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Enterprise And Employment

Volume 86: debated on Tuesday 12 November 1985

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4.21 pm

With permission, I should like to make a statement on new enterprise and employment measures. Overall provision for the Department of Employment has increased by some £600 million in each of the years 1986–87 and 1987–88 compared with last year's autumn statement. That growth in expenditure has enabled us to increase the number of jobs available under the community programme by 100,000, to introduce the new two-year youth training programme as from April next year, which will ultimately help some 450,000 young people each year and lead to real qualifications for a working life. It will also enable us to fund a range of new measures which I am announcing today.

The cost of those new measures is, of course, included in my Department's public expenditure plans for 1986–89 which were announced a few momemts ago by my right hon. Friend the Chancellor of the Exhequer. These and other increases in our Department's spending are offset in part by a reduction in spending from the redundancy fund.

We propose to bring to an end, for all firms other than those with fewer than 10 employees, the system of sharing part of the cost of statutory redundancy payments through rebates from the redundancy fund. Our intention is that the rebate should not be payable for redundancies which take effect after 31 October 1986. We shall introduce the necessary legislation later this Session.

It is important to stress that that change does not affect employees' entitlements in any way. Employees will be entitled, as before, to redundancy payments from their employer to go to an industrial tribunal if the employer refuses to make the required payment, and, where an employer cannot pay, to receive a payment direct from the Department of Employment.

The rebate has been steadily reduced by successive Governments. It is now 35 per cent. For most employers that is no longer a significant contribution to their total redundancy costs. We believe that that public spending should no longer be used in subsidising redundancy and ought now to be put to better use.

I turn now to our further measures to stimulate enterprise and the growth of small businesses and also to help long-term unemployed people find work.

We have suffered for many years from one of the lowest rates of self-employment and new business creation in the whole of western Europe. That has now changed. We now have more self-employed people than for some 60 years. However, we can do still more to encourage the growth of self-employment and small business by ensuring that both advice and finance are available to the small business man at the right time. We are therefore announcing three measures designed to further those aims.

As far as self-employment is concerned, the enterprise allowance scheme has already helped nearly 110,000 unemployed people since August 1983 to set themselves up in business. We have therefore decided to expand the scheme to a maximum of 80,000 new entrants a year in 1986–87 at an additional cost of £17·5 million —an increase of 20 per cent.

We have already assisted over £500 million of lending to small businesses through the loan guarantee scheme. In order to provide better access to finance and business advice we have now decided to extend the scheme, which was due to end in December 1985, until the end of this financial year while we consider its longer-term future.

We are also increasing significantly the support given in England to local enterprise agencies, which play an important and growing role in providing business advice and practical assistance to small firms at the local level. We are making available an additional £2·5 million for that purpose in 1986–87.

Besides its new responsibility for small firms, the Department of Employment now also has responsibility for tourism. The industry estimates that it is creating over 50,000 jobs a year. Last year some 14 million people visited this country, spending over £4 billion. To ensure that that growth continues, we are increasing the funds available next year to the British Tourist Authority and the English tourist board to £40 million—an increase of about 20 per cent. in the boards' funding. We shall ensure that a substantial part of that money will benefit areas of the country which could attract more tourists and where unemployment is high.

I turn now to our measures to help the long-term unemployed. They are designed to tackle two key problems. The first is that many people who have been unemployed for a long time become demoralised about their ability to find work. The second is that the relationship of benefits to pay can reduce the attractiveness of jobs at the lower end of the wages scale. We propose therefore to introduce pilot schemes to test the effectiveness of two entirely new measures designed to combat those problems. Those pilots will operate for six months from January 1986 in seven different areas.

First, we are asking the Manpower Services Commission to ask long-term unemployed people in the pilot areas to a counselling interview at their jobcentre. The object will be to see whether they can be placed in suitable jobs —including jobs in the expanding community programme—or in existing training courses. In addition, the MSC will be able to offer places on entirely new short training courses specifically designed for those who have been out of work for more than a year. The courses will help to assess their potential and aptitudes, to brush up their basic working skills and to improve the techniques of applying for a job. We shall ask the MSC to cover as many as possible of the long-term unemployed in the pilot areas with those new arrangements so that we can assess their effectiveness.

The second new measure is a job start scheme. This is a radical new approach under which any person in the pilot area who finds a job after being unemployed for at least 12 months will be paid a weekly allowance of £20 for the first six months of employment in addition to his or her wage. The scheme aims to make lower paid jobs more attractive to people on high rates of benefit. The allowance will be available to those who take jobs with a gross income of less than £80 a week. Full details will be announced shortly.

In the improving climate for jobs, we are determined to increase our contact with those long-term unemployed people who may have been losing hope. We have already started the expansion of job clubs, which have so far achieved remarkable success in placing the majority of people who use them. We are writing to all long-term unemployed people inviting them to contact their jobcentres for advice and support and the two pilot measures announced today reinforce our determination to help long-term unemployed people back into jobs.

The range of measures that I have announced today also demonstrates our determination to intensify our efforts to promote enterprise and business growth. We are creating the conditions in which jobs will come and unemployment will be reduced. I believe that today's new measures should have the support of all parts of the House.

Any measures that contribute to a reduction in unemployment will be welcomed by all sides of the House, but there is very little in the statement that will make a real contribution to increasing jobs. The Paymaster General has not made clear how many jobs he estimates will come from the series of measures he has announced. That is what the unemployed want to know—how many jobs will be brought about by this intervention of the Government to reduce unemployment.

Does the Paymaster General accept that his proposals have more to do with massaging the unemployment figures for the coming general election than with increasing real unemployment?

Does he further accept that the community programme to which he referred pays people £65 a week? If any of those programmes are expanded, does he envisage that more will be paid to people in those jobs?

Most of the youth training schemes are not new. Announcements were made about them previously. There is a possibility of 100,000 more YTS places being provided as a result of the announcement that the Paymaster General has just made. Can he tell us whether the quality of the training that young people can expect to receive under the scheme will be more than under the skivvy schemes offered at present? [HON. MEMBERS: "Oh."] The Paymaster General has only to interview YTS people to make a judgment about that. Will compulsion be used to get youngsters into YTS by the implementation of a mechanism to report those who refuse to accept places on such schemes.

The right hon. and learned Gentleman made proposals on redundancy. As the employer will now have to pay the full cost of redundancy, what is the right hon. and learned Gentleman's estimate of the increased number of redundancies, brought about by the Government's policies? While carrying their fair share of redundancy costs, will employers now face an extra charge of £250 million, to finance the scheme that the Paymaster General announced? Does that mean that there might be changes in the national insurance contribution to redundancy payments?

With regard to his proposals on local enterprise schemes, can the Paymaster General tell us whether he is prepared to be as generous in his approach to local authorities that have local employment and enterprise schemes? They have done a better job than many of the private enterprise schemes, producing more jobs, which are often cheaper, of better quality and longer-term. Does the right hon. and learned Gentleman accept that I do not want to knock private schemes? Anything that creates jobs I quite welcome—[HON. MEMBERS: "Quite?"] Will the right hon. and learned Gentleman join me in supporting instead of attacking local authorities that use their resources to create jobs through their enterprise schemes? I hope that he will give us an assurance about that.

Does the Paymaster General accept that his proposals to help the long-term unemployed will be welcomed in the House, but that hon. Members will recall that about 1·3 million people are long-term unemployed, which is more than the total unemployment that the Government inherited from the Labour Government? The House will welcome the right hon. and learned Gentleman's statement that he has recognised that the long-term unemployed are demoralised and not to be attacked. As often happens now, people say that such people do not want to work and are workshy. We constantly hear it from someone in another place.

The new initiative to which the Paymaster General referred is more about reducing wage levels than about meeting the need for real jobs. Does the right hon. and learned Gentleman accept that £20 added to average unemployment pay of about £50 gives a wage level of £70 for the six-month scheme? If that is so, will the scheme be compulsory? If people refuse to go on it, will they lose their benefit? At the end of the six-month period, if a person refuses to continue to work for a wage from which the £20 has been deducted, will he face the prospect of suspension of benefit?

The Paymaster General—[HON. MEMBERS: "Oh, no."] I am sorry. The Paymaster General's statement has many measures in it, and I am entitled to ask at least one question about each one.

The right hon. and learned Gentleman announced an extra £40 million of Government money to increase tourism. There may be more jobs for ice cream salesmen and so on, but does he accept that the reason why more people are visiting this country is to do with the high pound? The reason why people are visiting areas such as the west midlands is that the high pound destroyed the manufacturing base in that area. We find no comfort in thinking that now we must earn our living in the tourist industry.

If the Government's policy is to improve the business climate and create jobs, would not the community be better served with the measures that we have proposed time and again —for example, releasing the £6,000 million held by the local authorities in their housing accounts, resulting in real jobs to meet real need? The Government should be proposing such measures instead of designing policies simply to massage the unemployment figures downwards for the general election.

The hon. Gentleman asked me for estimates of how many extra jobs the package will create. It is important to stress that the background is a rapid growth in new jobs in the economy already. As my right hon. Friend the Chancellor of the Exchequer said, it is estimated that 677,000 new jobs have been created up to March 1983. The package will help to encourage such increases, but we have pilot schemes to discover how much extra job creation will result from some of the proposals.

The idea that the package is designed to massage the figures goes back to a former argument. It is not possible for the hon. Gentleman to sweep aside the extensions to the enterprise allowance scheme and to the loan guarantee scheme, the new money for tourism and the new assistance for people moving from long-term unemployment to their first job, as massaging the figures. The measures are substantial and we believe that all of them will encourage further the process of job creation.

The hon. Gentleman asked how much would be paid to those who go on the community programme. We keep under review the present £63 average figure. The hon. Gentleman will know, even before he leaps into free collective bargaining in this area as in others, that if we increase that average figure too rapidly, we merely reduce the total number of people whom we can assist under the scheme. We are expanding that number rapidly at the moment to 230,000 places.

I am disappointed by the hon. Gentleman's slighting remarks about the youth training scheme. The scheme now has the support of the vast majority of Labour local authorities and a growing number of trade unions up and down the country. I share his concern that we should achieve quality training and provide training that is likely to be at least a first step towards a recognised skill and vocational qualification. If the hon. Gentleman wants me to talk about consumer reaction, I can tell him that all our surveys show that a little over 80 per cent. of young people who go on YTS say that they derive value from it and are grateful for what they obtain.

The hon. Gentleman referred to compulsion in connection with YTS and other schemes. It is not our intention to go in for any compulsion in either training or jobs. We are not changing the rules on entitlement to benefit. The position remains that, as long as people can satisfy the officers that they are genuinely available for work, they are entitled to benefit. The package is concerned with making the opportunities for that work more readily available to more people.

The hon. Gentleman also referred to the effect of the change in the redundancy rebate arrangements. I am sorry, but I do not altogether understand his question. I cannot see how taking away the rebate that goes to employers who make redundancies is likely to increase the total number of redundancies. If anything, it is likely to have the reverse effect. The hon. Gentleman talked about a charge to employers. At the moment it is financed out of the redundancy fund. Therefore, the present arrangements, which we regard as obsolete, are a sharing of the pool of cost of redundancies so that the more successful businesses tend to subsidise the less successful businesses.

Any question of changes in national insurance charges will have to come much later, because the immediate impact in the coming year is negligible. My right hon. Friend the Chancellor has made clear our decision on national insurance charges for next year.

We are greatly increasing support for local enterprise agencies. They provide advice and support, and sometimes manage workshops. They intervene directly and helpfully in the business creation process. I shall reserve for a later occasion the debate about the good work of local authority enterprise boards which, compared with the hon. Gentleman's description, I find at the least variable. I am not at all sure that the policy of some of the local authority enterprise boards, of investing ratepayers' money directly in somewhat dodgy financial businesses, is altogether a good rival for our local employment agencies.

As regards the long-term unemployed, we all agree on the need to tackle the problems of over a million of these people. The fact that we now have an improving climate for jobs makes it easier for us to do so. What we are doing is re-establishing contact with them all, because some of them may well have assumed that no jobs can be found for them, and, when we have established contact, offering them a range of services, job experience, training and the kind of support offered by job clubs and so on that will make it much easier for many of them to find jobs. A higher level of vacancies is being notified to jobcentres than at any time since 1980. The job clubs in some difficult areas, such as the one in Middlesbrough which I visited last Friday, have had a great deal of success in placing long-term unemployed men and women in jobs.

The trouble with the long-term unemployed, as the job market improves, is that their own lack of recent work experience makes them less attractive to employers. Hence the job experience schemes, community programmes and the £20 payment that we are introducing. The latter means that the plunge from high levels of long-term benefit to income is cushioned, particularly if the job taken in the first place is a low paid one. After six months, we hope that the new employee will have so established his attractiveness to his employer that any loss in income would be made up, or that the six months' job experience will make him a much more attractive potential employee to others. Because we do not know how many new jobs it will create, we are introducing this as a pilot scheme in six or seven areas. We believe it to be a radical, new, imaginative idea to speed up the process of getting the long-term unemployed back to work.

Is my right hon. and learned Friend aware of the warm welcome on the Government's side of the House for the tone and content of his statement this afternoon? Will he tell us more about the pilot areas? Are they to be geographical areas only or concentrated on particular industries—for example, textiles?

First of all, geographical areas: one in Scotland, one in Wales and five in England. Their exact locations are to be announced shortly by my right hon. Friends the Secretaries of State in the case of the two other nations and by my hon. Friend the Under-Secretary in the case of England.

If these measures are to be effective at all, both for the long-term unemployed and others, is it not the case that new training places will have to be found or existing training facilities will have to be increased? Is more money to be devoted to that? Will those training centres or skillcentres, prevented from receiving Government increases, now be able to apply for the funds for which they asked six months, 12 months, or two or three years ago, when they were attacked or closed down by the present Government?

The total amount that we are spending on the introduction of the new youth training scheme is rising rapidly and will reach over £1 billion by the time the two-year scheme has built up to its full level. As regards skillcentres, there has recently been rationalisation of them, but the total amount of training available to adults in this country remains slightly higher than before.

Is my right hon. and learned Friend aware that there will be a very wide welcome throughout the country, and certainly among objective observers, for his increase in and expansion of the enterprise allowance scheme, which has been outstandingly successful in helping new entrepreneurs in the difficult first year of starting a new business? May I also welcome his announcement of a permanent place for the loan guarantee scheme in the armoury of help to growing businesses? It has been very cost-effective. Will my right hon. and learned Friend also tell the House that he will undertake a review of the detail of the scheme, particularly the fact that the money provided under it is very expensive? If he could reduce the premium, it would be a great help to the growing businesses that we all want to see expand.

I am grateful for my hon. Friend's support in pressing for the extension of the enterprise allowance scheme. It has been remarkably successful in helping people through the first year of business. For every 100 business men helped in this way, we find at the end of a year about 65 extra jobs created as they take more people into the new business.

I am also grateful for my hon. Friend's support of the loan guarantee scheme, which will be extended to give us time to review precisely those details of the present operation of the scheme to which he drew attention. I agree that the disincentive effect of the premium and other, connected matters are something to which we shall have to give our urgent attention and reach decisions.

Some of the palliatives that the Paymaster General has announced on behalf of his noble Friend will undoubtedly provide valuable but mostly temporary help to a relatively modest number of the unemployed. Will he say why his noble Friend has treated the 1·3 million long-term unemployed to these tiny crumbs? Will he explain why there are just seven pilot schemes when the needs and problems of this growing army of long-term unemployed are sufficiently known? Why this limiting of the scheme to a gross wage of £80 a week? Will he specifically say whether that must be a full week or whether this is a scheme to encourage the Government's favourite ploy of part-time jobs? Why six months? What magic transformation is likely to occur in six months?

On the problem of skilled men who have been unemployed so long that they worry about the decay of their skills, why are they exempt from a scheme that is so very limited in the maximum gross pay that is permitted?

First, this is a joint statement by my right hon. and noble Friend and myself. I trust that in another place he will not find people so desperately trying to minimise the impact of the package that we have announced.

I am glad, however, that the hon. Gentleman welcomes the two new measures to the extent that he wishes them to be introduced all over the place now, rather than waiting for us to try them out in seven pilot areas. This Government like to try out the effectiveness of new schemes before we introduce them everywhere. I realise that the Liberal party finds it easy to discover new ideas and sell them instantly, overnight, like a magic cure-all.

While I welcome these measures as an indication that the Government are prepared to leave no stone unturned, will not my right hon. and learned Friend accept that the greatest contribution to be made to job creation is by private employers ensuring that there is wage restraint throughout the economy, and that if wages simply kept pace with inflation instead of constantly outstripping it we would see the creation of something like half a million new jobs every year?

There has to be a relationship between wages on the one hand and inflation, productivity and performance on the other. I agree with my hon. Friend that if wages are allowed to outstrip the productivity improvement and performance of individual businesses, a great deal of this job creation programme will be put at risk. That is the message that we constantly reiterate. It is one to which the alliance parties offer the solution of some kind of inflation tax and a pay norm for everyone, and on which the Labour party remains uncannily silent when it comes to any discussion of employment.

Will the Paymaster General seriously consider putting more resources into the community programme to improve it and, in particular, to enable him to increase the allowance of £63? This would enable him to include family men who at the moment cannot be accommodated by the scheme.

The average payment allowed under the scheme is £63. As I have explained, while we are reviewing it, the difficulty is that if we dramatically increase it we may reduce the number of places under the scheme. [HON. MEMBERS: "Why?"] Within a set total. We shall review that allowance but it is important not to allow the scheme to be diverted into spending more money on fewer recipients.

I am grateful to the hon. Member for his support for the programme and his emphasis on improving the quality of it. We are taking steps to ensure that the work done under the community programme is of distinct benefit to the previously unemployed people working on it and also of benefit to the community. We are aiming to raise the quality of the work done under that programme.

I thank my right hon. and learned Friend for his statement, particularly coming after a further statement on selective investment for which many of us have pressed for some time. I congratulate him on the imagination shown in the range of measures brought forward and on trying new things such as the £20 premium. Can he assure us that, when we reach out to the long-term unemployed, an essential thing for which many of us on the Government Benches have been pressing, and which we support, the services of the Manpower Services Commission will be available in correct measure and talent to guarantee that they will be given the best possible counsel?

I am grateful to my hon. Friend for his comments and I share his welcome for the measures in the autumn statement, which confirm our continuing commitment to a proper level of capital expenditure in our financial planning. I also confirm that the Manpower Services Commission will be greatly involved in providing the quality of advice and service that is required by long-term unemployed people. We shall be taking steps to make sure that the necessary provision is made by way of resources, staff and preparation so that that proper advice and support is forthcoming.

Is the right hon. and learned Gentleman aware that the reference in his statement to the long-term unemployed and the implications of his statement represent a calculated insult to the long-term unemployed? [Interruption.] Is he not aware that when it comes to being skilled in filling in job application forms, the long-term unemployed are experts; they fill in hundreds of application forms and receive the same answer all the time. That is why they are the long-term unemployed.

I invite the Minister to visit my constituency, where we have suffered the closure of Kineal colliery, the decisions by the BP refinery to pay off 300 people, by BP Chemicals at Grangemouth to shed 300 jobs, by ICI to shed jobs, by the Grangemouth Whisky company to pay off people, plus a threat to Grangemouth docks as a result of the closure of Gartcosh. Will the right hon. and learned Gentleman come to my constituency and tell the long-term unemployed where they should send the forms once they have filled them in?

I do not underestimate the problems faced by people who live in areas that have undergone profound change in the nature of employment locally, as the hon. Gentleman described, and that is one reason why we are putting more effort into bringing back fresh jobs, even in areas such as tourism, hotels, leisure and so on, which are derided by his Front bench spokesmen—[Interruption.] Opposition Members deride it because it is not unionised. That is why they resist the growth of employment in tourism, leisure and related industries.

In relation to helping the long-term unemployed in difficult areas, I invite the hon. Gentleman as soon as possible to take the opportunity to visit one of the organisations that bear the unusual American-created title of job club, as I did on Friday, and meet some of the long-term unemployed as they settle down, with support and help, to make repeated applications for jobs with the advice that the MSC can give them. Where we have tried them so far, in difficult areas, about three-quarters of those who have gone through the organisation have found themselves in jobs. It is encouraging to find how high is the morale and to note the support that they give each other as well as the support that they derive from the jobcentres.

That all helps to enable them to get their way back into a job market that is steadily improving. I cannot understand why any steps of this kind should be dismissed by Opposition Members. Do they wish us to give advice and support to the long-term unemployed, or just leave them alone and pay benefit?

Is my right hon. and learned Friend aware that his welcome initiatives today will be applauded in areas such as the north-east of England, which have suffered particularly severe economic and unemployment problems and which historically have had a low percentage of self-employed compared with the average in Britain? Will he take a special look at the well-publicised claims of the north-east in regard to tourist potential and the growth that could be achieved in that industry with sufficient help centrally?

I hope that through the measures that I have announced and those that we have already taken, through the city action team in Newcastle and Gateshead and the Cleveland initiative that we are taking on Teesside, we shall be giving assistance to the north-east. I agree also with my hon. Friend in the emphasis that he placed on tourism because that is an area with considerable tourist attractions but also high unemployment.

At present, too many overseas—indeed, British—visitors tend to pass through, perhaps with a short stop at Durham, and then head north to Edinburgh from London. We must do something to detain them longer in the north-east and provide the services that will create jobs and wealth for the local economy.

Is the Minister aware that two former Tory Prime Ministers, the churches, a Select Committee of the House of Lords, chambers of commerce throughout the country, the trade unions and nearly 4 million unemployed people are telling the Government that their policies are not working, that the manufacturing base is in decline and that the economy is in tatters? Is he aware that it is pure arrogance on the part of the Prime Minister and her puppets to say that Conservative policies are working? His statement today is just another pathetic attempt to delude the unemployed.

The hon. Gentleman extracts a simple message from a large number of people allegedly giving it. I find that a cacophany of opinions comes forth from the various bodies to which he referred. It will not do, every time the Government explain that we have had five years of sustained growth in the economy, rising output in manufacturing, record levels of fixed investment and new jobs being created, for Opposition Members to say that that is just a palliative. I suggest that the expression of the hon. Gentleman is simply an expession of his political disappointment as he sees that things appear to be getting somewhat better.

May I offer a warm welcome to my right hon. and learned Friend on his initiative in supporting tourism. Will he ignore the snide remarks of Opposition Members on this important matter? Will he from this calculate how many jobs are provided through the building industry and manufacturing of various kinds in support of tourism?

I shall try to obtain the figures that my hon. Friend describes. I am sure that she is right to say that, as soon as one goes to Plymouth in the south-west, one finds that the remarks of Opposition Members on the subject of tourism are treated with total derision, because it is already an important source of employment of all kinds throughout that locality and could be the source of many more jobs.

Welcome though many of these measures are, is the Minister aware that some of them will be regarded as dealing with the symptoms rather than with the cause of the disease? As the youth training scheme deals with one of the causes of the disease, will he agree that if its status and value are to be improved, it will have to become a recognised qualification that can be used to enable youngsters to go on and obtain further qualifications? Will he discuss the matter with the Secretary of State for Education and Science and seek to bring that about at the earliest possible opportunity?

I can certainly say yes to the substance of that question. It must be our aim to introduce good quality youth training schemes, because youth training must become a permanent part of the preparation of many of our young people for work if we are to have a modern and developed economy. I look forward to contributions that press us towards attaining that quality. It is a pity that some people are still prepared to dismiss the whole idea and not see the way in which a modern economy should go.

Is my right hon. and learned Friend aware that his statement about the extension of the community programme will be warmly welcomed by my constituents? That welcome will extend in particular to one aspect of the package—the facility for voluntary organisations to take on additional staff under the community programme. Will he undertake to give the matter broader publicity?

I shall certainly take up that invitation because there is great scope in that area—so long as we make sure that the voluntary bodies that provide places under the community programme provide places in work that will be of continuing use to the unemployed. Many of the voluntary bodies that we have in mind provide a great deal of personal service. That service requires considerable organisation, and those bodies seem to have great scope for providing places under the community programme.

Is the right hon. and learned Gentleman aware that the problems of the long-term unemployed in a traditional industrial district such as south Yorkshire have been exacerbated by the emergence of a poverty equilibrium of low income, poor educational attainment, poor retraining facilities, poor public amenities and now the emigration of skilled and semi-skilled workers? Will he tell the House how even one of his measures will correct one of those conditions?

The enormous expansion of youth training, in particular, and the training initiative, has been aimed at that very problem in the last six years. I agree that in an area such as south Yorkshire, we must ensure that the level of skills is available so that the area remains attractive to new investment and employment.

I welcome my right hon. and learned Friend's statement and in particular that part of it dealing with local enterprise agencies and enterprise allowance schemes. Will he agree that we have the best ever climate for small businesses and the most comprehensible package to help those businesses? However, will he urge the Secretary of State for Defence to introduce a scheme of voluntary service in the armed forces to complement the community programme?

I agree with my hon. Friend's remarks about the climate for small businesses. The creation of new small businesses has been reasonably sucessful and has provided more employment opportunities. However, there is further to go. In many economies equivalent to ours, more people are employed in small businesses in proportion to the total work force than occurs in Britian. I shall refer my hon. Friend's final point to my right hon. Friend the Secretary of State for Defence to ascertain whether there is enthusiasm in the armed forces for a voluntary service.

Some of the measures announced today will be welcomed by some, although too few, of the long-term unemployed. Is the Paymaster General aware that undermanning in many jobcentres means that the support and advice that he wishes to offer to the long-term unemployed is simply undeliverable? Jobcentres such as the one in my constituency are so undermanned that the staff are scrabbling to keep pace with the paperwork and pointing applicants towards the notice board. It is wholly out of the question for them to offer advice. Unless the Minister gives the MSC more resources, some of the measures announced today will be meaningless.

We constantly try to make sure that the resources and staffing available to the MSC match its responsibilities. Resources available to the MSC have increased remarkably in recent years, but we have a duty to ensure that the resources are used in the best way and with the best value for money. Therefore, the staff required must be continually assessed. I hope that we get the balance right in Yeovil and elsewhere, but we must not reach the point where our main effort in creating new jobs is creating posts for the employees of the Manpower Services Commission. We shall endeavour to recruit the numbers required.

My right hon. and learned Friend will know how much his visit to the Lingdale YTS centre and the job club in Middlesbrough was appreciated. His announcement about the £20 for the long-term unemployed will also be appreciated. One thing that we seek is improved facilities for those have have just become unemployed and who wish to move. Would my right hon. and learned Friend consider easing the rules and regulations to assist those who could take jobs in other parts of the country before they become long-term unemployed?

I was impressed by the Lingdale training centre which is in a depressed area. That gives the lie to some of the comments of Opposition Members, who have said that there are no prospects in such places. Young people are acquiring skills in those centres that will greatly improve their job prospects in the neighbourhood. I welcome my hon. Friend's interest in people who wish to move about the country to obtain work. We shall review the effectiveness of our geographical mobility scheme. Mobility of labour is important; the problem lies in housing policy as much as in employment policy.

The right hon. and learned Gentleman told my hon. Friend the Member for Falkirk, East (Mr. Ewing) to think about tourism in Grangemouth. The right hon. and learned Gentleman referred to money for the English tourist board, but there was no mention of money for the Scottish tourist board. Is this because the Secretary of State for Scotland has been making cuts, or is there no money available?

I announced money for the British Tourist Authority and the English tourist board. That is the full extent of my responsibility. I shall pass the matter to the Secretary of State for Scotland, who I believe will make a similar statement.

My constituents will welcome the statement on tourism and especially the increased budget for the tourist boards. In addition to our famous Nottinghamshire miners, my constituency has the heritage of Sherwood forest and Robin Hood. Only recently there was an announcement about the development of a £25 million holiday village, which will create 300 new jobs. It is an insult for the Opposition to rubbish tourism as a job creator.

As someone who is almost a denizen of that forest, I entirely agree with my hon. Friend's remarks. I hope that the hon. Member for Kingston upon Hull, East (Mr. Prescott) need never visit the area when the jobs are in place to repeat his remarks about ice cream salesmen. The jobs are real and valuable. The hon. Gentleman would obstruct investment.

May I remind the Minister that young blacks and Asians in inner cities such as Birmingham, are trebly disadvantaged when they try to find work, especially against the background of the inner city riots in the summer? What is in the statement to offer them hope of jobs?

First, I rather agree with the hon. Member's analysis. As he knows, we are reviewing our policy on inner cities. A huge amount of money is expended by central Government in the inner city areas, where every possible support is needed to enable disadvantaged young people to get jobs. We must ensure that that money is spent to the best advantage to produce the maximum benefit for the residents and to get to the root of the problems the hon. Member described.

May I mention one problem with the community programme? To be eligible for the community programme one must draw unemployment benefit or supplementary benefit. A redundant steel worker or mineworker who has invested his redundancy payment wisely and prudently cannot benefit from the community programme. I ask my right hon. and learned Friend to consider this issue. It is unacceptable to have long-term unemployment in a constituency such as mine, or in a mining constituency, just because large redundancy payments preclude people entering the community programme.

I shall consider that question. However, I believe that recipients of unemployment benefit as well as those of supplementary benefit are eligible for the community programme. —[HON. MEMBERS: "No."] We foresee litigation about the benefit rules relating to the community programme. I shall consider the problem raised by my hon. Friend when I review the outcome of that litigation.

Will the redundancy payments mentioned by the Paymaster General affect people in small firms that have gone bankrupt? Will the Minister assure the House that redundancy payments will still be made in such cases? The top-up payment of £20 will reduce the payment of supplementary benefit and housing benefit. May we have a report to the House on how the pilot schemes have worked?

The hon. Gentleman raises an important point. The entitlement of the individual worker will not be affected. The workers in a company that has gone bankrupt, or that can no longer meet its statutory obligations on redundancy, will still be entitled to look to the redundancy fund and the Department of Employment for the payment of their legal entitlement. Details of the payment to be made to the long-term unemployed who go into work—those mentioned by the hon. Gentleman are all relevant—will be announced in the near future.

Does my right hon. and learned Friend accept that the British tourist industry will warmly welcome the initiative that he has announced? Will he confirm that the increase in funding to the British Tourist Authority and the English tourist board is the full amount suggested by the ETB chairman? Will he also confirm that the chairman estimated that, were he to receive that and additional funding, he could create 10,000 new jobs? Can the Minister give us some idea of exactly where—he mentioned the beach resorts, which I welcome—the additional money will be deployed? Finally, will he confirm that tourism creates not only ice cream salesman jobs, but real, long-term jobs in construction, the steel industry and the linen industry?

The sum that I mentioned was the amount for which the chairman asked. The chairman, who has considerable expertise in such matters, and no doubt with the support of his board, estimated the new jobs that would result. We are discussing with the boards the precise deployment of the moneys that we have made available. I have already mentioned the emphasis that we shall place on regions with high unemployment. My hon. Friend concluded with some perfectly valid points. I hope that today's exchanges, and the support that we have given the tourist boards, will stop people making flippant and hostile remarks about tourism.

Will the Paymaster General acknowledge that those of us who represent constituencies with fragile rural economies will give an unqualified welcome to the added priority given to tourism—provided, as the hon. Member for Linlithgow (Mr. Dalyell) made clear, that extra cash is available for Scotland? Will the Paymaster General accept that the Labour spokesman, the hon. Member for Kingston upon Hull, East (Mr. Prescott) speaks only for himself and the Labour party, and not for the alliance, when it comes to the importance of tourism?

I shall ensure that the Scottish position is made clear as rapidly as possible by those with more responsibility than I have for these matters. I endorse what the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) said. One need only look at the seats represented by the Liberal party and the Social Democratic party to realise that no hon. Member from either of those parties is likely to join in Labour's attack.

Order. I will allow questions to continue for another five minutes. We have a very heavy day ahead of us. If questions are short, everyone may participate.

In connection with the pilot areas for the operation of the new counselling service for the long-term unemployed, will my right hon. and learned Friend ensure that at least some areas of severe skill shortage are included in that scheme as they contain significant numbers of long-term unemployed people and the scope for helping people into jobs through counselling may be greater there than in some other parts of the country?

I appreciate that extremely valid remark, which is particularly relevant to my hon. Friend's constituency, where the problem is finding sufficiently skilled people to maintain the expansion of firms.

My right hon. and learned Friend is to be congratulated on his valuable statement. Will he ensure that the extra funds available to the BTA have a compensatory balance factor to allow for adverse fluctuations in sterling? Will he also ensure that attractions are stimulated in Yorkshire and the north of England to draw more tourists away from London and the south? Will my right hon. and learned Friend further ensure that the grants given under section 4 are dealt with speedily so that we can get new jobs into place as soon as possible?

If my hon. Friend had asked my right hon. Friend the Chancellor of the Exchequer a few moments ago whether any of the public spending provision could be made subject to movement in the exchange rates, he would not have got a sympathetic answer. It is impossible in public finance to budget on that basis. I am, however, sympathetic to my hon. Friend's point about the present uneven distribution of job opportunities in tourism and leisure. The Government intend to bear that in mind when discussing how the money should be distributed.

I am sure that these measures will be welcomed in parts of the north-west with high long-term unemployment. Is my right hon. and learned Friend aware of the good reception being given locally to a pilot scheme in Bolton to provide guaranteed jobs for those who have been out of work for three years or longer?

I am aware of that and I am grateful to my hon. Friend for keeping me in close touch with the progress of that pilot scheme, which will have a much wider interest if its success continues.

Is my right hon. and learned Friend aware that in the Lake District, we realise that thousands of genuine jobs depend on tourism? Will he ensure that the extra resources available do not go to Hull but come to places such as the Lake District where we are not snide and sneering about such jobs?

I have known Labour local authorities who disbursed their public funds according to the majorities of their members in different parts of the local authority area. The Government do not do that. They are as concerned with the unemployed people in Hull as they are with those in the Lake District. Nevertheless, we propose to make good use of the funds available.

Will my right hon. and learned Friend accept my congratulations on the extremely interesting package he has announced today? When will he introduce legislation which is directly relevant to small businesses and to local enterprise agencies?

We do not need primary legislation for any part of the package that I have announced today, except for the changes on redundancy rebate. The other parts will be brought into effect as soon as possible.

I too welcome my right hon. and learned Friend's announcement. Will he address himself to two problems? First, in areas such as Bristol, places on existing youth training schemes have not been filled. A similar point was raised by my hon. Friend the Member for Slough (Mr. Watts). Secondly, will my right hon. and learned Friend consider contacting companies that are announcing substantial expansion, to which the Opposition have not referred, such as Peugeot in Coventry, Farm Machinery in Doncaster and Nissan in the north-east, and ensure that they consider expanding the number of training places? The Government should assist with those places.

There is a surplus of youth training scheme places in most localities. It is important to retain some surplus because it gives more choice to would-be trainees, enables us to match their individual needs and gives some flexibility. Although we must ensure that we are not financing more places than necessary, the surplus gives us an opportunity to raise the quality of the training.

I note what my hon. Friend said about new firms and agree that the Government must ensure that the many firms that are expanding should be enabled to increase their contribution towards the training effort.

Is my right hon. and learned Friend aware that extra help for tourism and small businesses, will be very welcome in my constituency? Will the expansion of the community programme allow him to consider removing the anomaly of those who are long-term unemployed and not drawing social security benefit—often because they have a working wife—not being allowed to apply for a place on the community programme?

I am grateful to my hon. Friend. It is important to recognise that in a modern, developed economy such as ours, positive steps must be taken to accelerate the growth of new jobs in small business, through self-employment and in new industries such as tourism and leisure. The Opposition too often look back to the traditional pattern of industry where their political base used to lie. That is why they are so resistant to developments in those areas.

The Government continue to review the benefit rule in relation to access to the community programme. It is important that there are rules to enable the Government to target the opportunities of the community programme on those who have been unemployed principally because they have lost a previous job.

May I warmly congratulate the Paymaster General—[HON. MEMBERS: "Hear, hear."]—on his discovery that people who have been unemployed become demoralised by their inability to find work? Will the Paymaster General ensure that that revelation is passed on to the chairman and vice-chairman of the Conservative party?

Will the Paymaster General explain to the House what he meant when he said in his statement that the job start scheme will be concentrated on people on high rates of benefit? Does this mean that those who have been unemployed for a long time will not qualify for this new scheme? Will the people who qualify for this new scheme receive family income supplement? Are not the Government simply switching resources from one area to another?

We tested the scheme's effectiveness within pilot areas and all those who have been unemployed for more than 12 months will be eligible for this new payment. The hon. Member for St. Helens, North (Mr. Evans) mentioned the impact that will have on taxation, family income supplement and other matters affecting the beneficiary. All these matters will be dealt with in a more detailed statement as soon as possible. The Government's aim is that all those people will receive an additional £20 in their pockets to enable them to move from benefit to employment.

My "discovery" is not a new one. While looking at the Opposition during the statement by the Chancellor and during my own statement, I discovered that there is a growing sense of demoralisation among some underemployed ex-Ministers on the Opposition Benches. Perhaps they will be able to take advantage of the services offered by the Government.