Orders of the Day — Unemployment

Part of the debate – in the House of Commons at 12:00 am on 24 July 1978.

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Photo of Mr Bob Mitchell Mr Bob Mitchell , Southampton, Itchen 12:00, 24 July 1978

The Government proposed that the first £750 of taxable income should be at 25 per cent. I should have had great respect for the Conservative Party if it had sought to raise that figure to £1,000. That would have helped the very people that we are talking about. It would have increased the incentive to work by increasing the difference between what a man receives when unemployed and his net take-home pay when working. I should like to know whether the Minister has done any investigation to find out what percentage of people are not seriously seeking work because of the fact that they would be either worse off or very little better off in work.

I should like now to look into the future. I believe that we shall be faced with the continual slow decline, because of international competition, of many of our traditional labour-intensive industries. There is not only the competition that we are meeting from Japan but also the competition from countries such as Brazil and Korea and some of the other emerging countries. This applies to the steel industry and to the textile industry, both of which are labour-intensive. I think that this trend will continue, because there is no easy way to reverse it. New technologies will be introduced and, on the whole, these are capital-intensive.

I do not think that there is much scope in manufacturing industry for a major improvement in employment. I accept the point that our problem in this country is now productivity. Whether it is the fault of labour or of management is not for me to say, but undoubtedly it is a major problem. But when I hear of two factories, one in this country and one in Germany, producing the same product, and built at the same time with the same capital equipment, and that the factory in Germany is producing 1·9 cars per man for every 1·1 produced in Britain, I have to recognise that there is something wrong.

One of the major efforts that the Government must make is to improve productivity in British industry. That would, of course, be liable in the short term to worsen unemployment. It would have long-term benefits but in the short term it would make the situation worse. I do not believe that we shall get a great improvement in the unemployment situation over the next three or four years by any of the methods which have so far been suggested. Frankly, that leaves us with one thing. In my view the only hope of improving substantially the unemployment situation in the next few years is through the public service industries, and that means public expenditure.

It is a ridiculous situation to have unemployed teachers at the present time. All my life I have argued in support of cutting down the size of classes, and so on. Teachers who are at present unemployed could be used in the education service in all sorts of ways. It is ridiculous that there are large numbers of construction workers unemployed at a time when we urgently need more houses and more building construction. This has nothing to do with the Conservative Party or the Labour Party. There is something wrong with the organisation of society. I believe that it is in the public service areas that we shall have to look for an improvement in the unemployment figures.

If that is so, then it means that we shall have to maintain a relatively high level of public expenditure over the next few years. That is why the policy of the Conservative Party, as enunciated time and time again by its Front-Bench spokesmen—that of cutting public expenditure—will make the situation far worse than it is as present.