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Employment And Training Opportunities

Volume 980: debated on Wednesday 5 March 1980

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4.13 pm

I beg to move,

That this House deplores the repeated cut-backs in the budget of the Manpower Services Commission and expenditure on job support measures which are damaging their effectiveness at a time when Her Majesty's Government's economic and industrial policies are causing large scale redundancies and a dramatic increase in unemployment; and further calls upon the Government to pursue a constructive manpower policy which will support industrial development and provide training and help for the unemployed.
This debate takes place against the most sombre economic background that this country has known for many years. Throughout the developed world, Governments are facing recession or inflation, or both. At the beginning of this debate, I draw attention to these adverse world conditions, not because I believe that they offer any excuse for the damaging policies which the Government are pursuing, but because they strengthen the indictment against the Government in the context of a debate such as this. If the world and national economies were buoyant, the Government might have some justification for pursuing an economic experiment which everyone knows is at best a high-risk gamble. But to pursue such an experiment when the odds against it are so high, and when the Government are staking all that we have, is irresponsible in the extreme, because none of us thinks that it will work.

If ever there was a time for the Government to act to soften at home the impact of hazardous conditions overseas, the time is now. But, instead of doing that, the Government are pursuing policies that will make a bleak situation even worse. That is not just some partisan statement from a member of the Opposition. It is a carefully phrased analysis from the Department of Employment itself. Those are the words of an economic analysis which was published in January this year in the Employment Gazette, which is described on its title page as
"the official journal of the Department of Employment".
Indeed, I must give it that credit, because the title page also states:
"Brief extracts from the articles may be used (in a non-advertising context) provided the source is acknowledged".
I am prepared to acknowledge the source of that independent analysis. Page 45 states:
"Economic forecasts, both private and official, point to a recession in 1980. The main factors expected to contribute to the recession are thought to be depressed world trade coupled with a lack of United Kingdom competitiveness and the short term effects of tighter monetary and fiscal policies, with an associated fall in investment and stockbuilding".
Therefore, the Government are ready to accept and share their responsibility for the crisis. Certainly the Secretary of State's Department is prepared to take responsibility for it.

That confession is no more than we have the right to expect, because, far from taking steps to alleviate our problems, every industrial and economic measure taken by the Government in the past 10 months has been an attack on investment and jobs. I shall not go through the whole list, but they are all attacks on investment and jobs. For example, the minimum lending rate first went up to 14 per cent. and then to 17 per cent. We should remember what the Prime Minister said as Leader of the Opposition. When speaking from this Dispatch Box just over a year ago, when the minimum lending rate went up briefly to 14 per cent., she said:
"an increase in interest rates to 14 per cent. is a potential disaster for home buyers … and the small business who are having to pay the price".—[Official Report, 8 February 1979; Vol. 962, c. 550.]
A direct consequence of the 17 per cent. MLR is the high exchange rate of the pound sterling which is damaging our overseas competitiveness and those companies which export a large proportion of their goods. The quite reckless removing of all exchange controls will produce a direct incentive to export jobs. The public expenditure cuts on local authorities will have a catastrophic effect on essential employment. Very often, those who undertake the jobs are low-paid workers.

There have also been cuts in local authority housing expenditure and a 15 per cent. mortgage rate, both of which are having a devastating impact on employment in the building industry, which is one of the hardest hit industries of all. The crude impact of the unreal cash limits on the British Steel Corporation has not only caused that unnecessary strike but has imposed 52,000 job losses in some of the hardest hit areas of the country.

The two-year break-even scale for British Shipbuilders has also precipitated thousands of redundancies in areas of chronically high unemployment. The axe which the Secretary of State for Industry has taken to regional policy has removed incentives and job opportunities from areas of high unemployment. There has also been a contraction in the job creation activities of the National Enterprise Board. There has been the ending of industry support schemes, and the removal from many areas of the right to qualify for aid under section 7 of the Industry Act 1972. That is a far from complete list showing how active and zealous the Government are in destroying jobs and job opportunities.

How much responsibility does the right hon. Member for Chesterfield (Mr. Varley) think that the Labour Government bear for ensuring that the country entered a world recession with double the number of unemployed that they inherited when they took office in 1974?

I know that that is the type of question that Government Members will ask me and I am prepared to face up to the issue. In every month in the last 12 months of the Labour Government, unemployment dropped. In the next 12 months the Secretary of State will not be able to claim a similar record. It is more likely that there will be an increase in unemployment in each of the next 12 months. I shall return to that issue.

I have no doubt that the Secretary of State for Employment has spoken up in the Cabinet against many of the Government's acts of industrial butchery. We all know that his is a minority voice in the Cabinet. We know that the Prime Minister thinks that he is the wettest of the wet. He counts for so little in the Cabinet that the Prime Minister can afford to insult and humiliate him on television in front of millions of people. The Secretary of State for Employment is taking rearguard action to prevent his Employment Bill from being turned into a bludgeon against the unions. The Bill is bad enough as it is. We have made our views known in Committee. We believe that the Bill will lead to a deterioration in industrial relations. I suspect that the right hon. Gentleman does not really believe in it because in every speech that he makes about it he makes qualifying comments.

I thought the same until I heard the speech by the Secretary of State for Employment on Monday at a Parliamentary Press Gallery lunch. It appears that the right hon. Gentleman is a wet hawk—but basically a hawk.

It is incredible that in her first 10 months in government the Prime Minister could do what she did to the Secretary of State for Employment on television. I leave it at that. I am sure that some Government Members are upset, disgruntled and angry about it.

What is the attitude of the right hon. Member for Chesterfield (Mr. Varley) towards desirable trade union reforms? Will he urge Mr. Len Murray to reiterate the guidelines on picketing?

I could answer those questions fully, but that would prolong my speech. Our views were made known on 17 December during the Second Reading of the Employment Bill. We believe that voluntary action, provided that it is carried out to the letter and the spirit, is much better than the legislative nit-picking favoured by the Government. That is another matter. I am sure that if the Employment Bill ever emerges from Committee we shall discuss that.

The Secretary of State is fighting to prevent his Employment Bill from being turned into an instrument in which he does not believe. In all his speeches he says that the law cannot solve the problem alone and that other action is necessary. In Committee, Labour Members had to protect him. On one occasion we had to vote with him against an extremist from his own Back Benches who is not in the Chamber today. We are not there to vote with the right hon. Gentleman against the extremists in Cabinet meetings. At No. 10 Downing Street the right hon. Gentleman is on his own. He is finding it impossible to fight the battle on two fronts. He tries to fight a sturdy and defensive battle against a union-bashing Prime Minister, abetted by the Chancellor of the Exchequer, but he retreats in disorder on the second front—the jobs front.

It is extraordinary and almost incredible that after 10 months in office the Secretary of State for Employment has done nothing to promote employment. In 10 months he has not taken a single measure to create or protect jobs. I expect that when the Secretary of State moves the Government's amendment he will make great play of the rate of unemployment when the Labour Government were in office. That is fair enough. He and the Prime Minister are always referring to that even though page 47 of the Employment Gazette states:
"Unemployment in Great Britain fell gradually from late 1977 until September 1979."
The Labour Government's employment measures cut the potential number of unemployed by many hunderds of thousands. The Employment Gazette states:
"The rise in unemployment has tended to be reduced by the special employment and training measures."
The Labour Government's measures cut unemployment in the two years 1977 to 1979.

The Government have been in office for nearly a year. They cannot blame rising unemployment on Labour policies. The Chief Secretary admitted that he is adding 300,000 to the number who are out of work. The Government have a big majority. It is about time that they used it to fight unemployment. After all, that was the promise that the Secretary of State made before the election. In an interview published in the magazine jobs Weekly he said:
"We would certainly set out to bring about a reduction in the numbers of unemployed".
The Secretary of State has broken that promise. Instead of bringing about a reduction in the numbers of unemployed, he has repeatedly attacked the measures to protect and create jobs. That is what he has done in his attacks on the Manpower Services Commission and other bodies.

The difference in philosophy is that we try not merely to create jobs but to create profitable jobs. That is in the national interest and is the key to the problem. It is relatively easy to create jobs by spending money. However, profitable jobs are necessary to enable the nation to survive. That is the Government's difficulty.

About two years ago the right hon. Member for Sidcup (Mr. Heath) said that we should examine ways of saving and protecting all types of job. Is the hon. Member saying that shipbuilding jobs should not be protected or created? The popular view in the Conservative Party is that shipbuilding jobs should be destroyed.

The hon. Member is one of the more civilised members of his party. Does he believe that the shipbuilding industry should receive taxpayers' assistance in the next two years?

I do not say that jobs should be destroyed. I say that Government subsidies for jobs should be run down and that businesses should be made to create profitable jobs in an open market. The taxpayer has to pay for those subsidies and we must reduce taxes.

If the hon. Gentleman would be specific and would tell me what jobs should not be protected, I could meet his argument. Is he saying that jobs in the shipbuilding industry should not be protected. Is he saying that jobs in the motor industry—such as those at British Leyland—should not be protected? If he would tell me which jobs he wishes to get rid of because they are not profitable, I would take his argument seriously.

Perhaps the jobs referred to by the hon. Member for Winchester (Mr. Browne) are the 726 jobs which, I heard an hour ago, are to be lost at the Hygena factory in my constituency. That follows several thousand other jobs that have been lost in the past few weeks at Massey-Ferguson, and at Ward and Goldstone. Given the intolerably high level of unemployment on Merseyside, does my right hon. Friend agree that those are the sort of jobs that should be protected?

I am sure that the hon. Member for Winchester (Mr. Browne) will take my hon. Friend's remarks into account. We hear glib statements from Conservative Members about so-called "real jobs"—that is the term used by the Prime Minister from time to time—but no one knows what that term means. When Opposition Members mention specific jobs in industries such as textiles, footwear, clothing or shipbuilding, Conservative Members say "Oh no, we do not mean those jobs". They are never specific.

Every informed observer knows that unemployment will rise over the next 12 months. The National Institute for Economic and Social Research, the London Business School, the Department's own forecast and the Treasury model all point to rising unemployment. Indeed, the Employment Gazette states:
"The expected upturn in the unemployment trend is now underway."
That trend is underway at a time when the Secretary of State is leaving the unemployed more unprotected than they have been for many years.

Some Conservative Members may decry those unemployment measures but, as I have pointed out, the Secretary of State's Department knows that among those most affected by the axe that the Treasury has taken to the employment measures are school leavers, the unskilled, older workers and the ethnic minorities. It is difficult to decide which group will be the hardest hit. One of the most devastating prospects facing Britain is the huge and continuing increase in the number of long-term unemployed—those who have been out of work for 12 months or more.

The Manpower Services Commission estimates that in a couple of years there will be 500,000 long-term unemployed. Their number will remain at a high level even if the total number of unemployed begins to drop in about two years. There is a terrible degradation attached to being unemployed for a long period.

One of the long-term unemployed told the interviewers in the survey published in the Employment Gazette in February:
"You can't plan ahead, so you just live day-to-day … It's not just the money. Work gives you something to do. I'm just wasting away."
That sums up the general attitude of the long-term unemployed. It is one sort of humiliation that they suffer. Another humiliation is that suffered by school leavers who are unable to find employment. Bright-eyed youngsters go out into the world and find that it has nothing to offer them.

The Secretary of State, when he spoke from the Opposition Dispatch Box, made great play about unemployment among school leavers. At that time I was sitting on the Government Benches and I thought that his statements were very effective. After nearly a year of Conservative government, the Secretary of State has done nothing to help the school leavers who were his special concern when in opposition. What has happened to his concern for them?

The Manpower Services Commission, in its corporate plan, says that youth unemployment may rise disproportionately. It suggests that unemployment figures for school leavers may double in 12 months. Even the modest increase in the youth opportunities programme is totally inadequate in the present circumstances. Despite that, the Secretary of State's budget is to be cut.

The Government are cutting training provision at a time when technological change means that workers, and potential workers, must learn new skills.

I find it difficult to reconcile the right hon. Gentleman's remarks with the facts. The youth opportunities programme has been expanded by 20 per cent.

It has been expanded on the figures that were originally announced in the House. However, in these new circumstances, when unemployment will, on official and conservative estimates, rise to 1·8 million by this time next year, and perhaps even higher, and youth unemployment will probably double over the next 12 months, the youth opportunities programme is not sufficient to meet that demand. That is why the programme should be expanded further. There is no doubt that the budget will be cut. I shall give the figures to the House in a moment.

The question of training facilities has always sparked off the Secretary of State, and he was very eloquent on the subject when in opposition. He was forthright on the issue a year ago when he said:
"I don't think we do anything like enough training. We're certainly not doing enough training for the jobs of tomorrow and the skills of tomorrow."

Hear, hear. That is quite right.

One would never believe that the right hon. Gentleman who made that statement and has just said "Hear, hear" is the very same person who, when he has the power and the authority to take action, is actually reducing the training budget.

The right hon. Gentleman has picked out the skillcentres and the rehabilitation centres for his special targets. The most recent annual report of the Supplementary Benefits Commission states:
"The majority of the long-term unemployed are unskilled and their prospects are therefore very poor."
The Secretary of State has done absolutely nothing to improve employment prospects. We have not yet seen an end to the cuts. The right hon. Gentleman keeps hacking away virtually month after month at the essential programmes for employment and training opportunities. Last June, in the full flush of election victory, he said that he would make his contribution to the savings in public expenditure. He made a cut of £170 million in the employment programme, including £42 million off the special temporary employment programme, £25 million off the youth opportunities programme and £22 million off the training opportunities scheme—and that was for 1979–80. In December, he told the House that there will be a cut of £160 million in planned expenditure for the Manpower Services Commission in 1980–81, that 10,000 fewer people a year will benefit from the TOPS scheme, that nine skill-centres and 11 skillcentre annexes will close in February—and he announced further cuts for the next three financial years—and the small firms employment subsidy is to be ended. That from a man who said that there were about 500,000 small businesses in Britain and if each of them employed one extra person it would go a long way to solving the unemployment problem. There is a reduction in the effectiveness of the job release scheme because the qualifying age has been raised from 62 years to 64 years. That is an attack not only on the changes that have been made in the job release scheme and on those about to retire or near retiring age, but on the young jobless who would take their place from the unemployment register.

We have had three instalments of cuts. Who knows where the axe will be brandished again in the Budget which is just three weeks away to this very day? Who knows what will happen when the Chancellor of the Exchequer comes along on Budget day and decides that others, including the Secretary of State for Employment, have to contribute further cuts in training and manpower policies? Without any doubt, we know what kind of a Budget it will be. It is likely to be so unpopular that the Government are smuggling in the Southend, East by-election two weeks before the Budget is announced. One can bet that, if there were anything to hope for in the Budget, the by-election would be held after, not before, the Budget. Every elector in Southend, East should be asking "What are the Government trying to hide from me?" I hope that the Labour candidate in the Southend, East by-election is saying that, too.

This continuing attack on unemployment comes from a party which had the cheek to fight the election on the slogan "Labour is not working." The pictures of queues of Saatchi and Saatchi hangers-on, who were pretending that they wanted to work for a living, are now being replaced by the real thing. Pictures taken today outside the employment exchanges would be pictures of the real unemployed, not those who masqueraded as unemployed at that time.

It is sad, but true, that the Government are teaching a whole generation what Toryism is all about. The situation was starkly stated this week in an article by Mr. Peregrine Worsthorne in the Sunday Telegraph when he said:
"Little would be gained this time if the market economy were to win a short new lease of life, only at the price of building up a whole fresh generation of working-class grievances and resentments."
That is exactly what is happening.

Therefore, we urge the Secretary of State for Employment to go in and fight. He certainly has nothing to lose. The Prime Minister, in that famous television interview, said that no Minister should be sacked for making one mistake. The mistake that the Secretary of State is making is that he is fighting the wrong cause. If he were to fight the cause for the unemployed, he would get support not only in the House but in the country. The right hon. Gentleman should be fighting for a realistic programme of training to help the unemployed and for the budget of the Manpower Services Commission, which would allow it to plan a balanced programme for years ahead, instead of this continual chop and change. I hope that if the right hon. Gentleman cannot get some of those cuts restored, he can at least tell us that he has been able to protect the MSC's programmes for the years ahead and that we shall not have another dose of cuts when the Chancellor delivers his Budget in three weeks' time.

We urge the Secretary of State to go into the Cabinet and fight for the unemployed and show the people that at least one Conservative cares about the unemployed. If the right hon. Gentleman does that, he will get the support not only of the trade unions but of the whole House, and he will get the full backing of the Opposition. In order to give him the courage to do that, I urge my right hon. and hon. Friends to support the motion.

4.44 pm

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:

'welcomes the Government's concentration of resources on the priority tasks within the Manpower Services Commission programmes and its continued commitment to training for our industrial needs; believes that the best way to help the unemployed is to create soundly based jobs; and recognises that restraint on public expenditure is an important element in Her Majesty's Government's policy to achieve this end'.
We waited with bated breath to hear the right hon. Member for Chesterfield (Mr. Varley) put forward his policies for curing the unemployment problem. When he was asked whether he had forgotten about the previous Government's record, he quickly skated over that question. However, we did not hear what the Government of whom he hopes to be a member in future and of whom he was a member in the past would have done which was not the same as they did before, namely, to try to spend their way out of unemployment. They tried that in the years 1975 and 1976, only to be brought up sharp by the IMF. After that, for a period of two years, things were improving because public expenditure was kept under control. Then again, at the end of 1978–79, there were increases in public expenditure and that brought us back to the same old situation again.

The right hon. Gentleman has a very short memory. It is apparently so short that he does not remember that he it was who gave the British Steel Corporation the remit to break even in 1979–80—a target which it has not kept. Whilst the right hon. Gentleman may sympathise with what he considers to be my isolation in the Cabinet, he has perhaps forgotten the time when he was isolated—when he was a hawk, not a dove—because he wanted to get rid of Chrysler. He wanted Chrysler to be chucked out at that time, but he was overridden by the Cabinet. He did not resign. If I am overridden in the same way, I shall resign. It has not happened to me yet.

We might keep the right hon. Gentleman to that claim. There are two points that I should like to make, and I do not want to detain the House too long. The right hon. Gentleman must not continually perpetuate the falsehood of the British Steel Corporation's target. The Labour Government gave the BSC sustained public support to reach a break-even point. We did not fix a rigid financial break-even period. As regards Chrysler, the right hon. Gentleman will recall that I moved the rescue from the Government Dispatch Box, but he voted against it.

As I recall, the right hon. Gentleman was overridden over Chrysler by none other a character than Lord Lever. I do not think that he recovered his nerve from that moment on. Perhaps a period in opposition will do him a bit of good. It does not seem to have had much effect on him yet, because he is still harking back to the policies which achieved such drastic and terrible results in unemployment for the nation during the Labour Government's five years in office.

Listening to the right hon. Gentleman, one would think that the Labour Government had not been responsible for more than doubling unemployment in their five years—up by 692,000—and that he had had no responsibility for the long-term unemployed—up by 163 per cent., rising to more than a third of a million.

The right hon. Gentleman had a lot to say about youth unemployment. In 1974, youth unemployment was 100,000. By January 1979, it was 240,000. Therefore, the right hon. Gentleman had not got a very good case to put forward.

Not at the moment. I should like to get into my speech beyond the first stage before giving way again.

The right hon. Member for Chesterfield appears not to have taken account of the statement by the former Chief Secretary to the Treasury, the right hon. Member for Heywood and Royton (Mr. Barnett), that the laws of arithmetic do not change with a change of Government. The right hon. Gentleman would do well to remember that.

The previous Labour Government spent a great deal of money. As I have said before, the then Chancellor of the Exchequer had to admit that that policy would not succeed. Yet they started that process all over again in 1978–79. Not only that, they left us with an expansion in public expenditure in real terms of 2 per cent. which was in no way supported by any increase in production. They also left us with a number of postdated cheques—perhaps we had better call them post-election dated cheques—to the extent of around £3 billion, £2 billion on the Clegg awards and £1 billion for increased Civil Service and other public sector pay.

Perhaps the right hon. Gentleman would prefer to say something about the future, instead of raking over old history. What would he say today to the 726 people in my constituency who have been made redundant at Hygena Ltd? What hope is he able to offer to them that they will find alternative employment quickly? Will he also tell them what jobs he will create for them?

The hon. Gentleman has already asked his right hon. Friend the Member for Chesterfield that question. He got no answer, except that there would be more public expenditure. It is that sort of attitude which has got Britain into trouble and which the hon. Gentleman knows will never get the country out of its problems.

Order. The right hon. Gentleman is not giving way.

On a point of order, Mr. Deputy Speaker. I hesitate to raise a point, but several hundred of my constituents have lost their livelihoods to-day—

Order. I am sorry to interrupt the hon. Gentleman, but he knows perfectly well that that is in no sense a point of order. It was a good try.

If the hon. Gentleman has a little patience, I shall deal with that point a little later in my speech. I recognise that all these matters are extremely serious for those people who are unemployed.

I do not believe that any Labour Member has any reason to doubt my sincerity or the sincerity of Conservative Members in view of the record of the previous Labour Government over five years. If I may complete part of that record, during the five years of Labour government there was a fall in output in manufacturing industry averaging 0·7 per cent. a year. Unemployment rose by 125 per cent. and unit labour costs increased markedly.

In the CBI document "The Budget 1980" which has just been published, the CBI says that the January and October industrial trends show the highest proportion ever recorded of price competitiveness being a major restraint on new export orders. It says:
"This reflects a large rise in our unit labour costs in manufacturing which since the fourth quarter of 1976 has risen by over 60 per cent. relative to our main overseas competitors. Rather less than half of this reflects the rise in the effective exchange rate … Over a third represents pay in the United Kingdom rising by more than OECD average, and the remainder reflects mainly slow growth in our productivity relative to our main overseas competitors, and the imposition of the National Insurance Surcharge."
It is clear that all through the years of Labour Government our competitive position deteriorated, our manufacturing position went down, and we were left with the rest of the equation, which is, of course, higher unemployment.

If Labour Members look at the relative figures of the decline in employment in the various trade cycles of the last few years, they will see that between the 1966 peak in economic activity and the 1968 trough unemployment increased by 280,000. Between 1969 and 1972 it increased by 380,000, and between 1973 and 1977 it increased by 900,000. The economic policies that we pursued in the 1970s did not work for Britain. Trying to spend our way out of our problems did not work. If that is the remedy that the Opposition are suggesting we should be trying today, it shows that they never learnt a lesson. Unemployment would get considerably worse than it is today.

The answer to the hon. Member for Ormskirk (Mr. Kilroy-Silk) is that, although we have to undergo, as the right hon. Member for Chesterfield pointed out, a difficult period when world unemployment is rising as a result of the slow-down in world trade, we shall be doing no service to his constituents who are without a job simply by spending our way out of unemployment again. We have to go through a rough period. I know that that is no consolation to the people in his constituency who are unemployed, but nor was it any consolation to them when they were unemployed under the previous Labour Government. Perhaps he will make that point to them, and show them that it is right that we should be seeking a longer-term answer to our problems, recognising that the way in which we tried in the mid and late 1970s to solve the problems was no answer.

Is the Minister aware that at Tillotson on Merseyside, in the ship repairing industry and in the Meccano company, dozens of young apprentices who are three-quarters of the way through their training have now been thrown on the scrap heap? What will happen to those young people?

I realise the serious problems in Merseyside, but I give the same answer to the hon. Member as I would give to anyone else. I do not believe that we shall cure our unemployment problems until we cure inflation, and we shall not cure inflation by spending more money. The conquering of inflation is perhaps by far the most important problem with which we have to deal. Unless and until we beat inflation, job prospects in Britain are bound to remain poor. That is the message that the Government believe must go out from the House today. We should be joined in that message by the Opposition. Combating inflation is, and will remain, the top priority of the Government.

The defeat of inflation will be easier if wage increases are kept under better control. Similarly, the more of the strain that we take on pay, the less will the strain be taken on unemployment and on the reliance on monetary policy. Everything depends on getting down the rate of inflation.

The Secretary of State said that it is important to keep down wage settlements in order to cure inflation. As I understand, the policy of his Government is that wage increases do not create inflation, provided that the monetary controls are tight enough. Is he now saying that monetary controls are not sufficient to control inflation?

I am glad to be able to make the point again that if the money supply is controlled, and if some people get wage increases over and above what has been earned, or what the money supply can afford, it is bound to lead either make the point again that, if the money supply being put under strain, and then there is the tendency to push up the demand for the money supply to go up to take up the increased wages that have been granted. So one has to say that if one can keep wage increases down, the pressures that that puts on unemployment are not so great, and the pressures that are put on Governments to increase the money supply and defeat their own policies are the lesser.

I see the right hon. Member for Down, South (Mr. Powell) grinning at me. I believe that I am now putting forward a view that he would support, and that is a most unusual thing for me to do.

Before the right hon. Gentleman gets too excited, let me say that I was indeed grinning, but not for the reason that he thought.

That is a great disappointment to me. I thought that for the first time in my parliamentary career the right hon. Gentleman was about to agree with me—but there we are.

The point that the right hon. Gentleman has put to the House is very important, and we should be quite clear about it. Are we to understand that what he is saying is that the sanction and the pressure—the sanction against inflationary wage settlements and the pressure to keep them down—will be the threat of increased unemployment as a consequence?

The right hon. Gentleman was in the Department of Employment for a number of years. It is no wonder that he made such a mess of it. If he does not understand those factors, he would not know anything. It is a fact of life that under his Government the Chancellor of the Exchequer sought to control the money supply, and in so far as he was successful in controlling it and that wages were then not contained within that money supply, it led to higher unemployment. If the right hon. Gentleman does not know that, I am glad to have been able to give him that lesson this afternoon.

As regards the de-industrialisation that is going on, the truth of the matter is that, in many respects, if we had maintained our share of world markets or even our production for the home markets and export markets, we would be in a far stronger employment position than we are today. For example, the right hon. Member for Chesterfield mentioned shipbuilding. In 1965 the United Kingdom produced 1·281 million tons of ships, which was 10·9 per cent. of world output. In 1979 we produced 692,000 tons, which was 4·9 per cent. of world output. In 1965 we produced 1·722 million cars, but by 1979 we produced 1·07 million. Over the same period, France increased its car production from 1·4 million to 3·2 million, Germany increased its production from 2·7 million to 3·9 million, and Japan increased its production from 0·7 million to 6·2 million. In 1965 we produced 27·4 million tonnes of steel, 6 per cent. of world output; in 1979 we produced 21·6 million tonnes, 3 per cent. of world output.

So our industrial base has been declining. It was declining for all of that period from 1965 to 1979–14 years, for 10 of which we had a Labour Government, so I think that they must take a very considerable responsibility for the de-industrialisation of Britain during that period.

However, that is a measure of the problem that we now face. The situation is still getting worse and, as we know, our productivity and our ability to sell in competitive markets is still declining, as I have already pointed out.

I should have thought that it is simply no good thinking that the Government would help unemployed people simply by throwing money at the problem. This has been the approach and it has clearly failed. It does not tackle the deep causes of the problem. It is treating the symptoms and not the disease itself. Such an approach only makes the problem even worse in the long run. Jobs cannot be sustained in the long term by more and more Government spending and more and more Government borrowing.

It is a bogus argument to say that every single item of spending by the Department of Employment or the Manpower Services Commission should have been sacrosanct because of the economic outlook. To say that is to say that the mix of policies and programmes at May 1979 was ideal, that they were perfect, that there was no waste and that there was not an ounce of fat. I believe it is wholly defensible that these spending pro- grammes should have made a significant contribution to the overall reductions in Government spending.

Opposition Members must appreciate that it is no help at all to the unemployed and those seeking new skills unless public spending is kept within the resources available and is spent in the most effective and efficient way. We have to get value for money. I do not believe that in the last three or four years, in the budget of my Department, we have been getting value for money.

Does the right hon. Gentleman agree with Dr. Friedman or not?

I do not think that that has much to do with my Department at present.

All the experience of the last few years suggests to me that one cannot spend one's way out of unemployment. The experience of the previous Labour Government must confirm that view very strongly indeed, because had they been able to do so no doubt they would have done so.

I have a quotation from the right hon. Member for Leeds, East (Mr. Healey). On 4 February 1977 he said:
"In present circumstances we must rely for jobs and higher living standards on increasing investment and on increasing our share of both domestic and foreign markets. If instead we tried to stimulate demand by printing money to give away at home, then we would run slap up against the problems which nearly knocked us off our feet last year. We would simply suck in more imports and increase our balance of payments deficit. And we would increase the gap between what the Government spends and gets in revenue, to a size which we would not finance without raising interest rates to a level which choked off our industrial revival. So the only result would be to get deeper into the red, to send the pound plummeting and prices and unemployment rocketing."
When I am asked by the hon. Gentleman whether I am a Friedmanite, I might fling it back in his face.

No. I have given way a tremendous amount and I have a lot to say. If the hon. Gentleman will forgive me, I should like to get on.

We accept absolutely the role which the Government can play in alleviating the worst problems of unemployment and easing the necessary process of change. The Government believe in the need to devote a part of their limited resources to those two objectives. In doing so, the Government are seeing, first, that money for aid and assistance is concentrated on those areas and those groups hit hardest by unemployment, and secondly, that the money spent on training and retraining is concentrated on the skills needed today and tomorrow and not on yesterday's skills or on simply training for store, as it were.

Therefore, I begin by reaffirming the importance that the Government attach to the MSC and to what it is doing. It was, after all, a Conservative Government who set it up in the first place. It has advantages in that it contains TUC and CBI members and other members, and as such the operation of manpower programmes and managing those programmes lies in an organisation that is separate from the Department. I have had a number of meetings with the MSC, and I have personally assured its members of the importance that I attach to their existence and the programmes that they operate.

Let us look at the record. Between 1974 and 1979, the expenditure of the commission had been increased threefold in real terms, and its staff had increased from 19,000 on 1 January 1975 to 25,900 on 1 January 1979. Following this rapid expansion on all fronts, there was certainly a need for a period of consultation and assessment of priorities. Resources are now focused more sharply on activities of the commission which are of particular value to economic recovery or which help particularly vulnerable groups amongst the unemployed, such as young people and disabled people.

We have accepted reductions, and there has been a reduction in planned expenditure on Manpower Services Commission programmes of £110 million this year and of £160 million to £170 million for next year and beyond. There was a 3 per cent. fall in the staff level last summer. Over the next two years there will be a further fall in the number of staff employed of 12·8 per cent., representing a reduction of about 3,400 staff and a saving of another £20 million.

The effect of these cuts will be to produce a slimmer and fitter service with employment and training services more closely geared to the areas where they can make the most effective contribution. The commission will play a vital part both in assisting economic recovery and in helping particular groups. I believe that that is the right role for it.

I turn to the special employment measures for which the commission and my Department are responsible. I do not understand what the right hon. Member for Chesterfield means when he talks about the Government not helping the young unemployed. We have made additional resources available for the coming year for the youth opportunities programme. It will be expanded by 25 per cent. in 1980–81 following an expansion of 30 per cent. this year. That will provide sufficient opportunities for young people who are not able to find jobs to have training or work experience courses to improve their employment prospects, and enable us to meet the undertaking to offer places to unemployed school leavers and young people who are unemployed for 12 months.

We have agreed to maintain Community Industry. We are maintaining the special temporary employment programme for long-term unemployed at 12,000 to 14,000 places, although we have concentrated that programme on special development areas, development areas and designated inner city areas. As a result many more of the long-term unemployed are filling the places. The number on the special programme coming from the long-term unemployed has increased from 40 per cent. a year ago to over 70 per cent. It is still rising. It is being used now for the first time for the purpose for which it was set up.

We have discontinued the small firms employment subsidy. It would have cost an additional £15 million this coming year. The estimate of the maximum number of jobs that it would have produced was 3,000. There are much better ways in which we can help small firms by spending £15 million than in that manner. I hope that my right hon. and learned Friend the Chancellor of the Exchequer will take those words into account when he comes to his Budget.

We shall retain both the temporary short-time working compensation scheme and the job release scheme. I am sorry that we cannot do more for the job. release scheme this year. However, it is somewhat hypocritical of the Opposiition to tell me that it is scandalous that we have put back the age to 64 years for eligibility for job release when they in government had reduced it, six weeks be-for the general election, to 62 years. Again, we have picked up the bill. We do nothing but pick up their bills.

Those in the previous Labour Government knew that there had to be an election by October unless they changed the quinquennial legislation. I would not have put that past the previous Prime Minister. The Labour Government, in their last year in office, were determined to try to win another period of office by spending money that the country had not earned, spending money that they had not obtained by taxes and spending money that would have increased the public sector borrowing requirement by £5,000 million. I wonder what would have happened. If the right hon. Member for Heywood and Royton (Mr. Barnett) had been Chief Secretary what would have happened immediately after the election? I think that we would have seen many cuts.

We believe that there is an important role for the training opportunities programme, which provides training for adults who are unemployed or changing jobs. However, it needs to be much more closely directed towards our future industrial needs. Over the past five years the Manpower Services Commission has been asked to chase ambitious targets. The targets have always been concerned with trying to train more people. The emphasis has been on expansion, especially on clerical and commercial training. In 1977 that accounted for 36 per cent. of all the training opportunities scheme completions. There is nothing to be gained from continuous expansion if courses are substantially under-occupied, if trainees do not find jobs using the skills that they have acquired, or if training provided at public expense displaces what employers would otherwise provide for themselves.

Under the new Manpower Services Commission plan there will be about 60,000 adults per year trained under TOPS compared with 70,000 in recent years. The main reduction will be in commercial and clerical courses, which will be reduced by about 8,000 completions to 12,000 to 13,000. Training in the main engineering and craft occupations will be maintained. There will be an expansion of training for technicians and computer-related occupations. I do not think that we have gone far enough. It is not part of the Government's job to spend valuable money and resources on training those who could be trained by industry when at the same time we are not gearing the training requirement to the needs of tomorrow, which should be our approach. Although we are swinging the balance of training, we still have some way to go.

In computer occupations there will be a rapid expansion from 2,000 completions in 1978–79 to over 4,000 in 1980–81, including 2,300 programmers, 500 analysts and 200 engineers. The purpose of these changes is to shift the balance of training towards areas where it can make the maximum contribution to our industrial growth and for the trainees.

The proposals to rationalise the skill-centre network are designed not to reduce the overall capacity of the skillcentre provision but to make better use of that capacity. The aim is to produce a better utilised and more cost-effective training provision that is more in line with demand from industry. Some skillcentres and annexes will be closed where performance is poor or where there is local over-provision. In some instances new centres will be opened where they will be better used. Some of the centres and annexes listed by the MSC for possible closure are now being operated at only about half their capacity and/or place only 50 per cent. of trainees in their training trades. In other words, there are some centres that are only half full and only half the trainees that they turn out get a job.

That cannot be a good use of public money in any circumstances. If we had all the money in the world, it still would not be a good use of public money. As we do not have all the money in the world, we must concentrate on training to provide skills in areas which demand will build up when the economy does—I am certain that it will improve—so that they are available for the jobs that will be created when the economy expands.

Some of those who are now training as apprentices in areas such as Merseyside are losing their jobs because there is no future for them. Cannot the Government use public money to ensure that the youth that is being thrown out of work and not completing apprenticeships is not lost to us? Many valuable skills are being lost.

I am aware that the hon. Gentleman has a particular argument that he has raised already with my hon. Friend the Under-Secretary of State. We should try to help in the situation that he has described. That would be sensible. My hon. Friend talks to the MSC about these matters. If apprentices were thrown out halfway through their apprenticeships, we would try in any way that we could to find the finance to keep them going in their apprenticeships. We do not have too many skilled people. However, it is not true that we are so short of skilled people. Many years of incomes policy have compressed differentials to such an extent that skilled people no longer think it worth while to pursue their skills.

The MSC is also currently undertaking a fundamental review of the industrial training arrangements established under the 1973 Act. I welcome this review that will report to me at the end of July. There is much scope for improvement on the cost effectiveness of the present arrangements and for devising a more flexible and responsive system to meet the rapidly changing skill needs of the 1980s. I suspect that in the next parliamentary Session we shall need some type of training Bill. We need carefully to consider our whole training programme. A tremendous amount of money is being put into training by the Government, by industry training boards and by industrial concerns. Nevertheless, we now have higher unemployment, and lower productivity. We have spent a lot of money on training. What has happened to it? I therefore intend to look at training seriously. We are not getting good value for money at the moment. We have not achieved the right movement of young people from schools into training.

Trade unions can do much to help. Some trade unions continue to run outdated apprenticeship courses. One must begin an apprenticeship when one is below a certain age. It is also difficult to get into a union after a certain age. All those factors should be examined in a spirit of co-operation if we are to make any progress.

No one knows better than a Secretary of State for Employment that it is important to provide jobs. We must consider the cost of high unemployment in terms of the family and of society. The creation of new jobs must be given priority as old industries are run down and new technologies grow. We must also bear in mind competition from new trading nations, the current world recession and the fact that the pound is strong. It helps no one to pretend that some cosmetic scheme, temporary palliative or Government sleight of hand will aid those seeking a job.

Soundly based jobs are the product of a strong and vigorous economy. They are the only true and honest offer that we should make to the unemployed. Greater emphasis on industry and the creation of wealth means a switch of resources from part of the public sector. It is no good planning for a 2 per cent. growth in public services—as the previous Labour Government did—if the growth is simply not there.

It is therefore right that as Secretary of State I should make a major contribution to the restraint of public expenditure as well as to everything else. I am satisfied that we have done our fair share towards that common purpose. We have preserved a greater efficiency and concentration of effort on those who need our help now, together with a developing programme that will secure our training needs for the future.

We have heard nothing from the Opposition today that would in any way inspire confidence that they knew what to do about unemployment. There are many difficult decisions ahead. We shall have months and perhaps years of work on employment matters. However, if we are reasonable and if we stick to our course, we can build a far more successful economic system during the next two or three years than we have known for years. I commend the amendment to the House.

5.25 pm

The Secretary of State devoted much of his speech to economic issues. I am tempted to follow that course. However, I shall not take up all his points now, but rather wait until the Budget is debated. He tried to give the impression that the increase in unemployment—which will continue for at least the next 18 months—was somehow caused by overspending by the previous Labour Government. Most of the present unemployment is, and will be, caused by this Government's monetarist policies.

This Government have deliberately put up the rate of inflation. Some would argue that they have increased the rate of inflation by at least 8 per cent. Inflation will reach almost 20 per cent. during the next few months. Although we have an inflation rate of 20 per cent., the Government have a monetary target of 9 per cent. As a result, interest rates are high. One must consider the effect on industry. There have been cuts in public expenditure. There is, therefore, no growth in the public sector. That is why there will be an increase in unemployment. The Government did not have to incur those inflationary increases. They could have kept inflation to 12 per cent. or 13 per cent. That is the underlying rate. They could have had a monetary target that was consistent with that rate. Interest rates would have been much lower than 17 per cent., if the inflation rate had been lower. The level of employment could then have been preserved.

It is not necessary to print money. We need sensible policies on public expenditure and sensible monetary policies. One criticism of this Government is that they have even given monetarism a bad name. If the Secretary of State had attended Professor Friedman's seminar he would have noted that even he did not agree with the 4 per cent. increase in inflation caused by the last Budget.

The right hon. Gentleman proposes to close some skillcentres, including one in my constituency of Llanelli. He said that he thought that private industry should utilise its resources by training personnel. However, private industry will be under terrible pressure during the next few years. Profits are falling. Industry will have no money to provide training facilities. Industry is under pressure. It can hardly finance its stocks or present operations, yet he suggests that it should take on the additional burden of training. However, the Government will cut resources. They will not undertake the training of industrial personnel either. He proposes to close skillcentres all over the country at a time of high unemployment.

Llanelli lies on the edge of an area in which the steel industry is important. It is indirectly affected by closures in that industry. Nevertheless, the Government propose to close our skillcentre. I shall make three brief points which I put to the right hon. Gentleman when he kindly received a deputation. I shall give reasons as to why the Llanelli skillcentre should be exempted from the cuts. Valid arguments can be made for retaining the other skillcentres, but I wish to concentrate on Llanelli skillcentre.

First, that skillcentre does not affect only my constituency. It is the only skill-centre in South-West Wales. If the right hon. Gentleman consults his right hon. Friend the Secretary of State for Wales, he will tell him that about 30 per cent. of that skillcentre's intake comes from the constituency of Pembroke. The Secretary of State for Wales represents that constituency. I told him that I would raise this issue today. If our skillcentre closes, will the Secretary of State for Wales blame the MSC? That centre is being closed as a result of cuts in public expenditure. The responsibility for that lies with the Secretary of State for Employment, the Secretary of State for Wales and with the whole Cabinet. The MSC is not responsible. It is only doing its best to operate within the cuts and restraints laid down.

I hope that the people of Pembrokeshire and of the whole of South-West Wales will recognise where responsibility lies. It lies with the Government. As the right hon. Gentleman knows, the nearest skillcentre to the east of Llanelli is at Port Talbot. That is a long way from most of South-West Wales. It will be impossible for people to travel and find accommodation there. They therefore cannot be trained at that skillcentre. We are not discussing a skillcentre that covers only one constituency. Llanelli skill-centre cover at least six constituencies. It is the only skillcentre in industrial South-West Wales.

Secondly, the right hon. Gentleman said that he wished to help small businesses. Most skillcentres, certainly in Llanelli, help small businesses more than large businesses. Small businesses need assistance but do not have money. They will have even less money with the increased interest rates that the Government are subjecting them to. Small businesses need the assistance of skill-centres more than large businesses, because they do not have the resources and facilities for training. Small industries cannot provide money for training, especially in Wales.

In Wales, as in other parts of the country, we need to foster indigenous small industries. The economy of South Wales would then not be hit so hard by the ravages of world or Tory recession or whatever economic crisis arises. It should have the resources to withstand a recession, and it is therefore necessary to establish indigenous industries.

It is more difficult to do that if skillcentres are closed and the chances for training diminished. If the Government are concerned to foster small businesses, why close skillcentres?

Thirdly, the steel industry in South Wales is facing at least 12,000 redundancies. There are 6,000 redundancies in Port Talbot, where the next skill-centre is located, a further 10,000 or 12,000 in the coal industry and a further 10,000 at least in ancillary industries. Perhaps 50,000 will be unemployed in South Wales by the end of the year. How does it make sense to close a skill-centre which would help to train some of those people to enable them to find alternative employment?

The Port Talbot skill-centre will be, faced with 6,000 redundancies, which it will find difficulty in coping with. Why close the Llanelli skill-centre, which could take some of those people and train our own people at the same time?

It is inconceivable that any Government, even this Government, should want to close a training centre in an area where jobs will be lost on such a large scale.

Finally, the Government's policies are incomprehensible to most people, especially in South Wales. They cannot understand why the Government pursue policies which increase unemployment. It is incredible that, on top of those policies, they plan to close skillcentres such as the one in Llanelli and deprive future generations of employment opportunities, if ever the British and world economies pick up.

5.32 pm

Much of the speech of the right hon. Member for Llanelli (Mr. Davies) concerned his constituency, and I hope that he will forgive me if I do not follow him there.

I should like to devote most of my brief remarks to constructive comments. However, it is necessary to respond to the speech of the right hon. Member for Chesterfield (Mr. Varley). The crocodile tears that he shed about the prevailing levels of unemployment and the increase in the past month took a fair amount of swallowing. The right hon. Gentleman was a member of a Cabinet which presided over a period in which unemployment more than doubled. He chided my right hon. Friend about one mistake. A comparison of unemployment figures when the Labour Government took office with what they were when they left shows that 68,000 tragic mistakes must rest at their door.

The right hon. Gentleman appeared to take pride in the fact that in the last few months of that Administration, levels of unemployment were coming down. Many of us pointed out at the time what the Labour Government were doing. They were hoovering the pavements in preparation for a general election and trying to get people off unemployment rolls. Despite all those efforts, unemployment was still double what they inherited.

The country should never tire of hearing that every Labour Government since the war have left office with unemployment higher than when they took over.

I also believe that the Labour Government are guilty of cruel deceptions on those who suffered unemployment when they were in office. The then Chancellor of the Exchequer and other Treasury Ministers proclaimed their strategies. They planned to create 1 million new jobs in manufacturing industry as a result. Between the time when they announced that strategy and when they left office I do not know what the decline was, but the number of manufacturing jobs did not increase.

The Labour Government failed to live up to their promises even in regard to the precise subject that we are debating today. On 15 March 1978, the then Secretary of State for Employment made an announcement about special employment measures. He said:
"The current special employment measures are now providing in total some 320,000 jobs or training places and this figure should he raised by these new measures to over 400,000 by March 1979."—[Official Report, 15 March 1978; Vol. 946 c. 442.]
On 4 April 1979, my right hon. Friend who is now Secretary of State for Scotland tabled a question for written answer, which was answered by the then Under-Secretary of State for Employment. He wanted to know the estimated number of people who were being assisted by the various special employment and training measures. The answer is that, in March 1979, instead of increasing from 320,000 to 400,000, the number had dropped to 253,000.

Labour Members ignore their miserable record by tabling this critical motion.

Turning to more constructive remarks, we face a bleak outlook on the world front. We are entering a world recession when we are poorly equipped to help our people. We need to re-assess our priorities in equipment services and training. I am delighted that, within the constraints imposed by the Manpower Services Commission and the Department of Employment, it has been possible to increase in successive years the proposals for spending under the youth opportunities programme. STEP is at least being maintained. Community industry is being improved and expanded, although it is a modest programme but an important one in certain areas of the country.

I am sure that my right hon. Friend is right in saying that it is a responsibility not simply of the Government. Trade unions and employers also have a responsibility to see that we develop and improve our training, to try to ensure that when the recession ends we are better equipped to give our people a share of the world's expanded wealth.

It is not a general economic debate, but, if Mr. Rees-Mogg will allow me, I wish to divert momentarily to economic matters. I am not an economist, but 1 should like to say a brief word.

Order. The hon. Gentleman is addressing his remarks to me and not to Mr. Rees-Mogg.

Perhaps you, too, Mr. Deputy Speaker, will look on me kindly as I make these few ill-informed remarks on ecomonic matters.

We have very high interest rates and an over-valued currency. I believe that we have the worst attitude for productivity bargaining since the end of the Second World War. We have deflated demand and high wage settlements are being negotiated in the public and private sector. All that must bode ill for future patterns of employment.

I recognise and welcome the Government's determination to make the conquering of inflation their first priority. I do not wish the Government to divert from that primary aim. However, even Mr. Maurice Green, who is a monetarist and a former editor of The Daily Telegraph, has expressed the view that the Government might just be making their commitment to a speedy reduction of the public sector borrowing requirement too much of a totem pole. At a time when the natural tendency is for the tax product to fall and for expenditure on unemployment benefits to rise, one could be in danger of driving the economy down in a spiral. In the short term it might be better to take a more relaxed view of the level of the public sector borrowing requirement, accepting the longterm aim but not trying to do too much too quickly on that front.

One of the reasons why I am a Tory is that I believe that political and social judgments should sometimes override purely economic judgments. There must be a time when the social, economic and inflationary costs of unemployment have to be weighed against the costs that they impose upon our society. It is worth reminding ourselves that unemployment is of itself inflationary. We are paying people good money to produce no goods and services. I am not questioning the Government's fundamental strategy, but I think that on all these matters we must accept that a balance must be drawn in social, economic and political judgments.

Some Labour Members have been nodding very sagely in agreement with my comments, but I must point out to them that the trade unions must bear a substantial responsibility for the unemployment levels at present. If the unions continue to insist on wage settlements at a level of 20 per cent. or thereabouts when we are actually producing fewer goods, the inevitable result will be an increase in unemployment. The trade unions must accept their share of responsibility—one cannot put the blame on the Government.

In the document "The Right Approach to the Economy" and in the Conservative manifesto, the Conservative Party said that it was thinking about bringing together employers, trade unions and the Government on something like the West German pattern to try to get a common view about the level of wage settlements which would be acceptable to the economy in the forthcoming 12 months. I hope that this idea has not been buried under Friedman-ite layers and I hope that at some point we shall bring it back into circulation. I am sure that the Government have some sort of responsibility to influence the level of wage settlements in the economy, and to restrict the irresponsibility of trade unions in pushing for settlements which cannot possibly be afforded and which will inevitably take away the jobs of others in the long run.

I turn to the particular impact of unemployment on young people. The general prospects for unemployment are bad enough, but young people suffer disproportionately. They have done so in the past and are likely to do so in the immediate future. This is because employers have a loyalty to their own work force and when they run down their requirements for labour they do so by means of wastage which means stopping the recruitment of young people. Also, many employers have unfavourable attitudes towards the employment of young people because of what they read about the behaviour of the young in the media. It must be true that our educational system has failed to fit many of our young people for working in our industrial and commercial system.

Furthermore, young people face increased competition, particularly in a time of recession, from women coming on to the job market. Young people are in particular competition with women and in a recession more and more women want to go out to work. Therefore, the young are likely to suffer still more in the immediate future in the employment market.

The Department of Employment is still waiting for considered responses to its booklet "A Better Start in Working Life". I very much hope that there will be positive responses to the proposals which are put forward in that document. Some people query the special importance of youth unemployment. They say that it is much worse to lose one's job when one is 50 and has little chance of getting another. However, if we allow a substantial chunk of a generation of young people to grow up with no experience of working for a living, we will be sowing dragons' teeth for social unrest in the future.

I put two specific suggestions to my right hon. Friend. The first is outside his specific responsibility. The second is very much part of his responsibility, although it impinges on another Government Department. In the Conservative manifesto and in many of the speeches made by all of us during the election campaign, we paid particular attention to the needs of small firms and the contribution that they could make to getting the economy moving again and coping with unemployment. It has been pointed out that we have 1½ million small firms and that there are 1½ million people unemployed. If each small firm took on one person we could solve the unemployment problem overnight. That is a way of illustrating the contribution that small firms could make.

We all know how hard small firms have been hit, particularly by the level of interest rates. We all know how difficult it must be to launch a new enterprise in present circumstances. Is there not something to be said for launching some form of scheme which would be analogous to the export credit guarantee scheme whereby small firms could insure themselves and get a guarantee against losses? This would be a real encouragement for the launching of new enterprises. I hope that my right hon. Friend will do something to encourage that idea in the Department of Industry and the Treasury.

My second specific suggestion concerns the 19 million houses in this country, 75 per cent. of which lack even basic insulation—

The hon. Member has suggested that the Government should do something along the lines of the ECGD scheme to help small firms. Does he not remember that this Government stopped the small firms subsidy scheme which the previous Labour Government introduced? What is the point of substituting a new scheme for one that the Labour Government operated? Perhaps he should ask his right hon. Friend why the Government withdrew our scheme?

Of all the special measures for subsidising employment, the small firms subsidy scheme was the least efficient. If trimmings have to take place I would much prefer the expansion of the youth opportunities programme at the expense of the small firms subsidy scheme which was the least efficient.

I return to the point about insulation. The United States has, as part of its energy saving programme, a scheme for recruiting young people to insulate and weatherise buildings in the public sector. These young people are properly trained so that they can go into private industry and help to insulate private homes. That scheme has been remarkably successful and about 1 million jobs have been created as a result. I urge my right lion. Friend to do what he can to launch a similar scheme in this country. Perhaps we could specifically recruit young people for this purpose. Obviously they would need skilled supervision, but there are plenty of unemployed people in the construction industry who could provide that.

At the moment we have the benefits of North Sea oil; we are an energy-rich country. That gives us a breathing space and I would like to see us use that time to ensure that all homes in this country are properly insulated so that when we are short of energy again we will know that our homes, factories and offices are properly insulated. I am sure that there is scope here for a really imaginative scheme, involving young people, which would bring great benefits to our country in the long term.

My right hon. Friend the Member for Sidcup (Mr. Heath) was a member of the Brandt commission which has recently reported. Whatever we think about employment patterns in this country, and the need for training to fit British industry better for the future, we must look at what is happening in the developing world. As the developing world begins to industrialise, that will alter the whole context in which this country has to earn its living and provide a living for its people.

What the Brandt Commission says about those changes will have a profound effect on all our plans for the future. I was delighted to hear my right hon. Friend's commitment to a new Bill. I hope that in looking to the future pattern of employment and our future training needs we shall bear in mind the future international context in which our employment and training policies will have to be developed.

5.50 pm

The debate began with a few exchanges across the Dispatch Boxes which appeared to be at a personal level and did nothing to assist us in addressing ourselves to the problem of unemployment and training.

I do not know when the Government propose to cease reminding everyone of the errors made by the previous Government, but it will be only a short time before the public generally see through what they are saying and recognise it to be an inept admission that they have no solutions to our problems.

Last week we had a major debate which was really about how we make a capitalist society work more efficiently and less painfully, with shorter slumps and, if possible, some booms—even short booms, but preferably long booms. The present level of unemployment is clearly a product of a fairly long slump, the bottom of which we have not reached.

In the media and elsewhere the unemployed come in for a great deal of stick, for various reasons. They are sometimes described as scroungers and layabouts. The House has the responsibility to nail that lie firmly. I want to do it particularly in regard to the problem of the Preston travel-to-work area. When the last count was taken, on 14 February, there were 5,363 registered unemployed. Also registered on the same day was the number of vacancies—591.

On top of the 5,363 unemployed came the Courtaulds workers who were prepared to register. The first 850 clocked in on 15 February. Since then there have been 230, 400 and 120. The figure is still being added to, and the manager of the local employment exchange estimates that by the end of March it will total about 7,000. Those people are not layabouts or scroungers. They have been deprived of their job by the unplanned, chaotic system of economics that the Secretary of State for Industry describes as market forces. The failure to plan industry based upon the community's needs across the board, with instead an emphasis on private profit, means that we face periods of unemployment.

I do not excuse the last Labour Government, and I did not do so during their period in office, for some of their decisions that contributed to the increased unemployment. Today we are looking at some of the same problems, resulting from the same sort of decisions by the present Government.

Because of the high level of unemployment, questions about retraining inevitably arise. Instead of there being a major input into retraining, we face the threats of cuts. Previous speakers have already spoken about the closure of skillcentres. We hear a great deal about the shift in manpower needs that faces us if we are to have the right sort of growth in the economy and industry over the next five to 10 years. Clearly, for electronics, microchips and many other activities, there must be shifts in the training given in colleges of further education, universities and elsewhere. What preparations have Governments made over the past 20 or 30 years for the shift that will be required, given the development of new technology? We must admit that little has been done.

It is time to take a quick look at the way to overcome the difficulties, the omissions of past periods. Many of the workers coming out of Courtaulds at Preston, the textile industry generally, including A. S. Orr's mill in Bamber Bridge, and various other types of industry in which there is diminishing productivity, require substantial retraining. In further education colleges one would hope to see an increasing demand by some workers for basic O-level and A-level studies as adult students. In polytechnics and other colleges one would want to see a demand for sandwich courses, short courses of a trade character, year-long courses in one specialism or another. In other words, we should expect a major increase in demand in our education institutions because of the need not for building trade workers to chase nonexistent building trade jobs, but for workers to retrain in order to take up different employment. But we are not prepared for that. On the contrary, we face the sort of cutbacks that will make it impossible to respond to that increased demand.

For example, Liverpool polytechnic, of which I am a governor, faces a cut of £1·8 million. That will mean that the polytechnic will have to cut back on certain courses when it should be expanding. Because a fair amount of informative material has come to us from the North-East London polytechnic, most hon. Members will be aware that it faces a £2·5 million cut in its course provisions. All the growth has been eliminated from the forward planning of the Preston polytechnic. Despite all the growth that we would seek to include in course development to meet the Courtaulds redundancies, and demands from elsewhere having been eliminated, the present Government have indirectly imposed a further cut of about £400,000, alongside the other cuts that impinge on the whole question of unemployment and retraining.

The other side of the coin, some Conservative Members might suggest, is that the leader of the Conservative-controlled council in Preston has been able to boast, with great aplomb, that no rate increase is proposed in Preston in the future year. I understand that the Under-Secretary of State, the hon. Member for Beeston (Mr. Lester), now sitting on the Government Front Bench, recently went to Preston to add his congratulations to the cause. What is not given a great deal of publicity, and it has a direct effect on employment levels in the area, is the fact that the same council underspent by approximately £800,000 in housing during the previous financial year. If it had spent that money on relieving the situation for the 2,500 on the priority housing list in Preston, we might have been able to take up some of the slack that exists in respect of construction workers. That did not happen. The cuts that have taken place in recent months, as an act of deliberate policy by the Government, have had the effect of increasing the level of unemployment. That has to be made clear.

In terms of local authority resources and employment Preston is not unique in needing an extension of local transport facilities. Road and pavement conditions in Preston leave a lot to be desired. Street lighting needs to be improved. The welfare services provided in the Preston area by the Lancashire County Council need to be improved.

The absence of play areas in some of the city centre's concentrated housing is pathetic in terms of the problems it gives to parents and children. There is also an absence of certain amenities for the elderly and the disabled. All these are local services which, in the present situation, should be extended. They should be growth areas. They should be providing potential jobs for many young people coming out of further education. There is nothing in the claim being made by the leader of the Conservative council in Preston to be proud of. He is literally saying that £4 million reserves can now be switched to the present economic situation. But this has been achieved at the expense of poor services. If there is a Labour victory in the May elections, the new council will have the job of improving services by increasing the rate.

What has happened is a form of asset stripping at local level. The present Government are well qualified in asset stripping. This was shown by the British Aerospace Bill and other measures that have been debated in the House. Against this background, one can recognise the gulf that exists between Labour and Conservative policies in the provision of health services to the local community. Conservatives are clearly anxious to promote private medicine and not to put resources into the National Health Service. I could name one or two constituents who have written to me saying that they have been waiting for an important operation for 18 months and are still unable to get a hospital bed. If either of them, or both, could find £400 or £500 to see a consultant, their admission to a private bed would permit that operation to take place without further delay. That sort of absence of concentration of forces into the National Health Service has its effect in terms of job opportunities.

In education, much has been said over the last few years by the previous and the present Government about the shortfall and the diminishing demand due to the lower birth rate which means that not all the trained teachers available are required. This is a completely retrogressive approach to the problem. We should be taking every opportunity, with the increased number of qualified teachers, to improve educational facilities, for example, by reducing class sizes. That matter has been discussed for years. Very little has been done. It would be another method of reducing unemployment.

The Government often argue that this is a matter of public expenditure. It is said "We cannot afford it" and "We do not produce enough". It is astounding to me that the Government should talk about not producing enough when 2 million people are idle and unable to pursue productive activities. This is not an accident. It is a question of deciding what we in the House are supposed to be doing on behalf of the people. What plans are we trying to prepare that will give people the sort of life that they deserve? A job is at the root of the matter.

There was an exchange between the right hon. Member for Down, South (Mr. Powell) and the Secretary of State for Employment earlier in the debate. It was one of the nice little exchanges about whether one is for or against Sigmund Freud or Milton Friedman, I forget which. The argument seemed to promote in the mind of the Secretary of State the idea that "You cannot buy your way out of unemployment." That seems to suggest that the Conservative Party have completely rejected Milton Keynes' general theory on employment—[HON. MEMBERS: "Maynard Keynes".] That comes from the fact that when I drive down to London from Liverpool I travel through Milton Keynes. I am reminded, on those occasions, that the town is named after the economist, as far as I am aware. That is why it sticks in my mind. I accept the correction. John Maynard Keynes said—his views remain of value—that if the private sector in the economy is failing to invest in order to promote employment, it is the responsibility of the Government to provide public investment in order to do the job. I cannot see anything in our present situation that denies the validity of that premise.

I recognise that it is a question of values. The present Government are not interested in promoting public expenditure in that way. They are interested in finding some way of making private production and private enterprise work in a way that will avoid the problems of slumps. That has been the problem of capitalist society and remains the problem of capitalist society throughout the world. Reliance upon market forces has proved an utter failure. When shall we accept that and begin the process of planning our economy?

There were those of us who hoped—I was one—that after 1974 the Labour Government would begin that process. It could be said that in aerospace and shipbuilding and in one or two other ways they began, in a fumbling way, to control some productive activities. But very little change has in fact taken place. In my view, there can be no expectation, unless another major company such as Rolls-Royce suffers some sort of hiccup, that the present Government will seek to promote public enterprise.

I end on this note, recognising that other hon. Members want to speak in the debate. Until we are prepared to face the necessity for public ownership of the means of production, distribution and exchange and the planning of our resources to meet people's needs, we shall continue to have periods when unemployment wavers between I million and 3 million. So far as I can see, until this Government are removed from office to make way for those who can plan the economy, we shall continue to face our present difficulties.

Order. I remind the House that there are at least 15 hon. Members hoping to speak. It is easy for hon. Members to forget how long they are speaking when they are on their feet, but I remember.

6.11 pm

I shall do my best to be brief in what I regard as an important debate. Basically, the subject under debate can be divided into two parts. First, there is the argument about whether one accepts the need for public expenditure cuts at all. The second question is whether the cuts which have to be made are damaging particu- larly to employment and training opportunities.

On the first question—whether public expenditure cuts are necessary—I wholeheartedly support the Government's policy and recognise the need for such cuts. I think it right to remind people that we are honouring an election pledge given only last May, when we stated that we would have to look at everything, the only exceptions being defence and our police forces. Those were the only two exemptions from consideration for possible cuts that we made at the time of the election.

I have a highly marginal constituency. I do not believe that the support which I received last May, and which many of us on these Benches received in such constituencies, was support for an easy option. The easy option was not what the electorate was expecting. The public have had enough of Governments prepared to answer any problem by the injections of cash. The electorate wants no more of the idea that we should throw money at problems. It believes it to be important that we should act responsibly. The electorate sees public money as its money, not the Government's money, and it accepts that we must act in the spheres covered by the present debate. It realises that in the long term the only solution to our present high level of unemployment is a sound and strong economy. It recognises that as a nation we must live within our means.

In accepting the need for public expenditure cuts, people look for reassurance—the reassurance that the sacrifices that they are making in agreeing to public expenditure cuts shall not be in vain. Too often in the past they have been asked to make sacrifices which have been in vain.

It is therefore essential that the Government maintain their course and allow nothing to divert them from it. We must have no U-turns. There must be no truck with those who advocate the well-tried and failed policies of the past—prices and incomes policies, for example—or with those who would like us, for short-term benefit, to go down the road with import controls. I believe that only when an assurance is given by the Government that they will hold steadfastly to the policies which they have started will the public accept the need for public expenditure cuts.

I suspect that, in attacking the Government's cuts in the field of employment and training opportunities, the Opposition imagine that they have found a weakness in the Government's stategy, believing that they can attack the Government more easily here than on some of the other cuts which are being made. That is not true.

I turn now to the question of the cuts which affect employment potential and opportunities for training. It is not the cuts which I criticise. I am critical of the way in which the Government's agency, the Manpower Services Commission, implements those decisions. In this context, there are three specific ways in which my constituency is affected and which are relevant to the debate.

I refer, first, to skillcentres. I have a skillcentre in my constituency, and it is proposed that it be closed. I believe it to be folly to close a skillcentre in a new town which has unemployment 50 per cent. above the national average and a new town corporation which is having to advertise in South Africa and Rhodesia for skilled workers of the type which incoming industries need and which at the moment are available from the skillcentres.

As a supporter of the Government's cuts, I shall, no doubt, be reminded by the Opposition that one ought to be somewhat careful about advocating local needs if one does not show an alternative. I feel obliged, therefore, to suggest to the Manpower Services Commission where a sum at least equivalent to that which it hopes to save by the closure of skillcentres in the West Midlands can be saved.

It is not necessary to seek far for that saving, because within the West Midlands, when announcing the closure of the Telford skillcentre, the MSC announced in the same breath the opening of a new skillcentre at Redditch, also in the West Midlands and also in a new town. Incidentally, it is an area with unemployment at only half the level of Telford.

The Manpower Services Commission wishes to open the new skillcentre because—this is the impression I have—it is an experimental design. The commission wishes to use it for little experiments to find out about the construction of skillcentres for the future, and it appears to be a pet scheme of the regional manager.

I believe that decision to be wrong. I have spoken to my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), who has confirmed that he, too, has been an opponent of the new skill-centre at Redditich, because it is too expensive and for another reason, too—and that is that it is in the wrong place. It is being built some three miles from the further education establishment.

On the other hand, we in Telford are told that, as well as the arguments on the economic front, one of the reasons why our skillcentre should be closed is that it, too, is in the wrong place. It is about three miles from the further education establishment. We are told that it is too far away and that is one of the reasons why it should be closed.

I should add that the site was chosen by the MSC itself, although it was in fact more distant from the further education establishment than the site suggested by the Telford development corporation, which was the owner of the land originally.

We now find ourselves involved in the internal politics of the Manpower Services Commission. At the time of the planning of the skillcentre, the Telford area was under the control of the Welsh MSC area, but we now find that we are under Birmingham and Birmingham feels that it is in the wrong place. I am concerned lest my electors suffer because of the internal politics of the MSC. In my view, it should keep open the skillcentre at Telford and not open the Redditch skillcentre.

I turn now to the youth opportunities programme, which also is administered by the MSC. This is causing me concern. In the Telford area at present some 536 young persons are on work experience schemes. That is a reasonable number. What is more worrying is the number of vacancies available on further work experience schemes. We have 459 unfilled vacancies at a time of very high unemployment and I have deliberately asked employers, educationists and others involved why those vacancies exist.

I believe that the reason is attributable to the education system. Many unemployed young people are not going for the jobs which are available under the work experience scheme because the education system has not prepared them for their possibly having to accept a job which is not their first choice. We all hear of people who wish to be brain surgeons and Concorde pilots and who will look for nothing else. If the education system pushes people in a particular direction there is a danger that those who are unemployed will not be sufficiently flexible to accept those jobs which are not their first choice.

Some employers are also refusing to take some prospective workers. Why is that? In many cases the reason is the way some people turn up for interviews and the way in which they present themselves. That can lead an employer to decide that an applicant is not someone who they consider would benefit from the work experience scheme. Our schools must play a greater part in preparing youngsters to fill existing vacancies such as we have in Shropshire and in Telford.

The Government recently announced the expansion of employment opportunities for young people and I hope that they will ensure that better use is made of the vacancies which exist in the work experience schemes.

I think that we should also comment on and discuss the STEP projects which have been withdrawn from certain areas. We have lost such a scheme in Telford where we have a higher level of unemployment than many areas which are still eligible for STEP projects. I support the idea of concentrating help where it is most needed and I believe that Government resources should be concentrated—perhaps on a smaller scale—on those areas that need most assistance. The Government should question whether the present method is the best one or whether they might not introduce some more flexibility so that STEP projects operate in those areas where employment is at its highest and where the need is greatest.

I am happy with the Government's proposals for expenditure. I accept that cuts are a necessary evil, but I believe that they will result in a much stronger economic climate which will be of benefit to all. However, I believe that the Government could and should bring pressure to bear on the MSC. Firstly, in the West Midlands, I think that the MSC should look again at its proposals for skillcentres. Secondly, it should ensure that its resources in that area are used to the best advantage. I hope also that it will not be long before we can persuade educationists that they have a bigger part to play in preparing young people in our schools for their future work.

6.23 pm

The Secretary of State devoted most of his speech to attacking the last Labour Government. He did not tell the House what he will do about unemployment, though he did warn us, as did the Chief Secretary to the Treasury and the Chancellor of the Exchequer, that we were in for a rough period. The hon. Member for The Wrekin (Mr. Hawksley) is clearly in favour of all public expenditure cuts except where they affect his own constituency. He also appears to be worried about the rough times to come.

We are in a rapidly deteriorating situation. That is partly because of the number of people coming on to the labour market. We are experiencing the peak of the 1960s baby boom, fewer people are retiring and there is the increasing participation of women at work. It is true, as the Secretary of State said, that we have the problems of increased oil prices and a world recession but the Secretary of State might also have said that we are one of the few countries in the West that has a reduction in output. He might have said further that that reduction was due partly to the policies of the Government.

The hon. Member for Chelsea (Mr. Scott) made a brave and candid criticism of Government policies. I fear that his speech will not earn him the promotion that he deserves, but it was a notable speech which made an impression on the House.

I can understand why Conservative Members are not keen on unemployment forecasts. The much despised National Institute of Economic and Social Research—despised by the Government since they have cut down the amount of money for that organisation—has forecast that in the fourth quarter of 1981 unemployment will be 1·84 million. The forecast of the much favoured London Business School says that by the fourth quarter of 1981 unemployment will stand at 1·93 million. The CBI does not forecast for 1981 but says that by the fourth quarter of 1980 unemployment will stand at 1·7 million, and the OECD agrees with that forecast.

The Manpower Services Commission says that by the end of 1981 over 2 million people will be unemployed. Everybody agrees that we are in for a rough time.

Those are merely the overall figures. If we look at the regional figures we see the phenomenon that, as unemployment rises, the gap between the regions widens. The situation is becoming extremely critical in areas such as the North and in other development areas where redundancies and further unemployment are experienced almost every day.

The budget of the Manpower Services Commission and the Government's measures are the principal subject of this debate. The Chief Secretary said that the MSC was the creation of a Conservative Government. When the Conservatives were doing their last U-turn they acceded to the requests of the trade unions and the employers that there should be a strong MSC. However, the major expansion of the MSC and its work in employment and training came about under the last Labour Government.

By looking at the public expenditure figures we can see that in 1974–75 expenditure on employment services were running at £86 million. By the time Labour left office it had doubled to £167 million. In 1974–75 the money spent on training was £138 million and by the time Labour left office expenditure was running at £374 million. Much of that expenditure was counter-cyclical—that is, when there was a downturn in the economy and even when there were cuts in public expenditure during 1976 there were no cutbacks in the MSC budget. On the contrary, there was expansion.

What have we seen since the Conservatives came to power at a time when as the Secretary of State admits the situation is becoming worse? We have seen not only a cutback in planned expenditure but also the prospect of real cuts from 1980–81. The overall figures show that firstly in 1979–80 the MSC budget was cut by £109 million. In 1980–81 the cut in planned expenditure is £160 million and cuts of the same order are planned for subsequent years. On top of that there is the requirement to reduce staff costs by 13 per cent. That will mean a saving of a further £20 million.

Sir Richard O'Brien announced to the Select Committee on Employment that further cuts of £30 million would be required in 1980–81 and in subsequent years. Those considerable cuts will clearly have a major impact on MSC programmes, as Sir Richard O'Brien admitted when he was a witness before the Select Committee. He said that the cuts would have adverse effects for employers, individuals and the economy as a whole.

If we look at the MSC programmes—the Secretary of State skated over them—it is clear that there will be substantial damage. The occupational guidance scheme is being wound up. The special employment and needs scheme for the long-term unemployed is to go and the Professional and Executive Register is under threat. Some programmes will be damaged. The disablement services will be weakened. An unemployment rehabilitation centre is to go in Felling in the North.

The employment transfer scheme has been weakened, in that it has been cut back from 16,000 moves a year to 11,000. STEP will not be expanded. The plans were that it should cater for 36,000 longterm unemployed, but it will now cater for only 12,000, which represents only 1 per cent. or 2 per cent. of the total number of unemployed. It should be remembered that the number of longterm unemployed is estimated to rise to about 500,000. That is the impact on STEP.

I am pleased that the jobcentres will be modernised, but staff cutbacks will mean that at least 100,000 fewer places—that is the MSC estimate—will be available by 1980–81.

Training is the seed corn of our industrial future. Yet the grants to the training boards have been cut back. That will have a big impact on training. TOPS will be maintained, but there will be a fall of 10,000 completions, from 70.000 to 60,000 a year. In addition, there will be the closure of skillcentres, which many of my hon. Friends have already mentioned. We do not quite know exactly whether 10 skillcentres will be closed and 12 annexes, but clearly such closures have been imposed by Government cuts. Mr. Reid, who is the Director of Manpower Intelligence, said as much to the Committee. Those closures would not have taken place had it not been for the cuts imposed by the Government. They are not related to local needs. It is particularly bad to be closing skillcentres, such as Maryport and Darlington, in areas of high unemployment, where one needs such skills if one is to get out of the situation that the North presently faces.

I have not mentioned the additional cuts in other Government schemes, such as changes in the job release scheme, and the ending of the small firms employment subsidy. All those will have an impact.

The cutbacks in employment schemes and training are extremely short-sighted. They are not the fault of the MSC. They are the fault of the Government. Employment schemes are cost-effective, and they are very small beer in terms of public expenditure. We are talking about a sum of £300 million for training and £160 million for employment schemes. That is not large public expenditure. Employment schemes now cover about 400,000 people, which means that 200,000 people are kept off the unemployment register. Therefore, such schemes are very effective.

Indeed, most other countries operate exactly the same kind of schemes. A number of surveys show that most of our Western industrial rivals operate the same kind of schemes. We have a long way to go in respect of training. We are far behind West Germany, our main European industrial competitor, whose training schemes are far greater than ours.

If one adds the cuts in the MSC budget to other Government policies which have affected the level of unemployment, one will appreciate the seriousness of the situation. There is the high level of sterling, high interest rates and what my right hon. Friend the Member for Leeds, East (Mr. Healey) has called "punk monetarism", which has increased inflation as a result of the rise in VAT, so much so that it has had a major effect on wage negotiations throughout the current round. There are cuts in public spending, cuts in aid to industry and cuts in regional assistance. All of those directly contribute to increasing unemployment.

I hope that this debate will encourage the Secretary of State to go into the Cabinet and fight for changes in the Government's policies about which I have been talking, otherwise I am afraid that the Secretary of State for Employment—whom I much admire—will go down in history as a Secretary of State for Unemployment.

6.34 p.m.

Any hon. Member who came to today's debate hoping that a marvellous and magical solution was to be produced to the nation's tragic unemployment problems will have been disappointed. I suspect that my speech will not particularly encourage such hon. Members. The simple truth is that hardly any hon. Member now believes that he has a solution to the country's unemployment problem.

I should like to attack one major point that was made by the Secretary of State. He referred to the improvement that took place in employment during the last two years of the previous Government. That point has been made scores of times. It is constantly said that improvement took place because the IMF came in and because pubilc expenditure cuts were enforced. That is true, but that is not the reason why the major improvement took place. It took place because, all of a sudden, British industry became substantially more competitive when the value of the pound against other world currencies fell straight through the floor.

I can remember the time when hon. Members walked up and down the Corridor and read on the telex that the value of the pound was going down and down. That provided an edge for our industry which lasted for about two years. In addition, the then Government's pay policy was having some effect. That may well have been their best period. Therefore, in terms of jobs, we had the double advantage of a collapsing pound against the foreign markets—I know that a collapsing pound causes other problems—and a pay policy. As a result, British industry was more competitive against its rivals, and not suprisingly we gained some jobs.

I emphasise that point because, as an engineer who spent all his time in industry before being elected to Parliament, I must tell the House that the vast bulk of employment within Britain is now aimed at producing products which, by and large, are no better or worse than a whole range of other products that are made throughout the industrial word. The mass of people are employed in manufacturing such goods as motor cars, washing machines and home consumer goods. Britain makes quite good products. There is nothing particularly wrong with them. They are not necessarily a great deal better than what is produced abroad, even though they are not a great deal worse. Therefore, whether or not we are competitive has more effect on the trend of unemployment in Britain than has any other factor, including public expenditure Cuts.

Is the hon. Gentleman therefore saying that one of the unforeseen advantages of the Lib-Lab pact was a collapsing pound?

No, the pound collapsed before we started, and we managed to make the best of it afterwards.

However, we are now in a new situation. We have a pound which in my view is valued ludicrously high on the world markets, and we have pay claims and settlements which, if hon. Members are worried about the long-term future of Britain, can only lead one to the point of near despair. That is the horrible truth.

There is an answer with regard to pay policy. Such a policy may not be easy, but the Government should have one. It is ludicrous to carry on, watching British industry collapse around our ears, without a pay policy. Yet the Government will not have one. There are two reasons for the high value of the pound. The first, which falls outside the Government's control—although it should be helping the economy rather than hindering it—is that the pound is now a petro-currency. People who are looking for a currency in which to invest their money can see that Britain has oil. They think "Here is an industrial country which is self-sufficient in fuel. That must be a reasonable place to put our money.". I suspect that a shift will take place in the value of the pound against other cur- rencies for at least the next 15 or 20 years because of that fact. I am not suggesting that the Government should give away the oil to bring the exchange rate down, but that is a fact.

The second reason, which is clearly the result of Government action, is that their pursuit of money supply policy has landed us in the peculiar situation of having a petro-currency, which is not their fault, while at the same time offering quite astronomical interest rates to overseas investors, as a result of which money is pouring into Britain. It is not being invested in factories, mines and industry generally. It is pouring in to take advantage of short-term interest rates. That is because of the money supply, which is under Government control. They could do something about it. I see little prospect of an improvement until the Government abandon their money supply policy and introduce a pay policy or, at least, persuade the British people that it is in their interests to accept lower pay settlements.

Predicting unemployment figures resembles playing darts—at least the way I play. One throws at the board and hits a number. However, everybody agrees that unemployment will increase. I should not be surprised if, in a little over 12 months, we were discussing over 2 million unemployed.

The long-term prospects are worse. Our productivity is appalling. There are no signs of change in industry's attitude towards productivity. The attitude against productivity increases has hardened. A large element in the economy now argues in favour of import controls. In reality, such controls will make low productivity exist for all time. I could be persuaded that some import controls are neccessary if we achieved good productivity in the different sectors of our industry. However, import controls are no solution when productivity is so abysmally low.

We can expect investment to be low under a Government who favour high interest rates. For at least 15 years we have experienced miserable levels of investment. How do the Government intend to infuse some of the income from North Sea oil into industry?

When asked what we should do with the receipts from North Sea oil in the next 20 or 25 years, most people agree that we should use it to create high investment and a good, strong industrial economy. How will that be achieved? It seems that the only advantage that Britain has over its competitors is that it is self-sufficient in oil. However, the Government are following OPEC's oil price increases to the nearest half dollar. As a result the advantage of North Sea oil is denied to British industry. Oil is bringing in a great deal of money. How can we transfer that money from the Government to industry? The Government should use some of it to improve our industrial base.

Perhaps we could invest some of that money in the microchip. The microchip is on its way. It will destroy jobs. What worries me is that we face a totally imported industrial revolution. I see no signs of the extra jobs created by that development being established in Britain. The only prospect is that jobs will be lost as a result of that development and none of the new jobs will come to Britain. We are at a point of near despair because of the unemployment prospects in Britain.

The Government talk of 250,000 or 300,000 placements under their youth employment programme. I support that programme. I do not know exactly how many people leave school each year but it cannot be more than 1 million. We are talking about one-third of the children leaving school spending at least six months involved in the Government's youth employment programme. The Government should keep that scheme since they have nothing else to offer, but it is not the long-term answer to youth unemployment.

The Secretary of State was cynical about the way in which the early retirement scheme was changed just before the last election. I understand that cynicism. However, I was disappointed that the age limit of 62 will not be retained. The Government claim that their scheme is good value for money. They say that paying a person to retire early for only one year provides one job for one year and that that is good value. I cannot understand why it is not also good value to pay a person for three years so that another person can take a job for three years. I am disappointed that the scheme is to go because it was a small wedge in the retirement age anomaly that annoys so many men.

My party can claim to have negotiated the small firms employment subsidy with the last Government. The Government now say that it costs too much and that there are other ways of helping small businesses. I wish that the Government would outline their alternative plans for helping small businesses. Many employers in my constituency believe that the subsidy was of considerable help.

The Government have ensured that local rates will rise substantially. Public expenditure cuts have not necessarily occurred but rates have increased. There is talk of charging for planning permission and the Government have put interest rates through the roof. Under present Government policies there is probably little likelihood of small businessmen taking on new employees in the next few months, with or without a Government subsidy. Small businesses are an important part of our economy and yet the Government are dedicated to destroying them.

Apprenticeships are a problem in my constituency. One of my constituents was apprenticed for four years and has completed two and a half years. That young man was made redundant because his company went broke. He is continuing with his studies at a local technical college while trying to renew his apprenticeship somewhere else. Everybody speaks highly of him. His reward for attending technical college one day a week is that he loses one day a week of his miserable unemployment pay. If he stopped his part-time education and went on the dole full-time he would receive more unemployment pay. That cannot be sensible or rational.

Closing down skillcentres must be bad. Britain does not have an excess of skill. Closing down skillcentres, whether in the Wrekin or anywhere else, must be bad. The day that Britain has enough skill will be when the revolution has come and gone and all our problems will have been solved. Skillcentres do not cost much money. I ask the Minister to reconsider closing them.

I agree that there should be an investigation, or legislation, to sort out training in employment. The present position is chaotic. The situation is worse than the Minister claims it to be. In the last five or six years there has been a major drop in in-company training and apprenticeships. A great deal of money is spent on training. Clearly we are not achieving the required results. I was glad to hear what the Minister had to say, but, we shall not be supporting the Government in the Lobby tonight.

6.50 pm

I am always glad to follow the hon. Member for Truro (Mr. Penhaligon). I have to be careful in my remarks, especially after what the right hon. Member for Chesterfield (Mr. Varley) said about me earlier in the debate, thereby banging another nail into my coffin.

After my election to the House three years ago, I remember vividly that I was a guest of the Liberal Party in the Dining Room. I was enjoying myself when I heard a rich, plummy Tory voice saying "That fellow has been here only 10 minutes, and there he is dining with the Liberals". Therefore, I repudiate totally everything that has been said by the hon. Member for Truro and the right hon. Member for Chesterfield.

Whether we like it or not, we are all the victims, or the results, of our own experiences. It was my personal experience of poverty in India, when I was a child, that led to my concern about the problems of development. It was my unwilling and unwitting experience of the events of 1940 which led to my belief in a strong defence strategy for Britain. On others, their experiences of the depression and the poverty before and between the wars, and the miseries of the immediate post-war period, have had a comparably profound impact. One of the reasons why I have never had, and never will have, any quarrel with the Labour movement is that having witnessed that misery, I understand how the people felt.

There are dangers in allowing such experiences and attitudes to affect one's position in life. Circumstances change, and anyone in public life who remains adamant in his attitudes can become a political liability. That rule applies to political parties as well as to individuals. None the less, we arc the products of our backgrounds and experiences.

It is in debates such as this that those experiences and backgrounds become of particular importance. We are not talking about economic theory, or Friedmanism or monetarism. We are talking about people, and about the dilemma which afflicts too many of our fellow citizens in Britain and, regrettably, even more overseas.

It is now apparently the conventional wisdom in the Conservative Party to look back in anger or sorrow—or both—at the performance of the Macmillan Government. We are told that the turning point in our fortunes occurred when the entire Treasury team was forced to resign, and we embarked on a period of reckless, prodigality which has brought us to our present predicament. Some of my hon. Friends go back even further, and blame Winston Churchill and Walter Monckton for surrendering to the trade unions. I venture to take serious and grievous issue with that interpretation of the post-war history.

I referred earlier to one's position in politics being affected by one's experiences and the circumstances of one's life. Mr. Macmillan's political attitudes were dominated by his experience of the Great War and by his experience of representing a desperately poor Northern constituency with very high unemployment. A similar experience occurred to Duff Cooper, who subsequently wrote:
"In Oldham I had a glimpse of the condition of the people and had realised that a man's head must be as wrong as his heart who denied the need of social reform."
That was in the 1920s, the period of what the economists called "the intractable million" of unemployed—which the economists troubled about—in the declining industries, especially in the North of England, Scotland and Wales.

But it was not only those areas that suffered. I remember, as a small child in London, the wan faces of suffering children, obviously stunted by malnutrition. I came from a well-to-do professional family, and I was shocked. When I returned to England in 1944 the position had improved slightly, but it was still bad. It has improved ever since. Although it may be contrary to the conventional wisdom on this side, I must say that this country is an infinitely better one since 1945. I pay tribute to the Labour Party and the trade union movement which contributed to that improvement.

As a child in the immediate post-war period I wondered whether we were going to have a major revolution in Britain. Perhaps, in that awful period, we exaggerated the perils and difficulties. The fact that we did not have a revolution is due to the vision and the sensitivity of a number of people. High on that list I put the names of Harold Macmillan, Lord Butler, and the late lain Macleod.

One does not have to be poor to understand the suffering brought about by poverty. One does not have to be unemployed to understand, or have the imagination to realise, what suffering that causes. As soon as the Conservative Party ceases to have the imagination to understand those things it will cease to have any relevance in this nation.

If one looks back on the position in 1951—which many hon. Members will remember—there were controls, coupons, rationing, low incomes and little hope. If one looks at the position in 1964, at the end of the so-called "13 wasted years", one finds that the transformation was incredible in almost every respect. During those years the population had risen by more than 4 million, but there were only 319,000 unemployed. I say "only", but even that was 319,000 too many. None the less, given the context of that position, it was a remarkable achievement. I could go through the other achievements of the Government at that time, but that was the most remarkable.

The real significance of that Government and what they tried to do was less that inflation was virtually nil—2 per cent.—that interest rates had risen to the terrible height of 6 per cent., that income tax was very low and that industry was flourishing, and more that there was a sensible and helpful industrial relations position based on the determination of that Government to do all in their power to maintain full employment. They were not talking about economic theories but about our society, our country, and the need to maintain as full employment as possible as a social and political imperative. I believe that they were absolutely right to do so.

I see a clear connection between the combination of low taxes, low interest rates, increased investment in education —there was an enormous increase in further and higher education between 1955 and 1964—active encouragement to house building and to industry, and that very low rate of unemployment and underemployment. I believe that there was more to it than that. I do not believe that one can talk about economics in absolute isolation from those who are the victims or the beneficiaries of economic policies.

As I said, Mr. Macmillan was haunted by the memories of the 1920s, just as my father was haunted by his memories of the early 1900s. Those memories dominated him to the end of his life. John Boyd Orr wrote of the 1920s:
"A ruling class living on dividends, masses of people on the dole, and a Government trying to maintain an uneasy status quo, is a picture which fills thinking people with despair."
Mr. Macmillan rebelled against what he called "Casino capitalism", and he denounced laissez-faire and the hard-faced "industrials" of the Tory Party in the 1920s representing lush Southern constituencies—the sort of person Stanley Baldwin described as one who, after flicking his cigar ash over his roses to keep off the greenfly, considered that he had done a good day's work. That was the kind of person Mr. Macmillan was fighting, and such people are not defunct now.

In my view, what Mr. Macmillan did and tried to do, and others with him, represented a glittering and noble chapter in the history of the Conservative Party. I am determined, so long as I am a Member of the House, to ensure that the Conservative Party never walks the path that some people wished it to walk in the 1920s and 1930s.

What I find astounding about contemporary politics is that there is a general acceptance of a level of unemployment which is literally and totally unacceptable. No doubt the figures are exaggerated, no doubt the black economy is rampant, and no doubt there are cheats and scroungers and people who are work-shy. So what is new? The fact remains that there is a level of unemployment in this nation which is absolutely unacceptable in a decent socity. Although the Government are rightly a free enterprise and non-interventionist Administration, they must recognise that their actions, or inactions, have a profound effect upon business confidence, investment and employment.

As the hon. Members for Truro and Chester-le-Street (Mr. Radice) and the right hon. Member for Chesterfield pointed out, an excessively strong pound affects the exporter, particularly the small exporter. High interest rates affect everyone, but particularly the small businessman, the self-employed, the home buyer and the construction industry. I give those as examples.

A virtual doubling of VAT is bound to affect the rate of inflation and, consequently, wage demands. I was astounded to hear the Secretary of State for Trade on Monday say that the virtual doubling of VAT had no effect what-soever on the rate of inflation. If he had said that the increase in VAT, combined with cuts in income tax, meant that those increases would not have quite as large an effect as they might otherwise have done, that would have been a different thing. But to say that it had no impact whatsoever was somewhat excessive. What any Government do or do not do about energy prices, tax changes and the rating system is bound to have some impact upon the level of employment. From this reality there is no escape. This has nothing whatever to do with economic theory. It has everything to do with common sense and a vision of what our society should be. It has everything to do with people, particularly young people.

In repudiating the fashionable denunciations of the period between 1951 and 1964, I invite my right hon. and hon. Friends to look again at the lessons of that period. I think they will find that the villains were not those of that time but those who came immediately afterwards. If Ministers wish to have a theme and a text, which I suggest they might need, I suggest this one:
"There is only one thing which I feel is worth giving one's strength to, and that is the binding together of all classes of our people in an effort to make life in this country better in every sense of the word. That is the main end and object of my life in politics."
That was Stanley Baldwin in 1925.

It would indeed be tragic if it were said of this Government and of this Conservative Party, as Mr. Macmillan said of a former one:
"The Conservative Party has no clear policy on immediate problems; it has no clear goal towards which it feels itself to be striving. It has too many 'open questions' and too many closed minds."
I fully accept and applaud the general strategy of the Government. People who voted for economic realism should not complain if that is what they are getting. I believe that we shall eventually win the battle against inflation, but I ask: what happens in the meanwhile? How can such a battle be truly said to have been won if the dismal shadows of unemployment and under-employment still darken our nation and our society?

7.5 pm

I am pleased to follow such a thoughtful speech by the hon. Member for Cambridge (Mr. Rhodes James). I think that in one phrase he summed up the whole generality of the debate when he said that we are talking about people.

I make no apology for relating my remarks to a straight constituency interest, as did my right hon. Friend the Member for Llanelli (Mr. Davies). My constituency interest is in skillcentres. There is one in Dumbarton which is on the danger list of closures. It might be said that that centre, opened in the late 1960s, should have been named not just Dumbarton, but Dunbartonshire, or even Dunbartonshire and Argyllshire, to give a better impression of the area that it serves.

When I raised the subject of this proposed closure with the Minister with responsibility for industry at the Scottish Office, he replied:
"Dumbarton is part of the network of five skillcentres which serves the whole of the Glasgow conurbation, including Clydebank."
With respect, I suggest that Dumbarton, situated at the edge of the conurbation—perhaps one of the reasons for its possible demise—serves the Western Highlands also and should not be considered simply in the context of the Glasgow scene.

The remark about Clydebank is interesting. Dumbarton and Clydebank have always had strong ties. In fact, one of the Dunbartonshire parliamentary constituencies used to be Dumbarton Burghs, which were the two towns Dumbarton and Clydebank, well represented for a number of years by David Kirkwood—a well-known Clydeside rebel.

From an employment point of view, there has always been a flow of labour from and to the Vale of Leven, Dumbarton and Clydebank. Whilst we in Dumbarton and the Vale of Leven suffered the trauma of the loss of our basic industries some time ago, we know what has been happening to Clydebank in recent times. Closures have affected the work force in that area and in the surrounding areas.

The Government recognised that problem, and at the end of last year they set up a working party on employment in the Clydebank area. That body represented all Government agencies involved in industry. In paragraph 5.11 of its report, it states:
"MSC should build up a bank of employment vacancies to meet the needs of redundant Singer personnel and others, and should make known to employers the skills becoming available. MSC should also review the availability of training places for skills in demand, perhaps establishing temporary training places in vacant premises in Clydebank and recruiting redundant skilled workers as instructors."
Yet the Manpower Services Commission is talking of closing the Dumbarton skillcentre, which is only 10 miles from Clydebank. I cannot understand the logic of such a decision.

The Minister, in his letter to me, also said:
"A new skilicentre will be opening in Rutherglen in 1983."
That is not much of a sop to the unemployed in Dumbarton, the Vale of Leven, Clydebank and the surrounding area. My information is that the construction of this centre has not yet started. Looking at the map, Rutherglen does not seem very far from Clydebank and Dumbarton, but it is situated at the other side of Glasgow. Its geographical location makes it difficult for trainees to get there because of transport problems.

On a recent visit to the Dumbarton skilicentre, I was pleased to find that redundant workers from Clydebank—ex-Singer and ex-Goodyear personnel—were undergoing training. We should concentrate on building up the skilicentre to cater for the needs of the area.

When a delegation saw the Secretary of State for Employment recently he explained—he repeated this in general terms today—that the take-up of places at Dumbarton was not very high. I investigated and found that instructions were issued from the top of the MSC in Scotland to the effect that an area of this skilicentre should be reserved for training mechanics for domestic appliance repairs. It is virtually impossible to recruit an instructor in this skill. The MSC has also been asked to set out an area for training instrument mechanics. However, we know about the problems in the North-East of training instrument mechanics. Instructors are not available. The statistics on all those matters can be way out of line with reality.

Another point that was made to the delegation was that the building housing the skillcentre is substandard. I have seen better buildings, and I have worked in better buildings, but the conditions are good, and they have been improved by the workers undergoing training. It is the quality of the training that matters, and that is the criterion that should be applied. Although the Government are now talking of closing the centre, they have recently spent thousands of pounds on new offices. That does not seem to add up.

Another point that was made in the statistics was that of the placing of trainees after completion of training. However, many people who take courses are often offered and accept employment before the course is completed. Who would not take up the chance of employment if he had the opportunity? The statistics do not include those who have undergone only part of the training.

One of the other uses to which skill-centres are put is in-service training. Not only small businesses take up that opportunity. In my area one of the largest modern firms uses the skillcentre for in-training facilities. If the Government are looking for some reason to attract industry—we are all fighting to attract industry—this is a carrot that can be dangled in front of an in-coming industrialist.

If anything, more training facilities should be made available—a point that has been underlined by many hon. Members today. In some ways it is sad that I am arguing about the need to retain Dumbarton skillcentre. I know that, if one centre is saved, another might have to go. An expansion of the facilities is required, even though that might mean a radical rethink of subjects which are offered for training and retraining.

The centres carry out valuable work in helping the unemployed to face up to the future of our troubled industrial world, by providing an incentive to train and to retrain. If a person has skills he can always use them.

Dumbarton skillcentre is the only skill-centre in the whole of the Glasgow conurbation on the north bank of the Clyde—on the edge of the hinterland of the Western Highlands. It should be retained. I hope that the committee that will look into the question will take to heart some of my remarks, and that my right hon. and hon. Friends will use their powers to secure that Dumbarton skillcentre is retained to meet the needs of that area of Scotland.

7.15 pm

Perhaps the House will forgive me if I follow in the footsteps of the right hon. Member for Llanelli (Mr. Davies) and the hon. Member for Dunbartonshire, West (Mr. Campbell) and refer briefly to constituency problems. They have a bearing on the Government's policy and economic strategy—a strategy that desperately needs to show that the Government understand and care about the problems of the unemployed. My hon. Friend the Member for Cambridge (Mr. Rhodes James) put that point eloquently, and he showed the vital tradition within the Tory Party. I believe that many hon. Members come to the House in that tradition and with those beliefs.

I shall deal first with the pigmeat industry that is suffering decline—not structural or self-inflicted decline—because of the damage inflicted on it by the Labour Government. The failure to devalue the green pound has been the death knell of the bacon industry in Britain. During the last five years the industry has managed to achieve only £200 gross profit per pig compared with £350 for Danish pigs.

The amount of time that Labour Members have spent in areas where Labour votes are at risk is impressive compared with areas such as my constituency where the only thing at risk is the deposit of the Labour candidate.

The number of people employed in the pigmeat industry in my constituency has decreased from 2,000 five years ago to less than 450 today. That decrease in employment has had a fundamental effect on the population in a small rural town. It has brought with it many problems. I should like briefly to mention two of them.

The first problem is urging men and women to get out of the industry when they lose their jobs and to find new jobs quickly. Many of those people suffer a sense of loss and fear. Men and women who have worked for a particular employer for 30 or 40 years often cannot bring themselves to look for another job. They are, of course, cushioned by redundancy payments, but those payments do not last for long, and often they represent the only opportunity for many of them to get together a capital sum to put aside for difficult times ahead.

I ask the Minister to ensure that the Department of Employment encourages these people—particularly older men in their late forties and fifties who will find trouble anyway—to find other employment before they spend the money. I am sure that this problem is not confined to rural areas or to my constituency. I have spoken to many people at the Department and in jobcentres. They find that there are real difficulties in persuading people who may have received such an amount of money for the first time, and who think that they should have some time off before they go back to work, to find other employment. However, it is more difficult if they leave it for too long. Of 100 people who were made redundant in a pigmeat processing factory in my constituency last year, 30 still have not found work. Most of those 30 people have only just begun to look for work.

This is an area that my right hon. and hon. Friends in the Department—who are no longer present—would be advised to look at. They should ensure that the Department of Employment solves the problem. I cannot in any way criticise their efforts. They have set up a jobcentre in the factory itself. That is something that I am sure that they do throughout the length and breadth of Britain. But out of the 400 people who have lost their jobs, only 100 have gone along for interview, and within a week or so they will be out of the factory altogether.

Again, what needs to be done is to explain to people who are suffering this sense of fear, worry and anxiety that there are opportunities for them in areas such as mine. We are in that lucky position. At present, in my particular little town there are 237 vacancies and 250 unemployed.

Will my hon. Friend explain how it is that, if so many people are so frightened, they do not go immediately to the jobcentre which they know is available? Does not this illustrate that perhaps they are not as frightened as he is suggesting, and that it may be that, horrifying though unemployment undoubtedly is, it is a little less of a horrifying experience that it was in the 'thirties, which is the period to which the Opposition refer so often?

I am afraid that I cannot agree with my hon. Friend about that. As I said—perhaps before my hon. Friend came into the Chamber—when someone who has spent 30 or 40 years in his place of employment finds that his job has gone, he suffers a sense of trauma and shock. That does not mean that he goes away just in order to spend money. It means that the money he may get is a fall-back, but it does not mean that he is any less wanting to find a new job or is any less capable of having a new job. If the argument is that he is better off now than he would have been in the 'thirties, so I should hope. The last thing that we wish to do is to go back to that time. What needs to be done by the job-centres and the Department of Employment is to make sure that, instead of this sense of trauma and shock, there is flair and a rewarding future to which to look forward.

As I was saying, why is it that in Calne there are 234 vacancies for 250 unemployed? There must be a mismatch somewhere. It is this mismatch which brings me on to the question of training.

Will my hon. Friend explain a contradiction that seems to be emerging? I represent a constituency which has a very low unemployment figure and a very great number of highly skilled jobs that are going begging because there is not the talent locally to fill them. We have recently bussed down 150 unemployed skilled people from Merseyside to Dartford. They were shown the jobs and promised housing. They were given an undertaking that they would have a take-home pay in excess of £100 per week. Yet today not one of those 150 persons has applied for a job at the factory in Dartford.

Hearing my hon. Friend's remarks about the problems in Caine, I was conscious that a very small community in a rural setting has enormous problems, but it seems to me that one of the problems that we have as a country is that our unemployed work force is not mobile and is not prepared to go where the jobs are. I accept that it is tremendously difficult to leave a place where one has been all one's life and go elsewhere. But there are jobs in the South-East that can be taken if people are prepared to go for them.

I am grateful to my hon. Friend for his intervention. It goes to the roots of my point. I accept that because people find it difficult to move, they have doubts and worries. They may have relatives there, brothers, sisters, mothers and uncles, and so on, in work. It is not easy to tear up one's roots. However, the point I am trying to make to the Government is that this is something that needs to be looked at.

We know that the Ford motor company is desperately trying to introduce a second shift to produce Fiestas to obviate the need for them to be imported from Spain, yet it finds that it cannot get people to work on the second shift. One of the reasons may be—certainly in a small area such as mine—that people have to travel many miles to the skillcentre. In my area it happens to be in Swindon. People in rural areas must find it very difficult to get to the skillcentres. Understandably, public transport services are not what they were. Even though transport may be available, possibly it is at the wrong time and in the wrong place.

Skills that we know are desperately needed in parts of Britain must be provided for out of the people who are losing their jobs in old and dying industries.

I should like my hon. Friend the Minister to consider a vital point. I am sorry that my right hon. Friend the Secretary of State is not present. He has never read anything that I have written. There is little chance of his reading what I am about to say, but it is a vital point if we are to get the new industries that we require. In the 1930s, when old industries died, new industries came about. The automotive industry grew from very small beginnings, from employing hundreds to employing thousands and, in the end, millions. It grew in the East and West Midlands because it had the opportunity to create new factories and new jobs on new sites. This is one of the problems that concerns me particularly in the part of the world from which I come.

I am very glad that my right hon. Friend the Secretary of State has returned to the Chamber to listen to what I am saying. The most important point is that we do not in any way restrict the ability of new companies to get going in areas of potential growth. What is bothering to me is that at present county councils, hiding behind the cash limit, arc saying that it is completely impossible for them to provide the infrastructure, the services, or to bring forward within their structure plans sufficient industrial land to make sure that industrial growth keeps up with the pace of demand.

In the last three years the price of industrial land in Swindon has trebled. In the last year, in Chippenham it has doubled. Throughout that area, where there is real potential for growth, growth will not happen if it is not made clear to councils that they have to bring forward land where land is needed, and the infrastructure of schools and other facilities which will make the area prosper.

As I have said, it is an area which, because of its communications and its history of decent labour relations, has an opportunity to get going. I am very bothered that, for these two reasons, the mismatch in skills and our inability to take people who have lost their job in one industry and train them into new industry, coupled with our failure to make sure that entrepreneurs can get going, we shall lose that opportunity. If we are not careful, we shall end up with the worst of all worlds. There is no point in cutting public expenditure if the only result is that the money that we save ends up being invested in unproductive land at very high cost because sufficient land is not available. We shall also end up with increasing unemployment in some areas, which we cannot take up as we were able to do in the thirties because we do not have the fluidity of planning that we ought to have.

There are, therefore, these artificial constraints, and it must be vital to the Government that they are removed. I appreciate that my right hon. and hon. Friends understand the magnitude of these problems. I welcome the interest and understanding that they have shown. However, unless we on the Government Benches show care for and understanding of the problems of unemployment, together with a flexible ability to make sure that we get jobs where jobs are needed, the future of the present Government will not be rosy.

7.30 pm

Over the years Governments of both parties have tended to regard the West Midlands as one of the more prosperous areas of the United Kingdom. I am not here to dispute that. There was a degree of prosperity in the Black Country towns, largely because of the smaller manufacturing companies. We were once very prosperous. We made everything from nuts and bolts to submarine engines. However, there have been new dramatic increases in unemployment. Indeed, there have been such increases in the past few weeks. They have taken place in my constituency and they illustrate vividly that no Government can any longer ignore the de-industrialisation that is taking place in communities that were once considered to be reasonably prosperous.

I make no apology for referring especially to my constituency. Obviously it is the area that I know best. Its situation relates very much to the issues that we are debating. We have all seen the figures which appear in the unemployment registers. In May 1979 the figures published for my constituency indicated that there were 3,400 registered unemployed—far too high a number. The figures for February indicated that over 4,100 were registered as unemployed. That means that more than two workers each day, seven days a week, have lost their jobs since the Government came to power.

I am delighted that the hon. Gentleman refers to vacancies. I checked with the local office and learned that today there are 306 vacancies. What is not yet recorded is the high unemployment that is coming through because of closures that have been announced in recent weeks. On Friday I went to my constituency. I was faced with 1,500 workers from Patent Shaft who were faced with a closure. There were banner headlines about 1,500 workers in one firm being faced with a closure. Two weeks earlier, and only a mile down the road, over 600 workers in another firm were in the same position. On Saturday morning at my surgery I was told that 70 workers faced the closure of another firm. That means that more than 2,000 people are threatened with unemployment in addition to those who are already unemployed.

This afternoon workers from yet another firm in my constituency who are faced with a closure have been waiting to see me. They have been waiting for four hours. I know what their message will be. They will tell me that their firm will be closed. No doubt there are others that will follow suit. These people may register only as statistics to the Secretary of State and his Department. However, when I talked to my constituents on Saturday morning I saw registered on many faces a good deal of despair.

I was asked a number of questions. These people need to know what is to become of them and what is to be their future. They want to know what the future holds for them and their families in such an area. These are not all mature, middle-aged men and women who are able happily to accept redundancy payments. These are fairly young people with families. Many of them are skilled, but probably more of them are semiskilled. They asked many questions. They talked to me about the dual standards which they believe are being operated by the Government.

In her recent Airey Neave memorial lecture the Prime Minister said:
"The British economy was people at work—their efforts and their attitudes. Success will be achieved only in so far as people related the rewards they received to efforts they made."
It is an articulate and beautiful expression, but a statement far removed from the grim realities of the Black Country. The reality is that many people will not receive any rewards, no matter how great an effort they make. They know that at present no mechanism exists whereby they may use their efforts to gain rewards. In recent weeks too many of them have had the traumatic experience of being told that they are no longer wanted. They see little future because of the restraint on public expenditure, be cause of restrictions, and because of the Government's attitude towards the job opportunities programme. Most of all, they recognise that there is the lack of a cohesive industrial strategy.

The Secretary of State will be aware that this week I have made written representations to him about my constituency. My people ask questions that need answering. What future have they? What facilities will the right hon. Gentleman make available for other productive work? This afternoon I have heard many Conservative Members saying that they want productive work. I join them. I want it too. What facilities will the right hon. Gentleman make available to ensure that my people get productive work? What measures will he institute to equip skilled and semi-skilled workers for other productive jobs?

In what way is the right hon. Gentle man prepared to help my people, who are now deprived of wage packets in an area that is rapidly and week by week becoming a ghost town? The $64,000 question is: what are the Government prepared to do to enable people in my area, and many others like them, to find other jobs and to seek the rewards for their efforts to which the Prime Minister so glibly refers? I hope that I shall have the answer tonight from the right hon. Gentleman. My people in Wednesbury, Tipton and West Bromwich need to know. We need to know when unemployment is rising as a direct result of Government intervention in the balance of the economy.

That is what it is. In a modern in dustrial society there is no such thing as non-Government intervention in industry. The Government must first take steps to ensure that resources are available to reverse the decline and to ensure that a comprehensive industrial strategy is ready to meet the challenges when we have passed through this recession. It is because that strategy has not emerged—I do not see it emerging—that I, too, share the despair of those to whom I spoke at the weekend and the despair of those whom I shall see later tonight and who are waiting to tell me of their fate.

The Government cannot be indifferent to the hardships that they are causing as a result of implementing their harsh policies. In the midst of redundancies I am told about the closure of a skillcentre. Other hon. Members have spoken about skillcentres and I shall not labour the argument. I am faced with the possible closure of the Dudley skillcentre. Every week unemployment is increasing in that area. The closure of the centre is the daftest thing that I have ever heard. We shall give the Government some stick on that one.

Instead of encouraging and helping workers to seek their rewards, in the words of the Prime Minister, the Government seem to be waging industrial warfare with deliberate and callous indifference to the welfare of the victims, the future of Britain as a whole and the future of proud industrial areas such as mine.

We hear much of the Government's industrial guru. Professor Milton Friedman speaks with glee of the way in which Japan and West Germany rebuilt their industries after the war. Do the Government expect the British people to suffer hardships approaching those suffered elsewhere as a result of war before anything is done to remedy the cost in human misery caused by the policies that they are pursuing?

Will the hon. Lady let me have the Hansard references to similar speeches that she made when the Labour Government were doubling unemployment.

I have made many speeches both inside and outside the House on the question of unemployment. I consider employment to be basic to a civilised nation and to the families who live in it.

Perhaps my hon. Friend remembers making a similar speech to me in West Bromwich when I was in charge of this problem. She took a firm stand on behalf of the people of West Bromwich on that occasion.

I thank my hon. Friend for his remarks.

I do not deny that if the Labour Party had been returned it would have had to come to terms with the economic situation. However, the Labour Party understands industry and those involved in it. I criticise and attack the Government because they have failed to respond to our needs. Since the Conservative Party came into office, its policies and actions have shown neither concern for the future of Britain as an industrial nation, nor compassion for those who work in our industries.

7.40 pm

I shall not follow the speech of my hon. Friend the Member for Chippenham (Mr. Needham) nor shall I take up the remarks of the hon. Member for West Bromwich, West (Miss Boothroyd). I do not wish to make a constituency point. I shall do the reverse. The constituency of Saffron Walden would readily divest itself of the opportunity to create the 60,000 jobs which would result from the building of the third London airport. I can therefore speak with a degree of objectivity.

The essential point is that unemployment is rising. It will become a serious problem. Several forecasts have been made. I shall not indulge in any forecasting. However, it worries me that my 14-month-old son, who has just learnt to walk, totters across to our bookcase and unerringly picks out a paperback that was published a few years ago called "Prospects for Employment". He is obviously subconsciously worried about unemployment. Unemployment may become a long-term problem in Britain.

Conservative Members in particular should accept that unemployment will create serious problems. Some Opposition Members are almost looking forward to using unemployment as a political stick with which to beat us. They look forward to the time when the unemployment figures will have gone beyond those that they achieved. They wish to gain some satisfaction from political debate about unemployment. In one sense, unemployment must rise if we are to achieve the levels of productivity necessary to enable us to compete effectively with the rest of the world. Some industries will decline.

As Professor Stonier reminded us, we should accept that microprocessors and robots will take over the majority of work in industry. We must create an economy that will provide opportunities for those who are displaced. We must not stand in the way of progress if we wish to have a healthy economy. We must find a balance between the protection of jobs in certain industries and free market growth. New jobs and new technology should be allowed to come into existence.

The Opposition have put down a motion that refers to a "constructive manpower policy". That is a staggering piece of effrontery. When a party is in opposition it usually has more scope for using its imagination. One might have expected the Opposition to change their thinking during the past 10 months. One might have expected to see that reflected in the speech of the right hon. Member for Chesterfield (Mr. Varley). However, he was a little short of ideas. He managed the extraordinary physical feat of speaking for 31 minutes with his tongue in his cheek.

There is an obvious need for a balance. The Labour Party can be fairly accused of relying too much on the protection of existing jobs. We have heard that again today. The measures that the previous Labour Government introduced showed too much regard for protecting jobs. They did not give sufficient thought to the need to change the pace in industry in order to create new jobs. Some of my hon. Friends have expressed fears that the present Government may try to do things a little too quickly in order to make up for a lack of movement in the past. We must try to get the balance right.

As several of my hon. Friends have said, we must recognise that in some parts of the country vacancies go begging. In other parts of the country the figures for unemployment are horrifying. I accept and share the worry of all those who have spoken about the grim social and moral effects that unemployment may bring. I am fortunate in my constituency. Many companies in my constituency are successful. They have jobs on offer. However, they face other constraints. Last week I visited several companies in my constituency. They told me that they could expand but that they were not sure whether the economic climate was right. To take on more people and more machinery would involve risk. If they moved to a new site they feared that they might become too large and that they would be unable to manage as successfully. They fear to run into the problems in industrial relations that seem to bedevil the larger companies. Successful companies are thus held back, although they have the potential to expand. So the Government should not pump money only into providing skillcentres, through economic policies, they should create a climate in which people can overcome any inhibitions which they feel about the expansion of their businesses.

Training should be considered as a tool in itself. Our industrial society is of necessity changing. There should be greater reliance on training. That is a vital complement to this Government's economic and industrial policies. We should make training a way of life both for employers and for those who are starting out on their life of employment. People should not expect to retain the same skill throughout their lives. We must ensure a greater amount of training. People will do more than one job in the course of their lifetime. Training does not involve only the training of skills. I am reminded of the Newsom report that was published many years ago. That report was entitled "Half Our Future". Half of our future is tied up with young people who have not necessarily achieved the maximum at school. However, they will also provide half of our future work force. Jobs must be provided. Not everyone is capable of achieving the highest technical skills. They must be shown a way of gaining satisfaction in some type of work. Satisfaction can be gained if both employer and employee have the right attitude.

We should consider some of the new schemes that have been developed by companies and voluntary bodies and by an amalgamation of the two. Those schemes should be considered particularly in areas of high unemployment. I have seen schemes in which a group therapy has operated. That group therapy is an essential factor when re-establishing the motivation of those who have left school at the earliest possible moment. They suddenly discover that they do not have much to offer an employer. Those training schemes help young people to regain their self-respect. Over a decent length of time—a better length than is offered by some of the programmes under the youth opportunities programme—they offer young people a chance to sample various types of work. That allows them to realise that more than one possibility exists.

There are people to counsel them and advise them on what is in their best interests. We should look at such schemes as exemplified by the YMCA's "Training for Life" scheme, which is concentrated predominantly in the North-West.

We also have to ask the question, training by whom? I do not accept that skillcentres and other ideas developed under the Labour Government are the only means to train people. If motivated, many small employers can do that well. Some of those employers may only become involved in training when linked with the group training schemes that exist in certain parts of the country. The best and perhaps most cost-effective training is provided by an employer on the job. We need to harness many more employers to the training exercise.

I hope that we will give full weight to enterprise workshops, especially in areas of high endemic unemployment. That people have a function to perform is as important as having the training to perform it.

I hope that we shall consider the various training schemes up and down the country to see whether they can form the basis of a new training programme, which could form the substance of the Bill that my right hon. Friend said was in prospect.

As PPS to another Minister, I have to be careful, but I believe that it is a pity that many of the schemes are effective only for people of 16 years of age and over. I believe that it is wrong to consider that training does not begin until the age of 16. The House will understand if I do not pursue that point.

I appeal to my right hon. Friend and to the Government to adopt a wholly new attitude to training on the part of employers, unions, educationists, the Government and, dare one hope, the Opposition. We need a new approach if we are to modernise and make relevant our training system to the needs of not just very bright kids but those who will make up a substantial part of the future labour force. Without that, I fear that scores of families will be scarred by the menace of unemployment, which may have a profound and disturbing effect on British politics and British social life for a generation or more.

7.52 pm

I listened with close interest to the hon. Member for Saffron Walden (Mr. Haselhurst), who no doubt knows that many of his ideas on training are being tried out in inner city partnerships, two of which I was closely associated with. I entirely agree that there is enormous opportunity for experiment in training, particularly for young people.

Appalling dangers are liable to arise from youth unemployment. The current chairman of the Manpower Services Commission said some time ago:
"there is a danger of making unemployable out of the young unemployed."
The House and the Government should take that matter seriously, as did the previous Government.

Every young person who leaves school should enter some form of training, job or other occupation. The consequences of allowing young people, at the end of their school education, to become unemployed are too horrifying to contemplate. The cost to society in terms of social conditions and the development of petty crime and worse are great. We should concentrate our attention here.

I am glad to see the Secretary of State in his place. I listened with interest to the economic part of his speech. He appeared to be saying that there are two ways to run an economic policy. The first is what the Conservative Government are doing and the other is for a Government to spend their way out of unemployment. He implied that the second option was followed by our Government and by previous Labour Governments.

I was a Junior Minister in the previous Labour Government, and I never noticed that we were spending our way out of unemployment. The right hon. Gentleman quoted my right hon. Friend the Member for Heywood and Royton (Mr. Barnett) when he was Chief Secretary, but I and other Ministers in spending Departments found it difficult to get all the money that we wanted for the purposes that we wanted. There was a great deal of financial restraint.

I recall two Chancellors of the Exchequer, both Conservative, who tried to spend their way out of unemployment—the late Reginald Maudling in 1963–64 and Lord Barber in 1973–74. I believe that the right hon. Gentleman was referring to an argument within the Conservative Party and was not thinking seriously of how to deal with a developing evil in our economy.

There are many ways in which we could tackle unemployment. As has been said, it is not right and proper to refer to policies which will be the concern of the Budget. We should leave those considerations for later.

I also wish to concentrate on rising unemployment. Few areas of Government expenditure are more relevant and deserving of priority than expenditure by the Manpower Services Commission.

Year by year an increasing number of people enter the labour force. As every economic commentator knows, the economy has poor growth prospects for some years to come. We should also recall the unknown consequences that we shall experience from microprocessor technology and its effect on unemployment, changes in employment requirements and job specifications. For all those reasons, the Manpower Services Commission is enormously important.

I also listened with interest to the hon. Member for Chippenham (Mr. Needham) when he talked of the trauma that people experience through losing jobs, particularly those who have spent two, three or more decades in the same job. I know about that only too well from experience in my constituency.

Hon. Members may have read an extremely interesting paper published by PEP some years ago entitled "Whatever Happened to the Workers of Woolwich?". I was reminded of that study on the closure of AEI-GEC, which threw 5,000 people out of work, many of them highly skilled. It caused appalling traumas. Many highly skilled people seemed unwilling or unable to find similarly skilled employment elsewhere.

The Employment Service Division of the Manpower Services Commission plays a crucial role in placement. The study pointed favourably to the work done by the Department of Employment, before the Manpower Services Commission was set up, in trying to assist people to find alternative employment.

Unquestionably, we have to face the difficult problem of adaptation when new jobs are found. The Training Services Division will have a vital role to play. The importance of skillcentres has already been emphasised. I profoundly regret that the Deptford skillcentre, which has been argued about and which has experienced delay after delay—last month the matter was yet again thrown to the melting pot—has been so late in opening. As a consequence we have a temporary skill-centre in Kidbrooke which is providing the training needs. I have made it quite clear that it is my view that that should not close until the Deptford skillcentre is opened. The irony of this is that the very land on which the Kidbrooke skill-centre is situated is desperately needed for new factories in order to provide more jobs for our area. I hope that fast progress will be made with the development and staffing of a new skillcentre which is desperately needed in this area of high unemployment where there will be a considerable need for training. The skillcentre will serve an important part of the Dockland designated area where one hopes that the developments taking place will provide a wider range of jobs, and that there will be increasing demand for people with certain skills.

There is no doubt that the Manpower Services Commission has a vitally important part to play in the light of social and other tensions which could develop in society if unemployment is allowed to grow. In view of the technological changes in our society there is no question about the importance of the Manpower Services Commission, especially as we expect increased unemployment figures to result from the policies being pursued by this Government, and from other factors at work in the economy.

Therefore, it seems to be total madness for the Government to cut the budget of the Manpower Services Commission to such a degree. Of course the Secretary of State is entitled to argue—and the chairman of the Manpower Services Commission would echo this point—that not everything the Commission does is perfect. It has expanded very quickly, and rightly so in my view, in the light of growing unemployment. But that is not a reason for cutting back on the budget of the MSC. It is a reason for examining what the Commission is doing and developing its work in those areas where the priorities lie.

I wish to draw attention to one particular area. Perhaps when the Minister winds up the debate he will deal with this. One interesting development which has resulted from the work of the Manpower Services Commission is the development of courses in colleges of further education. I have visited a number of these colleges in the Inner London education area recently. Those courses have had the, effect of giving colleges of further education a career orientation which they had lacked before. The contact between the MSC and these colleges has been nothing but fruitful. The co-operation between the MSC and the colleges and the demands that the Commission has made have been important. Various sorts of courses have been designed to introduce people to the job market and to develop certain skills and knowledge that will be required to fulfil the jobs that are becoming available. I would be interested to know what the Government or the Commission itself can say about such developments which seem to summarise the importance of contact between the educational and training systems in this country.

There is one other small point I wish to make. I welcome what the Secretary of State said about a major review being undertaken by the Commission into industrial training. This is vitally important. There must be a fundamental reappraisal of the whole area of industrial training. I have drawn attention before to the massive difference between expenditure on those who go on to higher education and those who have to suffer the meanness characterised by the Government's cuts in the skillcentre area of further education, training and post-school education available to the least fortunate members of society.

I hope that one of the things we shall do as a consequence of the industrial training Bill is to raise the status of industrial training in this country to ensure that the less fortunate youngsters who leave school are given proper attention, and that there is expenditure on them. This will enable them not merely to find a good job, but to obtain basic educational training which will enable them to adapt to new jobs throughout their working lives in view of the technical changes taking place.

I find it incredible that this Government, knowing all the points that have been raised in the debate today, should decide to reduce the global sum made available to the Commission. I believe that the Commission's budget should be maintained and, possibly, increased. I accept absolutely that the Commission must be continually responsive to changing needs. The programmes already undertaken need to be adapted in the light of experience.

8.7 pm

In the course of the debate today we have ranged over all the aspects of Government economic policy in addition to the specific matter that is under discussion—the use of training resources and their relevance to the increase in the unemployment figures.

I cannot help but comment on some of the remarks made by the right hon. Member for Chesterfield (Mr. Varley) who described the Government's policy as "a high risk gamble". I would have thought that the gamble of the highest risk was the sell-out to increased public expenditure—the increased proportion of our resources being dedicated to the public sector. That route is effectively closed to us. There is no room for manoeuvre there. That road will lead us to hyper-inflation.

All this may be put in context by quoting just one figure—that of £8 billion. That is the cost of servicing the public debts in this country. At present our education service costs £8½ billion. That means that we spend as much on servicing the public debt as we do on making one of the biggest provisions for the social wage.

The right hon. Member for Chesterfield made some remarks about "industrial butchery". I wonder whether it is an offence in the House to take the name of another hon. Member in vain. Industrial butchery has indeed taken place in the Midlands over the past 10 years. I refer specifically to the policy of deliberately tempting and motivating industry to leave the West Midlands at a cost of 112,000 jobs. That is asset stripping on a major scale. It is a policy that weakens the industrial heartland of this country and in no way strengthens areas such as Merseyside and Glasgow, where many of these industries have gone.

The most classic example of this sort of lunacy was that of the Triumph TR7. It was deliberately taken from its natural home in Coventry and reassembled for a few blighted years on Merseyside only to fail and be brought back to its natural home, by which time that division of British Leyland had been seriously weakened. Now it has been shipped to another track leaving behind another closed plant. That is asset stripping. That is the lunacy of the politics of intervention. It is right that the Government should turn their back on such folly. I wonder whether there are still some Labour Members who would encourage us to continue building penny-farthing bicycles in the North simply because it was socially desirable to do so. That is the kind of thing that we must no longer welcome.

My hon. Friend the Member for Chelsea (Mr. Scott) made some enigmatic comments in which he expressed some views that are very tempting, particularly to anyone who is an aficionado of editorials in The Guardian. I hope that I repeat my hon. Friend's words faith-fully. I wrote them down at the time. My hon. Friend said that he detected what he felt to be the worst attitude to productivity bargaining that he had seen for some time. I wonder whether that is so.

Our evidence must be anecdotal, or gleaned from the press, but I think that attitudes are changing. I recently talked to a group of American business men who invest heavily in this country. I heard from them that there was a sea change, a noticeable change taking place in attitudes on the shop floor. It may be clouded by the present emergencies in the steel industry, but I believe that at long last people are realising that, to use a good old Yorkshire expression, one does not get "owt for nowt". We may well see wages rising by about 14 per cent. by the end of this calendar year, rather than the more spectacular examples of 20 per cent. and 25 per cent. that we have seen in certain sections of the public sector.

My hon. Friend also said that sometimes our political and social judgments had to override our economic judgments. That may often be the dilemma that we must face, but one should add to such a statement "at the cost of continuing inflation". One buys the liberty to make political and social judgments at the expense of economic judgments. The truth is that we get that liberty by allowing prices continually to rise, allowing an invisible and insidious tax to be maintained on the rest of the community.

My hon. Friend also argued for the short-term relaxation of monetary restraints. I doubt whether there is any hon. Member who would not now accept that to do that is simply to give unemployment another kick two years later onto a higher plateau. The evil returns, but in a much more grisly form. My hon. Friend the Member for Cambridge (Mr. Rhodes James), for whom I have great respect, put forward a humane and intelligent exposition of his brand of Conservatism. I share his objectives, but I differ with him on the means of achieving them. He rightly pointed out that our policies as parties and individuals were coloured by our experiences.

Nations have a fear of inflation or unemployment, depending on their experience. We rightly remember with fear the 1926–31 crises. The Labour party has in its blood the memory of the fall of Ramsay MacDonald in 1931. Unemployment is the bogy of this country. In Germany people remember the lessons of the Weimar Republic and how hyperinflation led to massive unemployment, hyper-inflation being the start of all their evils, eventually resulting in Adolf Hitler.

What I am saying is that the unemployment is harmful—a waste, socially undesirable—but hyper-inflation kills. It kills the fabric of a society. If we are to graft on an increase in employment later in the life of the present Government, we must first squeeze the worst aspect of our inflationary trends out of the system. We are fortunate or unfortunate, depending on how one looks at it, in that we and our parents have never had to cope with the days when one took a barrelful of money to buy the equivalent of a packet of 20 cigarettes. That is what happened in Germany in the 1930s.

My right hon. Friend the Secretary of State spoke of the value for money that we now require from the Manpower Services Commission. I am delighted to confirm that that is precisely what is being achieved in the Midlands, and in Coventry in particular. On training opportunities scheme courses in the Midlands area, we are to have a 10 per cent. cut next year compared with the performance this year, but the number of completed courses will be about the same in 1980–81 as in 1979–80. Therefore, we are having a better use of resources, a more rational distribution of the funds available to the commission.

In response to Government guidance, the MSC has selected for cuts those courses with the least successful placing results. It has reduced training for the semi-skilled where vacancies are limited, and has reduced training on the clerical, commercial and non-specific management courses. It has increased training in computing courses.

It was estimated that in Coventry last year £531,480 would be needed for TOPS courses in institutions sponsored by the local education authority. The actual expenditure was £406,374. I am delighted to report that the estimated expenditure for 1980–81 is £400,853, and roughly the same number of places will be made available.

There are other examples of the rationalisation that my right hon. Friend has asked for. There was poor support in the Coventry area for retail trade courses. They have therefore been cut. In the hotel housekeeping course two of the 16 places were taken up. Therefore, the local office has moved that provision to Stratford-on-Avon. The hotel receptionists course has been rationalised and centred on Coventry to serve the broad area. An export managers' course has been changed to export sales, where the need of local industry is greatest. There has been an increase in the provision for computer studies.

I turn to youth opportunities. Here I share the deep feelings of hon. Members on both sides of the House. We must not allow youngsters to lose the work habit. They must remain job-fit. The hon. Member for Coventry, North-East (Mr. Park), who is present, will have seen the magnificent example of how Coventry is tackling this matter in a facility now called "Top Shop", which was opened by Sir Richard O'Brien, the MSC chairman, on Monday. I am delighted that that endeavour has received all-party support. It shows that the city that I am proud to represent is prepared to stand on its own feet, to use its resources and the collective interest of our citizens to produce our own solutions. On youth opportunities generally in Coventry, we were programmed for 4,500 starts last year. We managed 3,000, and we shall continue at that level in the coming year.

I welcome my right hon. Friend's comments about the growth of training in computer skills. Having been weaned in that industry and having spent almost a decade in it, I should like to say that silicon chips, microprocessors, telematics—call them what one may—do not mean massive redundancies and massive leisure. They simply mean a new industry. They are a totally new arm in our economic weaponry.

We should perhaps one day have a debate to set a proper national tone for discussing the problem rationally, without the sort of fears that are being deliberately encouraged by certain members of the trade unions, who can probably use that fear as a bargaining counter when technology is about to be introduced in their area.

I cannot accept the terms of the Opposition motion, because it does not take cognisance of a number of simple home truths. First, public expenditure of itself suffers from its own law of diminishing returns. We cannot spend our way into fuller employment. The price of supplying one extra training place, paid for out of taxation, may be the loss of a job in the productive private sector elsewhere. Therefore, we are shifting around the deckchairs on the "Titanic". The Government must hold fast to their economic strategy. We have no alternatives. Everything else has been tried.

The Opposition motion is cynical. It implies that increased expenditure on training will somehow make all our economic problems go away. That is a cruel deception, particularly for the unemployed, be they young or old.

8.20 pm

It is not only the Prime Minister who regards the present Department of Employment as a disaster area. We shall debate on another occasion the cuts in the provision for health and safety, the worsening of industrial relations, the cuts in ACAS and the so-called Employment Bill. The difference between the previous Labour Government and this Government can be seen by contrasting this Government's so-called Employment Bill, designed to cut down the rights of workers and Labour's Employment Subsidies Act which set out specifically to make it possible for the Government to maintain and increase employment.

We should not kid ourselves. The Department of Employment does not determine the level of employment. That is done by the Treasury. What the Department of Employment can and should do is to help reduce and alleviate the unemployment that arises from so many causes. They are causes beyond the control of Departments of Employment. They include, under this Government, an artificially high pound, high interest rates and the cuts in Government expenditure. When the Labour Party was in office, we in the Department of Employment set out always to alleviate the effect of unemployment and to reduce its impact on particular groups. That is why we introduced subsidies which helped to create and save employment. Examples were the temporary employment subsidy, the small firms employment subsidy and the short-time working compensation scheme—a scheme which we intended to make permanent.

As an alternative to unemployment, we established the job creation scheme which was later developed into the youth opportunities programme and the special temporary employment programme. When job creation started, it was treated with derision. When we came to wind it up, in favour of the youth opportunities programme and the special temporary employment programme, it had won the hearts of all those concerned with it—all those who have the job of tackling unemployment.

I was shocked to hear the Secretary of State say last month
"Up to about a year ago, many of these schemes were not very productive. They in- chided the counting of lamp-posts or picking up wood from the seashore".
[Official Report, 14 February 1980; Vol. 978, c. 1764].

This shows clearly that the Secretary of State had not been well briefed. He was speaking off the cuff. He did not know what he was talking about in relation to those schemes. I was shocked because there never was a scheme simply to count lamp posts. The Secretary of State can ask his Parliamentary Private Secretary to consult the civil servants in the box at this moment to establish whether that statement is true.

There were schemes in Liverpool and Knowsley which were introduced as a result of local government reorganisation in 1974. Those were schemes to establish what street furniture existed. What was required was the establishment of the type of lamp post and street lighting that existed. That information was required because time is wasted when faults are reported in street lighting and people go along with the wrong spares to repair the lights. That classification work was a useful job.

The Secretary of State did not refer in detail to the Sunderland scheme to which I assume he was referring. That scheme—the seaweed scheme—was also useful. The day it started, the press and television descended on the beaches and spent a few minutes there while the lads started work. The matter was written up as something to be written off. When the press had gone, a very good scheme was continued. Youngsters who had experienced difficulty getting work performed several jobs. They tidied the beaches. They repaired culverts. They did a marvellous job. They were granted day release to be trained in a number of different skills.

That job creation scheme, like most of the others was a very good scheme. The Secretary of State was more generous in his attitude towards job creation when he sat where my right hon. Friend the Member for Doncaster (Mr. Walker) is sitting than he now is. I can recall that at a moment when I was sitting where he now sits the Secretary of State said that there were bound, in job creation, from time to time, to be some mistakes or disasters but that as the scheme depended on voluntary effort, one had to overlook these matters. His recent remarks were insulting to the organisers of the schemes in Knowsley and Liverpool and in Sunderland. His words were insulting to the youngsters involved.

Job creation, the youth opportunities programme and the special temporary employment programme have been very successful. In addition, the Labour Government introduced the job release scheme, which was suggested to me one Saturday night in the Halmerend club in my constituency. A man put to me a simple proposition saying "John, isn't it daft for us old 'uns to be working when we are tired and worn out and youngsters desperately wanting work have to draw the dole. Wouldn't it make more sense for us to receive the money paid out in unemployment pay, let the youngsters work and let us retire."

I have always accepted the logic of that argument. I cannot understand why the Government have undermined the scheme. We worked hard as a Government to alleviate unemployment. We did not succeed equally with each group. That is why hon. Members like my hon. Friend the Member for West Bromwich, West (Miss Boothroyd) were critical of those of us who worked in the Department of Employment. We did not succeed with each and every group. We had to accord priorities.

I remember asking the Manpower Services Commission whether it could expand the special temporary employment programme to help further in tackling the problem of long-term unemployment. The commission had to say that it was so stretched to meet the tasks which we had set it in solving school leaver unemployment that it could not do so at that time.

I have no doubt that had we stayed in office we should have further expanded the special employment and training measures. Never did we have difficulty in getting cash from the Chancellor of the Exchequer either for dealing with unemployment and training or for dealing with any of the associated social problems. Our problem, having got the cash from the Treasury—the hon. Member for Coventry, South-West (Mr. Butcher) referred to this—was to mobilise the Manpower Services Commission and the Department actually to spend it.

Our Labour Prime Minister took the hardest line of all in demanding that we cope with both youth and long-term unemployment. I think that the difference is that whereas my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) was urged by the Labour Prime Minister and Chancellor of the Exchequer to do everything possible to alleviate unemployment, the right hon. Member for Lowestoft (Mr. Prior) has to go into the Cabinet and fight for every crumb.

It is well known that the right hon. Gentleman was beaten in the Cabinet over the job release scheme. He has been beaten in the Cabinet on all the employment measures. It is a great pity that the discussion which has been going on in the past few weeks has been about his arguments with the Prime Minister over industrial relations rather than the defeats which he has suffered in the Cabinet on measures for the alleviation of unemployment.

I sympathise with the hon. Member for Beeston (Mr. Lester), the Under-Secretary of State now on the Front Bench. Whereas I had the job of going from town to town urging civic leaders, employers and trade unionists to pick up from the table money which the Government had put there to help deal with the problem of unemployment, the hon. Gentleman now has the job of going to towns to echo the words of his right hon. Friend the Member for Oswestry (Mr. Biffen) that things will be better in 10 years' time. Someone who left school at 16, 17 or 18 does not want to wait until he is 26, 27 or 28 to have a chance. The Under-Secretary has an unenviable job, backed as he is by a Secretary of State who does not know how to fight a Chancellor of the Exchequer and Prime Minister who do not want to give money.

What should the Secretary of State be fighting for? First, I mention the extension of the job release scheme. It is a disgrace that the Government have disappointed so many men of 61 and 62 who were looking forward to putting their feet up and letting the young ones get on with the work. I repeat that it is absolute nonsense to have old men, tired men, men who have worked hard all their lives, carrying on doing their hard graft when there are younger men desperately wanting work but unable to get it and to whom we are having to pay unemployment benefit. The logic of the job release scheme is inescapable.

Second, the Secretary of State should be tackling the problem of unemployment among the young. The Manpower Services Commission has forecast that for school leavers alone—never mind the other young—there will be a doubling of unemployment by next Spring. It strikes me that the Manpower Services Commission does not know how it will cope with that state of affairs. There are at present 250,000 young people under the age of 20 unemployed. This is also a disgrace, and the Secretary of State ought to be trying to cope with it.

The Goverment must give special attention also to the problem of long-term unemployment. Our Labour Prime Minister always pressed his Department of Employment to tackle this. It is a problem that the Manpower Services Commission never really wanted to tackle for itself. Yet now—I must try to get the figure right—almost half of all unemployed people aged 50 or over have been unemployed for more than a year.

Long-term unemployment is a total disaster.

All the psychological studies have shown that people can put up with unemployment that lasts for a fortnight, three weeks, a month or six weeks but once unemployment lasts for a year total demoralisation sets in. Yet this Government have been cutting away at the measures provided by the previous Labour Government to deal with long term unemployment. Their cuts have included an attack on the special temporary employment programme. The Manpower Services Commission expects the total of the long-term unemployed to reach 500,000 by 1982 and to remain at a high level even after that. The Government must tackle long-term unemployment.

Many hon. Members have said that the Government must also tackle the problem of industrial training. The Under-Secretary of State today replied to a question about the money to be spent on training. In 1978–79 expenditure on training was £304·9 million. In 1983–84 it is to be £278·2 million. That is a dramatic drop in the amount to be devoted to training by the Government. How on earth can the Government recommend employers and trade unions—bearing in mind the TOPS review of 1978 and the MSC programme for action—training in skills—to take training seriously when such massive cuts are to be made in the money to be allocated to training?

The cuts will be borne not only in clerical training. We have heard talk of training for the less able and in that context one of the worst actions of the Government has been to cut out training for the semi-skilled young as well as to introduce a cutback in other forms of training for the semi-skilled. These cuts in training programmes are difficult to justify.

The quicker we get a change of Ministers in the Department of Employment the better. We are getting the worst of all worlds at the moment, where Ministers appear not to have the strength to deal with unemployment and where there is so much confusion surrounding the Employment Bill that the country is befogged. I shall vote with enthusiasm tonight for the proposition of my right hon. Friends who I very much wish were in Government.

8.38 pm

To hear the hon. Member for Newcastle-under-Lyme, Mr. Golding, one might have thought that the policies of the last Labour Government had been an unqualified success and that they had achieved the regeneration of British industry that they claimed as their objective. The policies that he seems to think were so successful were makeshift and put together hurriedly to cover the total failure of that policy of regeneration.

It is surprising that in the course of his speech the hon. Gentleman never once referred to the fact that unemployment in this country—standing at 5·2 per cent.—is lower than the average figure for the whole of Western Europe. If that figure means anything it means that the problems that this country faces are not caused by the policies of the Government. Those problems are faced by the whole Western world at a time of recession.

For the Opposition to try to make capital out of a subject such as unemployment in the kind of attacks we have heard in the debate does them no honour. It makes one realise how cynical they are in pursuing what they think are the advantages of unemployment to the drooping performance of their party. I say that with considerable strength. I would add that some Labour Members have talked about the MSC as if it was a blameless organisation which could solve all our problems if only it was given unlimited money. They may be interested to learn that some industrialists I know of consider it to be administratively top heavy, trying to do too many jobs and grossly over-staffed. Therefore, I welcome my right hon. Friend's statement this afternoon that there is to be a 12 per cent. cut in its administrative staff, because that suggests that a keen look is being taken at the effectiveness of the Commission and how it is discharging the duties which it handles.

One of the most serious problems which has confronted our nation for the past decade, if no longer, has been the continuing shrinkage in the manufacturing base of our industry. To some extent, it is that shrinkage which lies at the root of the failure of our performance as an industrial country. I think that I am right in saying that, whereas in 1961 about 36 per cent. of our work force was employed in manufacturing, in 1975 that figure had dropped to about 30 per cent. In fact, at least 1 million people have left manufacturing. At a time when one is talking about rebuilding the prosperity of our nation, as my party and Government are, it is clear that the maintenance of the manufacturing base, even at its present shrunken size, must be of the keenest concern to all Government supporters.

Of course, a strong manufacturing industry not only means providing goods for the home market but producing goods for export. It means more jobs. It means that we are rebuilding our nation's prosperity on a strong foundation. Therefore, we must hang on to the manufacturing base of our industry at its present size. We must recognise that as our nation, like the other countries in Western Europe, goes into this period of deepening recession, we must ensure that our manufacturing industries are able to survive whatever heavy weather lies ahead, so that the base is unimpaired when the upturn in world trade comes, as it inevitably will, in order that we are given the chance of taking full advantage of that new prosperity.

I cite just one industry to illustrate my remarks—the aerospace industry, in which I have worked. It is a fact that that is a high risk industry, yet it is an industry which is often in the forefront of technology. I believe that the Government must consider the possibility of awarding contracts to that industry to enable it to undertake research and development on such things as blind landing control, flight controls and even airframe research, without which that industry will not be able to remain a viable entity. Without that, it will either become a subcontractor to the American or French industries or it will wither completely.

Yet, I remind my hon. Friend the Minister that before nationalisation—and what a blow that was—the British aerospace industry was double the size of the whole of the aerospace industry in Western Europe, and Hawker Siddeley alone was bigger than Boeing. That is the proud history of which that industry can boast. Therefore, its continuance is a matter of great concern.

It is impossible for our nation to go through a recession without casualties. The idea that a Government, by spending money, can prevent casualties, is unrealistic and, in a period of high inflation, totally out of the question. Some companies will die. Perhaps we shall experience the death of whole industries. One of the weaknesses of the policies of too many Governments since the war has been to prop up the traditional industries without recognising that those industries have fulfilled their usefulness and that the future depends upon new companies, new technologies and new ideas.

The shipbuilding industry is in a parlous state. British Shipbuilders recognise that the traditional industry will not be around in the future. The industry will be much contracted. It will survive and that will be a major achievement.

I am probably the only participant in this debate who represents a constituency which has no unemployment problem. My local jobcentre informs me that local unemployment fell by 18 in February. The total of 941 is the lowest for February since 1975. The jobcentre bulletin states:
"Jobs notified to the jobcentre during the month totalled 462 of which 323 were filled. Both figures are about 150 more than for the corresponding period last year. There was also a rise in the number of vacancies unfilled (300) at the end of the period although this is still less than last year's figure of 338. Trainees are urgently needed for many skilled engineering occupations, and immediate allocation to our skillcentres is now possible in several of the engineering trade courses."
Why are there vacancies at that skill-centre? Berkshire is fortunate to be in the "silicon valley" of the United Kingdom. Most of the major electronic companies can be found in or around the county. Most of those companies were set up in the last decade as a result of the initiative, ability and hard work of private individuals who recognised future needs and invested to meet them. Our small county now benefits from that private enterprise.

I asked the jobcentre why the vacancies exist. I was told that there are two reasons. The first is that obtaining a skill in the skillcentre does not necessarily mean that one earns a higher wage than in an unskilled job. There is not much inducement. Secondly, I was told that the lowest age that one can enter a skillcentre is 19. Why should someone of 17 or 18 not have the same opportunity? Why should we fix the limit at 19 when we know that the old concepts of apprenticeships are old-fashioned and have been forgotten in most of Western Europe? Let us train our young people as soon as possible to do the jobs that they will be asked to do, whether or not they have had four years' indentures.

Does my hon. Friend support reducing the school leaving age from 16 to 15 to allow boys and girls to spend a year in training or on academic pursuits in technical colleges instead of starting their indentures at 16 and finishing at 21? Is my hon. Friend aware that many engineering employees believe that the prospect of spending five years from 16 rather than 15 is a deterrent to young people taking up an engineering apprenticeship?

My hon. Friend is leading me along a road which I had not intended to travel. If I may leave my remarks as I said them, I shall not be saying something that, on reflection, might wish that I had not said.

I turn to the regional character of unemployment. I have said already that the unemployment position in my area is not causing concern. However, I have listened to many speeches today, and have heard of the sad position obtaining in so many North Country constituencies. There is a way to match the need for skills in the South-West with the unemployment in the North, which has not so far commended itself to any Government.

We should recognise that one of the obstacles to the mobility of labour—which may well become more common than hitherto has been the case—is the enormous expense of a family pulling up its roots and moving from the North to the South.

A figure of not much less than £4,000 is the sort of sum that such a move could cost. There is also the problem of finding a house when a family reaches the South.

Some hon. Members have said that because the Budget is so close we cannot discuss tax affairs. I feel no such inhibition. Is there no way in which the Inland Revenue could recognise the value of moving an unemployed person from the North to the South by giving the company that wishes to employ that person some incentive to produce the money to cover the cost of moving that person and his family?

My last point also relates to the assistance that the Exchequer could give to help solve the unemployment problem. I understand that the Canadians have introduced what they describe as employment tax credits, which are provided to companies to take unemployed people on their payroll. Is it not possible for us to do the same, and encourage companies to take on more labour than they may immediately require, if it provides them with some form of tax relief?

By the same token, have the Government considered the tax holidays which are used in Eire and in Canada to encourage new companies into areas where they wish to see employment, and where conditions are such that the company may have a certain lack of confidence unless there is enough inducement?

8.53 pm

I am glad that I have sat through most of the debate, because I have been able to listen to one or two sensitive speeches made by Conservative Members about the problems of unemployment. I must confess that I had begun to think that most Conservative Members, both in the House and outside, thought of all of the unemployed as feckless and work-shy scroungers who needed to be harassed and hounded into non-existent vacancies. Indeed, some hon. Members talked about the vacancies that occur in their parts of the country.

It is not my job to talk in general terms about the Government's economic strategy. I believe that it is completely misconstrued and that it will fail. They are in a dilemma because, in their own words, we arc faced with three years of unprecendented austerity, and it could be 10 years before the Government's policies begin to pay off.

This bright new world of jobs and small businesses, and this bright new world of a climate made favourable for enterprise to flourish may be a long-term solution to the problems that we face. But the Government have not got that kind of time scale. They admit that unemployment will increase. Indeed, it is widely predicted that unemployment will reach 2 million within the foreseeable future. We know that youth unemployment is likely to double within the next 12 to 18 months.

The question for the Government is not whether their long-term strategy will work but what they will do about the problem of unemployment in the short term. It will not go away. Are they prepared to abandon the increasing numbers of longterm unemployed to the scrap heap? Are they saying that there are no measures that they will consider because all measures will make the problem worse? Those terms have been used in the debate. It is said that all the propositions put forward by Opposition Members will make things worse because they will involve increasing public expenditure. Surely Conservative Members realise that they have little choice but to increase public expenditure to help the unemployed.

The Government have told us in previous debates how important the social security Vote is—it amounts to about 30 per cent. of public expenditure—how it must be reduced, and how they would like to reduce it by cutting down unemployment benefit in real terms. The Government have a dilemma. The question that they must face is: what are they prepared to do about the long-term unemployed in the short term?

I should like to refer to the youth opportunities programme. I worked in the education service when that programme was first launched. I had partial responsibility for the careers service in an area of very high youth unemployment—Sunderland. The careers service had for many years been demoralised because, when young people came to see careers officers, they had to say "As much as we should like to direct you to a worthwhile career, even though you may have three or four 0-levels and in any other part of the country you would be getting a job tomorrow—indeed, employers would be crying out for young people of your quality—we cannot offer you anything."

When the youth opportunities programme was launched, there was new heart in the careers service because some real counselling could be given by professional careers officers. They could give new hope to young people and to their parents in areas such as mine.

When young people have no prospects of employment, they quickly switch off from their school programmes. There is a grave disincentive to work when young people know that they face a prolonged period of unemployment when they leave school.

I applaud my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), because he did a great deal to ensure that the youth opportunities programme was well founded. But it is not good enough for the Government to say that the youth opportunities programme is to be expanded. They have chosen to expand it in the cheapest possible way—by increasing the aspect of work experience on employers' premises where the content of training is often highly suspect. That is a very cheap way of getting a large number of young people into the programme. I am not denigrating that, because it is much better than nothing.

When the youth opportunities programme was launched, we began to speak about a new transition from school to work. We began to speak about a work-based education service. Those concepts were exciting to the people who were working in the education and training services. We realised that every year about 300,000 young people left school and were either unemployed, or had no industrial training. We were excited by the prospects of being able to bring forward programmes. We co-operated. The further education service, the careers service, the training service agency, and industry and the voluntary agencies cooperated extraordinarily well, because the money was available—provided by the Manpower Services Commission. We treated the programme as though it were a new transition from school to work, and we treated it as though it were a work-based education service. An im-important backwash upon the further education curriculum and the school curriculum began to emerge.

Those were exciting developments in educating and training the less able. Now this new exciting concept is being diluted. We are being offered merely a numbers game, of getting the largest number of people into the programme. I implore the Secretary of State to re-embrace the fundamental objectives that were put in train by the Labour Government.

My hon. Friend and I, both representing Northern constituencies, have a positive interest in education. Since he has developed the point, will he take into account an experience that shows fundamentally our nonsensical approach to the problems of young people?

A young man in my constituency with one A-level and two O-levels was waiting to achieve his third O-level later in the year so that he could qualify in the next academic year for a major award in a university. To fill in that time he was given a second year course in the arts subjects in which he was interested, and he proceeded to go to college on that basis. [HON. MEMBERS: "Speech."] I shall come to the point. Will my hon. Friend bear in mind what happened to that young man? His mother was on social security, and he was told that he could not receive social security benefit. The State found it better to make him totally unemployed—thus depriving him of his course—and to pay him more money to be idle.

I am grateful to my hon. Friend for that intervention. We could repeat that instance time and again. It is a tragedy that in his area and mine the opportunities for able and young people are so few and far between. It is tragic that we cannot offer the opportunities to our young people that their skill and qualities deserve.

The Government cannot long delay the time when they bring in an opportunities scheme for adults that parallels the youth opportunities scheme. The question that challenges them is how to use the resources in the training and education institutions to offer some hope to those people who will now face prolonged periods on the unemployment register, with all the demoralisation and humiliation that it involves. Why will they not respond positively and act as a catalyst in bringing together industry, local authorities and the voluntary organisations to develop an opportunities programme that will enable many under-35s to develop the skills, adaptability and flexibility that will be necessary if we are to avail ourselves of the opportunities of the 1980s?

The local authorities, industry and voluntary organisations are ready and willing to respond to just that kind of opportunity. The Government will be paying out a lot of money for benefits anyway. Does not it make a great deal of sense, especially in areas of very high unemployment, such as my own and throughout the whole of the North-East, to make a response like this and to be able to use that money positively? Instead of paying out money for people to do nothing at all, we should pay it to enable people to acquire skills and adaptability which will be readily used.

Surely the Government cannot long delay the time when they consider all manner of work sharing schemes. We know that throughout the Common Market there will be a long-term problem of unemployment. Whatever the policies adopted by Conservative Members, that problem will not go away, particularly among the under-35s and under-25s. We have heard a great deal about unemployment among young people, and rightly have we heard about it, but there is dreadful unemployment among the under-35s and the under-25s, particularly in the North-East and the other development areas.

What will the Government do about that? What kind of response will they make to that sort of long-term problem? If the microchip revolution is to come about, as we all believe it will, what response will the Government make to it?

Surely the time cannot be long delayed when the Government must actively consider an earlier retirement age, a comprehensive education and training programme for the whole of the 16-to-19 age group, and paid educational leave for the vast majority of working people, especially those who have left school at the earliest opportunity and who have had no further education or training.

These are the programmes to which the Government must sooner or later turn their minds. It is no good pretending that we can go through the next four or five years ignoring the problem of long-term unemployment. It is there. Unless the Government make a positive response to it, they will encourage social disturbance of the most frightening proportions. In the North-East particularly, we are beginning to see that happening because people there are so demoralised. They are beginning to say "What on earth are this Government about?" Having suffered for 40 or 50 years, as people have done in those areas, we are now having to look back to the thirties in the kind of disturbance, distress and demoralisation that the present Government are engendering.

I wish that Conservative Members would come to the North-East and hear some of the things being said there and witness the disillusionment of people who know that the present Government's policies are not likely to work. Indeed, Conservative Members have said so themselves. Why do not they come to the North-East and offer us some incentive to respond positively?

The crowning insult was offered only recently, when the Secretary of State for Industry refused to restore special development area status to my constituency. In an area in which 15 people are chasing every vacancy, we find that almost impossible to understand and accept.

The hon. Gentleman has been on his feet for 16 minutes. He has prevented other hon. Members from making contributions to highlight other areas of unemployment, such as Wales. [Interruption.] I am surprised that he is trying to intervene from a sedentary position—

Order. Is the hon. Member for Anglesey (Mr. Best) intervening to pose a question, or is he making a speech?

Does the hon. Gentleman accept that one of the principal problems with which we are confronted are the regional areas where unemployment is twice the national average, such as Wales? In my constituency there is 12 per cent. unemployment. Will the hon. Gentleman address his remarks to some of the problems in such areas, which require critical and urgent Government attention?

I had finished, but I am grateful to the hon. Member for Anglesey (Mr. Best) for allowing me to address myself to some of the areas that he has mentioned. I come from just such an area, where the unemployment rate is 9·2 per cent. In that area that has been the historical figure.

Some Conservative Members have talked about regional policy. They have claimed that it has been damaging to certain areas. When regional policy was first given a great boost, there was great congestion in the Midlands and in the South. It made great sense in economic and social terms to divert some of the jobs from those areas to areas such as mine.

Is the hon. Gentleman pleased with what is now happening in the West Midlands, where the policies that he is advocating, and which presumably he would have supported in the past, would have led to much unemployment?

I do not accept that the regional policy of the past 15 years has been the cause of unemployment in areas such as the West Midlands. Some jobs have been diverted to areas such as mine. However, there has been a great loss of jobs in areas such as the West Midlands that would have been lost in any event. It is certain that not all of them would have come to areas such as the one that I represent.

9.12 pm

Notwithstanding that recent little spat, I think that on the whole we have had a good debate. It has been marked by some splendid speeches. It has been an agreeable debate—at least it was until now. In the course of the day we have learnt about the new academic guru and economist Professor Milton Keynes. He is truly a man for all seasons.

I am glad to see the hon. Member for Cambridge (Mr. Rhodes James) in his place. I hope that he will not consider it patronising if I pay tribute to what I consider was a totally honest speech of great courage. It was the most persuasively argued speech that I have heard in the House for a long time. I am sure that those who heard it will agree with me.
"It is crazy that with almost 1½ million people unemployed, key sectors of our economy are losing output because of a shortage of skilled manpower. People must be trained in a spirit of optimism, secure in the knowledge that they are gaining the right skills and are being educated to participation in the changes, not to be overwhelmed by them."
Those are not my words, although I totally endorse every one of them. They are the words of the Secretary of State for Employment in March 1979.

A few weeks later the right hon. Gentleman publicly declared that a key factor in his party's approach was:
"to retrain those people whose skills are no longer needed".
On 20 April, when speaking to the electors, the good folk of Radcliffe, in Lancashire, the right hon. Gentleman said:
"We shall encourage the retraining of those whose skills are no longer required."
It was in the same speech that he said:
"We have no intention of cutting off job subsidies."
However, five weeks after taking office he chopped £170 million from the special employment measures.

We heard nothing today from the right hon. Gentleman to encourage the "spirit of optimism" to which he was referring about a year ago. There was not a crumb of comfort for the unemployed. The women and girls who are now to be denied retraining facilities and the large number of school leavers who will be looking for jobs and training will find no hope in the right hon. Gentleman's speech. Instead, we had a long tirade of abuse directed at the record of previous Governments. It is curious that all the historical reminiscences that so often fill the speeches of those on the Government Front Bench ignore the history and performance of previous Tory Governments.

The Government have very selective memories. The belligerent, aggressive, hectoring and blustering performance of the Secretary of State may have been intended to help the flagging spirits and sagging morale of his party. It was hardly constructive or helpful. He shed little comfort and even less light. I accept that unemployment was high when we were in government. Unemployment was intolerably and unacceptably high. [Interruption.] We always accepted that.

I did not know that the hon. Member for Croydon, South (Sir W. Clark)—who is now barking—had acquired a lot of experience on this subject during debates in the Chamber. He should have the courtesy to listen. However, there is one difference between this Government and the previous Labour Government. We tried to do something about unemployment. [Interruption.] The hon. Member for Preston, North (Mr. Atkins) is a squawking hen. He has not attended most of the debate. He should listen now. Perhaps he will learn something. We are entitled to protest. The Government are trying to dismantle some of those things that we tried to implement in order to help industry and the unemployed.

For the sake of the hon. Member for Lancaster (Mrs. Kellett-Bowman), I shall establish my credentials. I have experience of being unemployed. I am the father of a 17-year-old lassie. She has just started work under a work experience scheme in a hospital for the mentally subnormal. Having left school she had spent 12 months unemployed.

I shall structure my speech along the lines of that of the Secretary of State, but I shall not take as long. Just before the election, unemployment had been following a downward path. It had been falling at an accelerating rate. For nine months before the election unemployment had fallen in each of the seven-monthly sets of figures. Unemployment is now rising both faster and further. The most pessimistic forecasts suggest a figure in excess of 2 million by the end of the year. Whichever forecast one chooses to accept, we are likely to face the worst unemployment since the war. Despite the Government's remarks, much of that increase will have been due to Government action. Even more of that unemployment will have been caused by Government inaction.

The Government have shown a shortsighted failure to recognise immediate needs. In July last year the Manpower Services Commission started to ring an alarm bell. On 24 July, in a press notice, it said:
"Unemployment inflicts heavy costs on the community. There is the direct cost to the State of unemployment and other benefits to unemployed workers and their dependants. There is the cost which arises because of the value of production forgone and the contributions to taxes not paid by unemployed people. And there is the cost in terms of deprivation to individuals and their families, which can be very substantial. All these must be taken into account in evaluating the cost of manpower services."
Some of those costs cannot be quantified. Some of them can. When I was in the Department of Employment we used to calculate the cost to public funds of making unemployed a worker who is unlikely to get another job quickly. We calculated that it cost £7,000 to £8,000 per annum. In questioning the cost of employment support measures and the cost of helping an individual to follow a satisfying, useful and fulfilling job, we should not overlook the cost of not doing so. If we must choose between subsidising unemployment and subsidising employment, we should subsidise employment.

I shall return to the opening theme of this debate. Last Thursday we debated the Government's economic policy. We are probably discussing one of the most important effects of that policy today. The Government say that their main objective is to gain control of inflation. Inflation has nearly doubled since the Conservative Party took office. The Government believe that by restricting an employer's ability to pay an inflationary pay increase, pay demands will be disciplined. The Secretary of State told us that this afternoon. The belief appears to be that, if that results in firms going out of business, the trade unions will have learnt the hard way that excessive pay demands can only lead to unemployment for their members.

Whether collective bargaining works in the way assumed is by the way, although I seriously doubt that it does.

What matters is that, contrary to widespread assumption, the Government have a pay policy, but one in which inflationary settlements are intended to be punished by unemployment.

No, I have already curtailed my speech.

I am not now talking of effects. I am talking of the Government's intentions. If the Government intend high unemployment to be the disciplinary instrument in collective bargaining, it follows that special measures to offset or mitigate that unemployment must be counter to their economic policy. Anything that diminishes the impact of unemployment—for example, the short-time working compensation scheme—must be regarded for this Government as a deflection of one of the purposes of monetarism.

The Government's policy has wider effects on unemployment, as was shown in last week's debate and as my right hon. Friend demonstrated this afternoon. Absurdly high interest rates not only choke off money which might otherwise be borrowed to pay wage increases. They also deter investment that will create jobs. They cripple the ability of employers to pay for inputs of materials and parts to keep going until the customer finally pays. They make it impossible for small firms to begin and they drive existing small firms to the wall. These same absurdly high interest rates drive the sterling exchange rate up, acting as a tax on exports and a subsidy on imports. It all hits employment. It all creates unemployment.

Apparently the last consideration in the Government's strategy is the plight of the worker who has been forced on to the dole by monetarism, cuts in public expenditure or chopping aid to industries such as steel.

It is against that background of the Government's economic strategy that we must judge their attitude to the special employment measures. Measures such as community industry, designed to help disadvantaged youngsters those who will go under in the open labour market, are cut by this Government from 7,000 to 6,000 places. Job release to help the older worker into early retirement and create vacancies for younger people is cut by this Government to the tune of £40 million.

I have given up quite a bit of my time. If there is anything incorrect in what I am putting to the House, doubtless the Minister will deal with it.

The small firms employment subsidy, which is currently sustaining 55,000 jobs and which offers help for a group of employers and their workers, which one would have thought would attract special sympathy from this Government, has been consigned to the dustbin. The special temporary employment programme, aimed at helping the long-term unemployed, has been severely cut back from our target of 35,000 places to 12,000 to 14,000 for the current year. That is pathetically inadequate when compared with the 330,000 adults who have been unemployed for more than a year. Those cuts reflect the Government's cynical indifference to the plight of the unemployed.

On a point of order, Mr. Speaker. I understood that, even if one was an Opposition Front Bench spokesman, reading a speech was not within the rules of this House.

You will judge, Mr. Speaker, the extent to which that is a point of order. I did not seek to intervene in speeches by Conservative Members. I have given up a considerable amount of my time. The more that hon. Gentlemen interrupt me, the more I shall be compelled to make inroads into the time available for the Minister.

Order. May I remind the House that we also have the winding-up speech. I suggest that both speeches be accorded a reasonable hearing.

I assure you, Mr. Speaker, that I can look after myself.

I turn now to training. There is a widespread recognition, indeed a universal acceptance, that the regeneration of British industry calls for improved productivity, increased efficiency, and a labour force that can meet the demands of rapidly changing technology. [Interruption.] I really cannot understand what I have said that so antagonised hon. Members.

I think that there is no less an understanding that our workers must be prepared to switch from older industries, which are, in many cases, in an obvious state of decline, to those industries that are more attuned to modern markets so that we might reasonably expect to have a future as an industrial nation. I agree with the Secretary of State that we must reverse the decline in our manufacturing industry. This will clearly require skilled craftsmen and trained technicians. It will require more of the kind of labour that is already in short supply—acutely so in some cases, such as instrument technicians. This labour can be produced only by training and education.

Yet, at this time in our history, when training and retraining are needed as never before and are crucial to our success as an industrial nation, this Government decide that resources and support for training should be slashed. So far, a total of £190 million has been chopped from the Manpower Services Commission budget and there has been a cut of 3,400 in its staff. That is the most severe cut that has been inflicted on any Government Department. That will cripple the Commission in its function and severely diminish its services and the help that it gives to industry and to the unemployed. The axe is now hanging over 20 skillcentres, some of them in areas where the steel industry is threatened with massive closures, such as South Wales. My own skillcentre in Doncaster which serves Scunthorpe where 5,000 jobs are threatened, is another which is at risk.

The TOPS training programme is to be cut from almost 100,000 places in 1978 to—

With respect to the hon. Member who is a pleasant enough fellow, he has not been present during our proceedings, so I shall not give way to him.

The Government are cutting the number of TOPS training places from nearly 100,000 in 1978 to 60,000 a year in the years ahead.

The industrial training boards, which must plan years ahead, have had to cut back their programmes and plans, and they do not know now from one year to another what plans they might confidently prepare.

No I shall not give way.

The Manpower Services Commission has repeatedly expressed its concern to the Secretary of State and tried to impress upon him the seriousness of the situation. A wide area of the Commission's employment and training activities will be reduced to a lower level at a time when unemployment is rising sharply, combined with an acceleration in technological and industrial changes. Also this is happening at a time when there is a growing working population, with large numbers of young people and women entering the labour market.

The cuts will undermine the consolidation and the development of the Commission's successful work in recent years in developing an active and comprehensive manpower policy and service. The cuts will mean a retrenchment plan for the Commission, a reduction in its comprehensive capability to meet the employment and training needs of workers in the economy and a reduction in the range and scale of the Commission's activities in the early 1980s.

The Secretary of State tried hard to minimise the damage that he is doing. Let me tell the House what the Commission itself has said. It claims that services to employers, individuals and the economy will be at a lower level than the Commission believes to be necessary. In the Commission's corporate plan submitted to the Select Committee, it said:
"This Corporate Plan therefore sets out not only what the Commission should do over the next four years, but must also perforce propose what steps the Commission should take to meet the Government's requirements with least damage to its overall strategy."

I shall not. I have little time, and the Under-Secretary of State wishes to reply.

I noted with interest what the Secretary of State said about the review of the 1973 Act. We shall look with interest at what he proposes. I hope that he will not do what is widely rumoured, which is either to weaken or to go so far as to chop the industrial training boards. When we last debated these matters we made it absolutely clear that we opposed the ceiling on the levy of 1 per cent., the extended exemption of small firms, and the question of Government acceptance of responsibility for the board's administrative costs. We felt that that was a dilution of the 1964 Act, the principles of which I fully support. Had the Act been applied more rigorously it might have been much more effective. It is a pity that the right hon. Gentleman did not lift the veil a little higher.

I want to leave the Under-Secretary as much time as possible. Doubtless the Under-Secretary will give way to the hon. Gentleman to let him make his point.

I want to suggest what I hope the House will regard as a positive approach, or the way in which our thoughts should be turning. First, we should recognise that each recession in the post-war period has tended to leave in its wake a higher plateau of unemployment than preceded it. It is almost as though our economy, and perhaps the economies of other highly industrialised countries, have acquired an inherent tendency to inbuilt unemployment. If nothing changed I seriously doubt—I speak only for myself on this matter—whether growth alone, even if we were capable of achieving the high and fast growth that would be necessary, would enable us to get unemployment back to the levels of, say, the mid-1960s.

We must have growth, based on a strong manufacturing sector, which requires higher productivity and improved efficiency. Those in turn call for trained, skilled manpower and womanpower. But there must be something more, not least because of the impact of technological change. We must start looking more seriously at how the total volume of work is distributed. MY hon. Friend the Member for Bishop Auckland (Mr. Foster) talked about the need to examine the concept of work sharing. We need to examine such matters as the duration of the working week, the extent of overtime, the age of entry into the labour market, the period to be spent at school and in training, and the age of retirement. We should consider the extent to which we help the disadvantaged and disabled, the less competent, who must be encouraged into satisfying, fulfilling work.

I commend a document sent to me by the managing director of Tesco, one of the biggest retail companies in the country. It says:
"The Company believe that there has to be a fundamental change in the attitude towards work, to the notion that there is something sacrosanct about the duration of the working week, about the length of annual holidays, about retirement ages."
That is absolutely true. It also says:
"It is essential that in the years immediately ahead sufficient resources are made available to retrain people not only in the skills needed to handle the new generation of high tech- nology equipment, but also for a new generation of work itself."
We must look at how we train and how much of the working life must be spent in such activities. Unhappily, far from being concerned with such matters, far from giving any indication that such thoughts entered his mind, the Secretary of State was concerned today only to brazen out his indefensible retreat from his responsibility towards the unemployed and those who will be seeking jobs in the future.

The right hon. Gentleman's speech showed little recognition of the harm that his policies will do to the needs of industry and the economy. Instead, he seemed to confirm what many of us fear—that the present Government are cruelly indifferent to the needs and hopes of the unemployed. That is why we shall vote for our motion.

9.35 pm

I understand that this occasion is known in my Department as on-the-job training. I agree with the right hon. Member for Doncaster (Mr. Walker) that we have had a thoughtful, genuine and good-tempered debate. That situation rapidly changed when he began to speak.

We have ranged widely over some of our most immediate and serious problems. Many helpful ideas and suggestions have been made by hon. Members on both sides of the House. Ministers share the real concern of hon. Members who have spoken about the problems of unemployment, not only threatened, but already here. I pay tribute to my hon. Friend the Member for Cambridge (Mr. Rhodes James) who spoke with considerable understanding and concern of the background of the Tory Party and its thinking over the long period before the war.

There have also been speeches by hon. Members more recently affected by unemployment, including my hon. Friend the Member for Chippenham (Mr. Needham), whose situation I know well, the hon. Member for Preston, South (Mr. Thorne) and other hon. Members representing the North-East, the North-West and Wales. These are all areas well known to Ministers in my Department. We spend a considerable time visiting those areas and seeing, on the ground, the problems that are faced.

I question the thinking of Opposition Members, especially the right hon. Member for Doncaster. They have tried to establish that our policies and actions would appear to be what they are not. I can understand this approach. Those hon. Members must forgive me if I take a few moments, even at the risk of repeating some of the remarks of my right hon. Friend, to set clearly before the House the key facts of the situation.

First, our unemployment situation, serious as it is, is not unique. Other countries in Europe—Belgium, Italy, France and Ireland—have much higher unemployment rates. The rates of unemployment that we currently face have not been caused by the policies of this Government in the few months that we have been in power. We are changing a policy. It is true that the employment and training programmes have not remained exempt from reductions in public expenditure. It is also true, however, that we have been careful not to affect essential functions. We have taken into account the expansion of past and projected levels of expenditure and staff.

Expenditure rose from £215 million in 1974–75 to £617 million last year and was projected to rise to £800 million in 1980–81. In June last year we announced a reduction of £110 million in the 1979–80 programme. Even so, planned expenditure is higher in real terms this year than last. It is £631 million against £617 million. While STEP was reduced, YOP has been considerably expanded and recruitment of craft and technician trainees has not been affected. We have paid special regard to the situation of the disabled.

We have asked for a reduction of £160 million in MSC expenditure in 1980–81. Even so, planned expenditure will be higher at £640 million in real terms this year. In terms of staffing, the 3 per cent. savings required this year have been applied to the MSC as to other bodies employing civil servants. Even so, there were 400 more staff in post on 1 January 1980 than on 1 January 1979.

That is not to say that our intention to effect real economies is not serious. We are determined to keep the use of resources in this area within bounds. But it must be clear by now that we are proceeding with care. To suggest that we-are cutting savagely into existing services is a serious misrepresentation. We have heard a good deal in recent weeks, and naturally today, about the consequences that may be expected to follow the current proposals to rationalise the skillcentre network. The right hon. Member for Llanelli (Mr. Davies), my hon. Friend the Member for The Wrekin (Mr. Hawksley) and the hon. Member for Dunbartonshire, West (Mr. Campbell) have spoken in defence of their areas.

I well understand that in any locality a single skillcentre, however inefficiently it may function, is an important asset whose future will arouse strong feelings. That is why the proposals have been the subject of such extensive consultations, and why my right hon. Friend and I have spent so much time in meeting and corresponding with those most concerned.

It must be recognised nevertheless that the present proposals are largely based on two reviews which were carried out independently of specific public expenditure requirements, and the first was started under the Labour Government. The proposals are not designed to reduce the capacity of the network or to deny any opportunity to anyone requiring training. Indeed, to the extent that provision is better sited and more fully used, it will be possible for slightly more skill training to be provided and to lead to more efficient service at less cost.

I promise that the points which hon. Members have made in the debate will be passed to the Manpower Services Commission, and I am assured that even if all the skillcentres suggested for closure were to close, which is hardly likely, there will still be more places in the network than there are trainees who require them. It is sad but true that empty places help nobody, and the number of places in some areas far exceeds any conceivable projection of their use. Training needs to be moved where skill training fills vacancies and in itself creates more employment.

Having spelt out the facts, I return to the thinking of some hon. Members, which, as I said, puzzles me. When I consider the terms of the motion which has been examined today, I see that it is based upon an assumption that there is, or should be, some direct link between the level of unemployment and the resources devoted to employment and training programmes. At first sight, this might seem obvious, but how does it stand up to closer examination?

If it is argued that programmes should be expanded because they help to reduce the impact of unemployment, we have some sympathy with that approach, as my right hon. Friend's statement on 14 February made clear. In particular, the youth opportunities programme is being expanded by some 25 per cent. against the background of the projected rise in young people's unemployment. The hon. Member for Truro (Mr. Penhaligon) asked for the figures for school leavers. I have been trying to get them for him, but I shall see that they are sent to him tomorrow.

Two points must, however, be made. First, we do not believe that it is right, even if it were possible, to attempt to deal with unemployment generally in this way. After all, the numbers of those unemployed conceal substantial flows between jobs, and the vast majority of those registered as unemployed at any one time have no need of special measures. There are 8 million job changes a year, and, even with the problems of the long-term unemployed, people flow on and off the register. Our approach has been to concentrate help on those who need it most.

Second, by no means all, or even the greater part, of our spending on employment and training programmes is of this kind. It is about normal work, helping people to prepare for and obtain work, and making the labour market operate more efficiently.

The Labour Government promoted an increase in Manpower Services Commission spending in three years of 35 per cent.—£468 million to £631 million—while the level of unemployment remained about the same—1·39 million in January 1977 and 1·4 million in January 1980. The Manpower Services Commission special employment measures admittedly increased in impact by nearly 60,000 over this period, but that explains only part of the increase. What about the rest of the increase in resources devoted to employment and training measures? Is it argued that the operation of the labour market was improved out of all recognition just by increasing the budget?

Let us look at this problem of skill shortages. This has been raised by my hon. Friend the Member for Newbury (Mr. McNair-Wilson) and by others. Reason rebels at the paradox of work—important and rewarding work—which is available at a time of widespread unemployment and yet is not done because people with the necessary skills cannot be found to fill the vacancies. Has the money which has been poured out resolved this problem? It has not.

It is true that there are some indications that the situation is now easier than it was in the past two or three years, but difficulty in filling vacancies in some skilled occupations, notably in engineering and those associated with new technology, is a cause for serious concern. But it is due to other reasons—pay policies, compressed differentials, demarcation, mobility and so on.

We should all be concerned about the wider and deeper defects in our arrangements for training people and helping them to find suitable employment. We have a system which is rigid, hidebound by tradition and custom and far too slow to respond to the change and challenge of the future.

As a nation, we devote too great a share of our resources to apprentice training, much as one has valued it in the past, restricted as it is to particular levels of skill at an early age in a limited number of occupational areas. Is this a sensible approach to our present needs, to say nothing of our rapidly changing future? The skill needs of traditional craft operations change with technological developments. Even when they do not, can we honestly claim that those skills can be acquired only by three to four years of time serving? Can we not see that the modular approach supported by the EITB is the way forward? One commends the maiden speech of Lord Scanlon in the other place on this subject. Does it make sense that entry to so many skilled jobs is barred to those who have not been through this specific form of training?

Labour Members have raised the question of skillcentres and skillcentre trainees and yet the acceptance of these trainees is a serious problem when they have been through our skillcentre network. What about areas—many of them already central to our economy as well as to the challenges of the future—in information technology and microprocessor applications? They have so far failed to command their proper share of resources even though this Government have increased support to industry.

There can be no doubt that technological change will dominate the 1980s and that our economic fortunes will depend vitally upon how well and rapidly we can respond. Some current problems have recently been analysed in the Finniston report on the engineering profession. That report makes clear that we need to change deep entrenched cultural attitudes if we are to have any chance of meeting the challenges to come. The Opposition have a big part to play in that process.

At this stage we cannot know what the needs will be in five to 10 years or where the difficulties will be greatest. But we can be sure that for just that reason an effective response will depend on an approach which is flexible rather than on one that is frozen in the traditions of the nineteenth century or even earlier.

I wish to put one point beyond any doubt. It is not only our economic performance that is at risk. When we consider the rigidities of our current systems, we must have always in mind the effect that they have on the individual. Not only does the present apprentice system obstruct adequate provision for current skill needs; it also crucially tends to deprive many working men and women of the opportunity to develop their abilities to the full and thus lead satisfying working lives. This is not a theoretical point. I am regularly brought into contact with individual cases of people whose training or subsequent employment has been hampered by outdated approaches to training and recruitment.

That we are still faced with problems of such size and difficulty indicates beyond doubt that attempts to buy our way out of trouble have not provided the solution. That is why we need to suggest that progress must be made. I am encouraged by the impetus that some training boards have given to modernising the system. They have been encouraged in that by the Manpower Services Commission, particularly through the training for skills programme.

The TOPS programme provides an outstanding example of what can be achieved in adult retraining, particularly by the pioneering of rapid and economical training for skilled work. These specific and important developments have not depended directly upon the massive injections of cash that have been devoted in part to financing volume increases in less vital MSC programmes such as clerical and commercial training.

Will my hon. Friend bear in mind the important part that preparatory courses play in programmes for those who lack the literacy and numeracy that are so essential? Will my hon. Friend ensure that such courses are not curtailed?

I can assure my hon. Friend that we bear that in mind. I shall deal with the issue later in my speech.

Nor are these the only hopeful aspects of the situation. If I have dwelt on these problems at some length, it is to show that they have not been solved by lavish spending in the past and to underline how essential it is to stimulate drastic discussion and action for the future centred on the real issues rather than on debating points about money. I see a number of initiatives coming together which could transform our approach to training and preparation for employment.

For once in my political lifetime all the strands seem to be coming together on the same time scale at this most challenging time—the start of the 1980s. A fundamental rethink of this whole area is currently under way.

First, the industrial training arrangements operating on the basis of the Employment and Training Act 1973 are being reviewed by the MSC. We think that this review is timely and essential, and I welcome what my right hon. Friend suggested as to the possibility of a Bill covering this area being presented in the next Session. Secondly we shall have the conclusions from consultations about vocational preparation for young people in employment based on our reissue of "A Better Start to Working Life".

The pilot programme of unified vocational preparation, which was launched in 1979 to develop and test various forms of provision to help young people who enter employment without training opportunities is acknowledged in most cases to be very successful. "A Better Start to Working Life" drew upon the unified vocational preparation experience. and proposed a larger and more structured system. While these proposals have some doubtful features, there is much that deserves serious consideration, and it is certain that we cannot afford to neglect the potential of these young people who face a future where changing job requirements will place a premium on adaptability. Many of my hon. Friends spoke movingly about that.

We also have experience of the youth opportunities programme in considering this whole area. I am sure that the success of good work experience schemes, combined with off-the-job training, has proved to employers what decent training and a little patience can do to improve a young person's attitude to work. As with UVP, the youth opportunities programme has brought to many employers the realisation that one gets more out of this exercise than one puts in.

The hon. Member for Bishop Auckland (Mr. Foster) criticised the work experience part of this programme. Yet it has been incredibly successful in placing young people in work. More than 70 per cent. of young people who go through the work experience programme end up with a job, and more than 50 per cent. of them end up with a job with the employer who has been training them. We take the hon. Gentleman's remarks about training very seriously. We are looking carefully to ensure that that part of the programme entails training as well as some off-the-job work. Therefore, we take on board the suggestions which the hon. Gentleman made. We are always looking for improvement in the systems that we operate within the overall budget.

The third strand in what is happening is the report of Sir Monty Finniston's committee of inquiry into the engineering profession, which examines clearly the reasons why industry is not always able to achieve the necessary engineering excellence on which our past has depended and on which our future depends even more.

Rather than read from his brief, will the hon. Gentleman attempt to answer the questions which Labour Members have put to him, and in particular will he respond to the question that I put to him about my own area?

Labour Members asked for a constructive response to what we were doing about training. Training is the essential issue about which we are all concerned, and that is the basis of my speech.

The committee of inquiry devotes a good deal of constructive attention to training, and the Government are looking very carefully at its recommendations.

Fourthly, my hon. Friend the Under-Secretary of State for Education and Science has a group which is reviewing the educational provision for 16-to 18year-olds. I am sure that that will be welcomed in all parts of the House. That review is considering the inter-relationship of education and the training agencies. In short, it is conerned with the education end of the link between school and work—the first steps on the ladder of employment. If there is a change in training in a modular form, one hopes that in future vocational training in schools will help young people straight into skillcentres and other forms of training, which will take them much more satisfactorily into profitable and sensible work.

Other factors affect unemployment. Some are deep-seated and have continued for generations. It is time to move in a new direction. Hon. Members have mentioned regional imbalance. We cannot in 300 days deal with problems that have developed over 30 years. My right hon. Friend the Secretary of State for Industry has reviewed regional imbalance with the aim of concentrating more aid in the needy areas. Hon. Members stressed the importance of mobility. The problem is increasingly difficult to understand. As jobs become available on the South Coast, it is more difficult to persuade people with the necessary skills to move from the North-East, for example. I accept that we must deal with the housing and schools problems in various areas. We have taken steps in the Housing Bill by providing for short-holds, leasing and by trying to make it easier for people to move.

The hon. Member for Truro said that he was a practising engineer and he asked about the three "Ps"—petro-currency, pay claims, and productivity. Speeches have been made in the House about those problems for years. The difficulty is in achieving co-operation between employers and trade unions.

Hon. Members have talked about lack of investment. We can achieve investment only when a return can be gained from an investment. Only when it pays people to invest in manfacturing industry will people invest in it. Perhaps even the trade unions will then consider investing their funds in our manufacturing industry. Profits are essential for a productive industry.

I have been asked why factories are closing. Sometimes factories must close because of product design, poor quality or lack of sales appeal. The Daily Mail conducted a survey in south London involving a young couple who furnished their house by shopping locally in Godalming. They bought according to good design and acceptable price. Fewer than 15 per cent. of the goods that they bought were produced in our factories. That is the seriousness of the problem.

Changes in technology also cause problems. The hon. Member for Preston, South talked about Courtaulds and the planned economy. How can one plan an economy on the basis of yarns which once were used to produce tyres but which are no longer needed? Our policy of stimulating the private sector to create

Division No. 216]


[10 pm

Abse, LeoCant, R. B.Dormand, Jack
Adams, AllenCarmichael, NeilDouglas, Dick
Allaun, FrankCarter-Jones, LewisDouglas-Mann, Bruce
Alton, DavidCartwright, JohnDubs, Alfred
Anderson, DonaldClark, Dr David (South Shields)Duffy, A. E. P.
Archer, Rt Hon PeterCocks, Rt Hon Michael (Bristol S)Dunn, James A. (Liverpool, Kirkdale)
Armstrong, Rt Hon ErnestCohen, StanleyDunnett, Jack
Ashton, JoeColeman, DonaldDunwoody, Mrs Gwyneth
Atkinson, Norman (H'gey, Tott'ham)Concannon, Rt Hon J. D.Eadie, Alex
Bagier, Gordon A. T.Conlan, BernardEastham, Ken
Barnett, Guy (Greenwich)Cowans, HarryEdwards, Robert (Wolv SE)
Barnett, Rt Hon Joel (Heywood)Crowther, J. S.Ellis, Raymond (NE Derbyshire)
Beith, A. J.Cryer, BobEllis, Tom (Wrexham)
Bennett, Andrew (Stockport N)Cunliffe, LawrenceEnglish, Michael
Bidwell, SydneyCunningham, George (Islington S)Ennals, Rt Hon David
Boothroyd, Miss BettyCunningham, Dr John (Whitehaven)Evans, loan (Aberdare)
Bottomley, Rt Hon Arthur (M'brough)Dalyell, TamEvans, John (Newton)
Bradley, TomDavidson, ArthurEwing, Harry
Bray, Dr JeremyDavies, Rt Hon Denzil (Llanelli)Faulds, Andrew
Brown, Hugh D. (Provan)Davies, Ifor (Gower)Field, Frank
Brown, Robert C. (Newcastle W)Davis, Clinton (Hackney Central)Fitch, Alan
Brown, Ronald W. (Hackney S)Davis, Terry (B'rm'ham, Stechford)Fitt, Gerard
Buchan, NormanDeakins, EricFlannery, Martin
Callaghan, Rt Hon J. (Cardiff SE)Dean, Joseph (Leeds West)Fletcher, L. R. (Ilkeston)
Callaghan, Jim (Middleton & P)Dempsey, JamesFletcher, Ted (Darlington)
Campbell, IanDewar, DonaldFoot, Rt Hon Michael
Campbell-Savours, DaleDixon, DonaldForrester, John
Canavan, DennisDobson, FrankFoster, Derek

and redirect resources from the public sector should be supported.

I turn to the question of training and its importance. I know from contacts with those directly involved on training boards, the youth lobbies, employers and trade unions and even from the hon. Member for Newcastle-under-Lyme (Mr. Golding), the Chairman of the Select Committee on Employment, that the time is ripe to assess the real value of the right training and the contribution that that can make to the sensible progress which is essential to our future. It is encouraging that, in spite of the motion, Labour Members and those closely involved in training and bringing young people into work are working on the same basis in this vital matter.

Government alone cannot solve the problems, even if money were no object. I illustrated that earlier. What is needed is ideas, not cash, clear priorities and the collective will to move with change instead of always lagging behind. We stand prepared to use our authority and resources to pursue a policy for the future, stimulating training for the skills of tomorrow, removing bottlenecks and working towards an expanding economy and falling unemployment. I ask my right hon. and hon. Friends to support the amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 260, Noes 311.

Foulkes, GeorgeMcElhone, FrankRyman, John
Fraser, John (Lambeth, Norwood)McGuireMichael (Ince)Sandelson, Neville
Freeson, Rt Hon ReginaldMcKay, Allen (Penistone)Sever, John
Freud, ClementMcKelvey, WilliamSheerman, Barry
Garrett, John (Norwich S)MacKenzie, Rt Hon GregorSheldon, Rt Hon Robert (A'ton-u-L)
Garrett, W. E. (Wallsend)Maclennan, RobertShore, Rt Hon Peter (Step and Pop)
George, BruceMcMahon, AndrewShort, Mrs Renée
Gilbert, Rt Hon Dr JohnMcMillan, Tom (Glasgow, Central)Silkin, Rt Hon John (Deptford)
Ginsburg, DavidMcNally, ThomasSilkin, Rt Hon S.C. (Dulwich)
Golding, JohnMcWilliam, JohnSilverman, Julius
Gourlay, HarryMagee, BryanSmith, Rt Hon J. (North Lanarkshire)
Grant, George (Morpeth)Marks, KennethSnape, Peter
Grant, John (Islington C)Marshall, David (Gl'sgow, Shettles'n)Soley, Clive
Hamilton, James (Bothwell)Marshall, Dr Edmund (Goole)Spearing, Nigel
Hamilton, W. W. (Central Fife)Marshall, Jim (Leicester South)Spriggs, Leslie
Harrison, Rt Hon WalterMartin, Michael (GI'gow Springb rn)Stallard, A. W.
Hart, Rt Hon Dame JudithMason, Rt Hon RoySteel, Rt Hon David
Hattersley, Rt Hon RoyMaxton, JohnStewart, Rt Hon Donald (W Isles)
Haynes, FrankMaynard, Miss JoanStoddart, David
Healey, Rt Hon DenisMeacher, MichaelStott, Roger
Heffer, Eric S.Mellish, Rt Hon RobertStrang, Gavin
Hogg, Norman (E Dunbartonshire)Mikardo, IanStraw, Jack
Holland, Stuart (L'beth, Vauxhall)Millan, Rt Hon BruceSummerskill, Hon Dr Shirley
Home Robertson, JohnMiller, Dr M. S. (East Kilbride)Taylor, Mrs Ann (Bolton West)
Homewood, WilliamMitchell, Austin (Grimsby)Thomas, Dafydd (Merioneth)
Hooley, FrankMitchell, R. C. (Soton, ltchen)Thomas, Jeffrey (Abertillery)
Horam, JohnMorris, Rt Hon Charles (Openshaw)Thomas, Mike (Newcastle East)
Howell, Rt Hon Denis (B'ham, Sm H)Morris, Rt Hon John (Aberavon)Thomas, Dr Roger (Carmarthen)
Huckfield, LesMorton, GeorgeThorne, Stan (Preston South)
Hudson Davies, Gwilym EdnyfedMoyle, Rt Hon RolandTilley, John
Hughes, Mark (Durham)Newens, StanleyTinn, James
Hughes, Robert (Aberdeen North)Oakes, Rt Hon GordonTorney, Tom
Hughes, Roy (Newport)Ogden, EricUrwin, Rt Hon Tom
Janner, Hon GrevilleO'Halloran, MichaelVarley, Rt Hon Eric G.
Jay, Rt Hon DouglasO'NeillMartinWainwright, Edwin (Dearne Valley)
John, BrynmorOrme, Rt Hon StanleyWainwright, Richard (Colne Valley)
Johnson, James (Hull West)Owen, Rt Hon Dr DavidWalker, Rt Hon Harold (Doncaster)
Johnson, Walter (Derby South)Palmer, ArthurWatkins, David
Johnston, Russell (Inverness)Park, GeorgeWellbeloved, James
Jones, Rt Hon Alec (Rhondda)Parker, JohnWelsh, Michael
Jones, Barry (East Flint)Parry, RobertWhite, Frank R. (Bury & Radcliffe)
Jones, Dan (Burnley)Pavitt, LaurieWhite, James (Glasgow, Pollock)
Kaufman, Rt Hon GeraldPendry, TomWhitehead, Phillip
Kerr, RussellPenhallgon, DavidWhitlock, Williiam
Kilfedder, James A.Powell Raymond (Ogmore)Wigley, Dafydd
Kilroy-Silk, RobertPrescott, JohnWilley, Rt Hon Frederick
Kinnock, NeilPrice, Christopher (Lewisham West)Williiams, Rt Hon Alan (Swansea W)
Lambie, DavidRace, RegWilliams, Sir Thomas (Warrington)
Lamborn, HarryRadice, GilesWilson, Gordon (Dundee East)
Lamond, JamesRees, Rt Hon Merlyn (Leeds South)Wilson, Rt Hon Sir Harold (Huyton)
Leadbitter, TedRichardson, JoWilson, William (Coventry SE)
Leighton, RonaldRoberts, Albert (Normanton)Winnick, David
Lestor, Miss Joan (Eton & Slough)Roberts, Allan (Bootle)Woodall, Alec
Lewis, Ron (Carlisle)Roberts, Ernest (Hackney North)Woolmer, Kenneth
Litherland, RobertRoberts, Gwilym (Cannock)Wrigglesworth, Ian
Lofthouse, GeoffreyRobertson, GeorgeYoung, David (Bolton East)
Lyon, Alexander (York)Robinson, Geoffrey (Coventry NW)
Lyons, Edward (Bradford West)Rodgers, Rt Hon WilliamTELLERS FOR THE AYES
Mabon, Rt Hon Dr J. DicksonRooker, J. W.Mr. Hugh McCartney and
McDonald, Dr OonaghRoss, Ernest (Dundee West)Mr. Ted Graham.


Adley, RobertBonsor, Sir NicholasCadbury, Jocelyn
Aitken, JonathanBoscawen, Hon RobertCarlisle, John (Luton West)
Alexander, RichardBottomley, Peter (Woolwich West)Carlisle, Kenneth (Lincoln)
Amery, Rt Hon JulianBowden, AndrewCarlisle, Rt Hon Mark (Runcorn)
Ancram, MichaelBoyson, Dr RhodesChalker, Mrs. Lynda
Arnold, TomBralne, Sir BernardChannon, Paul
Aspinwall, JackBright, GrahamChapman, Sydney
Atkins, Rt Hon H. (Spelthorne)Brinton, TimChurchill, W. S.
Atkins, Robert (Preston North)Brittan, LeonClark, Hon. Alan (Plymouth, Sutton)
Atkinson, David (B'mouth, East)Brocklebank-Fowler, ChristopherClark, Sir William (Croydon South)
Baker, Kenneth (St. Marylebone)Brooke, Hon PeterClarke, Kenneth (Rushcliffe)
Baker, Nicholas (North Dorset)Brotherton, MichaelClegg, Sir Walter
Beaumont-Dark, AnthonyBrown, Michael (Brlgg & Sc'thorpe)Cockeram, Eric
Bell, Sir RonaldBrowne, John (Winchester)Colvin, Michael
Bendall, VivianBruce-Gardyne, JohnCope, John
Benyon, Thomas (Abingdon)Bryan, Sir PaulCormack, Patrick
Benyon, W. (Buckingham)Buchanan-Smith, Hon AlickCorrie, John
Best, KeithBudgen, NickCostain, A. P.
Bevan, David GliroyBulmer, EsmondCritchley, Julian
Biffen, Rt Hon JohnBurden, F. A.Crouch, David
Biggs-Davison, JohnButcher, JohnDean, Paul (North Somerset)
Blackburn, JohnButler, Hon AdamDickens, Geoffrey

Dorrell, StephenKnight, Mrs JillRaison, Timothy
Douglas-Hamilton, Lord JamesKnox, DavidRathbone, Tim
Dover, DenshoreLamont, NormanRees, Peter (Dover and Deal)
du Cann, Rt Hon EdwardLang, IanRees-Davies, W. R.
Dunlop, JohnLangford-Holt, Sir JohnRenton, Tim
Dunn, Robert (Dartford)Latham, MichaelRhodes James, Robert
Durant, TonyLawrence, IvanRhys Williams, Sir Brandon
Dykes, HughLawson, NigelRidsdale, Julian
Eden, Rt Hon Sir JohnLee, JohnRifkind, Malcolm
Edwards, Rt Hon N. (Pembroke)Lennox-Boyd, Hon MarkRippon, Rt Hon Geoffrey
Eggar, TimothyLester, Jim (Beeston)Roberts, Michael (Cardiff NW)
Elliott, Sir WilliamLewis, Kenneth (Rutland)Roberts, Wyn (Conway)
Eyre, ReginaldLloyd, Ian (Havant & Waterloo)Ross, Wm. (Londonderry)
Fairbairn, NicholasLloyd, Peter (Fareham)Rossi, Hugh
Fairgrieve, RussellLoveridge, JohnRost, Peter
Faith, Mrs SheilaLuce, RichardRoyle, Sir Anthony
Farr, JohnLyell, NicholasSainsbury, Hon Timothy
Fell, AnthonyMcCrindle, RobertSt. John-Stevas, Rt Hon Norman
Fenner, Mrs PeggyMacfarlane, NeilScott, Nicholas
Finsberg, GeoffreyMacGregor, JohnShaw, Giles (Pudsey)
Fisher, Sir NigelMacKay, John (Argyll)Shaw, Michael (Scarborough)
Fletcher, Alexander (Edinburgh N)McNair-Wilson, Michael (Newbury)Shelton, William (Streatham)
Fletcher-Cooke, CharlesMcNair-Wilson, Patrick (New Forest)Shepherd, Colin (Hereford)
Fookes, Miss JanetMadel, DavidShepherd, Richard (Aldridge-Br'hills)
Forman, NigelMajor, JohnShersby, Michael
Fowler, Rt Hon NormanMarland, PaulSilvester, Fred
Fox, MarcusMarlow, TonySims, Roger
Fraser, Rt Hon H. (Stafford & St)Marshall, Michael (Arundel)Skeet, T. H. H.
Fraser, Peter (South Angus)Marten, Neil (Banbury)Speed, Keith
Fry, PeterMates, MichaelSpeller, Tony
Galbraith, Hon T. G. D.Mather, CarolSpence, John
Gardiner, George (Relgate)Maude, Rt Hon AngusSpicer, Jim (West Dorset)
Gardner, Edward (South Fylde)Mawby, RaySpicer, Michael (S Worcestershire)
Garel-Jones, TristanMawhinney, Dr BrianSproat, lain
Gilmour, Rt Hon Sir IanMaxwell-Hyslop, RobinSquire, Robin
Glyn, Dr AlanMayhew, PatrickStainton, Keith
Goodhart, PhilipMellor, DavidStanley, John
Goodhew, VictorMeyer, Sir AnthonySteen, Anthony
Goodlad, AlastairMiller, Hal (Bromsgrove & Redditch)Stevens, Martin
Gorst, JohnMills, lain (Meriden)Stewart, John (East Renfrewshire)
Gow, lanMills, Peter (West Devon)Stokes, John
Gower, Sir RaymondMiscampbell, NormanStradling Thomas, J.
Gray, HamishMitchell, David (Basingstoke)Tapsell, Peter
Greenway, HarryMoate, RogerTaylor, Robert (Croyden NW)
Griffiths, Eldon (Bury St Edmunds)Molyneaux, JamesTebblt, Norman
Griffths, Peter (Portsmouth N)Monro, HectorThatcher, Rt Hon Mrs Margaret
Grish, lanMontgomery, FergusThomas, Rt Hon Peter (Hendon S)
Grylls, MichaelMoore, JohnThompson, Donald
Gummer, John Selwyn
Hamilton, Hon Archie (Eps'm&Ew'll)Morgan, GeraintThorne, Neil (llford South)
Hamilton, Michael (Salisbury)Morris, Michael (Northampton. Sth)Thornton, Malcolm
Hampson, Dr KeithMorrison, Hon Charles (Devizes)Townend, John (Bridlington)
Hannam, JohnMorrison, Hon Peter (City of Chester)Townsend, Cyril D. (Bexleyheath)
Haselhurst, AlanMudd, DavidTrippier, David
Hastings, StephenMurphy, ChristopherTrotter, Neville
Havers, Rt Hon Sir MichaelMyles, Davidvan Straubenzee, W. R.
Hawkins, PaulNeale, GerrardVaughan, Dr Gerard
Hawksley, WarrenNeedham, RichardViggers, Peter
Heath, Rt Hon EdwardNelson, AnthonyWaddington, David
Heddle, JohnNeubert, MichaelWakeham, John
Henderson, BarryNewton, TonyWaldegrave, Hon William
Heseltine, Rt Hon MichaelNormanton, TomWalker-Smith, Rt Hon Sir Derek
Hicks, RobertNott, Rt Hon JohnWall, Patrick
Hogg, Hon Douglas (Grantham)Osborn, JohnWaller, Gary
Holland, Philip (Carlton)Page, John (Harrow, West)Walters, Dennis
Hooson, TomPage, Rt Hon Sir R. GrahamWarren, Kenneth
Hordern, PeterPage, Richard (SW Hertfordshire)Watson, John
Howe, Rt Hon Sir GeoffreyParkinson, CecilWells, John (Maidstone)
Howell, Rt Hon David (Guildford)Parris, MatthewWells, Bowen (Hert'rd & Stev'nege)
Howell, Ralph (North Norfolk)Patten, Christopher (Bath)Wheeler, John
Hunt, David (Wirral)Patten, John (Oxford)Whitelaw, Rt Hon William
Hunt, John (Ravensbourne)Pattle, GeoffreyWhitney, Raymond
Hurd, Hon DouglasPawsey, JamesWickenden, Keith
Irving, Charles (Cheltenham)Percival, Sir lanWiggin, Jerry
Jenkin, Rt Hon PatrickPeyton, Rt Hon JohnWilkinson, John
Johnson Smith, GeoffreyPink, R. BonnerWilliams, Delwyn (Montgomery)
Jopling, Rt Hon MichaelPollock, AlexanderWinterton, Nicholas
Joseph, Rt Hon Sir KeithPorter, GeorgeWolfson, Mark
Kaberry, Sir DonaldPowell, Rt Hon J. Enoch (S Down)Young, Sir George (Acton)
Kellett-Bowman, Mrs ElainePrentice, Rt Hon RegYounger, Rt Hon George
Kershaw, AnthonyPrice, David (Eastleigh)
Kimball, MarcusPrior, Rt Hon JamesTELLERS FOR THE NOES:
King, Rt Hon TomProctor, K. HarveyMr. Spencer Le Marchant and
Kltson, Sir TimothyPym, Rt Hon FrancisMr. Anthony Berry.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 ( Questions on Amendments), and agreed to.

Mr. SPEAKER forthwith declared the main Question, as amended, to be agreed to, pursuant to Standing Order No. 18 ( Business of Supply).


That this House welcomes the Government's concentration of resources on the priority tasks within the Manpower Services Commission programmes and its continued commitment to training for our industrial needs; believes that the best way to help the unemployed is to create soundly based jobs; and recognises that restraint on public expenditure is an important element in Her Majesty's Government's policy to achieve this end.