§ 2.24 a.m.
§ Mr. Frank Hooley (Sheffield, Heeley)
Unemployment is a curse. It is socially indefensible, and it is economic nonsense. But it has a particular evil for young people. This is the problem that I want the House to pay some attention to this evening.
Overall, the unemployment figure is about 1,500,000 but within that figure 708,000 are under 25 years of age. Within that figure 93,000 school leavers were unemployed last month. The trouble is that unemployment hits the most vulnerable hardest.
From January 1972 to January 1977 there was a 120 per cent. rise in the number of 16–17-year-olds unemployed in Great Britain compared with a 45 per cent. rise overall in unemployment. In 1970, 35 per cent. of the young unemployed were girls. This rose to 49 per cent. in 1977. A much more frightening statistic is that the number of young black people unemployed trebled between 1973 and 1977.
723 This problem is not only one of particular categories of boys and girls. It is a geographical problem, too. In the inner cities, the population is of the order of 7 per cent. of the total, while the number of unskilled people in those areas is about 12½ per cent. One of the difficulties which will compound the problem in the next few years is the rising population trend.
The Manpower Services Commission, in its report "Young People and Work" of May 1977—for the sake of brevity, I shall refer to it as the Holland Report—gave some figures. In 1977, the number of school leavers coming on to the labour market was 671,000. Next year, it will be 689,000. In 1979, it will be 703,000. In 1980, it will be 718,000. In 1981, it will be 725,000. So, in four years we shall have to deal with a labour demand by school leavers which has increased by 50,000, which is a formidable problem in itself, quite apart from the trends and difficulties of finding work for young people.
This raises the fundamental argument about whether the problem that we now face in relation to the unemployment of boys and girls is what is called cyclical—that is, simply a function of the downward trend in the economic recession—or structural, which is whether we are facing a problem in which, owing to our present economic arrangements and industrial development, something has gone wrong with the structure of our employment pattern and we face a much more intractable problem than even the very serious problem of the downturn in the economy.
I quote from the admirable Seventh Report of the Expenditure Committee, dealing with the job creation programme. In paragraph 19 on page 16, it says:As a result of this shift in view from a cyclical to a structural theory of unemployment, which is echoed by many other authorities, it is urgent that we should think about the unemployment problem in terms of policies for the next few years, not the next few months.What are the factors which are making this problem so difficult and so challenging? First, there is the change in the technological and occupational base of industry. Industry is demanding more highly skilled people. It is becoming more capital-intensive, even in our own 724 society, which is somewhat backward compared with West Germany, Japan or the United States. The technology is changing and becoming more sophisticated, and the demand for skilled people is higher, whereas the demand for the unskilled is less. In fact, it is a curious irony that even today, with so much high unemployment generally and amongst school leavers particularly, there is still a shortage of skilled workers. There is a shortage in Sheffield at the moment.
Secondly, there is a tendency for older people to stay longer in the same employment. Some of this derives from the very proper legislation that this House has enacted in terms of security of employment, redundancy payments, and so forth.
Thirdly, there is a comparative lack of mobility among younger workers. One may think that the young are foot-loose and can go here and there in search of jobs, but in practice they live at home with their families and are not as mobile as people sometimes imagine.
Fourthly, and extremely important, there is the enormous importance of the public sector as an employer. Unfortunately, the policies of the Chancellor of the Exchequer in this respect in restraining and even cutting back the growth of certain important areas in public services and even in public corporations have a serious repercussion on jobs overall which plays back into the job opportunities of young people.
The Manpower Services Commission's forecasts of posisble figures of youth unemployment over the period 1978–81 make extremely grim reading. The graph shows that the possible peaks in that period range from 250,000 to 350,000 unemployed young people, and even the troughs—the immediate outflow from schools and the gradual absorption into the labour market from Easter to the autumn—show figures of between 100,000 and 200,000 in the 1978–81 period. Therefore, if the Manpower Services Commission's figures are right, we are faced with problems of having between 150,000 and 300,000 boys and girls unemployed in each of the next three or four years.
I do not want to give the impression that I am unaware of any of the very important programmes that the Government have launched in the past couple 725 of years in order to cope with various aspects of the problem.
First of all, there is the question of training in industry through the Training Services Agencies and the Industrial Training Boards, on which £121 million has been spent. In the current financial year 41,000 places have been made available through the training services programme.
Secondly, there is the Training Opportunities Scheme—TOPS—which applies to older workers as well as youngsters. This has cost £10 million and has given training opportunities to some 13,000 young people.
A much larger scheme is the job creation programme. This is coming to an end at the end of this year, although it will be replaced by other schemes. It has cost £130 million, and by March this year it was estimated to have provided 68,000 job opportunities. Unfortunately, there has been a decrease in the numbers of young people involved in the scheme—from 57 per cent. in the earlier days to 40 per cent. currently. Apparently only 20 per cent. of those involved in the job creation programme have been girls. Nevertheless, it has done valuable work, as was indicated by the Expenditure Committee's report.
I quote one particular scheme in Sheffield. This involved the creation of Sheffield's first new park for 40 years. A local planning officer commented:There were tips of rubbish, four-foot high weeds, brickwork and stone scattered about, it was an eyesore.Altogether some 350 people have had jobs on the project. A formal entrance garden has been made, miles of new paths laid, a cycle speedway created and four football pitches have been drained and improved.One of the main improvements has been the planting of more than 67,000 trees and bushes. During the next few years, with continued maintenance, it will keep on improving as trees and bushes become more established and we will have another park to be proud of.An extra bonus is the fact that, of those who worked on the project, about 50 are being offered permanent jobs—some in the park they created.That indicates that the job creation scheme in some respects and in some areas has had a valuable and permanent spin-off.
Then there is the work experience programme, which cost £19 million and provided 726 about 16,500 places for young people. Under this heading about 55 per cent. of those involved were girls, thus offsetting the lower percentage of those benefiting from the job creation programme.
Apart from the specific training and work schemes, there have been major subsidies. The youth employment subsidy for boys and girls under 20 placed 12,500 young people and cost £3.7 million. The much wider scheme, affecting adult employment, as well as youth employment, was the temporary employment subsidy, which will cost £430 million to March 1978 and may have saved some 400,000 jobs. Again, this is a scheme which has some value in Sheffield. I quote this time from the Morning Telegraph:A Sheffield firm and nearly 80 jobs have been saved by the Government. Workers at Chapeltown dishwashing machine and catering equipment manufacturers, Dawson MMP, have been told that the firm's application for a temporary employment subsidy has succeeded. Redevelopment plans, which could mean new jobs next year, will now be able to start as hoped.Unfortunately, there are serious and alarming suggestions that the temporary subsidy is being threatened by the Brussels bureaucracy. Whether that is true I do not know, but, if it is, I sincerely hope that any such threat will be firmly and absolutely resisted by our Ministers. The temporary employment subsidy has been widely praised as a valuable technique for preserving jobs and, incidentally, holding skilled workers in firms where they will be useful as the economy expands, and it would be quite outrageous if this scheme were to be destroyed because of some technical pedantic objection from the Brussels machine. I hope that my hon. Friend the Under-Secretary of State can give us an assurance about that.
The Government have gone further than these various schemes and haw asked the Manpower Services Commission to provide a more comprehensive scheme drawing together the individual programmes and ideas. This was published by the Manpower Services Commission in May this year under the heading "Youth Opportunities Programme", but perhaps it is more generally known as the Holland Report. The intention is 727 to draw the experience of the job creation programme and the other subsidies and schemes into something more comprehensive to tackle more systematically the problem of youth unemployment.
Broadly, there are three heads in the Holland Report. First, there is the proposal to provide various preparatory courses to prepare young people for going into work, perhaps giving them a bit of help, advice and encouragement on how to present themselves and sell themselves to employers. These courses will last anything from two to 26 weeks. Then there are actual work experience courses either with employers or with various training projects or community service. These courses will vary from six months to one year in duration. Third, there are incentive training grants and Community Industry schemes, which will last for a year.
The total throughput, as it is rather inelegantly put in the report, of young people in these schemes is estimated to be 234,000 in the course of a year, at an annual gross cost of £168 million, though the net cost will be somewhat less because one has to offset the unemployment pay and other social benefits to which the young people would otherwise be entitled.
This is an ambitious and sophisticated scheme. I suspect that it may well be one of the most sophisticated efforts among the EEC countries as a whole, if not in the world. I wish to say nothing which would denigrate it or suggest that it should not be pursued, but I fear that it is not drastic enough to cope with the formidable problem which we shall face in the next two or three years and which the Manpower Services Commission's own figures reveal to us.
The scheme has three or four weaknesses. First, for individuals—I realise that the proposals can extend year by year—the projects are short term. Most of the courses or work experience schemes will last for six months or less, although in some cases they will be for a year. Boys and girls who get involved in the various schemes are faced with the prospect that they may be in a scheme for three months to a year but then what happens? They have been trained or had work experience but then they are back on the roundabout.
728 The work experience programme, which actually involved boys and girls with employers and which I regard as the most important idea within the whole report, will cover only about 60,000 within the total of 234,000 boys and girls involved at a cost of £28 million out of the total of £168 million. I should like to have seen that principle much more strongly embedded in the scheme and I shall speak more of this later.
There is also the basic point that young people want a job. They want to be at work and not shunted around from this, that and the other course and at the end find that they are still unemployed and with nothing to do. I discussed this matter with an officer of the Training Services Agency. She said "It is quite clear that those who have been on schemes or have been unemployed want only employment. They are simply not prepared to consider any other alternatives." That may be a rather strong way of putting it but there is a lot of force in that. It is true that offering people courses, training and preparation is useful but the boys and girls want a job.
Another weakness of the Holland Report is that it does not basically compel employers and trade unions to face up directly to their responsibilitites for the unemployed boys and girls, except in the case of the work experience programme, which forms but a small part of the whole scheme. Holland asks a whole series of Government agencies—capable civil servants and training service officers, of whom I make no criticism—to try to grapple with this terrible problem of 200,000 to 300,000 young people without work, while the people who should be forced to grapple with it directly and immediately are the employers and trade unions within the trades and industries involved.
In the not-too-distant future we shall be forced to adopt a much more drastic plan. My proposals would be along the following lines. I am assuming that the total number of unemployed 16-19-year-olds—that is, those above 16 years and under 20—will be about 400,000, which may be a slightly high estimate. One can arrive at slightly different figures by talking about different ages but I think that that is about right, and if it is a bit high the problem is slightly simpler.
729 The total registered work force in the United Kingdom is roughly 24 million, so young unemployment is equivalent to about 1½ per cent. of those in work. The essence of my plan is that every form of employer, in the public and private sectors, would be required to take on as supernumary to the normal work force the unemployed boys and girls at an agreed percentage. Small firms with fewer than 25 employees might be exempt, firms with 25 to 100 employees might be required to take on one boy or girl, those with 200 to 300 employees three young people, and so on pro rata up the scale. In effect, the right to work would be absolutely guaranteed to young people up to the age of 20 years. It would then be clear how many young people had jobs, how many had gone into full-time or further education and how many remained officially unemployed in each area. The manager in each area would be required to produce a form which provided space for the name and address of each unemployed boy and girl, some brief account of his or her qualifications and a list of the 20 or so main types of employment in the area. In Sheffield, for instance, this would obviously include steel works, engineering, machine tools, construction, cutlery, food processing, the retail trade, local government, the Civil Service, the Health Service, education, railways and so on. Not every type of employment need be included separately but all forms should be included somewhere in the main groups.
Each boy or girl would indicate his or her preference, ranked one to six, for the types of employment listed. In the meantime, every employer, public and private, from universities and hospitals to steel works, with more than 25 employees would be required to make a return to the employment exchange of the size of its work force and the pro rata number of supernumaries that it would expect to be allocated. The percentage allocation would vary from area to area, but the national average would be about 1½ per cent of the total of employees in each firm.
Employment exchanges would then allocate the boys and girls in the light of individual preferences they have expressed and the quota of each firm. If people do not like the idea of the allocation 730 being done by civil servants, perhaps an informal committee of trade unions, employers and a representative of the MSC could be set up to deal with the problem.
The duty of the employer would be to produce useful work and/or training or day release for each boy and girl in close co-operation with the shop stewards or trade union representatives in the establishment. This is essential. The scheme can work only if it has the wholehearted backing of the trade unions on the shop floor and nationally.
Every young person would be paid the normal rate for the job he or she was doing. There would be no question of undercutting wage rates, but perhaps a Government subsidy of £10 or £15 a week could be paid to an employer employing young people in the scheme who were surplus to his actual needs. This could cost £200 million or £300 million a year, but, of course, the gross cost would be reduced by the social security benefits otherwise payable. The net cost to the taxpayers would probably be rather less than £200 million a year plus a small addition to the total labour costs of the nation.
Can it be argued that this scheme is sweeping under the carpet and trying to push it out of sight? I do not think so. I would regard it as formal recognition by the unions and employers of the need to bring into the environment of the workplace, whether factory, hospital, office or college, boys and girls who look like being shut out for a long time. It would accustom them to the atmosphere of work and useful activity instead of the boredom of the street corner, an empty house or a betting shop. It would impose on them the discipline of clocking on and leaving at regular hours and give them a modest earned income instead of the unearned miserly dole. It would bring them into daily contact with trade unionists, supervisors and managers and destroy that yawning endless vacuum of month after month on the dole. There is no reason for it to hamper or retard the expansion of training, day release or apprenticeship schemes. Indeed, it might throw up new needs and suggest new techniques.
About four-fifths of young people would, I believe, welcome such a scheme. About 20 per cent. would, for one reason 731 or another, not fit in, and they would need special care, advice and guidance from careers officers and the TSA.
Is there any advantage in having young boys and girls bored and fed up at work rather than at home or on the street? It would be the job of the manager, foreman or shop steward to see that the young people were not just dumped in a corner with nothing to do. At worst the individual would be in a working environment with a chance of learning something about the working world and not on the street corner, cut off and shut out.
More than that, there is all the difference in the world in the expectation of permanent employment by an employer who knows a boy or girl as an individual and a young person trying to get a job from cold on the basis of a written application to someone who has never heard of him. There is nothing in my suggestion which would prevent the individual from applying quite freely for a permanent job, if he wished to do so, in any other place.
Clearly, such a scheme would have immense applications, and there would be immense difficulties in implementing it, and, indeed, in persuading employers, and some trade unions, to accept it. But my own belief is that we shall not grapple with the problem of youth unemployment successfully unless we go for something much more radical than what is included at present in the Holland Report, although, as I have said, I do not wish to play down the value of the suggestions in that report.
Finally, I should like to quote again from the report of the Select Committee, because I think that it has something very important to say on this whole problem. I quote from page 35, paragraph 112:Employment prospects are now such that young people face long periods of joblessness, particularly those of low educational attainment, but also special groups such as newly qualified teachers.There are dangerous social consequences, apart from important economic ones, from young people in many areas (especially the inner cities) having to cope with long periods of unemployment without the life experience of older people.It is therefore imperative to have a comprehensive and continuing programme to combat unemployment among all age groups and both 732 sexes, but primarily among the 16 to 18 year olds.I am not suggesting that the proposals that I have put forward are in any way the last word, but I am quite sure that something more drastic and far-reaching than what we have in the Holland Report will be required if we are to grapple successfully with what I regard as the most formidable social problem that we have on our hands at present.
§ 2.52 a.m.
§ Mr. Esmond Bulmer (Kidderminster)
The hon. Member for Sheffield, Heeley (Mr. Hooley) is to be congratulated on raising this issue. There is nothing of greater importance at present. The hon. Member has presented the House with a great many statistics. I should like to add one set only from my constituency experience.
In Kidderminster, taking the September figures, in 1975 there were 205 young people leaving school for whom there was no job; in 1976 there were 387; in 1977 there were 460. It is calculated that next year 50 per cent. of those leaving school will have no job to which to go. If that figure does not ring alarm bells, nothing will.
A society that does not look after its young people must be sowing the seeds of its own self-destruction. The hon. Member was quite right to point to the most obvious pressure point, but I think that it must be our overriding priority as a society to see that our young people have a proper start in life. I do not believe that the Minister will be able tonight to offer any immediate comfort. As I understand the figures, neither the Government nor the MSC can see the point in the future at which unemployment will drop below 1 million.
The unemployment from which we are suffering at present is both structural and cyclical, unfortunately. The cyclical problems that were brought upon us so viciously by the increase in oil prices were compounded by the Government's overspending and by the pressure that that overspending brought upon industry. From my own experience I have seen at first hand the demoralisation that is caused by Government over-reaction and and by excessive intervention. If a person running a company cannot fix the price of his product, cannot employ the people 733 he wants and cannot pay them as he wishes, he feels that he is running the business with one hand behind his back. Many of those in industry feel that the rewards are not there. They feel that the decisions that they wish to take are frustrated and that their companies are not being run to the best advantage. Until there is more confidence that the Government understand the problems and are reacting to them, I do not believe that industry will offer the jobs that are within its power to provide and on the scale that we want to see.
The starting point—I think that the Secretary of State for Employment recognised this in his contribution during the Queen's Speech—must be that we as a nation have to compete in the world, and that our competitive edge is all important. If our industries are to be competitive, a great deal of flexibility is required. That flexibility will not be forthcoming unless those who lose their jobs recognise that there is some hope offered by the alternative schemes produced by the Government.
Clearly, the Holland Report is an important contribution. What else is there that we can do? I wish to put a few thoughts to the Government.
First, we must improve our intelligence. I find it disturbing that the Manpower Services Commission has still not received any projections on the jobs that will be offered in future or the impact of technology on various skills. How can the country prepare young people for the future if we have not done our homework?
Some of the information to which I have referred will be available in the next few months. I hope that the Secretary of State will make it available to the House. He promised to consider doing so. No doubt he has some natural reservations about making available information that might induce greater gloom than perhaps he feels is justified. However, I think that he should consider the contribution that can be made at local level. The TUC is now becoming more aware of that factor. It is important that we get groups of people together, especially in towns and areas that are over-dependent on one activity, In that way we can get better intelligence 734 than that obtainable through sector working parties and develop strategies more responsive to the needs of the community.
In my constituency I have seen that system working at first hand. A group of people representing employers, unions, the council and those giving careers advice, for instance, is in a position to make a direct examination of the problems on a regular basis. It also has regular contact with all the major employers so that it can monitor both current reaction and future expectation.
It must be said that of 52 companies in my constituency only two expect to be taking on more employees within the next four or five years. Certainly half expect to be employing considerably fewer. What can we do about that? We are clearly at a disadvantage, not being a favoured region or in receipt of any special benefit, against the areas that have such benefits. We can ensure that land is brought as quickly as possible into a condition in which it can be used for industry. We can promote a much greater exchange between schools and employers. We can perhaps bring forward job creation schemes.
I would like to refer to some of the difficulties that are exprienced within the job creation scheme as it is now operating. It is still in the do-it-yourself stage, but I believe that it is potentially extremely important for the future if it can be developed. At present some of the constraints are too strict. The fact that a scheme cannot last beyond a year means that the young people working on it know that they have only a limited time. Towards the end of the 52 weeks they tend to lose interest. There are problems in getting the right level of supervision. There are problems in getting the right candidates put forward for the right opportunities. Sometimes there are difficulties with trade unions. But this approach should be developed.
I ask the Minister also to consider the special problems of rural areas, where the allowances for overheads are insufficient. The sum of £10 goes nowhere near covering fitting out somebody for forestry, which requires about £100. The cost of travelling is a powerful disincentive. Most bodies, such as the National Trust, have a separate cheque book and 735 separate bank account for each scheme they operate.
Perhaps the most important thing a local group can do is to enlist employer good will to see that the schemes put forward are advanced. Where possible, key managers spend time talking to those about to leave school and make themselves available to those in education to bring home to them future prospects in a way to which they can respond. It is particularly important that young people receive training in companies rather than at outside centres. It would be helpful if the Government allowed any employer who was training in a skill known to be one that the country required to recover the costs of that training in full.
But there is a limit to what can be done locally. Above all, we look to the Government to provide stability, and particularly to control inflation, because that is the great job destroyer; to raise the level of economic literacy; to provide cash for training; and to avoid the sort of interference that makes company longterm planning impossible. Examples of the interference to which I refer are arbitrary taxes, such as the 25 per cent. VAT, the violent fluctuations in interest rates from which we suffered a year ago as a result of the Government's mismanagement, or sudden cuts in Post Office contracts. The Government should in particular consider how to encourage the will to innovate and small business.
I recently talked to the sixth form in a school in my constituency. I asked the 112 boys and girls how many were going into industry and found that only one was. There is a great deal to do to bring home to those in education the real problem that we face and the extent to which it is competitive industry that pays for all the things they require in the future.
I hope also that the Minister will look again at the Employment Protection Act. There is a Private Member's Bill which would extend the qualifying period for unfair dismissal and redundancy to 52 weeks. I hope that when that Bill is introduced it will have the hon. Gentleman's blessing. When a similar clause was debated in Committee it had the blessing of the Secretary of State when he was 736 Minister of State. I believe that the Act is a powerful disincentive to small businesses taking people on.
The Minister might think again about how to bring together people, materials and money locally to get new business off the ground. This is not the time or place to relate the success of the Man-dragon experience in Spain. Many managers in their early 50s from big companies such as ICI can offer expertise. Many skills are not being used. We know that money is available to back the right schemes. What is lacking is a framework in which these can be brought together locally.
My constituency has suffered from the refusal of IDCs. I hope that the Government will reconsider the whole problem of mismatch in their regional policy to mitigate the appalling problems of youth unemployment. I hope that they will recognise that industry must have priority, that there must be a back-up for all those who face retraining and for young people, and that no young person should be without a worthwhile activity at least up to the age of 18.
But I think that we have to look at the question of structural reform, to the shorter working week and earlier retirement, and that can be done only in the context of a united European effort, because if one country acts on its own, it will put itself at a disadvantage. I hope that the Minister will pursue initiatives in this field as hard as he can.
So we approach Christmas and should be giving tidings of some comfort, but I regret that there are no such tidings at present. I hope that there will be combined action in this matter by all those of good will in the coming year and that some solutions will be offered.
§ 3.6 a.m.
§ Mr. Jim Craigen (Glasgow, Maryhill)
I agree that my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) deserves support for raising the important issue of youth unemployment. There is no doubt that there is a good deal of parliamentary consciousness about the problem of unemployment, although I suspect that there is less concern about the particularly acute nature of the problem of unemployed youth.
737 It is a few years since we lowered the voting age to 18. At the last General Election there were little more than a dozen Members of Parliament under the age of 30, and we are all three years older now—not that I was then in the category of the under-30s. Perhaps this relative absence of younger people from our political institutions reflects our seeming indifference towards the sensitivity that exists when one is looking for one's first job at the age of 16.
Only last week we had some staggering figures from the Secretary of State for Employment concerning the number of people who will come on to the labour market in the next decade or so. We are reaching the stage at which unemployment will be a way of life for many young people. In some homes it is almost a heredity factor, because the fathers or mothers have often undergone long periods of unemployment. In an area such as Clydeside the main forms of employment have been the traditional apprenticeship for boys and office work for girls, but this pattern is changing. The traditional apprenticeship itself is changing. The job opportunities for many young girls are shrinking as many offices organise their employment in such a way as to reduce the need for the same employment.
In the last few years we have seen employers revising their employment practices as a result of the raising of the school leaving age. We have seen the expansion of further and higher education, which, in its turn, has resulted in greater job expectation on the part of youngsters. Yet at the end of the period of further and higher education many of those youngsters have found even greater difficulty in getting jobs.
I was interested in the report that has just been published by the Manpower Services Commission on training for skills—"Programme for Action". As I understand it, the industrial training boards will have to assess the future needs for skilled manpower. I wonder, however, whether they will also take on board an assessment of future changes in technology—because every new technology puts jobs at risk. I am not suggesting that we should set our faces against technology, but increasingly in our political decision-making we should recognise the impact 738 that it is making on employment prospects. The more we automate, the more we decrease job opportunities. There is increasing pressure to eliminate routine work, therefore removing the need for people to do such work, but job opportunities are not being created in other sectors of our economy.
I shall not bore the House, at ten minutes to three in the morning, with statistics about unemployment. The OECD and member countries recognise the seriousness of the situation. Indeed, the Director-General of the OECD stressed the importance of youth unemployment when he addressed the Council of Europe in Strasbourg recently. The European Commission also seems to recognise that there is a serious problem here. What is lacking is a co-ordinated effort on the part of member Governments to produce a number of major social changes, which I think will be forced on us whether we like it or not, to overcome the growing unemployment figures.
Even if we get a substantial increase in industrial demand in this country, increasingly improved investment would seem to result in fewer jobs. Many firms openly say that they could get more production with the present numbers employed by them.
A lot of discussion is going on at this time about the spending of North Sea oil profits. Last night we discussed the European Commission's proposals for social security equality. I feel that an opportunity was lost to take action in that regard when we put through Parliament the Pensioners Payments Act, which is due to come into effect in April next year. It was felt that the cost of lowering the age at which men retire to 60 would be too great.
I wonder whether we should revise our views about weighing the social cost of such a step against the cost of not doing anything in that respect, quite apart from the fact that it would remove the discrimination between men and women regarding retirement. I understand that about 3 per cent. or 4 per cent. of the working population would be involved if we were to reduce the retirement age for men to 60. I hasten to add that, in my view, we ought not to force people at the age of 60 out of jobs, because many are mentally and physically fit enough 739 and want to continue working. However, we should certainly change our social security legislation to enable men to retire at the age of 60. Indeed, many people in the white-collar sector, particularly in the Civil Service, already have that provision in their conditions of employment.
My hon. Friend the Member for Heeley was right to stress the need to look at the longer-term trends in employment—for example, a shorter working week with perhaps a different pattern of working week. A serious attempt should be made by the Government to discuss with the trade union movement the possibility of reducing overtime working. Such a step would, of course, require some changes in pay policy, because overtime working in many firms is simply a way of topping up the pay packet.
A year ago the Department of Employment published some interesting statistics projecting the trend in new employment opportunities up to the early 1980s. It was significant that the major expansion was seen in the white-collar and non-manufacturing jobs. In many ways that runs counter to the Government's industrial strategy in the sense of expanding the manufacturing base. More investment often results in fewer jobs but higher production.
The latest Manpower Services Com mission's report suggests that about 10 million job changes take place each year That figure staggered me. I thought that the figure was nearer 7 million. This might indicate greater mobility and greater instability in the employment market with fewer gold watches being handed out at the end of a person's working life.
This has implications for young people I do not wish to go over the ground that was covered by my hon. Friend the Member for Heeley by describing the various measures which the Government have introduced in the last few years in an attempt to reduce the incidence of youth employment. I shall refer to the attempts that have been made to assist local authorities in the work of careers officers.
One of the best ways of assisting careers officers is to put more jobs on their books. There are limitations on the amount of advice that they can give to youngsters if there are no jobs on their 740 registers to Which they can direct them.
This year we are spending a great deal of time on job creation for politicians, not only by introducing direct elections to the European Assembly but by preparing for devolved Assemblies for Scotland and Wales. We really must concern ourselves more with employment opportunities for the rising generation. I fear that if we do not we shall have not only a generation gap but a real conflict of generations. There will be a growing resentment by younger people of the older section of the community which is not sufficiently concerned to create the type of job opportunities that they are seeking.
I do not want to knock my hon. Friend's suggestion that firms should take on additional young people. But when I examine the sectors of industry that are likely to take on additional labour I find that the nationalised industries are in the process of contraction and that there is great pressure on both the Civil Service and local government to restrict staff intake. I do not see the multinational companies becoming generators of additional employment opportunities. That leaves us with just the small firms, of which my right hon. Friend the Chancellor of the Duchy of Lancaster is, I understand, making a special study.
I do not think that we should fall back too much on to the idea that we should encourage firms to take on labour that they do not need. That would just build up a lot of bored workers in industry, and that is not a healthy state of affairs. The Government will have to act much more purposefully with other countries in the EEC and OECD to try to achieve changes in the pattern of the working life, the working week and the working year. Otherwise this problem of unemployment will remain and, because of the demographic changes in this country, become even greater and more alarming than at present.
§ 3.22 a.m.
§ The Under-Secretary of State for Employment (Mr. John Grant)
This is not the first time that I have replied to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) in a debate of this kind. As always, he has raised these matters in a thoughtful and constructive way. The whole House shares his view that 741 youth unemployment is a matter for grave concern. That is certainly the Government's view.
All unemployment is a serious matter but, without wishing to suggest that its effect on adults is unimportant, I think it is true to say that youth unemployment is particularly wasteful. Its economic and social consequences are especially serious. Work is a crucial factor in the transition to adulthood. If a job cannot be found, the impact on self-confidence and morale can be shattering. The opportunity for investment in human resources, if that is once lost, certainly is not easily regained, and the level of youth unemployment is now higher that it has been since the war.
My hon. Friend talked about youngsters being left on the street corner. My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) has referred to the conflict that could arise between generations. There is a very real danger that today's jobless school leaver could be tomorrow's vandal or football hooligan or maybe tomorrow's National Front recruit, or perhaps all three. This problem is storing up trouble, and it represents a serious challenge to the Government. I shall describe how we have tried to meet that challenge, but let me first put the matter into perspective and underline certain points that my hon. Friend has made. I do this because of the way in which my hon. Friend has framed his approach to our debate. The subject he has raised is the problem of youth unemployment. Let us look at the dimensions of the problem so that we all know exactly what we are dealing with.
This year over 845,000 young people left school in Great Britain. By November, some 780,000 of them had found jobs or training or further education. There were still 68,000 young people registered as unemployed who had never had a job since leaving school, and that is a worse figure for November than in any previous year. It is 68,000 young people too many to have on the unemployment register. But I mention the figure, and the number who left school, because I think it is important that we realise that the majority of school leavers do find jobs within a few months.
I do not make this point in order to minimise the size of the youth unemployment 742 problem, which, as I have already said, is a grave one. No Government can afford to be complacent about a problem the size of this. But I want to make the point that the characteristics of the unemployed are as important as the numbers when it comes to deciding on a policy to help them. When unemployment and youth unemployment are very high the weakest go to the wall. The better qualified youngsters will generally find jobs, even if the jobs are not as good as they had hoped, and that means that better qualified school leavers are taking the jobs that the less well qualified would normally have got. So the youth unemployment problem today is very largely about the most vulnerable section of our young people—the less able, the disadvantaged, the handicapped, the black, the youngsters in the inner cities.
My hon. Friend the Member for Heeley mentioned the rising population trend, and I point out that, because the numbers of young people leaving school each year are rising, the difficulties faced by the less able are likely to be compounded. In 1972 we had 573,000 youngsters leaving school and looking for their first job. As was pointed out, by 1981 we can expect the number to be about 725,000. It will not be until 1983 that the figure should begin to drop.
I say to the hon. Member for Kidderminster (Mr Bulmer) that this ought not to be in any way a subject for party points, and I am not accusing him of treating it in that way. It could be said that successive Governments have woken up too late to the scale of the problem. Action should have been taken earlier, but there is now very substantial action being taken.
The problem is not confined to school leavers either. It is less well known, perhaps, that unemployment among the 19 to 25-year-olds has increased enormously as well. Young adults often suffer disproportionately from "first in, last out" redundancy policies. They have not had time to build up long periods with an employer. They have at least had experience of work, and that in itself helps them when it comes to finding another job. But the fact remains that a growing proportion of our total unemployed are well under 25.
The question of protective legislation was mentioned and the disincentive that 743 that is to the employment of young people. We are not convinced by arguments that employment protection legislation has acted against the interests of young people. The evidence for this is somewhat shaky. I have seen the same argument quoted in other countries as well. It tends to rest on assumptions rather than facts. My right hon. Friend the Secretary of State has recently announced that we are mounting research so that we shall have the facts available. But in general I share the view that the Employment Protection Act is an achievement and not a liability.
I think I can reasonably say that the Government responded fairly quickly to this very serious situation. We began our programme of special measures to help the unemployed in 1975. Between them those measures have helped 300,000 people in two years, about one-third of them young people. The measures were, I accept, introduced piecemeal. The main need was to act quickly, and we have done that. My hon. Friend the Member for Heeley mentioned his own gratifying example from Sheffield under the job creation scheme. The hon. Member for Kidderminster talked about specific constraints. I think that the most sensible thing I can do is to draw his examples to the attention of the Manpower Services Commission.
Although the temporary employment subsidy is not specially applicable to young people, my hon. Friend asked me for a comment on that. My right hon. Friend the Secretary of State and, indeed, the Prime Minister have both made very plain the importance they place on the temporary employment subsidy. There are informal technical discussions going on with the Commission in Brussels at the moment on this issue. Certainly TES is due for review. It is not a static concept. We may want to alter the scheme in some way. But I repeat what I said at Question Time on Tuesday, that anything that undermines the basic purpose and effectiveness of the scheme would be viewed by us with great concern. I hope that we do not get into that sort of situation.
To return to the specific measures, by the beginning of this year it was clear that there was a need for a long, hard look at youth unemployment as a basis for a more coherent programme for dealing 744 with it. The result was the Manpower Services Commission's report "Young People and Work" and, subsequently, the youth opportunities programme for the 16–19-year-olds announced to the House by the Secretary of State at the end of June. The House is familiar with the details. The programme, which is to be run by the MSC, will offer a wide range of opportunities combining work experience and training within a single framework designed to adapt easily to the needs of individual boys and girls. They will be able to move from one element of the programme to another depending on their needs. Some 230,000 opportunities will be on offer each year, double the present provision. Above all, it is the Government's firm intention that no Easter or summer school leaver who is still unemployed the following Easter will be without the offer of a place under the programme.
What we have tried to do with this programme is to concentrate help where it is most needed—on those youngsters who would not get jobs without it. That is why we have put the main thrust of the programme into help for the 16–19year-olds who have just left school. Resources will be concentrated, too, on areas where youth unemployment is highest—allocation will be in proportion to the level of youth unemployment. Our experience with the measures we have already operated suggests that this is the best approach. We have tried to ensure that the programme does not interfere with employers' normal recruitment of school leavers, and we are putting the emphasis, for this age group, increasingly on work experience gained in a normal industrial or commercial setting rather than on straightforward job creation. This is likely to prove most attractive to potential employers. The present work experience programme is bringing good results as far as finding permanent jobs for the trainees is concerned, and we want to build on that.
So far I have concentrated on the needs of the 16–19-year-olds. We have not neglected the over-19s. Their needs are rather different. They have had some experience of employment and have less need of work experience and need jobs where they can build on and develop skills already gained. So for adults we are keeping job creation in the new 745 Special Temporary Employment Programme—STEP, as it is called. This will give priority to the 19–24-year-olds, who will take up as many places as they do on the present job creation programme.
All this amounts to a major commitment by the Government to tackle youth unemployment. We are mounting perhaps the most comprehensive, and certainly the most coherent, programme of any European country. We are doing it on the basis of voluntary co-operation and agreement with the many organisations and individuals round the country who have become involved in the programmes. Employers, trade unions and local authorities are working hand in hand with the MSC to put its proposals into action. The MSC has got full agreement from the organisations concerned, and from the Government, for its proposals to ensure local involvement in the new programmes. We cannot expect success without local co-operation. Here I agree very much with the remarks of the hon. Member for Kidderminster.
I now want to mention the disadvantages to the less qualified. I want to turn briefly to the particular problem among young black people which has been highlighted by my hon. Friend the Member for Heeley. Since the beginning of the present recession in November 1973 the number of unemployed in the racial minority groups has grown faster than the rate of total unemployed. The difference between the two rates of increase was most pronounced in the year ending November 1975, when total unemployment figures rose by 80 per cent. but the minority group figure rose by 217 per cent.
From November 1975 to the present time the rates of increase have been more closely related, with the total figure rising by 40 per cent. and the minority figure by 50 per cent. Some encouragement can be drawn from the fact that the rise in minority group unemployment has been levelling out in the past two years and has more recently fallen below the overall rate. But there can be no room at all for complacency, because unemployment among the minorities is still unacceptably high.
Various reasons can be advanced for the fact that young people under 25 have 746 suffered disproportionately in the current recession, as I said earlier, and there is a high proportion of young people in the minority groups. Unskilled workers have suffered disproportionately in the recession, and, again, the minorities tend to contain a high proportion of unskilled and semi-skilled. Recent immigrants have special difficulties very often arising from newness or language problems, so they find it more difficult to get work. Some of the increase will also be due to further immigration.
All these factors have had some effect, but it is undoubtedly the case that racial discrimination and disadvantage almost certainly play a significant part in the relatively high level of unemployment. The Government are taking positive steps to try to deal with these problems through the Manpower Services Commission's programme, which is aimed at all young people, whether black or white. But it is designed to help those most in need, and as members of the minorities are disproportionately represented in this respect, they will benefit accordingly.
I mention one other important feature in the area of black unemployment. We have been disturbed by reports that there are areas throughout the country where unemployed young people, especially blacks, fail to register for employment at employment or careers offices. That means they are unable to take advantage of the opportunities which are otherwise available to them. To deal with that problem the Government have provided funds for the employment of 20 additional officers whose task will be to reach out to those young people and encourage them to make contact and make full use of the services available to them.
I turn now to the quota proposal suggested by my hon. Friend the Member for Heeley. I have talked about the need for co-operation and for all-round involvement in making a success of the MSC programme. I stress co-operation because it is one of the keys to the operation. My hon. Friend has put forward an interesting proposal for a quota scheme for young unemployed people. I want to assure him that the Secretary of State has given his proposal—my hon. Friend was good enough to send a very detailed and constructive memorandum—a great deal of thought. But we do not believe 747 it is the right response to the present unemployment problems of young people. My hon. Friend said that there were immense problems, and I cannot see any way of making an allocation system work without a considerable degree of compulsion on employers and young people, and I do not believe compulsion is acceptable. I do not think local employers and unions are going to be willing to accept an agreed quota, regardless of the circumstances in a particular firm. We would almost certainly lose all the good will of employers and trade unions which has been built up—not, in the early days, without some difficulty. I think compulsion would alienate young people. It would be impossible to monitor a scheme as big as this one would be and to ensure that all the young people allocated to employers were getting something useful out of it. I can see some problems on the shop floor if employers are forced to take additional young people regardless of the situation in the workplace. But the real stumbling block remains the element of compulsion. We have had direction of labour only in war time, and that is how it should be.
My hon. Friend the Member for Maryhill referred to technological change, and he rightly said that the training boards would have to be looking forward at future skill requirements in their industries. They are doing that. They cannot deal with these requirements without taking account of changes in technology, and they already do so. The Engineering Industry Training Board has published the results of some useful studies showing clearly how the skill shortage, skill structure and skill requirements of the industry are changing.
Another matter raised by my hon. Friend the Member for Maryhill and the hon. Member for Kidderminster concerned international trade. There is, of course, a great deal of international concern about youth unemployment. Following the Downing Street Summit earlier this year, the OECD was asked to mount a high-level conference on youth unemployment as a means of exchanging experiences on a problem common to most industrialised countries. The Secretary of State and my hon. Friends the Under-Secretary and the Minister of State for Education will be attending the 748 conference, which begins tomorrow. We welcome the conference as a valuable means of bringing together Governments who, faced with a common problem, have reacted with a great diversity of measures. We can do nothing but learn from discussions with them. There is a continuing involvement through the EEC.
My hon. Friend the Member for Maryhill referred to the EEC. Following its tripartite conference involving Economic and Labour Ministers, together with representatives of trade unions and employers, that conference had a remit which is now being pursued by the Commission. The remit was to find a Community approach to look at measures such as the shorter working week.
There are very great difficulties in most of the changes in this field. If such changes are to be contemplated seriously there are major advantages in a Community approach.
What we have tried to do, as I said earlier, is to find out the real problems of youth unemployment and to concentrate our resources—which are not unlimited—on the areas of greatest need. We have also tried to concentrate them on the ways of helping young people which we know from experience are most effective in helping them into permanent jobs at the earliest possible time.
We have also looked for ways of getting the maximum number of opportunities out of available resources, but not at the expense of making the right kind of provision. It is essential that what we do for young people is adapted as closely as possible to their needs. The programme we have asked the MSC to run is a flexible one, because young people's needs vary so enormously.
In the last analysis, we all know that youth unemployment is going to fall substantially only when the economy begins to grow again. So young people's prospects depend on the success of the industrial strategy and our fight against inflation. There are encouraging signs here, but we know that youth unemployment is going to remain unacceptably high for some time. That is why we have put the programme on a medium-term footing. We shall be reviewing it every year, but the resources will be there to maintain it for as long as it is needed. It is one area where the whole 749 House will agree that a reduction in required expenditure would be more than welcome. In the meantime, we must do all we can to help the most vulnerable of our unemployed.