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Volume 934: debated on Wednesday 29 June 1977

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With permission, Mr. Speaker, I wish to make a statement.

One of the most disturbing results of the current recession has been the very large increase in youth unemployment, which can have lasting effects on the personal development and outlook of young people.

Youth unemployment remains un-acceptably high and is likely to remain high for some time to come. This is of serious concern to the Government. We have therefore decided that the Manpower Services Commission should be asked to operate a new programme of opportunities for unemployed young people on the lines of the proposals the Commission put to us based on the excellent report of its working party. In reaching this decision we have also taken into account the relevant report on the job creation programme of the Social Services and Employment Sub-Committee of the Expenditure Committee and comments made by hon. Members in the debate on 24th May and by many others.

The new programme will draw together and build on existing schemes for young people. It meets the criticism that existing provisions do not provide adequate training for young people by integrating a series of measures for unemployed young people in the 16–18 age group which will provide them with a combination of training and work experience. These will be run to fit the needs of individuals, with the purpose of improving their prospects of obtaining a satisfactory permanent job at the earliest possible moment.

There will be a maximum of 130,000 places on the programme, with opportunities being given to over 230,000 young people a year. This is about double the provision under the present schemes and corresponds to the assessment of the need made by the Manpower Services Commission. The Manpower Services Commission and Government will review the size of the total programme annually against the prospects for youth unemployment. In drawing up the programme account has been taken of the possibility of assistance from the European Social Fund.

We shall want to ensure that places go to those who most need them. Summer school leavers will be considered for places from September, and it is our firm intention that no summer or Easter school leavers who remain unemployed the following Easter should remain without the offer of a place under the programme. The Government will ensure that the necessary resources are available for this purpose, and the MSC will arrange the programme accordingly, making such special provision as is necessary.

About one-third of the young people who join the unemployment register leave it within one month, and we would not wish the programme to disrupt the normal flow of young people into permanent jobs. We therefore intend that places should go only to those young people who have been unemployed for at least six weeks, and the emphasis will be on those who are the least qualified with the poorest employment prospects. It will be important to ensure that the programme caters adequately for girls in this category.

The work experience courses for young people will last, in general, for up to 12 months but, taking account of the Expenditure Sub-Committee's report, we have asked the MSC to operate this rule with some flexibility for individual young people with no permanent job to go to in areas of high youth unemployment.

All young people on courses under the programme will be paid an allowance of £18 a week. This includes £2 for travel expenses with a discretion to pay more in exceptional circumstances.

The new programme will require increased provision for education and training and we shall be making resources available through the programme to meet the extra costs to the education service. In view of the extra work that will fall on it, we shall also be providing more support from central funds for the Careers Service, which has made an excellent contribution against the odds. Initially, we shall be providing an additional 170 unemployment specialist posts, on top of the extra 320 posts already agreed, and a new allowance for clerical support in respect of all these posts. To ensure that the Careers Service can maintain high standards, we shall keep its staff requirements under close review as the programme develops.

The programme will be in full operation by September 1978 and will cost about £160 million a year when it is fully in operation. Taking account of savings in unemployment benefit and so on, the net costs are about 60 per cent. of the gross cost.

Preparations for the new programme will begin immediately. There will be a progressive build up of places in train-ning and work preparation courses from this coming September. The work experience programme will continue into the new programme and, to ease the transition, the job creation programme will be extended for applications until the end of 1977, after which applications under the new arrangements will be received. There will be over 30,000 extra places available under the current schemes this autumn compared with last year.

In addition to the places in further education colleges required by the MSC programme, there will be a complementary education programme to enable more school leavers to continue their education. Resources will be made available to enable local education authorities throughout Great Britain to provide an additional 10,000 places in further education over and above present projections for 1980–81. My right hon. Friends the Secretary of State for Education and Science and the Secretary of State for Scotland will be providing further details shortly.

We have decided that the youth employment subsidy scheme should be extended to 31st March 1978 when it will end. To improve the provisions for young people in advance of the full implementation of the MSC programme, I would urge employers to make greater use of this scheme.

I turn now to measures for adults. We announced earlier this year the extension of the temporary employment subsidy until 31st March 1978, and the introduction of the temporary employment (supplement) scheme, and the experimental small firms employment subsidy which comes into operation this week.

The other two existing special measures for adults are the job creation programme and the job release scheme. The Man- power Services Commission has proposed that the job creation programme should be replaced on 1st April 1978 by two separate forms of provision for adults. The first would provide 8,000 places for adults from the unemployment register who would be employed as supervisors and instructors on work experience schemes under the programme for young people. The second would be known as the special temporary employment programme—STEP—and would provide temporary employment opportunities of up to 12 months for those aged 19 and over.

The Government have agreed to these proposals. We have asked the MSC to build up the number of places under the new STEP programme to 25,000. The resources will be concentrated on localities with exceptionally severe unemployment problems. Places will go to groups who have been particularly hard hit by the current recession. Priority will be given to maintaining the number of places currently provided under JCP for the 19–24 age group, whose unemployment rate is well above the average, and to increasing assistance to those aged 25 and over who have been unemployed for over 12 months. There has been a marked increase in the number of the long-term unemployed, many of them heads of families, and the new STEP programme will provide many more temporary employment opportunities for them.

Adults under the two new schemes will be paid the rate for the job subject to a defined maximum. The cost of STEP when it is fully in operation will be £68 million a year. Taking account of savings of unemployment benefit, the net cost is about one-third of the gross cost.

We introduced the job release scheme on 3rd January, and it is due to end tomorrow. About 20,000 applications will have been approved by then. We have decided that the scheme should be extended to 31st March 1978 but, taking account of criticisms made in the House, that from 1st July it should apply only to those in employment in the assisted areas. The cost of the extension is about £8 million. The net cost is about one-third of the gross cost.

The measures I have announced today reflect our determination to continue to mitigate the worst effects of high levels of unemployment, especially for young people at the beginning of their working lives. The new programme of opportunities for young people represents a major step forward in tackling the problem of youth unemployment. It demonstrates our concern, which I know the whole House shares, that we should not abandon young people who cannot find jobs, with the depressing prospect of long spells of unemployment, but should provide them with opportunities to improve their prospects of obtaining permanent jobs.

Is the Minister aware that his statement indicates the seriousness with which the whole House and the country view the problem of youth unemployment? Is he further aware that the Conservatives consider that there are other ways to help to achieve higher employment and perhaps extra production and wealth creation for society? Nevertheless, we believe that these schemes are to be welcomed as a contribution to solving the problem, and that it is important that everybody who has not a job when leaving school should have a chance to obtain a job under one of these schemes. Therefore we welcome that part of his statement.

Does the Minister appreciate that there is a great need to ensure that these schemes provide a link with longer-term employment, and that they should not be used merely as a way of putting off the evil day of unemployment for a year or 18 months? Does he also appreciate that we welcome the additional help given under the further education college arrangements entered into with his right hon. Friend the Secretary of State for Education and Science? Will both Ministers do everything they can to ensure that there is no bureaucratic wastage in what the MSC is doing, on the one hand, and action taken by education authorities on the other? We also welcome the changes made to the job release scheme in view of what has been said in the House on this subject on previous occasions, and we welcome the fact that the European Social Fund will be assisting the scheme. Has he any idea of the amount of help that will be available?

Finally, are the Minister and the House aware that the Conservatice Party will give support to any scheme which will enable young people to find jobs but that we want to see them in worthwhile jobs? We should all play our part in creating the publicity that will encourage people to take jobs instead of remaining idle on the streets.

I am grateful for the right hon. Gentleman's comments. I agree with him that my statement illustrates the seriousnes with which we regard youth unemployment. I also agree that there are other ways in which unemployment can be tackled. I also agree that it is necessary for these schemes to be directly related to permanent employment which will follow. I assure him that these schemes have been designed with that end very much in mind—namely, preparing people for work and giving them work experience. They contain important elements relating to job opportunities.

My right hon. Friend the Secretary of State for Education and Science and I will do all we can to ensure that there is no bureaucratic wastage, as the right hon. Gentleman called it, in the activities of our Departments in so far as they overlap substantially in the measures I have announced. To that end we have asked the MSC to consult local authorities, and they are working on this matter to ensure that schemes run effectively in combination in their respective areas.

Is the right hon. Gentleman aware that his statement will be welcomed on the Liberal Benches and that we wish to compliment the Government on the steps they have taken? Will he take note of the necessity to ensure that existing facilities in technical colleges are used not merely in educational training but in Manpower Services training programmes? Will he agree that the Government need a long-term solution to youth unemployment, in addition to the measures which he has now put before the House? Will he, for example, consider increasing public expenditure in cases where such money would result in the creation of more jobs for school leavers?

Finally, will the right hon. Gentleman consider the possibility of calling together Members of all parties in the House who profess to be concerned about youth unemployment, with a view to seeing whether there can be some kind of national drive among employers? Should we not seek to urge those employers, on a regional basis, to consider whether private industry could create more job opportunities for school leavers?

I am grateful to the hon. Gentleman for his initial remarks. I give him an undertaking that we shall ensure that technical college facilities are used by both the MSC and education authorities in facilitating and developing this programme. In many areas this is already happening, but we shall examine other areas to see whether there is further scope for such arrangements. We regard the programme as long-term in comparison with the projects which it will replace.

We have given an undertaking that we shall review the situation from year to year, but the projections on which the calculations are made run five years ahead. We shall examine within this programme what can be done by way of special projects in community service and in the public service area. There is room within the programme for that aspect. I shall consult with other parties, because I would welcome a joint party appeal to employers to support us in this programme. The matter cannot be left to the MSC and the two Government Departments now involved but will require the support of a number of sections of the community, including employers.

I welcome my right hon. Friend's statement, but is he aware that the TUC and trade union movement are deeply convinced that the only effective way of tackling unemployment is the early expansion of the economy and the restoration of cuts in public expenditure? Will he confirm that the Manpower Services Commission is being charged with the responsibility of spearheading the coordination of the schemes he has outlined this afternoon, and will he say what steps he is taking to monitor and increase the training content of all these schemes? We accept that if the schemes are to be worth while they must provide for proper and adequate training. What is he doing about that aspect?

If I may deal with my hon. Friend's last supplementary question, we have ensured that all seven different elements of the programme will have a high training requirement. They are a blend of work experience and job preparation. That meets a wide criticism of a narrow area of the previous projects. As regard the attitudes of the trade union movement, I am well aware that the movement would not regard any measure of this sort as being the total answer to the unemployment problem. However, my right hon. Friend the Secretary of State for Education and Science and I met TUC representatives at Congress House, who confirmed their support for the programme, and we have also discussed it with the CBI. I am conscious that it has broad trade union support, which I very much welcome.

Is the Secretary of State aware that his statement, as it relates to Scotland, though welcome, contains proposals which are far too little and far too late, and that the real way in which the problem can be solved in Scotland is by an increase in the budget of the Scottish Development Agency to £300 million a year? Is he aware that unless this is done, Scotland will be the only country in the world to have found oil in its waters and to have become economically the poorer for it?

My examination of the job effects of the discovery of Scottish oil does not lead me to believe that that will solve the unemployment problems of Scotland for a long time in the future. Unfortunately, it produces a hump of requirement for employment which then falls away.

As to our measures being too little, too late, I would point out that they are doubling the existing high provision and this, arguably, puts us in a position to say that we are making greater provision on youth unemployment than any other country in Europe.

Will the Secretary of State ask his right hon. Friend the Secretary of State for Northern Ireland to make an early statement indicating whether he proposes to introduce corresponding measures in the Province?

In developing this programme with the Manpower Services Commission, I have had discussions with the Secretary of State for Northern Ireland, who, I assure the House is anxious to bring every possible measure to bear on unemployment there. I shall be very surprised if there are any measures that we have proposed here which he will not wish to see made effective in Northern Ireland.

Given the urgent need, my right hon. Friend's announcement is to be welcomed, but is he sure that the adverse effect on school sixth forms which certain newspapers were predicting last week will not apply? Second, could my right hon. Friend publish in the Official Report his estimate of the benefit which each region will receive?

It is difficult to publish an estimate of the benefit which each region will receive because we are giving the undertaking, in introducing the programme, that we shall devote the resources on the basis of the youth unemployment levels of the areas.

It follows logically that wherever youth unemployment is highest, the greatest funds will flow and the greatest effort of the programme will flow.

I have discussed the position of sixth-formers with my right hon. Friend, and with that in view we have arranged to time the introduction of the various phases of the programme and the recruitment periods to ensure that these will not adversely affect sixth-formers. The major intake into the programme will take place after September when most sixth-formers have made their decisions to continue.

Will the Secretary of State accept our welcome to this scheme as a step towards integrated manpower planning? Will he comment more on the STEP proposals, particularly in view of the restrictions on job creation, in that it cannot be applied to such subjects as housing or education projects since it comes within other budgets? Will the same restrictions apply to STEP or will it be more flexible?

In the case of the STEP programme for adults we shall be seeking to give greater vocational guidance directed to the particular needs of the longer-term unemployed. That is why we are aiming at this increase in the number of places.

We shall also seek to ensure that in servicing the vocational support schemes for the longer-term unemployed we shall get a feedback of information which will enable us to see how far the job creation elements can meet the particular requirements of long-term unemployed. We do not want to stamp long-term unemployed as a particular class of people. We do not regard them in that way. We realise that they have individual needs, that some of them would benefit from retraining and that some will need other forms of assistance. For those reasons, we are certain that it is right to give priority to the longer-term adult unemployed over 25 and to examine their needs in order to achieve a proper balance between training provision and job creation provision.

Under the Manpower Services Commission programme, is there a fixed maximum time limit when young people can be employed?

There has been a general limit on job creation of one year maximum. Under this programme we are asking the MSC to operate with a certain degree of flexibility in those areas where there is very high youth unemployment, so that in certain special cases youngsters can be retrained in certain parts of the programme for more than 12 months.

When the Secretary of State quotes support from the General Council of the TUC for the measures which he has announced, that will only reflect the view of all those who are clear about these problems that the Secretary of State is doing a great deal and that he shows the fullest understanding of the gravity of the problem. But it does not in any way diminish the concern expressed by my right hon. Friend that when one sees the OECD report predicting large-scale and increasing long-term unemployment, the Secretary of State can only adopt these palliative measures with the best of intentions but must persuade his colleagues in the Cabinet to change our economic strategy if the problem is to be met.

In the specific field with which he has to deal, will the Secretary of State make some comment on the report of youth employment officers in recent months that a number of employers are dismissing people at the age of 18 or 18½ when they have become entitled to the full wage, after they have used them when they did not have to pay the full wage? Will his Department take measures to see that that is stopped?

One of the reasons why a guarantee of six months' employment was attached to the youth employment subsidy scheme was to ensure that those who entered it had the essential protections of the Employment Protection Act against unfair dismissal.

As to the approach of the OECD, that report backs our own experience that part of the youth employment problem is structural and demographic and that it would be necessary to have special regard to that even if we did not have the major problem of recession.

Does the Minister realise that this new scheme is yet another way over the past 18 months on which he has spent £700 million, and would he tell the House what he is planning to do for the 100,000 or so young people who will be the hard-core unemployed young people, drawing the dole and with nothing to do?

I cannot agree that one more scheme to be added to many schemes is an appropriate description. One of the special aspects of the programme which I am announcing is that it meets the criticism very largely that we have been running a lot of separate schemes which are not sufficiently integrated and do not take an overall look at the youth employment problem. This programme integrates very closely seven schemes. I think that it is entitled to be viewed in that way.

As to the 100,000 hard-core—or the higher number which was indicated by the Holland Report—I think we have met that by preparing a programme which, when fully in operation, will offer to all youngsters who have been without a job from the previous summer or Easter school leaving dates an opportunity to participate in a part of this programme by the following Easter. Therefore, it would be unthinkable, with this programme in operation, that there could be anything like that number who were without some opportunity to be trained or to take further education or work experience within 12 months of leaving school.

Is the Secretary of State discussing with employers and the industrial training boards the problem of the contraction in the number of proper apprenticeships for young men and women in industry—a problem particularly important in development areas? Taking the longer-term view of labour demand, is he seriously looking at the possibilities of earlier retirement, of a shorter working week and longer holidays, and discussing this with his EEC counterparts?

I announced today that we are extending the job swap scheme in respect of employed people only for a further period. I do not claim that this is more than an experimental scheme. It does not fully meet the whole question of what contribution can be made to reducing unemployment by earlier retirement, longer holidays, a shorter working week or keeping youngsters longer at school, but it is something which we must continue to examine. We are dealing in another way with the problem of maintaining the intake of youngsters into apprenticeships. Under the training awards scheme, which we operate through the Training Services Agency and the industrial training boards, we are funding up to 60,000 apprenticeships in industry with the aim of maintaining the level of intake into industry in that way up to the pre-recession level.

Has the Secretary of State offered any funds from the job creation scheme to his right hon. Friends to help with the employment of young teachers as supernumerary teachers in deprived areas, thus enabling them to complete the probation period without which their professional qualification is not complete?

Under the job creation scheme I have arranged with my right hon. Friend the Secretary of State for Education and Science that we shall provide certain money for retraining teachers who are unable to obtain jobs in their particular qualifications, to train them to obtain jobs where there are vacancies. We are therefore prepared to consider other applications of the same principle, including that to which the hon. Gentleman has just referred.

Has my right hon. Friend noticed that the representatives of all the Opposition parties have remarked upon and welcomed his statement although it was principally they—including the Liberals, I may say—who were calling for massive cuts in public expenditure only two years ago? It has been the cuts in public expenditure which have created most of the problem with which my right hon. Friend is now confronted, so will he learn the lesson from this, restore the cuts and intervene positively in the economy instead of having to introduce make-do-and-mend Lib-Lab policies as he has had to do today?

I welcome widespread support for measures which help to deal with youth unemployment, but, particularly in our present parliamentary situation, I cannot pick and choose too closely among our supporters on the basis of whether their attitudes on public expenditure generally are consistent with what they advocate on particular problems of youth unemployment.