Orders of the Day — Employment (Young Persons)

Part of the debate – in the House of Commons at 12:00 am on 24th May 1977.

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Photo of Mr Esmond Bulmer Mr Esmond Bulmer , Kidderminster 12:00 am, 24th May 1977

I share the concern of the hon. Member for Wolverhampton North-East (Mrs. Short) that the Holland Report is over-optimistic. I also believe that it deals too much with symptoms and too little with causes.

I should like to return to what I feel is the central problem and that is whether this youth unemployment, which has assumed such horrific proportions, is structural or cyclical. From what the Secretary of State said, I was not clear which he believed it to be. He seemed to be showing the same ambivalence that the Holland Report showed. That report said that one of the issues considered, but not resolved, was whether the problem among young people is structural or cyclical. The Government must clear their mind on this.

I am in no doubt at all that we have severe structural problems. The falling rate of growth of the Western economies, the rate of technical change and the nature of overseas competition all suggest that this is indeed the case. I therefore feel strongly that the measures proposed do not go far enough.

We are, of course, told that this is a problem which is common to the West. If they were present, some Labour Members below the Gangway would no doubt say that it was part of the crisis of capitalism. It is indeed true that in the Socialist countries there is less unemployment of this sort but at a price, and that price is the massive direction of labour.

The same people who bleat about the crisis of confidence in capitalism today would be the first to shout if conscription were reintroduced in order to meet the massive imbalance between the forces of NATO and those of the Warsaw Pact countries. I believe that as long as this imbalance lasts we should do all we can to encourage young people to go into the Forces and to see that the training they get there is as relevant as it can be to civilian life. But I think the Holland Report rightly rejects the direction of labour.

We must concentrate on creating opportunities, particularly opportunities in the wealth-creating sector, and we must concentrate on improving our competitive position in the world. When we compare ourselves with those countries that are so successfully depriving us of trade—Japan, Germany, the United States—I believe the nature of some of our structural handicaps stand out.

Which, indeed, of our industrial competitors has so consistently acquired the commanding heights of yesterday's economy and diverted so many of the nation's resources to the maintenance of structures that are often derelict? Which of our competitors has allowed the level of manufacturing industry to fall so low? Which of our competitors has taken so much trouble to design a taxation structure which drives out of the country all the most able? Which of our competitors allows the ground rules against which industry operates to be changed so often, and very often in a damaging way? Which of our competitors has allowed its small businesses to be squeezed so ruthlessly and the birth of new businesses to fall so low? Which of our competitors has such a powerful and fragmented trade union movement offering such resistence to change? Which of our competitors has civil servants who are so commercially inexperienced?

I find it hard to believe, but it is indeed the case, that neither in the Treasury nor in the Department of Industry at the rank of assistant secretary or above is there a single person with even one year's experience of manufacturing industry. Which of our competitors has allowed the balance between wealth creation and wealth consumption to tilt so far against wealth creation?

The Secretary of State for Employment did not address himself to these problems. These problems are all structural and, if they remain unreformed, that will lead to a further decline of this country and to a loss of job opportunities. That loss will be felt first by the young.

Therefore, our first task must be to see that those of our companies which can compete successfully in overseas markets are sustained and encouraged, and that the productivity gains made by the work people are enjoyed by them so that their standards of living rises and in turn generates employment. How many people these days can afford someone to decorate their house, or to have their car repaired, or to go out for a meal?

The Government no doubt are sincere in saying that they want more employment. However, they seem to have gone out of their way to create the impression that they do not want employers. From the moment the Chancellor of the Exchequer loosed off his first whizz-bang, and predicted the howls of anguish that would follow, employers have been running for cover.

We know that the attack was pressed home. First, there was the cold steel of higher taxes and price controls without wage controls, combined with the steady pounding of the social contract, this ensured that funds were not available in the employers' hands to meet the extra responsibilities placed on them. If this were not enough, land mines with variable time fuses were put under the foundations of every private business in the land in the form of capital transfer tax and capital gains tax in a period of rapid inflation.

Every Government Department seemed committed to loosing off a whiff of bureaucratic gas to ensure that as many people as possible were diverted from the job in hand. It is hardly surprising that many employers are shell shocked and resentful. They see the Chancellor's flag of truce not as white but red—red with the blood of bankrupt business. Even if some employers are inclined to believe that the Government have had a change of heart, that the unaccustomed silence of the Secretary of State for Energy may be construed as a change of heart, the hon. Member for Liverpool, Walton (Mr. Heffer) and his friends will no doubt open up sniper fire and make sure that employers keep their heads down—and that is bad news for jobs.

This loss of confidence is extending overseas and has been exacerbated by the Bullock Report. The chairman of the American Chamber of Commerce is on record as saying that United States industrial investment in the United Kingdom stands at £6 billion and that that figure is capable of considerable expansion. But the overriding factor is confidence in the future economic and political stability of the country.

The first reaction of American business to Bullock is a mixture of disbelief and dismay. We cannot ignore that, nor can the Government. The Government stand indicted for wanton destruction of business confidence. This means that many jobs have been lost. We have seen in many industries the writing on the wall—shipbuilding, steel, textiles, heavy engineering State and his ministerial colleagues.

The Secretary of State said that the sector working parties had reported and that information was available about where the decline in jobs as well as increases in jobs might occur. I hope that he will make that information available to the House at the earliest opportunity.

One of the many gaps in the Holland Report was that this sort of information was not available. In my own constituency the carpet industry is certain to lose many jobs in the next five years. It is vital for all of us, particularly those of us who represent towns where one industry is disproportionately important, to have as early a warning as possible of where the terms of trade or technological change will go against employment prospects.

There is no doubt that the outlook for young people in my constituency is bad. Not only are jobs not on offer to them, but older workers displaced by firms that have gone bankrupt will be preferred, not only because their skills are more developed, but in some part because the Employment Protection Act redundancy provisions and maternity provisions are acting as a disincentive. A pensioner is unlikely to be dismissed unfairly.

The problem that immediately concerns me is the time it takes to organise some form of alternative employment, to acquire sites and produce the infrastructure, and finding what help Government Departments can offer. Anything that the Secretary of State can do to see that help is available—particularly for areas that do not enjoy development area status and are therefore at a disadvantage when competing with those that are and where jobs will be lost—will be much appreciated. This applies particularly in my constituency, where Government action has deprived many people of jobs, especially through the closure of RAF Hartlebury. Anything that the Government can do to make good the loss of jobs in the public sector will be appreciated.

One hon. Member said that unemployment would not be solved without massive public expenditure. I agree. But we have to create the wealth to afford it. In my constituency and many others, road programmes, particularly for bypasses, are needed. If Winchester does not want a bypass, let Bewdley have it. There must be some way of making sure that the money for such programmes is passed on.

I make a plea to the Secretary of State to try to ensure that Government Departments realise the consequences of their actions. When the Department of the Environment puts double yellow lines outside the premises of small retailers and when fire precautions are introduced that affect hotels and boarding houses, Departments should understand some of the employment consequences, however well-intentioned such measures may be. Publicity should be given to the fact that when central area redevelopment takes place nearly half the firms affected go out of business and do not start again elsewhere.

We have to recognise that in some respects our industry is going the same way as agriculture. Fewer people will be employed to produce as much, if not more. That is not a bad thing because it gives us an opportunity for greater leisure. There is no reason why old men should be down a mine or why young married women should be out at work instead of looking after their children.

If we could get the output and productivity and maintain our competitive position in the world, there would be a lot more leisure for everybody. I hope that the Minister will give some indication of Government thinking on the major structural changes which I believe to be essential if we are to solve this terrible problem of youth unemployment.