Unemployment (Leeds)

– in the House of Commons at 10:40 pm on 28th April 1983.

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Motion made, and Question proposed, That this House do now adjourn.[Mr. Major.]

Photo of Mr Joseph Dean Mr Joseph Dean , Leeds West 11:02 pm, 28th April 1983

I listened with great interest to some of the points about youth unemployment in the previous debate.

It is two years almost to the week since I raised in an Adjournment debate the problems of the dangerously accelerating unemployment rate in the Leeds travel-towork area, with all the serious social consequences that this could bring if the situation were allowed to continue or to deteriorate still further. As I said in that debate, when the Government took office in 1979 unemployment in the area was 17,551 — or 6·4 per cent. of the working population, which at that time was slightly lower than the national average. At the time of that debate, the total had increased to 33,575 or 12·1 per cent., which was almost equal to the national average at that time. I also made the charge that the industrial base of the area was being damaged—in some industries beyond repair.

My purpose in raising' he subject again today is to show the further industrial deterioration that has taken place in the city of Leeds and surrounding areas in the past two years due mainly to the Tory Government's policies. By March this year, the total of 33,575 unemployed at the time of the previous debate had risen to 41,998 under the new criteria being used by the Government. I am assured by the officers of Leeds city council, however, that if the criteria in operation two years ago were used the figure would be between 5 and 10 per cent. higher, making the global figure in more realistic terms 45,000 — an increase of between 30 and 33 per cent. — appalling figures by any standard. It is no use the Government claiming that recent slight reductions in the figures herald a new dawn. They do not. The underlying trend in job losses and long-term unemployment is still rising.

When one compares the figures for Leeds, which is a Labour area, with those for surrounding areas which are not—Harrogate, with 8·1 per cent. unemployed, Malton 7·6 per cent., Ripon 8·7 per cent., Skipton 7 per cent. and Thirsk 8·8 per cent.—one wonders whether Leeds is not the victim of a deliberate vendetta by the Tory Government. Certainly, warnings to the Government before 1982 not to remove assisted area status from the city of Leeds in August that year and requests to restore it since then, even as late as this year, have gone unheeded, further exacerbating an already seriously deteriorating situation.

Leeds is not a city based on one industry. It has a wide variety of industries, the most prominent being engineering, textiles, clothing and footwear, chemical and allied products, and, of course, the construction industry. All those industries have suffered severely under the Government's policies, the worst hit being the clothing, manufacturing and textile industries. Second only to those is the engineering industry, in which thousands of jobs have been lost and companies that were household names in their areas, with a history of successful trading have been driven out of existence through no fault of their own, probably never to return.

A striking example in my constituency is the engineering company of Turners of Stanningley which only three or four years ago received the Queen's award for exports but which now stands forlorn and empty, a bleak reminder of the outcome of the Government's policies.

It is no use the Government blaming unreasonably high wages or poor industrial relations as contributing factors, because it is an established fact that Leeds is nowhere near the top of the wage league. It is also a fact that it has one of the best industrial relations records in the United Kingdom. The people of Leeds want to work, but the Government's policies are denying them the right to do so.

The Minister may say that the so-called shake-out will leave industry leaner and fitter to take advantage of the upturn in the economy if and when it comes. As has been said before, however, the animal may well starve to death in the process.

The Minister may also refer to isolated reports from Tory supporters such as the CBI's Sir Terence Beckett or the Institute of Directors, of signs that economic recovery is on its way. Such reports, however, are viewed with sceptism by those involved and in most cases dismissed as blatant attempts to influence the electorate in the forthcoming general election.

In answer to those who predict a recovery, I cite a report in the Yorkshire Evening Post last Saturday. Mr. James Cooke, chief executive of the CBI special programmes unit has said that of 8,500 youngsters leaving school seven out of 10 will be unemployed and the problem is not likely to be any easier for the next few years. He stated: It is hard to see any reason why unemployment will not rise remorselessly in the next three to five years. When one adds to this the increasing problem of the long-term unemployed who see no hope for the future, one sees clearly the damage that has been inflicted on the people of Leeds and the working population of the area by the Government under the leadership of the right hon. Member for Finchley (Mrs. Thatcher).

The Minister may also refer to the variety of schemes brought in by the Government to alleviate the situation. These may be welcome in some respects, but they are at best only palliatives and a poor substitute for real job creation. One of the great fears of people is that if and when the upturn takes place our manufacturing base will have been so eroded that it will be in no position to take advantage of it.

I should like to quote another set of figures that illustrate the increase in the area's problem. They are not absolutely accurate, because they have been culled from a set of figures for Yorkshire and Humberside as a whole. Nevertheless, they are near enough to illustrate the dimension of the problem in Leeds. In the Leeds travel-to-work area in 1979–80, £8 million was paid out in unemployment benefit. That sum has increased annually, and from 1979–80 to 1982–83, a total of £65 million has been paid out. I and many others believe that that is a complete waste of public money and resources. That is the economics of the mad-house, especially when one considers the job protection that could have been achieved for far less Government money had Leeds retained its assisted area status.

This year, seven out of 10 school leavers will go straight on the dole, without any hope of employment in the near or not too distant future. We may criticise the social patterns that are developing among the young, but they are entitled to ask, "What sort of a deal have you given us?". Youth unemployment is one of the major contributory factors to the social problems that emanate from that section of the community. Reports from various chief constables confirm that unemployment is a major contributory factor to youth crime, because, as unemployment goes up, so does crime.

We tend to concentrate on the young, but some of the most appalling tragedies in Leeds occur among people aged 40, 50 or 60 who have lost their jobs. These industrious people have an excellent record of moderate wage demands—often lower—compared with workers in our other major cities. Their industrial record stands up to examination with the best areas of the United Kingdom, yet they have been put out of work through no fault of their own.

Leeds was internationally known for its clothing industry. There used to be tens of thousands of jobs in companies that made top-quality suits for the best tailoring houses in London down to the multiple stores. Leeds had a name for delivering the goods at the right price and at the right time. It has been said that it played a vital part in clothing the nation. As the Minister represents a Yorkshire constituency, he probably knows as much about Leeds as any hon. Member. He would be saddened if he went around Leeds today. He would see factory after factory, where clothes of all types were made for markets all over the world, which no longer exist. I see no possibility of their re-opening.

Next week, the people of Leeds will be called upon to elect a party that will run that great city for the next 12 months. Sooner or later, they will have the opportunity to elect a Government that will run the country for the lifetime of the next Parliament. I issue a word of warning to the Government. The comfortable lead that they have enjoyed in recent opinion polls is not reflected among the people of Leeds. I know from having canvassed quite extensively for the local elections recently that evidence of increasing anger and bitterness towards the Government is hardening among the electors of Leeds because of the appalling damage that the Government have inflicted on them through their economic policies. I predict that they will exact their revenge when given the opportunity to do so through the ballot box.

I referred earlier to the removal of assisted area status from Leeds in August 1982. As far as I am aware, an appeal for its restoration was made earlier this year. Once again, it was rejected. People in Leeds are concluding that the Government no longer care and that there appears to be some penalty for behaving reasonably and relying on one's own resources. Leeds has done that, but it has reached the point when it can no longer determine its own future. Even if the Minister does not want to refer to assisted area status today, I ask him to reconsider that request and look upon it in a more favourable light than hitherto.

Photo of Mr Michael Alison Mr Michael Alison , Barkston Ash 11:18 pm, 28th April 1983

I congratulate the hon. Member for Leeds, West (Mr. Dean) on his good fortune in the ballot for Adjournment debates at this strategic time, and I welcome the opportunity to reply to at least some of his points.

Five of the 11 employment office areas that make up the Leeds travel-to-work area—although not Leeds itself — are in my constituency, so I am familiar with the special problems of the area. Both as a local Member of Parliament and as a Minister at the Department of Employment, I share the hon. Gentleman's concern about the continuing high unemployment in the Leeds area. Nearly 42,000 unemployed is a tragic waste of human resources, and, like the hon. Gentleman, I know only too well the misery that unemployment brings to those affected, not least the young.

However, jobs cannot be conjured up by waving a wand. They will grow only in certain circumstances. If our firms produce goods and services of the right quality at a price that people are prepared to pay — as, the hon. Gentleman said, the textile industry used to do—those firms will make profits that can be invested in new plant and machinery. That is the only way to create new jobs. The trouble is that under successive Governments during the past 20 years—the hon. Gentleman will recall that under the two previous Labour Governments unemployment doubled—our inflation has been consistently ahead of the average for other industrialised countries. Investment was conspicuously behind that of our foreign rivals, and productivity declined relative to that of our international competitors.

In addition, we had the world recession. It hit other countries as well as Britain, but we were in an especially bad position and we have suffered more than most. Although unemployment in the Leeds travel-to-work area is below the regional and national averages, that area, with its dependence on the engineering, textile and clothing industries, all of which have been badly hit, has faced serious problems. The solution to those problems for Leeds, and for the country as a whole, lies essentially in improving our capacity to compete for orders.

With a few notable exceptions—some of them in the Leeds area—clothing and textile firms generally must be included in the list of those which have failed to respond adequately to the changing needs of customers, which have not placed proper emphasis on the importance of good design, and which have not invested sufficiently in the most up-to-date technology. Survival depends upon reforming those shortcomings. The Government's job is to create a climate in which customers can be won back and new markets developed, and all the signs are that we are beginning to succeed. In recent weeks several people have expressed optimism about our prospects for economic recovery. The hon. Gentleman cast some doubts upon those signs, but the latest evidence came two days ago from the CBI's quarterly survey, which pointed to the appreciable increase in output and orders, fast-improving export prospects and growing business confidence.

Some people, such as the hon. Gentleman, claim that the optimism is ill-founded, but the evidence does not point that way. There are firm signs that our economic strategy is beginning to pay off.

On the world scene, the modest fall in oil prices should be an important factor in helping world recovery. At home, the foundations for sustained recovery have been laid. Productivity and output have increased, and output per head in production industries increased by 5·3 per cent. in 1982. Much, but by no means all, of the competitiveness thrown away during the reckless wages explosion of the 1970s has been painfully clawed back as wage increases have moderated. The CBI states that pay settlements now average about 5·5 per cent., which is a far cry from the 15 per cent. to 20 per cent. levels of a few years ago. Now inflation is under control, and last week we were able to announce that it was down to 4·6 per cent., its lowest level for 15 years. Interest rates have also come down. During an Adjournment debate in April 1981, the hon. Gentleman complained about high interest rates. Since then rates have decreased by another two percentage points and are now seven points lower than the peak figure of 17 per cent. in November 1979.

There are still deep-rooted problems to be tackled. It will take time for the recovery to get under way, and even longer for economic improvements to feed through into increased employment, but we are on the right path.

I am glad to say that all the signs are that Leeds will not be left behind in any economic recovery. Leeds firms are playing their part in our efforts to secure new orders from overseas. I have mentioned the Leeds computer firm Systime in this House before. It has recently secured its largest export order worth £3.75 million to equip a Paris firm of stockbrokers.

Other Leeds firms are expanding. The building firm, Magnum International, hopes to create more than 200 jobs during the next four years. One hundred additional jobs are likely at George Moore, the furniture firm at Wetherby in my constituency, which has a splendid record of growth and efficiency. New firms are moving into the area, such as NAT Holidays which plans to start recruiting for 170 vacancies in August. There are also brand new developments with exciting potential. I understand that planning permission has now been granted for the business park development— Apex park—only one mile from Leeds city centre. It will be a high calibre project and will be ideally positioned with good access to the MI, M621 and M62. So the news in Leeds is not all bad. We should not talk the city down. There are some good signs here, too, that recovery is under way.

The hon. Gentleman has suggested that Leeds would have been able to attract more jobs if it had not lost its intermediate area status last August. But the Government believe that assisted area status is no longer appropriate for Leeds which, despite its many problems, has a varied industrial base, good communications and a skilled and experienced work force. We have to concentrate regional assistance on the areas of greatest need, and the sad fact is that there are many much worse off than Leeds.

Firms in Leeds remain eligible for a wide range of assistance from the Department of Industry under national schemes designed to increase awareness of and investment in new technologies, the development of new products and processes, and the birth and growth of small firms.

I have already said that our general economic strategy is producing the right results. The recent Budget, while maintaining that strategy contained specific measures to encourage recovery more directly and to provide opportunities for growth in employment. The people of Leeds will share the benefits of all these measures. One particular measure announced in the Budget will be of direct help to the unemployed in Leeds and elsewhere. That is the extension of the enterprise allowance scheme to the whole country from 1 August. This scheme, which helps unemployed people start up in business on their own, was originally introduced as an experiment in five areas. There is already evidence that many of the new businesses created under the scheme are generating extra jobs. From 1 August people in Leeds will be eligible 'for the scheme for the first time. Knowing the entrepreneurial spirit of people in this area, I have no doubt that many will want to take advantage of it.

The hon. Gentleman mentioned the problems and needs of the young unemployed. The Government's estimate is that for every 10 youngsters who reach the age of 16 this year—the end of the compulsory attendance age—three will stay on at school, three will find jobs, leaving four out of the 10 in neither category. It is to that group of four that the Government will be offering a complete guarantee for the full 12-month youth training scheme starting in September. There is no need for Leeds' youngsters to fear the spectre of unemployment when they reach the age of 16 this year. If they do not get jobs, they will be offered the opportunity of a place on a 12-month youth training scheme.

Leeds has a good record regarding the youth opportunities programme. Since 1978 the youth opportunities programme has given more than 1·8 million youngsters throughout the country the chance to learn about work at first hand. It has improved their chances of getting a job. More than 7,000 young people entered the YOP programme in 1982–83. Our undertaking to 1982 school leavers of the offer of a place on the youth opportunities programme by Christmas was substantially met. Only 173 youngsters in the group remained without an offer in the whole of Leeds and north Yorkshire at Christmas 1982.

The Government's commitment to helping young people has now gone much further with the introduction of the youth training scheme. The scheme will provide real training for our young people, giving them the basic skills they need to compete in the labour market. It is envisaged that 6,500 places on the scheme will be needed in Leeds this year and the response from organisations wishing to be sponsors has been very encouraging. There are already sufficient proposals under consideration to meet the target and at least 4,500 places will be provided by employers. That is to say, they will be mode A schemes.

Another of our special measures, the community programme, has made an excellent start in Leeds. Agents have signed agreements to provide over 2,700 places, and already approval has been given to 126 schemes involving over 1,600 places. The projects cover a wide range of activities—a workshop involved in repair and renovation work for social services, the provision of community centres, creches and nursery facilities, environmental improvement work and gardening and decorating services for the elderly. That is just the sort of commitment to the programme that we hoped to see and a good example of what the community programme does to help people who have been out of work for some time. But the necessity for these types of schemes will diminish as our economic policies begin to bear fruit. It is real, permanent jobs that are desperately needed. The Government have delivered their side of the bargain and have created the right economic climate for recovery. Now it is up to both sides of industry to respond to the challenge. From my knowledge of the people of Leeds, I have no doubt that they will succeed in doing so.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to Twelve o'clock.