On a point of order, Mr. Speaker. I understand that there is a custom and practice whereby Opposition and Government spokesmen deposit any important documents that have been published in the Library of the House of Commons, so that hon. Members can be aware of the documents that will be used in a debate.
For the past two days I have been to the Library trying to obtain a copy of the published Labour party document, which has been trailed in the newspapers and which will be used by the hon. Member for Kingston upon Hull, East (Mr. Prescott) today, called—[Interruption.]
Order. I can help the hon. Gentleman and the whole House. There is no requirement for Opposition Front Bench spokesmen to lay documents, and the hon. Gentleman is surely aware of that rule. The custom relates to Government papers—not Opposition papers — that are relevant to the debate. Indeed, many hon. Members write pamphlets and often refer to them.
Further to that point of order, Mr. Speaker. It is much more serious than that. I went to the Library and asked that someone ring Walworth road to request a copy of the document. The Library is full of Labour party pamphlets and other party political literature. The spokesman at Walworth road said that the hon. Member for Kingston upon Hull, East—
I beg to move,
That this House commends the Government on the wide range of practical help it provides through its training and employment measures and the Restart programme; welcomes the national launch of the new Job Training Scheme, endorses the policies of promoting enterprise and small business, more flexible labour markets, better training for young people and adults, and more help for the long-term unemployed; and takes note of European Community Document No. 10119/86 and congratulates the Government on achieving the adoption by the European Community during the British presidency of an Action Programme on Employment Growth in line with the Government's policies.
We are about to start a serious debate on a serious subject during which, no doubt, we may discover what strings the hon. Member for Kingston upon Hull, East (Mr. Prescott) holds in his hierarchy on this subject.
The background to our debate on this important and serious matter was given a few moments ago by my right hon. Friend the Prime Minister, when she reminded us that for the past six months the trend in unemployment has been steadily downwards. Each month there have been good and improved employment and unemployment figures, and each month they have been a bitter blow to the Labour party. It is especially gratifying—I hope to the whole House—that the level of unemployment has been falling fastest in the north, the north-west, Wales and the west midlands—again, a setback for the Opposition.
I accept that this month has not been as good as the past five months, but the hon. Gentleman will be aware that January is always the worst month of the year. Unemployment figures always go up in January because it is the worst month of the winter. Even so, it is the smallest rise in any January for eight years. It means that the trend over the past six months is the best since 1973 — [Interruption.] The Government's training measures must be looked at against that extremely encouraging background—
The position in Scotland is very different from the gloss that the right hon. and learned Gentleman has tried to put on the figures for England and Wales. The underlying trend in Scotland shows unemployment to be worsening and there has been a collapse in employment in the manufacturing sector. From figures given by the Minister responsible for Scottish industry yesterday, it is obvious that manufacturing jobs in the new towns are down—by 3,500 in East Kilbride and 2,200 in Cumbernauld—since this Government came to office. How can the right hon. and learned Gentleman present such glossy figures in view of the position in Scotland?
Scotland is not doing as well as the other regions that I have mentioned because of the difficulties of the offshore oil industry. That industry gave rise to great prosperity in Scotland until the last change in oil prices, with the resulting change in the outlook for oil companies. There are some job losses in Scotland, but many more new jobs are being created.
The picture over the past six months has been best in the regions that I have mentioned — the north, the north-west, Wales and the west midlands. The picture is not so good in Scotland, for obvious reasons—which the hon. Gentleman, who holds a Scottish seat, knows even better than I. He also knows that the best hope for Scotland and elsewhere is for the good overall national news of the past six months to be maintained, as it is likely to be.
We must best judge those measures against a favourable economic climate and an economy that is performing well. Unemployment and employment figures look much more encouraging when we consider the broad difference of approach that we take, deciding where we are going and comparing what the rival political parties are using to guide their own employment policies.
We know that apart from the argument—sometimes noisy — that takes place between myself, the hon. Member for Kingston upon Hull, East and his colleagues, and apart from the difference about the detail of measures, there is a broad difference of approach both towards the kind of economy that we see emerging and the labour market in which we believe we have to create jobs. That broad division is best described in shorthand as the difference between those in this party and this Government, who are seeking to develop an enterprise economy, and those in the Labour party who still—[Interruption.] It is noticeable that the new guide and mentor of the hon. Member for Kingston upon Hull, East, the hon. Member for Dagenham (Mr. Gould), is not yet in the Chamber. If the hon. Member for Kingston upon Hull, East, went to the other place occasionally and heard debates there, by listening to debates in both Houses of Parliament he might be better informed on all the matters upon which he tries to address this House.
To return to the sharp division between policies that are based upon the development of an enterprise economy and policies that are still based on an inclination towards a public sector-led economy and a publicly planned labour market, that division is traditional between the two great parties. However, it has been made quite clear in recent debates on unemployment that it has never been more sharp than it is now. That is the choice that faces our country when it judges our economic measures.
Quite apart from our macro-economic policies that are designed to produce sustained growth in the economy, we have based all the employment and training policies that we have produced to reinforce our economic policies on the need to change and modernise our labour market so that it comes nearer to the kind of labour market that provides good employment prospects in all the most advanced capitalist countries that have succeeded in overcoming this problem. For instance—this theme runs through all our policies—we encourage and welcome a wider spread of employment in the service industries as well as in manufacturing industries, although I believe that the broad brush division that is made between the two is often artificial. We need jobs in both sectors.
In particular, we have encouraged new business start-ups; we have supported the growth of small and medium-sized enterprises, because that sector of the economy produces the fastest growth in new jobs; we have introduced the business expansion scheme and the loan guarantee scheme and we have developed the local enterprise agency network. In particular, we have encouraged self-employment, which was in the most unfortunate decline in the 1970s. It is now growing again strongly. We have also introduced such measures as the enterprise allowance scheme to support unemployed people who enter into self-employment and we have reduced the national insurance charges that the self-employed pay. We have tried to achieve what could broadly be described as a more flexible labour market. The Wages Bill contained many measures of that kind.
Our economy is becoming much more like those of other developed countries, in which a higher proportion of people are in part-time work, while more people are engaged on short-term contracts. There is a greater development of job sharing, with more people having more than one job. Sometimes that involves more realistic pay for inexperienced school leavers who are going into their first job. However, it also involves more pay that is based on merit and performance for those who have the skills and whose performance is the best.
We have also improved the preparation of our children for today's world of work. During the last seven years we have developed much better links between schools and industry, and we must continue to do so. We are developing a more relevant curriculum for pupils through the technical and vocational education initiative. Our proposed city technological colleges will reinforce that development. We are beginning to sort out the system of vocational qualifications so that pupils can seek to attain a set pattern of qualifications of which employers will be able to make the best use. We are seeking to improve training levels and to raise the skills of our work force. Probably our biggest single success has been the development of the two-year youth training scheme. However, the new job training scheme is the latest and the most exciting example of what we have in mind.
Has my right hon. and learned Friend yet received a letter from the TUC in response to the letter from the hon. Member for Huddersfield (Mr. Sheerman)—some kind of unemployment spokesman on the Opposition Front Bench—who wrote to the TUC complaining bitterly that it had approved the £206 million job training scheme and asking it to complain to the Government about the fact that it was illegal? Has he yet received that letter, or does he think that it is a figment of the Opposition's imagination?
I have seen the letter relating to the alleged illegality point that was raised by the hon. Member for Huddersfield (Mr. Sheerman) who, astonishingly, is not here, although—but we are never quite sure—he is also a Front Bench Opposition spokesman. The hon. Member for Huddersfield will be receiving a letter from the chairman of the Manpower Services Commission this afternoon, refuting his rather silly legal point and explaining that he is making a complaint about perfectly reasonable preparations, on a contingency basis, for the scheme.
Does the Paymaster General acknowledge that he has received a letter from the TUC dated 10 February making clear its position about the job training scheme and pointing out that most of it is not in line with the guidelines set out by the Manpower Services Commission and that therefore it cannot support the scheme?
Far be it from me to intrude into any of the discussions that are taking place between the Labour party and the TUC. My right hon. and noble Friend and I have responded to the work and the proposals of the Manpower Services Commission, based on the unanimous report of its sub-committee. We have an agreement with the MSC, upon which there are TUC commissioners, about how to proceed with the new scheme, on the basis of expanding it as rapidly as we can, consistent with quality. I do not believe that it is misleading. As for the Government and the Manpower Services Commission, there has been an exchange of letters between Ministers and the MSC that makes it clear that we are proceeding on the basis of the last MSC discussions.
I shall return to the job training scheme in a moment.
I am describing the way in which the totality of our employment and training measures is changing the patterns of work. We need a work force and a labour market that will serve a modern enterprise economy. The theme that runs through the complex package that we have put together is modernisation and an enterprise economy in which the private sector will produce the majority of the jobs and a more skilled, versatile and more appropriately rewarded labour force will be provided to serve it.
On the question of letters and training, will the right hon. and learned Gentleman refer to the letter that he has received from Mr. Sutton of Pinxton in my constituency who is complaining about the training scheme? He is 58-years-old and is just recovering from several operations for cancer. Having worked for 41 years underground and having been made redundant under the Government's miners' redundancy scheme, he was told to report to the local jobcentre with a view to taking part in the restart programme. Is it not a scandal? Does the right hon. and learned Gentleman not acknowledge that my constituent, Mr. Sutton, has told me to tell Parliament that
To receive a letter like this is I believe an absolute insult, there can be no depths this Government of lies, deceit and hypocrisy will sink. This letter ought to be read out in Parliament to those Tory cretins, even then I don't think it would shame them.
That is the way in which this Government are reducing joblessness. They are doing it by sending insulting letters to 58-year-old redundant miners, this one having had several cancer operations during the last few years.
I notice from the tone of his letter that Mr. Sutton of Pinxton is, like his Member of Parliament, a shy and sensitive chap who is upset by the letters that he receives. I shall of course consider the letter of Mr. Sutton of Pinxton. However, if he studied carefully the invitation that he received under the restart programme, he would find that he was being approached as a person who had been unemployed for more than 12 months to participate in an individual interview about circumstances that might enable him to return to work. If he is unable to take a job, that will be thrown up during the interview. The idea that, when we write to people like Mr. Sutton who have been unemployed for more than 12 months, it is justifiable for them to take offence is ridiculous. If he came to an interview and it was found that he had particular difficulties, he would be treated with sensitivity; and if it were found that, because of his cancer, he was entitled to other benefits that he is not at the moment receiving, no doubt he would be given advice as to how to claim them.
Earlier in his speech, the Paymaster General referred to modernisation, modern industry and so on. Last week at this time I was waiting to speak under Standing Order No. 20 because I had just learnt that the Stocksbridge steel works in Sheffield had just been notified that 600 of the 2,400 jobs in the factory were to go. It had slimmed down, cut down, done everything that the Government wanted it to do, and now another 600 jobs are to go, 25 per cent. of the labour force. Will the right hon. and learned Gentleman kindly explain to me how that can possibly help us in a very modern factory?
The hon. Member will be aware that over the years there have always been jobs going in some places and jobs being gained elsewhere, lost in one industry and created in another. Of course, I shall look at the case of the Stocksbridge steel works but I also look at the way in which people in Yorkshire and Humberside, for example, are taking advantage of all the employment and training measures that I have been describing and I see how that part of the country has the fastest growth in the number of self-employed of any region. When we are talking about the number of jobs in the country, we are all the time comparing the jobs lost as a result of competition or technological change, on the one hand, with jobs gained elsewhere in a growing and more dynamic economy. The balance at the moment is favourable and what I have described is a package of measures to train our work force into the new jobs that are emerging at an ever-accelerating rate.
Perhaps I may be allowed not to give way for a few moments because, having described the package of measures and the philosophy underlying our approach to this problem, I was going to move on to the approach of the alliance parties. [HON. MEMBERS: "Where are they?"] What has happened is that while I have been giving way to these interventions the alliance representation in the House has actually halved. While I has having this interesting exchange about Mr. Sutton of Pinxton, we have been reduced to one solitary hon. Member from the alliance parties.
Trying to draw out some broad themes before I get involved any more in these individual arguments about constituents, factories and measures, I have tried to study the alliance parties' proposals which were brought up to date only this morning in The Guardian by the hon. Member for Stockton, South (Mr. Wrigglesworth) who tried to describe the distinctive contribution of the alliance parties to the whole question of employment.
At the moment the hon. Member for Stockton, South is somewhat stuck in a groove, trying out everything that he suggests with various computer models—he has a slight obsession with computer models—and the particular proposals that he puts through computer models have a familiar air about them. Sometimes there is a touch of infrastructure spending about them—that seems to be out of favour at the moment, compared with the Select Committee's interest in job guarantees. But the distinctive feature of alliance policies, so far as I can tell from The Guardian today, and the only distinctive feature, is that they are the only people still urging a statutory incomes policy as the key part of their measures. What they urge is the failed method of getting more market-based pay, which was the policy of the 1970s. If one reads the article inThe Guardian, one sees that the approach of the alliance parties is to be a new payroll tax exacted on those firms which exceed a pay norm. Quite apart from the practicality of that, it is plain that the alliance parties are going back to the policing of individual pay settlements, company by company, across the country, with the only flexibility being those schemes given favourable financial treatment by the Treasury—an approach to pay and employment which failed quite sadly in the 1970s and which it seems to me quite ludicrous to bring back—
—at a time when our unit labour costs in this country are rising more slowly than those of our competitors. So, again, in the improving climate, the alliance contribution to equality is becoming particularly irrelevent.
What I will leave to the hon. Member for Kingston upon Hull, East to deal with in due course are those parts of the alliance policy which are plainly lifted from a somewhat watered-down version of Labour party policy. I see that the hon. Member for Stockton, South has revised the alliance commitment yet again on the figures. What he has now come up with is that the alliance parties will aim to cut unemployment by one million in three years at a cost of £4 billion. That is plainly cribbed from the Labour party's plan to cut one million in two years at a cost of, £6 billion. It is a curious measure of moderation by those who recently left the Labour party that, when asked to make a contribution, they look at what the Labour party is saying, tone it down a bit and present it with slightly modified figures.
I will give way in a moment. There still seems to be a little doubt in the alliance parties about who their employment spokesman is. They have only one in the Chamber at the moment so I will give way to him.
I should inform the House that I am the alliance spokesman.
What is the Government's alternative in circumstances where average earnings are rising at double the rate of inflation and unemployment has stuck at 3 million? It is all very well to attack the Opposition parties. What will the Government do to ensure that the unemployed get jobs, if it is not by having an incomes policy to ensure that money is shared round fairly and evenly?
What is happening at the moment is that pay is rising faster than inflation and we are also getting rapidly improving productivity and better performance, compared with the 1970s, for example, when these alliance policies were born. At the moment—and we must maintain this—unit labour costs in this country are rising more slowly than those of our major competitors. So at this stage still to be advocating what the hon. Member for Stockton, South was advocating, the use or a new tax
as a means of influencing the climate of pay bargaining…which would not be the short-term centralised draconian policy of the past but a tax levied on firms with over 100 employees who reached pay settlement above the agreed norm",
would involve bringing back the whole machinery of vetting each and every pay increase at a time when it not only was unnecessary, but would be an inhibition of more flexible patterns of pay bargaining.
I will give way for the last time as we have yet another party seeking to intervene, but I must be allowed then to continue my speech.
I am grateful to the Paymaster General, because he has given way a good deal.
Since he has been reading The Guardian so assiduously, would he answer the poser set in one of its editorials a week or two back, dealing with wage levels? Why is it necessary for the Government to contend, in an effort to increase production, that the people at the top must get exorbitant salaries and the people at the other end must have their wages cut?
I have no recollection of ever advocating what the right hon. Gentleman has said, nor can I recollect any of my right hon. and hon. Friends doing so. If any did, I will agree that it was a rather simplistic and undesirable approach to pay.
Let us look at what the Labour party is proposing. When we look at the direction in which the Labour party is going, we can see the very stark choice that faces this country and the very clear difference in the vision that we both have of the kind of economy that we are trying to create and the kind of labour market that we want. If the alliance parties have little if anything new to offer, the Labour party always seems to me to be looking very firmly backwards to the economy and the labour market of former times. In everything that it has said, even when it does not put its documents in the Library, it emphasises the need above all for more public sector jobs, particularly in local government and sometimes in nationalised industries as well. It wants state-directed investment in industry and it continually hankers after various forms of planning agreements which it disguises in various ways. It wants a much more regulated labour market and much more legal control of everything, from minimum pay to statutory arrangements for leave of absence for family reasons. It wants to make it easier to strike again without legal requirements for pre-strike ballots and it wants all the old, legal immunities given back to the trade union movement. In short, what it wants and what it is planning for is an economy in which the state and the biggest trade unions are dominant again, with growing numbers on the public payroll being supported by the taxes of private citizens and private industry.
That same range of political views which is to be found now in the three different political groupings in the country found an echo in the European Community during our presidency, as we developed, as a British initiative, the Anglo-Irish-Italian proposal for an action programme for employment.
This debate is intended to take note of that action programme at the request of the Select Committee on European Legislation. The debate that we had in Europe between Governments, employers and trade unions was about more restricted areas of policy where European-wide action might be relevant in individual countries. The choice offered by this British initiative to Governments, employers and trade unions for discussion was about where Europe sees itself going as a society in work and whether our labour market is to be nearer to the pattern of the United States and Japan or to that of eastern Europe.
In the European Community, with all 12 Governments of the EEC, the decisions and the choice went in our favour. Last June we launched this action programme on our own but with the collaboration of the Italian and Irish Governments. As I pointed out at the time, the Italian and Irish Ministers with whom I found myself arguing were both on the Left of the coalition Governments in those countries—a member of the Irish Labour party and an Italian Socialist. By the time we reached the informal meeting in Edinburgh, we had agreed on the principles of where we were going. Those Edinburgh principles were all agreed and incorporated in the action programme by the time we reached the end of the British presidency.
First, we agreed on the need to develop a more flexible labour market. Our aim was to increase the efficiency of the labour market so that it could respond more dynamically to the needs of employers and the market. We also agreed that there was less need for regulation of such matters as worker directors or leave entitlements of the kind that the Labour party continually advocates. We also agreed on more help for small and medium-sized enterprises and the promotion of the self-employed. We agreed on more training for young people and adults. The main benefit we get out of the European social fund at the moment is with our two-year YTS and we are now looking to help with JTS as well. Finally, we agreed on more help for the unemployed.
If the hon. Gentleman took a less parochial view of these matters he would find that there is great international interest especially in what we are doing in this country for the long-term unemployed—our restart programme, action for jobs, job clubs, and the help and advice that we are giving to every person who is out of work for over six months. Had the Opposition parties played any part in those European Council discussions and the agreement on that action programme, they would have been astonished at the irrelevance of their contributions. There was some participation by the British labour and trades union movement. I had to listen to shell-backed and old-fashioned contributions of some British trade unionists lecturing their European colleagues about this programme and trying to get it rejected. The programme was not rejected; it was agreed. The points that I have just mentioned, all of which were adopted, were suitably adapted to meet the needs of the other 11 countries. The policy of the British Government on employment is now the policy of Europe. That is hardly surprising when we look at the role we were able to play. A higher proportion of our adult population is in work than in any other member country of the European Economic Community or any major industrialised country in Western Europe except Denmark.
Since March 1983 more than a million additional jobs have been created by the British economy, which is more than in the rest of the EEC countries together. The Conservative Government in Britain have new ideas on employment. Our policies, which we agreed in this action programme with our European colleagues, will dominate the work of the European Council of Social Affairs Ministers from now on.
I am grateful to the Paymaster General for giving way. Has he received the press statement that was sent to all hon. Members in the past few days from the European trade unions, which made it clear that they totally reject the flexibility arguments in this programme, which mean the deregulation of employment rights and services that they have seen in this country?
No doubt some TUC representatives went out and got the ETUC to write that. I met the ETUC, the European trade unionists. They were parties to all those discussions. They were not parties to the final decision, which was a decision of the Council of Ministers.
The 12 Governments agreed on this programme. An intrusion of the British Labour movement would have been an irrelevance to our discussions. We took that role because of our new ideas and the package of programme schemes in this country, which is now outrunning in new ideas those of any other European country, and we moved on recently with the package that we announced only a fortnight ago.
The two-year YTS is now to be guaranteed to all l7-year-olds in this country. For the first time no person under the age of 18 in this country need be unemployed after March of this year, unless they have chosen to be so. The restart programme, which gives individual help and assistance as I have described, is now available to everybody after they have been unemployed for six months, which is the time when they are in danger of becoming most disillusioned. We have moved on the new job training scheme, targeting on the under 25-year-olds but making available free training of value to everybody who has been unemployed for more than six months.
My right hon. and learned Friend has been speaking of European initiatives and discussions on restart and job clubs. Is he aware that since April of this year, when the new job club was started in Norwich, it has been so successful that there is now a second job club and the prospect of two more to follow? Is he also aware that, of the 113 people who have been through these job clubs, 93 have got jobs and that this 90 per cent. success rate must be attributable to this strategy and these plans?
I am glad to say that we will soon have more than 400 job clubs and we are well on course to having 1,000 in a few months' time. We shall probably go beyond that.
As my hon. Friend the Member for Norwich, North (Mr. Thompson) has just pointed out to the hon. Member for Kingston upon Hull, East, the whole purpose of the job clubs is to give people who have been unemployed for a very long time assistance in the form of free postage and telephone and also the guidance and motivation which gets them back into jobs. The majority do get jobs—about two thirds get jobs. These are people who have been unemployed. Over 60 per cent of them get jobs.
I am pleased to have caught the attention of the hon. Member for Kingston upon Hull, East, who sits there looking incredulous. More than 60 per cent. of those who go to job clubs, who are long-term unemployed, actually get themselves into jobs. If that fact bears in on the hon. Member for Kingston upon Hull, East, he might stop his automatic knee-jerk opposition to each and every proposition we put forward, a reaction that has been causing so much trouble. The third measure of the recent package we announced was the job training scheme, which will provide free training for people under 25. This measure will fill a real need, which was first thrown up when we went through our restart programme and began to offer a variety of options to those who came to see us.
Would the Minister, when making points about training, say something to the House about the TVEI scheme, which is excellent? Unfortunately, my local authority continues to turn down the offer of some £7 million which will benefit many young people in my constituency. However, I understand that a meeting is to be arranged which, I hope, will persuade this local authority to change its mind and accept this sum of money.
The behaviour of some Labour local authorities in relation to the offer of schemes, work experience and training for their residents at times has been remarkable but I am glad to say that the number still holding out against TVEI is tiny. My hon. Friend's local authority must be one of the last handful still refusing to participate and I am glad to hear that it is changing its mind. Large numbers of local education authorities are coming forward and seeking to take part as managing agents in the job training scheme, which I have just described as filling a gap in the range of services that we are able to offer through the restart programme.
We are expanding that programme as rapidly as possible in line with quality and in agreement with the Manpower Services Commission. We are finding the managing agents, we will find the work experience, and we will also find the trainees who are eager to take advantage of the scheme. Why is it—when we have discussed and described this package of measures and the results—that we get automatic opposition every time from those who seem to be speaking for the Opposition? It is quite obvious that they do not want to see unemployment continuing to go down in 1987, but they do not address themselves to what they would do in the unlikely and undesirable event of them ever taking power. Would they withdraw all these schemes? Would they withdraw the advice? I very much doubt it. So far the Labour party has consistently opposed everything that we have introduced. YTS and the community programme are described as skivvy schemes. Even the enterprise allowance scheme is described as a skivvy scheme. The hon. Member for St. Helens, North (Mr. Evans), who will be replying to the debate, has even promised to abolish the new workers scheme.
The reason we have continual opposition to training schemes is that the Labour party has a lack of new ideas of its own. Occasionally the ideas that come from the Opposition seem to reflect some of our measures. After Christmas the Leader of the Opposition tried to describe how the Labour party would get 1 million off the unemployment figures. He could get up to only 600,000. Of those, 300,000 were to be in training programmes; that sounded remarkably like the JTS which we were on the point of announcing.
This morning in The Guardian the hon. Member for Stockton, South, speaking on behalf of the alliance, said that its strategy would be
to offer a job guarantee, including a crash programme of training and reskilling for those who have been out of work for a year or longer and are threatened with the scrap-heap.
That sounds like JTS but we have to wait longer for it.
I give a message to the Opposition parties that they should stop making these attacks on training schemes. Their obvious purpose is to obscure the fact that they do not have credible policies of their own. Whatever time scale of expenditure the various Opposition parties choose, they have no way in which to describe credibly how they will take 1 million off the unemployment register. If I believed that any of them could come up with a programme which would take 1 million off the unemployed figure, it would be my intention and that of my right hon. Friend to take advantage of it immediately and to begin to put it into practice. Such a reduction in unemployment is our aim as well, but the Opposition parties are unable to describe a policy. That has given rise to their recent problems in coming forward with a credible policy to take 1 million off the unemployed figure.
I am sure it also lies behind the change in responsibility on the Labour side for presenting employment policy. I am surprised not to see the hon. Member for Dagenham in his place, given the new role he has to play. In The Times of 11 February we read:
Mr. Neil Kinnock has given the key task of drawing up Labour's programme to cut unemployment to Mr. Bryan Gould, elected to the Shadow Cabinet for the first time in the autumn, and not to Mr. John Prescott, his shadow Employment Secretary. The appointment, decided by the Shadow Cabinet at its Bishop's Stortford summit in January, has not been officially announced for fear that it would be seen as a demotion or a snub for Mr. Prescott.…Mr. Prescott, although regarded as an assiduous and hardworking member of the team, has nevertheless worried some of his colleagues by making policy on his feet.
That seems to be a description of, for example, the 1 per cent. training tax which the hon. Gentleman announced in a casual speech at Knowsley only a short time ago.
This issue has been raised several times. Perhaps I may be given a second to explain, because it is a fair point. First, hon. Members should not believe all that they read in the press. Secondly, the corresponding position in the Government of my hon. Friend the Member for Dagenham (Mr. Gould) is as Chief Secretary to the Treasury. As I understand it, every Department goes to the Chief Secretary to the Treasury to discuss the financing of its proposals. I do not see the Chief Secretary on the Government Front Bench. The proposal that my hon. Friend should be responsible for the overall financial package for all jobs was made by me at the Bishop's Stortford shadow Cabinet meeting six weeks ago.
I had spent most of my energies on that, but the report referred to stressed the local government contribution. Details have to be worked out for all sectors of the economy and it is normal for the Chief Secretary to the Treasury to be involved. The corresponding position in the shadow Cabinet is held by my hon. Friend the Member for Dagenham.
The idea that the Chief Secretary's shadow is responsible for drawing up the Labour party's programme to cut unemployment is a curious definition of roles. It is obvious to those who have been observing the Labour party that the Gould committee, as it keeps being called by the hon. Member for Kingston upon Hull, East, is being called in to arbitrate between the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and the hon. Member for Kingston upon Hull, East about the package that they are unable to put together.
On a point of order, Mr. Deputy Speaker. I seek your advice because 1 am not informed about what can happen in the Chamber. I listened to your ruling about not referring to or pointing to people who are not actually in the Chamber. I am wondering about the position when someone listening to the debate can be seen by those who are sitting in the Chamber, especially when we know that that person has responsibility in another place. I wonder whether—
Order. I shall bring the hon. Gentleman's wondering to an immediate halt. The hon. Gentleman has been here for a long time and he knows that my earlier ruling was based on the long-standing practice and convention of the House that we do not refer to persons in the Strangers' Gallery.
May I also remind the House that a large number of right hon. and hon. Members wish to take part in the debate. Interruptions and interventions are made only at the expense of other hon. Members. I have been reluctant to intervene for the same reason. But while I am on my feet I think that I should remind the House of the fact that the debate has to finish at 10 o'clock and that many people want to speak before it ends.
Opposition Members are making a concerted attempt to stop my speech lest I get to the question of responsibility for policy on their side and exactly what their policy is. Given that we have had that tortuous explanation of how the hon. Member for Dagenham came into the act, let us see whether the hon. Member for Kingston upon Hull, East can shed light on what his policy will be, if, indeed, he remains the spokesman. He committed himself a long time ago to a programme to reduce unemployment by 1 million. As he knows—he acknowledged this in the interview he gave in "Weekend World" last Sunday—that policy must be based on an assumption that they will create 1·5 million jobs to hit that target.
We have already increased jobs by over 1 million in the last three years. The hon. Gentleman intends to create an additional 1·5 million jobs in two years. As he knows, every time he addresses himself to the subject, he has no idea in detail of how the policies of a Labour Government could achieve that. He has told us repeatedly over the last year or so that we will get more details. We were promised details for the Labour local government conference, but that came and went last weekend and we are still waiting. We were brought up to date last Sunday when the hon. Gentleman, in the interview in "Weekend World" with Matthew Parris, said that he would have everything sewn up within six weeks, and so we have six weeks to go. I found that reassuring. Describing the state of affairs in the Labour party, he said:
The debate's well on. I've produced a pamphlet now…we've already got the semblance of a package.
The pamphlet is not available. It was two years ago that the Leader of the Opposition first geared up his friends in the local authorities to get their spending plans ready. One might have thought that, after two years in the job, Labour's employment spokesman would have come up with more than the semblance of a package. Here, to be fair, is an explanation of that. Last Sunday, Matthew Parris said that the hon. Member for Kingston upon Hull, East had been thinking about that programme for two years as the Opposition employment spokesman. The hon. Gentleman replied:
The first year was industrial relations, I'm bound to say that was one formidable problem.
I dare say that the hon. Gentleman is right. Clearly, he is not the sort of man who can cross the road and chew gum at the same time, but he still had a year on the policy that he intended to put together.
We now know the broad outline of Labour's employment policy. We know that it will cost at least £6 billion because the right hon. Member for Sparkbrook has already conceded that. We know that it will mean increased borrowing and taxation, and we know that it will mean many more jobs in the town halls in particular, but we do not know precisely how many.
The hon. Member for Kingston upon Hull, East has accepted that local authority jobs could account for about one third of Labour's target, about 500,000 jobs. To be fair to the hon. Gentleman, I should quote verbatim the exchange between—
With the greatest respect, Mr. Deputy Speaker, the amendment has been selected for debate and that is what we are debating. It is most noticeable that, whenever we stray on to the question of responsibility for Opposition policy, the Opposition make a concerted attempt to stop all discussion going further. However, we are talking about how we can tackle the problems of employment, training and unemployment. I am about to quote—
The people who are scared, if I may say so to the hon. Member for Workington (Mr. Campbell-Savours), are most of the members of the Labour party, who do not wish to discuss the role of the hon. Member for Kingston upon Hull, East. Nor do Labour Members wish to discuss their policies or their alternatives to what we are putting forward.
Mr. Deputy Speaker has just ruled that interventions must cease. I shall continue as concisely as I can by quoting the words of the hon. Member for Kingston upon Hull, East when he was describing where he stood on the issue of local authority jobs. Last Sunday Mr. Matthew Parris asked what the hon. Member for Kingston upon Hull, East thought was a real job. Mr. Parris said:
Mr. Prescott, we mustn't let this remain obscure. You said that you thought about a third of the total jobs created needed to come from the area of local government. A third of those jobs is 500,000. You seem to be implying that that is the sort of ball park that you're in.
I shall read carefully the reply from the hon. Member for Kingston upon Hull, East. I have no doubt that this will not be interrupted by the hon. Member for Workington. The hon. Member for Kingston upon Hull, East said—
On a point of order, Mr. Deputy Speaker. You recently ruled, on my initial point of order, that the Paymaster General was not addressing himself to the motion. He is still not doing that and he is still not talking about Government policies, as outlined on the Order Paper. Will you, Mr. Deputy Speaker, bring the Paymaster General to order again?
Interruptions are being made to try to obscure the perfectly fair quotation I was going to make from the comments of the hon. Member for Kingston upon Hull, East. I am surprised at the hon. Member for Rhondda (Mr. Rogers) leaping in to prevent me giving the words of the hon. Member for Kingston upon Hull, East. I have a transcript of what the hon. Gentleman said and I shall read it verbatim.
The hon. Member for Workington keeps interrupting because he knows that I am going to quote from the "Weekend World" programme. The hon. Member for Kingston upon Hull, East said:
I'm saying that the third, I mean one and a half million, its estimated by the models to get a million off the register, if you fashion your package that more jobs are so designed that they come off the register, one figure of one and half to get a million off the register is an assumption that if you throw money at the problem it cascades down and the effect is a million come off the register if you create a million and a half.
The hon. Gentleman should listen to the words of the Opposition spokesman because he continued:
We're going the other way about. We're actually knowing what kind of jobs we actually want to create. We know what
the effect is likely to be on that register. It may not necessarily mean that you need one and half to get a million, but that's the kind of detailed work we're doing at the moment, but clearly if you're talking about a quarter of a million jobs in that area, that's a substantial part of any programme and if we can get more, then we will be delighted, but we're not going to create them just for jobs' sake, we are going to create meeting real needs. And that's the kind of work we're doing and that's why I can't be pushed into a position as to whether it's three hundred thousand or five hundred thousand—when we've completed the work we'll let you have the details in time for the election.
That is gibberish. We should send for the hon. Member for Dagenham to come immediately and explain it, because that is the job that he has between now and the Budget.
It is clear that the Paymaster General does not understand what happened in that programme. The models referred to of 1·5 million to get 1 million off the exchanges assume that one simply puts money into the demand equation and one must create 1·5 million to get 1 million off the exchanges. I hope that that is simple enough for the Paymaster General to understand. Some jobs in construction, for example, are more directly concerned with the exchange and one can take them off the exchange, putting a lot of money into the economy, and hope that one gets I million off the exchange. One can plan that. It is called planning. That is what o Labour is doing and that is how we will get them back.
We should get the pamphlet that the hon. Member for Dagenham was going to produce. We should get something soon that enables us at least to have that policy spelt out with sub-titles so that we can understand what language it is in and what it is aimed at.
Following my description of how the unemployment figures are improving, how we are creating real jobs, how we are creating an enterprise economy and how everything we have done is being criticised by the Opposition, my point is that they, in return, are wedded to a pledge to reduce unemployment by 1 million. That is incredible. It has not been worked out. It has not been agreed between them and they have not yet sorted out a spokesman who will try to present it.
We are certainly content to have the debate on real jobs. We see jobs of all sorts now coming along in industries and commerce. They are real jobs and we are performing better than other countries in the EEC.
Since March 1983, total employment in the United Kingdom has risen every quarter and in every region in England, and it has now increased by well over 1 million. That is the longest period of continuous growth in the number of people working since 1959, when the figures were first published. We must speed it up, and we shall do so by continuing the policies that created the climate to produce that level of employment growth, based on continuous economic growth. The motion commends our employment and training measures, which are part of this progress, and I commend it to the House.
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'condemns the Government's policies which have increased unemployment by over two million to the highest recorded level in this country's history; further condemns the
Government for drastically reducing people's rights at work and pressurising the unemployed into part-time, low paid, low skilled, special employment schemes; deplores the dismantling of the country's training infrastructure with the abolition of 16 of the 23 statutory Industrial Training Boards and the closure of thirty skillcentres, contributing to the de-skilling of what is already the worst trained labour force of any developed economy; and calls for a reversal of these policies to produce a positive programme of high quality training and the creation of real jobs to meet the ever growing needs of an increasingly divided nation.'.
In their motion, the Government congratulate themselves on selling to Europe an
Action Programme on Employment Growth",
in line with their policies. In other words, they are selling Europe to adopt the British model because it has won them, they believe, some success and will be good for Europe. Not much has been said about that success.
I welcome the fact that the debate is on our ground because it is about creating real jobs. We will not be pushed into the Government's timeframe for the agenda. We have said that those jobs will be spelt out in the most detailed work ever done by an Opposition party, which will be produced on 12 March. The debate today is not about Opposition policies but about the programme described by the Government in their motion as an
Action Programme on Employment Growth",
about which the papers have been deposited in the Vote Office for hon. Members to see.
The Paymaster General assumes that the Government's policies of monetarism, the market enterprise, deregulation, privatisation and a reduction in taxes are the ones that have produced the successful model that they are trying to get our European partners to adopt. Presumably that is the Government's claim to success, although, as the Minister knows, the programme does not recommend any action that is binding on us or the European Community.
Socialist Ministers in the European Community tried to get the British Government to agree to financial measures that would have allowed money to go into investment and use public money to get people back to work. However, that proposal was not accepted by the British Government, although it is what we would have advised Socialist Governments to do. It has been done in Europe by both Socialist and Christian Democrat Governments, which is why their levels of unemployment are lower than they are in Great Britain.
There have been seven years of waste under the Government. Some £20 billion has been spent keeping our people idle on the dole, and £50 billion of oil money has been wasted rather than being put into investment and training or into industry and our manufacturing base. It has flooded abroad so that the City can make millions. They know how to make money, but they do not know how to earn it.
No; I want to make my initial points.
The indictment of this Government—seven years of waste—reminds me of the 13 years of waste when the Conservative party was last in government for a long time.
That may be, but the country paid the price for those 13 years, in balance of payments, reduction in skills and investment, and in our industrial base. It is history, but the Labour party has always had to pick up the mess.
The Government inherited surpluses on the balance of trade and the balance of payments, and a manufacturing industry considerably stronger than it is now. After seven years, what is the result of the Government's policies? We have the highest recorded level of unemployment in the history of the country. It is among the highest in Europe. We have the highest rate of bankruptcies—up 170 per cent. since 1979. We have the largest number of people living beneath the poverty line in the European Community. We have a low level of investment in our economy and in manufacturing—17 per cent. below what it was in 1979. We have the lowest proportion of resources invested in training of any developed economy. We have a massive deficit in manufacturing. The Government inherited a £4 billion surplus in manufacturing, but we are now heading for a £7½ billion deficit, much of it being with European countries. We are heading towards a growing deficit in the balance of payments, which the Chancellor has told us he believes will be £1·5 billion in 1987. However, the OECD figure, which I am much more likely to trust, is that it will be a £3·2 billion deficit, despite the help of all the oil money. We still have a crisis in the balance of payments, the balance of manufacturing and the balance of trade.
Let us put all this on the record because our candidates will be reading this sort of stuff to make use of it in the election. [Interruption.] I notice that the Members who are not laughing are those in the marginal seats.
We also have the lowest level of average growth of the developed economies since 1979. Even the record on inflation, the success symbol of the Government, is dubious when compared to what it was in 1979. The argument about inflation is not an absolute one. In 1979 inflation in Britain was at 8 per cent. while in Europe it was 7·1 per cent. In 1986, our inflation was 3 per cent. and that in the seven OECD countries was 1·8 per cent. The Government's inflation record is even worse on a comparative analysis, although they fail to make that comparison.
I hope that the Paymaster General can understand the simplicity of the arithmetic, because that is the reality of the problem.
I am not prepared to give way because recently the hon. Gentleman intervened in the speech of my right hon. Friend the Shadow Chancellor and suggested such a preposterous level of employment that he clearly does not understand the facts in his constituency.
The Government's policies have provided a greatly divided nation and the divide is not between north and south—that is far too simple. There is the divide caused by the inner cities, with some London areas with unemployment levels of 50 per cent. The west midlands has been reduced to the begging bowl of the regional economies, with low income areas. Increasingly, the country is becoming bitterly divided. Our labour force is the worst paid, the worst trained and enjoys the worst employment rights of any in the developed economies.
The Government want to impose this "successful" United Kingdom model on the rest of Europe. It is like a car salesman selling a Sinclair C5 to someone who has a Rolls-Royce. They are offering a lousy bankrupt model.
What has been produced after seven years of this economy? It is no coincidence that the other European countries agree with the rhetoric of the European programme and say "Yes, let's have it, but do not impose the same model on our economy." They are happy for Britain to do that because they have more investment, more training, and more research and development, with the result that all their manufactured products are coming here and taking our markets, while we believe in this silly nonsense.
I represent an inner city marginal seat. The hon. Gentleman has said that we have the worst trained labour force in Europe, and he has proposed a 1 per cent. training levy on gross turnover, which I understand would amount to £6 billion, the equivalent of raising corporation tax from 35 to 50 per cent. Has he made an exact calculation of the consequence of such taxes on manufacturing industry costs and competitiveness?
The hon. Gentleman has raised a valid point. It is absolutely critical, and I shall certainly address it, but I should like to deploy my speech first.
We readily accept that the improvement of our economy, compared with other European economies, certainly leaves a great deal to be desired. It is amazing how the Government—with a history of fiddling more statistics than any other Government—make claims as the Paymaster General claimed, about activity rates, comparing Britain with Europe as part of the evidence of success. I am reminded that this is the first time that I have been in the same room with the Secretary of State since we appeared on a television programme. I wish I could face him at another time. It is amazing how statistics are used by the Government. They are beginning to believe their own propaganda.
The motion specifically relates to employment and training. I shall quote figures produced by the Library of the House of Commons. On the last occasion, the Paymaster General rejected the work of the Library. I have had the matter updated and I shall give him the figures. Most people accept that the Library is a good research facility. Hon. Members generally accept the information that it provides. The figures that I shall use have come not out of the fiddle department of Labour's statistics but out of the House of Commons Library.
I presume that most of the figures that the Paymaster General referred to relate largely to 1983. I do not know who was in power between 1979 and 1983 because all the references relate to improvements in 1983. The unemployment figures, even on the Government's fiddle figures—I shall stick with them for the moment—are 1·9 million more than in 1979, despite whatever improvements the right hon. and learned Gentleman talked about. That is a 164 per cent. increase. The Minister talked about an improvement in the unemployment figures in the past six months. During the other 90-odd months that the Government have been in power, the figures went up every month. They have found a few months in which the figure is going down—a lot to do with employment schemes.
Even the Department's employment figures have been changed to make them more favourable. l shall keep with the figures as they are. The number of employees in employment has fallen by 1·5 million. That is 7 per cent. If we take into account the great increase in part-time labour and measure that as full-time equivalents, the Library informed me that the fall is equivalent to 8 per cent., or 1·7 million. That is 1·7 million fewer full-time jobs than in 1979, whatever we do with the figures. In reality, we are clearly talking, even on the fiddle figures, of 1·8 million fewer in work than in 1979. Even on the full-time equivalents, 250,000 more people were in work in 1979, when Labour left office, than there were when we came to power in 1974. That is the reality of the record.
Even the vacancy figures produced by the Department show that a considerable number are dependent upon the community programme schemes. The reduction in unemployment is largely due to the schemes. Even the vacancy figures are brought about by including the CP schemes because nobody wants them. They are advertised in shops, and are regularly put together for the vacancy schemes.
If the hon. Gentleman gets a brief from the Library, he must use it properly. He continues to assert the figures that he has described—the reduction in the number of those in work—when he uses figures for those in employment. He leaves out the self-employed and the growth in self-employment. It is no good the Labour party continuing to assert that self-employment does not count when more than one in 10 working people are in self-employment. The hon. Gentleman said that vacancies are accounted for by schemes. They are not advertised in that way. The community programme has been expanded. The hon. Gentleman said that nobody wants community programme jobs, but 250,000 people are in those jobs. It is not true to say that those jobs are untaken. The programme is being expanded. The hon. Gentleman gets hold of a perfectly good brief and, as usual, totally misuses it to try to denigrate the improving position.
The Paymaster General again shows his ignorance of the facts. I repeat for him—because he has difficulty in understanding—that I talked about employees in employment. I carefully used the figures from the Library. Of course, the self-employed figures were vamped up and were not included in this form in 1979. Who put them in? The Government put them in. The revamping of the self-employed figure, as the right hon. and learned Gentleman knows, was considerably increased because the Government came to the view that, on an estimate of the market, more people were to be considered self-employed, so they further inflated the figures of the employed labour force. [HON. MEMBERS: "Rubbish".] It is not rubbish. The Minister made statements in the House to that effect. The Library makes those figures clear. I have the data. I shall pass it to the Minister if he wishes to see it. I suggest that the Paymaster General should visit the Library. It might be useful for him. He will get more honesty there than he gets out of his Department's figures.
A point is often made when comparing the levels of unemployment in Europe. If we look at the unemployment level in Europe and the OECD developed countries and the average for the 1970s and the average under both Tory and Labour Governments, we see that the average rose from 3 per cent. to 5 per cent., and Britain had the average level.
From 1979, something happened to make the British figures depart from the average. The average was 8 per cent. for the countries that I have mentioned. We went to 11·6 per cent. I asked the Library what the level of unemployment would have been if we had kept the OECD level. The answer was that there would have been more than I million fewer unemployed than there are now. The OECD has worked it out for us. Let us look at what happened to the British economy. There has been less investment in transport, schools, health—all the public services. None of the other European countries took that point of view. They did not adopt cuts in public expenditure. That is why unemployment in this country rose considerably. Perhaps if we adopt the European model instead of trying to sell the British model, based on that information alone 1 million more of our people would be in work.
We often hear from the Paymaster General and his boss about European activity rates. It is said that work activity rates in Britain are far higher. That is true—under past Labour and Tory Governments. Between 1964 and 1969 our activity rate average was 5 per cent. higher, but it collapsed at a faster rate than it did in Europe. Of course, higher unemployment in Europe reduced work activity rates, but the reality was always a 5 per cent. difference. Between 1979 and 1986, it was only a 2 per cent difference. There was a reduction in the activity rate from 65 per cent. to 63 per cent. Even that shows that the collapse in the activity rate has been greater because something significant happened in the British economy, and that was the election of the Tory Government.
The hon. Gentleman continues to speak about Europe, but he goes back only as far as 1979. Will he tell the House why, in 1978, a Labour Government submitted a paper to the European Community saying that the situation in the north of England was disastrous because of the general state of the British economy?
The figures that I gave related to the periods from 1964 to 1979 and from 1979 to 1986. History teaches me that there were both Tory and Labour Governments during those periods.
For one reason or another, something significant happened in the British economy. One difference for which the Government make a great claim was the expansion in special employment measures. They rose from 250,000 to 750,000. That increase had a considerable effect in holding down the registered employed figures. The measures are primarily designed to do that.
Indeed, today's figures reveal the Government's panic about unemployment. They claim that, over the past five or six months, unemployment has been reducing. Much of the figures is due to employment schemes and, indeed, the restart programme. I have good evidence for that. A statement dated 18 December was released by the Employment Secretary, Lord Young. Referring to the last figures, he said:
Restart is undoubtedly one of the major reasons for today's improvement in figures.
I do not suppose that any hon. Member would doubt that evidence, even if he had quibbles about the Library. The Paymaster General had better not quibble because he is under observation.
The figures show that unemployment has increased month after month, but now the Government claim that changes over two or three months are largely due to their policy of special employment measures. Panic has set in in the Government. They have set a target for getting unemployment below 3 million. They have carried out a lot of fiddles and now they are creating a job training scheme which they claim will create 250,000 jobs in 12 months. That will have a clear effect in the jobcentres, but it has nothing to do with training or with providing jobs. However, it is to do with reducing the unemployment figures.
We heard from the Paymaster General about flexibility in business. The European unions have totally rejected that principle. They have seen what flexibility means in Britain where it has reduced health and safety standards. It has removed rights about unfair dismissal and legislation about wages and hours of work, and denies pregnant women the right to go back to employment. None of those things was asked for by business because the surveys carried out and published in "Barriers to Business" show that the main concerns of business men were the rate of interest and value added tax. The Government have done precisely nothing about those things that have contributed to the massive number of bankruptcies in the economy.
Government policy has nothing to do with improving conditions because deregulation is about increasing a part-time, low-paid market. That is what the abolition of the wages councils and the truck Acts was about. Britain is the only country in the world, never mind Europe, which has begun to abolish ILO obligations contained in the wages Acts and the truck Acts. No other European country has done that. The Government have done it because they want to reduce the wages levels that they are becoming increasingly worried about. They are concerned about people in low-paid poverty work. The CP schemes are designed towards that end.
We have heard about the number of people who have got jobs. I shall be in Norwich on Friday and I shall be interested to see the jobs that the Government claim for the people there. The figures for the restart scheme have been given in various parliamentary answers. People have gone through the restart scheme with about 336 interviews, and about 3 per cent. of them went into CP schemes, 10 per cent. went to restart courses, 1·6 per cent. went into training and less than 1 per cent. went to real jobs. The real jobs figure is 2,547. Time and again we have attacked the Government about that and they are conscious of how many people get real jobs.
I have just been given a letter sent by the Manpower Services Commission to employees. It tells them that when they fill out the new form about whether they have gone to a new job they have to say not only whether they got a job when they left the scheme, but guess about a job by putting a positive reply on the assumption that they might have got a job. The letter says:
I should point out that the information given in the final column should relate to what will happen to the participant where a 'positive' outcome is known. Even if this is not likely to take place for some time this is the information which should he recorded, rather than the immediate destination which may be to return to unemployment.
The person who fills out the form might not have a job to go to, but in 12 months he might have one, and he will record that as if he were going into a job immediately. That is the kind of fiddle perpetrated by the Government to try to show that people are getting jobs. I shall hand the letter to the Paymaster General so that he can read it. On the CP scheme and the job training schemes, that is precisely the kind of fiddle that is going on.
The Government have made great claims about local authorities using taxpayers' money for propaganda. Is the Paymaster General aware of how much taxpayers' money is being used to pay for propaganda for these schemes`' In 1983 some £5 million was paid for advertising, so called, and public relations. The figure has now gone up because between 1986 and 1987 some £30 million of taxpayers' money was used in this way.
I am reminded of one of the adverts on television which said, "Come with me for the job, Joe, we get the going rate." The going rate? He said in a speech yesterday that people should not expect the going rate for the job. However, we have heard on television and everywhere else about the going rate. At least the community programme paid a going rate related to some kind of wage. It averaged £55, but the job training scheme is tied to benefits. People on YTS schemes could be paid less if they went on a job training scheme. That is the first step towards the workfare that the Government have always wanted. It is the first step to a sort of poor law where people will be told to work for their benefits and that they will lose benefit if they do not take a job.
As the Paymaster General's gaffer has left the Gallery, I shall ask the right hon. and learned Gentleman about an article in the press. I do not believe everything I read in the press, but I should like to ask the right hon. and learned Gentleman where he stands. The Independent on Monday said:
Lord Young faces battle over plans to cut dole.
Having cut people to working for their benefit, the Government now propose further cuts. The Independent says:
Further cuts in unemployment benefit are being sought by Lord Young, the Secretary of State for Employment, despite strong resistance from senior ministers and backbench
But Kenneth Clarke, his deputy, is less enthusiastic".
Where does the Paymaster General stand? Is he in favour of giving people less than the benefit that they would receive under the job training scheme? I should be delighted to hear what he has to say.
That report is total nonsense. I am happy to assert that. The Times produced a long and tortuous explanation from the hon. Member for Kingston upon Hull, East (Mr. Prescott) which makes me think that we shall hear more in due course from the hon. Member for Dagenham (Mr. Gould). The hon. Gentleman has just finished an extremely long harangue which, as far as I can tell, attacked every measure by the Manpower Services Commission and the Department of Employment for assisting the long-term unemployed and for promoting training. Which scheme will the hon. Gentleman abolish? Will he abolish the youth training scheme?
I shall come shortly to the right hon. and learned Gentleman's point about training. He had a great deal to say about the rates for the job. I have here a copy of a speech that he made yesterday and I shall read from it. It says:
It has always seemed strange to me that everone doing apparently the same job should receive the same level of pay.
Is the Paymaster General listening to the point that he made to the nation yesterday? He said:
It has always seemed strange to me that everyone doing apparently the same job should receive the same level of pay.
Does that mean the system will change for solicitors and barristers in relation to the automatic fees that are charged in their closed shop? The right hon. and learned Gentleman's suggestion raises a number of interesting points. Should the Paymaster General be paid the same rate as the Secretary of State for Employment who is in another place, is not elected and presumably does not have the same obligations as an elected Member? One also thinks of the Secretary of State for the Environment because we all know that he is fairly casual and comes in later than most hon. Members. Should he be paid as a hard-working member of the Cabinet?
The most offensive point in the Paymaster General's speech was that because the cost of living in the north is lower than in the south people there should be paid less than people in the south. A family in the north earns about £70 a week less than a family in the south. That feeds the arrogance of some people in the south who say that people in the north should live on less. It fits in with many of the lectures given to us about activity rates, that people should begin to earn less and should learn to live on less, live on benefits and the pay in job training schemes.
No. I have given way once. The right hon. and learned Gentleman can sit down.
Government policy reminds me of Victorian values. It takes us back to the board of guardians, workfare, making do without training, low pay and exploited labour. That is what it is all about. It is sheer arrogance for Conservative Members to believe, having let the City free so that the wealthy will work harder to get wealthier, that low-paid people should be paid less because that will make them work harder. That is the Government's ethic and thinking.
The problem in this country is not high wages; it is low investment. There is low investment in machinery and in training. When the Tory party came to power the right hon. Member for Chingford (Mr. Tebbit) made it clear that the Government would dismantle the training structure. In November 1981, he said that the training requirement of the sectors concerned could be met effectively on a voluntary basis at less cost and with less bureaucracy. We have seen the evidence. Sixteen of the 23 industrial training boards were abolished. Thirty skillcentres were abolished. It is fair to ask, after six years of this Government, what has happened to training?
I shall not quote the tremendous amount of information that is available on the collapse of training of all kinds. I shall quote the one body from which the Government get their evidence, the NEDC. Two weeks ago the NEDC paper made it absolutely clear that the training skills of our people and the shortages of all kinds of skills have increased quite considerably. The NEDC mentions every kind of technology through the traditional industries. I shall not quote the paper as there is insufficient time. [HON. MEMBERS: "Read it."] I will read it if that is what hon. Members wish. It states:
Current shortages include some which industry should have predicted and some which were identified and unsuccessfully addressed. The shortages, for example, of professional engineers, computer and IT skills, multiskilled
craftsmen, and people with managerial and accountancy skills all fall into these categories. Beyond that there are also surprising and recurrent shortages in the traditional skills eg construction where industry is not bringing on enough skilled apprentices, nor allowing access and progression to operatives or adult entrants…there is a low level of awareness and urgency in many firms and organisations of the need to develop these massive resources…A low skills base affects the quality of the UK's goods and services and of our ability to compete in technically demanding markets.
The decline in apprenticeships and in all forms of training has been pointed out by the NEDC.
Perhaps we should consider the resources expended on training. A report produced by the Manpower Services Commission led the chairman of the MSC to suggest that the British labour force was a load of thickies. That is not the word that I would choose, but I agree that it is the worst trained labour force of any developed economy.
It has been like that for decades. It did not start in 1979, but it was the Tory Government in the 1960s who introduced training boards to improve training skills. The belief that if we removed the bureaucracy, the levies, and the delivery mechanisms it would lead to more training has not come true. Those training boards have now been supplanted with YTS.
Even the much reduced apprenticeship programmes run by employers are financed by YTS money. They are no longer additional to it. Industry is spending one-fifteenth of 1 per cent. of turnover on training—about £500 million. Most of our competitors spend about 1 per cent. of their turnover, which is the equivalent of £3·5 billion. Some spend as much as 2 or 3 per cent. of their turnover, according to the NEDC report.
In reality, we do not spend anywhere near enough on training. Since controls have been removed, we do not even spend as much as we did in 1979, when we spent about 50 per cent. more. Even though there are training boards and levies, 95 per cent. of companies are exempt from paying the levy. As a result, training has collapsed. In the construction industry about 50 per cent. of companies are exempt from paying the levy. If our companies spent as much time and energy training our people as they do in finding ways to get round the levy and invested in training our people properly, we would be able to do something more about growth in our economy to deal with those problems. It is a searing indictment of British industry that it does not invest in our people. The evidence is clear to all. The NEDC, the Manpower Services Commission and other bodies make it clear that we do not invest enough money in training our people.
All companies have the responsibility to contribute towards training because training is an investment, not a cost. The problem is that British industry treats training as a cost. Companies, big and small, have been avoiding their obligations. One company that the Government claim is a success is Jaguar. But how much does the Jaguar company spend on training? It spends only 1 per cent. of its turnover. The same is true of Rolls-Royce. That is the reason for their success, of course.
I warn industry that it cannot afford to allow the Government to do that, because they have washed their hands of the skills of the people in this country. The Government have a responsibility to find a financial framework to deal with the problem. The Government should ensure that people have enough skills. The Government have relied upon the Manpower Services Commission and the job training scheme.
The Paymaster General was quite wrong to inform the House that the TUC fully endorsed the now job training scheme. Most of the commission members made it clear that they thought that the upper limit would be 55,000, but the Government suggested that there would be 110,000 places. I quote from a letter that I received from the TUC yesterday in which it says:
TUC commissioners should make it clear at the next Commission meeting the TUC's absolute insistence that the training offered must be of good quality and a target/upper limit of 100,000 places is entirely unrealistic.
The TUC believed that the limit should be 58,000. That was generally agreed by the commission. The TUC suggests a lower number because it believes that otherwise there is an insufficient quality of training. The TUC believes that we will he pushing too much under the system in that way.
We have evidence of that. The report by the Comptroller and Auditor General published yesterday made it absolutely clear that money is being wasted in our training programmes because we are trying to force to many places through the system in the manpower training. The MSC has not got enough money to do the planning. [Interruption.] The Government had an awful lot to say about the Audit Commission's report on local authorities, but they have not yet said a word on the report by the Comptroller and Auditor General which deals with the Manpower Services Commission and training,
The Government made statements before the Audit Commission's report was published. We have already heard Lord Young in the other place say that we must wait to study the report. But that did not stop Ministers commenting about the London authorities before the Audit Commission report was ever published.
If the hon. Gentleman reads the report — he has not as yet read from any of these documents in a reasonable way when he cites the figures — he will discover that the report concedes that the adult training strategy introduced by the MSC is an improvement on the old TOPS scheme. It suggests ways in which better value for money might be obtained. It also refers to dates two years ago, and a great deal has been done since then. The chairman of the Manpower Services Commission will be giving evidence to the Public Accounts Committee about his reaction to the criticism. The report is, on the whole, favourable and in line with what we are doing. It is quite wrong of the hon. Gentleman to make such remarks.
I ask the Paymaster General to read the report again. However, I shall give him one point that is relevant to the TUC's opposition to the programmes under the job training scheme. The qualifications that it gave for new resources was that they should be limited to about 58,000 and that there should be a topping up amount to the allowance. These were not met by the statement. The right hon. and learned Gentleman must not persist in saying that the TUC totally endorses his programme. It does not, and the TUC made that clear in writing to me.
The Comptroller and Auditor General made it clear that most employers did not know how many skills there were or even what they wanted. That is deplorable. It is said that nobody knows what is needed in the market. The Manpower Services Commission wanted to bring in a computer to deal with that problem. However, the Comptroller and Auditor General pointed out that there was not enough money available, and the programme was cancelled. Yet the Paymaster General says that all his programmes can be financed with the same amount of money. But no new resources are available. That is one of the complaints made by the TUC and other bodies. It is nothing to do with quality training; it is skivvy training. It has more to do with reducing unemployment and the figures involved. It has nothing to do with training adult people.
I am not giving way.
Let us face it: the Government through their programme are asking Europe to adopt the British model. Why should Europe adopt our collapsing economy, which has the lowest investment, the poorest trained labour force and a manufacturing industry that is declining faster than that of any other European country? We' have a skill shortage. That is the state of the British economy after seven years of this Government.
But there is an alternative, and the Paymaster General is getting very worried about it. We know that we can return people to work. The Europeans have done it with more success than we have, and we may have a lot more to learn from them than they have from us. In order to reduce unemployment, we need to invest in our economy and to train our people. That will mean Government intervention. The market will not do that. We will put the alternative to the electorate.
It is hypocrisy to assume that the Government's model is the one that Europe should adopt. If anything, the European strategy is more in line with the Labour party's proposal. The electorate will soon know that and will make the obvious choice.
No doubt the House will be grateful for that thoughtful and sensitive intervention by the hon. Member for Kingston upon Hull, East (Mr. Prescott). I have been trying to think of something on which I can congratulate the hon. Gentleman. All that I can think of is that ray wife was born in his constituency, and until an hour ago she was rather proud of it.
One of the first rules of this House is that no hon. Member should be involved or interested in another constituency. The second is that a repetition of an old speech is tedious. After all, who reads old speeches? I intend partially to disregard those perfectly reasonable and valid rules.
On 5 March 1980, when you, Mr. Deputy Speaker, occupied a different position, I made a speech on employment and training opportunities in which I strongly supported the record of the Conservative Governments of 1951 to 1964, and the life, aspirations and work of Harold Macmillan. That speech greatly upset my Front Bench. It included remarks such as this:
there is a level of unemployment in this nation which is absolutely unacceptable in a decent society". — [Official Report, 5 March 1980; Vol. 980, c. 548.]
I concluded with other words critical of my Government and tried to make the point that, while my constituency may prosper, I represent my country.
That speech immediately followed a speech by the then Member for Truro, David Penhaligon. Others have paid their tributes to him. I shall simply say in public that he was the kind of colleague who makes one feel honoured to be a Member of Parliament. I feel the same about Guy Barnett.
Yes, he was my friend, and Guy was joint chairman with me of the United Nations parliamentary group.
In 1980 the problem was grave enough, with 1·25 million unemployed, and it became more grave. I continued — I am afraid without much success in my own party — to try to explain and explore what was happening. I tried to draw the attention of my right hon. and hon. Friends to the problem.
There has now been a substantial change in attitude, but we still face the difficulty of trying to interest politicians in the long term. They are fascinated by tactics and immediacy, but they are uninterested in strategies. To look a week ahead is a quantum leap for many of them, although my right hon. Friends the Secretaries of State for Employment and for Education and Science are different from the common run. We must stop thinking solely in terms of tactics and immediacy.
We are suffering from unnecessary unemployment and from the depression of our education standards. The words "standard" and "quality" have become like the word "elite". People criticise and deride them. Our children have the longest period of schooling in western Europe, yet we have produced too many people who are illiterate, innumerate and massively ill equipped for the real world. The amount of money we spend on remedial teaching and training is an area where we have failed— [Interruption.] All of us are involved in state education. I send my children to state schools and I had no formal education before the age of 12. Some would say that it shows.
We are dealing with the most appalling scandal and paying a high price for the years of the permissive society —the years that the locust hath eaten. We had another lost generation then because we forgot our standards and our quality.
The link between education and employment is close and strong. I have been banging this drum for many years and have usually been met by a sceptical silence from Opposition Members. The strategic part of employment policy is not to do with YTS, job clubs or restart. Important and admirable though such schemes are, they are temporary. The strategic part of employment policy lies in massive investment in schools and in teachers' career and salary structures. In higher education, it lies in student support, civil research and academics' salaries. We must look to the future.
I strongly support the recent proposals of the Government. My only criticism is that these welcome and important resources should be available within a shorter time scale — perhaps two years rather than three. The foundation for our long-term prosperity and success must be laid now.
Finally, I must apologise to the hon. Member. for Kingston upon Hull, East. I had no wish to offend him in my rather quick response to his speech. I am in no position to criticise or sneer at any hon. Member. It is just that I feel very strongly about this subject. I obviously got it wrong.
I am most grateful.
I conclude by appealing to my right hon. and learned Friend to look hard again at resources for education at all levels, because education is the foundation of the future of our children and of our nation.
I shall first respond to the tribute paid to my colleague, Mr. Penhaligon, by the hon. Member for Cambridge (Mr. Rhodes James). In a sense, I stand in his shoes and feel very much overshadowed by that fact. I know that the House misses him, but it will understand that my party misses him much more and we appreciate the tributes from both sides of the House.
I looked at the document twice and I found that it rather resembled the Soviet constitution. It was a model of what appeared to be the right thing to do. However, I feel that it should be judged ultimately by its execution. My remarks will really be directed towards the areas in which I feel that the Government have fallen short or are likely to fall short in terms of their current initiatives. The document also falls short in a couple of areas.
What it says about the long-term unemployed is inadequate. The alliance parties have said that our objective is to give a guarantee to the long-term unemployed. We make it clear that that is an objective and we appreciate that converting it into reality cannot be achieved in 24 hours. Nevertheless, we have to make a special effort to give the long-term unemployed a real prospect of getting back to work. I do not intend to snipe at restart, but the proportion of people who have gone through the restart programme and then obtained a permanent job still seems very small. Job clubs have also been mentioned, but although they are good for individuals they do not create any new jobs.
The document signed by the Paymaster General talks of the need for employment protection. I wonder how that squares with the sweeping away of wages councils and the removal of protection from an area of the economy where it is absolutely essential—protection not just for the low paid but for employers who want to offer decent wages and do not want standards depressed to what can only be called sweatshop conditions.
We were all a little taken aback by the comments of the Paymaster General yesterday following his Peat Marwick lecture. The press release that I read sounded reasonable in the sense of advocating greater flexibility, but the specific things that it was hoped to sweep away were radical in the extreme and I do not believe that the Paymaster General seriously thought that his stance was likely to provoke a widespread positive response from those who represent people in a negotiating situation. I do not have the exact words, but the Paymaster General should consider what he said in subsequent television interviews. He gave the impression—if he did not say it in so many words, the words that he used amounted to the same thing—that people in the regions of England and in Scotland were paying themselves too much and should pay themselves less so as to attract investment and thus create jobs.
I am surprised at the Paymaster General using such language because it is not in character. He knows that wages and employment do not correlate as simply as that. Investment decisions, why companies locate in certain areas and why some expand and some contract, are all affected by many circumstances of which pay is only one. The counter-argument is that costs in London are now so high that firms should be moving out and individuals seeking to leave London to go elsewhere where the cost of living is lower, but in fact people and firms are moving into London despite the substantial premiums and people are not moving out of London because there are no jobs to move to. Indeed, increasingly the best jobs are concentrated in London, thus draining talent and enterprise away from other regions of the United Kingdom.
Did the hon. Gentleman see that arch-priest of the London weighting allowance, Mr. Clive Jenkins, castigating my right hon. and learned Friend the Paymaster General this morning for suggesting that it might be worth having differential wages in different parts of the country? Yet has nct Clive Jenkins spent most of his trade union career negotiating substantial London weighting for his members?
I shall not respond directly to that, but I will make an important point relating to my own constituency. The most recent surveys available show the cost of living in Aberdeen to be the same as the cost of living in London and the south-east of England. Yet our pressure to secure some sort of weighting allowance for Aberdeen has been thoroughly and firmly resisted by the Government in every area. There is a relevant and pertinent point behind the hon. Gentleman's intervention, but I suggest that it shows simply the complexity of the system and, in my view, the over-simplistic solution that the Paymaster General sought to offer yesterday.
Another area in which I support the remarks of the Paymaster General, as far as they go, and feel that the Labour party is boxing itself into a serious blind alley relates to the exchange that took place over the number of people in work and the relevance or irrelevance of the self-employed and small businesses. People in the Labour party have to face up to a certain reality—that the only job growth taking place in the United Kingdom economy, or for that matter in the economies of most of the developed countries, is among the self-employed and small businesses employing fewer than 20 people. If the Labour party does not recognise that fact and work to realise the potential of that enterprise, it will never achieve any of the targets that it claims for its programmes. In fact, the Labour party is interested in creating jobs only in areas under the control and manipulation of the public sector. Although some of those jobs are relevant, the Labour party must recognise that in a mixed economy it has to be flexible and recognise that free enterprise and small businesses are a crucial sector which must be backed.
How does the hon. Gentleman reconcile his remarks about growth occurring only in the small business sector with the Government's constant claim that they are creating jobs in all sectors of the economy? I noticed the Ministers nodding when the hon. Gentleman said that because they were hoping to make a cheap point against us.
I am not sure that it is my job to answer for Ministers. I am sure that the Minister who is to reply can answer for himself in due course. All I am saying is that we have to create new jobs in the manufacturing sector and that new jobs are indeed being created.
I am sorry, but I cannot give way too many times.
The net growth is coming from the small business sector, so I and my party are concerned to support measures that will expand that sector. We are not critical of what the Government are doing, as far as it goes, but we should be going much further down that road. The evidence that can be seen—which, as I have said, is a criticism of the shortfall — shows that one of the problems is that the take-up of the small business schemes being supported by the Government varies regionally.
With regard to the problems affecting Scotland, I believe that if the Government have any pretensions about holding seats in Scotland they must start talking about unemployment in a way that shows that they understand the seriousness of the problem north of the border. The underlying unemployment trend in Scotland has been steadily upwards and my constituency has the highest increase in the rate of unemployment in the United Kingdom. I am not a pessimist about that in the long run, but it is a real problem.
One of the problems in Scotland is that we have the smallest percentage of small businesses and self-employed of any sector of the United Kingdom economy. If we can turn that round, we shall mave made a significant contribution to dealing with unemployment.
The hon. Gentleman is right to say that there is a regional variation in the Government schemes available for small businesses. In fact, there is discrimination in favour of Scotland, the north-east, the north-west and a small part of the east midlands because of the business improvement services. I am sure that the hon. Gentleman welcomes that, as I do. There is no way in which we would be anxious to introduce such a scheme, with EEC support, in the south-east. I am sure that the right hon. Gentleman agrees on that.
My point is not that I disagree with what is being done, but that a great deal more needs to be done. I suspect that more could be done to help existing businesses to develop and expand rather than simply creating new businesses, many of which fail within the first year. I am sure that the Minister has had representations from many small businesses. He will therefore know, as I do, that people resent the fact that there is help available to get into business but it is not always available to help people stay in business and to grow and expand in employment. That is an area in which a great deal more could be done, and my party is addressing itself to finding new ways to stimulate employment.
The problem that should and could be addressed by the Conservative party is its attitude towards small businesses. I exempt the Minister from that as I believe he is committed to them. I refer to the Prime Minister's comment that Westland helicopters is just another small business. Her definition of a small business as one which employs 200 people shows a lack of understanding of what is really meant by the term "small business", which is one that would employ between one and 20 people. We need to do a great deal more to encourage further development in that area. I am not saying that the Government's schemes are not welcome, but simply that there are not enough of them and that they are not adventurous enough.
The main problem which we face right now and which the Government face, if they are at all honest with themselves, is that after seven and a half years of Conservative Government the unemployment figure is stuck at 3 million and when one allows for the 1 million people on schemes it is really a great deal higher than that. The Government have announced the expansion of the JTS scheme, which is clearly designed to take the unemployment figure to below 3 million, but the underlying trend is not downwards and there is no evidence that the Government have any solution that will lead to the creation of a sufficient number of long-term jobs.
The Paymaster General sneered at the Labour and alliance parties for putting forward a programme that would reduce unemployment, on a costed basis, by about 1 million. He can afford to do that because he is in government, but the British people will judge the Conservatives not on what they say they will do in the future, but on their record over the past eight years. That record shows not only a massive increase in unemployment, but that unemployment is stuck at a level significantly higher than it has ever been and higher than virtually all our competitors. For the most part, unemployment has been kept at its current level by the expansion of schemes, some of which are useful to individuals and contain valuable training elements, but most of which do not lead to the creation of sufficient long-term jobs in any sector of the economy. The Government's failure to address that problem has lost them the confidence of people in many parts of the United Kingdom.
The Paymaster General criticised the alliance parties for putting forward an incomes strategy for controlling earnings, but it is folly for the Government to pretend that they do not have an incomes strategy when the Paymaster General advocated his own incomes strategy only yesterday when he suggested that people in the poorer areas should accept lower pay. If that is not a reference to an incomes strategy, I do not know what is.
The Secretary of State is trying to duck the fact that average earnings are rising by 7·5 per cent., which is twice the rate of inflation. Unit costs may be falling, but the basis for any future expansion is not encouraging because a significant increase in the number of jobs in this country cannot be achieved without an incomes policy or refuelling inflation. We are honest enough to identify that as a real problem that any responsible Government should take on board. We know the risk of expanding the economy by generating inflation. We believe that the Government know those risks and therefore will not expand the economy and create jobs. Worse than that, they are going for the obscenity in the current climate of considering a massive reduction in taxation rather than stimulating the creation of new jobs. My party accepts that to do both would be ideal, especially for a Government about to call an election, but a Government who chose between one or the other without having stimulated the economy would rightly be indicted if they made the wrong choice.
The Government are in severe danger of making the wrong choice, not just for themselves but for the country. If they wanted to carry the British people with them, they would recognise the need for positive and constructive measures to deal with unemployment and to improve services. That should be coupled with a policy designed to keep inflation under control so that we do not throw away the stability that we may have in other sectors. That is what the British people are looking for, but there is not the slightest sign that the Government have any such policy.
As I said at the beginning of my speech, the document reads well, although it contains one or two Thatcherite themes, which the Minister doubtless insisted on as his contribution to securing unanimity. But it is a long way short of what is actually happening and if its aims are not achieved there will be no significant reduction in unemployment and there will not be the return to work and prosperity for which people are looking. Training schemes are fine—in this country we are unskilled and inadequately trained—and I welcome those training elements that work within the Government's schemes, but it is pointless to throw money at training schemes unless we get beneficial results from them and proper jobs at the end of the day—and the Government have no strategy for achieving that.
Unlike the hon. Member for Gordon (Mr. Bruce), the hon. Member for Kingston upon Hull, East (Mr. Prescott) is a competent partisan politician. I am not entirely surprised that during his long speech he made no reference to the billions of pounds that the Paymaster General and the Secretary of State have obtained from the Treasury for our training programmes. I am not at all surprised that he could not find it within him to say a single good word about any of the training programmes that have been introduced by the Government.
However, I was slightly surprised that during the hon. Gentleman's long speech, most of which was devoted to training problems, he made no reference to the fact that the technological revolution, which we are in the middle of, is immensely destructive of skills. Any sensible training policy must recognise that we are in the middle of a period when the need for many traditional skills is fast disappearing. After all, the strikers who have just left the picket lines at Wapping thought that they were striking against Mr. Murdoch. However, we all know that they have been striking against the technological changes which have made their long-acquired skills totally redundant. That has happened elsewhere.
Twenty years ago it would have seemed unimaginable that a television repair man would ever be short of work. However, now, because of the increased reliability and complexity of television sets, there is no need for the television repair man in the way in which we imagined that there would be 20 years ago. In the aftermath of the great freeze, it might seem foolish to predict that there may soon be a surplus of plumbers. However, because of technological changes in the building industry, I suspect that that may well happen by the beginning of the 21st century.
When Opposition Members talk about long apprenticeships, they have got it wrong, and when the Government emphasise the importance of short, modular training schemes, they have got it exactly right. About 18 months ago my hon. Friends the Members for Banbury (Mr. Baldry) — I am delighted to see him in the Chamber—and for Broxtowe (Mr. Lester) and I put forward a proposal in a pamphlet suggesting that one way in which the flexibility of training might be improved would be to introduce training vouchers. I am glad that the Government are moving some way in that direction.
We argued that an essential element in that was that no unemployed person who was willing to undertake training should lose benefit. I am glad that the Paymaster General has accepted that principle in the admirable new job training scheme. It is entirely right that no one should lose benefit when he is willing to undertake training. The Government's new scheme received scant thanks from the Opposition, but I welcome it.
However, the Government have not yet made sufficient use of our universities or polytechnics for training programmes. In the past few months the Secretary of State for Education and Science has eased the squeeze on our universities and polytechnics, but the extramural departments of our universities may well have to cut their work. Several of my constituents have written to me drawing attention to the financial problems faced by the extramural department of London university. We should not cut those departments; we should seek ways to harness their skill and capacity to assist our national training programmes.
We are supposed to consider European Community document No. 10119/86 in this debate. The Wellcome laboratory in my constituency has recently made great strides in anaesthetics. When I read many EC documents, I find them as mind-numbing as some of the products from the Wellcome laboratory. Part of this document, too, was mind-numbing, but one paragraph riveted my attention. It advocates
the provision of improved information and advice about employment opportunities throughout the Community, so as to remove obstacles to movement between Member States, using as appropriate the SEDOC system.
I note that one of the principal authors of the document is the Irish Minister for labour and that one problem at present is the rapid movement of the Irish unemployed to the United Kingdom.
For the past few years, Dublin has had a Lib-Lab Government who follow a policy of high Government spending buttressed by high taxation and a public sector borrowing requirement of 15 per cent. of gross national product—the shape of things to come if we have a Lib-Lab Government. The result of those policies has been a national unemployment rate of 19·6 per cent., soaring inflation and the emigration of 100,000 young Irish people to the United Kingdom, many of whom have gone straight on to our unemployment rolls. If they had not been forced out by the Lib-Lab Government in Dublin, the fall in our own unemployment figures would have been sharper and we would be substantially better off. When the Minister deals with the continued implementation of the European employment initiative, I hope that he will ignore the instruction to him in the document because we do not wish to see a greater flow of unskilled, potentially unemployed workers coming to the United Kingdom.
It would be churlish of me to end on a note of discord. We should congratulate the Government on their record on training and job creation over the past year.
It is a great pleaure to follow the hon. Member for Beckenham (Sir P. Goodhart). His knowledge and interest in these matters are well recognised in the House and he makes a valuable contribution to the Select Committee. He also regularly writes pamphlets which we all read with great interest.
Today, we are debating unemployment and training — an area where the Government have failed. In my constituency, unemployment has risen by 300 per cent. since 1979, so the Government's failure is obvious and glaring. If Labour "was not working" when unemployment was 1·3 million and falling, what have we to say about this Government with unemployment at 3·3 million a year or, on other reckoning, about 5 million? It is an appalling waste of people's lives and economic resources. The dole queue costs about £20 billion a year and lost production costs about ·30 billion. Such economics is crazy.
The tragedy is worse, deeper and longer lasting than in the 1930s, yet the Treasury Bench does not recognise that. The Government show no remorse and certainly no self-criticism. The Paymaster General is not good at self-criticism. He has not apologised to the millions of people whose lives have been blighted; instead, he portrays a dream world, a fantasy land, where everything is for the best in the best of all possible worlds. He even suggested that our policies were the envy of the world and that he is leading the rest of Europe
We are told that an EC document is relevant and I, too, have looked at it. It appears that in November the Paymaster General wrote to his right hon. and learned Friend the Foreign Secretary. I am sure that the House is well able to contain its excitement at that news. We need not waste any time on the letter because it was just a series of cliches and platitudes. For the British Conservative Government to have the effrontery to talk about giving leadership on employment to other countries is mind boggling. Their only expertise is in the production of the biggest dole queue in Western Europe.
I imagine that the hon. Gentleman is thinking in terms of absolute figures. In percentage terms, our unemployment is about average for the European Community and well below that of several other countries.
I beg to differ. The Paymaster General is wrong on that, and I am frightened that he should be so misinformed. I shall write to him on this and also give him some figures later in my speech. Perhaps it is his attendance at those awful EEC meetings that causes him problems. I commiserate that he has to put up with those meetings; perhaps they have affected his judgment.
If we are to find a solution to our maladies, it will be by our own efforts and not through the Common Market.
The Common Market is a major cause of our employment problems. Cmnd. 9911, the White Paper issued in October 1986 entitled "Developments in the European Community January-June 1986", shows that in 1970 we had a healthy surplus on our balance of trade with Common Market countries — the equivalent in today's prices of £3·2 billion. At that time, for every £100 that we imported from the Common Market we exported £143. Currently, for every £100 that we import we export only £68. Instead of having a healthy surplus with the Common Market of £3·2 billion we now have, from January to June 1986, a deficit of £5·2 billion—an annual rate of £10·4 billion. That trade deficit, which has been inflicted on us, has cost us at least I million jobs.
I prefer to finish my argument, if I may.
From 1979 to 1985, the number of employees in manufacturing in the rest of the EEC fell by 11·4 per cent. In the United Kingdom it fell by 24 per cent. In other words, the number fell by twice as much in Britain. For the biggest economy in the EEC, West Germany, employment in manufacturing industry during that period fell by 763,000 jobs.
Currently, a massive investment in manufacturing is occurring in the north of England. I am pleased that the hon. Member for Kingston upon Hull, East (Mr. Prescott) is present, because I understand he recently visited my area. Over £20 million is being invested in new factories in manufacturing in west Yorkshire. That should be put on the record, because that is good investment.
I understand that the hon. Lady has a marginal seat in the north of England, and that she would have liked to intervene during the speech of my hon. Friend the Member for Kingston upon Hull, East. If I will do as a surrogate, I am happy that she was able to get that point on the record.
I should like to get back to the main point of how employment has fallen in the EEC compared with Britain. In West Germany 763,000 jobs have been lost, in France 687,000 jobs and in Italy 614,000 jobs. In the United Kingdom the number has fallen by 1,741,000. In other words, over a million more manufacturing jobs have been lost in Britain than in any of those countries. The trade deficit that the Common Market is inflicting on us costs at least I million jobs, and all the figures prove it. The Paymaster General's going to Brussels or Strasbourg and taking part in these meetings will not solve the problem. The Common Market is not the solution; it is the problem.
The Government's monetarist policy—in particular, the high exchange rate which we suffered from for a number of years — is now changing. The Paymaster General mentioned in his speech that our labour costs are falling compared with those of Germany and Japan. That is quite right. That is the function of the movement of the exchange rate in Japan, Germany and Britain. It was the high exchange rate that the monetarists inflicted on us, plus membership of the Common Market, which wiped out a quarter of British manufacturing industry.
We still consume manufactured goods — financed, increasingly, by credit — but we import them. Those goods are produced in foreign factories, which provide employment abroad, while our industrial areas are turned into deserts. We shall never successfully tackle our unemployment problem until the EEC trade deficit is rectified. Until the tide of manufactured imports is stemmed and some balance is restored, we shall never satisfactorily tackle unemployment. We cannot stand back; we cannot leave it to the market. We must have a proper industrial policy in Britain.
The second way that the Government has caused unemployment is this. As industrial societies mature and manufacturing processes become more sophisticated and mechanised, the numbers employed in manufacturing gently decline as a percentage of the total. For example, in Denmark between 1979 and 1985 the number declined by 3·4 per cent. Simultaneously, the numbers in services —health, education and personal social services—float up. That is the accepted process in mature industrial countries. One process compliments and compensates for the other, maintaining an equilibrium of full employment. That is what happened in Britain before 1979. From 1966 to 1974 employment in manufacturing fell by 8 per cent. Employment in personal services rose by 25 per cent. Between 1974 and 1979 employment in manufacturing fell by 8 per cent. and in personal services it rose by 8 per cent. One floats down gently, the other floats up gently, leaving an equilibrium.
Between 1979 and 1985 the number employed in manufacturing declined by 25 per cent. The increase in services was only 1 per cent. That was not a gentle float down in manufacturing but a violent collapse. It was not the natural decline that we would normally expect; it was butchering. It was engineered by the monetarist policies of the Conservative Government.
During that period, there was no adequate compensatory increase in personal services. The United Kingdom is now the smallest spender on health, in percentage terms and in absolute terms, of the advanced industrial countries. The Conservative party has reined back expenditure on education, as was mentioned by Conservative Back Benchers, and cut expenditure on personal social services. That is a major cause of unemployment being higher in Britain than in other countries.
Reviving manufacturing industry takes time. It will take time before that revival will turn into jobs, although it must be done. Expanding our services can be done fairly quickly. That is a major way that a new Government can fairly quickly reduce unemployment. I congratulate my hon. Friend the Member for Kingston upon Hull, East — he has come in for a bit of criticism today—who wants to make good the ravages on our services in health, education and personal social services. He can do it quickly, and those jobs can be provided quickly. Those jobs are financed through the public sector, which is one of the reasons why they are being cut back. I applaud my hon. Friend's initiative.
Another area is construction. There is a backlog of maintenance on council housing of some £20 billion. The Audit Commission, to which my hon. Friend referred, in its report on local government, explained that in 1979 central Government expenditure in London on housing was £1·5 billion. It is now only £500 million, one third of what it was. That is why we have homelessness, why housing is in such a terrible state and why 500,000 fewer construction workers are at work than a decade ago. That has to be rectified and reversed. I should like my hon. Friend the Member for Kingston upon Hull, East to make provision for the employment of a further 500,000 people in the building industry. Of course that can be done. Indeed, it must be done if we want to live in a civilised country with proper housing. When he does that, he will save a lot of money which we are wasting on bed and breakfast accommodation. Nor will he suck in imports in so doing. Britain has the raw materials. Bricks are made out of mud. We do not have to import mud from Japan; we have plenty of British mud to make bricks.
Why do we not pay the private employer for the additional workers he takes on a subsidy which is roughly equal to unemployment benefit? That would make a lot of sense. People are demanding action. They are not complacent like the Paymaster General. He always looks cheerful, no matter how high the unemployment figures. Whatever disaster happens, the right hon. and learned Gentleman comes along, puts his hands in his pockets, pulls up his trousers, smiles at us and tells us that everything is all right.
On 3 May, there will be a human chain from Liverpool to London of ordinary people demonstrating and demanding that action should be taken.
I am grateful to the hon. Gentleman for giving way. He has told us some of his ideas for creating 500,000 jobs. What effect would the Labour party's policy of introducing a national minimum wage have on employment? Would not the introduction of such a policy destroy 500,000 jobs?
There is absolutely no evidence for that. With great respect to the hon. Gentleman, that is pure claptrap. That is untrue. If he would like to present me with any credible argument to support that idea, I should look at it.
Employment is not achieved by forcing down wages. If forcing down wages were the way to get employment, Britain would be the country with the highest employment because our wages are the lowest in Europe. Obviously, we cannot take that idea seriously.
The Select Committee on Employment spent a lot of time undertaking careful research and it produced a job guarantee programme. The Paymaster General made light of other calculations by people who are working on plans. But we worked on our plans and did the research and had it double checked with the London Business School. Professor Alan Budd worked through all the figures. We offered the Paymaster General a way of giving a job guarantee to the long-term unemployed, but we did not hear a positive response. Instead, we got the restart programme.
It is right that we should keep in contact with the long-term unemployed. My criticism is that it was wrong to stop having contact with the long-term unemployed in 1982. There used to be regular contact with the long-term unemployed, but in 1982 the Government stopped that because the numbers being thrown on the dole queues were so high in one year—almost 1 million—that they could do nothing with them. The Government therefore stopped talking to those people. In 1983, the Government tried to slash the jobcentre service. They wanted 10 per cent. fewer people to be employed in it. At that time, the jobcentre in my constituency in Heigham road, East Ham was to be shut down and the Government were talking about putting counters in Woolworth, building societies and banks.
It is right that there should be contact with the longterm unemployed, even if it is a deathbed repentance. We should have elections more often because we would see more reversals of Government policies. The Government have started to consider the problems of the long-term unemployed. They must forgive us if we suspect their motives and think that this is not an onslaught on unemployment but merely an onslaught on the statistics. Having brought the statistics down, perhaps the Government will think about getting unemployment down as the next step.
I criticise the restart programme because of Ministers' ludicrous presentation of it. They do the programme a disservice in the way that they try to explain it. Their wildly exaggerated, inaccurate and partisan claims, which border on the mendacious, cannot be remotely justified. We need a factual and dispassionate assessment so that we can have a rational debate, not the lurid propaganda of the Government's claims.
Ministers present the restart scheme in three ways. They talk about a "positive offer" being made to roughly 90 per cent. of people. If one says that quickly, it sounds as though 90 per cent. of the unemployed get jobs. The Government use a new language or jargon. Normally, we talk about people "placed" in jobs but the Government talk here about people "submitted" to jobs. That is meaningless because we do not know whether the offer has led to anything.
Secondly, Ministers talk about people "placed". They do this only rarely and get very bad tempered when they talk about it. I can understand why, because few people are actually placed. Thirdly, to add to the confusion. the Government talk about the number ceasing to claim benefit — 18 per cent. But there is always a flow of names off the register. During the previous five quarters, before the restart scheme 18 per cent. of people came off the register.
The Paymaster General said that the restart interview would last one hour, but it is now on average 25 minutes. Applicants receive a letter, and I hope that I am not trespassing on the time of the House—[HON. MEMBERS: "The hon. Gentleman is."] In that case, I shall not continue. I shall seek a later occasion to talk about this.
I am glad to take part in this debate because unemployment, rightly, is the issue of profound concern in the United Kingdom. The concern of Conservative Members is shared equally with the hon. Member for Newham, North-East (Mr. Leighton), the Chairman of the Select Committee on Employment. The fact that virtually all Western countries are suffering from unemployment in no way reduces the agony of the problem in Britain. There are no starry or magical solutions, but if we are to have hope we must meet two vital conditions. First, we must nurture a society which encourages enterprise and the creation of wealth.
Secondly, through education and training, we must force feed at every age and level the necessary skills and a sense of excellence.
One of the finest achievements of the Government has been to rekindle a spirit of enterprise. At last we have that essential background of economic stability, steady growth and an economic outlook which looks good. Here I part company with the hon. Member for Newham, North-East who had nothing but unbridled gloom to offer on the subject of the economy. Like so many of his colleagues, he is determined to see no hope.
With inflation low, demand buoyant and output and productivity significantly better, the climate is right for businesses to invest and risk new ventures. We can all welcome the fact that there are almost a million more self-employed people than in 1980 —a sharp contrast with the decline in numbers during the depressing decade of the 1970s. That reversal of the depressing trend under the Labour Government is the result not of luck but of a specific and co-ordinated policy to promote enterprise. For instance, we have removed the excessive taxation which is toxic to energy and smothers enterprise and we have eased the worst restrictions in planning and employment law.
We have pursued a steadfast and continuing programme to lift the burden from small businesses. What will the imposition of a £6 billion training levy, as promised by the Opposition, do for enterprise in small businesses? We have launched the successful enterprise allowance scheme to give positive help, to small businesses and enterprises, and it has won valid praise from all sides. It is responsible for launching 2,000 new enterprises a week and they are supported by a network of enterprise agencies which provide help and advice. We all know of people in our constituencies who have faced redundancy after years with a major employer, but who have found new purpose in the excitement of establishing their own businesses. As the election approaches, those people should rightly question how Labour policy will help them and encourage the spirit of enterprise. How would high inflation, which will result from the promised vast expenditure of a Labour Government, leave us with anyone with the confidence to invest in business? How would higher taxation fire people with a desire to work harder and take on risks? How would the inevitable burden of costs and the deluge of restrictions spawn any enterprises? Clearly they would not. Those policies failed in the 1970s and they will fail again.
Our policies are the policies for enterprise, but there are four specific problems in relation to that programme for enterprise. First, it is almost impossible for someone out of work in the north to move to a job in the south. The housing market simply does not allow that because the cost of housing is so much greater in the south. To assist the unemployed we must seek policies that will loosen the housing market.
Secondly, it is difficult for new businesses to raise venture capital. My right hon. and learned Friend the Paymaster General mentioned the loan guarantee scheme, but that scheme has done little to encourage extra venture capital because the banks use the same criteria to lend under that scheme as they do for a normal loan.
The goal that we are successfully pursuing is to create a country of enterprise, but that is only one arm of our policy. We must also have a fully-trained work force in the necessary skills. If that training is to be effective it must start at an early age in our schools and must continue for a lifetime. The Government are the first to admit that what we have already achieved is not enough. No one can be complacent, but the Government's training initiatives are on the right road. At last, we have a structure to sustain training throughout life. We have a programme to introduce technical education that is relevant to work and that training is carried out in our secondary schools. YTS has been extended so that no school leaver under 18 need be unemployed. The new JTS, to which my hon. Friend the Member for Beckenham (Sir P. Goodhart) referred, will give six months training to anyone under 25 who has been out of work for six months. Our adult training programme has been expanded and training is a central part of the community programme.
Nevertheless, we must do even better in both quality and quantity. In my constituency matters could be improved, and I am aware that my practical examples may be mirrored elsewhere. My hon. Friend the Member for Cambridge (Mr. Rhodes James) said that we must improve general standards and I agree that the basic disciplines are of central importance, but in an engineering city such as Lincoln we also need more technical education at secondary school level. I want a city technology college established in Lincoln so that young people have a choice of high quality technical education. Such a school would also benefit from the involvement of local business enterprise and investment. The college of technology in Lincoln has a major and growing role to play in the training of school leavers and older people. That college needs better buildings and a greater range of facilities. I support our policy for local training because skillcentres are often too far away and remote. I also wish for greater funding of our local college.
That college is just one centre in Lincoln for the training of those on the community programme, which raises a third problem. Building work is often the best work for a community programme but few worthwhile building projects are being approved for the community programme. I appreciate that a scheme must not compete with commercial builders, but the work that is currently being turned down for the programme would not otherwise go ahead at all. We face a shortage of building workers and it must be right to increase that training wherever possible.
The fourth problem concerns the unemployed who join courses at colleges. If a course is termed "full time" people lose benefit even if they are available for work. I know that the new JTS will address that problem, but my hon. Friend the Member for Beckenham was right on the mark when he said that we should adopt the principle that anyone out of work who wishes to seek training should be given that opportunity.
We shall continue to make progress as we have a clear policy for enterprise and training and a commitment to improve our efforts in both those areas, but we do not share the Labour party delusion that central control and central Government can solve all problems. In relation to training, there must be a partnership with industry because industry knows best what skills are necessary for the market place. In Lincoln some progress has been made and many firms have links with the schools. Large businesses such as Marconi and Ruston Gas Turbines have developed courses in partnership with the college of technology. The Government must seek ways to stimulate greater investment in training by businesses both large and small. Such commitment exists in Germany and we must achieve it here.
The Labour party has never learned that the way for a Government to be charitable is not to turn Government into a charity. To ensure success the Government must establish a structure within which enterprise and training can flourish. The British people want skills, but relevant skills, and in the end it is only a partnership of Government and industry that will deliver those skills.
In the terms of the motion we are invited to commend the Government for the employment measures described by the Paymaster General. Those employment measures are scarcely making any impression in the Yorkshire and Humberside region, despite the optimistic intervention by the hon. Member for Batley and Spen (Mrs. Peacock).
The economy of the Yorkshire and Humberside region has deteriorated alarmingly under this Government and continues to do so. The relief for that position lies not with Department of Employment micro-economic measures but with macro-economic measures. Contrary to my hon. Friend the Member for Newham, North-East (Mr. Leighton), I believe that, at long last, our membership of the European Community offers us the possibility of considerable gain. Before I discuss that, I wish to reveal to the House what has happened in the Yorkshire and Humberside region.
My hon. Friend said "at long last". We have been a member of the Community for 15 years and it has inflicted great damage upon us. Just how long do we have to wait to receive its beneficial effects?
Yorkshire and Humberside people do not ask for handouts. That is not their style. They believe that they can give the nation a fair return for the investment that it makes in them. Traditionally they do not believe in "owt for nowt." However, they are very concerned that the long decline in the basic industries upon which the north of England built its prosperity is dividing Britain—the north declining and under-privileged, the south enjoying the lion's share of investment and growth.
The House is familiar with that scenario, but it needs to be reminded that that gap is widening. In 1983, the Yorkshire and Humberside County Councils Association published the "New Deal" regional strategy—the last Yorkshire and Humberside regional strategy that is available to us—and it tried to address this disparity. It concluded that
the Region must make the most of its potential: action must be taken to help the Region's problem areas and industries; the Region must receive a fairer share of national resources.
Since then, despite the strenuous efforts of the Yorkshire and Humberside Development Association and of all the local authorities in the region to promote it, the necessary change of direction has not been achieved. Indeed, in some ways the region is now worse off. Unemployment has risen higher to above the national average; personal incomes continue to decline relative to the national average; poor housing and infrastructure, especially in the inner cities, have suffered further deterioration, perhaps reflecting the region's continued below average share of public spending.
The Government and the European Commission give some help to deal with these problems and the county and district councils are also working hard on them, notably my own city of Sheffield. However, the abolition of the metropolitan county councils that represented nearly 70 per cent. of the region's population has involved a loss of resources and has weakened the region's voice at a time when major problems must be faced.
Nearly 500,000 jobs have been lost in metal manufacture, textiles and engineering since 1979 and, contrary to the claim of the Paymaster General, more jobs are going every week. Last week, 300 railway jobs were lost in Doncaster. This week, 600 steel jobs in Stocksbridge have been lost. I want the Treasury Bench to know that in south Yorkshire there is widespread fear that during the next two, three or four weeks a further 1,000 steel jobs will be lost. Meanwhile, there are allegations in the current Metal Bulletin of continuing state aid to German steel, although such subsidies are banned under EEC rules.
Traumatic job losses and the combined effects of earlier slum clearance and plant closure have resulted in dwindling employment opportunities in south Yorkshire and in vast tracts of redundant land and buildings. Anyone who drives up the M 1 and comes abreast of Sheffield has only to look to his left in the direction of the centre of Sheffield to see that, although 20 years ago, it was one of the most industrialised cities 'in western Europe, it is now devastated and almost wholly derelict.
There is no new industry in Sheffield. I do not expect all the steel works and engineering works that have been lost to be recovered, but I repeat that there is no new growth at all, apart from a few small units, for which we are grateful and which the city council is very anxious to encourage. However, they are making no impression at all upon an unemployment figure in my constituency that is concealed by the travel-to-work scheme, about which I shall say more in a moment.
But it does not end there. Poverty in Britain is more widespread now than it was when the urban programme began in Sheffield 20 years ago. Then unemployment, nationally, was 500,000 — 2·2 per cent. of the economically active population. Now, on a narrower definition, it is over 3 million—six times what it was then. That is now the primary cause of poverty. Sickness, child care, low pay, and particularly retirement, all contribute, but it is unemployment that has pushed up the number of people who are claiming supplementary benefit from 2·6 million in 1968 to nearly 5 million by the mid-1980s. In Sheffield alone, the number of people claiming supplementary benefit increased from 39,000 in November 1979 to 75,000 by the mid-1980s, so the dramatic increase has been among those unemployed people who have been claiming the unemployment allowance. It has increased by nearly five times, more than reflecting the increase in unemployment from 5 per cent. of the working population to more than 16 per cent.
There is little prospect of relief. A detailed breakdown of the unpublished Government report, about which we heard much in the House towards the end of last year, entitled "United Kingdom Regional Development Programme 1986–1990" reveals that south Yorkshire will face further employment cuts and worsening environmental and industrial dereliction, with little likelihood of recovery. The report says:
Dereliction, lack of good services, industrial sites and poor internal communications tend to discourage development, in particular to the north-east of Sheffield in the River Don and River Dearne valleys, and environmental problems will grow as dereliction follows closures in basic industries.
That describes the part of south Yorkshire that lies between my constituency to the east of Sheffield and the constituency of my hon. Friend the Member for Don Valley (Mr. Redmond). I know that my hon. Friend is most anxious to say a word about this, if he catches your eye, Mr. Deputy Speaker. He represents the Don Valley, and I am thinking of the Don Valley. [Interruption.] I do not know whether Conservative Members are laughing at my reference to the condition of the Don Valley. I invite them to go and look at it. Those who represent southern constituencies cannot appreciate just how serious is the neglect of the north and the widening gap between the north and the south, unless they keep in touch with the north of England.
The report also says that future employment prospects within the coal industry remain "bleak". Although productivity has improved, the increased use of new technology will further reduce manpower demands in 1990. The report adds that what is certain is that south Yorkshire needs more financial resources.
Many areas suffering from industrial decline receive aid from the European regional development fund, but these grants are not as effective as they should be, because most national Governments, as we all know, in the Community, including our own, cut other spending by an equivalent amount so that the net benefit to the local area is small. The European regional development fund should be used to provide a truly additional source of funds for the qualifying areas that I am now describing in Yorkshire and Humberside.
As for the United Kingdom regional aid programme, the November 1984 review made substantial economies by cutting grants to those highly capital-intensive developments that provide few additional jobs. However, these savings are being retained by the Exchequer instead of being channelled back to the assisted areas in more effective forms of aid. The steep rises in unemployment in some parts of our economy—notably again in Yorkshire and Humberside—mean that regional aid needs to be maintained at 1984 levels, in real terms.
In the 1984 review some parts of Yorkshire and Humberside had their assisted area status reduced; others had their status taken away and consequently lost both United Kingdom and European Community aid. However, these decisions were made in the light of unemployment levels prevailing at that time, and since then more huge job losses have been announced in the region. In addition, some settlements with increasingly severe problems in the coalfield receive little or no aid because they are grouped in "travel-to-work" areas with more prosperous, larger towns. This also applies to my own east end of Sheffield. It applies to parts of Humberside and to north Yorkshire. The Government should give higher assisted area status where this is justified by changing circumstances, without waiting for a full national review. Yorkshire and Humberside have much to offer and many locational and environmental advantages—
Yorkshire and Humberside have much to offer and many locational and environmental advantages. The problem—and if the hon. Gentleman had just been a little more patient as well as more courteous he would have allowed me to come to this point — is how to unlock the potential. On all sides one encounters the view that it is reasonable to seek more help for the region. It needs extra incentives, for example, to benefit fully from measures such as support for innovation. It makes sense for a whole coalfield, not just part of it, to have assisted area status and to benefit from European Community aid. There is a growing feeling, and it must not be minimised, that it is inequitable for the region to receive only about one twelth of the aid that goes to Scotland when the two are of the same size and experience the same level of social and economic deprivation.
My own city of Sheffield and its council have a plan, the Sheffield employment plan for regeneration, that over the next two years would create 25,000 jobs and training places in the city. Did the hon. Gentleman not want to hear about that? It regards public sector enterprise as essential to meet the city's growing needs and also to improve the quality of life. It would deploy it as a tool of economic regeneration but with the council itself planning and executing the first stage of the job creation plan. Nevertheless, it looks to the Government to open the way through a programme of economic growth, to switch national expenditure away from maintaining unemployment to creating jobs in the public service if they are not available to us in manufacturing. I have argued that there is no evidence at all of recovery in Sheffield's manufacturing district which is largely my constituency. How is the city to avoid being accused of neglect if it does not seek job creation wherever it can? The city believes, however, that that can come only if the Government remove the battery of legal and financial restrictions on local authorities.
The key to a revival of employment in Yorkshire and Humberside, as in some other regions, may lie in a pregnant sentence in that unpublished report:
South Yorkshire is likely to remain fairly depressed because the area is very much dependent upon a general upturn in the U.K. and overseas".
In short, the European Community, in particular the United Kingdom and West Germany, need to devise and implement more expansionary policies. It is in that direction that relief for Yorkshire and Humberside probably lies for it would reduce unemployment at a time of low inflation. It would offset the depressing effect on America's trading partners of the current cuts in both the budget deficit and the trade deficit of the United States. It would defuse protectionist pressure in the United States, aimed at Europe as well as Japan. The view that the correction of United States deficits will act as a drag on world growth, requiring the adoption of less restrictive policies by Japan and West Germany, has been endorsed by the International Monetary Fund, yet European Governments, especially those of Britain and West Germany, remain unimpressed. They simply do not believe that it is possible to contrive a sustained, non-inflationary expansion at the rate required to bring down unemployment, yet one country has recently done just that.
The United States spent its way out of unemployment in the traditional way without an increase in inflation because it managed to combine expansionary policies with a strong exchange rate. It did so by keeping interest rates high. It was an act which any European Country expanding alone would find difficult to follow, but it demonstrates that a modern industrial economy can expand out of unemployment without unleashing a wave of inflation, provided the exchange rate does not fall. For the members of the European Community, trading so closely with each other, the most effective way to do this, if the political problems could be overcome, would be to expand together. Then, the additional imports sucked into any one country as growth picked up could be matched by exports to its trading partners, with little change in the pattern of exchange rates.
A British initiative to foster expansion would not only benefit depressed regions such as Yorkshire and Humberside but would respond positively to the appeal by Mr. James Baker, Treasury Secretary, in Washington two days ago when he looked to the Group of Five—but he was obviously looking to the member nations of the European Community principally — for a co-ordinated economic expansion. I hope that the Chancellor will not only listen to him but will initiate a meeting of the Finance Ministers of the Group of Five with a view to such a policy, for not only would that serve to improve economic relations with the United States and head off protectionism, but Britain's image in Europe would be transformed and the European Community itself would be back on the rails at last, addressing a problem that really matters.
I am very grateful for the fact that the hon. Member for Kingston upon Hull, East (Mr. Prescott) has returned to his seat because he would not give way earlier this afternoon when he made a remark in respect of an intervention which I had made during an earlier debate when his right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) had been courteous enough to write to me and tell me that he was going to mention me during a debate — which was why I intervened. I am grateful, because it now gives me the opportunity to remind the hon. Gentleman of what his right hon. Friend said. He said that the unemployment figures were falling in my constituency probably because of the characteristic excellence and industry of its Member of Parliament. So perhaps the hon. Gentleman would have a further look at that before he seeks to snarl and sneer in future across the Dispatch Box at an hon. Member who wants to make an intervention.
I did not have the figures wrong. The figures were actually correct. The hon. Member for Stockton, South (Mr. Wrigglesworth) sought to intervene in what the right hon. Gentleman was saying, which he did because the right hon. Gentleman, despite saying twice that he would give way to me and refusing to do so, did give way to the hon. Gentleman, who then misled the House with the figures that he gave. He knows now, because I have told him personally, and they have been corrected in the House; but I am magnanimous enough to accept that it was not his fault. He went for his figures to Cleveland county council. The council has written to me and has admitted that the basis of the figures which it used to give the information to the hon. Member for Stockton, South was incorrect. It made them up.
We have just heard a very good speech which I thought was intended for next week when we will discuss the economy. Today we are supposed to be discussing training. I say that with great respect to the hon. Gentleman. He does make a good contribution but it was totally out of order.
Furniture. I was chairman of training for London region and a member of the furniture industry training board. The fundamental failures in apprenticeships have their roots in a number of causes, including the raising of the school leaving age without any consultation with industry about its needs at that time. I believe that was done by right my hon. Friend the Prime Minister. Further, the age of majority has been eroded from 21 to 18, and the truncated apprenticeship period has been reduced to 18 months or two years.
I blame all sides of industry and the trade unions — especially the one I had personal dealings with— for not being realistic enough to take the same approach as the EEPTU, which has set a model for how apprenticeships ought to take place. I commend my hon. Friend and all those responsible for the training of young people to look very closely at the whole question of apprenticeships and to forget the old time-honoured schemes whereby if one lived long enough one was given signed indentures. I was guilty of signing many indentures without any verification of job capability, which was alleged to be part of the training. That is one of the reasons why we continue to have skills shortages in many areas.
We want a flexible training scheme for young people which has standards. I welcome the Government's initiative to offer YTS to all people up to 18 years of age, but the Government must have closer links and integration with the education world. In my part of the north-east of England—and I believe I speak as the most northerly so far of all the hon. Members who have spoken in this debate — there are apprenticeships in skills, but the trade unions have not sought to train people in a modular way by providing specialist training and core training, so that as they embark upon a career there is an integration of education even before they reach their training. Perhaps we could recognise and realise this by paying young people who stay at school beyond the age of 16.'There is little difference between paying youngsters to stay at school to the statutory leaving age and giving them an allowance to be trained by an employer subsequently.
The hon. Gentleman makes reference to the trade unions and changing the ways of training by modules. I remind and advise the hon. Gentleman that module training has been quite the norm for the past 10 years.
I accept that, but I was saying to my hon. Friend on the Front Bench and to other hon. Members that this modular expansion has not yet been integrated into the education system. For that reason I hope that the CTCs which have been announced will recognise the needs of industry and that there will be a through-put of training for young people from the earliest days so that they can not only choose and diversify but also more easily re-train into other skills at a later stage in life. I find, like the argument by my hon. Friend, that many of the young people I helped to train and was responsible for were given skills that are no longer necessary. They were not given a groundwork enabling them to move into other areas.
This was one of the fundamental failures of the training boards and why it was right that the training boards were discontinued. I cannot speak with great personal knowledge of all the training boards, but I did have an in-depth knowledge of the furniture industry training board and some knowledge of the catering industry. I probably have had more free lunches via the training board than I have had as a Member of Parliament, and that says a great deal, because they were always seeking what to do and how to do it. They were profligate, bureaucratic and, in the end, meaningless. My company, for which I was responsible, was one of only two companies in the whole of the furniture industry that had total exemption from having to fill in the iniquitous forms for grant and levy. Many other people had to fill in those forms to pay the levy.
If the hon. Gentleman has an intelligent contribution to make to this debate—because so far he has not—I am quite willing to give way. He would not give way to me but I am much more courteous to him. If he cannot shut up, then I am afraid I shall have to be very rude to him indeed.
I say to the hon. Gentleman that those statutory training boards that he is talking about produced twice as many apprentices as we have today.
They were decided by the members of the board and the officials. The vast majority of the people who did the training in the furniture industry in High Wycombe were former senior officers in the RAF because it was a nice, easy sinecure for them after they came out of their service, and they were appointed by the director who was himself in the same role.
I am grateful, Mr. Deputy Speaker. I am sure that all people, both inside and outside this House, will draw their own conclusions from the antics and the attitude of the hon. Member for Kingston upon Hull, East (Mr. Prescott) in the way he has sought very rudely to intervene in the speech of everyone who has spoken so far.
I wish to move on to another topic which has been mentioned by hon. Members opposite and on this side of the House. I wish to talk about restart in the field of training. In my constituency there is one jobcentre. I checked this morning with that job club. So far 60 people have been to that job club. Of that 60, 21 are still there. Nine have left for reasons which are not known. One has gone into a training scheme. Six have gone on to community programmes and 23 have gone into what I believe the Opposition would call real jobs — including one audio-visual aids technician, two PSV drivers, two security guards, one galvanising foreman, one radio repair man, two general workers. One person has gone to Wales to work as a cook, one has gone to the south-east of England to work as a nanny, one has gone to France to work as a general labourer, and two have gone into colleges to be lecturers. Those are all real jobs. They cover 23 of the 39 people who have so far gone through the job club. If the same rate of success applies to other job clubs, there will be an even greater dent in the unemployment figures than we have had so far.
I hope that my hon. Friend noted that three of those jobs were away from the north-east. Unless greater help is given to people who wish to take up employment elsewhere in this country and also in Europe, the unemployment figures in the north-east will continue to be high.
Last Saturday I had at my surgery a young couple who had had the misfortune to be out of work for some time. The man had found a job in Southampton. His house in my constituency was worth only £12,000 compared with £30,000 for a more modest house in Southampton. Therefore, he had had to give up the unequal battle of trying to keep two homes and had had to return to the dole queue in the north-east, although he had successfully filled the job in Southampton for a time.
That experience has been repeated over and over again as a consequence of an initiative which I took 18 months ago to try to link the High Wycombe and Thames valley area with the north-east in conjunction with local newspapers. The Government do not seem to have the will to tackle the problem. There is a reluctance to recognise that Rachman is dead and that it is time to open up the rental market so that more people can have the facility to be lodgers.
Would it not make sense to have sufficient council houses to rent in the south to enable those in the north who wanted to move to go into a public sector house for a bridging period until they had sufficient money to move back to the private sector?
I take the hon. Gentleman's point. I put forward a slightly more novel scheme because I believe in home ownership. I have already suggested to my Front Bench that rather than building masses of council houses we should consider seriously giving substantial grants of £6,000, £8,000 or £10,000 to people who want to move. The Government might make the grant equivalent to the amount that a person would receive from the dole or from social security for one or two years and let him use that money as a deposit on a house in the private sector. The equity could be held by the Government until such time as the person had moved along the mortgage scale. If someone defaulted, obviously he would be in trouble, but this would give people a stake in the area to which they were moving, and it would not cost the Government any more than it is costing them now to keep someone on the dole for a year or a year and a half.
My hon. Friend cannot expect people to move from the north to the south by giving them grants unless more houses are built in the south. That would involve opening up the green belt.
My hon. Friend can take that up with other people.
There has been much criticism by Opposition Members of the lack of training. I can give the number of professionals working in training. Professionals in training in industry and commerce are helping to train for the future. The Institute of Training and Development was established only in 1964 and in its first 15 years its membership grew to under 5,000. It is now 6,500, so it has grown by 1,500 over the last few years. The much more representative and larger Institute of Personnel Management, which is responsible for training, has grown from just under 22,000 to just over 27,000 in the past five years. So we can see that large numbers are involved in professional training.
While the Government must continue the initiatives which they have introduced, some of them need modification. It is not right to say that once a person has undertaken a period of training that gives him a qualification. We need established standards from proper technical, professional and vocational bodies who are capable of providing and organising examinations.
The case made by the hon. Member for Langbaurgh (Mr. Holt) destroys the famous remark about getting on one's bike to find a job. Is the realisation dawning even on the Government Benches that getting on one's bike to get a job down south is not a sensible, practicable proposition for people who desperately need jobs? The debate is not about housing but about employment and training. Every time I listen to Government Front Bench spokesmen on the subject I become more depressed because we keep on hearing the same old record—nothing new. We hear the same old excuses.
The Paymaster General often refers to packages, as he did today. When he appears before the Select Committee on Employment to talk about various schemes he uses the word "packages" as if men and women were packets of tea. That indicates how much he is out of touch with the human side of the problem. Of course, he makes his usual broadsides and raises the usual bogies about how wicked the Labour party is. He condemns the policies we believe in, such as a minimum rate of pay. We make no apology for believing in a minimum rate of pay because we are against starvation wages.
The right hon. and learned Gentleman also referred to wage rises being withdrawn and pointed out that we would give protection to workers. We make no apology for that either. That does not affect the issue of employment and jobs. If conditions are right, workers will respond. That has always been the case. Usually, it is bad management that creates disputes and strikes, as I shall illustrate shortly.
There is now less talk about employment and more statements about the Manpower Services Commission and so-called training. There is a training scheme for this, a training scheme for that and a training scheme for the other. We have got training schemes coming out of our ears, but what we need are jobs.
When I read the motion tabled by the Government, which once again refers to training, I thought that it would be useful to remind the House of the scale of the various training schemes. The purpose is to help to massage the unemployment figures. When the Minister replies he may dispute that. However, to remind the House how many training schemes there are, I shall recite from the following list. There is the YTS, the TVEI, adult training job training programme, national priority skills, job training scheme, local grants to employers, other local skills action, training for enterprise, special groups, management development, wider opportunities training programme, other occupational and adult training support, the Open Tech open learning.
In 1986–87 717,105 people will be engaged in those training schemes. In 1986–87 the cost to the taxpayer for the MSC and other bodies will be £1,337 million. The Government have expended a massive sum of money on so-called training and that does not go without much criticism.
I am sure that the Minister will have taken the opportunity to read the recent report entitled "Department of Employment and Manpower Services Commission: Adult Training Strategy". It resulted from an investigation by the National Audit Office of the MSC's development and implementation of an adult training strategy. The NAO makes many reservations in the report about expenditure: and training.
Paragraph 7.6 on page 23 states:
MSC has no national or local database recording the skills possessed by the working population and, since the introduction of voluntary registration for employment in 1982, it had kept no inventory of the skills of the unemployed. Although some data from national surveys are available, NAO concluded that MSC does not have the information which would enable it to be certain that training is not being provided in skills already in good supply or in surplus and available for use. While the classification of skills and qualifications might well pose difficult problems, and the collection and analysis of the relevant personal details would clearly be a costly task, it is difficult to see how the real requirement for MSC support for training can be determined accurately without a better balance sheet than exists at present of the supply of and demand for skills.
There is considerable criticism of the massive expenditure that is now being made by the Government on some of those so-called training schemes. Obviously, skill shortages exist in some parts of the country but it is also recognised that there is a serious mismatch for making provision for the skill deficiencies. Yet we provide all sorts of training for skills that are surplus to requirements.
I spoke to an officer in Manchester—not an MSC officer—and I asked him about training facilities in the city that I represent. He said that some people on YTS are training for jobs that do not even exist. I asked him to give me some examples. He said that there were courses in Manchester for beauticians but that there was virtually no chance at the end of the day of them getting jobs. Another YTS is on the welfare of animals. There will be virtually no jobs in Manchester for the people on that scheme.
I should like and would welcome evidence of those schemes. There is no way that the Department of Employment or its Ministers would encourage that sort of thing. We have tried desperately to detect those managing agents who run courses for which there are no jobs. That is unnecessary training. If the hon. Gentleman will send me details, I will look into the matter.
It is not my responsibility to feed the Minister that information. He has enough civil servants supporting him who could check that.
I obtained that information from the Low Pay Unit and from an officer who receives considerable feedback from people involved in some of the youth training schemes. It is up to the Minister to ask the civil servants to do their homework. He may be embarrassed to make that request. I wonder whether there are other training schemes, perhaps for ferret catchers or budgie keepers. All sorts of strange things come up when the Government decide that they want to create some sort of training scheme to keep people occupied. The purpose of the training schemes is to massage down the unemployment figures.
There are many training schemes for hairdressers, yet there is no overwhelming need for so many hairdressers. The Minister may say, "Oh, well, some of them keep on their hairdressing after the scheme." That is true, but it is also true that, with the low rates of pay on the YTS, some employers say, "We will keep you on, but we are not going to pay you any more than the YTS rate." That is sheer exploitation and is another matter that perhaps the Minister should take time to investigate.
There is also the other aggravation concerning the wages councils for which the Minister was responsible. Now there is no protection for anyone under the age of 21. There is no such thing as a minimum rate of pay. There are no workers' rights, even for holiday entitlement, for anyone under the age of 21. That causes all sorts of aggravation. It is all entwined with the YTS. [Interruption.] A Conservative Member is murmuring. I am always courteous and I always give Conservative Members a chance to reply. Does the hon. Gentleman wish to intervene?
The hon. Gentleman said that wages councils had been abolished for people under 21. Does he accept that there is possibly some correlation between that fact and the fact that we now have lower than the EEC average of unemployment for people aged under 25, and that school leaver unemployment is coming down rapidly?
That is a doubtful argument. I doubt whether it can be verified. We have challenged the Minister on this issue on numerous occasions in Committee and he has never provided any proof of that, nor did any other Conservative Member. I say to the Government, please do not go along the road of thinking that unemployment has been resolved by having people working on starvation pay, because that does not work.
A great suspicion is now developing that the training schemes in Britain have been borrowed from American ideas. There is suspicion about schemes such as the compulsory labour schemes, which are supported by the Tories, such as "Pay for your dole pay" and "Work for your dole pay". They consider that they are the way out. They are called training schemes to make them look respectable.
Another area of MSC activities which gives rise to concern is the private management agents. Because the Government privatise everything, they privatise management agents. Those gentlemen are in the business for profit. In some cases they make more than £50 per student to comply with the YTS, for which the taxpayers pay. There are other ways in which the taxpayer could spend money than by putting money into private training agents' pockets.
The MSC managers are causing great concern in our area. A dispute is taking place in Sale, just outside Manchester. My right hon. Friend the Member for Salford, East (Mr. Orme) has written to the Paymaster General about a firm called Senior Coleman Ltd., which is in dispute with 112 workers who have had deplorable conditions. In addition, it has decided to intimidate four handicapped workers who are deaf and dumb by saying that unless they go back to work they will lose their jobs and never get another one. Unfortunately, the MSC manager locally is co-operating in recruiting scab labour to take on some of this work. My right hon. Friend said in his letter:
Further, I have since been informed by the Trade Union that the Regional Manager of the Manpower Services Commission based in Manchester, namely Mr. Yendley, has been actively assisting the company in recruiting workers whilst an official dispute is taking place.
The Minister said that he would like some information, and this information is freely and readily available.
My hon. Friend highlights a deplorable case. The employers to whom he has referred are already suffering in that they are deaf and now unscrupulous and uncaring employers are added to that. Has not the Government's policy laid the fertile ground for inciting the greediness and nastiness of such employers?
My hon. Friend is right to say that the Government encourage such activity by employers, and I am sure that public opinion will condemn the Government for using the MSC and its agencies to undermine people who have legitimate grievances. I hope that the Minister will take this on board.
I remind the Minister about the responsibilities of the employers. The trend nowadays is for employers no longer to pay for training, and instead the Government are spending the taxpayers' money on it. On 5 February, the Chancellor made an interesting statement about this. A newspaper report says:
The Chancellor, Nigel Lawson, yesterday urged industry to invest more in training after seeing new evidence of shortages of skilled labour in some industries and regions. Industry was now making enough profit to invest more in its future, he told the National Economic Development Council.
The employers, through the CBI, gave their reply in the same article, which said:
David Nickson, president of the CBI, said that seven million, or one in eight, Britons were illiterate. Industry needed young people who could read, speak, add up and apply their knowledge in a practical way.
That is an appalling indictment of the Government. There are continuous cuts in education, and as a result illiteracy is increasing. This should be a matter of great concern, and money should be expended on training in further education colleges. I am told by educationists that for about £20 million we could embark on an adult literacy task force which would considerably improve the abilities of some of our workers.
Those are some of the matters that I should like the Minister to consider. I could go on for another 20 minutes, but others would like to speak. As I keep saying in the Select Committee on Employment, we want jobs. We do not want any of this artificial training — we want real job opportunities. Only then will we make progress.
I will not pick up any of the detailed points made by the hon. Member for Manchester, Blackley (Mr. Eastham), although I enjoy serving on the Select Committee on Employment with him. This may be an appropriate moment to pay tribute to the previous Chairman of the Select Committee, the former hon. Member for Newcastle-under-Lyme, Mr. Golding, who has now gone off to fish in more turbulent waters, but who did a good job, and is ably followed in the Chair by the hon. Member for Newham, North-East (Mr. Leighton). The hon. Member for Blackley spoke about a mismatch in training. When we were discussing reform of the industrial training boards, one of the points that came through clearly was that the ITBs, in spite of the best intentions, had been responsible for a great deal of the mismatch.
We have heard a lot of ritual noises from the official Opposition, but I must confess that if we ever had the misfortune of being in opposition, which we hope will never occur, we would probably also be making ritual noises. However, there is one fundamental and important difference between us. There has never been, in my recollection, a Conservative manifesto that has promised to cut unemployment. Even if we were to manage to get everything right, the United Kingdom cannot operate in isolation. We are part of the world economy and are subject to world economic factors. Someone, somewhere, be it in the middle east or elsewhere, is bound to shove a spanner in the works, as happened in 1973, which will knock us off course.
On the other hand, there has never been a Labour party manifesto that has not promised to cut dole queues, and voters will need to look carefully at the difference between Labour's promises and performance.
The hon. Gentleman has claimed that there has never been a Conservative manifesto that has promised to cut unemployment. Can he comment on what the Prime Minister said a couple of weeks ago when she promised the nation a return to full employment? Was that being economical with the truth or does the hon. Gentleman anticipate that that promise will not figure in the next Conservative manifesto?
There has never been an undertaking to cut unemployment in the short term, and that is the trap into which Labour Members always fall. They believe that by throwing Government money at the problem they can create jobs quickly. That may be the case, but in the long run they create unemployment rather than solve the problem. They have never succeeded in creating jobs in the long term. In spite of what the hon. Member for Kingston upon Hull, East (Mr. Prescott) said, all Labour Governments have left dole queues that were longer than when they came into office.
There is a problem with the credibility of the Labour party's alternative policies. I condemn it because it will never learn from its mistakes. One has only to look at its current promise to reduce unemployment by 1 million over a two-year period at a cost of £6·8 billion. It is hardly surprising that the hon. Member for Kingston upon Hull, East is recorded in the Municipal Journal of 7 February 1986 as saying:
How did we get this promise of one million jobs? Who worked on the programme? Promises such as these simply label us with targets that we cannot achieve and exposes our credibility.
It is nice for Conservative Members to be able to agree with at least something that the Opposition spokesman has said.
The so-called alliance is no better. It is a pity that alliance Members are not here. They are thin on the ground in Parliament. After some of the statements that have been made by alliance Members today, they should be here to hear our comments on some of their pronouncements. They have also said that they will cut unemployment by 1 million. They give themselves an extra year—they say three years at a cost of £4 billion. The hon. Member for Gordon (Mr. Bruce) made a Freudian slip. He nearly referred to the increase in employment that has occurred under the Government. He corrected himself at the last moment.
I was interested to see that, since March 1983, it is estimated that 985,000 new jobs have been created. Admittedly, a lot of them are for women working part-time, but nevertheless they are new jobs. Again, since March 1983, 457,000 more people are estimated to have become self-employed. That is good. It is a pity that alliance Members are not here to congratulate the Government on that achievement. The hon. Gentleman referred also to the fall-off in investment. We can put him right. In 1984, total fixed investment, both public and private, was at an all-time record in real terms. It is expected to have risen a further 4 per cent, in 1985 to £60 billion at current prices. It is, therefore, growing at a faster rate than the overall growth rate. This is the reverse of what occurred during the period 1974–79.
Many people ask why there was not more investment in the past and why there is so much more now. It is interesting to note that the return on capital from new investment in manufacturing industry in the period of the last Labour Government was 2 per cent. It is hardly surprising that investors were reluctant to put their money into manufacturing. The average return on new investment in manufacturing industry today is 17 per cent. Again, it is hardly surprising that investors are putting money into manufacturing, contrary to what Opposition Members would lead us to believe.
The Opposition's policy—whether alliance or Labour — would lead to some short-term jobs. We all know that. But the fact of the matter is that, in buying these jobs, which they would do with public money, they will weaken the economy and that would lead to ever higher borrowing. In turn, that would lead to higher interest rates, and that would lead to runaway inflation. As the right hon. Members for Cardiff, South and Penarth (Mr. Callaghan) and for Blaenau Gwent (Mr. Foot) admitted when they were Leaders of the Opposition, inflation is the mother of unemployment.
Conservative Members welcome the Government's motion. I even welcome some of the points made in the Opposition's amendment. I welcome the way in which they draw attention to the importance of training.
I endorse what is set out in the European Community document which was produced during our period of presidency. The Government motion takes note of that document. I wish that they had been a little more robust in what they had to say. It shows that the United Kingdom is leading the way in employment and training, although West Germany could be said to have set the style with its dual system of education and training, from which the United Kingdom has learnt a great deal.
Pages 8 and 9 of the EEC document, in the section dealing with training, called for measures to
promote amongst both employers and employees a greater awareness of the importance of training both in encouraging economic growth and in meeting the aspirations of individuals, … encourage employees to invest more in training in industry, … aid the development of more responsive training systems, including the use of new technologies and distance learning for the provision of education and training,".
I digress to mention an experience that I had while working for my right hon. Friend the Member for Waveney (Mr. Prior). During our period in opposition, he set up a manpower working group to study the problems that we knew we would have to face when we gained office at the general election in 1979. That was back in 1977–78. At that time, we seriously considered the possibility of having to face unemployment levels of around 4 million. We jolly well knew then that there would be no short-term solution. While studying the plans for the Open Tech programme we realised that many training resources in schools, colleges and universities were not being fully used. We considered that the doors should be opened to those who needed that training.
I can well understand the EEC document. It asks for Community action to examine ways of
overcoming restrictions on access to training,".
It also calls for ways of
identifying the developing training needs of enterprises at local level.
That leads me to a specific and welcome development training in the United Kingdom. Those whose job in is to train often complain that employers do not tell them what is wanted. What could be more logical than for employees to link in with educators and trainers, to let those at the sharp end of the job market know which skills are most in demand? The new Local Employer Networks are designed to involve employers more effectively in our system of vocational education and training.
On 3 February, this new training and education initiative was nationally launched. I welcomed the remarks by my right hon. and learned Friend the Paymaster General in his opening speech about that new scheme. There was a reception in the House last week, sponsored by my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet). It is perhaps a pity that more hon. Members did not go to the reception to hear what the scheme was about. The Local Employer Network scheme is a joint initiative by the Association of British Chambers of Commerce, the Confederation of British Industry and the Manpower Services Commission. It aims to make a substantial contribution to national economic performance by improving vocational education and training. It is intended to have a network in every local education authority area. Each network will feed information on present and future employment needs to local planners of vocational education and training. It will represent employers in that planning process and provide a wide range of services related to education and training. It will provide a continuous dialogue between all who are involved.
Back in November 1985, a report was published for the Manpower Services Commission and the National Economic Development Office under the title "A Challenge to Complacency". Among other things, the following was suggested:
We think that what is needed is a network of locally-based arrangements. The roles of such network of local bodies could include monitoring firms, training activity, collating information about small firms' needs, distributing some MSC grants, gathering local labour market information and organising local skill testing.
Several of these aspects have already become central to the role of Local Employer Networks. What do we want these networks to achieve? First, they should consult employers about their needs and problems. Secondly, they should collect and interpret data on the local labour market and, thirdly, they should pass on what they have learnt to education and training providers. Those are just three of the main aims in an exciting concept. Local Employer Networks have the potential to wipe out our skill shortages by tackling the causes at local level.
The chairman of the Manpower Services Commission, Mr. Bryan Nicholson, said on the day of the launch of the Local Employer Networks:
They offer an unparalleled opportunity for companies to ensure they get the right skills and qualifications in their workforce to help them compete in world markets.
A key feature of the scheme is joint action. The chairman of the CBI education and training committee, Mr. John Peake, said at the launch of the network project:
For a number of years the CBI … has taken the view that a local employer network should be established to ensure that industry's voice is heard in vocational and educational training at local level. Industry is well represented on these issues at national, regional and sectional levels, but until now, for a variety of reasons, this has not always been the case at local level.
Now the CBI has got what it wants. I think it welcomes the plugging of that gap and its only reservation is that we do not try to reinvent the wheel and duplicate work that has already been done. The second of the three partners is the chamber of commerce. Mr. R. G. Taylor, the director-general of the Association of British Chambers of Commerce, said at the launch:
It is ironic that even at a time of high unemployment in the UK, we have persistent shortages of particular skills which are inhibiting the growth of many companies. One of the great advantages of Networks is that they will be able to spot skill shortages before they become damaging and ensure that remedial action is taken in good time.
It is encouraging to know that over 100 networks throughout Britain will soon be responding to training and retraining needs at all levels and for all ages. They will do that for high-tech jobs, such as computer programmers, and low-tech jobs such as skilled jobs in the construction
industry. Employers of every size and type will be invited to join their local network. The plan is to commission one in every local education area within a year. The first member networks already set up are in the cities and towns of Middlesbrough, Manchester, Redruth, Slough, Aberdeen, Luton, Sheffield, Norwich, Hull, Birmingham, Solihull, Enfield and Portsmouth which is in my county, Hampshire. I am sure that hon. Members who represent constituencies in those towns and cities will welcome the existence of those network members and will play their part in the work that they do.
There is a network in Portsmouth and that is good, but it raises a question in my mind. To make a constituency and parochial point, I wonder why there are none in Southampton. I made some inquiries of Southampton chamber of commerce and was told by Mr. Peter Beebe, its director-general, that the Southampton chamber, which I think is the largest chamber in Hampshire with direct membership in the city of about 1,600 firms and businesses and about a further 3,000 associated members throughout the country, found it essential wholeheartedly to support the concept. The chamber has already got a nucleus of employers who have agreed to join the network and is working hard to expand the employer base.
I think that Mr. Beebe plans to call the members of the network together and will invite the organisers of the network to help his chamber to the next stage. He made the point that he did not want to see the network become a talking shop. There is a wide disparity between chambers of commerce and I have seen good and bad ones. The Southampton chamber of commerce is extremely good and is active in promoting business and employment. However, in some parts of Britain chambers of commerce are little more than talking shops.
All hon. Members will wish to congratulate the local enterprise networks on their initiative and will want to wish Mr. David Stanley, the project director, all the best in this initiative. I shall end my speech with the words that he used on the day of the launch. He said:
The aim of networks by working closely with Vocational Education and Training, and planning for employment needs well into the 21st century, is to improve levels of skills and to better utilise Britain's workforce which, we hope, will in turn be reflected in enhanced economic performance for Great Britain Limited.
I wholeheartedly welcome this scheme and the Government's support for it.
The debate has been in progress for four hours and only 11 hon. Members have had the opportunity to address the House. I hesitate to ask for brevity now, especially from those hon. Members who have sat through the debate, but it is necessary to do so. The first Front-Bench speaker hopes to catch my eye at 9.20.
In moving the Government motion the Paymaster General spent five minutes talking to it and then subjected the House to a load of garbage and bile, the like of which I have never heard. He winced when the auditor's report was mentioned, and it is worthwhile looking at that report. It makes the accusation that perhaps the Manpower Services Commission and the Government are not cost efficient because there is no way of checking. One could infer from that that the Government have a lot to answer for-in the way that the MSC is run. It is rather strange that the MSC is not cost efficient, because the Government have spent the last seven years browbeating the public sector into becoming cost effective. It does the Government no good to preach that to the public sector and practise something totally different by seeking to manipulate employment and training.
On a number of occasions the Paymaster General refused to give way to my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). Then he took the hump when my hon. Friend gave him similar treatment. Perhaps he will learn a lesson from that.
One of the reasons for the country being in such a mess is the lack of Government forward planning. I have listened to the Prime Minister a number of times and I listened to her today at Prime Minister's Question Time. I have also listened to Government Ministers, and to hear them one would think that there were no problems about unemployment or the Health Service or education. They are not living in the same real world as; I am.
There are many problems in my consituency and I suggest that the Paymaster General and the Prime Minister should come down from their ivory tower into the world of reality that the people of Britain have to endure. Perhaps they should stop behaving like the little Dutch boy who put his finger in a hole in the dyke to stop the water from coming out. We would make better progress if the Paymaster General pulled his finger our. and got on with the job that he is paid to do.
In the Yorkshire and Humberside region there are old industries that have been the backbone and wealth of the country for many years. They have certainly seen us through two worlds wars and helped industry to recover from the effects of the wars. Of course, they have been exploited and, having been exploited, they are now left to rot.
The high unemployment in Yorkshire and Humberside creates many problems which I do not have time to go into. Part of the Don Valley area in my constituency has one of the highest unemployment levels in the Doncaster area with the exception of Thorne on the east. The people of my constituency are good and proud people and they want the opportunity to work. The steel industry, the pits and the fishing industry, from Sheffield to the east coast, are now being left on the scrap heap. As the old industries die out, there is nothing to replace them. That is as a direct result of Government policies and a lack of forward planning.
I am sick to death of hearing Ministers blaming past Governments for today's faults. I have never heard owt so daft in my life. The Ministers blame the previous Labour Government, the Macmillan Government and future Labour policies, but not today's policies. It is the Government's policies that can help solve today's problems. I hope that for the good of the country the Government will step aside and let a Labour Government in with the sort of policies that my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) was talking about. They are good, sound policies.
The apprenticeship scheme has been referred to. The Coal Board had an excellent apprenticeship scheme. It had to train over 50 per cent, more than it required because the private sector did not want to spend any money on apprenticeships. Of course, the private sector offered higher wages, hence the need for the Coal Board to train more apprentices. Unfortunately, with the Government's policies and the rundown of the industry, such apprenticeships, even though they have been scaled down in years, are not coming through. Because the Coal Board is not taking the youngsters on, we have problems with those youngsters.
It is daft to say, as one Minister did, that we should have lower pay for the north and keep high pay in the south. The Daily Mirror contained an article attributed to the Paymaster General. It says, "Ban comparability payments." I heard the Paymaster General make a remark earlier in reply to a question saying that Lord Young gets nowt. Perhaps he is frightened of getting some comparability with Lord Young.
The CBI should be concerned, as the Government should be concerned, because the number of jobs available down south and the lack of jobs up north is forcing wages up in the south. If jobs were forced up north, there would be a better balance in wages. If the Paymaster General wants me to go into detail I will be pleased to see him later over a cup of tea.
We talk about wages being the cause of the lack of job opportunities. I do not hear the people who advocate that sort of policy talk about the high wages and salaries of the directors and captains of industry. That is in order according to the opponents of wages for the workers. Of course, we must have profits to reinvest in industry. Well, when the exchange controls were lifted, all the profits went abroad to build factories to bring goods back to Britain. The philosophy of the Government is that the lowering of income tax will create jobs because of the spin-off effects. I do not see any jobs coming from the big fat profits that the directors have been making under this Conservative Government.
I shall now come back to forward planning. We have to keep coming back to it because we have to plan if we are to meet the challenges of the 21st century. The Government's motion talks about the MSC, YTS, ATS and uncle Tom Cobbleigh and all. I ask you. They fiddle the figures. I looked at Prime Minister's Question Time and I thought, Christ, Groucho Marx and his team. I can just imagine them running around. I apologise, Mr. Deputy Speaker, if I swore, but the Government's policies are enough to make a parson swear. We do not have forward planning. For example, there has been great publicity by the Prime Minister about the Channel tunnel. It is said to be a massive project which will enhance Europe and so on, but she has left it to the private sector to raise the funds. I have no argument about that but, at the same time, we must have decisions in relation to infrastructure. All the jobs that the Channel tunnel will create must not be down south but must be brought up north either to the west or east or both. The Government must make those decisions now to enable local authorities such as Doncaster to come up with suitable schemes to complement that decision.
It took a large amount of Government money to try to lift Corby out of the mire that Government policies had put it in. When one is dead weight, it costs much more. Help in my constituency and in Yorkshire and Humberside is needed now.
An application for development status was turned down. The letter said:
The AA map has to have some stability.
The initials "AA" stand not for Automobile Association but for assisted areas. While we are talking about stability, may I ask why cannot local government have stability? In seven years there have been about 13 schemes in relation to rate support grant that have caused all sorts of problems for forward planning. We need help now, not two years on, because that suggests that Nero fiddles while Rome burns.
I ask the Prime Minister to bring about a co-ordinated team that will embrace all Government Departments within a region so that they can start planning for the future. Government Departments do a little bit here and a little bit there. The British Enterprise Board and British Rail are all doing separate things and there is duplication. We need forward planning so that we can work as a team, but not as the Minister of Agriculture, Fisheries and Food and the Secretary of State for the Environment did earlier this week. There is the Secretary of State for Education and Science's grand design for education. The Government should get their heads together with the Department of Education and Science to see how we can co-ordinate, not when the lads are reaching maturity but early on, so that we can have the sort of core training that will equip pupils to meet the challenges and changes of the future.
I should like to comment briefly on the MSC which has a training and retraining scheme for the private nursing home sector. Local authorities employ a hell of a lot of people in that area and they should have the same facilities. There is a high turnover of staff in that area of social service work and the local authorities should have that facility.
Unless we take positive steps, we shall see a breakdown of law and order in this country. It will get worse and riots will bring the troops on to the streets. That will happen if the Minister does not listen to the advice of Labour Members and bring about some sensible forward planning.
In following the hon. Member for Don Valley (Mr. Redmond), I should like to say that he has been present for most of the debate, as I have. He has shown some restraint in saving his remarks until he was called to speak, unlike his hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), who gave an unfortunate exhibition on the important occasion of this debate. Although I do not agree with the views of the hon. Member for Don Valley, he expressed them in a good humoured and balanced manner. I should like to respond briefly to just one of the points that he made and which, I think, it is important that we debate among ourselves. He said that, if elected, a Labour Government would seek to freeze all opportunities for overseas investment. In saying that he is running into a classic trap. British industry, which has been built up over many generations and which operates throughout the world, provides not only a stream of dividends but an essential underpinning for much of the invisible earnings of the City, to the tune of about £7 billion a year. I shall be happy to debate that point with him on another occasion.
In meeting the spirit of what you said earlier, Mr. Deputy Speaker, I should like to concentrate my remarks on training and retraining, especially in relation to skills shortages. I wish to do that because throughout the debate —I have heard it all—one of the key aspects has been the changes that have been caused by technology. That was touched on by my hon. Friend the Member for Beckenham (Sir P. Goodhart). The hon. Member for Don Valley criticised Governments for blaming their predecessors. It is true that all Governments do that and all Governments can be criticised for not doing as much as is humanly possible. That is the nature of the beast. However, the Government are facing problems of technological change on an unparalleled scale. I should have thought that there would be common ground across the Floor of the House as we try to look at the ways in which we could resolve some of those grave issues.
There is no doubt that the shortage of skills is the preeminent problem that we face in relation to training. A year ago the CBI said that three in every five companies would take on people in the skilled areas if they could overcome the problem of training. Companies were facing difficulties in filling jobs that required skills, qualifications and experience.
I should like to comment especially on information technology because that area is not only the fastest growing but is the key to future growth and prosperity and to matching our competitors. If we do not manage to achieve that build up of skills, we shall see our international trading position and thus our domestic economy badly eroded.
I differ from many hon. Members in feeling that during the debate there has been a concentration on what could be termed public activity, in terms of what Governments, the Manpower Services Commission and, to a degree, the universities and polytechnics are doing, and the public funding that is used.
I do not have any difficulty in supporting the motion because important initiatives have been taken. However, if we do not recognise what industry is doing about training we shall neglect an important area of debate. My hon. Friend the Member for Romsey and Waterside (Mr. Colvin) partly answered the criticism that was made earlier by the hon. Member for Kingston upon Hull, East by discussing the limited amount of training that is done by some companies. However, in the period which my hon. Friend describes, the return on manufacturing industry averaged 2 per cent., and there was a great problem in putting aside resources for training because of the limited funding that was available to meet that task. As my hon. Friend rightly pointed out, there are now more profitable opportunities for British industry, up and down the country. There is an opportunity to move ahead once more in relation to industrial training.
The hon. Member for Kingston upon Hull, East was certainly adrift when he refused to recognise the substantial areas in which training is successfully carried on by industry. Within the Palace of Westminster, many hon. Members consider that issue with blinkers on.
The Select Committee on Science and Technology in the House of Lords recently issued a useful report on education and training for new technologies. However, it tended to concentrate on the idea of public funding, whether in Government schemes, or by universities and polytechnics. In my view, the Committee did not achieve the right balance because when one considers the figures, there is no question that industry still does far more training than any other part of Government or the education system.
The central training provisions of British Telecom are far larger than the entire electrical engineering resources of all our universities and polytechnics. As another example, ICL and IBM also provide far more training individually than the entire computer science training units at all our universities and polytechnics. Such companies underpin and, in many cases, underwrite much of the work done by universities and polytechnics, and I welcome that. We must look at training for new technologies if we are to build on what is successfully happening in some companies, and if we are to open up the way for others.
In a sedentary intervention earlier today, the hon. Member for Stockton, South (Mr. Wrigglesworth) asked how companies could be encouraged to do that. I should like to suggest to my hon. Friend the Minister some thoughts about that, especially in the light of the Budget that we shall consider on 17 March. To reiterate the problem once more, the National Computing Centre's latest estimate showed that 60 per cent, of all companies involved in information technology do not take on trainees. Therefore, there is a danger that they will look to others to do the training and then poach those who have been trained. The Minister may recall that the Undersecretary of State for Trade and Industry, my hon. Friend the Member for Coventry, South-West, (Mr. Butcher), warned, in a 1980 pamphlet entitled "The Big Steal", of that increasing problem. However, that problem is far greater today.
What can be done? Two years ago I was a member of a working party that argued that 3 million new jobs could be created by the end of the century if certain legislative restraints were removed and if the Government provided the opportunities that would open the way for the information technology industry to develop and expand. If we moved in that direction, we could see that number of jobs created. I shall be happy on another occasion to debate those figures. We have seen some movement in that direction, as is reflected in the creation of about 900,000 new jobs.
I should like to outline one or two suggestions which could give added encouragement to training. I strongly disagree with suggestions made by Opposition Members that a further levy on industry for training would be the way ahead. Opposition Members have been plain about their views, and the hon. Member for Kingston upon Hull, East admitted today that the Labour party would lax small businesses. That would hit at companies in the growth sector which are least able to meet that kind of impost. That sort of taxation is the wrong way to go. It is true that the alliance parties have argued along the same lines. Therefore, the arguments at the election will be fairly poised. However, we could consider encouraging companies to use their own money and in that respect we should look carefully at training costs and taxation.
Perhaps the Government could be persuaded to consider this proposal within taxation policy. Training costs, including pay, could be treated as a loan and that loan could be subsequently repaid, if there was a premature departure of the person who was trained. Otherwise, it would be a tax write-off. That would begin to help build apprenticeship training. Many hon. Members on both sides of the House recognise that there is a problem caused by the decline in our apprenticeship system. In Germany there is a form of indenture apprenticeship which is successful. Perhaps we should move in that direction, but allowing companies a tax incentive.
Similarly, I would extend the same principle to individuals seeking training. Those who have deep knowledge of information technology reckon that someone with no knowledge of it can acquire the digital skills and basic needs in 18 months. It is important that we should recognise that. Moreover, the underpinning of industry requires constant up-dating. Over the coming years we shall see the need for people to train and to be retrained. Individuals, whether in work, about to start a job or unemployed, should be given an incentive to undertake training. I should like to see such training allowable as a deduction against personal taxation.
It is possible to give generous tax relief to individuals or companies, perhaps in the American style, for making donations to education and research. I would take that process one step further and say that in recognising companies' activities in training it would be reasonable to set up a Queen's award for training for companies of all sizes.
The idea of a repayable and tax-free loan recognises the collapse of the apprenticeship system as we have known it. In future we can find ways to prevent poaching and to provide a greater sense of stability and continuity in this area. On individual training for future employment and a tax-free allowance, information technology skills can be acquired in a relatively short period. The incentive of that should appeal increasingly to a society which will have more and more people working from home in small information technology businesses. I see that almost as a reversion to the growth in craft industries where many people, working at a keyboard, can relate to a centre and will need to meet for social rather than industrial or technical reasons. That is the background in which such individual training should be encouraged.
Tax-free donations for those who support education and training would be in keeping with the Government's consistent line in so far as they have already changed taxation policy to assist the arts. That would be a sound development. It would provide opportunities for many people to show that they believe in the importance of that area, particularly those in industry who have perhaps been involved in building their business and who can provide seed corn for other opportunities.
It may be said that a Queen's award is a gimmick, but I do not believe so. The Queen's award for export is regarded with great pride. My right hon. and learned Friend the Paymaster General and my hon. Friends must have seen, as I have, the Queen's award for export flag flying over companies which have achieved it. We underestimate what people will do, not for monetary award but for pride.
A few years ago many hon. Members were impressed when we saw the great response to the campaign, "I am backing Britain". It reflected the deep patriotism of many of our people. We should encourage them to say, "I am training for Britain", and let us help them to" do that.
The background to my speech is a travel-to-work area in Preston where 17,722 people are unemployed. Today we are talking about job creation and the motion refers to employment and training initiatives.
First, we must recognise certain priorities in overcoming this problem. I am convinced that it will be difficult, even for a Labour Government, radically to improve employment opportunities. I am certain that we must concentrate on labour-intensive industries, particularly the building industry. The shortage of houses, the problem of school repairs, the question of health centres, nurseries and so on would be met by major investment in the building industry. Moreover, that would create many jobs in the short term. In turn, that would have a multiplier effect on manufacturing industry.
I am aware that technology is changing. The Government have cut skillcentres and I hope that a Labour Government will give urgent priority to reestablishing a wide range of skills. But, despite those skillcentres, fewer jobs will be available and that is a fact that we must face.
We should already be planning for a much shorter working week, for example, three or four days' work. That raises the question of planning for leisure. There is no justification for asking workers in Britain today to work 50 or 60 hours a week, considering our unemployment figures. I am thinking, not of leisure on the poverty line but of leisure that can be creative. For that we must invest in public services. A Labour Government will give tremendous priority to meeting people's needs if they wish to be re-elected after a five-year term and to put Socialist measures into effect. Only Socialist measures can ultimately solve our economic problems. Anybody who believes that private enterprise can meet the needs of the British people over a long period and in real terms is living in cloud-cuckoo-land. We must control our resources, and plan our economy and the way in which we meet the needs of people in terms of buses, railways, street lighting, old people's homes and care centres. We are not meeting those needs; the Government do not have that sort of priority. Private profit is still the Government's main consideration.
My son-in-law has been unemployed in Liverpool for six years. He would like to be an ambulance driver. He inquired about the prospects, but there were no vacancies; yet the local ambulance services are crucially short of resources. People are suffering as a consequence.
We need investment in a large number of areas to achieve growth in the economy to meet the need for new jobs. Using the country's wealth to create jobs and relieve poverty is a human and moral consideration that must be uppermost in the mind of the next Labour Government.
Training is mentioned in the motion. Millions of people will have to be trained, and that will need considerable planning. Hundreds of thousands of adults in Britain could do extremely valuable work by going back to school as mature students and obtaining qualifications. That demands resources. Will there be the necessary investment in education to provide retraining, re-education and the application to new technology that is so vital? Those are some of the problems that the next Labour Government will face. I am confident that they will solve them.
I do not propose to emulate other speakers who have taken 20 minutes to make a few valuable points, but I must mention the problem of Leyland Trucks. Leyland Trucks is still facing a considerable problem with regard to job losses. It is suggested that Paccar or Daf could take over Leyland Trucks. Research shows that both companies would demolish Leyland Trucks, and thus there is a major concern that 5,000 jobs could be lost in direct terms, but many more indirectly. Paccar and Daf spell doom for job
prospects in the area. This is at a time when programmes at Leyland's assembly plant are increasing. Leyland are again producing fire engines. What, one might ask the Government, is the Ministry of Defence doing to ensure that military vehicles are manufactured at Leyland Trucks? That is a clear possibility, but the Government do not care.
Employment is a major priority for the next Labour Government: they will ignore it at their peril. I am confident that the Labour party will make a realistic appraisal of needs and resources, and will take control of those resources which are vital to establish jobs, and will not hesitate to maintain that as a powerful priority.
I shall follow the themes of the hon. Members for Kingston upon Hull, East (Mr Prescott) and for Manchester, Blackley (Mr. Eastham) on the question of the training programmes that the Government are providing.
Both hon. Gentlemen slated the Government's training programmes. They did not put forward any constructive alternatives, say what they would do when they came to power, or what was wrong and what could be done.
Perhaps the hon. Gentleman will allow me one minute. They did not say how they would seek to improve training constructively. I am sure that my hon. Friend the Minister would welcome constructive criticism and that he would not be ashamed to say that, if there were better ways of training people, the Government would not be slow to listen to them.
I am sorry if the hon. Gentleman did not pick up one of the points that I deliberately tried to make. I was referring to illiteracy and some of the shortcomings in education. I was suggesting that it would be a good idea if the Government were to redirect some of the money away from bogus training schemes to further education colleges to improve literacy.
Resources to further education colleges are increasing in real terms. The hon. Gentleman confirmed what I have just said by referring to bogus training schemes. I shall pick one example, the youth training scheme.
The Labour party, especially its spokesman, the hon. Member for Kingston upon Hull, East, must make up its mind about the youth training scheme. Does the Labour party welcome it? Is it a scheme that is doing good and achieving results—which is why the majority of trade unions and certainly the sensible trade union leaders are supporting it—or does the Labour party think that it is a skivvy scheme and a bogus scheme? If so, the Labour party should say so so that everyone knows precisely where it stands.
If the Labour party thinks that the YTS is a skivvy scheme and a bogus scheme, what would it introduce to replace it? How would the Labour party increase the training of young people? All we know from what we have heard is that a levy would be imposed, yet the hon. Member for Kingston upon Hull, East went on to say how terrible it was that so many companies managed to be exempted from the levy in respect of training boards. Surely the problem would be even greater if a levy of 1 per cent. were imposed on all companies, let alone if it sustained the bureaucracy to which my hon. Friend the Member for Langbaurgh (Mr. Holt) referred.
The only other definite proposal which we have heard from the Labour party is that a greater allowance should be paid to YTS trainees. That is very nice, but will an increased allowance mean that there will be less money to spend on the training of young people, or will it mean that companies will have to pay the top-up allowance? If companies have to pay that allowance, they will he able to afford to recruit fewer young people. Youth unemployment has been a serious problem and the number of apprentices has fallen because, over the past 20 years, the price of youth labour had been constantly bid up by the action of unions and weak management. Consequently, many young people have been priced out of jobs and training.
Although I welcome the change of heart by many trade unions, old attitudes persist. Only the other day I was at a construction company office and was told of a young man over 21 who was a labourer but who wanted to train as a bricklayer. The company was happy for him to do so and the labourer was happy to take a wage cut so that he could go on to the construction industry training board scheme and be paid at the appropriate rate. He recognised the investment in training that would be made by the company. But he was not allowed to undertake that training because his union would not let him. The union put a block on it. So long as such union attitudes persist—as they would if the Labour party came to power—there will not be the numbers of people in training that we so desperately need.
If the hon. Gentleman will forgive me, I want to continue because there is not much time.
It is right that those who have suffered most from unemployment — the youth—should be be benefiting most from the Government's steps to increase training and put more people in work. The pledge that no school leaver under 18 will need to be unemployed is a major one which any Government would love to give. It means that there is now an effective vaccine for everyone under 18 against the disease of unemployment. There can he nothing more wasteful than for our youth to leave school with no hope and no training to undertake.
Unemployment for those under 18 is an option only for those who have been misguided enough to listen to the likes of some hon. Members, to organisations such as Youthaid, to those who, unfortunately, have been misinformed or to those who choose, for their own reasons, to be deliberately idle. The time has come for that not to occur at the taxpayers' expense.
The youth training scheme has been successful because it has changed the attitudes of employers who now voluntarily subject themselves to rigorous inspection to ensure that the training which they provide meets the quality demanded by the MSC. Employers do that so that they can obtain sponsorship from the MSC. Employers now have a commitment to train, which means that the numbers trained have increased and the financial commitment has increased. An ideological commitment is returning to industry, which recognises the importance of training for all the reasons that we have heard in the debate.
There are positive sides to the changes. An increasing number of companies and an increasing number of employer associations are incorporating YTS in their training arrangements and reforming the old apprenticeship systems — for example, in the electrical contracting and construction industries.
More significantly, and moving away from traditional training and craft areas, people are being trained who would never have had the opportunity even two or three years ago. Shop assistants are receiving proper training in core skills to enable them to diversify during their working lives so that they are not left stocking shelves. Workers in warehouses are learning how to use computers so that they have opportunities to diversify and advance their careers. Those basic core skills mean that everybody leaves the YTS with a qualification to take to future employers. They have the knowledge that their qualifications are worth something and are what they employer wants. That is a major change of attitude.
It is no coincidence that about 29 per cent. of school leavers go into unskilled jobs but that of those leaving the YTS the figure is only 15 per cent. We are making training available to all. That means that companies are extending their skill base; that a work force can adapt and retrain as the changing economy demands; that the country has fewer unskilled people chasing a declining number of jobs in that category; that young people have something that they can sell and that they have a start in life.
The most satisfying aspect of my discussions with young trainees was to discover that young people who had been written off at school as academically hopeless and given no hope of a future by their careers teachers were now, because of the YTS, able to do something as valuable to themselves and society as can those who are more academically gifted.
There has been a change of attitude among many people who now have a widespread acceptance of the YTS, especially those on it. That is where the Labour party is dangerously out of touch with the youth of today. Who can blame young people being cynical about politicians when they hear Opposition Members, including the hon. Member for Kingston upon Hull, East, continually carping about the YTS? Yet 90 per cent. of participants find the scheme extremely worthwhile, and one reason for that is that it creates jobs.
My constituency in Bradford has above average unemployment. The latest figures — I checked them today — show that 75 per cent. of people leaving the YTS go into work. Overall, 82 per cent do something and only 18 per cent. go back on to the unemployment register. It is no coincidence that school-leaver unemployment in Bradford is going down and that more and more young people go into skilled jobs.
We have heard a great deal about shortages and undoubtedly they exist—for example, in the construction industry, as was mentioned by the hon. Member for Liverpool, Walton (Mr. Heffer). In the Yorkshire and Humberside area there were 1,192 entrants to CITB courses in 1979, while in 1986 there were 1,904 entrants—800 more than in 1979. The Opposition cannot have it both ways. They cannot say, on the one hand, that we need training in all those skill shortages to fill vacancies and, on the other, condemn all that the Government are doing to expand training by claiming that that does not create jobs. They have to make up their minds.
Training creates jobs to fill the skill shortages that so much hamper the expansion of production. It allows new products and new methods of production to be developed, and also equips our young people with the skills they need to set up in business on their own. Enterprise is alive and kicking with young people. Some 26 per cent. of those receiving the enterprise allowance are under 25. I am pleased to say that the attitude of many young people has changed. They no longer leave school with the attitude, "Who will give me a job?", that the world owes them a living. Instead, they ask, "How can I create a job for myself and also for others?"
The lesson to be learnt is that 16-year-olds, taken on as permanent employees at possibly twice the YTS allowance but receiving little or no training, are not doing themselves a favour by sacrificing their long-term potential for short-term gain. The Government's target should be not 66 per cent. of school leavers looking for employment going on to YTS but nearer 100 per cent., which would mean the transfer of about 140,000 young people aged 16 from employment into YTS, though not at additional cost to the Government, because employers would realise a saving of about £1,500 per employee by paying allowance and training costs rather than a wage.
Consequently, we should eliminate almost completely unskilled jobs. We should remove once and for all the stigma that YTS is second best. Also we should remove any distinction between employee and trainee. All would have a legally guaranteed contract. There would no longer be two classes of youth labour. We should also catch up that much sooner with the number of under-18-year-olds who are in vocational training and education in advanced competitor countries. Eventually, the proportion of the work force with a vocational qualification would begin to match the proportion in, for example, Germany.
Many of today's young people still perceive that the going for them is tougher than it was for their parents. So it is, if the easy option is preferred, and if the level of their expectations is no higher than £60 a week and the first job that comes along, with no training and no career prospects. If, instead, a school leaver wants the opportunity to achieve a level of skill competency that will enable him or her to go for a high wage job, with good prospects, the prospects for young people now are much brighter than they have ever been.
During the 1980s the recession bit deeply into manufacturing industry in Coventry and the west midlands. Internationally known companies such as Alfred Herbert disappeared, and others — such as British Leyland, Alvis, Talbot, GEC and Rolls-Royce — drastically slimmed down their labour force. But what has become clear in the past 12 months is that the recession is still very much with us. Even the suspect official figures show that last month in Coventry there were 25,000 unemployed, plus 844 school leavers.
In parts of my constituency of Coventry, North-East, unemployment levels are as high as 40 per cent. Business organisations that are not prone to criticise the Government have issued outright condemnation of the Government's inactivity. The West Midlands Engineering Employers Association says:
We are sick and tired of the Chancellor telling us we need to keep wage settlements low. That now seems to be the whole answer to our problems. But in a recent survey 46 per cent. of wage settlements in the West Midlands were below 4 per cent. and more than 80 per cent. below 5 per cent.
The Chancellor's argument is that as labour is cheaper, firms will take on more workers, but reduced real wages lead to reduced demand and higher unemployment.
The Chancellor has now apparently passed the parcel to the Paymaster General, judging by his speech to the City University Business School yesterday. That speech gains credence because of its source, but Ministers are just as capable of coming out with daft ideas as anyone else.
The Paymaster General conjures up an "Alice in Wonderland" picture of employers distributing largesse to their employees in totally unjustified amounts, unrelated to their performance or to the position of the company— a situation I never came across in a lifetime of working on the shop floor. Companies are urged to pay lower rates of wages, as it is said that this will produce more jobs in the regions. The ultimate logic of that argument is that if we worked for nothing we should get all the jobs.
National pay bargaining is condemned, but the Paymaster General and his advisers seem unaware that in many sectors, such as engineering, national bargaining seeks to establish basic minima, with regional and company variations negotiated in hard-won agreements at local level. Job evaluation seeks to establish the value of a job to the employee and the employer; it has to be related to the ability of a company to pay and its prospects.
Instead of indulging in these flights of fancy, if the Government wanted to be constructive they could do something about the rates of interest which push up the costs of borrowing for research and development to enable companies to continue to be prosperous. They could do something about cheap, subsidised imports of castings, for example, from Spain and Brazil which have already cost us 700 jobs in Nuneaton. They could do something about the dumping of cement by Greece. They could stimulate demand by spending money on the infrastructure. For example, we have in Coventry 944 unfit dwellings, 4,935 buildings which lack basic amenities and 4,182 which need renovation. If we started to rectify that situation nationwide the problem of the labourer wanting to be a bricklayer would be solved because there would be jobs for all the people in the building industry.
The Government could do something about the open access to the United Kingdom market, which does not apply in the reverse direction. I have not got time to develop that argument, but people know all about the tariff barriers that our goods have to jump in other countries which exporters from those countries do not meet when their goods enter this country.
Despite the huge totals of the unemployed, which have trebled since this Government came into office, employers still say that there are skill shortages. This brings me to the question of training. The Government repeatedly stress that training must be market-led and that in the long term responsibility must lie with the employers; but it is well known that in a recession one of the first costs to be cut is that of training.
In engineering the intake of apprentices has dropped from 27,000 in the mid-1970's to around 8,000 in 1985—although I realise that there are other approaches to training. The Government have channelled resources through the Manpower Services Commission, but there is a need for real liaison to see that the money is used effectively. Too much reliance is placed on local labour market intelligence to inform the planning of training provision, but this cannot be relied on to give a firm prediction of future training needs. This may partly explain why, in the three White Papers on training, no mention was made of the needs of women or of black people nor of the reasons for the closure of the industrial training boards and skillcentres.
Instead of trying to break the backs of the trade unions through punitive legislation, the Government will be well advised to look to coherent and well-reasoned policies towards British industry, based on reality and not on fancy, and not drive further wedges between north and south by advocating reductions in wages to go with the reductions in jobs which we have already had—and I include in the north anywhere above Watford. The Paymaster General has said' that expectations must change. Let him make a start by creating the expectation of a job and a decent home for millions of our fellow citizens.
On a point of order, Mr. Speaker. Many hon. Members on the Opposition and Government Benches have been waiting to take part in the debate. Unfortunately, because of the length of some of the speeches, some hon. Members have been squeezed out, including me because I gave my name to you, Mr. Speaker, this morning.
Could I make a point of order which I hope is constructive? Some two years ago I suggested to one of the members of the Select Committee on Administration that next to that digital clock in this Chamber there should be another digital clock, the same as on the Annunciator, showing when an hon. Member gets up. When Members rise to speak they do not realise the length of time they are speaking. It is all right to have a clock on the desk so that the Clerk can see how long an hon. Member has been speaking, but sitting on this side of the House we cannot see and do not realise the length of time an hon. Member has been speaking. Can that be taken up with the Leader of the House to see whether something can be done about it, so that instead of appeals being made from the Chair for short speeches hon. Members who speak w ill be conscious of the time?
I fully share the frustration expressed by the hon. Gentleman and I say to the other hon. Members who have been unable to be called tonight that they only need to look at the list at the end of the Chamber to see the length of the speeches. One solution would be for the House to pass the ten-minute limit on speeches, which would have enabled everybody who wished to speak to do so.
My hon. Friend the Member for Jarrow (Mr. Dixon) put forward a suggestion which will be supported throughout the House with a great deal of sympathy. I add my commiserations to those hon. Members on the Government Benches who have not been able to participate tonight, but I suggest that they should level some of that criticism at the Paymaster General, who spoke at inordinate length at the beginning of this debate.
This has been one of the most cynical motions that the House of Commons has ever had before it. It
commends the Government … welcomes the national launch … congratulates the Government".
We have not heard one word tonight from the Paymaster General or any of his hon. Friends about the fact that there are 3¼ million people who are registered as unemployed in this country. In fact, about 4½ million people are out of work who are available to work if there were any jobs for them.
The fact that the wording of the Government motion comes entirely from the EEC document entitled, "Action Programme for Employment Growth", which is itself something of a joke, only adds to my cynicism of almost everything that this Government have done in employment and unemployment over the past eight years. There was a very strange omission from the Paymaster General's speech this afternoon, and indeed from the speeches of all his hon. Friends. Only two weeks ago, at the action for jobs breakfast, about which we heard such a great deal, the Prime Minister told the country that she was aiming for full employment. It is significant that the Paymaster General and the Secretary of State have said not one word about that remarkable promise that the Prime Minister made to the nation only a fortnight ago.
I have followed employment and unemployment issues ever since I came into the House of Commons. I have worked with or against every Secretary of State who has ever held that office, but I am bound to say that the present twin incumbents of the office in my view have reduced the Government's credibility on statistics in general and unemployment statistics in particular to the lowest ever level. The truth is that no one in this country now believes the Government's unemployment statistics. The Paymaster General and the Secretary of State are not in the least concerned with the plight of the unemployed. We never hear anything from them about the problems of unemployed people with families, particularly those who have suffered long-term unemployment.
The Paymaster General is not even concerned with the actual numbers of unemployed because he constantly alters the totals to mask the amount of unemployment that exists in our society. He is certainly not concerned with the growing divide between north and south, although I accept that the "south" has to be very carefully measured. Certain figures were released recently which I found fascinating and saddening and which indicate the depths of the north-south divide. Let us take three constituencies in the north-west and three constituencies in the home counties. I appreciate very much the problems of women, but nevertheless male unemployment is a very solid indicator of the depth of the problem. The unemployment rate in Liverpool, Riverside is 38·4 per cent., in Chesham and Amersham 3·9 per cent., in Manchester, Central 36·3 per cent., in Esher 4 per cent., in Knowsley, North 32·2 per cent., and in Beaconsfield 4·2 per cent. That is a clear indication of the depths of male unemployment in the north and south of this country.
The Government are not remotely concerned with the decline in manufacturing industry. My hon. Friend the Member for Newham, North-East (Mr. Leighton), in a devastating critique of the Government's statistics, pointed out that there has been a drop in employment in manufacturing of 1,750,000. My hon. Friends the Members for Sheffield, Attercliffe (Mr. Duffy) and for Don Valley (Mr. Redmond) outlined the devastation in their areas where once-great industries have been reduced to virtual rubble. Certainly the Government are not concerned about the decline in skills, although we have heard a great deal about skill training from the Government Benches.
Some interesting figures were released recently by the engineering industry training board. They give a clear indication of the size and scale of the problem. On page 7 of the document issued on 22 January the EITB said:
Between 1980 and 1984 the recruitment of craft and technician trainees into the industry fell by 50 per cent. In the 1986–87 training year total recruitment is provisionally estimated at 8,125, against over 20,000 in 1980–81. This will include 2,175 YTS trainees.
Later the EITB said:
CBI surveys in 1985 began to show increasing evidence of shortages of traditional craft skills.
It takes four year to train a traditional craft apprentice, so in 1985 we were beginning to see the results of the Government's folly in 1981–82.
The one and only concern of the Government and their Employment Ministers is statistics. I would not dream of accusing Ministers of the Crown of lying to the House. I would not even dream of accusing them of subverting the truth. They may conceal it at times and certainly they are often economical with the truth, which appears to be an ongoing issue for them. None the less, if we compare the Government's position on unemployment and employment measures with reality, we find that the two have little in common.
As the public are aware, the unemployment figures provide the classic example of the Government's handiwork. There have been some 19 changes in the way the figures are compiled or presented. All the changes have had the same effect—to reduce the gross total of those eligible for benefit. I shall not go over the precise figures. Suffice it to say that if the Labour Administration of 1979 had used the same basis of counting the unemployed as the present Administration, there would have been fewer than 1 million officially registered as unemployed when the 1979 election took place. I remind Conservative Members that they won that election on the lying slogan that Labour was not working. How many of them are now ashamed of the filthy campaign which they ran on that occasion against the Labour party?
The Government will tell us that there have been only six changes in the presentation of statistics. I have written to the Parliamentary Under-Secretary of State for Employment, the hon. Member for Pendle (Mr. Lee), giving him evidence of the 19 changes. So far I have not heard from him. No doubt we shall learn from the Department of Employment that two plus two equals three.
Another example of the black propaganda employed by the Department of Employment is the title given to its latest wheeze to get the unemployed off the register in time for a general election—the job training scheme. The first point about that scheme is that there are no wages. The people who will be dragooned into the scheme, who will be mainly young people, will get only their previous rate of benefit, but it will not be called benefit. To get round the nightmare of bureaucracy and regulation which passes for a welfare system, conscripts to the scheme will receive payments slightly lower than their previous rate of benefit, topped up to exactly that level by a training allowance. The Government have still not decided what they want to call the new payment. I suggest that they ask some of the people who have been involved in the pilot areas and they will probably receive some interesting suggestions.
Secondly, all the information which is available on the so-called training that is involved in the scheme and which the young people would receive shows that it will be negligible—perhaps five or six hours a week. That total is equivalent to about three or four weeks' training in six months. At the end of that six months we are told that they will obtain a qualification. In fact, they will gat a useless piece of paper which will guarantee them nothing. There will certainly be no work for them.
When the Minister replies, will he tell us what those young people have been trained for and where the jobs are that they will receive when they have finished their six months' training? The job training scheme will not improve Britain's training record, which has been well documented in a whole range of reports.
In a report submitted to the MSC in 1985 entitled "Adult Training in Britain" it was noted that:
for the workforce as a whole, off-the-job training occupied on average 1·9 days per year. This represents perhaps 14 hours compared with the 30–40 which is thought to be good practice in West Germany—and the 9·5 days per year which it has been calculated British managers spend on business lunches, above a normal lunch break.
This new scheme will not improve on that. Indeed, to dignify this concoction with the title of a scheme is beyond a joke. However, the Government are not joking. They are deadly serious in their endeavours to get this scheme off the ground, so much so that within weeks of it being offered to young people in pilot areas around the country, and without waiting for an appraisal of its effectiveness, the Government have decided to increase its availability nationwide and to increase the number of places to 110,000 before September.
Now we hear of proposals to increase the scope of the scheme still further, to the 220,000 under-25s who have been unemployed for more than six months and to the whole of the age group without a job. That would probably involve about 500,000 people.
Time grows short and, unfortunately, much of what I have prepared must be left on the cutting-room floor. However, it must be said that this rather cynical motion talked of more help for the long-term unemployed. If Ministers really want to help the long-term unemployed, why do they not give the higher rate of supplementary benefit to the over-55s, who would truly benefit from it? The truth is that in vast areas anyone who is over 55 and is unemployed is on the scrap heap. He will not get a job in the future. It is cynical of the Government to suggest anything otherwise.
On the matter of cynicism, the speech that the Paymaster General made yesterday is possibly one of the most synical speeches that he has ever made in his political career. He talked about offering a five-point action plan designed to remove barriers to flexibility in pay bargaining. He said that an annual pay round should be banned. However, I remind the Paymaster General that we are still a democracy and it is for the employers and trade unions to decide whether they wish to abandon the annual pay round.
The Paymaster General talked about abandoning the going rate. As my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) said, the MSC advertisements on television talked about paying the rate for the job. Presumably that will be dropped from the advertisements.
The Paymaster General talked about abandoning comparability and job evaluation. Surely those are tools which are necessary in industrial relations and which are used by all managements.
Finally, the Paymaster General talked about ending national pay bargaining. Certainly, in the private sector, pay bargaining has always been about minimum rates. Considerable plant bargaining follows national pay bargaining and that gives wide variations across different parts of the country.
The Paymaster General said that all these practices
restrict labour market flexibility, encourage excessive pay increases and destroy jobs.
He did not offer a single shred of evidence in the speech, in the press release or in his speech today to the House. He gave the game away when he said:
In the public sector, virtually all employees are covered by national agreements. Where the government is the employer we will seek to gain acceptance of a wider geographic variation in pay rates … Greater variation in pay rates will help reduce differences in regional unemployment rates. Lower wage costs in the regions may encourage firms to move there.
Why are the firms not flocking there now? Why are they not flocking to the north-east, where the wages are lower? Why are they flocking instead to the M4 belt and other areas where wages are higher, and retreating from the regions?
The Government have served notice that they intend to attack workers in the public sector, the Civil Service trade unions and workers in local government. Notice has been served that the Government intend to ensure that those who live and work in the outlying regions had better expect wage cuts from the Tory Government soon.
There is a deep cynicism at the heart of the Tory party. On Monday, I read in The Independent about the plight of a dozen former Ministers in the Tory Cabinet, who have picked up a remarkable batch of directorships and consultancies over the past years. They include a former Secretary of State for the Environment, the right hon. and learned Member for Hexham (Mr. Rippon), who has increased his directorships from 33 to 47. Presumably he cannot manage on his £18,000 a year.
On page 1 of The Independent on the same day there was an article saying that the Secretary of State for Employment is seeking further cuts in the unemployment benefit. The article said:
Lord Young, who carries the support of the Prime Minister, is convinced that more limitations on social security benefits are needed to persuade more people, particularly school leavers, to take up the Government's jobs and training schemes.
It is all very well for well-heeled former Secretaries of State and City-slicker Members of Parliament to earn fat salaries, but the unemployed and the poor have to suffer at the hands of the Tory Government. There is much talk about an early general election. The sooner the better. We
can put the Government's policies in front of the country, get the Government out of office and get in a Labour Government. I commend our amendment to the House.
Throughout this long debate, I have been fascinated to hear which Government schemes the official Opposition have chosen to attack, and which they have chosen to leave well alone. With the exception of the hon. Member for Sheffield, Attercliffe (Mr. Duffy), they have chosen to avoid talking about small firms and entrepreneurship, I suspect for two reasons. First, they have to concede that the Government have taken the high ground on the subject, with record figures in self-employment and the net growth in small firms reflecting our success, as was made clear by my hon. Friend the Member for Lincoln (Mr. Carlisle). Secondly, they do not believe that they could convince the electorate that they understand enterprise or small firms. They admitted as much by not mentioning them once in either of their manifestos for 1979 or 1983.
On the other hand, the Opposition talked a lot about what should be done that could destroy this sector, such as the significant increase in local authority rates, which would finance their half-baked ideas on council expenditure, and increases in taxes which would kill off the entrepreneurs and risk-takers and nullify the projected increase in the jobs about which they fantasise. If, after all that, the firms in the sector are dead but will not lie down, the Opposition will hit them with a statutory training levy. That proposal was as eloquently rejected by my hon. Friend the Member for Arundel (Mr. Marshall) as it is by me. How can the Opposition say that they are in touch with the electorate when they want to hand them the poisoned chalice entitled "Real needs, local jobs"?
The Opposition are fond of quoting my Department's statistical data but choose to ignore the more than 1 million extra jobs that were created between 1982 and 1984 in firms employing fewer than 20 people. The hon. Member for Kingston upon Hull, East (Mr. Prescott) worships at the altar of the regional enterprise boards, but even they recognise the vital importance of new and emerging companies. It is a slow process, but they are beginning to recognise that new jobs will come from small firms—a fact that we have been trying to hammer home for the past few years. Conservative Members want to know what restrains the Labour Front Bench from declaring wholehearted support for small businesses. Is it that, by increased support given through local authorities, they can benefit only a mere fraction of the total population of small firms, whereas by increased rates and taxes they will damage them all? I point out to the hon. Member for Attercliffe that Sheffield is a good example of an area with high rates.
These days, we are talking about 1·6 million small businesses and 2·7 million self-employed people. They are record figures. Unless local authorities are to subsidise, invest in or lend to every small business, which is a ludicrous proposition, any help given to the chosen few will be a drop in the bucket alongside the increased charges that they will have to face, according to the recent Labour party policy document.
I have no intention of giving way. We face a shortage of time.
How many small firms meetings have been attended by the hon. Members for Kingston upon Hull, East, for Huddersfield (Mr. Sheerman), for St. Helens, North (Mr. Evans) and for Birmingham, Ladywood (Ms. Short)? Not a lot, I should think. How many of those who have attended such meetings have found that their audiences have asked for substantial increases in rates and taxes, or did the Shadow spokesmen not mention that point? The Opposition have not mentioned it in the debate.
One of the most successful schemes introduced by the Government is the enterprise allowance scheme. Most people would find it difficult to attack the scheme. It is like motherhood—one could not knock it—but that does not stop the hon. Member for Kingston upon Hull, East from having a go. Shortly, we shall launch the 200,000 business set up under that scheme. Opposition Members should tell the people who run such businesses and employ people that they are not in real jobs and hear what they have to say. They should tell people employed in tourism that they are in candyfloss or Mickey Mouse jobs and hear what they have to say.
There are conflicting claims between the hon. Member for Kingston upon Hull, East and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) about whether a statutory levy is to be introduced for all businesses, which would have the effect of increasing corporation tax by at least 15 percentage points. The hon. Member for Gordon (Mr. Bruce) accurately referred to the European Community document, the action programme on employment growth, which stands as part of the motion. Frankly, the Opposition should be prepared to listen to what the hon. Gentleman said about it. We could learn a great deal from the European Community social affairs council. Over the past 18 months, not just from December, the action programme adopted by the Council—adopted unanimously, as my right hon. Friend said—sets four priorities for action. First on the list is more help for small businesses and the self-employed. There was not a dissenting voice in Europe, only from the British Labour party. The council suggested better training for young people and adults, more help to get the long-term unemployed back to work and steps to loosen the labour market by, for example, the encouragement of more part-time and temporary employment.
The real lesson to be drawn is how far the countries of the Community, whatever their political colour, have moved away from the 1960s-style economic policy that is still so loved by the Opposition. Only the official Opposition and the alliance are left still believing that one can somehow spend one's way out of unemployment. The message is very clear. Everyone except the Opposition is out of step. They have learned absolutely nothing from the past.
What about the policies of the alliance? There is disarray in the alliance. I listened carefully to the speech by the hon. Member for Gordon. He will remember that in January 1986 the Liberals announced officially:
We aim at creating one million jobs in three years at a cost of £4 billion per annum.
By the spring of 1986 the equation had been changed again. Officially the SDP-Liberal alliance — they were together then — said that their Budget policies would reduce unemployment by at least 750,000 over three years.
At the Liberal party conference in September 1986—what a wonderful conference that was, especially when it discussed defence policies — the Liberals committed themselves to a policy of reducing unemployment to 2 million over the lifetime of a Parliament, while in the previous week the SDP proposed to cut unemployment to under 2 million within two years. That was an even more ambitious target than that of the Labour party. This morning it was changed again, according to the article that we all read in The Guardian written by the hon. Member for Stockton, South (Mr. Wrigglesworth). He says the target will be achieved within three years, so he is moderating the policy somewhat.
At least we all know that, despite its past conflicting claims, the Labour party says that it can reduce unemployment by 1 million. But how and at what cost will it do that? That is the question The Guardian asked last weekend. How many jobs must be created in order to knock 1 million off the register? Is it 1·3 million, 1·5 million, or 1·7 million? No account is taken of the jobs that will be shed by companies crippled by the increased rates and taxes that are proposed.
Why should the Labour party be any more credible now than it has been in the past? Every previous Labour Administration promised to reduce unemployment and every one has presided over substantially increased unemployment. [Interruption.] It did not work in the past so why is it more likely to work in the future? [Interruption.] The Leader of the Opposition has said that under a Labour Government local authorities will be the engines of growth in our economy. [Interruption.
Labour models its policy on a plan drawn up by Southwark council. Southwark's proposals call for the creation of 6,000 new jobs within two years and these would include a pool of 400 council employees to cover for absences and nearly 1,000 trainee positions in council departments. About three quarters of the jobs created would be people working for the council. On the basis of Southwark's own figures, the total cost of that plan, if applied nationally, would be £20 billion.
However, it is not just the cost and the nature of the employment envisaged that make these proposals demonstrably daft. The weakness of the scheme is compounded by the fact that nearly a quarter of Southwark council's existing white-collar jobs are currently vacant. The hon. Member for Kingston upon Hull, East hailed the Southwark blueprint as "the best thing that had happened on the employment front for a long time." That is a clear indication of his failure to understand how real and lasting jobs are created.
Miraculously, the Opposition urge us to spend more on training, but when we introduce a scheme to help that process, like the job training scheme, they say that it is rubbish. The Opposition cannot have it both ways. In recommending an expansion of the scheme, the Manpower Services Commission stresses the absolute priority that must be given to quality. That point was made by some of my hon. Friends.
I shall now respond to the point made by the hon. Member for Manchester, Blackley (Mr. Eastham). No one would seek to deny that in geographical terms there is a skill shortage in certain sectors. However, there is no need to get carried away about that because the figures show that fewer than 15 per cent. of firms currently expect output to be constrained by a shortage of skilled labour. That percentage contrasts with the figure of 50 per cent. that applied when the Labour party was last in government. We did not hear much about that from the hon. Member for St. Helens, North (Mr. Evans).
The hon. Member for Newham, North-East (Mr. Leighton) tried to rubbish restart. The aim of restart is to provide people who have been out of work for a long time with opportunities to help them back into the labour market. How can one attack that? In fact, 4 per cent. of interviewees are placed immediately into work as a direct result of the interview. Many others go from restart into opportunities such as the enterprise allowance scheme, the community programme, training and jobclubs which, in turn, lead to a job. I know that it was news to the hon. Member for Kingston upon Hull, East, but 60 per cent. of those leaving jobclubs go into a job. I bet the people who have found those jobs do not think that that Government initiative is tea and sympathy. I bet they do not think that in Langbaurgh, as my hon. Friend the Member for Langbaurgh (Mr. Holt) was quick to point out.
The hon. Member for Blackley and my hon. Friend the Member for Bradford, North (Mr. Lawler), in his excellent contribution, spoke about YTS. The hon. Member for Huddersfield made a point of assuring the House just last week that he and his hon. Friends have never voted against the youth training scheme. He is right. I am glad that he said that and I welcome it. However, it does not stop his hon. Friend the Member for Kingston upon Hull, East from denigrating the young people on the scheme. Time without number — we hear it again today—he has referred to YTS as a "skivvy scheme". That is an insult to those on it and an insult to the trade union members who are commissioners on the MSC.
In spite of all the rhetoric about the need for more spending on training, it is shameful that the previous Labour Government vetoed an embryonic form of the youth training scheme on the ground that it would be too expensive. The House will be interested to hear that the Department of Employment is today spending five times as much on training as the Labour Government did in their last year of office.
We are used to the Labour party accusing us of fiddling the figures but I am surprised to hear it trying to roast this old chestnut again today. The measures we have introduced to help young people and the unemployed are popular with the people they are designed for, even if they are not popular with the Labour party, and they work. That does not suit the Opposition, so every time we introduce something new they say we are interested only in numbers and not in people. What did the previous Labour Government do?
Listen to this. I bet Opposition Members did not know this. Did the Labour Government add on to the unemployment count everyone on Government training schemes or receiving subsidies, everyone on STEP, the youth opportunities programme or those kept in work through temporary subsidies? Of course not. They knew then, as they know now, that people working on schemes such as the community programme or those receiving full-time training are not unemployed. If the Labour party employment spokesman was able to set about reducing the unemployment count by 1 million as he claims he can, will that be before or after he has added on all the people on special employment and training measures and all the young people who are being trained on the youth training scheme?
When he is put on the spot, as he was on "Weekend World" on Sunday by Matthew Parris, he was blown out of the water, as was his party and his policies. The reply he gave to the question about what his party would do if it was to come into power was pathetic. He said that he believed the Labour party could reduce unemployment by creating more jobs. He went on to say:
we will spell out where they come from and you keep dragging me down to three hundred thousand.
The hon. Gentleman cannot be specific. He kept referring to the "Bryan Gould Committee". There is a new application coming from him for the plain English award for 1987. Because he now has to refer everything to the committee of his "comrade", as he calls him, the hon. Member for Dagenham (Mr. Gould), he will probably become more balanced because now he has a chip on both his shoulders.
The truth is that the Opposition policy is wholly shredded, which is probably what has happened to the document that was supposed to be released at the weekend. Their efforts in the debate have been abominable. They are in disarray. Never have their policies been so absurd. They must be rejected.
|Division No. 91]||[10 pm|
|Abse, Leo||Carlile, Alexander (Montg'y)|
|Adams, Allen (Paisley N)||Carter-Jones, Lewis|
|Anderson, Donald||Clark, Dr David (S Shields)|
|Archer, Rt Hon Peter||Clarke, Thomas|
|Ashdown, Paddy||Clay, Robert|
|Ashton, Joe||Clelland, David Gordon|
|Atkinson, N. (Tottenham)||Clwyd, Mrs Ann|
|Banks, Tony (Newham NW)||Cocks, Rt Hon M. (Bristol S)|
|Barron, Kevin||Cohen, Harry|
|Beckett, Mrs Margaret||Coleman, Donald|
|Beith, A. J.||Corbett, Robin|
|Bell, Stuart||Corbyn, Jeremy|
|Benn, Rt Hon Tony||Cox, Thomas (Tooting)|
|Bennett, A. (Dent'n & Red'sh)||Craigen, J. M.|
|Bermingham, Gerald||Crowther, Stan|
|Bidwell, Sydney||Cunliffe, Lawrence|
|Blair, Anthony||Davies, Rt Hon Denzil (L'lli)|
|Boothroyd, Miss Betty||Davies, Ronald (Caerphilly)|
|Boyes, Roland||Davis, Terry (B'ham, H'ge H'l)|
|Bray, Dr Jeremy||Dewar, Donald|
|Brown, N. (N'c'tle-u-Tyne E)||Dixon, Donald|
|Brown, R. (N'c'tle-u-Tyne N)||Dormand, Jack|
|Bruce, Malcolm||Dubs, Alfred|
|Buchan, Norman||Duffy, A. E. P.|
|Caborn, Richard||Eastham, Ken|
|Callaghan, Jim (Heyw'd & M)||Evans, John (St. Helens N)|
|Campbell-Savours, Dale||Fatchett, Derek|
|Canavan, Dennis||Faulds, Andrew|
|Field, Frank (Birkenhead)||Morris, Rt Hon A. (W'shawe)|
|Fields, T. (L'pool Broad Gn)||Morris, Rt Hon J. (Aberavon)|
|Flannery, Martin||Nellist, David|
|Foot, Rt Hon Michael||O'Brien, William|
|Forrester, John||O'Neill, Martin|
|Foster, Derek||Orme, Rt Hon Stanley|
|Foulkes, George||Park, George|
|Fraser, J. (Norwood)||Parry, Robert|
|Freeson, Rt Hon Reginald||Patchett, Terry|
|George, Bruce||Pavitt, Laurie|
|Gilbert, Rt Hon Dr John||Pike, Peter|
|Godman, Dr Norman||Powell, Raymond (Ogmore)|
|Golding, Mrs Llin||Prescott, John|
|Gould, Bryan||Radice, Giles|
|Hamilton, James (M'well N)||Redmond, Martin|
|Hamilton, W. W. (Fife Central)||Rees, Rt Hon M. (Leeds S)|
|Hardy, Peter||Richardson, Ms Jo|
|Harrison, Rt Hon Walter||Roberts, Ernest (Hackney N)|
|Hart, Rt Hon Dame Judith||Rogers, Allan|
|Heffer, Eric S.||Rooker, J. W.|
|Hogg, N. (C'nauld & Kilsyth)||Ross, Ernest (Dundee W)|
|Holland, Stuart (Vauxhall)||Ross, Stephen (Isle of Wight)|
|Howarth, George (Knowsley, N)||Rowlands, Ted|
|Howell, Rt Hon D. (S'heath)||Sedgemore, Brian|
|Hoyle, Douglas||Sheerman, Barry|
|Hughes, Robert (Aberdeen N)||Sheldon, Rt Hon R.|
|Hughes, Roy (Newport East)||Shields, Mrs Elizabeth|
|Hughes, Sean (Knowsley S)||Shore, Rt Hon Peter|
|Hughes, Simon (Southwark)||Short, Ms Clare (Ladywood)|
|Janner, Hon Greville||Silkin, Rt Hon J.|
|John, Brynmor||Skinner, Dennis|
|Kaufman, Rt Hon Gerald||Smith, C (lsl'ton S & F'bury)|
|Lambie, David||Smith, Rt Hon J. (M'ds E)|
|Lamond, James||Soley, Clive|
|Leadbitter, Ted||Spearing, Nigel|
|Leighton, Ronald||Steel, Rt Hon David|
|Lewis, Terence (Worsley)||Stewart, Rt Hon D. (W Isles)|
|Litherland, Robert||Stott, Roger|
|Lloyd, Tony (Stretford)||Straw, Jack|
|McDonald, Dr Oonagh||Thomas, Dafydd (Merioneth)|
|MacKenzie, Rt Hon Gregor||Thorne, Stan (Preston)|
|Maclennan, Robert||Wardell, Gareth (Gower)|
|McNamara, Kevin||Wareing, Robert|
|McTaggart, Robert||Weetch, Ken|
|McWilliam, John||Welsh, Michael|
|Madden, Max||Williams, Rt Hon A.|
|Marek, Dr John||Wilson, Gordon|
|Marshall, David (Shettleston)||Winnick, David|
|Maxton, John||Wrigglesworth, Ian|
|Maynard, Miss Joan||Young, David (Bolton SE)|
|Michie, William||Tellers for the Ayes:|
|Mikardo, Ian||Mr. Frank Haynes and|
|Millan, Rt Hon Bruce||Mr. Allen McKay.|
|Aitken, Jonathan||Boyson, Dr Rhodes|
|Alexander, Richard||Bright, Graham|
|Amess, David||Brinton, Tim|
|Ancram, Michael||Brittan, Rt Hon Leon|
|Arnold, Tom||Browne, John|
|Ashby, David||Bruinvels, Peter|
|Atkins, Rt Hon Sir H.||Bryan, Sir Paul|
|Atkins, Robert (South Ribble)||Buck, Sir Antony|
|Atkinson, David (B'm'th E)||Budgen, Nick|
|Baker, Nicholas (Dorset N)||Bulmer, Esmond|
|Baldry, Tony||Burt, Alistair|
|Batiste, Spencer||Butler, Rt Hon Sir Adam|
|Bellingham, Henry||Butterfill, John|
|Bendall, Vivian||Carlisle, Kenneth (Lincoln)|
|Benyon, William||Carlisle, Rt Hon M. (W'ton S)|
|Bevan, David Gilroy||Carttiss, Michael|
|Biffen, Rt Hon John||Cash, William|
|Biggs-Davison, Sir John||Chalker, Mrs Lynda|
|Blackburn, John||Channon, Rt Hon Paul|
|Blaker, Rt Hon Sir Peter||Chapman, Sydney|
|Body, Sir Richard||Chope, Christopher|
|Bottomley, Peter||Churchill, W. S.|
|Bottomley, Mrs Virginia||Clark, Dr Michael (Rochford)|
|Bowden, Gerald (Dulwich)||Clark, Sir W. (Croydon S)|
|Clarke, Rt Hon K. (Rushchffe)||Hordern, Sir Peter|
|Colvin, Michael||Howard, Michael|
|Coombs, Simon||Howarth, Alan (Stratf'd-on-A)|
|Cope, John||Howell, Ralph (Norfolk, H)|
|Cormack, Patrick||Hunt, David (Wirral W)|
|Corrie, John||Hunter, Andrew|
|Couchman, James||Jenkin, Rt Hon Patrick|
|Cranborne, Viscount||Jessel, Toby|
|Critchley, Julian||Johnson Smith, Sir Geoffrey|
|Dorrell, Stephen||Jones, Gwilym (Cardiff N)|
|Dover, Den||King, Roger (B'ham N'field)|
|Dunn, Robert||King, Rt Hon Tom|
|Durant, Tony||Knight, Greg (Derby N)|
|Dykes, Hugh||Knight, Dame Jill (Edgbaston)|
|Eggar, Tim||Knox, David|
|Evennett, David||Lamont, Rt Hon Norman|
|Eyre, Sir Reginald||Lang, Ian|
|Fairbairn, Nicholas||Lawler, Geoffrey|
|Fallon, Michael||Lee, John (Pendle)|
|Fenner, Dame Peggy||Lilley, Peter|
|Finsberg, Sir Geoffrey||Lloyd, Peter (Fareham)|
|Fletcher, Sir Alexander||McCurley, Mrs Anna|
|Fookes, Miss Janet||Macfarlane, Neil|
|Forman, Nigel||MacKay, John (Argyll & Bute)|
|Forsyth, Michael (Stirling)||McQuarrie, Albert|
|Fowler, Rt Hon Norman||Malone, Gerald|
|Fox, Sir Marcus||Marshall, Michael (Arundel)|
|Franks, Cecil||Mawhinney, Dr Brian|
|Fraser, Peter (Angus East)||Mitchell, David (Hants NW)|
|Freeman, Roger||Moate, Roger|
|Fry, Peter||Monro, Sir Hector|
|Gale, Roger||Morrison, Hon C. (Devizes)|
|Gardiner, George (Reigate)||Neubert, Michael|
|Gardner, Sir Edward (Fylde)||Ottaway, Richard|
|Gilmour, Rt Hon Sir Ian||Portillo, Michael|
|Glyn, Dr Alan||Powley, John|
|Goodhart, Sir Philip||Rhodes James, Robert|
|Goodlad, Alastair||Rhys Williams, Sir Brandon|
|Gorst, John||Ridley, Rt Hon Nicholas|
|Gow, Ian||Rippon, Rt Hon Geoffrey|
|Grant, Sir Anthony||Roberts, Wyn (Conwy)|
|Greenway, Harry||Roe, Mrs Marion|
|Gregory, Conal||Rossi, Sir Hugh|
|Griffiths, Peter (Portsm'th N)||Rost, Peter|
|Ground, Patrick||Rowe, Andrew|
|Gummer, Rt Hon John S||Rumbold, Mrs Angela|
|Hamilton, Hon A. (Epsom)||Ryder, Richard|
|Hamilton, Neil (Tatton)||Sackville, Hon Thomas|
|Hampson, Dr Keith||Sainsbury, Hon Timothy|
|Hannam, John||Sayeed, Jonathan|
|Hargreaves, Kenneth||Shaw, Giles (Pudsey)|
|Harris, David||Shaw, Sir Michael (Scarb')|
|Haselhurst, Alan||Shelton, William (Streatham)|
|Hawkins, C. (High Peak)||Shepherd, Colin (Hereford)|
|Hawkins, Sir Paul (N'folk SW)||Shepherd, Richard (Aldridge)|
|Hawksley, Warren||Shersby, Michael|
|Hayes, J.||Silvester, Fred|
|Hayhoe, Rt Hon Sir Barney||Sims, Roger|
|Hayward, Robert||Skeet, Sir Trevor|
|Heddle, John||Smith, Sir Dudley (Warwick)|
|Henderson, Barry||Speed, Keith|
|Heseltine, Rt Hon Michael||Spencer, Derek|
|Hickmet, Richard||Spicer, Jim (Dorset W)|
|Higgins, Rt Hon Terence L.||Spicer, Michael (S Worcs)|
|Hind, Kenneth||Squire, Robin|
|Hogg, Hon Douglas (Gr'th'm)||Stanbrook, Ivor|
|Holland, Sir Philip (Gedling)||Steen, Anthony|
|Holt, Richard||Stern, Michael|
|Stevens, Lewis (Nuneaton)||Waddington, Rt Hon David|
|Stewart, Allan (Eastwood)||Wakeham, Rt Hon John|
|Stewart, Andrew (Sherwood)||Walden, George|
|Stokes, John||Wardle, C. (Bexhill)|
|Tapsell, Sir Peter||Warren, Kenneth|
|Taylor, John (Solihull)||Watts, John|
|Taylor, Teddy (S'end E)||Wells, Sir John (Maidstone)|
|Temple-Morris, Peter||Wheeler, John|
|Terlezki, Stefan||Whitfield, John|
|Thomas, Rt Hon Peter||Wilkinson, John|
|Thompson, Donald (Calder V)||Winterton, Mrs Ann|
|Thompson, Patrick (N'ich N)||Winterton, Nicholas|
|Thorne, Neil (Ilford S)||Wolfson, Mark|
|Thornton, Malcolm||Wood, Timothy|
|Thurnham, Peter||Woodcock, Michael|
|Townend, John (Bridlington)||Yeo, Tim|
|Trippier, David||Tellers for the Noes:|
|Twinn, Dr Ian||Mr. Francis Maude and|
|van Straubenzee, Sir W.||Mr. David Lightbown.|
|Vaughan, Sir Gerard|