check HANSARD and see who is right. If the tide of pent-up wage demands had been dammed for that extra nine months, the situation that would have followed would have hit the Government in exactly the same way.
The difficulty of the Government's analysis is that it does not explain the situation. High wages do not explain unemployment in declining industries where wages tend to be lower. High wages do not cause unemployment where there is high capital investment and a low labour content to permit productivity at a level that can absorb high wages. Higher wages do not explain redundancies when there is a market, nor do they explain the change in structure of unemployment and its longer duration.
Moreover, unemployment nowadays does not weaken the bargaining power of the unions as a reserve army of unemployed once did. The recent settlements in the motor industry should prove that. Neither expressions of Ministerial disapproval nor cosy lunches with Henry Ford at No. 10 could alter the basic balance of advantage of a settlement as Ford saw it. There is only one circumstance in which unemployment would have the effect which Ministers intend that it should have. That is if it rose so high and lasted so long and was so savage in its effect that it succeeded in genuinely frightening the main body of people out of wage claims. But, as a recent Bow Group pamphlet pointed out, that is not politically acceptable.
The real explanation for the Government's policy is simpler. It is that they have always wanted a market economy, and now they have got one. This is why unemployment is high. When the Prime Minister insists that his policy is succeeding, that is the only explanation of what he means. The dreams at Selsdon Park have become the nation's nightmare. There are more people chasing fewer jobs. That is the sort of competition they really believe in.
The Cabinet have dismantled every instrument they could find by which every Government in every modern industrialised society aim to guide the economic system: prices and incomes, effective regional policies; industrial support programmes. Now we really do have the competition of which the Conservatives spoke of in the General Election.
The incentives are confined largely to the people at the very top of the tree. Even at £2,000 a year—the sort of man the Conservative canvasser begins to think of as the Tory working-class—people are actually worse off under these policies. One has to turn to the right hon. Member for Wolverhampton, South-West (Mr. Powell) to find a vivid phrase to describe the policy of unemployment. This is what he said in the Budget debate:
It is like a game of musical chairs. When the music of inflation stops, there will always be somebody who for the time being is without a chair until a new pattern of activity,
behaviour and expectations is attained which corresponds either with the reduced rate of inflation or with stable money values."—[OFFICIAL REPORT, 5th April, 1971; Vol. 815, c. 75.]
The right hon. Gentleman is not in the Cabinet, but he still has a way of putting some Conservative policies better than any Conservative Minister.
The truth is that this is not just a question of reversing the policy of a Labour Government. The Cabinet has deliberably set out to destroy the whole postwar consensus based on the maintenance of a high and stable level of employment and the whole social fabric that went with it.
What, therefore, must be done to correct it? First, I believe that we shall make no progress until a Minister, preferably the Chancellor, makes it clear that the Government accept, as a major objective of policy, a substantial cut in the present level of unemployment. If the Government will not tell us what level they expect, if they decline to forecast—all Ministers, advised by their officials, are reluctant to forecast—will they tell us what level they would accept and how they will get it?
Second, it follows from this that the rate of growth must now be geared above the level of productive potential if unemployment is not to rise. The Chancellor has many instruments at his disposal—public expenditure, tax levels, the regulator and credit controls—to produce the necessary momentum to absorb people back into production.
Third, there must now be a serious attempt to discuss the future growth of the economy with both sides of industry. It is really no good trying to run a modern industrial society unless we are making a serious attempt to inter-mesh corporate plans with national plans. Manpower forecasting too should be an integral part of any Government's industrial policy.
Fourth, the Government will have to rethink their attitude to the trade union movement. It is an act of supreme folly, in my judgment, to decide to make war on organised labour, using the instruments of the Industrial Relations Bill and higher unemployment. The problems of wage negotiations and industrial relations are at least as much a social and political phenomenon as they are an economic phenomenon. As has been said, power has passed to workers at least as much as it has passed to international companies. The pressure for industrial democracy, for the trade unions to be brought into Government policy, is so strong that it is inconceivable that any government should succeed in the long run if they choose to maintain an attitude of the kind which we have seen since the election. The Government must now take up with the T.U.C. some initiative for a fresh look at problems of prices and incomes. Every Government has a prices and incomes policy, and what is wrong with this Government's policy is that it is a bad one and an unfair one. The Government ought to take up the indications given by the T.U.C. for further discussion on this.
No one knows better than somebody who served in the previous Government how many difficulties there are in making it succeed. But everyone knows that this is a long term educational process which can only possibly succeed as part of a broader framework of social justice and, above all, full employment. We had our failures, I confess that; but they were nothing to the disaster lying ahead if, in addition to increasing inequality through budgetary means, the Government throw away full employment as part of their social contract with the people of this country.
The Government must be prepared to take special measures to deal with special aspects of the unemployment problem. There is a Bill next week to abolish investment grants, and these should be looked at again, with R.E.P., which Sir John Hunter said a year ago might lead to the bankruptcy of his and other major companies. In the industrial training field, an expanded programme is necessary to deal with the problem of longterm unemployment for those lacking skills to re-enter production.
The Labour Government did not succeed entirely in getting unemployment down to the level which we thought right. But we had a balance of payments problem which, compared with the record of this Government—[Interruption.]
I do not want to add to my right hon. Friend's qualities as an impressario, but before he comes to his final peroration, throughout his speech he has convinced me that the policy being pursued by right hon. Gentlemen opposite is to achieve one million unemployed in this country. May I take it, and may the House take it, that in his opinion, in the absence of any objections to this prediction, we can now read it as being the policy of the Government to have one million unemployed? There has been no objection to my right hon. Friend's words throughout his speech. Therefore, we take it that this is what the Government intend.
As my hon. Friend knows, I put a very simple question to the Chancellor: if the Chancellor will not say what level of unemployment he thinks there will be this year, whether he would say what level he will accept this year and, if it is likely to go above that level, what action he would take to reduce it. My hon. Friend's point is right.
Finally, I warn the Government not to fall into the error of supposing that the British people will accept unemployment at its present—or worse still—a higher level. If anything, unemployment is less acceptable in an affluent society, for obvious reasons, than it was 30 or 40 years ago. I warn the Government not to think that they can avoid their responsibility by blaming the outgoing Government, the unions or the nation as a whole. To do that would be to go back to Stanley Baldwin in 1925, and what he said about unemployment has been recorded in the reference books:
I have never pretended to have a remedy…If the people cannot save themselves, no Government can save them.
There is a frightening similarity between what Baldwin said on unemployment and the speeches made by senior Ministers now.
The Prime Minister may remember what happened to Mr Winston Churchill in 1945. Then, at the moment of his greatest triumph, he was dismissed from office. Why? Because the public, grateful as they were for all he had done during the war, were not prepared to take back the Party which had made unemployment a major instrument of policy throughout the 1930s. If that is to be their policy now, that too will be their fate.
I beg to move,
to leave out from "House" to the end of the Question and to add instead thereof:
recognising that one of the main reasons for the increase in unemployment is the cost inflation caused by excessive pay settlements, endorses the determination of Her Majesty's Government to defeat inflation and so to make possible a reduction in the number of people out of work.
I was concerned and distressed to hear the right hon. Member for Bristol, South-East (Mr. Benn) express the kind of views which he has been expressing and saying such things as that the present Government regard unemployment as an essential part of their economic strategies, and that the present rate of unemployment and, even more, the kind of figures he was postulating for the future, represent, as he said, a deliberate act of government.
I read with interest the debate on the Finance Bill yesterday and I saw that his right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) took a more balanced view than he does, but said that he thought that the present Government had varied the order of priorities as between inflation and unemployment in the terms of their economic management.
I reject absolutely his assertion in this respect. The Government are deeply perturbed at the present level of unemployment and are determined to do something about it. [HON. MEMBERS: "What?"] Perhaps hon. Gentlemen opposite would do me the favour of listening and I will try to draw out the Government's policies.
Surely the concern about unemployment is intimately bound up—the right hon. Member for Cheetham made this clear—with the whole question of inflation, a view which the right hon. Member for Bristol, South-East sought so hard to reject.
Generally speaking, on both sides of the House and in the country at large, there is a very real understanding of the impact of inflation on our national and social performance, the damage that it does and the fearful consequences that the present rate of inflation, which exceeds by far anything we have recently experienced, can have.
There seems to be, however, singularly less understanding of the effect of that rate of inflation upon the whole question of unemployment, and it is to this question that I propose to address myself. I hope very much to enlist the efforts of the House to try to see how important is the restraint of the present level of cost inflation, which has a critical effect on the whole question of the employment level and the unemployment level.
The real place where this bites is in the industrial sector. At the moment the industrial sector is caught in a veritable pincer movement between, on the one side, the very high level of cost inflation and, on the other side, despite what hon. Members opposite say, what is none the less the much lower level of price inflation. For years now the level of wage inflation has considerably outdistanced that of price inflation, and the pincer movement between the two has grossly undermined the resources of industry generally.
Clearly, this works in two ways. There is, on the one side, the ever rising level of industrial costs which are so strongly geared to wages. Wages represent by far the greatest element in industrial costs. The rate at which they have been moving—the upward pressure of industrial costs generally—fatally presses against the generation of resources within industry.
I ask the hon. Gentleman to be kind enough to let me proceed a little further and I will give way in a minute or two. I should like to complete this section.
On the other side, there are the two functions of prices and of the extent of the market. On prices, I have spoken on the question of the Index of Retail Prices which, as a concentration on the statistics shows, has not moved at the same rate. This represents very severe pressure on the major engineering industries in the country and the effect of the movement of cost inflation on the whole of their pricing problems as they have had to face them over the years.
The right hon. Gentleman mentioned the shipbuilding industry. That industry had undertaken contracts at price levels which were by no means sufficient to counter the growing level of cost inflation which it has had to face. The industry has felt the terrific effect of the pincer movement to which I have referred.
If the right hon. Gentleman seeks to relate wage costs to the level of unemployment, must he not take the figure of direct wage costs? Most recent analyses seem to agree that the wage element within the final price is now about 28 per cent. If this is so, how can the right hon. Gentleman assert that wages are the biggest element in prices?
They are certainly the biggest single element in prices. This is what I said, and it is a fact. Faced with this extreme effect, the natural tendency is for industries, generally speaking, to look for wherever there can be cost economies and to take the steps necessary to secure them.
The other side of the question is the size of the market. The right hon. Gentleman had something to say about this, too. The size of the market is at present of very severe concern to industry. Consider what the market is composed of and first the field of exports—our position in exports, where after devaluation a great part of the national production was switched out of the home market into exports, is substantially changing. Last year showed an awkward position in exports. Though the value kept up, because price levels were higher, the volume of exports was not satisfactory. Last year we were moving at a much lower rate of increase—a 3 per cent. rate of increase in exports. In the last six months of last year we were in an absolutely stagnant position with exports in volume terms. This tendency has continued into 1971. So the export market itself is not providing for industry the outlet which it looked for.
Take the position in regard to imports. The fact of the matter is, again, that cost-inflation—the pushing forward of prices—had a very substantial effect and imports were continuing at a relatively high level.
I quote as an indication the position of a very significant part of the economy—the motor car market. British motor car manufacturers saw within this market last year a 7 per cent. increase in their outlet as compared with a 53 per cent. increase in the outlet for imported motor cars. This is an indication of the impact of cost-inflation on the outlets for merchandise.
I am coming to the point of international inflation. I will certainly deal with the right hon. Gentleman's point. As to imports of motor cars, I agree with the right hon. Gentleman that we are still relatively small importers in comparison with our European neighbours but the contrast and the differential is disappearing fast. Then there is the question of the home market itself.
I will continue for a moment, if the hon. Gentleman does not mind. Hon. Members opposite are continually recommending my right hon. Friend the Chancellor of the Exchequer to shift the home market rapidly upwards and to reflate. The T.U.C. and others are all giving weight to the thought that there should be a rapid reflation, presumably by the vehicle of a considerable relaxation in taxation in a form which my right hon. Friend the Chancellor has not at present undertaken.
In the light of the disappointing trend of events which the continuing rate of inflation represents and which in my right hon. Friend's own estimate accounts very largely for the very large increase in the total level of consumer demand in the coming year—in his Budget speech my hon. Friend mentioned a figure of 5 per cent.—how could my right hon. Friend, with his eye on the future and to the kinds of problem I have indicated in terms of the sustainability of our export market, responsibly have given a sharp jolt forward to the home market. It would have been very irresponsible.
On the question of exports and imports, will the Secretary of State enlighten the House about the level of imports of steel and steel pipes and about the refusal of export orders for B.S.C. in America? Is he prepared to accept some responsibility for the Government's attitude to the steel industry which is causing uncertainty and large numbers of redundancies?
I shall certainly come to the question of the steel industry in a minute. I will just remark to the hon. Gentleman that the steel industry has been working to absolute maximum capacity to satisfy the home market latterly. The market is now easing off, but it was exceedingly buoyant until recently.
I return to the question of the crunch in which industry generally finds itself. What it first of all seeks to do in these circumstances is to find cost economies. It finds them largely in the manpower field. Hon. Members on both sides of the House know very well that by international standards we are in many sectors of industry still grossly overmanned. It is therefore natural that industrialists should in those sectors be seeking to get the economies that they can.
The other and not less important factor to which these conditions have given rise is that the resources from which investment is generally generated, and which is the security for future employment, are very seriously undermined. Of course investment levels are not satisfactory. Hon. Members opposite are constantly pressing this point on me, and I do not disagree with them. Investment levels are not, and have not been for a long time, satisfactory. For years the level of investment has been inadequate to sustain the amount of development, not only in terms of security of employment, but also in terms of growing real wages which arise by virtue of improved investment. Of course that is true.
The machine tool industry serves as a good temperature taker of the nature of investment in the economy. Reports, whose details one may question but which none the less give a broad indication of the truths in this respect, have shown that the age of our machine tools is seriously in contrast with the age of the machine tools of our industrial rivals. It reflects sustained years of lack of investment.
These are the kinds of problems which are confronting many industries. The thing which is of great concern is that the treatment of them has for very many reasons in the past been deferred. There has been a dilatory effort to cope with the problems of lack of investment and overmanning to which I have referred.
The steel industry is a case in point.
When the Secretary of State speaks of the Chancellor's policy and asks how he can be expected further to reflate now, given the anxieties he is supposed to have, does not the right hon. Gentleman realise—one would have thought that it had been accepted doctrine, at least since Keynes—that the wastage of resources by keeping idle resources at the high level which the Government are now allowing is far more responsible for there not being a reduction in the total price of British products than would be any reflation which the Chancellor brought about, thus allowing 250,000 people to be employed?
I understand that, but the hon. Gentleman knows very well that the impact of such a move in the rather special conditions in which we find ourselves would open us once again to all the perils of the balance of payments problem and its resultant evils from which we have had such pain in the past.
I realise that there is special interest in the steel industry in this debate. Here again, we have an industry in which there has been—I do not refer only to recent years—a sustained failure to cope with the problems of over-manning and under-investment. The steel industry has suffered, as I have said in recent debates, from a sense of lack of stability, but it has not yet been able to grasp the intentions which it should have entertained in terms of rectifying these deficiencies.
Nevertheless, the steel industry, back in 1969, made some declarations about its proposals to deal with its over-manning problems, and at that time it said that it proposed, over about a seven-year period, to try to bring down its manning by about 50,000 workers. The closures and redundancies to which that gives rise must obviously be a matter of immense concern not only to the House as a whole but to individual hon. Members and their constituents. But the recent announcement—the right hon. Gentleman referred to this—is absolutely part of the plan which was declared during the period of the Labour Government although, as I say, it has been somewhat deferred until this point.
It is true that a large number of the closures and redundancies announced by the steel industry would have come, but, had it not been for the present Government's policy, they would have come by 1975 or 1976 and afterwards, by which time there would have been opportunity to provide new employment.
On the contrary. The redundancies and closures are late coming, not early coming, and nothing which this Government have done has forced them forward at all. Above all, what has not forced them forward has been any pricing decisions by this Government, as has been suggested.
The right hon. Gentleman is misleading the House and the country about this. What the Steel Corporation proposed was a plan for running down a part of the industry but at the same time for expanding other parts. What the Government have done by their measures has been to increase the pace at which the rundown is happening in certain places while restricting the investment programme which the Steel Corporation has put forward. As regards Irlam, for example, that was specifically on the documents to be dealt with in 1976. So the right hon. Gentleman has his facts quite wrong.
What I have said is correct, and it is borne out by the statements of the Chairman of the British Steel Corporation. The closures and redundancies implicit in this programme are severe, but the Corporation has devised imaginative and sensible arrangements for early consultation with the unions concerned and for proper preparatory work in order to try to accommodate what is by any standards a painful process.
I realise that there is specific interest in the plant at Irlam, and I shall now refer to that. Irlam presents a special problem in so far as it combines two rather contrasting elements in the industry. One part, which is in effect the steel making element, is an old-fashioned and out-of-date plant. The other part is a highly modern wire drawing and rod making plant very much within the framework of the Corporation's own plans for the future, It presents very real problems. There has been reference to offers made to take over the plant as a whole. As yet, the Corporation tells me, it has not had any such firm offer for the take-over of the whole plant, but it will consider it if it does.
The Opposition are wrong to try to seek to make political capital out of the present proposals for the steel industry. I recall to them that, during the period of their Government, between 1964 and 1969, they—and they were right to do it; I do not doubt it for a moment—were very much involved in the rundown of the coal industry, ably handled by the then chairman, Lord Robens, which brought its manpower down by 200,000 during the period of the Labour Government.
The right hon. Gentleman the Member for Birmingham, Stechford (Mr. Roy Jenkins), who is not in his place at the moment, has asked about the timing of the broad review of the steel industry which I am currently undertaking. For his information, the timing is as follows. The first phase of it, which deals only with the immediate ensuing financial year of the Corporation, will be in my hands in the course of the next week or two. The much more profound survey, which goes into the whole of the future development and investment of the Corporation, will not be in my hands until the autumn.
On the subject of the steel industry, the Government made an announcement yesterday, through the Secretary of State for Wales, that there would be a £60 million development at the Spencer Works at Llanwern. In Scotland, we are greatly concerned about our steel industry. As the Government made a decision in 1969 regarding certain investments—which the Government of the day accepted—may we be told in this debate whether a statement will be made about the Government's investment policy, and will the Secretary of State for Scotland, for a change, tell the Scottish people what the situation of their steel industry is?
As soon as I have the first part of the survey in hand and I see clearly what developments this may allow, I shall not fail to see that either the House as a whole or individual hon. Members are informed.
It will be of interest to the hon. Gentleman to know that one of the major projects in Scotland which I believe he has in mind—Ravenscraigis not yet even put forward by the Corporation to the Government for approval.
I understand what the right hon. Gentleman means, but he knows very well that, after approval is given to the overall investment programme, each item of this kind comes back for final approval. It has not yet come back.
In the steel debate two or three weeks ago, the right hon. Gentleman said that his review of the investment programme would be finished in about six weeks, as I understood it.
In a short time, at any rate. He has now told the House that the review of next year's programme will be with him in the next week or two, but he will not complete his review of the Steel Corporation's investment programme until the autumn. That is a major announcement which he has now made.
No, I made it before. I have said that the second phase of the review would not be completed until much later this year. It covers of course a wide range of investments running through to the end of the decade.
The right hon. Member for Bristol, South-East made some reference to the level of international inflation, and I shall now say a word about that. He is quite right when he says that countries like Germany and Japan have been having wage inflation at a rate comparable to or greater than our own. But the rate of productivity of those countries is very much greater than ours. Their rate of growth is very much greater indeed. That, of course, is the great contrast and it has an immense impact on the difference between this country and the others.
The Government's policy in face of the effects of inflation on the economy generally and on the level of unemployment has been clearly stated and will be continued. It is to confront excessive claims wherever they arise, be they in the public sector or the private sector. As I have sat on this Bench over these past months listening to right hon. and hon. Members opposite consistently, on almost every claim that has arisen, trying to force the Government to give way and concede more, I have been literally horrified by their failure to understand the seriousness of the situation with which we are confronted. I am deeply concerned by their attitude, which I believe is very damaging to the level of employment itself. Excessive settlements mean redundancies.
On a point of order, Mr. Deputy Speaker. In the event of a right hon. Gentleman being prepared to give way, it is well understood that the hon. Member seeking to intervene does not press the point. But would you ask hon. Members opposite to stop baying like a lot of sheep on every occasion on which hon. Members on this side try to intervene?
That is a point of order, at any rate. I think, however, that there is not a great deal of substance in it. I think that the House of Commons is acting as the House of Commons should this afternoon, with cut and thrust, and provided the Secretary of State is given a fair hearing—and I am sure that he will be—I do not see any great harm in what is happening at present. But I think that it ought not to go furher.
I turn now to the other side of the picture—the question of lack of investment and the problems with which this confronts us. The Government have been very conscious of the shortfall of resources in industry to meet the needs of investment, and considerable efforts have already been made. Undoubtedly, the Chancellor of the Exchequer's measures in relation to corporation tax and selective employment tax, and his cut in the Bank Rate will have a profound effect on the resources, which are of paramount inportance, available to the private sector. The acceleration of investment grant payments which I have also authorised and the removal of import deposits have also helped.
The objective of the Government is to create the basic conditions in which industrial investment can move forward again, and this means trying to move into the state of growth which allows it. I recall to hon. Members opposite what the levels of growth have been in the economy over recent years. In the period 1959–64, there was a growth rate of 3½ per cent.; in 1964–69 it was less than 2½ per cent.; in 1969–70 it was 1 per cent. The Chancellor is planning to try and get the economy to move forward up to the rate of its productive potential of 3 per cent., which will be a very big improvement on anything we have had recently.
I was interested to note that the right hon. Gentleman did not refer specifically to regional policy, and certainly not in detail. But it is right that I should say a considerable amount about this. I see that, in a debate on this subject last year, he made an association between unemployment and regional problems. I think that to a large degree he is right in saying that this is where the problem is at its bitterest and bites most deeply.
I believe that between the Opposition and the Government there is really not a profound difference in ends as regards regional policy. [Interruption.] I say that there is not a profound difference in ends, although there is a profound difference in means. The ends are not dissimilar. Both sides believe that an active regional policy is an essential part of Government. I believe that both sides see an active regional policy as a development with three particular characteristics.
The first of these characteristics is the purely human one that it is inadmissible to see large sections of the country with large populations having little prospect of employment at all or without prospects of employment over long and sustained periods. The second factor is the obvious danger of allowing under-heating and over-heating to contrast in different parts of the country with the deleterious effects that this has on the economy. The third factor, which plays a very big part in the generation of regional policy, is the unwisdom of failing to use resources. The right hon. Gentleman referred to that and I entirely agree with him.
On assuming office last year, we undertook a major look at the whole of regional policy. We did it in two directons. We sought first of all to look at it in the context of the incentives devised by the last Government in order to try and encourage increased and sustained industrial development in the regions. We looked at it also in the context of the boundaries which had been devised as being the appropriate boundaries within which these incentives were payable.
The trouble about these incentives—and I refer obviously to the differential rates of investment grants, regional employment premium and selective employment tax—was that their coverage had the effect of being exceedingly hit or miss. They were not directed towards specifically securing lasting and self-renewing investment which would generate the resources to preserve itself and continue and expand. These incentives were a generous throw-out of cash which landed where it did and might have and did have uncertain results. In certain cases it did have the effect of creating investment, but that investment proved to be precarious in the event. During the course of the cold winds on the economy, it has proved to be the most subject to withdrawal and deterioration. That is a fact. It is something with which I am confronted day by day.
Again, the provisions made by the last Government inadequately dealt with the problems of the older industrial conurbations. There is no doubt that, in those parts of the country where old industries were inevitably falling into obsolescence and where unemployment was being created, the last Government had inadequate provision in their policy with which to cope.
No, I will not. I realise, of course, that in making the changes that we have in terms of incentives or boundaries, one faces difficulty in so far as one of the necessities, as hon. Members opposite have stressed, is that the provisions should be dependable and long-lasting. It was necessary, in the face of the obvious defects of the last Government's policy, to make changes which would have a long-term effect and allow long-term investment to take place.
No. I think I will get on.
We concluded that marked changes in both respects needed attention. As regards incentives, we have introduced a system of depreciation at will on a much wider range of assets than before in place of investment grant differentials. We have decided to maintain the higher initial allowances on industrial buildings and we have gone in for a much intensified use of the Local Employment Acts as a vehicle for more effective deployment of effort in terms of long-term investment. We have, moreover, changed the boundaries. The most important changes have been to deal with this problem of the older industrial conurbations and to extend to them the special development area assistance.
It is necessary to see the incentive system in its proper context. There is an erroneous belief that an incentive system will actually create investment. It does not create investment, or at any rate very little. It provides conditions in which investment under certain circum- stances will be moved into an area from one in which it would have preferred to have deployed itself. This is what has been the guiding light of the Government.
While I do not necessarily agree with the last passage of the right hon. Gentleman's speech, surely he must concede that it is absolutely impossible to have a workable regional policy with the present level of national unemployment and the present rate of growth of the economy? He might as well roll up his map of the regions until he persuades the Chancellor to get the economy expanded.
Let us not anticipate what I am about to say. The right hon. Gentleman is not entirely correct in what he says. I am sure that the general level of the economy and its general buoyancy, has a profound effect on regional development. I continue to emphasise, I have never suggested anything different, that the incentive system can work only at the margin of decision. It shifts but it does not create, and it is no good imagining that by pouring more and more incentives into regions when investment is low we will create the conditions we wish. It does not happen.
From the indications I am getting it is not correct to say that the general package which the Government have produced is unattractive. On the contrary, industry is more and more becoming of the opinion that it is an attractive package. May I quote somethting which is of some interest. In the first quarter of this year the number of inquiries by industrialists about investment in the assisted areas was twice the level of what it was last year [Interruption.] There have been 1,083 inquiries in the first quarter of this year.
I am talking about the total of assisted areas. Dealing with I.D.C.s, and hon. Members showed keen interest in this just now, taking the last nine months and comparing it with the preceding nine months, the figures show that the development areas have performed better, not worse, than the nation as a whole.
Order. No one knows me better than the hon. Gentleman. The whole House knows that they must give a proper hearing to the Minister, who has a case to make. There will be an abundance of opportunity for hon. Members to express their disagreement, but we must have a fair and proper hearing for the Government case—whatever we may think about it.
Order. The hon. Gentleman knows that that is not a point of order for me, and he should not raise it as a point of order for me. I will deal faithfully with any genuine point of order that is raised, but I ask hon. Members not to raise points like that, which are really not points of order.
On a point of order. Is it a point of order for us on this side of the House to point out to you that the speech we are now listening to is an absolute shambles—
I have heard enough of the hon. Lady's point to realise that it is not a point of order, because whether the speech is, as she describes is, a shambles, or is not, is nothing to do with the Chair. As long as the speech is in order, and the right hon. Gentleman is perfectly in order, then it is not a matter for the Chair.
Further to that point of order. We are supposed to be debating unemployment. Earlier, the right hon. Gentleman promised the House that he was coming to the solutions of his Government for the serious unemployment position. So far, although I have been listening carefully, he has not got to that part of his speech. May I ask that you instruct him to get to it—
The right hon. Gentleman is perfectly in order in making his speech as he thinks best. No doubt he will get to the point about which the hon. Lady is concerned. In the meantime, it is for the House to listen to him.
Further to that point of order. Is it not an unparliamentary remark for the hon. Lady to suggest that the speech of my right hon. Friend is a shambles—[Laughter.]—since—
Now, I think we ought not to allow ourselves to get too heated up over all of this. The House knows very well what are and what are not points of order. I know that this is a subject about which the country and the House feels very deeply. No one will admit that more freely than I. It is my duty to see that all hon. Members, whoever they are, get a proper hearing. The House, however much it may disagree with what is being said, must remember that this is the House of Commons. We should give all Members a fair hearing.
I realise that to show by facts that the policies adopted by the Government are producing the results at which we aim and to illustrate the deficiencies of past policies must be unpopular with right hon. and hon. Members opposite. None the less, I am obliged to put the facts as I have ascertained them.
In the light of all this, I do not share the gloomy forebodings of the right hon. Member for Bristol, South-East. On the contrary, it is dangerous and damaging to sell the future short, as he was doing. I have great confidence that the Government will face the very difficult problem of cost-inflation which is undermining the country. I am certain that the incentives which my right hon. Friend the Chancellor of the Exchequer has devised are already serving, and will more and more serve, as a strong stimulus to industry. I believe that we are moving forward to a constructive and effective regional policy and to a much improved economic situation in the country as a whole.
When someone speaks in a debate on unemployment as the Secretary of State for Trade and Industry has just spoken it is worthy of note by people who are unemployed. I could point to a lot that was wrong with the right hon. Gentleman's speech, but I will tell him in one sentence what was wrong with it. He spoke about the over-heating and under-heating of the economy, whereas he should have spoken about overeating and under-eating. The people about whom he spoke are not statistics. They are people who are under-eating. That is the problem to which the right hon. Gentleman should have addressed himself.
We on this side of the House are not concerned with atmosphere or norms or beating patriotic drums about what other countries are doing. I wanted to hear what the Government propose to do about the disgraceful situation in which thousands of people who are out of work find themselves. The right hon. Gentleman said not a word about what the Government propose to do about unemployment. I do not want to make any personal attack, but the right hon. Gentleman's representation of Government policy was disreputable. I do not blame him personally, because it is the Government who are devoid of ideas for tackling a basic human problem. He said that he found the level of unemployment deplorable. We all find it deplorable. He spoke like the lady who protesteth too much. He did not spell out what he proposed to do about the situation which he found to be deplorable.
Every time the Tories speak about unemployment they peddle the myth that people who are unemployed do not suffer. The saving grace of the Conservatives is that they bring myths up to date. The old myth was that people living in poverty put coal in the bath. To their great credit, the Conservatives do not stick to old myths but bring them up to date. You cannot beat moving with the times, and that is what the Tories are doing. They have moved their myth from housing to industry. The present myth is that men who are on strike do not suffer because they take very lucrative jobs on the side and receive high social security benefits. According to the Conservative myth, unemployed people do not suffer because they receive high social security benefits. It is time that right hon. Gentlemen opposite realised that they are speaking about a basic human problem which the Government must tackle before it is too late.
The trouble with the Secretary of State's analysis is that it rests on the assumption that nothing can be done in the short run. This is a false assumption. The right hon. Gentleman ignores the fact that even though unemployed people are receiving social security payments, they are still suffering a very severe fall in their living standards. This fall must be taken into account by anyone who pretends to speak for the Government about the unemployed.
The Government also ignore the demoralising effect of unemployment. It is demoralising for any man who is the family breadwinner to have to go home to his wife and children and say, "We must do with half a loaf", and they must accept it or lump it. This demoralising effect is one of the basic factors which the Government do not take into account when they speak about the overheating and underheating of the economy. They also ignore the sense of fear being bred in men who are out of work and in men who are in work. This sense of fear permeates the whole of industry. When men are afraid, a dangerous situation is created. It is not in the interests of the unemployed or of the Government.
By accepting, explicitly or implicitly the myth that the unemployed do not suffer, the Government are getting a false sense of priority. As a result they have failed to understand the consequences of unemployment. They tried to create the impression when in opposition that they were concerned about unemployment. The Secretary of State for Employment is on record as having said that if a Conservative Government were in power unemployment would be at a different level. The men who a few weeks ago were talking about lame ducks have become the sitting ducks because quotation after quotation of what they have said about unemployment can be given to prove that they are wrong.
I should like to spell out why I feel the Government are reaching a very dangerous stage. The Government believe that unemployment will bring down inflationary wage increases; but it will not. The pools of unemployment are lapping around citadels of industrial power. The powerful and strongly organised industries with well-organised workers will not be affected by unemployment. Unemployment, therefore, does not have the effect of bringing down the level of wage increases. It does not affect the higher-paid workers who are well organised, but it does affect the low-paid workers who are badly organised. They are the ones to suffer because of unemployment.
The actions of the Government in allowing a high rate of unemployment are the actions of an industrial bully, attacking the poor, the weak and the badly organised. At best the policy is irrelevant in tackling the well-paid workers and what are called their inflationary wage claims, and at worst it is ineffective in tackling the major problems of people who need to be assisted rather than hammered. If I may give one figure to prove that point, in the engineering industry in February this year there were l·6 skilled and semi-skilled workers unemployed for every vacancy, but there were 28 labourers unemployed for every vacancy. This shows how the low-paid workers are suffering not only from low wages and from unemployment.
One of the basic effects of this policy is the loss of resources, and this was dealt with by my right hon. Friend the Member for Bristol, South-East (Mr. Benn). He also dealt with the growth of restrictive practices. When Government spokesmen speak about business efficiency, I ask them to remember that restrictive practices were the product of fear, and were defence mechanisms. Restrictive practices were created by workers to defend themselves against employers. These defence mechanisms were dismantled in good faith under the Labour Government. Once workers begin to suspect that their good faith has been tricked and cheated by unemployment, there will be a growth of restrictive practices, assisted—and rightly so—by the trade unions. This is one of the real dangers of unemployment.
But the most important effect of unemployment is on the attitudes of the unemployed. My right hon. Friends on the Front Bench speak in terms of "socially divisive" policies. They describe unemployment as a socially divisive policy. I am all for economy of language, and a certain felicity of phrase can be beguiling, but I sometimes wonder whether our Front Benchers get through to the right hon. and hon. Gentlemen opposite with this kind of language.
Unemployment is placing an intolerable burden on the good will of millions of workers throughout British industry, whose tolerance and co-operation should not be under-estimated by the Government. All the newspaper headlines speak of strikes in industry; but millions of workers voluntarily give their co-operation. The Government are jeopardising this co-operation by their refusal to do anything about unemployment. Men who are robbed of their security can very quickly change. They soon become embittered and turn ugly.
We now have new generations of men who demand a job as if right. We sometimes forget that only people who are over 50 knew unemployment: in pre-war years, they lived with it. We forget this at our peril. The Government should remember that we no longer have the powerless passivity of the 1930s or the preoccupations with the war of the 1940s. We have people who assume that they should have a job, and rightly so. These men are not prepared to stand on their two feet in a dole queue, particularly now that the Government have replaced the old idea of "Get rich quick" by the new one of the rich getting still richer under their policies.
I know that the Government are worried about inflation. We are all worried about it. Something must be done, but the problem will not be solved by unemployment. In their own good time, although time is not on their side, the Government will have to come round to a prices and incomes policy. By that I do not mean the suppression of wages. There are any number of models to choose from. There is the Balogh model, the Clegg model, the O.E.C.D. model and the model suggested by the far-sighted Sir Frederick Catherwood. The essential point is that the policy must include prices, profits and dividends, and it must have a moral purpose and a sense of social justice.
I ask the Government to recognise that only when they have lifted this evil shadow of unemployment from the homes of millions of workers in this land will they have any hope of averting the real danger of the social and economic upheaval which threatens to engulf us.
The hon. Member for Stoke-on-Trent, South (Mr. Ashley) has the great respect of the House, and I know that there are many on this side who would agree with his analysis of the problems of unemployment. Where we depart from him—and he will not be surprised to know this—is in his conclusions about the action that should be taken at this moment. I thought he was less than fair to my right hon. Friend about his proposals and his statement that over-hasty action at this time could do the opposite to what all hon. Members would wish to see, namely, an early reduction in the level of unemployment.
I hope the hon. Gentleman will forgive me if I do not continue with his detailed study of the present economic situation, which will be the matter of considerable mention by my hon. Friends. The fact that I will deal with a somewhat different aspect of the subject in no way diminishes my recognition of the serious level of unemployment, which is affecting my constituency, an area which is not traditionally regarded as one normally affected by unemployment.
We recognise that, in this situation, much of the hardship falls on those who least deserve it, and both sides of the House share a heavy responsibility for the difficulties which we now face. President Truman had a notice hanging over his desk saying "The buck stops here". That would be an appropriate motto for hon. Members on both sides in this situation.
Apart from considering how to tackle the immediate problems, we must urgently look much further into the future than we are in the habit of doing, and I emphasise the need for longer-term manpower planning. The signs I see look rather unattractive and I have a nasty feeling that, unless the longer-term situation receives more attention, this debate will develop into an annual event. Shortly after my arrival in this House a year ago an unemployment debate took place. I should hate to see it develop into an annual event.
It is natural that in this debate some of the topics which were raised in the debate last May should be reiterated, such as the need for reflation, the regional aspects of the unemployment problem, the need for more retraining—the hon. Member for Stoke-on-Trent, South spoke of the relative imbalance of unskilled available labour compared with skilled labour—and the better provisions that now exist for the unemployed, but I wish to speak of the long-term aspect.
In an O.E.C.D. survey in 1970 of United Kingdom manpower policy the work of the Statistics Division of the D.E.P. was analysed. A particularly interesting pronouncement made in that survey was that that Division made longterm projections of population but only short-term forecasts of employment. There are impacts in the present situation which suggest that a major effort should be made to make longer-term forecasts of employment.
The only relevant work on this by the Department which I have discovered is a document entitled "Manpower Study No. 1: The Pattern of the Future". But that was published in 1964. It should be updated and more serious work done on the pattern for the future.
There seems to be a general consensus accepted rather loosely nationally and internationally—that in the coming years we shall face a labour shortage. This has led to the additional emphasis on retraining and mobility and the belief that a shortage of labour will be a restriction on growth. I have suspicions about this and I suggest that there is evidence to show that we may be facing a substantial labour surplus.
If one analyses the way in which these forecasts are made, one detects that something is left to be desired in the forecasting. Indeed, the authors on this subject accept the limitations of their methods since it merely consists of identifying past trends and projecting them forward. If one identifies the variations that have arisen in recent years, one has considerable cause for concern.
The starting point in my thought process on this comes from the speech made by the right hon. Member for Grimsby (Mr. Crosland) in last year's debate, in which he drew attention to the tremendous movement of labour in recent years from the traditional industries. He pointed out that between 1959 and 1964 in seven major industries there had been a loss of 466,000 jobs, those industries included the four main ones of agriculture, mining, shipbuilding and textiles. While we may think we know of these changes, I suggest that we do not appreciate the magnitude of the collective figure.
From 1964 to 1969 that figure of 466,000 had risen to 678,000. I have been studying the figures relating to 1951 to 1971, for the longer period, and it is clear that the rate of movement has been increasing fast.
Up to now this job loss has been adequately replaced by growth in other industries. For example, there was an enormous expansion between 1951 and 1971 in education, with over 816,000 jobs, and in the medical and hospital sphere, with over 400,000 jobs. In insurance and banking there was an expansion of over 500,000 jobs. These have been the development areas and there seems to be a rather soggy acceptance of the philosophy that as we develop and as the traditional labour-intensive industries fall by the wayside, jobs will automatically appear to take their place in other industries.
From that, it is said that when we get the economy going again, the jobs will return. We have found that unemployment is something of an "odd ball" in the economic equation and that the statistics do not behave in the way we predict. I have the firm conviction that when the economy gets going again—I feel sure that the Budget measures will soon result in it being seen to be going again—we will unfortunately find that the level of employment will not pick up as fast as has been predicted by some commentators.
While in the last 15 years there have been considerable peaks and valleys in the unemployment level, if one looks at the overall trend, it is clearly upward. One may be shocked to recall that the unemployment level in 1955 was 210,000. Against that figure, the level of unfilled vacancies—it is difficult to identify a trend here—is almost flat, but, if anything, been going down over this 15-year period. This automatic acceptance of the view that reflation will put us back on course might, therefore, be dangerous.
The I.L.O. World Employment Programme published a pamphlet entitled "The Employment Prospect for the 1970s" which related particularly to the developing countries but contained this passage which we may see happening in this country:
It is increasingly recognised that solving this problem is not merely a matter of stepping up economic growth…Indeed, a number of developing countries experienced a very rapid growth of national income during the whole decade 1960–70 without any improvement in the employment situation. In some cases there was actually a deterioration in the employment situation coupled with rapid economic growth.
We have an example before us in the shape of the steel industry, which doubtless will figure in this debate. That industry's plans include considerable increases in output, coupled with substantial reductions in employment. The G.N.P. will look all right, but the employment figures
will not look any better at the end of the industry's activities.
If there is one phrase which is an insult to the human personality, it is the expression "natural wastage" which we hear constantly. It is often used to cover a situation where there will be no natural re-employment to replace retirements and so on and is a regular companion of productivity and rationalisation schemes. A further complication in the present climate is the problem of population growth. In the last 10 years, there has been very little movement in the level of the working population, and we face a situation now where, for various reasons, including the raising of the school leaving age, the working population available will drop until the year 1974. In the present situation, that may be quite convenient, but we face an alarming state of affairs after that. Between 1975 and 1981, there will be a further million added to the country's working population. Against the prospect of a possible further reduction in traditional jobs, to my mind this emphasies the enormous urgency of the need to plan the employment prospects of the 1980s and 1990s.
To sum up, there is an urgent need for a much more sophisticated review of what employment prospects are likely to be 10 and 20 years ahead, where new industries will come from, and what the activities of the people will be. Can we go on accepting that the average working week will remain at 46 hours, while for a considerable proportion of the population there is not the employment which their self respect and their natural desire to earn deserves. I urge my right hon. Friends to give added priority to this review in the belief that if work is not started on such a review very soon, the Government and Parliament will have failed in their duty to the future working population.
On another occasion, I should have been happy to follow the extremely constructive line of argument of the hon. Member for Bridgwater (Mr. Tom King). I agree with a great deal of what he said. The problem of technological unemployment is a matter which undoubtedly we shall have to face. I went to the United States some years ago to study the effects there. They had not anticipated the problem, and great suffering was caused in consequence. However, I shall not pursue that theme, because I wish to discuss the problem which has been referred to by both Front Bench speakers, that of the Irlam Steel Works in my constituency.
The other day, we were hit between the eyes by an announcement from the British Steel Corporation for which none of us was prepared. I received 24 hours' notice of it, the local authority had about four hours' notice, the full-time officials of the appropriate trade unions were not given much notice, and certainly the men in the firm itself were astounded at the nature of the announcement. As a result, we have a huge problem, and it is one which, if the intention is carried into effect, means that in an urban area of some 20,000, there will be a loss of more than 4,200 jobs. It is a fantastic problem to ask any area to face.
I was astonished when the Secretary of State for Trade and Industry said that the B.S.C. had not brought forward any of its programme of redundancies and closures. The right hon. Gentleman told us on 18th March that it had. On that day, he said:
The Corporation has made it clear that a serious decline in steel orders over the past few weeks, coupled with a substantial increase in raw materials and production costs, has led to its announcement last week of the speeding up of its rationalisation plans and the proposed closure of a number of loss-making plants.
I could not have put it more clearly than that myself, and I am astonished that the right hon. Gentleman should say today that nothing of the sort has happened. He went on:
This, again, is the Corporation's decision, and it must be accepted."—[OFFICIAL REPORT, 18th March, 1971; Vol. 813, c. 1689.]
The right hon. Gentleman must think that hon. Members are extremely naive. Of course, we know—indeed, he announced on the same date—that the Government had been breathing over the shoulders of Lord Melchett and his colleagues for months. They had stopped effectively the Corporation's capital development programme, and the whole of its finances are now being subjected to a more severe scrutiny by members of the right hon. Gentleman's Department.
I want to begin by asking a question, and, if the Secretary of State for Employment has not the information now, I hope that he can get it for me. The B.S.C. announcement said that the Corporation
…will now discuss with the trade unions their proposals to close 10 plants",
and that there will be a
3 months consultative period".
Is that announcement to be considered as some sort of law of the Medes and Persians? Are we to take it that it is not capable of amendment and that, in the three-month period in which the trade unions will be discussing the matter with the Corporation, its ears will not be open to any new suggestions? In other words, if the trade unions are not to have the possibility of arguing for a change, I do not know what they will argue about for the next three months. It will be a sham and a farce to ask either the full-time trade union officials or my friends in the Irlam Steel Works to discuss these matters for three months if a final and irrevocable decision has already been taken.
The people in the works have never taken and are not taking now any sort of dog-in-the-manger attitude along the lines of saying, "We do not want changes. We have done very nicely, thank you. Leave us alone." That has never been their point of view. For the last 10 or 15 years, the shop stewards and other representatives of the men in the Irlam works have come to me time after time worried sick about the lack of any appreciable amount of new investment in that great works. They have done that in the knowledge that, at a time when vast changes were taking place in the industry, if they were not to get modernisation in the works there would be only one end.
When I became Minister of Power in 1964, I discussed the matter with the then Steel Board. It had little authority with the private steel owners. It had certain negative powers. I asked it whether it could do a bit of arm twisting to get new investment into Irlam, because of the interests of so many of my friends and constituents in the works.
This has been a long-standing problem. I do not disagree with the right hon. Gentleman's analysis of the content of the Irlam works. I think that he was right. But suppose we are asked, as we now are, to face a closure in two phases. In the first we lose 1,960 jobs. That is a shocking punch, as it were, at all of us. We know that the kind of factory space and plant there is obsolete. Therefore, we understand that some of it will go. If, after that—this is where I come back to my first question—instead of wanting to go on to a second stage where we should lose another 2,400 jobs, the Corporation were to say, "Once we have got rid of that obsolete plant we shall then begin to build, we shall begin to bring in electric are furnaces and so on to replace the old gear with which the men are now working", that would be one thing. But in heaven's name, when we have had 1,960 losses, to then ask us to take another 2,400 losses is not rationalisation; it is annihilation. It is a shocking and disgusting imposition to ask us to bear.
The right hon. Gentleman told us about the problems which the Government see because industry is not investing anything like as much as it should. He is quite right. But he is stopping the greatest investment programme of any industry in Britain today. How can he, at one and the same time, complain about a shortage of investment and stop a huge, enormous development programme which would make the steel industry what I wanted to make it when I issued the White Paper in 1965—an industry comparable with any of our competitors overseas? That was the object of the exercise. We were not then thinking in terms of stultifying development and relying on imports of steel because we had a big balance of payments surplus with which we could play. We wanted to see a huge increase in the amount of steel produced by our own industry.
The right hon. Gentleman said that there has been no change in the Corporation's plans. As a matter of fact, I have been in touch with Lord Melchett on a number of occasions—needless to say, when my friends in the Irlam steel works have expressed their apprehension. I wrote to Lord Melchett in, I think, October or November, 1969. I understood the reply very well. He pointed out the huge programme which they had, but said that as yet he was unable to make any announcement about the future of Irlam.
I was not satisfied, so 1 wrote again on 21st January, 1970. Lord Melchett, replying on 5th February, said:
As I indicated in my letter of 5th December, the issues involved are highly complex, requiring time to resolve, and this is the principal reason why we have been unable so far to make an announcement on Irlam, or, indeed, on most of the other works for which development schemes involving essentially the same problem have been submitted by our operating groups. I am, of course, fully aware of the concern of the work people at Irlam, and I certainly intend that there should be no avoidable delay in making an announcement about developments at the works.
There is nothing negative about "development at the works".
I think that there is now a good chance that we shall be in a position to reach final decisions around the middle of this year.
That is the middle of 1970.
I do not believe that if a decision to close Irlam had then been taken Lord Melchett would have been writing to me about "a good chance" and statements on this issue being made "around the middle of this year."
We know of one event which took place in the middle of the year. A new Government came into office. I know also that in July, 1970, the management at Irlam was still saying to the trade unions that there would be more money invested at Irlam and that the prospects were good. The management consists of honourable men. They would not say things of this kind if they did not know the state of play within the Corporation. So at that stage they were quite convinced that there was a good future for the Irlam works.
Since then, as the right hon. Gentleman told us, the Government have set up this inquiry into the finances and development projects of the Corporation. Therefore, firms such as Irlam—I have given the House the words which Lord Melchett used—have been left high and dry.
That position was bad enough, but last Tuesday's announcement by the right hon. Gentleman made it immeasurably worse, for whilst he was continuing to hold back much of the modernisation programme, he invited private enterprise to begin producing new steel capacity in many parts of the industry, apparently without reference to the B.S.C.'s development plans. In other words, while my constituents are being sent down the road to the unemployment queue, private enterprise is being told that it can invest in the steel industry anywhere it likes.
I do not know about helping lame ducks. It seems that the policy is that if the ducks are not lame now they darn soon will be from the way that the Government are behaving in these matters
I have had a lot of contact with the British Seel Corporation under other conditions. I had Ministerial responsibility for the Northern Region. I cannot speak too highly of the consideration with which I was treated when I discussed problems on Tees-side, and so on, where there are a lot of old steel plants. Indeed, the two-year agreement on the notice of closure was concluded in my room in the D.E.A., for which I was most grateful.
I am not making a general complaint that the Steel Corporation is negligent in these matters. I am all the more certain that had it had its way in this matter it would never have made an announcement of this cruel and terrible kind to my constituents at Irlam. It seems that we have had neither a considered judgment of the Irlam position, nor any consideration of the effects of that judgment.
I said earlier that I was responsible for the Northern Region. Before anything of this kind took place—indeed, before closures or redundancies far less severe than these were ever considered—we had months and months of discussions before statements were made. In any event, in the development areas we had preparations for retraining and we had advanced factories built. In every way preparations were made for this kind of thing.
It has been said that Irlam may have to close in 1976. I do not know about that. I know that because of the attitude at Irlam—it has one of the finest work forces in any part of the steel industry; workers have their roots deep in the industry; son has followed father into that works, so it is almost a family concern—we shall not lightly give up steel making, no matter what this announcement means at the moment. We shall fight it. It seems to me that there must be an examination of why this decision is deemed to be justified.
Despite the fact that we have not had the capital investment programme that I want, I understand that the wire group, of which Irlam is by far the greatest single firm, as recently as March of this year returned profits of more than £250,000 in one month. When listening to the right hon. Gentleman the other day, one wondered whether the wire group was one of the marginal activities which private enterprise was now being invited to look at. We know that private industry will not take over where losses are involved. Is the wire group one of the areas in which an initiative by private enterprise would be welcomed by the right hon. Gentleman?
Mention has been made of the possibility of a take-over by some private concern in Irlam. I do not know the name of any concern that wishes to take over there, but I have received from the local authority a typewritten paper—I do not doubt that what the authority says is true—without the names of any individuals or firms at the top, and without any signature, containing an offer for the Irlam works, and Rylands, also. If anybody wants me to read the document, I shall do so. It says that the person concerned had been in touch with Irlam, with the Corporation's agreement, and that after several approaches it had been arranged by the Corporation that the financial advisers of the firm and the writer of the letter should inspect the old Lancashire steel works. A letter was addressed to Dr. Finniston, making an offer for Irlam and also for Rylands. That was in February of this year.
What struck me was that I did not know how this firm came to know that Irlam might be in the market. It has been rumoured for a long time that there has been trouble there, but I did not know anything about it in February. My right hon. Friend mentioned leaks. I should like to know what happened. I do not believe that large transactions of this kind come about simply because somebody puts out a rumour.
I also have what purports to be a letter from the British Steel Corporation. It is dated 25th February, 1971, and says:
Thank you for your letter of 12 February…
Since Mr. Carmichael's visit to Irlam and a further meeting I had with him and Sir John, I have had an opportunity to discuss your proposal with my colleagues. Our view is that the interests of the Corporation would be better served by proceeding with our present
programme of rationalisation, and I have written to Mr. Carmichael in this sense.
I hope that this will not be too great a disappoinment to you.…Yours sincerely, H. M. Finniston.
We all know Monty Finniston. When the Corporation is denying that that is the position, it had better produce some evidence of its own to support its contention. I do not want the B.S.C. to go out of Irlam. I want an employer there, because we have 4,260 people who are in the greatest difficulty.
I know that in 1968 a proposal was made by the regional people for a new layout at the Irlam works. The intention was to have three electric arc furnaces in place of the open hearth furnaces, coke ovens and blast furnaces, at a cost of between £10 million and £12 million. We have never had an answer to that proposal, and we know that without a proper programme of that kind we shall be in the greatest difficulty.
Irlam is by far the biggest single component of the steel works of Lancashire. I have discovered that of the products of the Irlam works, nearly 60 per cent are sold within a ten-mile radius of the works, and that all its products are sold within a 70-mile radius of it. If we were to stop making steel at Irlam, where would we get the steel from to replace our output? Would it have to be dragged over the Pennines? Such a decision would be the most remarkable since Hannibal brought his pack elephants over the Alps.
I earned my living by cutting up steel in Trafford Park. In the area of this great works we have one of the biggest engineering connurbations in the country. We cut up more steel than is cut in any comparable area. Can it really be the case that we are now to be denuded of the only large producers of steel in the area? Can it really be good economics, in the interests of the Corporation, or of the nation, that we should be utterly dependent on importing steel from other parts of the country? It seems to me that there are a number of questions which require an answer.
If we are told that Irlam is in this position because of a long-term plan for a huge £10 million-ton green field development, and that steel works are to be erected around the Mersey, one could understand that as a project for the '80s. Indeed, that is what I was looking for in the White Paper of 1965. But to be told that Irlam is not to be used for steelmaking purposes, and that this huge connurbation, which cuts up so much steel, is to be utterly dependent upon imports, seems to me not planning, but the very negation of it.
I do not wish to detain the House for much longer, but I feel that I have a right to demand the withdrawal of the statement that has been made. We have made no preparations for this course of action. Somebody has spoken about vacancies. There is one vacancy in Irlam. The effect of this decision will not be confined to this area. People from other parts of my constituency will be affected, and my hon. Friend the Member for Manchester, Openshaw (Mr. Charles R. Morris) will find much the same situation in his constituency.
I want there to be discussions between the trade unions and the Corporation on a fair and proper basis. My friends will be found to be utterly and completely constructive in their approach to this problem. There will be no niggardliness, and no negative approach. If we cannot find a solution to the problem, the despair and despondency that I have witnessed since the Government's announcement are things that we shall not be able to live down for many years. Therefore, not only on humanitarian grounds, but because we believe in these people and in their ability to produce some of the finest steel in Britain, we ask for a modernising programme. Give these people that assurance, and I am sure that they will do the job for us.
With the assent of the right hon. Member for Newton (Mr. Frederick Lee), I spent Tuesday this week at Irlam accompanied by my hon. Friend the Member for Stretford (Mr. Churchill). This is an area which, as the Member for Eccles, I was privileged to represent. I saw a good deal of the Irlam Steel Works then, on the borders of Stretford and Eccles, and a few of the elderly men I saw on Tuesday last I recognised as men who, when they were young, 30 or 35 years ago, I helped to get their jobs at the steel works.
I agree with the right hon. Member for Newton that this is a tragic announce- ment not only for Irlam but for the whole area. It is a tragic announcement for the Manchester area. Every hon. Member involved in that area between Trafford Park and Wigan must be directly concerned with the closing of this works.
I resented the tone of the right hon. Member for Bristol, South-East (Mr. Benn), who, in his convincing and persuasive way, accused my right hon. Friends of complacency about unemployment from their comfortable constituencies in Kent or the London suburbs and of knowing all too little about the hardship of unemployment in the northern areas. I shared my early years in this House with the right hon. Gentleman's father, when every hon. Member of the House collectively suffered the agonies of mass unemployment.
The Conservative Party left office in 1929, leaving 2 million unemployed. We returned in 1931, and the party opposite handed us 3 million unemployed. But that was in world conditions which promoted that process, conditions in which there were between 13 million and 15 million in the United States alone.
Fortunately, in the times in which we live now, the social conditions of many countries have improved so much in terms of health services and welfare and so on that unemployment does not cause the distress and misery to which Mr. Harold Macmillan referred on television the other night. That can never return, certainly to a developed and sophisticated country like our own.
The hon. Member for Stoke-on-Trent, South (Mr. Ashley) touched one small button in my mind—the effect on the morale of the men who will be unemployed. The worst effect of this pronouncement is the effect on morale of the near-certainty—in view of what my right hon. Friend the Secretary of State for Trade and Industry said—that one part of the Irlam works is certain to die because it is out of date.
I felt it my duty as one so closely associated with the area for 10 years in pre-war days, after this announcement, which affects the whole of the Manchester area, to seek the right hon. Gentleman's permission to visit his constituency, to go to this old works which I knew so well. I always think that a personal reconnaissance is much the most informative way of tackling any problem On one side of this activity at Irlam, I gathered that to keep the older side of the plant going 11,000 tons of iron ore, 6,000 tons of scrap and 10,000 tons of coal—which produced 6,000 tons of coke—were brought up the Manchester Ship Canal every week. Many of the circumstances of the plant, as I felt them last Tuesday, are a laborious and out-of-date exercise. Surely there must be modern methods of doing the job. I fully understand what the Secretary of State said about steel wire, but not only Irlam Works is concerned with this. The distress of the area is the collapse of its morale.
This wonderful and highly skilled work force is on the edge of the great industrial conurbation in Trafford Park, which I know well. If we could save 2,000 men of that work force, that would be a service to the future interests of our country. In his announcement the day before yesterday, my right hon. Friend spoke of others who would be interested in this matter. If a group or consortium were interested and were prepared to look at this and to make steel in this vital old steel-making area by the installation of electric furnaces, that would free the plant from this laborious exercise of bringing up iron ore, scrap and coal. Electric furnaces would require only scrap as their motive power. The danger lies only in the long-lasting shortage of scrap.
If we could ensure a sufficiency of scrap over the next few years, could the consortium in conjunction with the B.S.C., come to some arrangement whereby the most vital part of these 5,000 men, the 2,000 of the younger element, could be kept there? Perhaps the older element would not try to seek positions which they could not fill. Having been in steel works for 30 years and more, they might think in terms of an early retirement. It is the middle slice, those who were taken on 12 or 15 years ago, who are now 33 years old, highly skilled steel makers with commitments, young families and mortgages, whom I want to save. Even if only one person can be saved, it is a social obligation to see that he is saved. Many of the things which my right hon. Friend said are all too clear and true. To help this works, could some steps be taken to save the best working element?
I believe that a site is to be prepared at Trafford Park which is not in the possession of the British Steel Corporation. But there are certain sites available in Trafford Park, which I know very well from other days. There is a duty upon the Government to investigate and press for the creation of alternative work within Trafford Park. Many other smaller pockets of unemployment could also be taken up.
I regard Trafford Park with a great deal of affection because my predecessor as Member for that area was Colonel Marshall Stevens, whose family were the creators of that complex. One of its early members engineered the creation of the canal, and the thought occurred to him and his family that it would be possible to create a great industrial estate on the edge of that new canal. It has got everything. When I first went there 35 years ago it was the most perfect conurbation as an industrial estate not only in this country but in the whole of Europe. It has every facility. It contains good communications in the form of transport and airways, and plenty of water. I cannot understand why there is not a long queue of firms waiting to get into Trafford Park. One superb asset from an industrial point of view is that it is the most perfect catchment area for skilled labour, and this is what we must try to preserve.
My experience of these matters goes back a long time before the Lancashire-Cheshire border was created. I remember the miserable conditions which existed in some areas of London when I was a candidate, and I am sure that those miseries will never come back. The effect on the morale of a population that is unemployed is quite awful. Whether it be a million, 500,000 or 50,000 unemployed, the impact is the same. I have spoken to men who have been without a job sometimes for as long as 10 or even 15 years. I have talked to men in their middle and late thirties who have never had a job at all. That sort of situation must never return.
I would say to my right hon. Friend the Secretary of State for Trade and Industry that he should pursue the policies which he has laid down. To turn aside now would be fatal. I hope that my right hon. Friends will succeed in their task, and I would ask them at this critical stage not to give up. There must be a point at which the level of unemployment, if that point comes, must be unacceptable.
The Secretary of State for Trade and Industry had a difficult task in addressing the House today and he failed in three respects, all of which are important. First, he failed to indicate that he had properly appraised the scale of the problem of unemployment which we face today. Secondly, he not only failed to establish that cost inflation is not a serious problem, because it is, but failed convincingly to relate the existence of cost inflation to the present level of unemployment in Britain. His third and most conspicuous failure was that he put forward no proposals on behalf of the Government which will be likely to reduce unemployment in the days that lie ahead.
I should like to deal with the question of the scale of unemployment. It is fairly clear that today we are debating the re-emergence of unemployment, and this is why this debate is so important. It is not so much a regional problem or a problem affecting a particular industry, nor is it a problem relating to a two-month winter peak. It is a serious national problem. Today in Britain there are nearly 800,000 unemployed, and the number of job vacancies in the country as a whole is less than one-quarter of the number of unemployed.
The Secretary of State spoke about the regions. What is the picture in Scotland? The latest figures show that for every 15 adult workers unemployed there there is only one job vacancy—in other words a figure of 15 to 1; in the North the figure is 11 to 1, and in Wales 8 to 1. The problem is not just related to the development regions, as has been the situaton in past years. Today it is to be found in areas and regions where unemployment is not expected to be a problem at all. In the prosperous West Midlands area, and even in London itself, there are three adults unemployed for every job vacancy that exists. In my own area of East London we know that the Port of London Authority plan to accelerate its redundancies and that this will lead to the loss of a further 1,700 jobs by 1972. I mention this not merely because it is part of my constituency concern, but because it is part of the flow of information that one firm after another is laying off men all over the country. We hear this week in and week out.
Worse than the actual figure itself we all know that it will rise and that the Chancellor has so planned. His maximum objective during the next 12 months is to see that the rise is checked during the first part of next year. I stress that this is his maximum objective, because, as he himself has made clear, he will do nothing to arrest a further increase in unemployment if he does not achieve a reduction in wage and salary increases. That is the threat he has delivered in this House and outside it. Thus we have an army of unemployed, and, going on the information which we have, we know that the Chancellor of the Exchequer and the Government have no intention of demobilising it for as far ahead as we can see.
As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) pointed out, unemployment at this level is a tragedy. It is always a human tragedy for those who are forced into idleness and for the families they support. Faced with unemployment of this magnitude and duration, it is no good saying that the short-term benefits or redundancy payments will suffice. They were meant to deal with the short-term unemployment situation to cushion people against the shock of losing particular jobs, but certainly not to help eke out a miserable existence when unemployment is measured not in a period upto six months but in terms of a year, two years, or perhaps even longer.
There is more to this matter than just hardship. Human tragedy is involved, and unemployment has a terrible effect on the self-confidence and pride of people. There are few worse things than for a man to feel that he is unwanted by society, that he cannot provide for his family and that he is on the scrap heap. I am not one of those who bemoan what has been called the end of consensus politics in Britain. This does not mean to say that I like what right hon. Gentlemen opposite have been doing. I do not. I am not surprised by what they have done in terms of cutting the public expenditure and putting charges on the social services, nor am I surprised by the obvious and grotesque bias that is reflected in this year's Budget. I expect a Tory Budget and a Tory Government to introduce Tory measures, just as I expect a Labour Government, when they have the power, to introduce Socialist measures.
But the one area where I had hoped and thought that there would be a worthwhile agreement was in the desire to maintain full employment, because we all know, or we should know from the history of the 1920s and 1930s, not only the cost of unemployment but, even more in our post-war experience, the immense benefits that accue to the whole nation if we maintain full employment, as we have done so far. I bitterly regret that in this area consensus has ceased to exist. I go further and say that this is not an accident at all. It is a wicked policy. I use the word "wicked" deliberately, and I mean by it that the Chancellor and the Government have not been forced into a policy of high unemployment; I mean that they have deliberately chosen it.
I agree with my right hon. Friend that it is a wicked policy. He will remember that the Secretary of State denied my claim that the steel closures, for example, had been substantially brought forward as a result of the deliberate policy of the Government. In reply to a Question on British Steel Corporation rationalisation, on 26th January, 1970, my right hon. Friend the then Minister replied:
The Corporation…expects to increase efficiency by developing and rationalising facilities at existing works, by its formal cost-saving programme and by productivity agreements, rather than by major closures of complete works in the medium term."—[OFFICIAL REPORT, 26th January, 1970; Vol. 794, c. 232.]
Does not my right hon. Friend think that the right hon. Gentlemen ought to apologise for misleading the House?
I leave that point to the right hon. Gentleman. My hon. Friend is perfectly correct in spelling out that in those areas of the economy where the Government have direct managerial responsibility they have been making decisions which have the clearest effect of reducing employment.
My main charge against the Government, the charge which I wish to develop, is about their total economic management, because it is in this area that the major charge should be made. Earlier my right hon. Friend the Member for Bristol, South-East (Mr. Benn) made the same point. What distinguishes the Chancellor's policy today and what makes the present experience of unemployment utterly different from what we have known in the past 25 years—there have been occasions, short-lived on the whole, when unemployment has risen—is that today the difference is that the Government have combined the highest level of unemployment with the highest ever surplus that we have had in the balance of payments. That is a most remarkable combination. Though our minds can go back to periods under bath Governments, in the 1950s and 1960s, when a reluctant Government have been forced to pursue demand management policies and have produced, because of the bad balance of payments, an increase in unemployment, this is the first time that we have had this peculiar combination of a massive balance of payments surplus and a record level of unemployment. Nor does it look as though this is something in which we can look forward to change in the future, as far as the economic forecasts go.
Before the right hon. Gentleman leaves the question of the periods during which unemployment has increased, would he agree with me that from mid-1966 onwards, until now, the level of unemployment has "steadily" increased?
On the contrary, that is not so. If he looks at the figures, the right hon. Getleman will find that there was a sharp increase, as he well knows, immediately after the summer, after what I used to call, Mr. Speaker, Saint Selwyn's day, of 1966. When the deflationary package was announced, there was a sharp increase then up to the beginning of 1967, and then the extraordinary thing about the unemployment figures is that, until recently, they have been extraordinarily level since, in spite of many changes in the business cycle, devaluation and many other events. But I do not think that this would greatly affect the point I am making.
I wish to look into how the right hon. Gentleman and the Government justify the policies they are pursuing. Yesterday we heard from the Chancellor that he would not be justified in expanding output and having a further boost in demand because it would lead to
a…disproportionate increase in the demand for imports…
…undermine our efforts to introduce some moderation into wage settlements."—[OFFICIAL REPORT, 28th April, 1971; Vol. 816, c. 440.]
The first of these arguments, about the increase in imports, I find extremely unconvincing. I do not know what the Government consider to be the current ratio of imports to the growth of G.D.P. It used to be roughly one to four, or perhaps one to five. I will take it as one to four. If the G.D.P. increases by about 1 per cent., it means that we are increasing purchasing power, at the present level of G.D.P., by about £400 million a year. If we increase it by 2 per cent., it means £800 million a year. If the import ratio is one to four, it means the balance of payments will go down by about £200 million a year.
I see no reason why, in the present period, the Government should not so arrange their affairs and the national economy that they obtain an increase on output of some 2 per cent. over that planned now. With a balance of payments surplus which, even allowing for debt repayment, is about £600 million a year, they can afford to invest £200 million of our balance of payments surplus in returning the economy to a state of full employment.
If I am wrong in my calculations, or if there are other factors of the balance of payments which I have not taken into account and of which the Chancellor knows—such as some new commitment on our balance of payments arising out of the negotiations in Brussels—let them say so. But if the picture is as I have put it, let them argue why they cannot invest £200 million of the balance of payments surplus in increasing employment.
I turn to their second reason: moderating wage settlements. This is rot. Demand inflation only adds to cost inflation when labour is genuinely tight, when job vacancies begin to exceed the number unemployed. We are so far from that today as to make this fear quite unrealistic. If the Chancellor thought that this would arise in 18 months to two years' time, in heaven's name what are his demand regulators for? Far from increasing inflation, an increase in demand could be expected to moderate it—particularly in the capital-intensive and mass-production industries, where unit costs of production normally fall when output rises.
I said earlier that I saw what we are experiencing today as a human tragedy. It is a tragedy which can and should be tackled. The Government have the power to do so. What is lacking is the will to do so. It is also a national tragedy. Yesterday the Chancellor talked—these are words with which I happen to agree—of Britain being starved in recent years of achievement and success. The morale of the nation is very important. Nothing could do more harm to the nation's morale and to the confidence of people in our institutions and in our capacity to make a better future in Britain than a prolonged period of unemployment such as we are beginning to experience. In the national interest, I beg the Government to change course.
I hope that the right hon. Member for Stepney (Mr. Shore) will forgive me if I do not follow his argument. In view of your last comment, Mr. Speaker, I shall keep my remarks very short.
I speak for the area of country which, as the right hon. Member for Bristol, South-East (Mr. Benn) said, has perhaps the highest regional unemployment in the United Kingdom. It is 7½ per cent. One man in 10 is unemployed.
I speak for a highly industrialised area. I welcome the support that the Government have given to Northern Ireland. The right hon. Member for Bristol, South-East made it the theme of his speech that the Government did not care. He mentioned in particular the position of Short Bros. and Harland. As the Member representing the constituency, I am able to say that the guarantee the Government have given in the past week to Short Bros. that employment will be maintained in its factory is welcomed in the factory and throughout Northern Ireland. The right hon. Gentleman, who today has seen a deputation which is over here from Short Bros., knows that the Government, both in his time at the Ministry of Technology and particularly in the present difficult days when the aerospace industry is going through a period of great strigency, have done their utmost to help this factory in a development area.
In exactly the same way the Government have helped the neighbouring factory of Harland and Wolff. The help that the Government have given is greatly appreciated. This help gives the lie to the attack which the Labour Party has made on the Government.
Northern Ireland has not only faced the general unemployment which has affected the whole country and the general depression and lack of advancement of new industries. It has also had to put up with a series of civil disturbances which have been sparked off by a malicious minority in the community which is determined, first, to overthrow the constitution and, second, to do so by disrupting Northern Ireland's economy.
The results of these disturbances are reflected in the debate. Little new industry has been directed to Ulster in the past few years. Northern Ireland is absolutely dependent on new industry to take up the slack arising from the high unemployment which we have had to put up with since the war and to deal with the rundown which has occurred in the traditional industries. The linen industry has had to face a severe restriction owing to the transfer from traditional fabrics such as cotton and linen to modern synthetic fabrics. Agriculture, due again to modernisation and increased mechanisation, has been sending hundreds of thousands of men into the cities from the country. Shipyards, as a result of mechanisation, have reduced the numbers employed and have turned to new methods of highly mechanised modern prefabricated ships which have been provided by Government money.
In this way the Government have helped Northern Ireland, but it has been at the cost of unemployment in the shipbuilding industry. In the years that I have represented Belfast, East I have seen the numbers employed at Harland and Wolff reduced from 24,000 to 12,000.
Because of the rundown in the traditional industries and in agriculture, it is very important to attract new industry to Northern Ireland. Therefore, Ulster looks to a general growth and expansion in the economy in the long run to tackle its unemployment problems and its civil unrest, because the two are linked.
I ask my right hon. Friends to continue the steps they have taken to help to build up Northern Ireland's infrastructure, which will help to provide an attraction for new industry and help to counter the efforts of the subversive elements and help to get us back on our feet. I hope that my right hon. Friends will maintain incentives to new industry. I hope that they will continue their existing policies of concentrating on the established and traditional industries, such as linen, shipbuilding, aircraft, ropes and other vital industries which provide a large part of our exports.
I do not come to the House with cap in hand. I am proud to represent a part of the country which exports more per head of the population than any other part of the United Kingdom. Our ships, our linen, our ropes, our tobacco and our agricultural produce come to Britain and go all over the world earning valuable currencies for the United Kingdom.
I thank my right hon. Friends for their present and past efforts and ask them to continue and sustain their efforts in view of Ulster's particular difficulties.
May I at the outset of my maiden speech remind right hon. and hon. Members that in the whole history of the Liverpool, Scotland, division, which goes back 86 years, apart from myself there have been only three Members of Parliament. There was, first, Mr. T. P. O'Connor, affectionately known as "T.P.", who served the constituency for 44 years. Then there was Mr. D. G. Logan, who served the constituency for 34 years. These two predecessors of mine served the House for 78 years between them. This, judged by any standards, was a massive vote of confidence.
My immediate predecessor, Mr. Walter Alldritt, laid claim to the Chiltern Hundreds to take an important trade union post in the North West. He continues to serve ordinary men and women as he has done for most of his life.
My constituency lies on the banks of the Mersey, which takes in a large part of the Liverpool dockland. Earlier this week the House debated the financial policy of the Mersey Docks and Harbour Board. Hon. Members can imagine the state of uncertainty that exists in my constituency.
The constituency has got dotted all over it—I will come to what this has to do with unemployment—pieces of land which have lain derelict for many years. One large piece of land situated in the middle of my constituency has lain derelict for more than 30 years. It is known as "The Brickfield". The council, when it is pressed about these matters, says that it is shortage of funds. With all the expertise available to the Government, they should be able to make moneys available to local authorities, possibly at low interest rates, so that they can advance public works and help to reduce unemployment.
On Merseyside there are now 41,222 unemployed, or 5·1 per cent. of the working population. In the City of Liverpool alone there are 20,000 unemployed, or 5·6 per cent., well above the national average. Such figures cannot be tolerated by any society that calls itself Christian or civilised.
Something must be done. My constituents are not asking; they are demanding that the Government do something in the short term to reduce these drastic unemployment figures. One of the sad things in a very sad tale is the fact that juvenile unemployment on Merseyside, unemployment among boys and girls between the ages of 15 and 17 who are on the very threshold of an adult career, is now well over 3,000. This is to be deplored. The situation is serious. Something must be done. This position cannot be allowed to continue. The time for the Government is now, the time to act is now—and to act vigorously.
My first and pleasant duty is to congratulate the hon. Member for Liverpool, Scotland (Mr. Marsden) on his maiden speech. It is not so long ago that I had to face the same ordeal, and I know how thankful I was to have it over. We on this side all congratulate the hon. Gentleman, and look forward to hearing his contributions again.
In the Welsh Grand Committee yesterday we discussed some of the long-term problems facing us in Wales, and the current level of unemployment. I drew attention to the startling rise of 60 per cent in Welsh unemployment from 25,000 to 40,000 which took place in the 10 months from July, 1966, as a result of the Labour Government's economic policy at that time. We saw a similar rise, though at lower percentage rates, throughout the United Kingdom. Since 1965 there has been a trend of continually rising unemployment.
The problems involved are deep-seated and of long standing. I believe that they are inadequately understood, and that the nature and causes of unemployment today may be more complex than is sometimes acknowledged by either side. As Peter Jay suggested in his article in The Times on 23rd April, they may have become more difficult to cure. My hon. Friend the Member for Bridgwater (Mr. Tom King) gave some of the reasons.
Some causes are obvious. Unemployment can be created, at it was in 1966, by direct action and demand management. It may be caused, as I believe a good deal of it is today, by pay settlements that are unrelated to increases in productivity. It may arise from the transformation of old established industries. But, as Peter Jay in his article made clear, other factors, such as the impact of redundancy payments, are less clearly understood.
I believe that there is an urgent need for a widespread re-examination in depth of the nature of unemployment, and I would welcome such an examination in my constituency where, over a number of years, we have seen puzzling and conflicting factors at work. Unemployment in Pembroke ranges from 7·1 per cent. in Haverfordwest to 10 per cent. in Milford—it was 11½ per cent. there six or nine months ago. No one who knows the area could fail to be distressed by the grave social consequences or to be anxious to find a solution. The hon. Member for Stoke-on-Trent, South (Mr. Ashley) spoke of these social consequences, but they are most severe in areas where unemployment has continued for a very long time, as it has in my constituency.
But even a superficial examination reveals that these high levels which have been with us now for so long and have hardly been affected by the growth of the great oil port of Milford have complex origins. There is the rundown in the fishing industry. There is the lack of adequate communications—now being rapidly improved by the present Government. There is the closure of military establishments as a direct result of decisions taken by the previous Administration. There is the closure of rural bus services, in which the changing pattern of life may have been a more fundamental cause than political action. There is the lack of job opportunities for young people of increasing technical accomplishment.
To some extent, but not adequately, these pressures have been eased by the construction of oil refineries and the new Pembroke power station, and by the introduction of manufacturing industry, yet it is a fact that in recent years, as the oil port has developed and job opportunities have widened, as the numbers in employment have increased so unemployment figures have remained obstinately high.
There can be no doubt that many who have come to Pembroke from outside to work on these major construction projects have stayed behind when the jobs were finished, and many have joined the ranks of the unemployed. It is also true that some skilled labour has been brought from outside on a permanent basis to man these highly technical projects but, fortunately, it is only a small proportion. What we do not know is how many of those who stayed behind are permanently unemployed, or journey temporarily to other well-paid construction jobs only to return between while to the county. Nor do we know what proportion of those registered as being out of work are genuinely unemployed.
In the first place, I suspect that there are some who should be more truly classified as disabled, or as having for one reason or another become physically or mentally ill equipped to work. This may well be the case in areas in which old, heavy and sometimes hazardous industries have declined. The right hon. Gentleman the Member for Bristol, South-East (Mr. Benn) spoke of the 80 per cent. of the unemployed in Wales who were over 40 years of age, and this I believe may be one of the explanations. I wonder whether it is right to include such people among the unemployed at all, or whether we should not find a new category for these people so that we can give them the special treatment which I believe is called for.
But the question is also asked: are there a significant number who are not really out of work at all, or who are not genuinely seeking a job? Many people in my constituency believe that they know the answer; that there are people who prefer to live on a combination of unemployment pay and casual labour, or for whom it may be that in one way or another the incentives to work are inadequate. And no people are more bitter about this than the large numbers of my constituents who are really out of work.
There is certainly some evidence for it. There is the fact that at a time when unemployment is at over 7 per cent., and has been for a very long time, employers frequently cannot recruit the labour they seek and do not even have applications when they advertise. There are specific examples, but the fact is that we do not really know. The charge is made. It may be that in an area where there is great scope for casual labour—early potato lifting, and so on—it is true. I have no means of discovering how much phoney unemployment there is, or how much fraud, but it is believed that the amount is significant. The fact that that belief is widespread, and is reported in the local Press, which is independent—it is by no means a Government supporter—gives a reason for finding out more about it, not just in my constituency but elsewhere. We really have to analyse more deeply than we have done the causes and nature of unemployment in many areas, so that we can be better equipped to eliminate it.
It is a particular pleasure for me to speak so soon after my hon. Friend the Member for Liverpool, Scotland (Mr. Marsden), whose excellent maiden speech we all so much appreciated. He may not know that I was born in Liverpool in the 1920s and grew up there in the 1930s. if anything made me a Socialist, it was the ugliness and squalor of the unemployment in the city at that time, and nothing causes me greater concern and pain today than the rise in unemployment which we have witnessed, and the Government's determination, it seems, to do nothing whatever about it.
In his extremely interesting speech, my right hon. Friend the Member for Newton (Mr. Frederick Lee) made a powerful case for the future of the Irlam works, in which he was at once supported by the hon. Member for Manchester, Withington (Sir R. Cary). Both my right hon. Friend and the hon. Gentleman spoke very seriously about a problem which many of us face in our own constituencies, but the tragedy today is that problems of this kind, which in some circumstances might be manageable, and on rare occasions inevitable, become greatly inflamed and beyond toleration simply because of the high level of unemployment nationally. Moreover, the pity of it is that some of the changes which may have to occur both in working circumstances and in practices at work will become increasingly hard to achieve just because the overall picture is so unsatisfactory and so damaging to morale.
The opening speech of the Secretary of State for Trade and Industry was sometimes obscure, occasionally absurd, and at all times totally unconvincing. I do not wish to speak unkindly of the right hon. Gentleman because I think that the burden of his Department is larger than any of us, given it, could possibly bear, but he has a duty to the House, a duty which he did not fulfil today, either to tell us the Government's intentions in terms of the level of unemployment which they expect and would regard as tolerable or to bring before the House new proposals. We had no forecasts, no facts, and no policies. We had a charade, and I very much regret it.
As I say, one might, perhaps, allow the excuse of the heavy burdens of his Department, and any criticism which I make is not of the right hon. Member for Knutsford (Mr. John Davies) so much as of the Government as a whole and, in particular, of the Chancellor of the Exchequer, who sat there smiling through a large part of his right hon. Friend's speech. Beyond that, the only case which could be made for the Secretary of State is that he had the awkward task of trying to defend the indefensible.
A few days ago, my hon. Friend the Member for Birmingham, All Saints (Mr. Walden) wrote a most interesting article in The Times in which he referred—it was his phrase—to the "harsh vulgarity of Toryism". In the rise of unemployment and the Government's approach to it now we see fully revealed the harsh vulgarity of Toryism.
One of my predecessors as Member of Parliament for Stockton-on-Tees was Harold Macmillan. I should quarrel with him, both as a Member and as Prime Minister, on many counts, but I do not doubt, and no one has doubted, that much of his political career was shaped by his experience of unemployment in Stockton 30 and 40 years ago. When Mr. Macmillan became the Member for Stockton, there were 6,000 men out of work, the shutters were up in the High Street, and there were no jobs for people to go to. I am glad that the figure today is not 6,000, but it is rising towards 3,000 and that is far too high.
I should like to think that the Government had a policy which would deal with this situation not only in Stockton but elsewhere in the country. It would be kind, perhaps, to say that things were out of control, that they did not know what they were doing, that they were steering blind, if steering at all. But they have said plainly that, in their view, the rise in unemployment is necessary to cure the greater evil of inflation. What nonsense! Even if it were not indefensible on social grounds, it is economic nonsense.
We have seen no evidence—perhaps the right hon. Gentleman will produce some when he winds up—that rising unemployment in present circumstances—we are not discussing the circumstances of 30 years ago—is a cure for wage inflation. There is no evidence anywhere, as far as I know. If the Secretary of State thinks that there is evidence, perhaps he will give us the equation, show a clear and direct relationship, and then tell us when the equation will be fulfilled and at what level of unemployment he expects to see acceptable wage increases.
I do not deny that in some ways there has been a qualitative change of attitude towards unemployment. The earnings-related benefits which the Labour Government introduced have cushioned some of the consequences. Redundancy benefits have done something of the same sort. The younger generation has up to now been less afraid of long-term unemployment than those who went before. Also, leaving aside the present high level, there are certain specific emerging problems to which we should give increasing attention.
Not only in Tees-side and my constituency but generally, the major problem affects unskilled workers. We see this more clearly now than we have ever done before. But, here again, there is tragedy, because, although it is unskilled men who are losing their jobs, the effect which this has on morale is such that there is often a greater reluctance on the part of trade unions to accept the necessary steps towards training a larger number of skilled men out of a fear that they may be affected in turn. We are in a vicious circle when unemployment reaches these levels.
There is then the problem of those over 40 or 45. My right hon. Friend the Member for Bristol, South-East (Mr. Benn) referred to this. My concern is as much for a man in the middle ranges of management when he loses his job at that age and cannot find another as it is for the man on the shop floor. The tragedy is as great and as demoralising. It is a terrible thing for men to lose their jobs at that age and know that no one wants them because they are already over the hill. We have sometimes seen it here when a colleague loses his seat at a General Election, but that is a hazard which is part of the profession which we follow. It is a terrible hazard for those who are turned out, even when they are told that they have a pension to cushion the consequences, and this is another of the problems to which we must give increasing attention.
I recognise, as we all do, that in certain respects the problem may have changed. I should even say that for this reason it is possible today to find tolerable a higher level of unemployment than, perhaps, 10 years ago. But this is in no way an excuse for using unemployment as a deliberate act of policy, and no alleviation whatever of the levels which we see now. The case againt the present level of unemployment is that it is naiÏve, is stupid and will not work as a cure for inflation, and, second, that it is economically wasteful and socially damaging. If it were the easy way out, one might say that what the Government are doing could be understood because we all sometimes try to find an easy way out of difficulties. In fact, it is not an easy way out at all.
My hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) made a powerful speech in which he referred to the social and psychological impact of unemployment, and the hon. Member for Withington referred to the effect on morale. But I do not believe that most of us here fully understand the consequences not only for the man—perhaps he can bear it—but for his family and, in particular, his children at school. It is damaging to self-respect. It is damaging to confidence. It is damaging to the social fabric of the nation. In the end, not next year or the year after but in five, 10, 15, or 20 years, we pay in many different ways for unemployment when it destroys the social fabric of the family and of the community as well.
I do not believe that the present Government are committed, as, I think—to be fair—the Conservative Party was in the latter days of its last period of office, to effective regional policies. I am not impressed by what they have set forward; I am not impressed by their sense of purpose. Nor—and the Government have made this plain, so they are condemned out of their own mouths—are they committed to a prices and incomes policy. In both respects I believe the Government to have been wrong.
In 1964 the Labour Government made these two policies central to all that they intended to do. I will not claim that that Government was an unqualified success, although I was a member of it throughout. I could tell the House where I think we went wrong. But we were committed to two policies which I still believe to have been right. One cannot manage the economy at whatever level unless one deals continuously with the deep-seated regional problem, and it is a mistake for anyone in this House to believe that it can be solved in three or four or five years or even in 10. It requires consistent and firm and determined policies, and the right thing for the Government to have done when taking office was to continue with what we had started. Then we would have seen results. I do not believe that we are going to see results now.
I am not saying that at all stages our prices and incomes policy was a success. I am prepared to say in this House that it broke down in the last year of our Government. I was witness to that and I could explain why. But now is not the time. However, I will explain it on some future occasion or hold a private seminar for those hon. Members who would like to hear.
For the first three years of our Government we achieved a notable success and approached the policy in precisely the right way. It was not always popular then with the trade unions, nor with some of my hon. Friends, including my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). It was not popular in the closing phase with some prominent trade unionists who somehow believed that the Labour Government were not following the steps which they thought appropriate. But every Government in the end must return to this, and without a prices and incomes policy we shall see unemployment used as a remedy. Without a prices and incomes policy we cannot see a closing of the gap between those who are relatively well paid and those who are are still badly paid.
On Tees-side there is a particular problem which I cannot now develop. It concerns the redundancies in I.C.I. and in the steel industry. My right hon. Friend the Member for Newton got it precisely right when he said that the concern in this House, and, more important, in the constituencies, is not only with the redundancies which are seen but with the cutback in investment. People are prepared to see change and to accept it but only when they have a claim in the future, and it will be increasingly difficult to get change and raise morale, particularly in the development areas, as long as the policy as we at present understand it towards the steel industry is pursued. I do not understand for a moment the arrogant and unexplained rejection of special development area status for Teesside. A powerful case for it was made to the Government, but it was dismissed with hardly an explanation.
I say sadly that the Government have got off on the wrong foot. They should face the truth honestly that their policy should be changed. I ask them to think again, forget ideology and put the interests of our country and its people first.
I begin by apologising to the right hon. Member for Bristol, South-East (Mr. Benn). I was not present at the beginning of the debate because I was on other business in the House. I trust that he will understand that no discourtesy was intended. I join others in congratulating the hon. Member for Liverpool, Scotland (Mr. Marsden) on his maiden speech. It is always a frightening experience, and we commend him for his performance today.
I want to speak about what I term the "Cinderella" area of the country—the South-East of England. [HON. MEMBERS: "Where is it?"] Some hon. Members ask where it is. Some people associate it with the blossom of Kent, but not all Kent enjoys blossom.
We have in my constituency heavy industry, particularly two basic industries which have for some time been running down—paper and cement. The cement industry has been contracting mainly because of mechanisation and so forth. But in the paper industry we have witnessed in recent times a very serious contraction, and this has been accelerating in the last few months. Indeed, in the industry as a whole throughout the country, in 1970 three mills and four paper machines closed down. In the first three months of this year, seven mills and 45 paper machines closed down, representing 10 per cent. of the country's 500 paper machines. This represents about 7,000 employees out of a total work force of 90,000, and it is a serious situation.
I asked my hon. Friend the Minister of State, Department of Employment, a Question about the paper industry on 5th April. I pressed him about the unfair pricing policies followed by certain Scandinavian countries, which resulted in a meeting being held at his Ministry on 24th March with the industry. He said that he understood the situation and that it had already been the subject of representations to Scandinavia. That is all very well. But imports since the formation of E.F.T.A. have risen from 26·9 per cent. of consumption in 1960 to 35·1 per cent. in 1970. The Scandinavian share of imports of paper and board rose from 38·5 per cent. in 1960 to 56·2 per cent. in 1970. The Scandinavians are the dominant suppliers of pulp to the United Kingdom, holding 70 per cent. of the market, and they have thus been able to maintain prices at a high level. This is having an effect on the British paper industry and upon industry in general, particularly in my constituency.
I turn to another facet of the Question I asked my hon. Friend on 5th April, concerning the run-down of industry on Thamesside. He replied that because it was in the travel-to-work area of London it represented a 1·5 per cent. level of unemployment. In general terms in this House and in relation to some areas of the country, this may seem to be peanuts, but in my constituency, both in Northfleet and in Gravesend, there was an unemployment ratio of 4·5 per cent. in March and it is still rising.
I am particularly concerned, therefore, that when the Kent Development Plan Review came under the scrutiny of the Secretary of State recently he was not, unfortunately, able to make modifications of the Kent County Council's proposal in, for example, paragraph 133, which said:
The policy for industrial development as stated in the approved Town Map should be continued, namely, that new industry will not normally be permitted in the area of the Town Map.
Paragraph 134 said:
Proposals for additional office development in this area should not be permitted if they would result in increased demands for provision of housing land locally.
All this is devastating for the area. This is an area which has not enjoyed the advantages of development area or even
intermediate area status. Nothing has come to that area at all. The only thing we are asking for is flexibility in the granting of industrial development certificates. I ask the Government tonight to be flexible with them in the South-East, particularly for its industries along Thames-side.
Abraham Lincoln said that one does not strengthen the weak by weakening the strong. But we have seen this sort of thing far too long in our part of England. I ask my right hon. Friend to remember that, whatever the prosperity of the South-East may have been, people there have become unemployed and more are becoming unemployed. Many of them, particularly in the paper industry, are men in their middle fifties who are finding it difficult to find other jobs. Men who have spent their working life making paper and now find themselves on the scrap heap are in many cases unable to be retrained. It is no good to this country now or in the future that these men should see no prospect in their lives other than possibly being on the dole.
In deference to your request, Mr. Speaker, I will be as brief as possible. I want to comment first on the speech of the Secretary of State for Trade and Industry. He has not been very successful recently in keeping the temperature down. In an offhand way he referred to Ravenscraig and suggested that the plans for approval had not been submitted to him. That will not be taken kindly in Scotland; it will be treated with alarm. I hope that the Secretary of State for Employment will make some comment on this in winding up the debate. It is manifestly unfair that the Minister should cause a crisis of confidence in Scotland and create an air of uncertainty over the steel industry.
The right hon. Gentleman tried to suggest that the previous Government were responsible for a contraction of 200,000 jobs in the mining industry. Hon. Members opposite will be aware that I was a bitter opponent of that policy of massive contraction of the mining industry. The right hon. Gentleman must confess that, despite that massive contraction, despite substantial contraction in agriculture and the railways, under a Labour Government we were not confronted with the unemployment problems we now have.
Last week I was at the Scottish T.U.C., at Aberdeen. It was a meeting of great importance for the Scottish people. The Scottish T.U.C. is an independent organisation, making pronouncements and consulting with Governments. There is a continual dialogue between it and industry. It was significant that Congress described the present rate of unemployment as absolutely obscene.
The right hon. Gentleman tried to tell us that there was some doubt about the unemployment figures. He said that some investigation was needed. The facts and figures were spelled out at the conference. In Scotland we have 123,000 unemployed. When we look for comparable figures we do not look during the lifetime of a Labour Government but we go to the year 1963, the year before Labour came into office, when unemployment stood at 137,000. The tragedy is that we now have 123,000 unemployed and every indicator—this has been reemphasised by the Government Front Bench—suggests that we will probably have something in the region of 160,000 unemployed in Scotland this winter. When trade unionists say that unemployment of 123,000 is obscene, how will they describe it next year when they will be discussing the highest record of unemployment that some of us can remember?
There was a long and meaningful debate at the Congress about the steel industry. Probably one of the best speeches, applauded by knowledgeable trade unionists, was that made by Mr. Arthur Bell, a well-known trade unionist who has been campaigning consistently in support of the facilities at Hunterston not only from the point of view of the Scottish economy but from the point of view of the economy of the United Kingdom. His speech was reported widely. Mr. Bell said that steel in the Scottish economy was, with coal, the basic industry in a modern industrial society. It was basic from the point of view of its very size. The loss of employment for 20,000 steel workers in Scotland would indirectly affect the employment of millions who used the industry's products in shipbuilding, engineering and the motor industry. As a leading consumer industry it was of outstanding significance. Iron and steel
entered our lives as articles of use in many hundred ways. There are 25,000 people employed in the Scottish steel industry. Mr. Bell concluded:
To sever the umbilical cord of steelmaking here in Scotland will eventually strangle the Scottish economy.
It is an apt description, because unless the Government make a decision about the expansion and modernisation of the steel industry not only will we have terrible unemployment problems but the Scottish steel industry, and with it the United Kingdom industry will become second rate.
Mr. Vic Feather was a fraternal delegate at the Scottish T.U.C. and he addressed himself to the problem of unemployment. He asked whether the Government were determined to go for a high level of unemployment to maintain the balance of payments, since a high balance of payments was the price of entry to the Common Market.
The right hon. Gentleman must tell the House whether that is Government policy—for the people of Scotland to have imposed on them unemployment of 160-odd thousand this winter so that the Government can carry the Common Market negotiations to a successful conclusion. I could document this, because The Times addressed itself to the problem recently. There is a Scottish Office Minister sitting on the Front Bench. He knows that we have a high rate of unemployment in Scotland and he knows that one of the most disgraceful aspects of it is that we have the highest rate of unemployment among children under 18 years. I am not talking of percentages but straight figures. There are nearly 7,000 young people under 18 who are unemployed.
What a problem we are building up. We will have the best educated unemployed in the world. These children have been educated to a job expectation but, because of the reactionary policies of this Government, they are unable to obtain employment. The people will have an answer to a Government that continues to pursue a policy that means high unemployment and misery. An election cannot come quick enough. If the Government cannot begin to solve this problem they should have the decency to resign and let an Administration come in which will tackle this obscene problem.
The right hon. Member for Newton (Mr. Frederick Lee) spoke earlier with compassion about the redundancies that face his constituents in Irlam. I speak as the neighbouring Member across the stretch of the Manchester Ship Canal, and I fully share his feelings in this matter. The decision of the British Steel Corporation to close the steel-making and primary rolling facilities at Irlam is a local disaster of enormous dimensions, putting out of work nearly 4,500 men, in an area where the Irlam steelworks was overwhelmingly the largest employer.
If the British Steel Corporation decision is allowed to go ahead it will be the end of Irlam. The suffering and hardship that will be caused to those made redundant will be enormous, especially for those large numbers of skilled men who have spent 20 or 30 years in the industry and are now in their fifties. I know from many of my constituents thrown out of work at that age following the merger of G.E.C. and A.E.I. in what was proudly known as Metro-Vicks in my constituency in Trafford Park that it is very hard for a man in his fifties in the Greater Manchester area to find other employment, particularly when his skills are confined to doing a job for which he has been trained for more than 30 or 40 years.
The closure will mean not only suffering and hardship for the men directly involved but a loss to the local community of about £10 million annually in wages. It will mean the depopulation of the area as men move to the Midlands and South-East in search of work. In a word, Irlam will die. I assure the right hon. Member for Newton that for the Greater Manchester area this question is above party politics. We all share the same sentiments and all feel very strong about this matter. If the decision to close the Irlam Steel Works is allowed to go ahead it will be a major human economic disaster for the whole of the Greater Manchester area, including my constituency of Stretford and Urmston, where more than 750 redundancies will result from the closure.
I believe that I speak for all Members on both sides of the House representing constituencies in the area when I say that we stand united in our determination to mitigate, so far as possible, the unem- ployment and economic depression in the area which will result from the closure. There is strong reason to believe that what was formerly Lancashire Steel—namely, the Irlam plant and Rylands wire works at Warrington—could still be a viable and economic proposition. Lancashire Steel was profitable in the past, and it could still be profitable today.
The British Steel Corporation's proposal is to close down the steel-making and primary rolling capacity but to retain the rod mill at Irlam and the Rylands wire works at Warrington, supplying them in future with steel from one of the other British Steel Corporation plants. It is quite right for the B.S.C. to take such decisions as it thinks right to procure the rationalisation, efficiency and expansion of the British steel industry as a whole, and it is perfectly understandable that it should feel that it can supply steel cheaper from other plants for the wire-making division.
However, the fact must be faced that had it not been for the Labour Government's doctrinaire pursuit of nationalisation, Lancashire Steel would not be on its way to the knacker's yard today, nor would 4,500 men and their families be faced with the misery of unemployment and hardship. As a private company, Lancashire Steel would have been faced with having to take the necessary steps to modernise the Irlam Steel Works or go out of business. [Interruption.] British steel is not going out of business. What is happening at Irlam may be only a small matter for those who run the British Steel Corporation, but for those in the Greater Manchester area who are concerned with Lancashire as opposed to British steel it is a major disaster.
Even now there is every reason to believe that in the hands of private enterprise Lancashire Steel as a whole could survive and pay its way. Of course, out-dated open-hearth blast furnaces, which, thanks to the courtesy of the right hon. Member for Newton, my hon. Friend the Member for Manchester, Withington (Sir R. Cary) and I had the opportunity of seeing earlier this week, would have to be phased out over the next few years because they are uneconomic. But a private firm—unless it were willing to submit itself to the monopolistic control of the British Steel Corporation for its steel billets—would undoubtedly install electric furnaces with continuous casting fed with scrap metal.
To my knowledge, three separate companies or consortia have made approaches to the British Steel Corporation with regard to the works. One of them, a major wire producer, would be interested in doing no more than the B.S.C. itself; namely, acquiring the rod mill at Irlam and the Rylands wire works. The second is an international consortium in which the B.S.C. has a major interest and which has substantial Belgian participation. However, I fear that there may be some doubt about whether those involved, in view of their link with the B.S.C., would be interested in ensuring that the Irlam plant continued its steel-making capacity.
I understand that a third group has approached the B.S.C. The right hon. Member for Newton referred to it. He said it had been turned down in a letter from Mr. Finniston of 25th February. It is most unlikely that such a group, if it were allowed to take over Lancashire Steel, would wish to be dependent on someone else for the supply of steel, and it would no doubt be interested in installing the electric furnaces which would provide substantial employment for half or more of those threatened with redundancy.
Although the British Steel Corporation may have no more duty than to think of the efficiency and cost of steel making, the Government have a wider responsibility. They have a responsibility to the men and their families, to the community and to the local economy, particularly as this is such a major employer in the area. They must also weigh in the balance the cost of supporting those unemployed and those who may never again find employment as a result of the closure. There can be no stronger case for hiving off, to use a very unsatisfactory and ugly phrase, a sector of a nationalised industry than when that nationalised industry is incapable of carrying on its business itself and private enterprise is willing and able to take on the activity.
I do not wish to raise any false hopes, but if there is a bona fide offer for the steel works from private enterprise which would retain a large number of the jobs of the Irlam steel workers, perhaps the B.S.C. would not welcome the competi- tion, but I hope that the Government would think it right to require the B.S.C. to disgorge the Irlam steel works and the Rylands plant so as to create a viable, independent wire-making capacity in Irlam and thereby substantially mitigate the effect of the closure.
Manchester has suffered enormously from the restrictive policies of the previous Government. There were 750 redundancies in my constituency as a result of the closure of this plant, and that was on top of 10,000 redundancies in my constituency, especially in Old Trafford and Trafford Park, since 1964. That has been a colossal blow to the whole Manchester area.
The hon. Member is talking about Trafford Park, where many of my constituents also work for the A.E.I.-G.E.C.-English Electric organisation. He has been talking about the rationalisation of the British Steel Corporation. Will he tell the House how many redundancies were caused as a result of rationalisation in the private sector following the merger of those three great companies?
I was in no way arguing against a programme of rationalisation to make an industry pay. My constituents, just as much as those of the hon. Member, understand that the pattern of industry changes when certain industries come to an end. What our constituents cannot understand or accept is that when such industries are coming to an end no new industry or capital should come in to replace them.
It was the deliberate policy of the previous Administration to steer away industries that had an interest in coming to Trafford Park, and to prevent local industry from expanding there by the denial of industrial development certificates. It was not until two days before the General Election that the Leader of the Opposition—the former Prime Minister—came to my constituency and promised the I.D.C.s which his Government had for several years denied to it, which was a disastrous and damaging policy for the Manchester area.
I ask my right hon. Friend to ensure that this policy of a denial of I.D.C.s to the Greater Manchester area will be reversed, so that we can carry on the fight against obsolescence and dereliction without our hands being tied by Whitehall. We are not asking for hand-outs; we merely want an assurance that there will be an end to discrimination in the issue of I.D.C.s and a reduction of the disparity between my area and other areas in the North-West.
The hon. Member for Stretford (Mr. Churchill) made a doctrinaire contribution which has shown a little of the biased approach behind the Government's intentions in their treatment of the British Steel Corporation. He still has a certain amount of innocence, which allowed him to speak rather freely. I do not imagine that the right hon. Gentleman who is to reply to the debate will make similar admissions. I want to concentrate on only two points involving direct Government responsibility. The major purpose of the debate in the grave situation that exists concerns Government responsibility, first, for the high level of unemployment in general and, secondly, for the special position that is now developing in the steel industry.
Earlier in the debate the Secretary of State for Trade and Industry made sure that everybody understood what he had in mind when he referred to the Chancellor's troubles and worries. The first thing to put on the record is that if the Chancellor is really thinking in the manner represented by the Secretary of State we are back to 1924 and 1925. We are back to a pre-Keynesian position, and to the kind of economic policy which, before the war, led to dereliction in some of our major industries. If the Government have not yet learnt that if we want to reduce the cost of production the first thing to do is to take up the slack—to use resources that are not being used at present—they will never be able to provide an effective economic policy.
The Secretary of State for Trade and Industry made that point time and time again. It will not help the Government to repeat their statements about inflation and high costs if they stick to the ill-informed policy of not wishing to reduce the cost of production by getting more people into employment and using some of the machinery that is not now being used.
I want to turn to the position in the steel industry and try to put the record straight, as it has not been put straight by any Government representative so far. First, the House was misled by the Prime Minister in a statement he made at Question Time about seven days ago, in which he said that he had it on the authority of the British Steel Corporation—and he mentioned Lord Melchett by name—that the current redundancies had nothing to do with any new policies that the Government might have imposed upon the Corporation but were the consequence of policies agreed upon between the Labour Government and Lord Melchett. That was wholly misleading.
Today, during an exchange with the Secretary of State for Trade and Industry, the same misleading information was repeated. One of the essential results of this debate will be to establish the truth of this aspect of Corporation policy. Happily, there is a great deal of documentation, which should not make it too difficult to establish the facts. For many years, at various meetings with Lord Melchett, hon. Members have heard him say—and I deliberately want to put it on record—that he had been urged by people, many of whom were outside the steel industry, to speed up the programme of redundancies. He said that he was determined to stick to the original plan of the Corporation, which was to take a considerable time over the programme. He talked of a period of five, six or seven years from 1969. At the same time, he was going to develop existing plant and put up new plant, absorbing thereby a large majority of the people who would gradually become redundant.
The last occasion on which I attended such a meeting, with Lord Melchett, Mr. Forder, the head of the Special Steel Division of the Corporation, and one other representative of the board, was on 9th December, 1970. Dates are important in this respect. That was not very long ago. At the time there were rumours that Ministers—especially junior Ministers in the Department of Trade and Industry—were developing schemes to hive off and sell to private enterprise many of the most profitable sections of the nationalised steel industry.
At that meeting, responsible spokesmen for the Corporation gave us the prospects. We were told that the schemes being developed by the B.S.C. were estimated to meet a total demand for steel in 1975 of over 32 million tons per year and that the Corporation, in accordance with its previous plans, having reviewed the situation, had come to the conclusion that there would be a slight increase on that figure and that it was, therefore, preparing for a total volume of production by 1975 of 35 million tons.
We were also told that in the early '80s the total demand would be in the region of 42 million tons per annum, that the Corporation had submitted detailed plans to meet that demand and that, so far, the Government, who were the new Conservative Government, had not countermanded those proposals.
Those are the facts and it is absolutely clear that the doctrinaire intervention of the Government in the last six months has imposed two new policies on the B.S.C. The consequences of these two new decisions are now to be seen in the comments which hon. Members in all parts of the House are making about industry, not to mention the redundancy figures with which we have been suddenly faced.
The B.S.C. had no intention, only a few months ago, of hastening redundancies as part of its long-term plans. But the Government have, first, prevented the Corporation from obtaining an assurance of further public loans to carry out its investment programme, and, secondly, imposed a limitation on the increase in price.
The Government are entitled to make decisions and I appreciate their right to tell a public corporation, "We are not prepared to sanction the full increase for which you ask"—be it a 14 per cent. increase or a larger or lesser amount—but if they take that view and refuse an increase in price, they should go on immedately to say, "We are making other financial resources available to enable you to carry on."
Instead, the Government took a doctrinaire decision and thereby intended to force the Corporation into the position of having no alternative but to have some of its most profitable sections sold to private bidders. The Government were not interested in making it possible for the Corporation to develop its programme.
In general I have neither disrespect nor lack of sympathy for the hon. Member for Stretford but why was he able to make such an ill-informed statement about the Corporation not being able to deal with its own expansion plan and, therefore, having to be sold off to private enterprise? He is not aware, in his innocence, that he is really implementing the purpose of the Government, for that is what they desired him and others to think when they took their decision in this matter. I trust that the hon. Gentleman will think again about this, and, if he does, he will discover that he made a misleading statement.
I am grateful to the hon. Gentleman but, having spoken on Tuesday morning to several of those who are involved and who are of the same political persuasion as himself, I can assure him they do not care who runs the Irlam plant, provided it continues; but the B.S.C. has no plans to continue steel making at Irlam.
The hon. Gentleman is trying to ride away from this on the basis of some conversations which he has had, as though he is the only one who talks to those concerned at this steel division. I attended a long meeting yesterday afternoon, with 16 hon. Members representing Lancashire steel areas, with the regional organiser of the union to which the hon. Gentleman referred earlier. My colleagues will assure the hon. Gentleman that we were told the policy of the workpeople there. Their policy is not to have the Irlam works shut down. They acuse the Government of having imposed on the B.S.C. a closure involving a hurried decision, and they complain of the unreasonable tempo with which this has been done.
The regional organiser told us that they want a firm declaration from the Government not to hinder the Corporation in modernising the Irlam works and, meanwhile, to phase out any limited redundancies in older sections of the works as and when necessary. The men there are appalled at the sudden decision, with-oust consultation, to impose this helter-skelter scheme of shutting down the works.
First, the Government forced the Corporation to be short of finance. Second, they said, "We will have a quick review to decide what will happen to the expansion programme of the industry." Third, this contributed to unemployment, and will continue to do so, primarily because they said "You must not go ahead with your expansion schemes for some time." This has forced the Corporation, in my judgment wrongly, to bring forward some closures and, therefore, redundancies.
This has meant the Corporation abandoning its original plan to take five years or more to bring about some of these changes, which the industry could have absorbed. Although "wastage" may be an ugly term to use in this context, it is reasonable when a policy is spread over a lengthy period. It results in modernisation being carried out in such a way that the staff is reduced by men retiring naturally and not needing to be replaced, and with others being retrained in more modern mills. This happened in Yorkshire under the Labour Government.
The indictment against the Government is clear and definite. They are entirely responsible for the dangerous developments which have occurred in the steel industry and they cannot get away from this by the sort of propagandist statements Ministers have made today.
When the Secretary of State for Trade and Industry was questioned earlier by some of my hon. Friends, I pointed out that the documents were there to prove how these changes had come about in recent months. At that point I heard the Secretary of State for Employment —who in many debates has shown himself not to be well informed of either the details of his own legislation or of other Government measures—shout "What documents?"
I must say what is essential for the outcome of this debate. When I said that the documents were there to prove this, the right hon. Gentle- man asked, "What documents?", whereupon my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) pointed out that the facts were to be seen from the discussions that had taken place between the Corporation and those who were interested in the subject.
It is clear that the right hon. Gentleman did not know what he was talking about when he shouted "What documents?". The Government are fraudulently misleading the country, are following irresponsible policies and creating an atmosphere in which they hope their proposals will seem more acceptable to their supporters and others. They intend to sell off some of the most profitable sections of the steel industry to private owners, thereby once again paying off their political debt to those who put money into their election machine. [Interruption.] We do not intend to mince words today. They will not get away with it. They are putting forward a policy which is directly detrimental to the steel industry and the people in it.
Lord Melchett and other members of the Board have assured many hon. Members of this House and, above all, those representing the men in the steel industry, at meetings with the Executive Council of B.I.S.A.K.T.A., among others, about the Corporation's point of view. At a meeting for hon. Members which I attended in a Committee Room upstairs, Lord Melchett's view was that he
… cannot conceive of a successful British steel industry in the future without the special steels divisions; that is, one confined only to the production of bulk steel.
In just the same way, one could not conceive of a steel industry in Japan or the United States that did not contain both.
The damage which will be done by the Government to the B.S.C. will be damage to British steel. Right hon. and hon. Gentlemen opposite do not like clear and frank language on these matters. But we shall prove that it is their responsibility. They are preparing a sell-out, and they should know that they will not he allowed to do it.
The hon. Member for Stoke-on-Trent, South (Mr. Ashley) should be thanked for bringing an air of humanity into what must be a very mechanical debate. The hon. Gentleman brought home the individual horror and personal problems of unemployment. It is easy for hon. Members to talk glibly and with mock amazement about the global figure of 815,000, or to say that we are discussing only 3·5 per cent. of the labour output. If a man or woman is out of work, he or she is not 3·5 per cent. workless. He or she does not go home 45 minutes early on a Friday afternoon or pick up a pay packet containing 3s. or 4s. less. He or she is totally out of work. We are discussing 815,000 individual tragedies of people totally out of work and knowing nothing other than the hopelessness and helplessness of unemployment.
At the same time, with respect to both sides of the House, the trade unions and the employers, British people do not give tuppence who is responsible for it. What the British people want to know and what the unemployed want to know is what the Government intend to do about it. Let us look forward, and not over our shoulders.
What the Government intend to do about it is a question which is being asked just as much in the two constituencies which make up West Cornwall as anywhere else in Britain. The people of West Cornwall are not interested in excuses. They do not want to know who is responsible. They have not the time to sit down and look for causes. They want to know whether the Government know what is going on and what they intend to do about it.
Alas, the evidence of this month is not reassuring. It might almost be referred to as "Black April". We have seen a shattering catalogue of events. On 1st April the Western Morning News quoted my hon. Friend the Under-Secretary of State for Employment, whom we are always delighted to see in Cornwall, as having said at Truro that Cornwall should not rely too heavily on the holiday industry, but should encourage diversification. We were delighted to be told by someone who had come all the way from London what we had been telling the Department for years. We felt that at last we had begun a dialogue, that London knew what we were thinking. For a few hours, we thought that the Government intended to encourage diversification in Cornwall, to get away from our reliance on tourism.
When I opened my post a couple of hours later, I found something rather different. There was a letter from the Department of the Environment saying that it had changed its mind about granting loan sanction to Penryn Town Council in connection with that vigorous council's successful attempts to bring a heavy industrial undertaking into an area greatly in need of alternative employment.
That was not the end of West Cornwall's black April. After all, this was only 1st April. Jumping three weeks, on 20th April, the very day that West Cornwall had a record unemployment total of 4,891, or 7.2 per cent., exactly 2 per cent. up on the bad figures of the previous year, the local employment committee received a circular from the Department of Employment suggesting that it should cut back on the frequency of its meetings. That was a very strange suggestion at a time when unemployment was rising. In effect, the Department was saying that the employment committee should not hold meetings so often in order to get to grips with problems arising day by day.
West Cornwall will not be fobbed off by these strange procedures. We want to know here and now exactly what is to be done for West Cornwall. As Cornish people, we are always helpful, and we offer the Department a few constructive suggestions of ways in which it might help us.
First, the Department of Employment must, by its own actions, disprove the local belief that it regards unemployed men and women in West Cornwall as having less right to job creation than the unemployed of Ulster, the North-East, and Scotland.
Secondly, there must be a reappraisal of encouragement incentives to attract office undertakings into areas such as Cornwall, to offset the depressing prospects of low immediate industrial growth and of surpluses in non-manual unemployed resources.
Thirdly, the Department must provide early planning for accelerated population growth of a particular target size and for the provision of the necessary additional supporting services.
Fourthly, there must be a far better dissemination of information to industrialists and potential migrants of the expected movement of jobs and population as notice of these arises.
If the Government are to proceed with their policy of withdrawing grant inducements, it is their duty immediately to encourage the growth of manufacturing employment in West Cornwall by all the means at their disposal, including the immediate grant of special development area status.
At the same time, there must be a more vigorous drive than we have yet seen to raise the quality of housing. Remaining unfit accommodation, especially in the derelict and devastated former mining areas, must be cleared and rebuilt as a matter of urgency. Here I suggest consideration of the use of the unemployed as a direct labour force employed at the national rate applying to the building industry.
While West Cornwall derived great and positive benefit under the original Local Employment Act provisions, the increasing scheduling of neighbouring but less remote areas with development, intermediate or special area status has eroded and devalued Cornwall's industrial investment attractions.
As the basis for action and the ground work of development, and as a remedy for the financial and social burden created by unemployment, we want action and a special survey of our needs. We must hope for action first, because a survey will only further dissipate time and resources that we can ill afford.
I do not want in any way to lessen the condemnation of the Government which the hon. Member for Falmouth and Cam-borne (Mr. Mudd) has poured upon them. I am delighted to have heard the hon. Gentleman and to be able to be called immediately after him, seeing that the people of my nation have such a close relationship with the people of Cornwall.
I want to add to the complimentary remarks made about my hon. Friend the Member for Liverpool, Scotland (Mr. Marsden), whose maiden speech showed sympathy, concern and great consideration for the people whom he is proud to represent here. I remind the House that on one occasion such a maiden speech was made in this House on unemployment. On that occasion Mr. Aneurin Bevan castigated the predecessors of the party opposite for their callous disregard of people by the creation of the unemployment which so affected Wales in the 1930s. It is no pleasure for me tonight to refer to the fact that Wales today has the highest unemployment figure since 1940. This has again occurred under a Conservative Government.
It is known that I am a member of the largest union in the British steel industry —the British Iron and Steel and Kindred Trades Association. Therefore, it would be expected that I should represent the views and opinions of men and women in this industry which is finding itself sorely pressed indeed by redundancy and by unemployment.
Ministers continually try to advise the nation that the cause of rising unemployment is inflationary wage settlements. I should like to examine this so-called question of inflationary wage settlements in the steel industry which, it is claimed, has recently led the British Steel Corporation to make such vicious cuts in its labour force.
The last agreement between the British Steel Corporation and the Iron and Steel Trades Confederation, made some 18 months ago, gave process workers a minimum wage of £15·19 for a 40-hour week on work which I and many other hon. Members know to be among the most arduous and hazardous in any part of industry. But that increase of just over 4p per hour was offset by the steel workers relinquishing their monthly cost of living bonus. Since that agreement was signed, the cost of living index has increased by nearly 10 per cent., far in excess of the increase which was negotiated in 1969, thus reducing labour costs for the B.S.C. over the last 18 months compared with what they might have been if the steel workers had retained their cost of living sliding scale.
I want to emphasise this point for those who remain under the misapprehension that cruel wage inflation alone is responsible for higher unemployment. In the financial year 1967–68 production salaries and wages expenditure of the British Steel Corporation—I apologise that these figures are in £ s. d. and not new pence —amounted to 5s. 7d. in the pound, whereas raw material and fuel costs were 10s. 5d. in the pound.
In 1968–69 labour costs had fallen to 5s. 5d. in the pound, but fuel and raw materials had increased to 10s. 8d. in the pound. Unfortunately, there are no later figures. But it becomes apparent that this is continuing when one looks at a speech made by the managing director of the B.S.C.'s general sales division in February this year in which he pointed out that in the past two years the costs of iron ore and coal respectively went up two and a half and one and a half times faster than labour costs. I believe that that disposes of the myth, to which we are treated almost daily by Ministers, that wage inflation is the major cause of rising unemployment.
We have heard a great deal about the need for investment and about the increases in costs of the British Steel Corporation. I welcome the announcement made yesterday in the Welsh Grand Committee that the investment programme at the Llanwern steelworks is to proceed. This investment programme had been confirmed by the Labour Government, but this Government, on their accession to office, immediately put aside those investment plans. I ask, and the steel workers of Llanwern and Newport will ask, why they were put to the unnecessary anxiety and worry of having to wait until yesterday's announcement in the Welsh Grand Committee to know that they could proceed with their investment plans?
It has been suggested in certain quarters—I hope that this will be repudiated by the Secretary of State when he winds up the debate—that Britain should in future look to imports for its steel requirements. I suggest that this would indeed be a very foolish way to conduct our economy and would lead to further and greater unemployment. What is required in the steel industry is for the British Steel Corporation to be allowed to proceed unhindered with its investment programme and the revision of its prices structure so that we may have a modern steel industry capable of meeting Britain's needs for steel and ensuring our competitiveness in the world.
If we do not make these investments, all the talk which we have heard about large integrated steelworks will be no more than talk, because they will not be needed. Investment by the Steel Corporation in our steel industry is needed now. Steel workers have never feared the rationalisation of their industry. In fact, they entered into agreements with the British Steel Corporation which would have met the requirements of rationalisation. When they entered into these agreements they did so knowing that the Corporation intended that these redundant plants should be phased out, but that any hardship would be dealt with in a humane and sensible manner.
The Government will not be forgiven by the steelworkers, who are among the most responsible of people in any part of British industry, if, as a result of their behaviour and action, the industry is destroyed, the livelihoods of themselves and their families are destroyed, and they find themselves, having given a lifetime of responsible service, on the scrap heap.
I was hoping to take part in this debate as the only Member on this side of the House from Tees-side, or on the back benches on this side from the North-East, with the notable exception of my hon. Friend the Member for Tynemouth (Dame Irene Ward), but, alas, she and I are separated geographically by the whole of County Durham, and in terms of status we are separated, too.
I think it was a mistake to give the North-East still further special aid of this blanket kind. Help, yes, but should have expected a more selective approach from the Government—a return, rather, to the growth area policy. But, having done that, Tees-side should not have been singled out for exclusion at this moment in its economic fortunes.
I do not hold that special development area status, or any other status, will transform our prospects when the economy is not yet expanding, but I think the carrot effect of the financial incentives that we are given in the development areas is wildly over-estimated, in the same way as the stick effect—and here I refer to industrial development control—is underestimated
My hon. Friend the Member for Gravesend (Mr. Roger White) said that one does not strengthen the weak by weakening the strong. All the evidence in the North is that the one thing which has brought industry to us in the North-East is I.D.C. control. Of that I am positive. To get the thing in proportion, the first thing that industrialists want to know when they are considering investing in the area is the labour situation and what skills are available.
I agree with the Government's view that within the North-East the greatest future promise and potential lies in Teesside, but at this juncture we are in more difficulty than for eight years, since 1963. In that year there were nearly 12,000 unemployed on Tees-side. Today we are approaching 10,000, and with the prospect of further redundancies in the steel industry we are moving from 5 per cent. unemployment to the Northern Region average of 5½ per cent.
I was particularly sorry that in an otherwise sensible enough speech the hon. Member for Stockton-on-Tees (Mr. William Rodgers) put in a bit of partisan nonsense about the Government following a deliberate policy of unemployment. I know the hon. Gentleman is not so foolish as to believe that himself, and he cannot expect us to do so, either.
Mention has been made, in particular by the hon. Member for Penistone (Mr. John Mendelson), of Government policy and pressures affecting the development programme and rationalisation of the British Steel Corporation. In the North-East the situation is that the melting shop closures scheduled for 1971–72 have been brought forward by some months, but it was stressed when these closures were first anticipated and announced between 1968 and 1970 that the actual dates for closure were subject to revision, depending on the demand for steel at the time. It follows that if the overall demand is less than planned for, the new plant overtakes output from the old plant earlier than it otherwise would. That is what has happened in Tees-side, and the North-East at least, and it is rubbish to connect in any way the rationalisation programme with the pricing policy or any Government pressure.
As for the statement by the hon. Member for Ebbw Vale (Mr. Michael Foot) at the weekend that contraction and expansion in the industry must take place together, side by side, everyone on Tees- side, at any rate, knows that to coincide these exactly is totally impracticable. The total capacity in South Tees-side is due to double to 5 million tons a year, and what we now need is the Minister's decision—which I was disappointed to hear will not be made for six months—on whether we are to have the brown field development at Redcar, which will double our capacity agan in Tees-side. Without this double capacity of 10 million tons, we shall be faced with an appreciably greater shrinkage in employment in the steel industry than we shall have otherwise.
This debate must be as much about inflation as about unemployment, because my right hon. Friend the Chancellor said this week that if wage inflation continues at the present rate he can hold out no hope for a halt in the rise of unemployment. If the Opposition have any policy, it is, or has been, to extol every wage demand, however preposterous, unjustifiable and damaging. If we have a policy, and it is in the private sector that it has to bite, it relies largely on exhortation, and ever since the Cohen Commission was set up in 1957 to pronounce on incomes and prices, exhortation, from whatever quarter, has been too little or no avail.
The Government may be right. I hope they are. They are not seen to be effective. I believe that the unions cannot voluntarily do something contrary to that which it is the purpose of their existence to do, which is to preserve and improve the relative wage levels of their members. I do not believe that they can be exhorted to act differently from the way in which they have always acted, or to put the interests of the community first.
Nor do I believe that management can be toughened by exhortation, and we seem to have examples daily to prove it. Managements very often simply cannot afford to shut down plants, and, therefore, to listen to exhortation. But if, as we in the North-East would wish, the economy is to be expanded as fast as the Government can get it expanded, we have to curb inflation and thereby avoid running into further balance of payments troubles. We do not want to go back to the old levels of unemployment in the North or, for that matter, another futile wage freeze.
The Government have been radical in many directions already, and I ask them to be a little more radical in setting about our basic aim, which must be to stop the erosion of the currency. On the achievement of this, we stand or fall. There is scope, I think, for a new initiative.
Of the many alternatives which have been tried and have failed, I would rather that the Government seriously considered the sort of initiative proposed the other day by Lord Beeching, the idea of a permanent tribunal with industry-wide jurisdiction over income changes and changes in wage comparability, before which unions or employers would have to argue their case before relative pay levels were changed. This tribunal would work with clearly set out criteria on which to decide comparability, and within the framework of a total and possible increase in wages matching an estimated increase in production. It may sound bureaucratic, but it is more logical than the piecemeal bargaining which does damage to everyone out of all proportion to the increase in real earnings which it offers anyone. It is also radical, and such a radical approach is better than any of the alternatives.
It is a tragic irony that this debate should be taking place at almost exactly the same time as the Royal Economics Society has chosen to publish the first four volumes of Keynes's Collected Works. Since we face the dissolution of the British economy today, no one—. certainly no Liberal—can refrain from saying, "I wish to God he were here now." When I hear one of the new generation of Conservative thinkers, the hon. Member for Bridgwater (Mr. Tom King) talking about the coming labour surplus, I reach for all the volumes of Keynes and want to throw them at him.
No one on the Labour benches would suggest, and no one has suggested, that unemployment did not rise under the Labour Government. We know that it did and to my way of thinking that is the true dimension of our problem. In 1964, we had a Government who were committed heart and soul above all things to two things—economic growth and high employment. They achieved 2 per cent. growth and rising unemployment.
In the South-West Region, for instance, they actually doubled the number of men unemployed in six years and from about 1966 onwards, we had a British Government who squeezed the economy to make devaluation unnecessary. This did not work, so from 1967–68 onwards, we had a British Government who squeezed the economy so as to make devaluation work. This did not work either, so, without even a break for coffee in between, they moved into what we now see carried on by the present Government, a squeeze to make the next devaluation unnecessary. Is it too cynical to ask, on exactly what date shall we move again, without a break for coffee, into the next squeeze to make the next devaluation work? That is the story of our times, and it is a tragic story indeed.
Is it surprising that I suggested at Question Time on 19th April to the Minister of State, Department of Employment and Productivity, that the present high level of unemployment was a direct consequence of the Government pursuing the last Government's policy to its logical conclusion? I gather from Mr. Norman Shrapnel in The Guardian that hon. Members on both sides thought this a whimsical idea, but I believe that it is the reason for this high level of unemployment.
The Government say, as they have said today, that unemployment is too high and that they do not wish to make unemployment an instrument of policy. We had a specific denial of this today, but nevertheless, they admit and the Chancellor admitted yesterday that we have now two features—inflation and unemployment combined in intensity and scale as never before in our history.
They are committed to beating both unemployment and inflation, yet both have now together reached a level which is more appropriate to a banana republic. The Government held out no hope today that unemployment would fall. They have steadfastly refused to forecast what the unemployment figures will be in six months or a year. We have desperate inflation, and their policy is de-escalation of wage claims. It is not working.
One has only to quote the Economist of 24th April:
It has thus become impossible to say with honesty that the Government's anti-inflation policy is succeeding. When Ministers go on pretending that it is succeeding they are trying to fool the public and may succeed in fooling themselves.
Perhaps that is what they have succeeded in doing.
The Government's policy, if I understand it, is that unemployment is caused by rising wages. It is possibly true that in some cases business men are shedding labour because it is too expensive. However, it is not proven and could be argued the other way, namely, that increased purchasing power as a result of higher wages ought to create higher consumer demand and might cancel out. Almost certainly the whole question of employment is tied up with confidence and with the assessment of profitable demand in the future. Confidence is largely psychological. We used to believe that the Tory Party had some mystical tie-up with the business community, but this has now proved to be a myth.
Supposing that unemployment is partly due to rising wages, what are the Government to do about it? The Economist has said that the Government's policy is not succeeding. It is no good Government Ministers coming to the House, as the Prime Minister does every Tuesday and Thursday, and talking about de-escalation of wage claims. They are not de-escalating. They are certainly not doing so sufficiently. If the Prime Minister can detect any de-escalation, he must be using a very powerful microscope.
The Government cannot run away from the fact that, if they are to solve the problem of unemployment, they must settle for an incomes policy. Of course we shall do this in due course, but before we get round to it we will waste time, jobs and an enormous quantity of national production. I do not accept that the Government should involve themselves in day-to-day bargaining but pay, as a whole, is by far the biggest item of income expenditure and cost of production. It is so important that no modern Government can ignore it or fail to have a policy for it.
The Government can create a climate in which inflated pay increases are made difficult and possibly useless. They can control money supply, they can create bankruptcies and create unemployment, but at what level do unemployment and a level of bankruptcies ensure that wages do not go on rising? The Government also can act directly, perhaps by imposing a wage freeze. The earliest suggestion of this was made by Professor Michael Fogarty, Director of Economic and Social Research Institute, Dublin, and there was a follow-up by Professor Weintraub in the Lloyds Bank Review in January. The Economist has come out with a suggestion of taxing social security contributions to ensure that wages are kept down to a level which national production can justify. But if there is to be intervention, and I believe that there has to be in an incomes policy, this is the best way of doing it.
I should like to deal with the problems of unemployment, particularly as it relates to the South-West of England. For every male unemployed in April, 1964, there were 1·92 males unemployed by April, 1971—nearly double. In the South-West Region as a whole, for every male unemployed in April, 1964, there were 2·45 males unemployed in April, 1971. By roughly comparing these figures with development area incentives, we can see that since 1964 male unemployment has multiplied 1·92 times as against 2·45 times for the whole of the South-West Region. To put it another way, if there had been no development area incentives at all, the number of males unemployed in this part of the development area in the South-West might have been 9,100 instead of 7,100—in other words, 2,000 additional male jobs in an area where the male insured population is between 80,000 and 90,000.
Was this worth all the effort which has been put into it? Apparently the Government do not think so. This is why they have destroyed a large part of the system of development area incentives. That is why they are doing nothing to encourage new industry to come to Cornwall and Devon, which is a development area. Regional development is all a matter of investment, and investment is very much a matter of confidence. But the Government, by their policy of economic stagnation, have destroyed the will to invest anywhere, let alone in development areas. By their lack of firm constructive policies, they have made it almost impossible to attract new industries to the development areas. They do not have to take it from me, as a member of the Opposition. They can take it straight from the hon. Member for Falmouth and Camborne (Mr. Mudd), who is on their side.
Since June of last year the supply of new industry has virtually dried up and that is entirely the Government's fault. They have no clear policy. Worse still, instead of a policy, from the more junior members of the right hon. Gentleman's Department, some of the wild men of the Right who inhabit his offices, we have had a series of wild and irresponsible statements about the Government's attitude to development areas. Those statements have created the impression that the Government are no longer interested in regional development. That is the impression that we have in Devon and Cornwall.
At the election the Conservative Party made a great deal about value for money in their incentives. They wanted to create new jobs, but to create them with the minimum amount of money. How much money have they spent and what has the effect been? Do they believe that it has been cost-effective? They have spent some money, but it has had no effect. They have spent far too little.
On the policies announced in the White Paper on Government expenditure, there are cuts all along the line. Between 1969–70 and 1974–75 there is a reduction of grants for the promotion of local employment—these will actually increase by £25 million but, at the same time, the Regional Employment Premium will fall by £37 million, and we shall lose £12 million that way. Investment grants will also fall. They are to be replaced by tax allowances. Does the right hon. Gentleman realise that in the Common Market—which both he and I are in favour of Britain joining—the Commission produced a report last week on regional development which recommends that all the countries of the Common Market should go over to investment grants rather than investment allowances, because they are a much more effective encouragement to regional development?
So far, the Government have effectively managed to ruin the economy of the South-West. In the four years between 1966 and the election in 1970—after which I was a Member of Parliament for Cornwall, North for the first time—the South-West attracted no fewer than 27 new factories. In the following four years we could have attracted another 27 factories if this policy continued. But since June of last year not one new factory has been set up. One factory has closed, and we have been unable to replace it since August of last year.
There is no confidence to invest on the part of businessmen. We want to know whether the Government consider that the far South-West is important to the British economy and whether they think that Cornwall has a right to be a complete community—with all-year-round Jobs, not jobs just for the summer, and with varied prospects—or whether their attitude to the unemployed in the far South-West is the modern equivalent of "Let them eat cake", or "Let them move".
I propose not to mention the special problems of the Midlands but to deal with a more general problem stretching across the British Isles, a problem which has had only an occasional mention. That is the problem of unemployment among executives and managers, who number about 80,000 people, approximately 10 per cent. of the total of those unemployed today. The problem for them is as severe as, and sometimes more severe than it is for manual workers. Their jobs are often more at risk than those of people working in a more routine capacity. The old saying "The nearer the top, the nearer the gate" has never been so true as now.
Industry and commerce are bound to involve risk because the essence of business is risk. That is why salaries are generally higher than those in the public sector and in other non-risk jobs, and rightly so.
These facts were well understood before the war, but in the period of postwar booms they tended to be forgotten. After the war firms vied with one another to emphasise in their staff recruitment brochures the long-term careers which they could offer. Nowadays it is generally agreed that these claims could be false and misleading.
There are, for instance, a number of factors which may cause an executive to lose his job. His boss may not take to him. His face may not fit. The firm may be taken over, or bad trading may lead to his redundancy.
The position is not so bad for an executive under 40, because nowadays there is so much more movement between firms among younger executives than there used to be. However, for men over 40, particularly over 45, in the executive or managerial range the position gets much more difficult, and for the over-50s it is almost hopeless. If an executive has some savings, he may be able to open a shop or start some other modest venture, or he may decide, as many now do, to go abroad and live in a cheaper country. Whatever he does, he is usually in a profound state of shock. So is his wife, who soon begins to wonder where next week's housekeeping is coming from.
This is an appalling waste of experienced men. It is difficult to suggest many remedies. Senior men will have to be prepared to take lower salaries in their next jobs and also to consider jobs right outside industry and commerce. To take a few examples, the technical colleges, which have been expanding so rapidly in recent years, are still short of staff and would greatly value trained men of experience from industry with a good technical background. Teachers are also in great demand in schools, and mature men and women can be trained to become good teachers. Lastly, in all the churches there is a tremendous shortage of clergy for those few who have the necessary sense of vocation.
To start at the beginning, graduates and others leaving university should be made to realise that industry and commerce are suitable for careers only for those who have the temperament for them and that there are high rewards but high risks as well. Those who are not prepared to accept these risks can opt for lower-paid but more secure jobs. This year, for the first time for many years, a large number of graduates may not be able to choose their jobs or even find a job immediately at all. Possibly conditions for graduates were too easy and too lush in the 1950s and 1960s. There is no complacency now among young men and women leaving the universities.
As people grow older in firms they age at differing periods. Industry and commerce require people of unremitting energy, and those whose energy flags or whose intellectual equipment begins to fail as business grows more complex may well find themselves declared redundant or have to face earlier retirement. That is one of the inevitable risks of the game.
British companies are reducing their staffs and labour forces today to reduce costs, costs which have increased not only because of over-large wage awards but also because of another underlying factor. For years, certainly since 1946, British industry as a whole has been overstaffed, not only on the factory floor but in the office as well. The big firms were particularly prone to this. The growth, for instance, of specialist staffs at large headquarters remote from both the factory and the sales force has been a feature of recent years, as has been the over-elaboration of computer services, and all that went with it. Hard and painful, therefore, as the present pruning is, resulting, as I know from personal experience, in many heart-breaking cases, I am sure that what is happening now had to take place in order to make our companies, particularly our larger companies, fitter, slimmer, and more able to face the rigours of foreign competition.
But I cannot see the present trend lasting for more than six months or so. Already the Stock Exchange, which always looks well ahead, is turning upward, and I am sure that a general upturn in business will soon follow. When it does, British industry and commerce will be in a far stronger position in every way, and will be able to take up some of the slack which the present unemployment has caused.
It is perhaps understandable that in a debate on unemployment at this time the problems of the British steel industry and the announced redundancy should emerge as a major factor. I have been impressed by the contributions that have been made from both sides of the Chamber. In many cases they have been informed and impressive.
The one exception was the speech made by the hon. Member for Stretford (Mr. Churchill). My hon. Friend the Member for Penistone (Mr. John Mendelson), in his characteristically kindly manner, attributed innocence to the hon. Member, but I feel that the hon. Member made the most irresponsible speech to which I have listened for many a day. In connection with the announced redundancies affecting the Irlam plant of the British Steel Corporation he held out the hope of alternative employment, but did so without being able to produce any evidence to support that hope. Then he blandly shrugged it all aside and said that he did not want to encourage hope. If there is hope of alternative employment at the Irlam steel plant, I hope that the right hon. Gentleman the Secretary of State will give names and details of those consortia which have made offers of alternative employment opportunities in that area.
The hon. Member for Stretford went on to charge a Labour Government with withholding I.D.C.s in the greater Manchester area. One fact that must have been known to him, but which he did not emphasise, was that during the whole period of a Labour Government unemployment in Manchester was running at a level of 2½ per cent. Would he have had a Labour Government put additional job opportunities in an area where the unemployment level was so low while there were other areas which were experiencing unemployment percentages of 5, 7, 9 and 12 per cent.? So much for the hon. Member's charge that a Labour Government had no concern for the employment prospects of the Greater Manchester area.
Rationalisation, redundancy, unemployment—call it what one will—is no stranger to the constituency which I have the privilege to represent. In Failsworth and Newton Heath they experienced it at first hand, and my constituents suffered from what was euphemistically called the contraction of the cotton industry. Contraction?—it was the decimation of people's jobs. And if they had needed any fact of life to disperse any illusions they may have held, they saw the one remaining Bradford Manchester Colliery closed in recent years, with the consequent further loss of job opportunities.
It was against that background that, just a few weeks ago, the British Steel Corporation made its announcement that its plant at Openshaw would close, leaving another 600 men scrambling for jobs.
The only argument we have had from the Government is that unemployment is attributable to what they term wage-cost inflation, that inflationary wage claims bring unemployment. It sounds a convincing enough argument, and so it seemed to the audience whom I saw the Prime Minister addressing some time ago. No sooner had the Prime Minister given voice to the thought than it was echoed by the Chancellor of the Exchequer, and then, after he had given his authority to the theory, we had the noble Lord the "Lord Bellringer" himself lending his not inconsiderable talents to give credence to the same illusion.
When we examine it, we see that it is an illusion. It is fallacious and wrong to argue that inflationary wage claims inevitably bring unemployment. In fact, the reverse is true. I did an analysis of those who had succeeded in achieving and receiving the largest wage and salary increases during recent months to see whether there was unemployment or redundancy among these groups. A survey published by the Bar Association of Commerce, Finance and Industry in November, 1970, showed that barristers' salaries had risen by 44 per cent. in three years. There is no redundancy there; there is no fear among barristers of the dire threat that their future is in jeopardy. A survey of the salaries of over 60 company chairmen between the General Election and November, 1970, showed increases averaging 30 per cent. Where is the queue of company chairmen worried at the prospect of redundancy? Where is the unemployment problem among chairmen caused by inflationary wage settlements?
Although the theory may sound convincing, it has no validity whatever. For doctors, there have been increases of 20 to 30 per cent., for army officers up to 34 per cent., for the higher judiciary 25 per cent., and the car workers at Ford and Chrysler have all had what some people, and certainly Conservative Members of Parliament, may well regard as inflationary wage settlements. Their security of tenure, their employment prospects, seem far more secure than those of the steel workers in Openshaw.
Six hundred steel workers at Openshaw have now been given notice that they are to lose their jobs. One could not find a more reasonable, more industrially pacific group of workers in the nation. When they were encouraged by the management to co-operate in rationalisation procedures, they gave their wholehearted support. They accepted schemes which brought about a reduction in pay of £2.50 a week in order to demonstrate their earnest in ensuring that the plant would have a continued life. They accepted improved procedures for the operation of the furnaces. They even accepted one-man manning of the steel furnaces. Despite this degree of co-operation, they are faced with redundancy and unemployment.
It may be thought that they will have the opportunity of alternative employment. I have consulted local officials of the Department of Employment in Openshaw. They say that at present in Openshaw 1,100 fit, able and eager men are seeking employment. The current vacancies total 35. When these additional 600 redundancies come about, 1,700 men in Openshaw will be scrambling for 35 vacancies. My hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) talked about the distress and despair which unemployment brings and about the demoralising effect that it has on decent working men. That is the only future which the Government can hold out to my constituents, and it just is not good enough.
My first task is the pleasant one of congratulating my hon. Friend the Member for Liverpool, Scotland (Mr. Marsden) on an excellent maiden speech. I think he is rather unique in this House. The Scotland division of Liverpool has had only four Members of Parliament for the better part of a century. First came T. P. O'Connor and then David Logan. I remember David Logan making speeches in this House when he was over the age of 90. Then came Walter Aldritt. I am sure my hon. Friend the new Member for Liverpool, Scotland, with his background of being Liverpool-born and knowing his people as he does, will get the loyalty from them that seems to be traditional between the electors of the Scotland division and their Members of Parliament. We look forward to hearing him again.
This has been a quiet and serious debate. It has differed to a certain extent from other debates on unemployment in recent years. We were not being told about the difficulties of Manchester or of Gravesend in those earlier debates. One of the features of the present unemployment situation is that it is not the same as in the past. It is not the same as it was in January or April, 1970, when the right hon. Gentleman mounted an attack on the Labour Government. Then unemployment was running at the rate of 613,000. That was when he and his hon. Friend the Under-Secretary were telling us that it was bordering on the unacceptable. The right hon. Gentleman was saying, "We want plain words and plain facts. What is it to be in future?" He has an opportunity of answering that question, put by me, tonight.
We heard from the Secretary of State for Trade and Industry a rather turgid lecture. I think he thought he was addressing some junior chamber of commerce on the subject of employment. He has been here for a few months; my hon. Friends have been here for years and have been concerned about this problem for many years. It is not quite so simple as he seems to suggest. He should give us credit for a certain amount of experience, knowledge and intelligence.
We have not seen the hon. Member all day, although we have tried to let as many hon. Members speak as was possible.
It is wrong for the right hon. Gentleman or anyone else to imagine that we attribute hard-heartedness to them. The hon. Member for Manchester, Withington (Sir R. Cary) was correct; we all feel terrible about this. I was faced with the same feelings and concerns when I saw unemployment rising in Scotland. I said that if ever it went over 100,000 I would give up. I am glad to say that in all those years it did not, but it is now. I will come to some of the things we did at the time to ensure that everything was done to kep unemployment down.
The central point is not the employment but the policy, of which the Government argue that unemployment is a consequence. They say that they must keep on with their policy. We want to know for how long. I am not arguing whether that policy is right or wrong but simply asking how long they are to keep on with it when they must appreciate that unemployment is rising month by month against the seasonal trends, against what was happening at this time last year.
From January to June last year unemployment was falling in the United Kingdom. There was, as there always is, a seasonal increase in the July because of the school-leavers, particularly in Scotland. Since that time in Scotland in every month without any exception, it has risen. In England and Wales it has gone up every month, with the exception, I think, of October, when there was a drop of about 200 or 300. We are not at the end of the road yet. It has risen not only in the traditional areas but all over the country. We get worried about it. But we are so used to the worry that I think we flap less than people in other areas who suddenly discover unemployment.
We are right to be concerned, because unemployment in East Anglia has gone up from 2·3 per cent. last year to 3·3 per cent. this year. The hon. Member for Falmouth and Camborne (Mr. Mudd) spoke forcibly and in a forthright way about the position in the South-West. He said how he felt he had been let down by his Government and mentioned the rise from 2·9 per cent. to 3·5 per cent. In Scotland it rose from 4·1 to 5·7 per cent. I am glad that the hon. Member for Dumfries (Mr. Monro) is present; he is aware of the male unemployment rate in Sanquhar—over 17 per cent.
This is why we have been trying desperately for weeks to see the right hon. Gentleman the Secretary of State, but he is very elusive.
Is not the right hon. Gentleman aware that I was very anxious to meet all the hon. Members who asked to meet me and gave them the opportunity but not one hon. Member opposite turned up?
My hon. Friends wanted to see Lord Melchett on his own and they wanted to see the right hon. Gentleman on his own. [HON. MEMBERS: "Why?"] I do not represent a steel constituency, but I am the spokesman in the House for the Scottish Labour Members, and they are very concerned about the situation from the Scottish point of view. We shall not be fobbed off with the kind of meeting which the right hon. Gentleman seems to think we would attend. [HON. MEMBERS: "What is wrong with it?"] Hon. Members opposite should appreciate that there are certain customs and formulas which we follow in the House.
My right hon. Friend the Member for Newton (Mr. Frederick Lee), the hon. Members for Withington and Stretford (Mr. Churchill) and my hon. Friends the Members for Newport (Mr. Roy Hughes) and Penistone (Mr. John Mendelson) have voiced their concern about the situation in the steel industry and the announcement without any warning that there will be between 7,000 and 8,000 redundancies.
The Secretary of State for Trade and Industry suggested that we were a little unfair to him in suggesting that the closure programme was being brought forward. That was dealt with by my right hon. Friend the Member for Newton. If the right hon. Gentleman looks at HANSARD for January last year he will see a Question asked by an hon. Member who is now a junior Minister in his Department to which the reply was that the British Steel Corporation did not envisage any major closure in the medium term. There is no doubt that there has been an advancement of the Corporation's closure programme. The right hon. Gentleman says that he is looking at the development programme and that he will also look again at the long-term development of investment plans. Crazy, is it not? The Government know exactly what to close down but they do not know what they are going to do.
In Lanarkshire and North Lanarkshire, where there is already very high unemployment—over 7 per cent.—and the male rate is very much higher, people are concerned about the steel industry, which is the heart of industry in Lanarkshire. An announcement was made by the Steel Corporation about development at
Ravenscraig. My hon. Friend the Member for Bothwell (Mr. James Hamilton) received a letter for Lord Melchett which said:
The Corporation announced in January, 1970, its plans for increasing the production from Ravenscraig works. Orders have been placed for preliminary work associated with the main scheme and the project is under detailed study. Following the steel industry debate in the House on 18th March you will appreciate that the future programme for Ravenscraig will now, of course, form part of the discussions …".
This is my concern. This is our concern. Fears have been expressed in respect of Wales. We are surprised that the Secretary of State for Scotland could not make a similar announcement in respect of Ravenscraig. Our worries in Scotland go beyond that, right to the question of the future of the whole steel industry.
The hon. Member for Stretford seemed to think that this was all the responsibility of nationalisation. He should have read the reports produced by the private sector about the future of the steel industry. He should have asked why there was not a tremendous row when the Labour Government nationalised the industry. He should find out what happened when we were campaigning for a steel strip mill in Lanarkshire. Sir Andrew McCance said that he was not interested, because he could hardly raise the finance for what he wanted to do. That would be the trouble with private enterprise, in relation to the colossal expenditure involved if we are to keep up with Continental and Japanese steel producers.
It is suggested, "Never mind if the Steel Corporation has not got the money and the Government will not give it the money. We will get the Germans or the Japanese to take over this basic task in Britain. It is time we folded up". What kind of reputation is this, when people are confessing that we cannot undertake the basic task that is required in the steel industry?
My hon. Friend the Member for Stoke-on-Trent (Mr. Ashley) was right to introduce the personal aspect of unemployment. It was an hon. Member opposite who reminded us that if only one man is unemployed he is 100 per cent. unemployed. We have to remember the effect on his home and his family. It is not just a question of his not being able to pay his way or to have to do without. I spoke to a young man on Sunday. He was a designer. He said, "I am nearly broke. I have been unemployed for over six months, but I will not declare to the world that I cannot keep my family. I do not want to go to get social security". There is a great blow to the dignity of a person in a situation like that.
I shall not weary the House with all the figures, although I have them if anybody wants to challenge me on them. The number of wholly unemployed compared with June last year increased by 200,000. There was a time when we were shocked at that total, but that is now merely the increase. It is also fair to say that unemployment is lasting longer for more people. We are told by the right hon. Gentleman, "It is all right. Our policies are working". But hon. Members opposite are the only people who think that they are working. They say "We shall keep on with them". That will mean more unemployment. There will be less chance of people getting jobs. Are they to wait two or three years?
I should like the Prime Minister to make a tour of the places in which he spoke during the General Election. I would like him to go back to Cardiff—he was going to reduce not merely prices but unemployment at a stroke—and tell them how and why the unemployment rate which was then 2·7 per cent. has now risen to 3·6 per cent. Let him write a personal letter to the 25,000 unemployed in Newcastle. Let him go to Portsmouth or Newcastle and the Tyneside area. During the General Election campaign unemployment there was high enough—4·9 per cent.—now it is 6·3 per cent. and there are nearly 25,000 unemployed. Let him go to Leeds. At the time the unemployment was 2·2 per cent. They never knew that unemployment existed. It is now 3·2 per cent. The figure for Bradford was 2·3 per cent. and it is now 4·5 per cent. Glasgow had a rate of 4·6 per cent. and it is now 6·6 per cent., with more to come.
All this is unfair, particularly when we hear people talking about honest government and the rest of it. An apology is due.
Let us remember that at the time of the General Election it was not just a question of wages. We were informed that the Conservatives were anxious about prices as well: but promises of that sort were not new to Scotland. Why do hon. Gentlemen think only two Tories have been returned from Glasgow? We have been through all this before.
The Secretary of State for Trade and Industry will become almost as bad as the Secretary of State for Scotland if he goes on in the way he has been going on. The facts are clear. The unemployment figures are increasing, and the Government have no policy, have declared that they have no policy and have no intention of doing anything to bring unemployment down.
I am reminded of an epigram which was applied to a former resident of Dove House, which was at one time the home of a Prime Minister:
Promise, pledge, pause, then postpone.
And end by leaving things alone,
So they earn the nation's pay,
By doing nothing every day.
This is happening under the Conservatives now. I am obliged to the hon. Member for Gillingham (Mr. Burden) for his brief intervention, but we would have welcomed his presence during the debate.
When attacking regional policy, the Secretary of State for Trade and Industry said that all the regional incentives and industries that went into the areas where they were needed under our regional policy were the types of company which would be blown about by the first breeze of adversity. I trust the right hon. Gentleman will look into this, note the names of the companies about which he was speaking and let us know whether he really meant that. These firms have been declaring redundancies in Scotland. The figure for March was over 6,500. In the last nine months 34,200 redundancies have been declared. Would the right hon. Gentleman consider firms like Plessey of Bathgate, which has declared 300 workers redundant, Burroughs Adding Machines and Weir Westgarth of Troon to be frail and feeble organisations? That is what the right hon. Gentleman implied.
Really! The right hon. Gentleman said that the kind of industries we got under our regional policies were those which would fade away with the first breath of adversity. The trouble with the right hon. Gentleman is that he does not know what he says.
I am not concerned about when, for example, Burroughs went to Scotland. The firm went there under regional policies which have been developed by both parties, and firms like Burroughs have been expanding. Apart from its factory at Cumbernauld, the firm has expanded into Glenrothes, and that expansion occurred under a Labour Government.
I am deeply perturbed at the lack of evidence to show that the Government have any new policies at all. It seems that they are not prepared to take action irrespective of the heights attained by the unemployment figures.
For how long are the unemployed expected to wait? It was all going to happen quickly at the time of the General Election. Industrial relations were to be improved. Have they been improved? I warn the Government that one cannot make war and then hope for peace—[Interruption.]—that one must not declare war on the workers in the way the Government have done. Starting with a mini-Budget is not the way.
Only now are people beginning to realise what 4s. per item per prescription means. Only now are they realising what the increase in the cost of school meals means, because it started only recently. The Daily Record conducted a run-down of Scottish local authorities and found that 50,000 fewer children are now taking school meals. That is what is happening. It is a direct attack on the social wage. It is a direct attack upon the people with whom the Secretary of State for Employment hopes to establish cordial relations. That will have to be done some time.
The present policies are not working. If the Government continue with them, it will mean that unemployment has become part and parcel of their policies. Commentator after commentator has told the Government that their policies are not working, that they are wrong, and that they should be changed. The Chancellor of the Exchequer and the Prime Minister do their Nelson act, with the telescope at the eye which does not see. In the days of Mr. Macmillan, it used to be the gleam at the end of the tunnel—
Yes, and the right hon. Gentleman very quickly got to the end of the road.
Have right hon. and hon. Gentlemen been reading the papers in the last few weeks? The Daily Telegraph on 24th April said:
Thirty women were dismissed yesterday at ֵ Blackburn, West Lothian … A total of 160 employees are to lose their jobs. Redundancy was also announced yesterday by Burroughs Business Machines at Cumbernauld, Dunbartonshire, for 120 employees. In February, 500 workers were dismissed.
On the same day, the Daily Telegraph told us:
A clear warning of more trouble is that the Reyrolle switchgear concern is to make redundant about 12 per cent. of its Tyneside labour force, witth 900 jobs to end in the next few months.
This is still to come.
It does not say that at all.
A major blow … has been the decision of the Central Electricity Generating Board to postpone ordering the f250 million Sizewell B nuclear power station.
So it goes on. At the same time, we have a report in Business Observer of the following day:
Machine tools cutting back … The home market is in a dreadful state with orders running at nearly 20 per cent. less than last year. Exports are just as bad.
So Alfred Herbert cut its labour force by 1,000.
Engineering orders fall 11 per cent. in three months.
This is the success of the Government's policy. This is the indication of whether they are succeeding. They cannot laugh it off.
The hon. Member for Belfast, East (Mr. McMaster) spoke about the loss of jobs at Shorts, and he knows what will happen at Harland and Wolff.
Shipyards face £20 million loss.
The responsibility must rest with the Government. After all, they have been in office nearly a year. They cannot rely on alibis much longer.
Then we get the C.B.I. chief. This was a bright feature of the weekend. Mr. Partridge said:
Brighter business hopes.
Let us examine that statement.
We have grounds for hope of a gathering revival in business confidence.
Here are the conditions:
If we can get on top of cost inflation …".
That is the whole problem. We are not on top of it, and we are not likely to get on top of it, judging from the way that the Government are going.
and gradually ease the brakes on demand…".
That is what we have been asking. When will the Government do it? Are they willing to do it? Can they afford to do it? We have pointed out that they were never in a stronger position to do it because of the balance of payments, but they have not done it yet.
The Daily Telegraph said that
a contracting industrial and economic future",
was before us.
The third priority was the need to reinforce the motivation of competition, the reward of enterprise, and to restrict the stultifying influence of Governmental intervention.
Had it not been for the Government's intervention the outlook on the Clyde, Tyneside, Belfast, and elsewhere, would have been much better. The hon. Member for Belfast, East should be asking for even more.
Every piece of news which has come in the past week has been bad.
Who are the people who are suffering'? The people who are suffering are those who were promised that they would be part of one nation. We have over 800,000 unemployed. A great proportion of that number have been unemployed for a considerable time.
No hope has been given by anything which has been said today by the right hon. Gentleman. He has the admirable reputation of creating uncertainty and probably of creating more lame ducks than we have ever known in industry.
Nationalisation has been touched on. The dogmas of right hon. and hon. Gentlemen opposite relate to anti-nationalisation. But when it comes to the point they have to intervene, although no Government in the world has been so opposed to intervention as this one. [Interruption.] The right hon. Gentleman should tell his hon. Friends to keep quiet. What are they doing now? I hope that the right hon. Gentleman will pay some attention to what is happening.
These are the dilemmas which we get. We can have a stock market which is buoyant and booming but at the same time is prepared to accept 1 million unemployed.
It is worth reading.
We shall be in the paradoxical position when there are more than a million unemployed at the same time as some knowing chaps are making small, or not so small, fortunes in a Stock Exchange boom. It has happened before. It can happen again and it looks as though it is going to happen now. So, if we are all concerned only with our personal stake, we should clearly be planning our next speculative investment and not caring a damn about the unemployed. Let the rabble rot.
This is The Financial and Business Scotsman columnist, not a member of the Labour Party.
That sounds like an old, bad joke, but it appears that it is now the deliberate policy of the Government to let the unemployed total rise so that, in time, the pressure from the unions for increased wages will slacken and that the hungry will force down living standards.
We are back not to the Toryism which we know of recent days, but to pre-war Toryism. If right hon. and hon. Gentlemen persist in these policies, if they are prepared to see the unemployed figure rise month after month, I assure them
that nothing will have done more damage to the reputation of this country under this Government. They have already shown their incompetence. I trust that they will not further show their hardheartedness.
This has been an important debate, because unemployment is a serious subject for every person in this country, and it is right that we should have debated it.
May I first have the pleasure of congratulating the hon. Member for Liverpool, Scotland (Mr. Marsden) on his maiden speech. He impressed the House greatly by his sincerity and his knowledge of his constituency, and perhaps even more by being so short and yet so powerful and to the point. If the hon. Gentleman keeps up that form we shall all want to hear him often, and I should like, on behalf of the whole House, to wish him the longevity which his hon. predecessors have enjoyed.
Many hon. Members have made points which I cannot pick up, particularly since many referred to detailed though important matters which are the responsibility of my right hon. Friend the Secretary of State for Trade and Industry, but I assure them that the points made will be noted and studied.
Steel has been one of the main themes of the debate, and I can only say a few words about it. I should like, first, to say something about Ravenscraig, and to confirm categorically that the processing of this decision is with the British Steel Corporation, and has not been, and is not being, interfered with in any way by the Government.
For hon. Gentlemen opposite to shout, "Get on with the debate" is laying things on a bit too thick, even for them.
Irlam was another subject that was mentioned, particularly by my hon. Friends the Members for Manchester, Withington (Sir R. Cary) and Stretford (Mr. Churchill), and the right hon. Member for Newton (Mr. Frederick Lee). The right hon. Gentleman's suggestion that the British Steel Corporation could not have acted as it is doing on its own responsibility and initiative is simply not true. This is the Corporation's responsibility and initiative, and I assure the right hon. Gentleman of that. I also assure both the right hon. Gentleman and my hon. Friends that consultation by the Corporation will be full and genuine. The debate will be a real one. I should particularly like to assure them about that, and to tell them that their views will be considered most carefully by my right hon. Friend and by the Corporation.
Some hon. Members, particularly the right hon. Member for Kilmarnock (Mr. Ross) and the hon. Member for Penistone (Mr. John Mendelson), suggested that the Corporation's rationalisation programme had deliberately been accelerated by Government action. That, too, is not true. What is true is that the precarious and deteriorating financial state of the Corporation which we found on taking office last summer, coupled with the repeated price increases which the Corporation sought, and the decline in the demand for steel led, by the very force and pressure of events, to the Corporation itself speeding up that action.
No, because the right hon. Member for Kilmarnock did not give way, and he took at least five minutes of my time.
I think that the right hon. Gentleman's argument might have had more gilt upon the gingerbread but for the one fact that he was Secretary of State for Scotland for six years until last summer. When he ceased to be Secretary of State, there were 40,000 fewer jobs in Scotland than when he started. When he ceased to be Secretary of State—
If anyone suggests that, in the 12 days between the election and the end of June, we could have done anything to alter that figure, we are open to suggestions.
I want to state categorically that the Government regard it as one of the most vital functions of Government to maintain a high and stable level of unemployment—
Did I make a mistake?—to maintain a high and stable level of employment—[Horn. MEMBERS: "Ah."] —as one of the vital functions of Government. Unemployment is not just a waste of resources, although it is that. It is a curse to the individual and his family. It means hardship in material terms, but it also means fear and demoralisation. I agree with the hon. Member for Stoke-on-Trent, South (Mr. Ashley)—
Reasonable security of work is the vital component in the security of life, without which freedom cannot be enjoyed. This Government are committed to the ultimate objective of a full employment economy, and it would be a lie to suggest that the Government are deliberately engineering increases—
—in the level of unemployment in order to bring about a reduction in the rate of incomes or for any other purpose.
I would say to the right hon. Member for Bristol, South-East (Mr. Benn) that the Cabinet do not see unemployment as a main instrument of economic policy. The party opposite should be a little chary of making charges of that kind, in view of the fact that, in their period of office, they allowed unemployment to double. That should not be forgotten.
The unemployment position today is serious. The present level is too high. It must be and it is one of our major national objects to lower the level of unemployment—
—and to keep it low. I want to stress the words—and to keep it low. It would be relatively easy, by stimulating consumer demand, to bring about some fairly quick reduction, but to do that on top of the present cost-inflationary position would be a short-term spree, followed too soon by a much longer-lasting hangover. We might get it down, but we could never keep it down that way. To get it down and keep it down depends on the correct diagnosis of the causes.
We must have a clear understanding of the relationship of unemployment to inflation. We do not maintain that high unemployment and inflation always go together—of course not. Obviously there have been circumstances when inflation and low unemployment are compatible. What we are saying is that the present circumstances resulting from the policies pursued over the last four or five years impose certain severe restraints.
Let us follow briefly step by step what would happen if we injected substantial additional purchasing power into the economic system under our present conditions of serious inflation. Clearly demand would rise, but with pay rising at its present rate firms with their profits under their present squeeze would inevitably transmit their extra costs into higher prices, adding further to the inflationary spiral. Moreover, given the growing disparity between trends of unit costs in this country and those of our competitors, only part of this increased demand would result in higher output in this country, but a lot would suck in more imports. That is what we saw happening last year.
Between 1969 and 1970 production in the United Kingdom rose by 1 per cent., sales in the home market remained virtually stagnant, but the volume of imports in that year of finished manufactures rose by no less than 19 per cent. In other words, we were producing jobs not for ourselves, but for our competitors overseas. That was the year 1969–70 when right hon. and hon. Gentlemen opposite shares the responsibility with us for half the year.
The extra push to our prices would endanger the volume of our exports. Again last year we saw the increase in the value of our exports was almost entirely due to increased prices and scarcely at all to increased volume. So increasing imports and no boost in exports would soon adversely affect our balance of payments surplus.
Clearly, under present circumstances moving to reduce unemployment by boosting domestic demand without first controlling our cost inflation would be short term. That is why I say that the temporary lowering of unemployment would not be maintained.
That is why we must first tackle our domestic cost-inflation fed by wage increases. This is the first priority of policy in tackling our unemployment problem. In the mid-1970s, when this Government came to power, earnings were increasing at an annual rate of 12 per cent. and output per head was increasing at an annual rate of 2 per cent. The present position is now about 14 per cent. in regard to earnings and 2 to 3 per cent. in regard to productivity. That gap must be substantially closed. [HON. MEMBERS: "HOW?"] And it cannot conceivably be closed by expansion.
And the C.B.1., but not to an unconditional extent as was proposed by the T.U.C.—the T.U.C. talked about a target of 5 per cent. annual growth, but 5 per cent., growth compared with 14 per cent. increases in earnings would still be an intolerably large gap. It would still be totally unsafe in regard to expansion. That is why the level of settlement must come down. Restraint in incomes is our only guarantee against unemployment. [Interruption.]. Let me repeat that statement, because it is at the basis of our problem. Restraint in incomes is our only guarantee against unemployment. [Interruption.]
They were true then and they are true now. We simply cannot expect companies to absorb pay increases of 10 to 15 per cent. per year, or even more. They cannot do it. So we have rising prices and reduced profits. Prices rise to a level where business is reduced, leading to cuts in output and, inevitably, to laying off of people. Rising prices, because of the poorer prospects of business and sales, project into future plans, and, therefore, reduce investment for creating extra capacity. Moreover, they open the door wider to the import of more competitively priced foreign goods, and the reduced profits directly reduce funds available for new investment.
I will not give way.
A reasonable level of increase in earnings—the last Government's idea of what was reasonable in the conditions of this country in 1970 and onwards was 2½ to 42 per cent.; that was what they put in their White Paper—is not only possible but healthy. A reasonable level of rising wages stimulates growth and efficiency in the economy. It leads to an increase in real earnings. But at the totally excessive rates of today, it leads to stagnation in real earnings, impoverishment in our real standard of living, especially for the lower-paid and pensioners, and directly to fewer jobs.
—and that is what we are going to bring about. I believe that an increasing number of the British people understand this. We shall bring the rate of inflation down, and when we do so we shall be able to give the full green light for reflation.
In a free society this very largely depends on the degree of responsibility shown by trade unions and managements in this country. We will create a climate to enable them and help them to do so, but, in the end, it is up to them. The quicker this level of settlements comes down, the quicker will unemployment be able to come down, too.
Meanwhile, in the recent Budget, by taking £1,000 million off the annual rate of taxation, compared with the £3,000 million annual rate added by the Labour Government, we have taken the first fundamental step to prepare for a soundly based expansion as soon as the level of pay settlements moderates. That is the basis of our policy.
I turn finally to some aspects of my Department's work. Although what we do in my Department cannot create jobs, the more effectively we can carry out our employment services the more quickly can we get people to the jobs which exist.
ing such important matters as manpower forecasting, looking at the whole techniques of placing and job guidance, training and retraining. In a few months' time we shall be coming forward with plans which we hope will bring our placing services and our employment services up to the level of those which exist in some other countries. That will be a vital contribution.
When we have reduced the present level of pay settlements, on the foundation of my right hon. Friend's Budget we shall be able to give a green light to expansion; because we are determined to reverse the trend which was left by the previous Government and which, had it been allowed to continue, would have made this country the poorest country in Western Europe by the end of this decade. [Interruption.]
|Division No. 353.]||AYES||[10.0 p.m.|
|Adley, Robert||Baker, Kenneth (St. Marylebone)||Benyon, W.|
|Alison, Michael (Barkston Ash)||Balniel, Lord||Berry, Hn. Anthony|
|Allason, James (Hemel Hempstead)||Barber, Rt. Hn. Anthony||Biffen, John|
|Amery, Rt. Hn. Julian||Batsford, Brian||Biggs-Davison, John|
|Archer, Jeffrey (Louth)||Beamish, Col. Sir Tufton||Blaker, Peter|
|Astor, John||Bell, Ronald||Boardman, Tom (Leicester, S. W.)|
|Atkins, Humphrey||Bennett, Sir Frederic (Torquay)||Body, Richard|
|Awdry, Daniel||Bennett, Dr. Reginald (Gosport)||Boscawen, Robert|
|Bowden, Andrew||Harrison, Col. Sir Harwood (Eye)||Morgan-Giles, Rear-Adm.|
|Boyd-Carpenter, Rt. Hn. John||Haselhurst, Alan||Morrison, Charles (Devizes)|
|Bray, Ronald||Hastings, Stephen||Mudd, David|
|Brewis, John||Havers, Michael||Murton, Oscar|
|Brinton, Sir Tatton||Hawkins, Paul||Nabarro, Sir Gerald|
|Brown, Sir Edward (Bath)||Hay, John||Neave, Airey|
|Bruce-Gardyne, J.||Hayhoe, Barney||Nicholls, Sir Harmar|
|Bryan, Paul||Heseltine, Michael||Normanton, Tom|
|Buchanan-Smith, Alick (Angus,N & M)||Hicks, Robert||Nott, John|
|Buck, Antony||Higgins, Terence L.||Onslow, Cranley|
|Bullus, Sir Eric||Hiley, Joseph||Oppenheim, Mrs. Sally|
|Burden, F. A.||Hill, John E. B. (Norfolk, S.)||Osborn, John|
|Butler, Adam (Bosworth)||Hill, James (Southampton, Test)||Page, Graham (Crosby)|
|Campbell, Rt. Hn. G. (Moray&Nairn)||Holland, Philip||Page, John (Harrow, W.)|
|Carlisle, Mark||Holt, Miss Mary||Parkinson, Cecil (Enfield, W.)|
|Carr, Rt. Hn, Robert||Hordern, Peter||Peel, John|
|Channon, Paul||Hornby, Richard||Percival, Ian|
|Chapman, Sydney||Hornsby-Smith, Rt. Hn. Dame Patricia||Pike, Miss Mervyn|
|Chataway, Rt. Hn. Christopher||Howe, Hn. Sir Geoffrey (Reigate)||Pink, R. Bonner|
|Chichester-Clark, R.||Howell, David (Guildford)||Pounder, Rafton|
|Churchill, W. S.||Howell, Ralph (Norfolk, N.)||Powell, Rt. Hn. J. Enoch|
|Clark, William (Surrey, E.)||Hunt, John||Price, David (Eastleigh)|
|Clarke, Kenneth (Rushcliffe)||Hutchison, Michael Clark||Prior, Rt. Hn. J. M. L.|
|Clegg, Walter||Iremonger, T. L.||Proudfoot, Wilfred|
|Cockeram, Eric||Irvine, Bryant Godman (Rye)||Pym, Rt. Hn. Francis|
|Coombs, Derek||James, David||Quennell, Miss J. M.|
|Cooper, A. E.||Jenkin, Patrick (Woodford)|
|Corfield, Rt. Hn. Frederick||Raison, Timothy|
|Cormack, Patrick||Jennings, J. C. (Burton)||Ramsden, Rt. Hn. James|
|Costain, A. P.||Jessel, Toby||Rawlinson, Rt. Hn. Sir Peter|
|Critchley, Julian||Johnson Smith, G. (E. Grinstead)|
|Crouch, David||Jones, Arthur (Northants, S.)||Redmond, Robert|
|Crowder, F. P.||Jopling, Michael||Reed, Laurance (Bolton, E.)|
|Curran, Charles||Joseph, Rt. Hn. Sir Keith||Rees, Peter (Dover)|
|Davies, Rt. Hn. John (Knutsford)||Kaberry, Sir Donald||Rees-Davies, W. R.|
|d'Avigdor-Goldsmid, Sir Henry||Kellett, Mrs. Elaine||Renton, Rt. Hn. Sir David|
|d'Avigdor-Goldsmid, Maj.-Gen.James||Kershaw, Anthony||Rhys Williams, Sir Brandon|
|Dean, Paul||Kilfedder, James||Ridley, Hn. Nicholas|
|Digby, Simon Wingfield||Kimball, Marcus||Rippon, Rt. Hn. Geoffrey|
|Dixon, Piers||King, Evelyn (Dorset, S.)||Roberts, Michael (Cardiff, N.)|
|Dodds-Parker, Douglas||King, Tom (Bridgwater)||Roberts, Wyn (Conway)|
|Drayson, G. B.||Kinscy, J. R.||Rodgers, Sir John (Sevenoaks)|
|du Cann, Rt. Hn. Edward||Kitson, Timothy||Rossi, Hugh (Hornsey)|
|Edwards, Nicholas (Pembroke)||Knight, Mrs. Jill||Rost, Peter|
|Elliot, Capt Walter (Carshalton)||Knox, David||Royle, Anthony|
|Elliott, R. W. (N'c'tle-upon-Tyne, N.)||Lambton, Antony||Russell, Sir Ronald|
|Emery, Peter||Lane, David||St. John-Stevas, Norman|
|Farr, John||Langford-Holt, Sir John||Sandys, Rt. Hn. D.|
|Fell, Anthony||Legge-Bourke, Sir Harry||Scott, Nicholas|
|Fenner, Mrs, Peggy||Le Marchant, Spencer||Scott-Hopkins, James|
|Fidler, Michael||Lewis, Kenneth (Rutland)||Sharpies, Richard|
|Finsberg, Geoffrey (Hampstead)||Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)||Shaw, Michael (Sc'b'gh & Whitby)|
|Fisher, Nigel (Surbiton)||Llovd, Ian (P'tsm'th, Langstone)||Shelton, William (Clapham)|
|Fletcher-Cooke, Charles||Longden, Gilbert||Simeons, Charles|
|Fookes, Miss Janet||Loveridge, John||Sinclair, Sir George|
|Fortescue, Tim||Luce, R. N.||Skeet, T. H. H.|
|Foster, Sir John||McAdden, Sir Stephen||Smith, Dudlley(W'wick & L'mington)|
|Fowler, Norman||MacArthur, Ian||Soref, Harold|
|Fox, Marcus||McCrindie, R. A.||Speed, Keith|
|Fraser, Rt. Hn. Hugh (St'fford & Stone)||McLaren, Martin||Spence, John|
|Fry Peter||Maclean, Sir Fitzroy||Sproat, lain|
|Galbraith, Hn. T. G.||McMaster, Stanley||Stainton, Keith|
|Gardner, Edward||Macmillan, Maurice (Farnham)||Stanbrook, Ivor|
|Gibson-Watt, David||McNair-Wilson, Michael||Stewart-Smith, D. G. (Belper)|
|Gilmour, Ian (Norfolk, C.)||McNair-Wilson, Patrick (NewForest)||Stodart, Anthony (Edinburgh, W.)|
|Gilmour Sir John (Fife, E.)||Maddan, Martin||Stoddart-Scott, Col. Sir M.|
|Glyn, Dr. Alan||Mattel, David||Stokes, John|
|Godber, Rt. Hn. J. B.||Marples, Rt. Hn. Ernest||Stuttaford, Dr. Tom|
|Goodhart, Philip||Marten, Neil||Sutcliffe, John|
|Goodhew, Victor||Mather, Carol||Tapsell, Peter|
|Gorst, John||Maude, Angus||Taylor, Sir Charles (Eastbourne)|
|Gower, Raymond||Mawby, Ray||Taylor, Edward M. (G'gow, Cathcart)|
|Grant, Anthony (Harrow, C.)||Maxwell-Hyslop, R. J.||Taylor, Frank (Moss Side)|
|Gray, Hamish||Meyer, Sir Anthony||Taylor, Robert (Croydon, N.W.)|
|Green, Alan||Mills, Peter (Torrington)||Tebbit, Norman|
|Grieve, Percy||Mills, stratton (Belfast, N.)||Temple, John M.|
|Griffiths, Eldon (Bury St. Edmunds)||Miscampbell, Norman||Thatcher, Rt. Hn. Mrs. Margaret|
|Grylls, Michael||Mitchell, Lt.-Col. C. (Aberdeenshire, W)||Thomas, John Stradling (Monmouth)|
|Gummer, Selwyn||Moate, Roger||Thomas, Rt. Hn. Peter (Hendon, S.)|
|Gurden, Harold||Molyneaux, James||Thompson, Sir Richard (Croydon, S.)|
|Hall, Miss Joan (Keighley)||Money, Ernie||Tilney, John|
|Hall, John (Wycombe)||Monks, Mrs. Connie||Trafford, Dr. Anthony|
|Hall-Davis, A. G. F.||Monro, Hector||Trew, Peter|
|Hamilton, Michael (Salisbury)||Montgomery, Fergus||Tugendhat, Christopher|
|Hannam, John (Exeter)||Morgan, Gerarint (Denbigh)||Turton, Rt. R. H.|
|Vaughan, Dr. Gerard||Wells, John (Maidstone)||Woodnutt, Mark|
|Vickers, Dame Joan||White, Roger (Gravesend)||Worsley, Marcus|
|Waddington, David||Whitelaw, Rt. Hn. William||Wylle, Rt. Hn. N. R.|
|Walker, Rt. Hn. Peter (Worcester)||Wiggin, Jerry||Younger, Hn. George|
|Walker-Smith, Rt. Hn. Sir Derek||Wilkinson, John|
|Walters, Dennis||Wolrige-Gordon, Patrick||TELLERS FOR THE AYES:|
|Ward, Dame Irene||Wood, Rt. Hn. Richard||Mr. Reginald Eyre and|
|Warren, Kenneth||Woodhouse, Hn. Christopher||Mr. Jasper More.|
|Abse, Leo||Fitch, Alan (Wigan)||Lyon, Alexander W. (York)|
|Albu, Austen||Fletcher, Raymond (Ilkeston)||Lyons, Edward (Bradford, E.)|
|Allaun, Frank (Salford, E.)||Fletcher, Ted (Darlington)||McBride, Neil|
|Allen, Scholefield||Foley, Maurice||McCartney, Hugh|
|Archer, Peter (Rowley Regis)||Foot, Michael||McElhone, Frank|
|Armstrong, Ernest||Forrester, John||McGuire, Michael|
|Ashley, Jack||Fraser, John (Norwood)||Mackenzie, Gregor|
|Ashton, Joe||Galpern, Sir Myer||Mackie, John|
|Atkinson, Norman||Garrett, W. E.||Maclennan, Robert|
|Bagier, Gordon A. T.||Gilbert, Dr. John||McMillan, Tom (Glasgow, C.)|
|Barnes, Michael||Ginsburg, David||McNamara, J. Kevin|
|Barnet, Joel||Golding, John||MacPherson, Malcolm|
|Beaney, Alan||Gordon Walker, Rt Hn. p. C.||Matron, Simon (Bootle)|
|Benn, Rt. Hn. Anthony Wedgwood||Gourlay, Harry||Maltalieu, E. L. (Brigg)|
|Bennett, James (Glasgow, Bridgeton)||Grant, George (Morpeth)||Mallalieu. J. P. W. (Huddersfield, E.)|
|Bidwell, Sydney||Grant, John D. (Islington, E.)||Marks, Kenneth|
|Bishop, E. S.||Griffiths, Eddie (Brightside)|
|Blenkinsop, Arthur||Griffiths, Will (Exchange)||Marquand, David|
|Booth, Albert||Cunter, Rt. Hn. R. J.||Marsden, F.|
|Boyden, James (Bishop Auckland)||Hamilton, William (Fife, W.)||Marsh, Rt. Hn. Richard|
|Bradley, Tom||Hamling, William||Mayhew, Christopher|
|Brown, Bob (N'c'tle-upon-Tyne,W.)||Hannan, Wlliam (G'gow, Maryhill)||Meacher, Michael|
|Brown, Ronald (Shoreditch & F'bury)||Hardy, Peter||Mellish, Rt. Hn. Robert|
|Buchan, Norman||Harper, Joseph||Mendelson, John|
|Butler, Mrs. Joyce (Wood Green)||Harrison, Walter (Wakefield||Mikardo, Ian|
|Callaghan, Rt. Hn. James||Hart, Rt. Hn. Judith||Millan, Bruce|
|Campbell, I. (Dunbartonshire, W.)||Hattersley, Roy||Miller, Dr. M. S.|
|Cant, R. B.||Healey, Rt. Hn. Denis||Milne, Edward (Blyth)|
|Carmichael, Neil||Heffer, Eric S.||Molloy, William|
|Carter, Ray (Birmingh'm, Northfield)||Hooson, Emlyn||Morris, Alfred (Wythenshawe)|
|Carter-Jones, Lewis (Eccles)||Horam, John||Morris, Charles R. (Openshaw)|
|Clark, David (Cofne Valley)||Houghton, Rt. Hn. Douglas||Morris, Rt. Hn. John (Aberavon)|
|Cocks, Michael (Bristol, S.)||Howell, Denis (Small Heath)||Moyle, Roland|
|Cohen, Stanley||Huckfield, Leslie||Mulley, Rt. Hn. Frederick|
|Concannon, J. D.||Hughes, Rt. Hn. Cledwyn (Anglesey)||Murray, Ronald King|
|Conlan, Bernard||Hughes, Mark (Durham)||Ogden, Eric|
|Corbet, Mrs. Freda||Hughes, Robert (Aberdeen, N.)||O'Halloran, Michael|
|Cox, Thomas (Wandsworth, c.)||Hughes, Roy (Newport)||O'Malley, Brian|
|Crawshaw, Richard||Hunter, Adam||Orbach, Maurice|
|Cronin, John||Irvine, Rt. Hn. SirArthur (Edge Hill)||Orme, Stanley|
|Crosland, Rt. Hn. Anthony||Janner, Greville||Oswald, Thomas|
|Crossman, Rt. Hn. Richard||Jay, Rt. Hn. Douglas||Owen, Dr. David (Plymouth, Sutton)|
|Cunningham, G. (Islington, S.W.)||Jeger, Mrs. Lena (H'b'n&St.P'cras,S.)||Palmer, Arthur|
|Dalyell, Tam||Jenkins, Hugh (Putney)||Pannell, Rt. Hn. Charles|
|Darling, Rt. Hn. George||Jenkins, Rt. Hn. Roy (Stechford)||Pardoe, John|
|Davidson, Arthur||John, Brynmor||Parker, John (Dagenham)|
|Davies, Denzil (Llanelly)||Johnson, Carol (Lewisham, S.)||Parry, Robert (Liverpool, Exchange)|
|Davies, G. Elfed (Rhondda, E.)||Johnson, Walter (Derby, S.)||Peart, Rt. Hn. Fred|
|Davies, Ifor (Gower)||Jones, Barry (Flint, E.)||Pendry, Tom|
|Davies, S. O. (Merthyr Tydvil)||Jones, Dan (Burnley)||Pentland, Norman|
|Davis, Clinton (Hackney, C.)||Jones, Rt. Hn. Sir EIwyn (W. Ham, S.)||Perry, Ernest G.|
|Deakins, Eric||Jones, Gwynoro (Carmarthen)||Prentice, Rt. Hn. Reg.|
|de Freitas, Rt. Hn. Geoffrey||Jones, T. Alec (Rhondda, W.)||Prescott, John|
|Delargy, H. J.||Judd, Frank||Price, J. T. (Westhoughton)|
|Dell, Rt. Hn Edmund||Kaufman, Gerald||Price, William (Rugby)|
|Dempsey, James||Kelley, Richard||Probert, Arthur|
|Doig, Peter||Kerr, Russell||Rankin, John|
|Dormand, J D.||Kinnock, Neil||Reed, D. (Sedgefield)|
|Douglas, Dick (Stirlingshire, E.)||Lambie, David||Rees, Merlyn (Leeds, S.)|
|Douglas-Mann, Bruce||Lamond, James||Rhodes, Geoffrey|
|Driberg, Tom||Latham, Arthur||Richard, Ivor|
|Duffy, A. E. P.||Lawson, George||Roberts, Albert (Normanton)|
|Dunnett, Jack||Leadbitter, Ted||Roberts, Rt. Hn. Goronwy (Caernarvon)|
|Eadie, Alex||Lee, Rt. Hn. Frederick||Robertson, John (Paisley)|
|Edelman, Maurice||Leonard, Dick||Roderick, Caerwyn E. (Br'c'n&R'dnor)|
|Edwards, Robert (Bilston)||Lestor, Miss Joan||Rodgers, William (Stockton-on-Tees)|
|Edwards, William (Merioneth)||Lever, Rt. Hn. Harold||Roper, John|
|Ellis, Tom||Lewis, Arthur (W. Ham N.)||Rose, Paul B.|
|English, Michael||Lewis, Ron (Carlisle)||Ross, Rt. Hn. William (Kilmarnock)|
|Evans, Fred||Lipton, Marcus||Sheldon, Robert (Ashton-under-Lyne)|
|Faulds, Andrew||Lomas, Kenneth||Shore, Rt. Hn. Peter (Stepney)|
|Fisher, Mrs. Doris(B'ham, Ladywood)||Loughlin, Charles||Short, Rt. Hn. Edward (N'c'tle-u-Tyne)|
|Short, Mrs. Renée (W'hampton, N.E.)||Summerskill, Hn. Dr. Shirley||Watkins, David|
|Silkin, Hn. S. C. (Dulwich)||Taverne, Dick||Weitzman, David|
|Sillars, James||Thomas, Rt. Hn. George (Cardiff, W.)||Wellbeloved, James|
|Silverman, Julius||Thomas, Jeffrey (Abertillery)||Wells, William (Walsall, N.)|
|Skinner, Dennis||Thomson, Rt. Hn. G. (Dundee, E.)||Whitehead, Phillip|
|Small, William||Thorpe, Rt. Hn. Jeremy||Whitlock, William|
|Smith, John (Lanarkshire, N.)||Tinn, James||Williams, Alan (Swansea, W.)|
|Spearing, Nigel||Tomney, Frank||Williams, Mrs. Shirley (Hitchin)|
|Spriggs, Leslie||Torney, Tom||Williams, W. T. (Warrington)|
|Stallard, A. W.||Tuck, Raphael||Wilson, Alexander (Hamilton)|
|Stewart, Donald (Western Islet)||Urwin, T. W.||Wilson, William (Coventry, S.)|
|Stewart, Rt. Hn. Michael (Fulham)||Varley, Eric G.||Woof, Robert|
|Stoddart, David (Swindon)||Wainwright, Edwin|
|Stonehouse, Rt. Hn. John||Walden, Brian (B'm'ham, All Saints)||TELLERS FOR THE NOES:|
|Strang, Gavin||Walker, Harold (Doncaster)||Mr. Donald Coleman and|
|Strauss, Rt. Hn. G. R.||Wallace, George||Mr. James Hamilton.|
|Division No. 354.]||AYES||[10.13 p.m.|
|Adley, Robert||d'Avigdor-Goldsmid,Maj.-Gen. James||Hill, James (Southampton, Test)|
|Alison, Michael (Barkston Ash)||Dean, Paul||Hilland, Philip|
|Allason, James (Hemel Hempstead)||Digby, Simon Wingfield||Holt, Miss Mary|
|Amery, Rt. Hn. Julian||Dixon, Piers||Hordern, Peter|
|Archer, Jeffrey (Louth)||Dodds-Parker, Douglas||Hornby, Richard|
|Astor, John||Drayson, G. B.||Hornsby-Smith, Rt. Hn. Dame Patricia|
|Atkins, Humphrey||du Cann, Rt. Hn. Edward||Howe, Hn. Sir Geoffrey (Reigate)|
|Awdry, Daniel||Edwards, Nicholas (Pembroke)||Howell, David (Guildford)|
|Balniel, Lord||Elliott, Capt. Walter (Carshalton)||Howell, Ralph (Norfolk, N.)|
|Barber, Rt. Hn. Anthony||Elliott, R. W. (N'c'tle-upon-Tyne, N.)||Hunt, John|
|Batsford, Brian||Emery, Peter||Hutchison, Michael Clark|
|Beamish, Col. Sir Tufton||Farr, John||Iremonger, T. L.|
|Bell, Ronald||Fell, Anthony||Irvine, Bryant Godman (Rye)|
|Bennett, Sir Frederic (Torquay)||Fenner, Mrs. Peggy||James, David|
|Bennett, Dr. Reginald (Gosport)||Fidler, Michael||Jenkin, Patrick (Woodford)|
|Benyon, W.||Finsberg, Geoffrey (Hampstead)||Jennings, J. c. (Burton)|
|Berry, Hn. Anthony||Fisher, Nigel (Surbiton)||Jessel, Toby|
|Biffen, John||Fletcher-Cooke, Charles||Johnson Smith, G. (E. Grinstead)|
|Biggs-Davison, John||Fookes, Miss Janet||Jones, Arthur (Northants, S.)|
|Blaker, Peter||Fortescue, Tim||Jopling, Michael|
|Boardman, Tom (Leicester, S.W.)||Foster, Sir John||Joseph, Rt. Hn. Sir Keith|
|Body, Richard||Fowler, Norman||Kaberry, Sir Donald|
|Boscawen, Robert||Fox, Marcus||Kellett, Mrs. Elaine|
|Bossom, Sir Clive||Fraser,Rt.Hn.Hugh(St'fford & Stone)||Kershaw, Anthony|
|Bowden, Andrew||Fry, Peter||Kilfedder, James|
|Boyd-Carpenter, Rt. Hn. John||Galbraith, Hn. T. G.||Kimball, Marcus|
|Bray, Ronald||Gardner, Edward||King, Evelyn (Dorset, S.)|
|Brewis, John||Gibson-Watt, David||King, Tom (Bridgwater)|
|Brinton, Sir Tatton||Gilmour, Ian (Norfolk, C.)||Kinsey, J. R.|
|Brown, Sir Edward (Bath)||Gilmour, Sir John (Fife, E.)||Kitson, Timothy|
|Glyn, Dr. Alan||Knight, Mrs. Jill|
|Bruce-Gardyne, J.||Godber, R. Hn. J. B.||Knox, David|
|Bryan, Paul||Goodhart, Philip||Lambton, Antony|
|Buchanan-Smith, Alick(Angus,N&M)||Goodhew, Victor||Lane, David|
|Buck, Antony||Gorst, John||Langford-Holt, Sir John|
|Bullus, Sir Eric||Gower, Raymond||Legge-Bourke, Sir Harry|
|Burden, F. A.||Grant, Anthony (Harrow, C.)||Le Marchant, Spencer|
|Butler, Adam (Bosworth)||Gray, Hamish||Lewis, Kenneth (Rutland)|
|Campbell, Rt. Hn. C. (Moray&Nairn)||Green, Alan||Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)|
|Carlisle, Mark||Grieve, Percy||Lloyd, Lan (Portsm'th, Langstone)|
|Carr, Rt. Hn. Robert||Griffiths, Eldon (Bury St. Edmunds)||Longden, Gilbert|
|Channon, Paul||Grylls, Michael||Loveridge, John|
|Chapman, Sydney||Cummer, Selwyn||Luce, R. N.|
|Chataway, Rt. Hn. Christopher||Gurden, Harold||McAdden, Sir Stephen|
|Chichester-Clark, R.||Hall, Mies Joan (Keighley)||Mac Arthur, lan|
|Churchill, W. S.||Hall, John (Wycombe)||McCrindle, R. A.|
|Clark, William (Surrey, E.)||Halt-Davis, A. G. F.||McLaren, Martin|
|Clarke, Kenneth (Rushcliffe)||Hamilton, Michael (Salisbury)||Maclean, Sir Fitzroy|
|Clegg, Walter||Hannam, John (Exeter)||McMaster, Stanley|
|Cockeram, Eric||Harrison, Col. Sir Harwood (Eye)||Macmillan, Maurice (Farnham)|
|Coombs, Derek||Haselhurst, Alan||McNair-Wilson, Michael|
|Cooper, A. E.||Hastings, Stephen||McNair-Wilson, Patrick (NewForest)|
|Corfield, Rt. Hn. Frederick||Havers, Michael||Maddan, Martin|
|Cormack, Patrick||Hawkins Paul||Madel, David|
|Costain, A. P.||Hay, John||Marples, Rt. Hn. Ernest|
|Critchley, Julian||Hayhoe, Barney||Marten, Neil|
|Crouch, David||Heseltine, Michael||Mather, Carol|
|Crowder, F. P.||Hicks, Robert||Maude, Angus|
|Curran, Charles||Higgins, Terence L.||Mawby, Ray|
|Davies, Rt. Hn. John (Knutsford)||Hiley, Joseph||Maxwell-Hyslop, R. J.|
|d'Avigdor-Goldsmid, Sir Henry||Hill, John E. B. (Norfolk, S.)||Meyer, Sir Anthony|
|Mills, Peter (Torrington)||Redmond, Robert||Taylor, Edward M. (G'gow, Cathcart)|
|Mills, Stratton (Belfast, N.)||Reed, Laurance (Bolton, E.)||Taylor, Frank (Moss Side)|
|Miscampbell, Norman||Ress, Peter (Dover)||Taylor, Robert (Croydon, N. W.)|
|Milchell, Lt. Col. C. (Aberdeenshire,W)||Rees-Davies, W. R.||Tebbit, Norman|
|Moate, Roger||Renton, Rt. Hn. Sir David||Temple, John M.|
|Molyneaux, James||Rhys Williams, Sir Brandon||Thatcher, Rt. Hn. Mrs. Margaret|
|Money, Ernie||Ridley, Hn. Nicholas||Thomas, John Stradling (Monmouth)|
|Monks, Mrs. Connie||Rippon, Rt. Hn. Geoffrey||Thomas, Rt. Hn. Peter (Hendon, S.)|
|Monro, Hector||Roberts, Michael (Cardiff, N.)||Thompson, Sir Richard (Croydon, S.)|
|Montgomery, Fergus||Roberts, Wyn (Conway)||Tilney, John|
|Morgan, Geraint (Denbigh)||Rodgers, Sir John (Sevenoaks)||Trafford, Dr. Anthony|
|Morgan-Giles, Rear-Adm.||Rossi, Hugh (Hornsey)||Trew, Peter|
|Morrison, Charles (Devizes)||Rest, Peter||Tugendhat, Christopher|
|Mudd, David||Royle, Anthony||Turton, Rt. Hn. R. H.|
|Murton, Oscar||Russell, Sir Ronald||Vaughan, Dr. Gerard|
|Nabarro, Sir Gerald||St. John-Stevas, Norman||Vickers, Dame Joan|
|Neave, Airey||Sandys, Rt. Hn. D.||Waddington, David|
|Nicholls, Sir Harmar||Scott, Nicholas||Walker, Rt. Hn. Peter (Worcester)|
|Normanton, Tom||Scott-Hopkins, James||Walker-Smith, Rt. Hn. Sir Derek|
|Nott, John||Sharples, Richard||Walters, Dennis|
|Onslow, Cranley||Shaw, Michael (Sc'b'gh & Whitby)||Ward, Dame Irene|
|Oppenheim, Mrs. Sally||Shelton, William (Clapham)||Warren, Kenneth|
|Osbom, John||Simeons, Charles||Weatherill, Bernard|
|Pago, Graham (Crosby)||Sinclair, Sir George||Wells, John (Maidstone)|
|Page, John (Harrow, W.)||Skeet, T. H. H.||White, Roger (Gravesend)|
|Parkinson, Cecil (Enfield, W.)||Smith, Dudley (W'wick & L'mington)||Whitelaw, Rt. Hn. William|
|Peel, John||Soref, Harold||Wiggin, Jerry|
|Percival, Ian||Speed, Keith||Wilkinson, John|
|Pike, Miss Mervyn||Spence, John||Wolrige-Gordon, Patrick|
|Pink, R. Bonner||Sproat, Iain||Wood, Rt. Hn. Richard|
|Pounder, Rafton||Stainton, Keith||Woodhouss, Hn. Christopher|
|Powell, Rt. Hn. J. Enoch||Stanbrook, Ivor||Woodnutt, Mark|
|Price, David (Eastleigh)||Stewart-Smith, D. G. (Belper)||Worsley, Marcus|
|Prior, Rt. Hn. J. M. L.||Stodart, Anthony (Edinburgh, W.)||Wylie, Rt. Hn. N. R.|
|Proudfoot, Wilfred||Stoddart-Scott, Col. Sir M.||Younger, Hn. George|
|Pym, Rt. Hn. Francis||Stokes, John|
|Quennell, Miss J. M.||Stuttaford, Dr. Tom||TELLERS FOR THE AYES:|
|Raison, Timothy||Suteliffe, John||Mr. Reginald Eyre and|
|Ramsdsn, Rt. Hn. James||Tapseifl, Peter||Mr. Jasper More.|
|Rawlinson, Rt. Hn. Sir Peter||Taylor, Sir Charles (Eastbourne)|
|Abse, Leo||Crosland, Rt. Hn. Anthony||Gilbert, Dr. John|
|Albu, Austen||Crossman, Rt. Hn. Richard||Ginsburg, David|
|Allaun, Frank (Salford, E.)||Cunningham, G. (Islington, S.W.)||Goldhig, John|
|Allen, Scholefield||Dalyell, Tam||Gordon Walker, Rt. Hn. P. C.|
|Archer, Peter (Rowley Regis)||Darling, Rt. Hn. George||Gouriay, Harry|
|Armstrong, Ernest||Davidson, Arthur||Grant, George (Morpeth)|
|Ashley, Jack||Davies, Dcnzil (Llanelly)||Grant, John D. (Islington, E.)|
|Ashton, Joe||Davies, G. Elfed (Rhondda, E.)||Griffiths, Eddie (Brightside)|
|Atkinson, Norman||Davies, Ifor (Gower)||Griffiths, Will (Exchange)|
|Bagier, Gordon A. T.||Davies, S. O. (Merthyr Tydvil)||Gunter, Rt. Hn. R. J.|
|Barnes, Michael||Davis, Clinton (Hackney, C.)||Hamilton, William (Fife, W.)|
|Barnett, Joel||Deakins, Eric||Hamling, William|
|Beancy, Alan||de Freitas, Rt. Hn. Sir Geoffrey||Hannan, William (G'gow, Maryhill)|
|Benn, Rt. Hn. Anthony Wedgwood||Delargy, H. J.||Hardy, Peter|
|Bennett, James (Glasgow, Bridgeton)||Dell, Rt. Hn. Edmund||Harper, Joseph|
|Dempsey, James||Harrison, Walter (Wakefield)|
|Bidwell, Sydney||Doig, Peter||Hart, Rt. Hn. Judith|
|Bishop, E. S.||Dormand, J. D.||Hattersley, Roy|
|Blenkinsop, Arthur||Douglas, Dick (Stirlingshire, E.)||Healey, Rt. Hn. Denis|
|Booth, Albert||Douglas-Mann, Bruce||Heifer, Eric S.|
|Driberg, Tom||Hooson, Emlyn|
|Boyden, James (Bishop Auckland)|
|Bradley, Tom||Duffy, A. E. P.||Horam, John|
|Brown, Bob (N'c'tle-upon-Tyne, W.)||Dunnett, Jack||Houghton, Rt. Hn. Douglas|
|Brown, Ronald(Shoreditch & F'bury)||Eadie, Alex||Howell, Denis (Small Heath)|
|Buchan, Norman||Edelman, Maurice||Huckfield, Leslie|
|Butler, Mrs. Joyce (Wood Green)||Edwards, Robert (Bilston)||Hughes, Rt. Hn. Cledwyn (Anglesey)|
|Callaghan, Rt. Hn. James||Edwards, William (Merioneth)||Hughes, Mark (Durham)|
|Campbell, I. (Dunbartonshire, W.)||Ellis, Tom||Hughes, Robert (Aberdeen, N.)|
|Cant, R. B.||English, Michael||Hughes, Roy (Newport)|
|Carmichael, Neil||Evans, Fred||Hunter, Adam|
|Carter, Ray (Birmingh'm, Northfield)||Faulds, Andrew||Irvine, Rt. Hn. SirArthu (Edge Hill)|
|Carter-Jones, Lewis (Eccles)||Fisher, Mrs. Doris (B'ham, Ladywood)||Janner, Greville|
|Clark, David (Colne Valley)||Fitch, Alan (Wigan)||Jay, Rt. Hn. Douglas|
|Cocks, Michael (Bristol, S.)||Fletcher, Raymond (Ilkeston)||Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)|
|Cohen, Stanley||Fletcher, Ted (Darlington)||Jenkins, Hugh (Putney)|
|Concannon, J. D.||Foley, Maurice||Jenkins, Rt. Hn. Roy (Stechford)|
|Conlan, Bernard||Foot, Michael||John, Brynmor|
|Corbet, Mrs. Freda||Forrester, John||Johnson, Carol (Lewisham, S.)|
|Cox, Thomas (Wandsworth, C.)||Fraser, John (Norwood)||Johnson, Walter (Derby, S.)|
|Crawshaw, Richard||Galpern, Sir Myer||Jones, Barry (Flint, E.)|
|Cronin, John||Garrett, W. E.||Jones, Dan (Burnley)|
|Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)||Milne, Edward (Blyth)||Sillars, James|
|Jones, Gwynoro (Carmarthen)||Molloy, William||Silverman, Julius|
|Jones, T. Alec (Rhondda, W.)||Morris, Alfred (Wythenshawe)||Skinner, Dennis|
|Judd, Frank||Morris, Charles R. (Openshaw)||Small, William|
|Kaufman, Gerald||Morris, Rt. Hn. John (Aberavon)||Smith, John (Lanarkshire, N.)|
|Kelley, Richard||Moyle, Roland||Spearing, Nigel|
|Kerr, Russell||Mulley, Rt. Hn. Frederick||Spriggs, Leslie|
|Kinnock, Neil||Murray, Ronald King||Stallard, A. W.|
|Lambie, David||Ogden, Eric||Stewart, Donald (Western Isles)|
|Lamond, James||O'Halloran, Michael||Stewart, Rt. Hn. Michael (Fulham)|
|Latham, Arthur||O'Malley, Brian||Stoddart, David (Swindon)|
|Lawson, George||Orbach, Maurice||Stonehouse, Rt. Hn. John|
|Leadbitter, Ted||Orme, Stanley||Strang, Gavin|
|Lee, Rt. Hn. Frederick||Oswald, Thomas||Strauss, Rt. Hn. G. R.|
|Leonard, Dick||Owen, Dr. David (Plymouth, Sutton)||Summerskill, Hn. Dr. Shirley|
|Lestor, Miss Joan||Palmer, Arthur||Taveme, Dick|
|Lever, Rt. Hn. Harold||Pannell, Rt. Hn. Charles||Thomas, Rt. Hn. George (Cardiff, W.)|
|Lewis, Arthur (W. Ham, N.)||Pardoe, John||Thomas, Jeffrey (Abertillery)|
|Lewis, Ron (Carlisle)||Parker, John (Dagenham)||Thomson, Rt. Hn. G. (Dundee, E.)|
|Lomas, Kenneth||Parry, Robert (Liverpool, Exchange)||Thorpe, Rt. Hn. Jeremy|
|Loughlin, Charles||Peart, Rt. Hn. Fred||Tinn, James|
|Lyon, Alexander W. (York)||Pendry, Tom||Tomney, Frank|
|Lyons, Edward (Bradford, E.)||Pentland, Norman||Torney, Tom|
|McBride, Neil||Perry, Ernest G.||Tuck, Raphael|
|McCartney, Hugh||Prentice, Rt. Hn. Reg.||Urwin, T. W.|
|McElhone, Frank||Prescott, John||Varley, Eric G.|
|McGuire, Michael||Price, J. T. (Westhoughton)||Wainwright, Edwin|
|Mackenzie, Gregor||Price, William (Rugby)||Walden, Brian (B'm'ham, All Saints)|
|Mackie, John||Probert, Arthur||Walker, Harold (Doncaster)|
|Maclennan, Robert||Rankin, John||Wallace, George|
|McMillan, Tom (Glasgow, C.)||Reed, D. (Sedgefield)||Watkins, David|
|McNamara, J. Kevin||Rees, Merlyn (Leeds, S.)||Weitzman, David|
|MacPherson, Malcolm||Rhodes, Geoffrey||Wellbeloved, James|
|Mahon, Simon (Bootle)||Richard, Ivor||Wells, William (Walsall, N.)|
|Mallalieu, E. J. (Brigg)||Roberts, Albert (Normanton)||Whitehead, Phillip|
|Mallalieu, J. P. W. (Huddersfield, E.)||Roberts, Rt. Hn. Goronwy (Caemarvon)||Whitlock, William|
|Marks, Kenneth||Robertson, John (Paisley)||Williams, Alan (Swansea, W.)|
|Marquand, David||Roderick, Caerwyn E.(Br'c'n&R'dnor)||Williams, Mrs. Shirley (Hitchin)|
|Marsden, F.||Rodgers, William (Stockton-on-Tees)||Williams, W. T. Warrington)|
|Marsh, Rt. Hn. Richard||Roper, John||Wilson, Alexander (Hamilton)|
|Mayhew, Christopher||Rose, Paul B.||Wilson, William (Coventry, S.)|
|Meacher, Michael||Ross, Rt. Hn. William (Kilmarnock)||Woof, Robert|
|Mellish, Rt. Hn. Robert||Sheldon, Robert (Ashton-under-Lyne)|
|Mendelson, John||Shore, Rt. Hn. Peter (Stepney)||TELLERS FOR THE NOES:|
|Mikardo, Ian||Short, Rt. Hn. Edward (N'c'tle-u-Tyne)||Mr. Donald Coleman and|
|Millan, Bruce||Short, Mrs. Renée (W'hampton. N. E.)||Mr. James Hamilton.|
|Miller, Dr. M. S.||Silkin, Hn. S. C. (Dulwich)|
That this House, recognising that one of the main reasons for the increase in unemployment is the cost inflation caused by excessive
pay settlements, endorses the determination of Her Majesty's Government to defeat inflation and so to make possible a reduction in the number of people out of work.