Orders of the Day — Unemployment

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

Alert me about debates like this

Photo of Mr Frank Hooley Mr Frank Hooley , Sheffield, Heeley 12:00, 24 July 1978

In discussing the question of employment and unemployment, we have to face three curious paradoxes. First, we have high employment as well as high unemployment in this country at the moment. On the last count, there were 24,935,000 people in work, which is a higher figure than in any year for the past 10 years, except two. Over the past 10 years, the number of women in employment has gone up by 1 million from 8·7 million to 9·7 million. The number of men employed has fallen.

In 1971, the Department of Employment estimated that the working population would grow by 75,000 over five years. In fact, it grew by 850,000. Between 1973 and 1977, 99,000 jobs disappeared, but the actual labour supply grew by 1,200,000. Looking to the future, we have an estimate that the work force will increase by 1,750,000. It is something of an ironic commentary on our society that this is regarded as a social and economic problem instead of a great opportunity.

The second paradox is that we have high unemployment but a shortage of skilled workers. In Sheffield, there are now 16,000 people unemployed, hut there are estimated to be about 8,000 vacancies in manufacturfing industry in that city—one of the great industrial cities of Europe—and many of those vacancies are for skilled people.

A lot of valuable work has been done by the Engineering Industry Training Board, and I want to quote from something written by the regional training officer of that board for Northern England, which appeared in the Yorkshire and Humberside Development Digest. He wrote: It is quite clear that the time has arrived to question, review and no doubt revise the whole approach to craft and technician training in particular, and the EITB intends to undertake major review as part of its forward strategy. That is very promising comment, but it clearly is important that we grapple with this problem of the shortage of skilled men at a time when we have 1,500,000 unemployed overall.

The third paradox is the shortage of skilled workers with, at the same time, a 25 per cent. rate of vacancy in the Government skillcentres which are designed to train skilled people. According to the figures given to me by the Department of Employment, at the end of March this year there were 4,704 vacancies in skillcentres—a 25 per cent. under-use. This does not relate simply to trades such as construction and building, where there is a general depression. In engineering production there were 1,600 vacant places—an under-use of 31 per cent. In the electrical and electronic field, there were over 1,000 vacant places—a vacancy rate of 38 per cent.

In the light of these figures, there clearly is something adrift in terms of recruitment or financing of men for these trades to go to these skillcentres. I also believe that there is something adrift with the recruitment of instructors. They are dissatisfied with their rate of pay. They compare it unfavourably with the pay of people giving somewhat similar courses in further education colleges. This is a matter which needs to be looked at.

Apart from the three basic contradictions in the system, there are some important trends which we ought to examine in looking for solutions. First, there is the general swing from manufacturing to services, which I believe has been touched on earlier in the debate. In Sheffield, in the period from 1971 to 1976, the number of people employed in manufacturing fell by 18,600. That is a decline of 5·7 per cent. But in the same period the number of peeple employed in services—including such things as communications, insurance, banking, professional services, scientific employment and administration —went up by 13,600, which was an increase of about 4 per cent. As far as I know, this trend is fairly general throughout our economy, and clearly it is something that we have to take into account in building up some sort of strategy to cope with the unemployment problem.

The second point, on which a great many speakers have already touched, is the impact on the disadvantaged and the young population of our country of a high level of unemployment. In the period from 1973 to 1977, the number of immigrant young people unemployed increased threefold. It is estimated that the inner city areas contain about 7 per cent. of the total population of the country. They contain 12½ per cent. of the unemployed. It is depressing to see that the Manpower Services Commission recently forecast that there will be between 200,000 and 350,000 youth unemployed by 1981. Clearly, again, there are certain areas and certain groups on which we have to concentrate our minds in seeking to solve this problem.

There is one area on which I think that we need not waste too much time, although much has been made of it by some parts of industry and by some Opposition Members. That is in relation to the Employment Protection Act 1975. The Policy Studies Institute findings have already been mentioned earlier in the debate, but I think that they are worth quoting in certain respects, because they are very significant. I quote from its report: The chief advantages reported were that the EPA required management to be more systematic, explicit, precise and consistent in its methods of operation. This applied particularly to procedures for discipline, dismissal, selection, appraisal and appointments. It had also encouraged unions to accept and comply with procedural agreements where proviously some had been happier to exploit unclear situations. Management had been required to think more about the human side of its business. Workers felt more secure having the backing of the EPA and the clear guidelines it laid down or which had been developed from it. Workforces had become more stable. 'Excesses of personal eccentricity' had been constrained. And last, but perhaps not least, managers themselves had gained protection for the first time. This is the considered judgment of a very careful study. Although the study has been criticised on the ground that it did not take in the smallest companies, it nevertheless covered a range of companies employing between 50 and 5,000 people in manufacturing industry, which I would have thought was a pretty representative selection. On any judgment, that study indicates that the Employment Protection Act certainly cannot be blamed to the extent that it has been blamed by some people and made a scapegoat for unemployment.

The various remedies which have been applied so far to the present situation are, of course, fairly well known at national level—the temporary employment subsidy, the small firms employment subsidy, the job release scheme, the youth employment subsidy, the job introduction scheme, the youth opportunities programme, community industry, the special temporary employment programme, the job creation scheme, and the promotion and subsidy of training places in industry. They provide in all for about 310,000 people. These were and are valuable, and clearly must be built upon.

In Sheffield, fairly vigorous action, I am glad to say, is being taken by local authorities. They have introduced a special grant to sixth-formers to encourage them to stay on at school beyond the school-leaving age. A community industry scheme has been produced to provide 100 jobs. Twenty extra lecturers in further education colleges are to be appointed to provide 400 extra places there. Twenty extra staff have been appointed at schools and colleges to deal with youth employment problems. A training workshop for unemployed young people is being set up, and an environmental project is in hand which will create another 40 jobs. Work is being done to deal with the improvement in housing. The area health authority reckons to create 1,000 new jobs in the next 12 months, mainly for the elderly and community services.

Last but not least, the shop stewards committees in the engineering firms, under pressure and strong direction from the local district committee of the AEU, have exerted considerable pressure on firms to take on trainees and perhaps to train more people than they would do in the normal course of events.

All these things are valuable and should show that a great deal can be done locally as well as nationally to tackle the unemployment problem. But the longer-term issue is what must concern this House tonight. It is my belief that full employment is possible at any level of the economy, barring a total catastrophe. It is possible, given the political will, to provide full employment in a modern industrial society, by which I mean an accepted level of unemployment of about 2 per cent. of the total population. But the political will and the economic policy must be there. I am sorry to say that I believe that the policy of the Chancellor at the moment is to keep unemployment at the 1 million or so level for the next three or four years. That is a policy which I reject and find unacceptable.

I believe that it is perfectly feasible to expand the economy, primarily by using the public sector. If the private sector will not expand, we can use the public sector. We have great public corporations. Through those corporations it would be possible to expand industrial investment. For example, the electrification of the railways would be an immense and valuable project which would create a spin-off of a great number of jobs. The modernisation of our telecommunications system would, again, provide contracts for equipment which is much needed and could be installed.

There are also the problems of housing in the inner cities, where a large improvement programme could create an enormous number of jobs with virtually little or no impact on the balance of payments problem. The problems of education and training, especially in the 16-to19-year- old age group, could be tackled by providing increased staff in our colleges, and perhaps using some of the teacher-training colleges for offering new opportunities to our young people. There are immense opportunities in preventive and social services for creating jobs for people to look after the very young and the very old.

Some hon. Members have referred to the international dimension. In concert with other countries we need to increase the flow of resources to the third world in order to create there the opportunities which would spin off in jobs not only for them—and they have unemployment problems vastly more formidable than ours—but also to create jobs for people in this country who can supply them with the machinery, equipment and technology which they need to develop their own countries.

But there must be the political will. We must absolutely declare in our policies and in our economic arguments that unemployment is unacceptable and that a modern industrial society will not tolerate 1½ million unemployed. Our economic policies must be directed to the elimination of this social curse.