§ Mr. Derek Conway (Shrewsbury and Atcham)
I beg to move,That this House welcomes the great progress that has been made in employment and the reduction of strikes since 1979 and condemns the employment policies of the Labour Party, particularly its proposals to encourage strikes, to accept every aspect of the European Commission's Social Action Programme and to impose a national statutory minimum wage, all of which would significantly increase burdens on British employers, undermine competitiveness and destroy jobs.There is a saying that one should never explain or apologise in making a speech. However, I must break that rule this morning and apologise for the fact that I have an extremely heavy cold, which will make the delivery of my speech a long process—and even longer for the House, which has to be detained in listening to it. I rather foolishly ran round the Staffordshire moors on Saturday with the perhaps to be disbanded 5th Battalion Light Infantry from Shrewsbury and caught a heavy cold. Perhaps that is a lesson that, at my age, I should stop doing such silly things. I therefore move the motion with a glass of privatised water ready to hand.
I welcome my hon. Friend the Member for Mid-Worcestershire (Mr. Forth), the Under-Secetary of State for Employment, who will reply to the motion. I have followed in the national press with great interest my hon. Friend's borough's activities. Unfairly, Redditch has been described as the most boring town in Britain, which produces the most boring postcards. That is unfair on that wonderful area. Anyone who has witnessed my hon. Friend and his especially outstanding and noticeable ties will see that Redditch has many lively things on which it can be commended to the nation. I hope that the campaign about its postcards will end.
I suspect that during today, when we warm up and wake up, we shall have a fairly broad and lively debate. The purpose of the motion is to enable the House, with the Chair's permission, to range as widely as possible over the subject of employment and unemployment, over the Government's policies and record, over Labour's record —not least that of the shadow Chancellor—and over the alternative policies that may be offered if the format of the Government changes.
With the permission of the House, I hope that it will be possible to conclude the debate briefly to allow the hon. Member for Edinburgh, East (Mr. Strang) an opportunity to say something about his motion. The terms of the motion may not be welcome to all hon. Members., but what he has to say deserves to be aired and I hope that the House will ensure that he has an opportunity to make his point today.
1172 I hope that hon. Members will bear with me if I paint a brief picture of my own borough of Shrewsbury and Atcham in Shropshire. Shropshire is about one quarter of the land mass of the west midlands and it is the most rapidly growing county in that area. My constituency fills a broad canvas. Although it is a huge rural area, with 117 villages and the county town, only 3 per cent. of the work force are employed in agriculture. Another 4 per cent. are involved in energy and water industries, and we have a regional headquarters of the electricity board. Thirteen per cent. are in manufacturing. In a town such as Shrewsbury, a high proportion of manufacturing is linked to the defence industry. The superb main battle tank engine is made by Perkins Engines, one of our larger employers. Five per cent. are employed in the construction industry —that may be why the effects of the recession have not hit Shrewsbury as hard as they have hit other parts of the country, although we have felt the cold wind.
A large proportion of people employed in the borough —23 per cent.—work in the hotel and catering and associated distribution industries. Shrewsbury is one of the most attractive county towns in the country, which, because of its historic nature, attracts much tourism. It also acts as the regional centre for mid-Wales and north Wales, as well as for Shropshire.
A further 16 per cent. are involved in finance and commerce. A huge and seemingly ever-growing number of accountants, solicitors and estate agents have made Shrewsbury their professional base. I am not sure whether we have found a professional group that the Government have as yet failed to offend, but if one exists, it is a growing sector of Shewsbury's business community.
A further 6 per cent. are employed in public administration in the area. We have the headquarters of Shropshire county council in the town, as well as the borough council and the district headquarters of the Shropshire health authority.
More recently, on the defence employment front, the "Options for Change" programme has meant that the unified command for the west midlands, the north-west and Wales has been sited in Shrewsbury, under the command of Major-General Mike Regan, who took over on Monday. The borough welcomes the presence of the unified command, although it has caused consternation in parts of Wales and the north-west. We feel that, historically and geographically, Shrewsbury is the right place for it. Thirty per cent. of our people work in associated industries.
Across the borough, about 27,000 people are in full time employment and 10,200 in part-time employment—about 37,200 people in all. That employment pattern is not necessarily reflected in many areas these days. Shrewsbury is still a traditional market town, so employment patterns, especially for women, are different from those to be found in urban areas. Perhaps for many people who come to live in the town that is part of its attraction.
My motion centres on the level of employment, because there are 2,700 more people in employment in Shrewsbury now than there were a decade ago. We still face unemployment problems, but the fact remains that employment has increased by 2,700. That is not to say that we can ignore people who are unemployed and seeking a way of earning a living.
In 1983, a total of 3,774 people were seeking work in Shrewsbury. By 1987, that figure had dropped a little to 3,401. But this year, the figure was down to 2,558, so since 1173 the general election, unemployment has fallen by 28.7 per cent. Over the five years since the present Administration were returned in 1987, there has been a welcome change in the picture. We appreciate that, over the past 12 months, unemployment has become an issue again, as the figures have begun to rise. Nevertheless, the record over five years is a fall of 28.7 per cent.
In the House there is a tendency to think that the experience of unemployment, and care for the unemployed, rest exclusively with Opposition Members. The election of the Prime Minister has done much to dispel that idea and to show the general public that in my right hon. Friend we have a Prime Minister who is frank about his business background and honest about the employment difficulties that he faced as a young man. The public know that he understands the difficulties of unemployment, having had personal experience of it, which he has not forgotten.
I left school at 15 under a Labour Government. I was one of many thousands of unemployed school leavers. The experience of unemployment has not been exclusive to people who left school under a Conservative Government. Many of us remember that experience from the days of the Labour Government, many of whose Ministers are now in another place.
One brighter aspect of the unemployment figures in Shrewsbury has been the steady and sustained drop in long-term unemployment. It would be unfair to the House to spend hours reeling off reams of statistics but, so that the picture of Shrewsbury is fully painted, I must tell the House that in 1983 there were 1,334 long-term unemployed people. In the four years to 1987, that picture had not changed much; the figure had grown slightly to 1,337. There had been little movement—really no improvement at all—in long-term unemployment.
However, this year the figure has dropped to 548. That reflects the emphasis placed by the Department of Employment, both at the centre and among those who represent it in Shropshire, on trying to help the long-term unemployed in particular. The big drop over the past five years since the 1987 election is welcome news. Undoubtedly, the problems of long-term unemployment are the most difficult to come to terms with and to solve.
That is probably enough history and geography. I shall now consider the way ahead, and the way in which unemployment is being tackled by the Government. Some of those activities will be continued whichever Government are administering the country's affairs in six or seven months' time.
Part of the progress that has been made in our area has been the establishment of the Shropshire training and enterprise council. Our TEC, which is one of 82 in the country, is chaired by David Houghton, who lives in my constituency in Shrewsbury but is the managing director of GKN Sankey, one of the larger manufacturing employers in the constituency of the hon. Member for The Wrekin (Mr. Grocott).
I pay tribute to the work, energy and effort that David Houghton puts in as chairman of the TEC. Undoubtedly that takes much time, and the GKN Group is to be congratulated for encouraging its senior executives to play such an important part in an organisation that achieves such excellent work in Shropshire. It is all too easy for 1174 senior executives, especially in times of great pressure on business, to say that they have no time to devote to such activities for the community. That has not been the attitude of David Houghton or his group, and they are to be congratulated for that. So are the members of the Shropshire TEC board, who also run demanding businesses yet give much time to developing the TEC and working towards what it is trying to achieve, especially for young people in Shropshire.
As the House will recall, board members have to be in business currently, rather than retired. That is a matter for debate. It is arguable that more recently retired business men would have a constructive role to play. I tend to favour the idea that people who have not been out of business too long could probably play a valuable role, although I accept that, if someone has been out of active business life for two or three years, his contacts and awareness of up-to-date affairs may have changed. That is why the Government have concentrated on keeping people who are actively involved in business. My hon. Friend the Under-Secretary of State for Employment may care to comment on that later.
The chairman of the TEC, David Houghton, and his team are backed up by an able chief executive—Roy Knott. Although the TEC has been operating only since I April this year, Roy Knott and his team have shown that they are dedicated to the employment training future for Shropshire. They have rapidly pulled the TEC together. This year, it is operating on a budget of about £14 million.
Shropshire's population is just under half a million. The youth training element of the budget for 16 and 17-year-olds is £7 million—roughly half the total budget. Three million pounds is for employment training; for employment action, which is specifically related to longer-term unemployment, there is £500,000. Shropshire TEC turns its attention to various other schemes, too. There is £..5 million for the business enterprise scheme. Those training activities represent only part of the work in which Roy Knott and his team are involved. They have a business development programme, an "investors and people" programme and an education programme for business partnerships, all of which are of particular help to those who are new to their own businesses.
The TEC is also actively pursuing a much closer liaison between the local education authorities, which provide excellent courses for those developing their business life, and with the careers service and the vocational education structure. One of the initiatives is to encourage more teacher placements in industry, so that those in education who have gone from school to college and back to school as teachers and who have not experienced life in industry or commerce can be exposed to it, the better to assist their pupils in preparing for a working career.
The establishment of TECs was debated and fought in the House, but it is now evident that the TECs are doing good work and that the system needs to be given time to settle down. Equally, we must have realistic expectations of TECs and realise that those that have not been in existence for very long—as is the case with our own TEC, which has been going only since April—will take time to work themselves up to their most effective point. The start that has been made in Shrewsbury, however, is extremely encouraging for my constituency and for the people of Shropshire in general.
I have spent quite long enough outlining the picture in my own constituency and I have no doubt that the House 1175 will wish to consider the national picture as well. Nationally, the fact remains—sadly, it is a fact not often reflected in the media—that there are more people in employment in the United Kingdom today than there have ever been before. Let us compare the present Government's record with that of the Government from whom they inherited power in 1979. There are some 800,000 more jobs than there were then. Many people will say, "They are probably all part-timers, grossly underpaid and grossly overworked, so it is not a genuine increase." But the increase in part-time unemployment—
§ Mr. Conway
It may be full-time unemployment for the hon. Gentleman and his hon. Friends, in six months' time.
Part-time unemployment has increased by 7 per cent., so the growth in employment is not reflected exclusively in part-time jobs or twilight industries. We are talking about 800,000 effective jobs.
The fact is, however, that unemployment is rising, and we recognise that. It is rising in every G7 and other industrialised country in the world, and particularly in Europe. Although we are constantly hearing about cuts, and the Opposition and hostile media want to make everything that the Government have done seem bad, one positive development has been that, whereas, when the Conservative party came to power in 1979, there were 6,000 training places for young people, the figure today is 260,000, and that reflects a remarkable commitment by the Government to ensuring that young people who leave school and who do not want to go into higher education have the opportunity to train for a career. We talked about training for decades. We used to envy the commitment of the Germans and French, but British politicians talked about it without doing anything. Today, the opportunities are there. In 1981, 52 per cent. of the population had experienced sonic kind of work-related education. By 1989, the figure had increased to 73 per cent., and it has continued to grow.
Today, Opposition Members will have the useful opportunity to explain to the House the precise impact of the policies that they will put to Britain and the British people. I think that the facts and figures will explode the myth that more people arc unemployed in Britain. The fact is that more people are employed. One wonders what the picture would be in five years' time were the Government to change in the next six months.
Some of us are a little sceptical about the extent of the commitment of the official Opposition and the Liberal Democrats to all things European and wonder for how long it will survive. However, those on the Labour Front Bench say that they are committed to the social charter. Several independent studies, including one by Liverpool university—hardly a hotbed of Toryism—have examined the impact on the business community that the adoption of that charter would have. The Liverpool study shows that it would increase the burden on business by £4 billion per annum, and undoubtedly it would affect employment, business efficiency and Exchequer income from corporation tax.
It has been estimated—although I know that this is a matter of controversy—that the adoption of a minimum wage would result in the loss of some 2 million jobs. I do not know whether the hon. Member for Stretford (Mr. Lloyd) will come clean on the Opposition's position on the 1176 minimum wage, but the principal Opposition spokesman, the hon. Member for Sedgefield (Mr. Blair) has put on record his own confusion. This debate provides an excellent opportunity for us to hear once and for all—if such a thing can be imagined—where the Opposition stand and whether they accept that a minimum wage—
§ Mr. Peter L. Pike (Burnley)
As an hon. Member representing a constituency where industries have always paid low wages, let me ask the hon. Gentleman this. Can he not understand that people in such areas know that low pay has not helped to save jobs in the past? Can we not refer instead to fair pay, and does not the hon. Gentleman recognise that, in 1991, £3.40 an hour is not an unrealistic wage? It is the absolute minimum to which anybody in work should be entitled.
§ Mr. Conway
The hon. Gentleman makes a reasonable point which stands examination. In my part of the world, for example, one does not find salaries as high as those paid in more industrialised parts of the country, but, particularly to part-time workers on lower pay, the option that the Opposition offer is not better pay but no pay. That is the difficulty.
Perhaps the hon. Gentleman fails to realise that some Members of the Conservative party do not come from the same background as the right hon. Member for Chesterfield (Mr. Benn), who inherited huge wealth. Some of us come from more modest backgrounds. I remember my mother leaving home at 4.30 am to go to her part-time, low-paid job. That is precisely how many working-class families on Tyneside had to live in the days of the Labour Government, when the problems of low-paid workers were very much worse.
§ Mr. John Bowis (Battersea)
Does my hon. Friend agree that it is one thing to use income support and so on to ensure that people can live at a reasonable level of income but quite another to place the additional burden on firms which may not necessarily be able to afford to pay more? The result of placing such a burden on industry is that the most vulnerable people in society, such as young people and people with disabilities, are either thrown out of work or cannot find work, because insufficient jobs are being created.
§ Mr. Conway
As ever, my hon. Friend makes a pertinent point, and the House will look forward to hearing of his personal experience, particularly of trade union legislation. Under this Government, provision for most low-paid families has increased dramatically.
I was interested to note that, on 29 June, the principal Opposition spokesman on employment wrote to The. Independent trying to clarify, for the benefit of the country and the House, his view on the impact of a minimum wage on jobs. Under the heading "Pay, Low Pay or No Pay", the hon. Gentleman wrote:I have not accepted that the minimum wage will cost jobs …I have simply accepted that econometric models indicate a potential jobs impact.I do not know what that will mean to someone on low pay, but to me the message is, "Look out for unemployment." Whatever gobbledegook the hon. Gentleman may have written, that will be the consequence.
The Opposition's policies would have a further impact on the business community and those who create and maintain jobs. Principally because the Labour party is in the pocket of the major trade unions, it is committed to 1177 repealing the trade union legislation that has transformed not only the United Kingdom's working record but our record of inward investments. It is partly to that legislation that Britain owes its success in attracting foreign investment.
We should think of the citizens charter and the various rights and opportunities that the Government arc affording consumers and parents. The general public will welcome those developments and compare the citizens charter with the strikers charter offered by the Opposition, under which we would again face secondary picketing and the impact of flying pickets on wholly unrelated businesses. That would have a dreadful effect on employment and businesses and it would make Britain far less attractive for foreign investment.
I would welcome more information about the jobs tax which has been so widely canvassed and debated. I should like to know whether it would simply add to employers' burdens and at what level it is likely to be set. Independent experts suggest that it will cost 50,000 jobs a year. In addition, there will be an impact on corporation tax. While Opposition Front-Bench spokesmen are running around the country promising more jam for everyone, their shadow Treasury colleagues must be wondering how that jam is to be made, given that it is being spread so thickly.
No doubt that tax will have a serious impact on the level of taxation paid by the general public and it will have an equal impact on the business community, which in this country enjoys the lowest rate of corporation tax in the industrialised world. I am certain that our business community would not enjoy the prospect of a change of Government.
Bearing in mind the intervention by the hon. Member for Burnley (Mr. Pike) about low pay—or the offer of no pay under the Opposition —we must consider the application of national insurance contributions in respect of part-time workers. The 1.75 million people who earn less than £52 a week in part-time employment would. according to the Opposition's proposals, fall within the national insurance contributions framework. That would be a retrograde step and would not he welcomed by the lowest paid and the part-time community.
I do not want this debate to he exclusively a Labour-bashing exercise. Those of us who are interested in regional policy are a little concerned. I served on the North of England development council which tried to attract inward investment to the north of England. After that, I served on the Washington development corporation. which was one of the new town hoards. We were reasonably effective in attracting new investment to that part of the United Kingdom and we were helped by the implementation of enterprise zones. While the enterprise zones were not loved by the Treasury from their introduction in 1981, they have been hugely successful. Although most of them were established for only 10 years. people in many areas now want to know what will follow them.
While my constituency does not have a level of unemployment that qualifies it for assistance, many people in Shrewsbury travel to work in Telford, which has an enterprise zone. Although not every quarter of the Conservative party accepts this. I believe that regional policy has a role to play and the Government should help 1178 to balance the geographical and social problems. If regional policy is properly controlled and effectively directed, it has a role to play for the future. It must be managed in a way that eases the burden on business instead of increasing them.
In that sense, greater emphasis must be placed on inward investment and agencies should not simply run around the country trying to attract jobs from one area to another.
§ Mr. Steve Norris (Epping Forest)
I have been listening with interest to my hon. Friend as he addressed this loosely packed House. I want to contest his proposition that enterprise zones and regional policy have a net effect on the economy. From my experience of working in Reading, which is quite a high-cost area, and being offered constant inducements to move to Wales and occupy free factories—
§ Mr. Norris
My experience is that the taxpayer simply contributed a great deal of money to move a job 100 miles down the motorway. Will—
§ Mr. Conway
I am grateful to my hon. Friend the Member for Epping Forest (Mr. Norris) for intervening, because he has allowed me time to drink some water. He has had a medicinal effect on my speech.
I understand my hon. Friend's point. Many people believe that regional policies have existed only to shift Government money around the country and to take jobs from one constituency to another. When I was a member of a development council in the north of England, we were not really in competition with other parts of England. Of course, we were in competition with Scotland and Wales, which had greater resources and could call on the support of the royal family to impress Japanese visitors more effectively than we could. We were principally in competition for foreign investment.
I recall a time when the Government of Eire offered 10-year tax holidays and they were very effective for many businesses. However, businesses that were tempted to move often found that the move was not so attractive and that they could not sustain a long-term plan.
The employment pattern in this country is disproportionate, particularly in the areas further from the centre. Without the balance of regional policy, the cluster in the south-east because of its proximity to the channel and the European market would make life in the south absolutely unbearable. We arc trying to help people get their cars from one part of the south-east to another and in some small way to spread the employment burden.
Businesses must carefully consider the disadvantages of long communications connections for their markets. The motorway system has undoubtedly improved dramatically under this Government, particularly to the north and north-west. That has made it more attractive for businesses to move from the south-east and we particularly welcome that in the midlands.
People who prattle on about the north-south divide amuse me. Bearing in mind your constituency, Mr. Deputy Speaker, and the constituencies of hon. Members who represent northern and north-western areas, I should point 1179 out that business commuting to Doncaster, Newcastle upon Tyne or Edinburgh has been dramatically transformed as a result of British Rail's capital investment in the east coast line. Businesses can now move around the country more easily, and that places pressure on local authorities, which must ensure that they are more supportive and welcoming to businesses instead of erecting, as is sadly so often the case, planning barriers that drive away potential investments.
The House should recognise that in my right hon. Friend the Prime Minister we undoubtedly have a man who has experienced unemployment and has demonstrated that he has not forgotten that experience. He is so patently honest about it and that shows the nation that he cares. The unemployed voters we survey and canvass understand that our Prime Minister is a man who understands their difficulties.
In the next six months, the country will have to compare the record of this Administration against that of the previous Administration and consider the alternative of many of the Opposition retreads on offer. The country must conclude that, in my right hon. Friend the Prime Minister, we have a man we can trust. I am confident that the verdict from the general election and the slogans from the British people will be "Kinnock can't" and "Major makes it".
I hope that we will have an opportunity today to hear what the Opposition propose. Once we have heard that, it will be clear that my constituents might face a bleaker future on both the business and employment fronts. When the time comes, those policies will be firmly rejected.
§ 10.7 am
§ Mr. Ron Leighton (Newham, North-East)
I congratulate the hon. Member for Shrewsbury and Atcham (Mr. Conway) on his motion and on giving us an opportunity to debate unemployment. The House should spend more time debating unemployment. The present appalling unemployment figures are graphic evidence of this Government's failure.
We all remember that in 1979 the Conservative party spent an enormous amount of money festooning the country with posters saying that Labour was not working.
§ The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth)
It was very effective.
§ Mr. Leighton
As the Minister said, that cynical propaganda was effective. At that time, unemployment was 1.3 million and falling. Perhaps the Minister can tell us what the position is now. Is not unemployment now double what it was in 1979?
§ Mr. Leighton
I like to see eager young men at this time on a Friday morning, so I will give way to the hon. Gentleman.
§ Mr. Arbuthnot
I am enjoying the hon. Gentleman's speech so much that I want to take part in it. The hon.
1180 Gentleman said that unemployment was 1.6 million—1.3 million—at the end of the Labour Government. What was it at the beginning of the Labour Government?
§ Mr. Leighton
The hon. Gentleman cannot get his figures right. He thought that unemployment was 1.6 million when it was 1.3 million. The best thing for him to do is to listen for a little while and perhaps he might be in a better position to understand. Of course, I shall gladly give way to him again if he wishes to make such helpful interventions.
§ Mr. Arbuthnot
Would the hon. Gentleman care to answer the question by saying what the figure was at the beginning of the Labour Government?
§ Mr. Leighton
I shall give several statistics in a moment. I do not want to give too many. Statistics are boring. If the hon. Gentleman will contain his eagerness and enthusiasm, he will be rewarded. One of the figures that he might like to consider is the grievous economic and financial cost. We might hear from the Minister what the cost of the dole queue is. It is well in excess of £20 billion. Each unemployed person costs in excess of £8,000 and that huge cost has ruined the public finances.
We used to hear a lot about the iniquity of borrowing and having a public sector borrowing requirement. The Government used to boast that they were repaying the national debt. The cost of unemployment is now so high that the Government are in the red. Perhaps the Minister will tell us how many billions the Government are borrowing this year to pay for the mistakes that they made on unemployment. Perhaps he will tell us about the human cost—the heartache, the misery and the destruction of family life. We did not hear much about that from the hon. Member from Shrewsbury and Atcham. The Government's rhetoric, which we will no doubt also hear before the election, is all about choice and opportunity. We might even hear a bit more about the classless society. When we hear the cynical and hollow rhetoric we should remember that the Government are busy destroying choice and opportunity for millions of people.
A man or woman is what he or she does. That is how a person defines himself. Often, when we meet people, they ask, "What do you do?" If one does nothing, one tends to feel that one is nothing. That is damaging to one's identity and sense of self-worth and it is destructive to society. That matter is closely connected with the increase in crime, which is sometimes denied by the Government. It does not surprise me in the least that we have riots every summer. Law and order does not come from having large numbers of policemen on the streets; it is social control. People ask, "What will the neighbours think? What will people at work think?" Of course, if one does not have a job, if one has never had a job and if one does not think that one will ever have a job, what the hell—what does it matter what people think? One has no perspective on the future; one lives for today. That is part of the explanation for crime and riots.
Let us consider life on the estates dotted around the country. Children see their fathers idle. Home is where there is never an alarm clock going off in the morning. Children never see their parents going to work. They see their older brothers and sisters leaving school without a 1181 job. That is disruptive of society and family life. When such matters are raised, the Government blame everybody but themselves. They normally blame the victims and look for scapegoats. They say, "It is the parents' or teachers' fault; it is evil." They never blame themselves for the unemployment that they have brought about.
The truth—it is a brutal thing to say—is that the Government are using unemployment as a weapon of policy. It is a deliberate feature of Government policy to have a high level of unemployment.
§ Mr. Leighton
I intend to refer to that point as well, if the Minister will contain himself.
We often hear the recession referred to as though it is an act of God or an act of nature, or as being like the weather. One gets up to see whether there are any signs of confidence or whether there are any green shoots. The Government engineered the recession. They set about deliberately to cause a recession. They deliberately increased interest rates. When the Government deliberately set out to increase interest rates and to shut down large parts of the economy, they knew that they would cause unemployment.
At the beginning of the recession there was much talk about the economy and whether there would be a hard or soft landing. If we have a healthy or successful economy, why not keep flying? Why have a landing of any description? The Government deliberately increased interest rates to cause a recession and they knew that it would lead to mass unemployment.
When we referred to high unemployment and the pain and damage that it was doing to our society, what did the Prime Minister—then Chancellor of the Exchequer—say? He said, "If it is not hurting, it is not working." The policy was deliberately to cause unemployment. He was saying, "Yes, it is hurting. That is proof that it is working. I want it to hurt." That is Government policy. The present Chancellor of the Exchequer made the Government's position absolutely clear. Incidentally, where would politicians be without the phrase "make our position absolutely clear"? The Chancellor said that high unemployment was "a price well worth paying". Mass unemployment was a deliberate Government policy and he said that it was a price well worth paying.
The Conservative party has become what it was before the war—the party of chronic mass unemployment. Were we to have the misfortune of the Conservative party winning the next election, it would be the party of chronic mass unemployment for as far ahead as we can see. Mass unemployment is built into all its calculations for public expenditure. Full employment is not among its economic objectives.
§ Mr. Bowis
The hon. Gentleman is a reasonable, moderate and fair-minded man. Therefore, he would wish to give the true context of what he is saying. Is not it the case that unemployment is now 13 per cent. below what it was in 1987 and about 21 per cent. below what it was in 1986? As my hon. Friend the Member for Shrewsbury and 1182 Atcham (Mr. Conway) pointed out, there are 800,000 more people in jobs today than there were in 1979 when the Government came to office.
§ Mr. Leighton
I begin my reply with a rhetorical question. I know that Mr. Deputy Speaker would not want me to provoke the hon. Gentleman into replying immediately. However, during that period, what happened to the number of people of working age? The hon. Gentleman will find that the working age population increased much more substantially than the number of jobs that were created. Those extra people in the labour force are, therefore, purely a function of the population growth and of the fact that the population is growing much faster than the economy. That is why there is high unemployment. That must be the case otherwise how could the hon. Gentleman answer the puzzle that there are hundreds of thousands more jobs but also much higher unemployment? The simple explanation is that the population has grown. The hon. Member for Battersea (Mr. Bowis) used to research such matters and should know the answer to these questions, but I will give him the exact figures because I looked them up in the Library only yesterday. I am now whetting his appetite for the information that I shall give him later.
Nowhere among the Government's objectives have I ever heard any mention of full employment. I listened to Treasury questions yesterday when the Government appeared to be saying that the level of inflation at the moment would justify a cut in interest rates, that industry is crying out for such a cut in interest rates but that now, given that everything must be subordinated to the exchange rate mechanism, our growth, employment, interest rates and everything else must be abandoned and sacrificed to that end. There was no suggestion that full employment was one of the Government's policy objectives.
I do not think that Ministers care about unemployment. I have seen no evidence to that effect. It seems to be well down their list of objectives. I have no doubt that they subscribe to obscure and extremist economic theories that anaesthetise their conscience on such matters. The Secretary of State for Employment has now been in office for 22 months, during which time there has been the most enormous increase in unemployment yet. I find it impossible to detect any remorse in the right hon. and learned Gentleman's demeanour and attitude. I have yet to hear him apologise to those hundreds of thousands of people whose lives he has blighted and whose happiness and prosperity he has destroyed. Instead, he tries to ignore it altogether. He never talks about it. I have never heard him address that problem.
The right hon. and learned Gentleman appeared before the Select Committee on Employment on Wednesday— only two days ago. I asked him, "Secretary of State, since you have been in office, how many extra people have become unemployed?" The right hon. and learned Gentleman did not know, or at least he pretended not to know. He would not answer, but he, at least, should have known the figures. I can make allowances for some of the Back-Benchers who may not have the figures, but the right hon. and learned Gentleman lives with these figures every day and one would have thought that he, as the Secretary of State, would know. However, when I questioned him, he said that the number of unemployed was "irrelevant". Those were his words to the Select Committee.
1183 I was able to help the right hon. and learned Gentleman by telling him by how much unemployment has increased since he took on that job. The figure was 857,000 people. Did the right hon. and learned Gentleman show any concern about that? No. Yet that is an abysmal figure. I do not know of any other Secretary of State for Employment under whom unemployment has risen by that amount. It must be a record. It should be in the "Guinness Book of Records", yet the right hon. and learned Gentleman did not know the figure and showed no concern. He does not seem interested in unemployment. Could we have more telling proof of the Government's failure than the fact that unemployment has increased by 857,000 during his 22 months?
The Government's policy is to ignore unemployment and the associated figures. At employment questions on Tuesday, one of my hon. Friends asked the Secretary of State what was the total increase in unemployment across the European Community, the increase in the United Kingdom and the latter as a percentage of the former. The right hon. and learned Gentleman did not answer—he never does. He said only that there were no comparable estimates. In other words, he pleaded ignorance again. I do not know whether the right hon. and learned Gentleman is really not interested, but he pretends that he does not know.
Again, I have consulted our estimable Library, which had no problem giving me the figures. I received a nicely typed letter within the hour telling me that there has been no increase in unemployment in many European Community countries—in fact, there has been a decrease in unemployment in some. The figures, which the Secretary of State did not know, or pretended that he did not know, or was not prepared to tell the House and the country, show that there has been an increase in unemployment in the European Community in the year to September of 972,000 while the figure for the United Kingdom is 777,000. In other words, 80 per cent. of the increase in unemployment across the European Community is solely in the United Kingdom. It is therefore the responsibility of the Conservative Government and I hope that the Minister will explain and apologise for that.
§ Mr. Forth
The hon. Gentleman is now basing his case on arbitrary time periods. He must know that what my right hon. and learned Friend the Secretary of State was saying to the Select Committee was that his period in office was irrelevant as a way of measuring the movement in the figures, not that the figures themselves were irrelevant. That is nonsense, but the hon. Gentleman is now doing the same thing again.
In addition to giving the House the figures that he has just given, will he tell us about the actual levels of unemployment in socialist Spain, socialist France and in some of the other continental countries for which he seems to have so much admiration? Will he explain the connection between socialist policies and high unemployment?
§ Mr. Leighton
The policy that has led to an increase in unemployment in France and Spain is those countries' adherence to the exchange rate mechanism—
§ Mr. Leighton
That is the explanation for those figures. In such a regime, the strong and the competitive are successful, but the non-competitive are less successful and that fact will be revealed in their unemployment figures.
Our question about the movement in the figures in the past year is the sort of question that is regularly asked—it was a fair question, not a trick one—yet when we asked, "What has been the increase in the past year", the Secretary of State did not say, "You should have chosen another year"; he simply said that he did not know. Then, when we pressed him, he said that it was "irrelevant". The question that he described as "irrelevant" was by how much unemployment had increased during his 22 months in office. How on earth can the right hon. and learned Gentleman say that that is irrelevant? Is not it grotesque and bizarre for the Government to be reduced to saying that the issues that we raise in our pointed questions are irrelevant and for them to refuse to answer? Is not that ghastly evidence of their failure? I know that the Under-Secretary of State is extremely articulate and intelligent and that he can always put a gloss on a case, but if he cannot do better than that, he cannot have a case.
The truth is that for 22 months the Secretary of State and his Government have been destroying jobs at an average rate of 1,250 a day—that is how the figures work out. They are still doing it and will continue to do so.
One way to disguise what is happening has been used this morning by the hon. Members for Shrewsbury and Atcham and for Battersea, who said that there are now more jobs than in 1979. I now come directly to the point of the hon. Member for Battersea. His argument will not wash because the simple explanation is that the population has grown. Again, I asked the Library for the figures, which show that between 1979 and 1990—perhaps the Minister will agree that that is a reasonable period because it is not only one year, but the Government's entire period in office—the population of working age grew by 1,862,000. That is an increase of 5.6 per cent. It was much greater than the increase in the total work force in employment. The total work force grew, not by the figure of 800,000 given by the hon. Member for Shrewsbury and Atcham, but by just over 1 million. To have stood still we would have needed over 1,862,000 jobs. That is the explanation. So it does not help the Conservative case to say that the total number of jobs has grown. It has grown because the size of the country's population has grown. The most important factor is the level of unemployment and the waste of paying people to stay on the dole and ruin the public finances.
§ Mr. Leighton
The hon. Member for Battersea has dredged up another figure and found another angle. We shall see what he has this time.
§ Mr. Bowis
Although I welcome the hon. Gentleman pointing out that even more people wish to be born in Britain when there is a Conservative Government and come through to the working population, surely the hon. Gentleman does not suggest that the increase in the population is entirely people who wish to be in work. Many of them are married women, people with children and so on. The hon. Gentleman should accept and give credit to the Government for the fact that, far from employment dropping, as he implied, job opportunities 1185 have risen to the tune of 800,000 in that period, which means that an additional 800,000 people have been able to find jobs during the Government's period of office.
§ Mr. Leighton
The hon. Gentleman is making a brave attempt, but his effort gets worse each time and he is digging himself into a deeper and deeper hole. He suggests that the extra people on the dole queue do not all want jobs. Of course they want jobs. They would not be allowed the dole if they did not want jobs. They are claimants. They have to prove that they are looking for work in order to receive the dole. That is the answer to the hon. Gentleman's question.
Let me give the hon. Member for Battersea some more information. More than a third of the increase in the total number of jobs is part-time jobs. I do not criticise part-time working, but to include those part-time jobs without talking about full-time equivalents is not to compare like with like. In addition, three quarters of a million of employees have more than one job. Some have three jobs and they are counted three times. Whichever way ex-researchers, budding and Back-Bench Members of Parliament approach the matter, the position is appalling.
In "Alice in Wonderland" press releases which the Government turn out six times a day, the only way forward that they seem to suggest is to have what they call realistic wage settlements. I have a press release here. It says that we must contain wages and get away from what the Government call the going rate and inflation-proofed settlements. Let us be clear that the Government are not referring to bosses' pay. They are not talking about the managers of the privatised monopolies, who have doubled and trebled their wages, their pay—I think they call it their remuneration packages, which is usually in telephone numbers. The Government do not want to stop those people having inflation-proof settlements. Indeed, such people's pay increases are two, three, four, five, six or seven times the rate of inflation. The Government want the ordinary workers to have wage settlements which are below the rate of inflation. In other words—let us be clear —they must have wage cuts. That has been happening. The level of wage increases has been falling. But has it helped? The answer is no, it has not. The important factor is unit labour costs, which is a function of productivity. If wages and productivity rise together, unit costs do not rise. But we have suffered the second Conservative recession and, by definition, in a recession productivity declines. So, although our nominal wages are coming down to nearer the German levels, our unit labour costs are not.
My figures about wage costs come from not the Library but the Department of Employment. They were given to me on 17 October.Unit wage costs in mining and manufacturing in the former Federal Republic of Germany rose 3 per cent. in the year to the second quarter of 1991, which is the latest available information."—[Official Report, 17 October 1991; Vol. 196, c. 235.]That is less than the increase in wages because Germany's productivity is rising.
In the same period unit wage costs in manufacturing in the United Kingdom rose by 11 per cent. So our workers are taking home lower wages. That is the Government's way forward. But does it help? With the recession and the 1186 drop in productivity, even though the nominal wages of British workers have fallen, it does not help. The economy is still spiralling down.
§ Mr. Leighton
Let us hope that this time the Minister will say something sensible. He is girding his loins and he should get better as he goes along.
§ Mr. Forth
We should reinject some realism into the debate at this point. Is the hon. Gentleman aware that average earnings increases in the United Kingdom are still running at about 7 per cent., whereas, as the hon. Gentleman knows, the inflation rate is half that at about 3.5 per cent? That does not suggest that, overall, the British people are taking the dramatic pay cuts that the hon. Gentleman suggests. In some areas people are agreeing to lower wage settlements. They judge what is appropriate in their circumstances. How the hon. Gentleman can square the figures that I have given him with the claims that he makes? I should be interested to hear.
§ Mr. Leighton
The claims that I make merely regurgitate what I read in press handouts from the Department of Employment, which claims that it is succeeding in bringing down the level of wage increases. The level is still higher than in Germany, but Ministers go round saying that we are converging and that our inflation rate, interest rates and wage increases are coming down to nearer the German levels. I agree that we have not yet come down to German levels, but the all-important difference between Britain and Germany is that Germany is a successful country where the economy is growing, productivity is increasing, employment is rising and unemployment is falling. Germany is the benchmark against which we must measure ourselves in everything that we do.
The main reason for German success is investment in research—large German companies put enormous amounts of money into research—plant and, most importantly, training. So we must ask how our training compares with that of Germany. The answer is that it does not compare at all. I wish to examine the Government's record in training.
I must not give too much punishment to Conservative Members, so I shall pass over employment training. ET is beginning to lack all credibility—I do not think that the Minister will intervene to say that I am wrong. The previous Secretary of State for Employment used to give constant hype about that wonderful programme, which he said was the greatest training programme in the western world. Every programme that the Government introduce is the best programme in the western world. They gave us all that hype about preparing the workers without jobs for the jobs without workers. We do not hear much about that any more.
We know what the Financial Secretary to the Treasury thinks about ET. He thinks that it is such a waste of money that we should not spend any more on it. My local training and enterprise council, the East London TEC, said of ET in a newsletter issued in October:The plain truth is that ET was misconceived. It has been a flop.The Minister is giving the delightful smile that he gives from time to time to cheer us up. Let us draw a discreet veil over ET. I remember when it was first thought of. Roger 1187 Dawe came to the Select Committee and said that 600,000 people would go through the scheme in one year. I said, "Are you sure you'll get that?". He said, "Yes, we are sure." The Parliamentary Under-Secretary of State will give us the numbers, which are much smaller.
The Government claim and pretend that there is a youth training place for every young person who does not get a job. I shall be interested to hear whether they do so again today. Ministers stand at the Dispatch Box regularly and say that they are committed to the guarantee. When hon. Members raise the subject in the House, because we learn from constituency experience that that is not so and that the guarantee is not being delivered, Ministers deny it. I doubt whether they will deny it today because the evidence is so overwhelming.
§ Mr. Arbuthnot
The hon. Member for Newham, North-East (Mr. Leighton) has been exceptionally generous in giving way during his speech and I am grateful. I have here a copy of the same leaflet that he was quoting from, saying that ET was a flop. It continues:What we do not want is to replace it with another monolithic, all-things-to-all-corners programme. We need a range of types of training to meet the needs of different market niches.It is because of recent Government initiatives that the TEC is able to say that and put that sort of initiative in place. Does the hon. Gentleman agree?
§ Mr. Leighton
The TECs make the opposite case. They say that they do not want another monolithic programme, butneed a range of types of trainingto meet the needs of a different market. That is what they need, but they have not got it. The hon. Gentleman is in an area covered by the same TEC as my constituency and I urge him to have discussions with Mr. lain MacKinnon and Mr. David Dickinson, the chairman.
§ Mr. Leighton
Let me answer the question first. The hon. Gentleman should ask them about the extra menu of programmes for adult training. That is what they want.
All the TECs have been writing to tell us that there must be a strategic review of adult training, which is totally unsatisfactory. That is what they want, but they have not got it and they do not have the money to provide it.
I draw the attention of the hon. Member for Wanstead and Woodford (Mr. Arbuthnot) to a letter dated 22 November which I received from the East London TEC concerning the YT guarantee. I am certain that he will be interested in it and I will give him a photocopy if he would like one. I raised the subject of YT in my constituency, saying that 500 youngsters were without YT places. Another Under-Secretary of State said that I was misinformed. That upset me grievously. I try to be well informed, especially about what is happening in my constituency. I am not the only one saying that the guarantee is not being delivered. East London TEC is saying so, too. I shall not read the whole letter, but only relevant parts. It says:Therefore, I must conclude that we cannot now meet the YT Guarantee—and we see no prospect that we will be able to do so for some time. We are using our 'best endeavours' to 1188 meet the YT Guarantee and DE officials have acknowledged that, but the scale of the need is too great for a quick solution.The TEC has a low unit price for YT and says that there have beenyears of under-investment in YT locally.I hope that the hon. Member for Wanstead and Woodford is paying attention. I want him to stand up on his hind legs and demand some money for young people in our areas. The last sentence of the letter reads:We are conscious that many local young people remain without an offer.That is the situation in our area.
No doubt the Under-Secretary of State will say that the Government have handed youth training to the TECs and that it is nothing to do with them. They will say that they are committed to YT, but have handed over the details.
The Select Committee on Employment wrote to the TECs to get confirmation of the figures and has received replies from almost all of them. The replies are in the Library and I urge hon. Members who are present and who show a great interest in the subject to read them. The TECs say that half of them are not delivering the YT guarantee or are having grave problems with it. They are trying to deal with demand-led programmes with cash-limited budgets. They tell me that the YT programme was predicated on employer participation and say that the Government are spending less per unit place and that employers are supposed to make a larger contribution. However, many employers are not making any contribution, but are pulling out. The sums just do not add up. Often, the unit price is so low that it is not worth the while of training providers taking part.
In a moment the Under-Secretary of State will say, "I am committed to the YT guarantee."—especially after the note that he has just received from the officials in the Box. He will then say that TECs have a responsibility for delivering the guarantee, but they contract YT out to training providers, who tell us that they are pulling out because it is not worth their while financially. Employers, who have not given any guarantees, are not taking part.
When I raised this subject in an Adjournment debate the then Parliamentary Under-Secretary of State tried to detract from the letters I quoted by saying that they were out of date. The Under-Secretary nods his head. I have bad news for him. It is no good trying to tell me that this time. We summarised the letters that we received from the TECs and sent a letter summarising them to the Secretary of State. We sent a copy of our summary to all the TECs because we wanted them to know what we were telling the Secretary of State on their behalf and we did not want to misrepresent them. We have received some replies from the TECs. I have one here, dated 21 November. I hope that the Under-Secretary will not say that that is out of date. Bexley, Bromley, Croydon and Sutton—South London —TEC writes:I am content that our principal concerns have been fully reflected.On 19 November, Humberside TEC wrote saying:The concerns expressed in that letter reflect very closely the views of the Humberside TEC.On 25 November Hertfordshire TEC wrote:In early September we had still got 1,500 young people under 18 registered at Careers Service Offices as unemployed and available for a training place.It is no good saying that this letter is out of date as it only arrived the other day. It continues: 1189Hertfordshire's unemployment rate has risen by 140 per cent. in the past twelve months…"—the TEC knows what is going on, even though the Secretary of State may not—there are now 30,000 unemployed people in Hertfordshire. With the recent reductions in funding for Employment Training we are only able to provide 990 ET places".That means 990 places for 30,000 unemployed people.
In a letter dated 29 October, Thames Valley TEC states:We have problems: local young people covered by the Secretary of State's guarantee are having to wait for places at the moment since available places are full. This is due to the markedly higher levels of unemployment which have hit this area so very quickly in recent months.Essex TEC has been negotiating with the Department of Employment and has been given some extra money, but the TEC tells us that because there are no employer placements it has had to create project placements. it says:Where no work experience provision was available due to the recession, the Essex TEC has been able to establish new training workshops which simulate work experience in a training environment. Unfortunately, workshop training is extremely expensive and in some cases is more than twice the cost that the Department is currently paying the Essex TEC for its provision.If employers do not make contributions, the TEC has to set up workshops. That is costing them twice as much, even with the extra money given by the Department of Employment. Because the unit price is too low, the programme is failing. The South London TEC is 40 per cent. underspent on its budget. It cannot spend the money, although it is facing substantial demand for youth training places from more than 1,000 young people. How has it underspent its budget, with 1,000 people waiting for a place? It is becausethe negotiated Unit Price turns out to be too low to generate the volumes of training required.In other words, training places cannot be bought for the puny sums that the Government are offering.
What do the Government intend to do about cash? All the TECs are telling us that they need more cash. We have had the autumn statement, but there was no mention of any new money for YT. On Wednesday we asked the Secretary of State about it. After he was passed a note, he explained that it had not been mentioned because it had been announced previously that the money for YT was to move from £840 million to £850 million. I then asked the simple question whether that meant that there had been a cut in real terms after allowing for inflation. Again, he would not answer. I do not think that he said that the question was irrelevant, but, after being pressed on the point several times, he said that we could work it out for ourselves. He could not bring himself to face the truth —that the amount of money for YT is being cut.
All the TECs are crying out for more money. What do the Government do? They cut the sum available. When we ask the Secretary of State about it, he cannot tell us the truth, but has to say that we must work it out for ourselves. We are clever enough to do that. We have worked it out and it is a cut. That is appalling. It is betraying our young people and failing the TEC movement.
I have been going on too long and I must bring my remarks to a close. I will not say much about employment action. I asked how many people were on EA and the figure seemed to be about 2,240. That is equivalent to two 1190 days of extra unemployment. That is marvellous, isn't it? So far this great new programme has soaked up just two days of extra unemployment.
Finally, I appeal to the Government to support the TECs. The Government tell us that the TECs were set up to develop business and enterprise, not just to run YT and ET. The Training Agency could have done that. As the hon. Member for Shrewsbury and Atcham said, people were brought in from the private sector. Retired people are not taken on, not because they do not have the knowledge but because they do not have the clout. The chief executive officer is the boss of a big organisation and what he says goes. The right hon. Member for Finchley (Mrs. Thatcher) may not agree, but once one is retired, one does not have the same influence. That is why we have the big wheels from the private sector.
Those big wheels are saying, "We didn't come into this just to run programmes for the unemployed and to fail in that because we do not have the money. We want to do the proper job that we signed up for." I do not know where the phase "sign up" comes from. What is the difference between signing up and signing? Nowadays people sign up; they do not sign. All the big wheels have signed up for the TEC movement and it is falling apart.
The Government must not maintain their cynical attitude. Their policies are failing the economy, employment and training, and they are strangling the TECs. They must buck up and do better.
Mr. John Bowls (Battersea)
I am grateful for the opportunity to say a few words in this debate. Although my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) kindly suggested that the second motion in the name of the hon. Member for Edinburgh, East (Mr. Strang) might be reached, even he had little hope of there being enough time for us to reach the third motion. I am grateful to see present my good friend and neighbour in Wandsworth, the hon. Member for Tooting (Mr. Cox), who has clearly come along to support my motion. I fear that he may be a little disappointed. I apologise to my hon. Friend and the Front Benches that I may have to slip out for a constituency engagement when they come to respond to the debate.
It is always a pleasure to follow the hon. Member for Newham, North-East (Mr. Leighton). In the past few years we have accompanied each other down many paths. I always enjoy hearing his speeches. He often speaks dutifully, as today, about one side of the argument. He was kind to leave time for others to respond with the other half of the argument and we shall come to that. He referred to the unemployment problems that people undoubtedly face, although the latest figures show a welcome fall of 25,000 which he forgot to welcome. The other side of the coin is the increase in the number of people in work today compared with the figure when the Government took over in 1979.
I congratulate my hon. Friend the Member for Shrewsbury and Atcham on his good fortune in having this debate and on his inimitable and eloquent introduction. In particular, I welcome what he said about our Prime Minister. He rightly highlighted the fact that our Prime Minister has known, and therefore recognises, the problems faced by people who are, however temporarily, without work. His tribute was a fitting one. 1191 Moreover, our Prime Minister has climbed the ladder of opportunity. Unlike many people, he has not sought to haul up the ladder behind him. He has left it down. His whole policy and philosophy is to enable others to follow those steps up that ladder to opportunity and individual and collective prosperity.
We have always had people out of work. Today's debate is about how we enable such people to find fulfilment, preferably in work, and meanwhile to prepare for work. Every hon. Member has a real care for however many people there are without jobs. That is right and proper.
It is also right and proper to put the debate into the perspective of the additional jobs that have been created. Fewer people are out of work, certainly in my constituency and nationally, than at the last general election and many fewer than a year or two before that. The record shows that half of those who lose their job find another job within three months. If 7 or 8 per cent. are without jobs, as is the case in my locality, 92 or 93 per cent. are in jobs. That is the good picture behind the debate while we consider, as we certainly should, the real individual and family problems facing people without work.
We all meet people in our surgeries and as we knock on doors who are genuinely seeking work, but finding difficulty in terms of their and their families' finance and morale. That is why I am keen that we should do whatever possible to enable people to find a useful way of filling their time while they are out of work to prepare themselves for future jobs. I draw the attention of the House in particular to those who suffer additional problems, perhaps because they have a disability of one form or another. It is even more difficult for someone with a disability to find a job opportunity at a time of higher unemployment than it is in good economic times.
Another category whose interests we must look after covers people who have been in prison or in care. Again, it is difficult enough for them to find job opportunities. We need to encourage them to train. I pay tribute to the Share Community, which looks after people with disabilities, and organisations, such as the Apex Trust, which look after people who have been in prison. They do a great deal of work to promote training and encourage employers to take on such people.
We must pay special attention to unemployed young people and those who lose their jobs when they are over the age of 50. Such people find it more difficult to sustain themselves and to get back to work.
The causes of unemployment are many and varied. The hon. Member for Newham, North-East was a little unjust in seeking to place all the blame on one Government. For a start, we know that unemployment is a consequence of economic cycles. Such economic cycles occur all over the world and the present unemployment and recession are not peculiar to this country. It is a worldwide and certainly a western problem, and it must be tackled.
Another cause which perhaps the hon. Gentleman has forgotten and needs to go to the Library to consult the history books about—I know that he is an assiduous user of the Library—is the problem of past industrial relations. Does he forget how many jobs were lost in the 1960s and 1970s because of bad trade union and management practices? The hon. Gentleman did not pay tribute to the Government for their policies on industrial relations, strikes and pickets, which have enabled industrial relations problems to be corrected. He did not speak about the 1192 problem of unemployment caused by excessive pay demands. Pay should not be suppressed, but it should be linked to the ability to pay, and I welcome pay increases that are linked to productivity. The absence of such a link leads to the loss of jobs.
§ Mr. Leighton
Does the hon. Gentleman agree that the lead should be set from the top? Should workers in the privatised monopolies aim for the same sort of increases that managers have received? The hon. Gentleman says that high wages eliminate jobs. Will those managers all be sacked or will their numbers be reduced?
§ Mr. Bowis
I agree that the lead should come from the top. I hope that the people who have awarded themselves excessive pay rises will hear that from me and the hon. Gentleman. Such increases set a bad example and I hope that managers in the private and public sectors will remember that the setting of pay for those who are high on the ladder affects the willingness of people further down the ladder to respond sensibly.
Over the years, there have been other difficulties, one of which the hon. Gentleman implied in his reference to the increase in the number of part-time workers. Women, especially married women, have increasingly desired to return to work and remain there by having a break to give birth. They then return quickly to the jobs for which they have been trained. That is a good way for women to contribute to society, but, of course, it has implications for the unemployment statistics.
The final factor influencing employment are the changes in the developing world. When the hon. Member for Newham, North-East and I were buying one or two shirts in Sri Lanka, we must have been conscious that we were supporting the industry of the developing world, and rightly so. The pattern of raw materials coming from the developing world to this and other developed countries for production and sale of finished goods, often back to the developing world, has changed. That is a fact of life and it influences unemployment.
The Opposition are always quick to speak about unemployment. I suspect that Labour has bemoaned unemployment vigorously and at length during every period of opposition. However, every Labour Government have increased unemployment, as the Library will confirm. Anyone who examines the Opposition's policies will fear very much for people without jobs and for those who will become unemployed should there ever be a Labour Government implementing the policies to which the Opposition are committed.
Labour is committed to the restoration of the worst of the industrial relations abuses, to allowing flying pickets, unofficial strike action and secondary strike action, which all lost jobs in the past. It is committed to a high tax policy, high borrowing and high spending, which in the past have led to pain, suffering, misery and job losses. The IMF had to intervene in the past and in the future it would be the European Monetary Institute. Such policies cannot work, because cuts have to be made at a difficult time and even more jobs are lost.
I do not have to speak to people on my side of the political and philosophical fence to understand what a minimum wage policy would cost; I need only listen to Gavin Laird of the Amalgamated Engineering Union and read in the Library the works of the Fabian Society and, on Sundays, The People. All the independent experts—by 1193 the hon. Gentleman's lights—say that a national minimum wage on the lines proposed by Labour would lead to the loss of 200,000 to 2 million jobs. If one is generous and takes an average, 600,000 to 800,000 jobs would be lost, and the country cannot afford that.
A Labour Government would roll over on their back and uncritically accept any proposal from the European Community in order to prove that they are more communautaire than the Conservatives. They would accept directives such as those calling for fewer part-time workers, and would welcome a 48-hour rule. Hon. Members might be happy to consider a 48-hour rule, but the farming community, to name but one, would find it extremely difficult at harvest time if they were not allowed to ask their farm workers to work more than 48 hours a week. That is why we should regard Labour's albeit genuine crocodile tears as extremely salty.
The hon. Member for Newham, North-East asked us to consider a policy of full employment. That sounds like motherhood and apple pie until we examine what full employment really means. It would mean that the whole of the potential work force would be employed at any one time. It would be like having all our soldiers in the front line at the same time. There would be no reserves to call in as the army started to push the enemy forward and nobody to call in to support a fall-back.
As many people as feasible should be in work, but we should have an unemployment reserve in the economic battle when the economy expands. Otherwise, there will be no reserves, imports will be sucked in and workers abroad will benefit. By an unemployment reserve, I do not just mean a register but a reserve of people who are being trained and well paid and who feel part of the economy and of our industrial community. Only people who decline to join that reserve should be included in an unemployment register.
§ Mrs. Teresa Gorman (Billericay)
Does my hon. Friend agree that probably the only economy in which full employment was implemented was the Soviet Union, where those who did not have a job were usually found somewhere to go, such as Siberia or the Gulag archipelago? We have seen the result of that in the Soviet economy. It is not exactly one of the world's most prosperous economies, although the Opposition used to admire it greatly before it decided to drop its socialist credentials.
§ Mr. Bowis
I note that the hon. Member for Barnsley, West and Penistone (Mr. McKay) has left the Opposition Front Bench for the Back Benches. I do not know whether that means that he has changed his policy or is distancing himself from the official line of the Labour party on unemployment issues. Either way, I happily give way to him.
§ Mr. McKay
Even though the hon. Gentleman's view of full employment is entirely wrong, his other comments on 1194 the subject puzzle me. Full employment does not mean everybody working. It could involve, for example, people retiring aged 60 and that could happen now. In other words, the type of full employment that he envisages is not realistic.
I am puzzled by the hon. Gentleman's perception of a reserve of unemployed, a sort of Dad's Army pool of people waiting to be employed. He envisages a highly trained, skilled, well-paid pool of unemployed. How does that equate with his opposition to a minimum wage? If we are to have a fairly well-paid reserve of unemployed people, why not have a minimum wage?
A minimum wage involves the Government dictating to private employers what they should pay their workers. I answered that point in an earlier intervention. I am talking about a public sector reserve, state supported, composed of people without jobs for the time being, who are receiving training. We now have in power a Government who have produced the biggest-ever package of training in support of people who are out of work. We should adapt that and perhaps incorporate into it some of the schemes that have been tried and could be improved. Perhaps the TECs are coming up with new ideas about the sort of training that should be developed.
My hon. Friend the Member for Norfolk, North (Mr. Howell) spoke recently on the radio about his idea of paying, say, £100 a week to people joining a community task force, enabling them to obtain work experience and contribute to society, which does not simply mean filling in holes in the road but involves going in for a range of useful activities, from working on environmental improvements to caring for the vulnerable in society. The training could be technical or non-technical, enabling people to help, for example, in hospitals and so on.
We should look seriously at such ideas, because, unless we say that everybody should be in work at the same time, we cannot just forget the pool of unemployed. We must consider how to look after them, train them and give them the self-esteem and confidence they deserve. They would obtain that more readily if they were involved in some sort of community task force. The employment reserve of which I spoke would help them to contribute to society and to their personal future and well-being. Having answered the hon. Gentleman's intervention, I shall understand if he now wishes to return to the Opposition Front Bench.
I have a bid to make for additional assistance, and I suggest that there are three means by which we could help people without work more than has been possible in the past. The first would be to expand the system of training credits with which the Department has been involved. I understand that the pilot schemes have proved effective and I was delighted to be told in answer to a parliamentary question this week that other pilot schemes elsewhere in the country will be launched. The sooner that idea is introduced universally, the sooner individuals will have the right to a credit which they can cash in for training and further education, and we should be talking of both—of further education colleges and training schemes.
Secondly, adult education as a whole—or continuing education, as I prefer to call it—has an important role. Handing out certificates recently at my adult education college in Wandsworth, I was enormously impressed by the number of special needs students who received one, 1195 who never in their lives thought that they would qualify for a certificate. They and I were proud of what they had achieved. That shows what adult education can do.
That type of education can also achieve access, which can lead on to other types of training and education. Often, people who hesitate to come into the world of education—perhaps because English is not their first language, because education has not been highlighted as important in their households or because they missed an opportunity earlier in life—can come into adult education, not necessarily taking vocational courses in the first instance, but going on to take such courses, which provide them with the training and self-assurance they need. I hope that the Minister will discuss that point with his colleagues in the Department of Education and Science.
Thirdly, we must consider further ways to assist lone parents. I have particularly in mind community nurseries and similar support. All too often, when I meet constituents in tower blocks in Battersea, the women—often young women with children, the fathers of whom have disappeared—need opportunities to get out, to become trained, to earn and, in due course perhaps, to start to buy their council flats, building opportunities for themselves and their children. They are unable to do any of that because they cannot leave their children and start to climb the ladder that the Prime Minister has exemplified. Because I want that type of development to take place, I urge the Minister to discuss those issues with his colleagues in the Department of Health and in the Treasury.
I again congratulate my hon. Friend the Member for Shrewsbury and Atcham on initiating this debate, particularly since virtually everybody I speak to about employment, especially if they are out of work, tell me, "It's tough. We need help, guidance and training. But we also need Conservative policies because those are our best hope for getting the economy into the sort of condition that will ensure that we have real job opportunities in the future."
§ Mr. Richard Livsey (Brecon and Radnor)
Being an MP can be a frustrating experience. Seventeen minutes ago, in the Queen Elizabeth II conference centre across the way, there began the presentation of training awards by the Prince of Wales. The Secretary of State is there, as are people from Coleg Powys, in my constituency, to receive awards, and I should be there. The instructions say that I cannot enter the building after 11 o'clock this morning. Even so, I hope that the House will forgive me if, after my speech, I am absent from the Chamber for perhaps a quarter of an hour while I go there to congratulate the winners of training awards.
I congratulate the hon. Member for Shrewsbury and Atcham (Mr. Conway) on moving a motion about employment policies. Although I am not entirely convinced by the contents of the motion, I agree with parts of it. To point to progress in employment matters seems to be an anachronism when unemployment is today higher than it was in 1979. We appreciate, as other hon. Members have said, that more people are in employment.
One of our objectives should be to utilise labour resources, which are valuable to this country. They should be deployed to the maximum, while full employment is an ideal that we shall not reach. None the less, we should try 1196 to get as many people into employment as possible. The fact that unemployment is now double its 1979 level shows that the Government have failed.
One must look at the other side of the coin. There has been a good reduction in the number of strikes; we must give the Government credit where it is due. Their policy on reducing strikes has been successful, partly owing to the introduction of democratic ballots before strike action. That measure is not considered controversial on either side of the House; my party finds it easy to support ballots. Therefore, the two aspects of the motion need full consideration.
§ Mr. Arbuthnot
Does the hon. Gentleman agree that the success of the Government's policy is also to do with the banning of secondary picketing, which the Labour party would bring back with open arms?
§ Mr. Livsey
Having seen some of what went on with secondary picketing in the 1970s, I regard it as the unacceptable face of socialism. I experienced it on one or two occasions and I feel that it is not the way to proceed. It did the Labour party a great deal of damage, from which it is still recovering. Labour Members do not speak about it much now, and may now be moving in a more constructive direction.
Whether we have a successful employment policy, with the maximum number of people employed, depends on the state of the economy. That, in turn depends on how the economy is managed by the Government of the day and on the quality of management in British industry. Having worked in ICI, I know a little about the management of industry. I always felt that there was room for improvement in top management. Although the standard of management has been variable, it is much better than it was 10 or 15 years ago as a result of fiercer competition and a great deal of fall-out. The approach to management is not quite so lackadaisical as it once was, but there is still a long way to go, particularly in employment policies within the companies. The most progressive companies have an excellent record, but others could improve their labour and personnel management.
Yesterday, John Major celebrated his first year as Prime Minister but we know that he was Chancellor in Mrs. Thatcher's Government in the latter part of it—
§ Mr. Deputy Speaker
Order. The hon. Gentleman is breaking with our convention. We refer to hon. Members not by name but by their constituencies.
§ Mr. Livsey
I apologise, Mr. Deputy Speaker.
The Prime Minister cannot be proud of his performance in the past year. GDP has gone into reverse, falling from 2.4 per cent. growth to minus 3.7 per cent. That is bound to affect employment, as shown by the number of business failures, which has risen in the past 12 months by 14,000, and the number of mortgage repossessions, which has topped the 100,000 mark. That is not progress.
Even in the past 12 months, unemployment has risen from 1.66 million to 2.47 million—more than 700,000 in a short period. Some would say that that is because of the recession, but we are in a slump rather than a recession. In the part of the world that I help to represent—Wales—unemployment stands at more than 120,000. The Government cannot be proud of unemployment levels of 7.6 per cent. and male unemployment of 10.1 per cent.
1197 Unless the Government's employment policies are more effective, unemployment could hit 3 million within the next nine months. I hope that that will not happen, but it is a possibility.
Inflation has been a problem in the past. It has stoked catastrophic business failures and contributed to increased unemployment. High interest rates, which were the orders of the day until relatively recently, have undoubtedly contributed to that. The introduction of a uniform business rate has also had an adverse effect on business, especially small businesses.
Unfortunately, training has been cut by 40 per cent. since 1988. By May 1991, 66,000 training jobs had been axed in the voluntary sector alone. The Secretary of State had quite a struggle last summer in his discussions with the Treasury on the revised community training programme. He appears to have been capped by the Treasury and to have lost the battle. If so, training has been downgraded by the Cabinet and has less priority than it once had.
I know about the scourge of unemployment, because my family suffered badly from it. My father, who was a well-qualified master mariner, was unemployed for four years in the 1930s. He left me a legacy of letters inquiring about jobs, and the replies. I have tens of them in a box at home, and they make sad and tragic reading. They show what happens when an economy goes into a downward spin. They prove that Conservative policies did not work in the 1930s and are not working in the 1990s. Sadly, my father had to find work in the Gulf just before the last war and died out there when I was three years old. He went to find work 3,000 miles from this country, with tragic consequences, and I have lived with that all my life. It explains in part why I hold the political philosophies I do.
Today, in my constituency of Brecon and Radnor, where my father came from and where I come from, unemployment has doubled in the past 15 months. Only last week, I spoke to a garage owner who told me that almost every other customer was either losing a job or had just lost one in the past month or so.
Current Government policies seek to tackle the problem, and it would be churlish of me to say that the Government are not trying to come to terms with the unemployment problem. From the tenor of speeches that have already been made this morning, it is obvious that the work TECs do must be acknowledged. Their formation has been a good thing. The only problem is that they were not introduced soon enough. The Government are now considering skilled training, which is vital. Without a skilled work force, we cannot compete in world markets. That problem needs far more attention.
The employment action programme has created more places. The Government's targets of 30,000 places in 1991–92 and 60,000 in 1992–93 are at least a start in the right direction. They apply to people who have been out of work for six months or more. It is welcome that the TECs are administering that scheme and that a minimum reward is at least available in that situation. None the less, there is a long way to go and parts of the training programme have been cut, which has serious implications for this country's future.
We know less about the official Opposition's policy on the issue than we should, as is the case with many other aspects of their policy. They appear to rely on temporary 1198 work schemes that will be rewarded by a "proper rate for the job". The Labour party rightly emphasises the importance of training, but it has not made any financial commitment to it or identified any sort of financial commitment to the training programme. We are still involved in a guessing game about the Labour Opposition's commitment.
I shall not turn to the vexed question of the national minimum wage. I am proud to confess that, in the 1970s, I campaigned for a national minimum wage because I felt that it was the right thing to do then. With the wisdom of hindsight and the benefit of several years' experience, I now see that analysis, particularly involving econometric models, shows that it brings a reduction in employment.
§ Mrs. Gorman
Is the hon. Member for Brecon and Radnor (Mr. Livsey) aware of the statistics from the United States, where a national minimum wage was introduced in about 1947 when unemployment among the unskilled black people was lower that among white people, as the black people worked for less? As the national minimum wage was edged up, so the position altered. Now, unemployment among unskilled black people is six times higher than among whites, because employers have to pay the same rate to both, and they express their prefence by choosing white employees. We might deplore that, but it shows that the national minimum wage has harmed the most vulnerable people in that society.
§ Mr. Livsey
I take note of what the hon. Lady has said. I do not know of that detailed work, but she has made an interesting comment on the position in the United States.
It would be good to have a national minimum wage, but the practicalities in terms of employment would be dangerous for the management of the British economy. Wage levels in the United Kingdom are often too low; they are certainly far too low in my constituency, which worries me. The fact that there are low wage levels in many parts of this country is a result of the stop-go economy and stop-go management of the economy over the years, which have now brought about a recession. Unfortunately, a minimum wage in Britain at present would create more unemployment among the young and among women, who are both on low wages. I believe that low wages are an absolute scandal, but in Britain they are a result of the economy running at half-cock, which is regrettable.
It is easy for the Liberal Democrats to do a demolition job on the way that the economy has been managed and the way in which unemployment has crept up, but we must provide some analysis of remedial and positive measures to tackle the problem. We believe that, to reduce unemployment, there must be a national minimum income —which is different from a national minimum wage.
A national minimum income can be achieved through integrated tax and benefit systems that take into account a person's total net income—taking all factors into account. We believe that the various circumstances of different people can be calculated, and allowances made for them. We want reformed and strengthened wages councils to protect workers and employers in traditionally low-paid sectors. We believe that that is important.
1199 Those improvements depend on a successful macroeconomic policy and the way in which that is run by the Government and the European Community with which we are now closely connected. We need firm anti-inflationary policies, which would be better achieved through an independent central bank. We need much more investment in education and training and a much more effective competition policy, particularly in those industries that have recently been privatised, such as British Telecom, and the gas and electricity industries, where there should be real competition, not misuse of monopolistic powers. We need far more effective policies on small businesses to encourage employment and greater economic activity. The taxation system must be reformed and investment made in infrastructure.
§ Mr. Bowis
As the hon. Gentleman obviously takes econometric models to bed with him, I wonder whether he would look at the implications of Liberal Democrat policy on one of the small industries to which his party is committed—the armed forces. The Liberal Democrats are pledged to cutting those forces by 50 per cent. What effect would that policy have on the unemployment figures?
§ Mr. Livsey
I do not love econometric models that much; I just take note of them. Our armed forces policy was to be phased in over 10 years, not introduced at a stroke, as the hon. Member for Battersea (Mr. Bowis) appears to think. That policy, like that of the Government and the official Opposition, is at present under review because of the enormous changes that have occurred during the past two years. It is two years since we were talking in those terms, and the defence policy of every party is now under review. One need not come to the same conclusions now as one did two years ago.
Tax reforms are important, as is investment in infrastructure, particularly in public transport, such as British Rail and other forms of high-quality public transport, to take cars off the road. We must encourage investment in the environment and in environmental schemes, as well as investment in research and development, which is currently far too low in the United Kingdom.
Clearly, profit-related pay is extremely important if we are to stimulate higher-quality jobs, greater commitment to employment and more jobs. That aim must be linked to industrial democracy, profit-sharing and share ownership.
Such is the importance of education and training that we have committed ourselves to a programme of investment of £1.7 billion. The Liberal Democrats are not frightened to say how they would raise the finances to do that. We have regularly said that we are prepared to put another 1p on the standard rate of income tax to ensure that people are properly trained and skill-trained, so that we can tackle the problems of the 1990s and try to achieve a much more dynamic and effective economy. That will be achieved only by putting education and training at the top of the agenda.
Liberal Democrats believe that unemployment is a key issue which must be tackled head on, and I am glad of the opportunity to address the issue presented by this debate. Our programme "Just the Job", announced in July 1991, will create 396,000 jobs and is extremely important.
We believe in local employment initiatives in housing, schools and hospitals. We also believe in energy initiatives for insulation and draught-proofing—great programmes 1200 for housing. We also want to increase funds for training and enterprise councils and would like an additional £675 million allocated to TECs to increase training quality in the existing programmes and provide an extra 71,500 places. We think that such programmes will help to tackle the skill problems of this country.
We back the development agencies in Scotland and in Wales. They have been successful in bringing in inward investment and greater job opportunities in those countries. It is vital for small, home-based industries to grow as well. We believe that, in that way, Britain can pull itself out of the slump and out of the recession into better times economically.
§ Mrs. Teresa Gorman (Billericay)
I congratulate the Government on their remarkable turnround of our economy from the strike-ridden, dilapidated, collapsing structure in 1979, when we came in, to the dynamic and modern economy that we have today. It is unfortunate that there are people who are out of work, but we should try to keep a balance and remember that most people who want work are in work. Perhaps over 90 per cent. of those who want a job can find one.
Each day more people arrive in Britain and find work. Whenever I go in a minicab on my way to a radio or television programme—the companies are kind enough to take us in a car—I end up discussing with the driver how he has come to Britain in the fairly recent past and now has a job driving round London. I have met people from Africa, Europe and all over the world. Every day such people come to Britain and are still able to find work because they are determined to find it. They come here to make a success of their lives, which suggests to me that, despite all the gloomy statistics and stories that we hear from the Opposition, this is still a country of enterprise and opportunity, if one really wants to find that opportunity.
I welcome the fact that as a country we do not drive the unemployed into begging or starving. We are quite generous towards unemployed people. They are not well off, but they are not on the breadline and it is to our credit that we have a structure that supports people when they are between jobs. Nevertheless, there are still many opportunities for people here.
§ Mr. Tony Lloyd
What the hon. Lady has just said is astonishing. If she walks within a few hundred yards of this building, she will see young people, whom the Government have deprived of benefit, sleeping rough and begging on the streets because of the total indifference of people such as the hon. Lady and Conservative Members.
§ Mrs. Gorman
I take the hon. Gentleman's challenge. If he can produce individuals who will come and have a discussion with him or with me, I bet that we could find somewhere where they could work, especially in a city such as London where jobs in the tourist industry, in the retail trade and in the back-up to that are still available. I urge the hon. Gentleman to get a copy of the Evening Standard every night and to have a look. I urge him to go to the railway stations each weekend and to get the newspapers that are handed out free of charge. I urge him to read the newspapers that come through my door in Billericay. Each week, the free papers are stuffed full of job advertisements. That is how the newpapers pay for themselves. Although 1201 I am sorry for those young people, I believe that their problem is often psychological, rather than inability to find work. In a constructive spirit, I certainly would wish to help them to find work and I am sure that the hon. Gentleman would too, if he will bring those individuals to our attention.
The Government have a great deal of which to be proud in their record since 1979. Our economy continues to advance, to become more technological, to bring out new products and ideas and to develop new industries. We always forget the new industries that are blossoming. At this very minute things are being designed under railway arches about which we have no idea, but which will emerge as new industries in the future. Industry does not stop because one of our political parties likes to suggest that everything in Britain is going wrong.
How could we have guessed 10 years ago that there would be a video shop on every street corner? How could we have guessed that there was an enormous and developing business in entertainment of a new kind, with a range of information technology and machinery? All that is going on now and we do well to remind ourselves of it.
The Opposition's attitude to industry is negative because they largely view the world from the past. They always look back to the old smokestack industries. In fact, people did not have a very nice time working there, with dirty conditions, long hours, heat and underground work. The jobs from which we say that we want to rescue people are in industries which, thankfully, are now in decline. The Labour party should be pleased about that, hut, because those industries are its old power base, it naturally regrets that it no longer has trade union members coming from that source. The trade unions have sustained the Labour party over all these years and Labour gave the trade unions the appalling powers which were so badly abused in the run-up to the 1979 election when, as we all know, the country was brought to its knees by a new strike almost every week.
As an employer of labour, I have vivid memories of that time. I am one of the hon. Members who has started a business from scratch and who has been an employer of quite a lot of people whose jobs were created out of that initiative and enterprise. Another feature of our economy is that we have many enterprising people. We have people such as Alan Sugar, who start off in life without any great qualifications. They start off on a barrow in a market and they build up an enormous industry. People such as Richard Branson and the Body Shop founders constantly come up with new ideas. The freedom and liberalisation of our economy which were created by this Government allow such people to get new industries off the ground. That is another reason why, for the sake of our economy, we must stick with the Conservative party. We do not want to creep back to the economy that we had when Labour ran the country.
The Opposition are very fond of the idea that one can create new "safeguards" for employees. They love the idea of saying, "We must have laws that say 48-hour working weeks, two years' maternity leave and a minimum wage." They imagine that by designing such schemes and by imposing them on employers, they are protecting workers. They may change the job conditions for some people who are in employment. A business that depends on its trained 1202 work force may be able to take on board those extra restrictions on profitability. By and large, those extra "advantages", as the Labour party calls them, for the employee have to be paid for out of the profits of the organisation as a whole and they eat away at the capital that the business would ultimately have available to reinvest in jobs. The pay-off in the long term is probably bad, although it may seem quite good in the short term.
I am more concerned about employers who employ only a few people and whose main criterion is the flexibility of being able to take on staff, to change their hours from time to time and, on occasions, to get them to work 60 or 70 hours a week when they are busy. We do that in Parliament and my minicab drivers tell me that they work about 60 or 70 hours a week. People who do shift work often choose far longer hours than the basic hours that the Labour party would have them work.
If we impose those conditions on employers we shall discourage some of them from employing anyone. We never know how many jobs are lost that way. There are no bureaucrats going round counting the jobs that never happened, the jobs that went away or the small firms that have packed up because they could no longer make a profit under the new controls and restrictions on their work force. Nobody adds those up, but they are significant.
The restrictions often affect the most vulnerable people —people who badly need a job, but do not have the qualifications to get one in, say, ICI or the Department of Trade and Industry. Such people's best chance of employment is with small firms which may not be very profitable. To force increased employment costs on such firms, as we do when we add all that baggage to employees, is likely to drive them nearer to the margin, nearer to closing down. We can create conditions for an employer, but we cannot make him employ someone under those conditions. We must remember that, when we talk about the desirability of improving workers' conditions.
Furthermore, if restrictions eat too far into profits, employers will look elsewhere to get their work done. I remind the Opposition that many people come to this country to persuade businesses here to make their products abroad. When I ran the Alliance of Small Firms, we had regular visitors every year sponsored by the Government of Korea, who wined and dined small business men and tried to persuade them to take their work to Korea to be done. When things become too expensive to do in this country, the jobs will go abroad. Many employers will seek alternatives—perhaps now in eastern Europe. I understand that Rolls-Royce and one of the German companies—Mercedes, I believe—are about to open a new factory in Poland or eastern Germany. They will make things there which, if the climate were better and the labour more flexible and less expensive, they would have continued to make in this country. Yesterday we heard the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) complaining about the loss of jobs at Jaguar in her constituency. Where have the jobs gone? Perhaps they have been driven out of the country and gone abroad because extra conditions have been imposed here. Certainly that can happen. The conditions may sound wonderful, but they can have dire consequences.
§ Mr. Arbuthnot
Is my hon. Friend saying that imposing a condition to help a class of worker is quite likely to 1203 disadvantage that very class? For example, insisting on conditions that would in theory make the employment of women more likely often has the opposite effect.
§ Mrs. Gorman
I agree. I could not have said it better or more concisely. Employment is a two-way trade and it is as well to remember that the conditions that we in the House think can be imposed on employers may backfire on the very people whom they are supposed to help.
No one asks the woman in the part-time job in the bookshop whether she would like the extra maternity leave and all the rest of the baggage, or whether she would prefer to keep her job. I remember when sick pay and conditions were added and when, under the wages councils, wage rates were raised. Little shops employing people part time had to drop some of their jobs. They could not make more money from selling books. People did not suddenly rush into the shops to spend more money on books because the Government said that staff had to be paid more. So jobs disappear and nobody notices how many—except the people who lose out.
I urge the Government to continue to resist the idea of more regulations being attached to employees. The same applies to the minimum wage. We have heard plenty of talk about that and I entirely support the Government, not for dogmatic reasons but because I know that the minimum wage would harm some of the most vulnerable people—the unskilled, the ethnic minorities, and women.
Whenever there is a slight recession in the economy, we immediately hear talk of displacement. People ask whether we should encourage women to go to work and whether they are taking jobs away from men. We are beginning to hear such talk again and it is absolute nonsense. Women are a crucial part of our economy. Not only do they represent almost half the work force—we often seem to overlook that fact—but they are the most flexible element in it. They fill the nooks and crannies of the economy. They do part-time jobs which may not pay enough for a man, but which may be crucial in adding that little hit extra to the family income which makes all the difference between bread and marge and bread and jam. It is terribly important to remember that, although many of them prefer to do a part-time job because they have children to look after, the role of women is vital.
Many of the jobs that women occupy, particularly in nursing, teaching and retailing, are not jobs that automatically lend themselves to being done by men. Most people like to be nursed by women when they are in hospital. Most young children are probably better off being taught by women and I am sure that the chaps share my view that, when one goes shopping, it is nice to find a woman behind the counter. I have no objection to being served by a man, but such jobs go well with the work pattern, temperament and niceness of women. It is absolute tosh to suggest that, if we pulled all those women out of the work force, there would be loads more jobs for unemployed men.
§ Mr. Conway
My hon. Friend, who is known throughout the House for her staunch defence of women's rights, makes a valid point, and many hon. Members have wives who enjoy the opportunity to work on a part-time basis. But does not she agree that the pressure placed on young women to consider it in some- way demeaning to concentrate on their young family is having an effect on the social fabric of Britain that we do not see on the 1204 continent, where there is much less pressure on young mums to work? Is that fact perhaps reflected in the harmony of family life generally and in the divorce rate?
§ Mrs. Gorman
I listened with interest to what my hon. Friend said, but I reject most of it as absolute nonsense. We must learn to trust adults in our society to make decisions for themselves. Many young couples have joint mortgages and, when the wife has a baby, they still have the mortgage to pay. In those circumstances, the wife needs to earn a bit of money to keep the family out of debt. Women do not go out to work to pay for tights and lipstick, as some people think they do, but out of necessity. Many women are abandoned by men—something which men seem to do frequently these days—and have to raise children on their own. Those women need a job, not only to supplement their benefit but because, psychologically, they need a break from that very closed environment.
These days, women are highly educated and highly trained. Half our university graduates are women. Half those training as doctors are women. Half of those who go in for accountancy and the legal profession are women. Some 80 per cent. of people entering teacher and nurse training are women. We spend an absolute fortune training our young women and rightly so, but when they get married and—perfectly naturally—start a family, we slam the door in their faces and start talking about them as if they are misbehaving socially because they want to keep in touch with their work. That is nonsense; it is a ridiculous waste of money.
§ Mr. Arbuthnot
My hon. Friend is a wonderful exception to the rule, but does not she agree that women are sometimes their own worst enemies? I know that, on some selection committees, it is the women who say that they never wish to be represented in Parliament by a woman. It is often women who dislike the idea of other women being properly employed and having responsible jobs.
§ Mrs. Gorman
I thank my hon. Friend for his intervention—although I think that the situation is changing rapidly. Men get to the House largely by going through certain routines, one of which has traditionally been involvement in local government, and thus gaining experience.
§ Mrs. Gorman
And a good wife to back them up.
Since the introduction of domestic machinery, women have been able to find the time to take part in activities such as local government. They begin to build up their confidence and training and it is to be hoped that many of them will eventually come here. As I have said before, if I had my way, every constituency would elect both a man and a woman. The idea was originally Bernard Shaw's. That is the proper thing to do. If we did it, half the people sitting on these Benches would be women, and I would welcome that. Women are getting there, although we should remember that there is a glass ceiling over the heads of some of the women who are already here—a subject for another day, perhaps.
Nowadays, we have numerous domestic applicances the washing machine, the drip-dry shirt, throwaway nappies and Marks and Spencer with its marvellous 1205 pre-cooked food, and all those things have done much to emancipate women from the drudgery of the kitchen sink and endless cooking for the family.
All that has given women the option to re-enter the work force or to become involved, as I hope more will, in the political life of this country.
It is important for us to help women to keep in touch if that is what they want. Some women prefer to stay at home with their young children. We should remember that 80 per cent. of women with children under the age of five choose to remain at home and that is perfectly reasonable. Nevertheless, more and more women with children of school age wish to return to the work force and we should help them to do so.
It is part of my political crusade to persuade the Treasury to grant tax relief on the cost of caring for children while women are at work. That is particularly important for women during school holidays, in the mornings before school opens and after school. If we could help women in that way, we would make their lives easier and, incidentally, we would win a few more votes.
§ Mr. Arbuthnot
I have agreed with almost everything that my hon. Friend has said up to this point. However, tax reliefs are a pernicious and damaging part of the tax system. I believe that there should be low tax rates and very few tax reliefs.
§ Mrs. Gorman
I accept my hon. Friend's point. In an ideal world, we would have a flat tax rate of 10 per cent. and no allowances. However, we use tax to encourage certain activities. For example, tax relief on mortgages is intended to encourage people to buy their own homes. We also provide businesses with tax assistance, not least on motor cars for transport. Indeed, if a business man has a rottweiler to guard his business premises, that is tax deductible. However, if a women needs help, she is treated as though she is asking for the moon. In fact, women are simply asking for the kind of help that men take for granted in their jobs. They have secretaries and personal assistants. Even if a man simply has a young labourer or apprentice who hands him tools, that helps the man to be more productive. I should like more of that help to be given to women, not just because we want to be nice to them, but because they have a perfect right to go out into the world and exercise their talents.
I compliment my right hon. Friend the Prime Minister on his support for the Hansard Society's Opportunity 2000 initiative to encourage more women who opt for the workplace to get through into the top jobs where they can make a vital contribution to the design of new industries and the top element of our society. Women have a tremendous amount to contribute to management structures because of their intellect and because of their natural personalities and culture which are kinder, softer, nicer and more pleasant. We could do with more of that in the board room. That is another reason why we should help women back into the work force.
I want to refer to training because it occupies a great deal of our time in employment debates. In Germany, young people automatically work for a business when they leave school if they do not go to university. They work for two years at what in the old days would have been called an apprenticeship. Every business in Germany, even 1206 bakers and plumbers, offers that training. The young person, who is actually not very productive, is paid a small amount of money. He is not expected to be able to live on it: it is pocket money plus. Between the ages of 16 and 18 or sometimes a little older, the young person lives at home and learns on the job. It is possible for the employer to provide such training because it is not costing a fortune to employ the young person.
However, if a young person is taken on in this country, he must be paid 50 or 60 per cent. of an adult's wage. That young person is not productive. The work that he can do at that age—unskilled and inexperienced—does not warrant an employer paying that money. If we force such wage levels on employers, they will give up training young people on the job. That has already happened in this country. That policy was dictated by trade unions in pushing up wages generally. They have made it more expensive to take on youngsters. Incidentally, that applies not only to small firms which may have trained two or three apprentices but to big industry.
Every year, ICI used to take on about 40 or 50 young women and train them as secretaries. It gave them an excellent training in office technology which enabled them to launch themselves into all sorts of jobs in other companies. Gradually, because the cost of paying those young women increased, the scheme was abandoned. The company said, "Let the Government train them; they have made it too expensive for us." We have created a real dilemma for training youngsters.
My experience in small business tells me that training schemes such as YOPS, TOPS or one of the other flops that we have had over the years are not the answer. I do not know whether TECs will help to bridge the gap—perhaps they will to some extent. However, I have always pressed the point that a bright youngster can go to university, get a grant and be looked after by the state until his or her training is finished, but a young person who is practical, not academic, and who wants to train with the local plumber, butcher, baker, mechanic or whoever, is supposed to be able to get money and resources from the employer. Clearly, that is classist, sexist and biased in every possible way. I have always pressed on the Department that we should make available a grant, voucher or whatever for youngsters who are not academic but practical and want to train on the job in industry.
I am glad that the Government are now pushing a number of those schemes. I hope that they will be widely implemented so that any youngster leaving school will have the choice of going to university to be trained as a lawyer, accountant and so on—something that they can do in a college. The alternative, which is training on the job, should be treated with equal seriousness and youngsters should be able to claim a grant in exactly the same way as those who happen to be academic and go to university.
People with practical skills are just as important to our economy as those with academic or intellectual skills. I have often said that a city such as London would grind to a halt in a week if all the plumbers went on strike. We could probably manage for a couple of years without lawyers or accountants and nobody would notice the difference. People with practical skills are greatly undervalued. Giving them the same grant and help as we give academic young people going to university would help to give new status to those jobs.
I congratulate the Government on having embarked on that policy. I hope that they will continue to pursue it 1207 along those lines. I hope that, when considering future employment policies, the Government will continue to bear in mind the attitude of the people who create jobs—employers. If we allow a structure of regulation and control and obligations and expense to build on the back of the employee, we will make many of the most needy, vulnerable, least skilled and, perhaps, the least bright less attractive to employers. I refer not to employers such as nationalised industries or large corporations, because they can cope and can help to spread the cost, but to small firms—the guys and the women—which employ two or three people. We must keep them in mind. I urge Opposition Members to look again at their policies in the light of the employer, in particular the small employer, if they really want to help people to get back into work.
§ 12.9 pm
§ Mr. Tom Cox (Tooting)
This has been an interesting debate, and I welcome the opportunity to participate in it. The hon. Member for Shrewsbury and Atcham (Mr. Conway) opened the debate by saying how well things were going in his constituency. Of course, I am pleased to hear that, but I must advise him that things are not the same everywhere, and certainly not in London. It is another world for those of us who live in and who represent London constituencies. As my hon. Friend the Member for Newham, North-East (Mr. Leighton) said, the problems of unemployment go wider than simply losing a job. A great many other problems can arise. Many people have to worry about whether they can keep their home and whether their marriage will survive. Sadly, we know that people who become unemployed run into enormous problems trying to keep their home and to maintain what, for many years, might have been a stable marriage.
Throughout the 32 London boroughs, many small businesses are being destroyed. Many have been developed over many years by a lot of hard work and by the people who were running them putting as much money as they could back into them, but all those years of effort are now being destroyed. In any shopping area in London—I am sure that this is true of many other parts of the country also—one can see shops shut and boarded up, which show no sign of reopening. That is what life is like in London, but, as I have said, I am sure that hon. Members who represent other parts of the country can tell the same story.
That has happened against the background of 12 years of Conservative government when the Government have had two of this country's greatest assets at their disposal, which should have ensured an on-going flourishing economy. The Government have had an abundance of money. I doubt whether any Government in our history have had similar financial resources available to them. However, the vast sums of money from North sea oil and from selling this country's state assets have, in the view of many people, been squandered.
The Minister wanted to know how recent were the figures that my hon. Friend the Member for Newham, North-East quoted about London. My first quotation comes from the London Evening Standard of Tuesday 26 November—this week. Under the headline "6,000 chasing 40 part-time Ford jobs", the article states:The stark reality of the recession in the South-east was brought home today when it emerged that 6,000 people are chasing 40 part-time manual jobs at Ford's biggest car plant …Among the avalanche of applicants for the 40 part-time 1208 posts offered by Ford are hundreds of letters from well-qualified former white collar employees who have lost their job since the recession began hammering London and and South-east.Let us now look borough by borough at the unemployment figures for London. These figures come from a document published on 14 November this year, which shows that 16,000-plus people are out of work in Brent. The figure for Enfield is 11,000; for Haringey 17,000; for Croydon, 12,000; for Hounslow, 8,000; and for Newham, 16,000.
Those are just some of the boroughs. Hon. Members may think that I have been selective and given only the worst figures. But I could have quoted Hackney, which has 18,000 out of work, or Lambeth, which has over 22,000 people out of work. That is the position in London. In the borough for which I am one of the Members of Parliament —Wandsworth—we now have 14,700 out of work. We have the eighth highest unemployment of the 32 London boroughs.
The hon. Member for Battersea (Mr. Bowis) has the third motion on the Order Paper, which we know will not be reached. He talked about the position in the Conservative-controlled borough of Wandsworth. It is a pity that we shall not reach his motion. If I had been called, I could have described the other side of the supposedly wonderful borough of Wandsworth. There is another, depressing side. The hon. Gentleman's motion does not contain any reference to employment. In fairness to him, he touched on both employment and unemployment.
The motion that we are debating says:this House welcomes the great progress that has been made in employment".Such progress certainly has not been made in London or, indeed, in many other parts of Britain. The motion also refers to the European social action programme and a national minimum wage. I sometimes wonder what Conservative Members know about the social charter.
I am one of this Parliament's delegates to the Council of Europe and I sit on the social and health committee. We do not have an employment committee. The social and health committee deals with employment and welfare in general. It is composed of parliamentarians from various countries. The Council of Europe has 25 member states of all political persuasions. The delegates may be the equivalent of Labour, Conservative, Liberal or independent Members of Parliament. They represent Governments controlled by Conservatives, socialists or coalitions.
Delegates to the Council of Europe tell me and other British delegates that they look with utter dismay and disgust at the British Government's attitude to the social charter. When Conservative Members talk about the social charter, it appears that all that it proposes is a minimum wage. A minimum wage certainly figures in it, but the social charter covers many other matters and it would be interesting to know whether the Government support some of them. It deals with not just salaries but working conditions, safety regulations at work, opportunities for women and a range of other issues.
The British Institute of Management supports the proposals in the social charter. It recently sent out a document called "The European social dimension—the manager's view", which says:Managers welcome the principles of a Social Europe. Employees at all levels should be involved in the creation of wealth and share in the beneifts that flow from it. The United 1209 Kingdom government should recognise this and negotiate on the social dimension as a willing and constructive participant. In many areas, Britain leads Europe in the development of good management practice. We should turn the Social Charter to our advantage to spread best practice throughout Europe.
§ Mr. Cox
Well, well—a comment from the Minister. He and I have clashed before. So that is Government policy. It is not merely my hon. Friends and I who do not believe that that is Government policy: the Europeans do not believe it either.
I have never seen the Minister at a Council of Europe meeting. That is not a criticism, as I realise that certain Ministers go to certain meetings, either at the Council of Europe or at the European Parliament. However, if he is in doubt about what people believe, and if he wants to defend the Government's policy and his Department's policy, I will make the necessary request to the social and health committee for him to do so. He will not find it an easy ride—and not because of people like myself. I would not need to say anything. He could hear the comments about the Government's policies from other European parliamentarians on the social and health committee.
Training is another aspect of the motion. After 12 years of Tory government, I do not think that there is any doubt that we now have one of the worst training records of any industrial nation. The Financial Times on 31 October 1991 carried a report headed "Quarter of business report skill shortages", which said:Nearly a quarter of businesses reported skills shortages in the past year, according to government figures published yesterday.Also the report, Training Statistics, shows that skills shortages over the year to May rose to 41 per cent in some high-technology sectors.The Engineering Employers London Association sent me a letter on 22 November which says:The engineering industry is keen to play its full part in reviving the country's economic fortunes.The association obviously does not think that our economic fortunes are so rosy, despite what we heard earlier. The letter continues:To do this it needs to work in practical and productive co-operation with government to ensure an adequate supply of well educated, trained and motivated people; to increase investment and industrial capacity; and to create and sustain conditions in which engineering can be competitive and innovative.It would appear that that major organisation in London does not think too much of what the Government have been doing.
Hon. Members from both sides of the Chamber have spoken about things that we do have, such as TECs and local enterprise companies. Business people—whether from large or small businesses—complain bitterly about the system. They find it utterly confusing to work with, and they are certain that more companies will have to pay for training as financial help from the Government is reduced.
What does the electrical engineering installation industry have to say?The situation currently remains fluid with rumours of substantial reductions in Government support for Youth Training, the underlying implication being that it will be ultimately the employer's financial responsibility to meet the cost of training.1210 There are now 82 training and enterprise councils in England and Wales to deal locally with all training issues. All funding is now channelled through these bodies. The industry now has to negotiate separately with each of the 82 TECs, and each TEC determines the local needs and establishes the rate of financial support. Therefore, there are 82 different rates of financial support.
It would be interesting if, possibly, the Minister could pay a little attention. The industry continues:A trained electrician, with similar training costs across the country (from Cornwall to Northumberland), is valued differently from TEC to TEC, training support ranging from £15 to £50 per week.That is the confusion which companies that most certainly want to play an active role in training their work force must deal with when working with the Government. That is why so many organisations are, rightly, complaining bitterly about what is happening.
The Heating and Ventilating Contractors Association, which represents another big industry throughout the United Kingdom, said of the Government's policies:Over the last two years the government has introduced so many different schemes …that it is sometimes regarded as not merely moving the goal posts but actually changing the game.It goes on to say that the arrangements have produceda bureaucratic paper chase for industry, government and local organisations themselves. The reality is that government cannot deliver its training guarantees because it does not have a completely 'hands on' control of the new systems it has introduced.The association says that the waste in human and financial resources argument has been rehearsed many times without any constructive response from the Government. It comments:Although college fees for the standard City and Guilds pipe fitting course"—the association, by its very nature, would be involved in that—operated by the Heating and Ventilating Contractors Association through its own managing agency costs (apart from London) £31 per week, per student in the first year, each TEC provides a different level of funding.For example, Northampton provides £10, Sheffield £56, Avon £26, Bury £22 and Manchester £30.
If the Government have this great commitment to training, how does the Minister expect a business to be committed when an association to which employers belong, just as workers belong to trade unions, says that this is a jungle of confusion in which they must try to operate? That is why, sadly, young people face the same difficulties as those of people of other ages. The hon. Member for Battersea (Mr. Bowis) spoke about people in their 40s and 50s who have lost their jobs. If they live in depressed areas, they find it difficult to get retrained and obtain jobs which they hope will last for about 10 years. The young unemployed often face the same difficulties. That happens despite the fact that, during their period of office, the Government have had the advantages of the income from North sea oil and from the sale of our assets.
Britain has great skills, many good companies, and a good work force, but it lacks opportunity and confidence. Above all, there is a lack of Government support for the very people who want to help this country prosper and develop.
Europe offers us enormous opportunities, but we are being left on the sidelines. I am a member of the Council of Europe and treasurer of the British group on the Inter-Parliamentary Union. During the past year, we have 1211 been greatly involved in central and eastern Europe helping emerging democracies to learn how our Parliament functions, but we do not discuss only parliamentary democracy. Next week, we are to have a visit by a parliamentary delegation from Hungary. Europeans always say to us, "Why do you British not become involved in our country?" The lack of meaningful commitment by the Government bedevils British industry and the people who try to run it.
§ Mr. Conway
All hon. Members appreciate that the hon. Gentleman plays a distinguished role in the Council of Europe and an even more distinguished role in the IPU. It does not matter whether the hon. Gentleman is being fair to the Government, but he is being less than fair to our country when he speaks about the part that we play in Europe. I am sure that, when the hon. Gentleman attends international meetings, he makes the point that the United Kingdom is a vital part of the European Community and has applied more directives than any of the other member states. We should not let people get away with saying that Britain is not playing its role. We are in there and doing more than any of the others, as I am sure the hon. Gentleman recognises.
§ Mr. Cox
The Minister says that they are wrong, but the events of the past two or three weeks have been confusing and have not made it clear what the Prime Minister will or will not sign for.
The hon. Member for Shrewsbury and Atcham says that we are committed to Europe. He should read in today's issue of The Daily Telegraph a letter from 25 prospective Conservative parliamentary candidates who say, "Hold on, we don't really want anything much to do with Europe." That is the view of the hon. Gentleman's colleagues, and he should bear it in mind when he reflects on what Europeans say about us and our attitude.
Within the next four or five months, we could be in an election campaign. The debate in that campaign will not only be about the attitude of the electorate to the national health service, to housing, to the absolute chaos in our transport system, to the reports only this week about education and about how parents have to contribute more and more money to educate their youngsters.
Apart from those issues, the voters will take an even stronger line over the total lack of policies in the last 12 years to lead Britain into developing a modern industrial base. That base is still lacking, despite all the opportunities, especially financial, that have been available to the Government. As soon as the electors are given a chance, they will indict the Government on all those matters.
§ Mr. Jacques Arnold (Gravesham)
I welcome the initiative of my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) in initiating a debate on employment policies. Although this is a vital matter, it is regrettable that the exposure of the Opposition green leather Benches is in excess of 99 per cent.
1212 The motion includes the important issues of the strike record of the nation and a national minimum wage and I shall confine my remarks to those. In terms of strikes, we have made considerable progress. Last year we had the record lowest number of strikes for 56 years. We seem at last to have got away from the nonsense of class war and head bashing which so damaged our social and industrial structure.
The present situation has been due largely to the long-standing policies of the Conservatives over the past 12 years on reforms through industrial relations policy. Those reforms have been fundamental in handing back the trade unions to the members who pay the union subscriptions. People join trade unions only if they believe that they are relevant and worth the subscriptions involved. The reduction of millions in the membership of trade unions is perhaps a commentary on the position.
Trade union members have got back control of their unions by the balloting that has been made possible by Conservative legislation. They ballot for their leaders and when deciding whether to strike. There have been examples time and again of politically motivated union officials proposing strikes which their intelligent members have chucked out.
Legislation has also brought trade unions back within the law, limiting their unfair coercive powers. That is why, even during the current recession, the British economy has shown remarkable resilience. Proof that the economy remains effective is revealed by the figures for investment by foreign companies in the European Community. The Japanese have placed 40 per cent. of their investment in the United Kingdom, with the remaining 60 per cent. spread among the other 11 members of the EC. American investment in Britain is even higher, with 42 per cent. coming here and the other 11 struggling to obtain the rest. That shows the effectiveness of the British marketplace.
Thank goodness we have seen the end of the old knee-jerk reaction to industrial relations and strikes. Gone are the days of the political antics of the likes of Red Robbo. An example of the great days of Labour Government was the freelance journalist who, out of curiosity, ran through the docks in an old raincoat, waved his arms in the air and yelled, "All out, brothers", and the dockers came off the ships and sat around the dockside for the rest of the day. They thought that their union had instructed them to cease work, although they had no idea why. They acted in such an inefficient manner that they were not even responding to their union.
Those days have gone, but what a tragedy it would be if the Labour party were able to put back the clock. I wonder how many of our constituents know the policies that the Labour party currently advocates on trade unions. If a Labour Government came to office, they would legalise secondary strikes and flying pickets, limit the courts' power to sequestrate a union's assets and make unofficial, unballoted industrial action lawful. We do not want such legislation.
It is worth considering that Labour's active contribution to industrial relations in recent years has been equally negative. How many people remember that the Labour party supported the P and 0 seamen's strike in 1988, the dock workers' strike in 1989, the railway workers' strike in 1989, which caused such misery to my commuting constituents, and the ambulance men's strike in 1989? It supports such strikes because it is bound to its paymasters. However, the public is not given that impression.
1213 The Leader of the Opposition, writing in the Director magazine, made an extraordinary claim in respect of the trade unions and the Labour party. He said:There isn't a dependent relationship of any kind".That is not the view of Ron Todd, who explained only last August that the Labour party needs the trade unions' money and strength. But it fears and resents that power, as is shown by the Leader of the Opposition's comment.
We must not forget the reality—the Leader of the Opposition is sponsored by the Transport and General Workers Union. He expressed his real views on the matter in a speech to a TGWU conference and they were reported in The Daily Telegraph on 11 July this year. He said:in every region, in every industry, in every constituency, this union represents the Labour party. This union is the Labour Party in so many ways".This country forgets that basic background at its peril. The problem is that, for the Labour party, the matter is a one-way bet. Union restrictions and wrecking action equal higher unemployment. Higher unemployment equals party political advantage. Time and again, it appears that the Labour party wants higher unemployment. After the 1983 election, the Leader of the Opposition predicted that the new Conservative Government would create mass unemployment of 6 million people. Not to be outdone, Arthur Scargill trumped that figure with 8 million people. As so often happens with such predictions, the Labour party was disappointed when unemployment fell steadily for some years thereafter.
The syndrome of pressure from the Labour party would bring about higher unemployment, which would be reinforced by its highly damaging policy for a national minimum wage. A national minimum wage sounds nice and caring, but all academic studies based on realities and projections show otherwise. A former Labour party Employment Minister, Mr. John Grant, has looked into the matter in detail. In an article in The Guardian on 28 June this year, he recalled a study on the national minimum wage carried out for Barbara Castle in 1969 when she was Secretary of State for Employment. Mr. Grant recommended that the study should be dusted down, brought out and madecompulsory reading for the Labour leader Neil Kinnock and his economic team as they flounder around in their quest for a presentable policy which tackles inflation.Mr. Grant extrapolated from the 1969 report that,appropriately updated for inflation, a statutory wage today would add at least £1,000 million to the annual pay bill. To keep it to that level would imply remarkable restraint by higher paid workers.We all know that such restraint would not be shown. He continued:There is only one context in which a statutory minimum wage makes sense for Labour—as part of an overall incomes policy.We have been told time and again that there will be no overall incomes policy, despite the fact that when the Leader of the Opposition was a young Member in the early 1970s he favoured one. The Labour party has clocked up yet another U-turn.
What is the reaction of the trade union movement to the proposals for a national minimum wage? On 5 June this year, Gavin Laird of the Amalgamated Engineering Union stated on Channel 4: 1214It's never worked in the past, there's no logic for it, it doesn't work in any other country and it certainly will not work in Great Britain.We all remember the association that Joe Haines of the Daily Mirror had with the Labour party. He said:The minimum wage proposals won't work and if they do, won't help.The Fabian Society, which is so close to the background of many Opposition spokesmen, has produced an analysis showing that up to 880,000 jobs could be destroyed by the minimum wage. Other academic studies have researched the matter in considerable detail. Their analyses show that if there were to be a Labour Government and they introduced a national minimum wage, the jobs cost would amount to 1.5 million in the first stage of that policy, with a minimum wage set at £3.40 an hour. When the second stage of that Labour policy was introduced, the loss of jobs would rise to 2 million.
The Labour party may advocate policies that inflame unemployment, particularly at the bottom end of the scale for the most vulnerable people, but the Conservative party does not. We should be concerned to improve skills and to allow people to retain their self-respect and win jobs—better and better-paid jobs—on the basis of their innate skills, complemented by the training that we support. That is why I welcome the wide range of measures introduced by the Government.
Britain is the only country to guarantee an offer of a place on a two-year youth training scheme for every 16 and 17-year-old. Under the last Labour Government there were only 6,000 such training places; today there are well over 250,000. The hon. Member for Tooting (Mr. Cox) referred to the employment training programme. Our employment training programme in this country is the largest in Europe. Job clubs deal sensitively with the unemployed, assisting them in the practicalities of getting back to work and half of those who leave job clubs go straight into jobs.
Training and enterprise councils provide an imaginative way to draw local industry into training to ensure that employment and youth training is tailored to the precise needs of local communities. I see my role as being supportive of the Kent TEC in my area rather than looking for teething problems about which to complain. I wish the TECs success in achieving practical steps which will deal with the problem of unemployment.
§ Mr. Tony Lloyd (Stretford)
This has been an interesting debate. I place on record my admiration for the hon. Member for Shrewsbury and Atcham (Mr. Conway) for choosing to table a motion on employment, given that over the past 12 months, unemployment in his constituency has increased by 50 per cent. We know that that 50 per cent. increase in unemployment represents considerable human misery for those of his constituents who now find themselves out of work. It is a little sad that, as Conservative Members have spoken, one after the other has shown almost no recognition of the human costs of the total failure of the Government's employment policies over almost 13 years.
It may be helpful to examine the state of the labour market as we move into the Prime Minister's second year of office and into the 14th year of a Conservative Government. Although it suits Conservative Members, such as the hon. Member for Gravesham (Mr. Arnold), to 1215 try to re-run the battles of the 1970s, those are not the battles that the British public want to fight. The public want an agenda that faces the 1990s and the problem of mass unemployment, with which the Government have now dabbled twice. The Government have unashamedly used unemployment as an arm of social and economic policy.
My hon. Friend the Member for Newham, North-East (Mr. Leighton) commented that the Chancellor of the Exchequer said that unemployment was a price worth paying. There have been no apologies to my constituents, to those of my hon. Friends or to those of Conservative Members for the huge human suffering which the policy has caused. There has not been an increase in unemployment in my constituency on the scale that exists in Shrewsbury and Atcham. The reason is not that there has been less unemployment, but that unemployment has been outrageously high in inner-city Manchester throughout every year in which the Government have been in power.
Unemployment has caused poverty and pressures on families, which lead to their breaking up. Unemployment has led directly to the associated problem of crime, to the problem of drug abuse and to the problem of drug sales in which crime is involved. It has led to women working in prostitution.
Those are the realities of the policies of unemployment which the Government accept as "a price worth paying". Those social consequences are so stark and alarming that they are dividing British society down the middle. Those who are lucky enough still to be in work are no longer secure, but at least they can count the blessings of being in work. They are divided from those who are thrust into unemployment and who struggle to make ends meet.
We know that, even among the working population, one of the greatest growth areas has been the increase in part-time work, and the associated growth of poverty wages and financial difficulties. Home working has risen to an extent that we never knew in the past, and it has caused some outrageous employment conditions, yet not one word of apology for the damage that they have done comes from Conservative Members.
Over the past 12 months, unemployment has risen to 2.5 million. Using the basis that applied in the late 1970s, more accurate figures would show that, once again, we are above the 3 million mark for those out of work. The numbers of those in long-term unemployment have increased to more than 650,000—an increase in one year of 50 per cent.
As my hon. Friend the Member for Newham, North-East pointed out, the chances of those 650,000 people obtaining a decent training scheme, whether as part of employment training or elsewhere, are virtually non-existent. There have been cuts in ET from the heady days when we were promised 600,000 places a year to the present, when the numbers on ET courses have been cut. Last year, ET starts were more than 200,000; by March this year, ET starts were down to 197,000. There are 197,000 employment training places for 650,000 long-term unemployed people—the casualties of the Chancellor's economic doctrines and ideologies.
In the construction industry, which has already been hammered by unemployment, another 100,000 people have been thrown on to the dole queues. The hon. Member for Billericay (Mrs. Gorman) said that she had benefited from talking to taxi drivers about the growth in 1216 self-employment. I must tell her about the self-employed taxi driver who drove me recently. He told me how bitterly he regretted having to do such work, because he was a skilled construction worker who had been thrown out of work and denied the opportunity of earning the living that he wanted to earn in a trade that he valued. He could have been helping to build the homes, schools and hospitals that the country so badly needs. Such are the results of the Chancellor's policies.
Manufacturing industry, which was so brutally hit by the Government in the early 1980s, has shed another 300,000 jobs. The service industries, which we were once told would be the salvation of the country, have shed 150,000 jobs over the past 12 months. The right hon. Member for Blaby (Mr. Lawson) used to insist that manufacturing had no future and that service industries would drag the country into a brave new future.
Conservative Members once thought that they could contemptuously treat the south-east as their own, as they damaged employment in the north and in other parts of Britain. But now unemployment in the south-east has grown by a dramatic 109 per cent. in the past 12 months —making it the worst affected region in the land.
That is the reality of the modern labour market in Britain—an economy increasingly dominated by people either out of work or under-employed and by outrageous and unacceptable working practices. I hope that the figures I am about to reveal will shock Conservative Members.
Conservatives talk about days lost through industrial action, but I ask them to compare with that figure the number of days lost through directly preventable industrial injuries, accidents and illnesses. Every year, about 60 million working days are lost through preventable accidents and ill health. By underfunding the Health and Safety Executive and the mechanisms for protecting people at work, the Government guarantee that that figure will continue to be a running sore on the back of the British economy.
§ Mr. Forth
I am sure that you, Madam Deputy Speaker, will forgive the ritualistic element that enters such debates from time to time. The hon. Gentleman yet again trots out the tired old charge about underfunding the Health and Safety Executive. With as much enthusiasm as I can muster at this stage in the debate, I remind him and the House yet again that the Health and Safety Executive gets the resources it asks for to do its job and that the Government have confidence in its performance. Does the hon. Gentleman believe that the Health and Safety Executive is not doing its job, or is he making an explicit pledge for more funds for it should he ever be in government? I would appreciate it if he made that clear to the House now.
§ Mr. Lloyd
No, not at the moment.
I have tabled questions asking the Minister to explain the recruitment ban that the Health and Safety Executive impose on further employment last year. The ban was caused by lack of funding, yet the Minister has said in 1217 parliamentary answers that no such ban existed. I have a letter from the Health and Safety Executive making it clear to the relevant trade unions that such a ban existed. Is the Minister prepared to explain how he has misled the House of Commons?
§ Mr. Lloyd
I welcome that commitment.
I must reiterate the charge that 60 million days are lost in British industry every year. It is calculated that that loss is avoidable, but the Government are simply not prepared to take the necessary steps to prevent it.
We have also lost a staggering 4 billion days as a result of the increase in unemployment since the Government came to power. The amount of money lost to the economy—some £400 billion—is so enormous as to dwarf revenue from North sea oil and all the other benefits to which my hon. Friend the Member for Tooting (Mr. Cox) referred. The Government have squandered the future of the British people and the British economy in pursuit of their policies of high unemployment.
§ Mr. Arbuthnot
Has the hon. Gentleman compared the number of days lost through unemployment since the Government came to office with the number of days gained through employment since the Government came to office?
§ Mr. Lloyd
The days lost through unemployment are the days that the economy forgoes; for the purpose of deciding at what level the economy could be operated, that is the significant figure. Any other figure has no relevance at all—except to massage the hon. Gentleman's own prejudices.
We are aware of changes in the nature of the labour market and I shall deal with that in referring to the challenges that we ought to face. There is an alternative agenda for Britain. We shall not hear it from the Minister this morning and, so far, we have certainly not heard it from his hon. Friends, with the possible exception of the hon. Member for Billericay, who briefly referred to the kind of labour market that we should have in Britain.
How are we to turn away from this destructive Government's capacity to view Britain's future as that of a low-wage, low-cost producing nation, and turn our economy instead into a highly skilled, high-technology, high-performance economy? There are a number of prerequisites for that, and the first is training. Whatever set of standards one applies, the British work force is undertrained. Training provision in Britain bears scant comparison with that in countries throughout the rest of western Europe, as well as that in Japan and the United 1218 States. We know, for example, that we lag way, way behind other OECD countries when it comes to young people going into full-time education and training.
Only about 30 per cent. of people in the British labour force have any qualification—a figure which compares very badly with those of other western European countries. The Secretary of State for Employment lost the battle at the time of the autumn statement this year. The Financial Secretary to the Treasury worsted him and made it clear that money would not be made available for training. As a result, money for youth training places has been cut by £25 million and those who Conservative Members say represent the future of our country—on that, at least, they are quite right—are to lose training opportunities. On employment training, the Secretary of State lost the battle to the tune of £105 million.
The commitment from the Labour party is clear. We shall reverse those cuts in training. We must do so, because, without a proper effort to ensure that training becomes a priority, we shall simply doom Britain to the same sorry cycle of low-pay, low-cost production.
Given that, in a slump, one business in four operates with a skill shortage, it is clear that the Government have the training relationship fundamentally wrong. That is why a Labour Government will introduce a training levy. We shall ensure that those employers who are already facing up to their training obligations will be rewarded for doing so, by preventing undercutting and unfair competition from employers who are not prepared to train. That will have a significant effect on ensuring that there is a level playing field so that the good employer does not face unfair competition from the bad employer.
§ Mr. Conway
Has the hon. Gentleman costed the impact that that will have on businesses and the consequent effect on jobs? Is he not contradicting a statement from the Opposition Treasury team, who have said that they will give a costed commitment only to pensions and maternity benefits? The House needs to know the figures, so that we can understand precisely what the hon. Gentleman is saying.
§ Mr. Lloyd
Half a per cent. of the payroll—and that will be used to fund training. That is a legitimate activity, which is pursued in many other countries. It is pursued at a high level in France, where it is successful. French training is better and more successful than ours. We aim to ensure that the British work force is the best trained work force in the world. Without that kind of training commitment, we doom Britain to having no future in terms of competition with the rest of western Europe.
Britain has a very poor record with regard to the number of women in the labour force. Between 1979 and 1991, the rate of increase of women's pay relative to men's has been so slow that, if we simply continue at the same rate, it will be 50 years before women's pay reaches parity with men's.
The Minister should bear in mind the fact that my four-year-old daughter, who will be entering school next year, will be thinking of retirement before her pay reaches 1219 parity with that of men if she has to wait for this Government and their voluntaristic approach. She and I are simply nor prepared to wait for that.
§ Mr. Lloyd
That is a fair question. Like the hon. Member for Billericay, I welcome the role of women in the labour force—unlike some Conservative Members, the stuffed-shirt neanderthals, who have a rather different view of women's role in society.
With regard to family finances, the Family Policy Studies Centre stated that the wages of working mothers are increasingly saving families from the breadline. It found:Ten per cent. of families where the mother has no job live on less than £100 a week, compared with fewer than one in a hundred families with dependent children where the mother does work.We have become a two-wage economy: families cannot survive unless there are two wages. Women are forced into work to make ends meet and to allow their families to exist. Poverty wages disfigure the role of both women and men in employment.
Women in British industry are underpaid relative to men to the tune of £21 billion a year because of the unfair pay rates. Women are locked into a limited number of industrial structures and are offered limited career options, and we have the worst publicly funded child care facilities in western Europe.
§ Mr. Jacques Arnold
The hon. Gentleman's speech seems to be a long catalogue of running down Britain. He is suggesting that we are the worst-off in Europe. Time and again, hon. Members in this debate have highlighted a variety of areas in which we are well ahead in comparison with Europe. It does not help the debate simply to run down this country because we happen to have a Conservative Government.
§ Mr. Lloyd
Unfortunately, I have a different kind of patriotism to the hon. Gentleman's. My patriotism lies with the people I represent, including the women who cannot find adequate child care facilities for their children because they do not exist, and the women who would like to work full-time because they need to support their families. However, they have to work part time or not at all and they depend on benefits because there are no child care facilities. The hon. Gentleman can dance, scream and prance all he likes, but he will not change the reality that we have very poor child care facilities. He should put pressure on the Minister to make sure that we improve the matter or, perhaps better, vote for a Labour candidate at the general election, to make sure that we have a Government who will introduce child care services.
If we really are to alter the role of women in the labour force, we must do something, as the Equal Opportunities Commission pointed out in its document entitled "The Equality Agenda". I am sure that the Minister has read it. The commission makes it clear that one of the significant deterrents to women properly entering the labour market and competing equally with men is the inflexible and inadequate training on offer.
1220 We know, for example, that employment training, a source of training for women returners, has been cut. We must make resources available to give women returners the training that is necessary if we are to liberate the potential of women in Britain. We know that 90 per cent. of new entrants into the labour force between now and the turn of the century will be women. Many of them will be women returning to the labour market, or perhaps coming in not straight from school but for the first time, without adequate training. We not only condemn them to lousy work and low pay: we condemn the economy to under-perform, and we condemn society to an unacceptable long-term future of a kind that simply should not be on offer in the last part of the 20th century.
We know that we will not get that change from the Government. We know that the Government have blocked the directive on pregnant women.
§ Mr. Forth
In the interests of honesty and truthfulness, I must ask the hon. Gentleman to withdraw the form of words that he used—that the Government "blocked" the directive on pregnant women. He must know, because we told him and everybody else at the time, that the directive on pregnant women went through the Council of Ministers on the European Community a few weeks ago, with only the Italians voting against. How he can square that with what he has said, I really do not know.
§ Mr. Lloyd
If the Minister cares to read my remarks in Hansard, he will have to consider the absolute truth. The Government were part of the process of blocking the directive until it was so badly mauled that it is now very different from the one that we first saw and debated in the House a month ago.
§ Mr. Leighton
Is it not the case that the Minister—perhaps he will confirm this—abstained to allow through an emasculated formula which gave pregnant women in this country the equivalent of sick pay? Not many of us think that women producing babies are suffering from an illness. We think that that is insulting and humiliating.
§ Mr. Lloyd
I can confirm that that is exactly what happened. It certainly is not pregnant women who are sick—the Government have that problem. We are intent on making sure that British women, even if no longer with the protection of the directive, have adequate protection during pregnancy.
We know that the Government have blocked the directive on part-time workers, which would have helped many women in Britain. We know that the Government have a record on child care. This Government in particular took away tax relief on workplace nurseries. Even from his hon. Friends, the Minister has received a request to consider that matter again.
The women of Britain—the women in the work force and those who want to be in the work force—will not look to the Minister to offer them any hope of liberation or any hope of a better future. They will rightly look to a Labour Government who will not look at the matter in the narrow 1221 economic calculus that we have heard from Conservative Members but will recognise that, unless we are prepared to accept the role of women in the labour force, we will fail as an economy to receive and achieve our full potential.
The minimum wage seems to exercise Conservative Members to the greatest extent. The Government try to justify their claims about a minimum wage on the grounds of what it might to do employment, so it is worth spending a little time on the reasons why we shall insist on introducing it, and the rationale behind that.
The Select Committee on Employment recently produced a very good report on home workers, which revealed that many earn as little as 20p or 30p an hour for making up Christmas crackers. Some receive wage rates of £1 for sewing blouses, skirts and dresses. Some receive 20p or 30p an hour for packing cards and others 80p or 90p an hour for painting table mats.
I hope that the Minister will comment specifically on whether that is an acceptable employment practice for this country or whether he believes—as I most certainly do— that we should offer some form of legal protection for those women are the most exploited. I also hope that the hon. Member for Brecon and Radnor (Mr. Livsey) will reconsider his unyouthful radicalism in that context, because surely nobody can justify pay rates of 20p an hour. Such women—home workers are almost exclusively women—are entitled to some statutory support, but they are most definitely not getting that support from this Government, with or without the wages councils.
The same report examined individual cases. We are not prepared to accept the fact that women, such as one woman from my own city of Manchester, can make skirts, blouses and trousers and be paid as little as 25p per pair of trousers. That women was not offered a contract of employment or a payment slip, and does not know whether she is an employee or self-employed. Each item takes between 30 and 40 minutes to complete now, but took as long as one hour during her training period. Her employment conditions are atrocious. Her health and safety provisions are non-existent. The protection that she is offered is so grossly inadequate that the Minister should be ashamed that he has done nothing about it. Such people deserve legal protection. They deserve a role in our society that gives them a little more economic security and social dignity than is offered by the current outrageous employment practices.
We know that many people in Britain who are on poverty wages, even if they are in more regular forms of work, simply cannot make ends meet. The "Breadline Britain" report quotes the words of a Liverpool housewife in a low-wage family. Talking about the reality of living on poverty wages, she said:The children, mainly, don't get enough to eat; things they need when they need them, like the shoes and the clothes. I just wish we could do the things we want without having to worry where the money is coming from.When a mother is forced to deprive her children of food, clothing and shoes, the Minister must explain the employment policies and successes of the Government, because we have yet to hear them. We know that roughly 10 million people in Britain today cannot afford adequate housing; that 7 million people go without essential clothing, such as a warm, waterproof coat for the winter, and that about 2.5 million children are growing up in 1222 families that go without the essential things in life, such as three meals a day, toys and out-of-school activities. The list could go on and on. When we know that poverty is one of the biggest growth industries in Britain, we know that the Government simply are not working—at least not in the interests of all our people.
About 4 million people would gain from the minimum wage that the Labour Government would introduce. If the Minister has not heard it before, this is another commitment for him—4 million people would gain. Half of them would gain at least £10 a week and another quarter at least £20 a week. About 40 per cent. of Britain's adult women part-time workers would benefit from Labour's proposal for a minimum wage.
We are not running away from the moral and social justification for introducing that minimum wage, because it is an outrage in our society that no such thing exists. It is an interesting curiousity that the nearest thing that we have to a minimum wage was introduced by Winston Churchill that one-time Conservative Prime Minister, in an earlier political guise. That fact is of great fascination to Labour Members whose view of Winston Churchill might otherwise be differently coloured.
We know that more than 10 million people in Britain are low paid according to the Council of Europe's decency threshold. The gap between the top 20 per cent. and the bottom 20 per cent. of men working full-time has never been wider in the past 100 years than it is today. One million people in work claim means-tested benefits. For all the reasons that I have given, we are determined to introduce a minimum wage that will offer decent protection to decent people whom I, my hon. Friends and, indeed, Conservative Members represent.
We hear scaremongering that a minimum wage will destroy jobs. We heard the same thing when the Labour Government introduced the Equal Pay Act 1970. Conservative Members and their predecessors came out with the same sorry story that paying women acceptable wages equal to men's wages would destroy jobs. It did not happen. Instead, there was a steady growth in the number of women in employment in Britain. Empirical studies of what happened when a minimum wage was introduced in France show that it did not destroy the economic base of France.
§ Mr. Lloyd
The Minister can refer to the definitive report prepared for the Organisation for Economic Co-operation and Development by Martin and Bazen, which made it clear that there was no loss of jobs among adult workers and no evidence of loss of jobs among youth workers.
Empirical models give a different tale from the hysterical claims of the Secretary of State for Employment. He started by claiming that a statutory minimum wage would result in three quarters of a million jobs losses. Then, perhaps a little frightened by his own rhetoric but thinking that he might as well be hanged for a sheep as for a lamb, he increased the figure to 1 million. Then, in a fit of excess, he ratcheted it up to a full 2 million job losses.
Everyone who has examined the issue with any professional respectability thinks that the Secretary of State is simply off his head. Having lost out to the Treasury on training, lost face with the British public by failing to recreate a climate of industrial expansion and lost out 1223 politically to his colleagues in Cabinet, he is in need of a political success. He hoped that he would have such a success on the minimum wage. He simply will not achieve it, because the British public share the view of the Labour party that social decency and economic efficiency are assisted by a minimum wage which gives all our people a long-term secure role for them in the labour market.
This has been an interesting debate, because there is such a sharp contrast between Opposition Members and those who support the Government in their view of the future of Britain. Conservative Members see Britain as a low-pay, low-cost centre of production. They see our future as merely an offshore island for foreign investment which guarantees some tenuous future in the European Community.
Opposition Members believe that the British people have the basic talents and abilities which, with investment in their skills and a programme committed to training, will allow us to map out a better, more secure and more dignified future not for only those already in work but for the many people who will join the labour market in years to come. It will not be long before the Minister will be able to continue his ideological rantings, but this time he will do so from not the security of the Department of Employment but from the Front or Back Benches of a Conservative Opposition.
§ Mr. James Arbuthnot (Wanstead and Woodford)
I begin by congratulating my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway), if congratulating is the correct expression. I often wonder whether being successful in the ballot is a matter for congratulation or commiseration. I suspect that in many cases—and perhaps in that of my hon. Friend because, as he said, he has a severe cold—it is a matter for commiseration.
My hon. Friend has chosen a particularly important subject for today's debate, and I congratulate him on that. We have had a most interesting debate, in which several hon. Members have taken part. I do not want to take too long, but I should like to refer to some of the points made by the Member for Newham, North-East (Mr. Leighton). He suggested that I should visit my local training and enterprise council, the London East TEC. As it happens, I was there only last Friday. This debate is an opportunity for me to pay tribute, as he did, to the excellent management skills and work of Iain MacKinnon and his task force. They do valuable work and are led by a good group of people.
I disagree with the impression of London East TEC that the hon. Member for Newham, North-East gave. Far from bumping along on the bottom, desperate for money, it is in good heart. The deputy chief executive of London East TEC wrote in an article:LETEC is proving to be an essential catalyst to the economic rejuvenation of the London East area. We are not just watching from the sidelines, but rather are rolling our sleeves up and getting involved not just in getting local people back into work, but in keeping them there. The young people of the London east area will have enormous opportunities in the future. We must ensure that they are equipped to grasp them.I was heartened to see that one of the slogans on London East TEC's letterhead is:Our vision is that by the year 2000, the East side of London should be as prosperous as the West side"—1224 that seems to be an excellent vision for London East TEC. It continues:Our mission is to help local people and local businesses to share fully in that new prosperity.The TEC is well equipped to achieve precisely those aims and that is something which we very much hope to see.
§ Mr. Leighton
I am pleased that, like me, the hon. Gentleman is liaising closely with London East TEC. It may have told him that although 2 per cent. of the country's population is in its area it receives only I per cent. of the expenditure on TEC programmes. I hope that he will help to rectify that situation.
In the documents that the hon. Gentleman is quoting from, did he notice the statement that unemployment in the TEC area has risen by 81 per cent. since March 1990, by 57 per cent. since November 1990 and that the highest rise was in Waltham Forest—is his own constituency, I believe—where it rose by 6.5 per cent.?
§ Mr. Arbuthnot
The hon. Gentleman will forgive me if I say that he has the same problem with me that I have with the Whips Office. Sometimes they confuse me with the hon. Member for Walthamstow (Mr. Summerson)—I am the hon. Member for Wanstead and Woodford, and unemployment in my constituency has not risen to quite the extent that he suggests.
I was quoting a different document from the leaflet that the hon. Member for Newham, North-East has. It says:On Monday 7 October LETEC hosted the national press launch for the new Employment Action programme. The launch was headed by the Secretary of State for Employment. LETEC requested 1,000 places but were allocated 800. We were of course disappointed. None-the-less, we are determined to fill those places by the New Year and then go back to the Department of Employment for more.London East TEC is obviously not getting everything that it would like, and the hon. Member for Newham, North-East and I will be pressing for more spending to cure the ills of unemployment in our area. We both work for our area in different ways with our different policies.
London East TEC is doing an extremely good job. For example, it is taking steps to discover what local employers and businesses need and want from their employees. One example is the recent survey of 1,500 local business people. LETEC is using the information acquired in that survey, along with other research information to develop its training and enterprise support initiatives.
During the next few months and years, we must avoid continuing in the trap that we were in before. When this bout of unemployment is over, or when unemployment is declining, we must avoid children leaving school with no idea of the skills that they will need to work properly in the jobs that they will want, and in the jobs that will be available. Education has to be the key to that.
I welcomed the computer initiative in schools, which has brought so much innovation to our schools, from the primary age up. Last night I visited the Queen Mary and Westfield college in the Mile End road and I was told that it was soon to have a level of computers of almost one work station for every six students. That is most impressive. One of the problems that the college told me about is that school children are leaving school with more computer literacy than the university teachers, so university teachers are having to run hard simply to keep up with the people they are teaching.
There is always a problem with education providing for skills in information technology. It has always been 1225 noticed that information technology skills, of which we shall need more and more in the coming years, have tended to lag behind the demand for those skills. Perhaps it is not surprising, because those demands change so much and so often.
To return to some of the initiatives London East TEC has introduced, it has set up a series of education and business partnerships. Employers now come to schools and colleges to talk about what they need from their employees, and pupils go to their potential future work places and gain considerable valuable work experience. Another plan is to help a minimum of 10 local students find a job with companies in east London before those students go on to university or a polytechnic. The scheme is called Year in Industry and it is operated by Top Business Links—a company which helps businesses to communicate with schools. Obviously, that is extremely valuable. It improves the experience of the students themselves and the businesses' experience of the type of people coming out of the schools. It provides links between businesses and students so that students know what the businesses need and the businesses know how they can influence the schools. A year of a different sort of experience before university or polytechnic is valuable. It builds a sort of dedication, a work ethic, which is valuable at a university or a polytechnic.
Part of today's debate has been about an increase in unemployment which has hit this country like so many others. It is good news that the increase in unemployment in this country last month was the lowest for almost a year. I hope that that means that the trend is that we shall plateau soon and thereafter we shall see unemployment reducing. If that is true, as I hope it is, it may well be that the long-term trend of unemployment, which has seen troughs and peaks rising over the past 30 or 40 years with every trough and every peak getting higher, will turn round so that the peak of unemployment will be considerably lower than the last peak of unemployment.
The hon. Members for Stretford (Mr. Lloyd) and for Newham, North-East gave a telling and effective account of what happens during unemployment—of the destructive, demoralising and damaging effect on individuals who are unemployed. Of course they were both right. We must never dismiss the problem of unemployment as unimportant. The fear of unemployment is hitting everywhere, particularly in the south-east. It is hitting even my constituency in a way it has not done for many years.
What follows from that is that the last thing we should do is to introduce policies that are almost specifically designed simply to increase unemployment. We must not impose minimum wages on businesses, whether or not they can afford them. The hon. Member for Stretford said that 4 million people would gain from the imposition of a minimum wage. He is assuming that all those people now paid below what his party would bring in as a minimum wage would keep their jobs. The opposite would be the case. Many businesses would be unable to afford people at a higher rate. In any event, the Labour party's suggestion of a minimum wage is in itself rather obscure and bizarre. As I understand it, it is tied to the average and would therefore not only be relatively high at £3.40 but would increase as the average wage itself increased. With each 1226 increase in the average rate of pay, the minimum wage itself would have to go up and it would be for ever chasing its own tail.
§ Mr. Tony Lloyd
Perhaps I can help the hon. Gentleman. It will be tied to the median, which is not the same as the average. It is simply a mid-point on the range and would not be affected by changes in the minimum wage.
§ Mr. Arbuthnot
From what I understand, even an amount tied to the median would be affected because if the lowest wage were increased to £3.40 per hour, the median would have to rise.
§ Mr. Tony Lloyd
I shall put the matter in simple terms. The median, the mid-point in a series of numbers such as 2,2,5,6 and 7, is defined as being the difference between 2 and 7, which is 3.5. If we alter the figures 2 and 2 to 3.5, the middle figure of 5 would remain unaltered because it is independent of the bottom figures.
§ Mr. Arbuthnot
I do not understand the hon. Gentleman's mathematics and I slightly doubt whether he does.
§ Mr. Matthew Carrington (Fulham)
I am extremely confused. I studied mathematics for some years at school and I have not totally forgotten all of them. The median is not the mid-point between the first number and the last. It is where the largest number of items in a sample comes to, whereas the average is obviously the sample multiplied by the number of items. The hon. Member for Stretford (Mr. Lloyd) is obviously extremely confused. The median has a precise mathematical definition which is absolutely right, and my hon. Friend is correct in saying that the median is bound to alter if the number at the bottom of the scale is changed. That will alter the average as well in a different way, but it is bound to alter the median. Perhaps the hon. Member for Stretford wishes to define median in a non-mathematical sense.
§ Mr. Arbuthnot
I am grateful to my hon. Friend for sorting out at least the hon. Gentleman's mathematics with obvious skill and knowledge.
Another aspect of the policies that Labour is pledged to implement and which would only increase the damaging effects of unemployment is the imposition of high taxes. It would impose taxes on business and individuals which would discourage enterprise and discourage people from trying to work hard. It would discourage profit and perhaps take us back to that nadir of Labour party policy when Shirley Williams was able to say with some pride that profit levels were the lowest they had been for years.
As the hon. Member for Stretford said, Labour would impose a training levy of 0.5 per cent. of the payroll. That is nothing more or less than a direct payroll tax on jobs. It is like the selective employment tax that a Labour Government introduced many years ago. Every Labour Government, except one, since 1929, has doubled unemployment, and the exception increased unemployment by only 50 per cent. Therefore, it was not surprising that when I intervened on the hon. Member for Newham, North-East he was a little coy about referring to his party's record on unemployment.
The hon. Member for Newham, North-East made an interesting speech. He put forward the proposition that adherence to the exchange rate mechanism is what causes 1227 unemployment in socialist France and socialist Spain. But adherence to the exchange rate mechanism is one of the policies not only of the Conservative party but of the Labour party. While the hon. Gentleman's speech was interesting if idiosyncratic, he appears to join us in condemning the employment policies of the Labour party.
§ Mr. Leighton
The hon. Gentleman says that a training levy is the same as a selective employment tax. How could he be so confused? The previous selective employment tax went to the Treasury. If a firm spends 0.5 per cent. on training, it does not pay the tax. We have heard that Nissan is spending about 15 per cent. of its payroll on training, and it is an extremely successful company. All successful companies spend much more than 0.5 per cent. on training. The only criticism one might make of the Labour party's proposal is that it is not large enough. So the hon. Gentleman should not get nervous about 0.5 per cent. of payroll being spent on training. If he really supports the work of the east London TEC, he should not be saying that firms should not spend 0.5 per cent. on training.
§ Mr. Arbuthnot
My answer to that long intervention is that I did not say that a payroll tax was the same as the selective employment tax. I said that the payroll levy that the Labour party would introduce would have the effect of being a tax on jobs, in precisely the way that the selective employment tax had the effect of being directly a tax on jobs. They are both ways of discouraging firms from taking additional people on to their payrolls.
I applaud Nissan for having a high training budget, but decisions of that type must be taken by companies. The Government can encourage firms to train more, but for the Government to impose taxes on companies to insist that they train more does not take into account the effects, demands and needs of different industries. People who see that high training encourages success, as obviously it does for Nissan, will follow the designs and needs of the marketplace and will themselves introduce high training. Levies on the payroll will not have that effect.
My hon. Friend the Member for Battersea (Mr. Bowis) made the sort of eloquent and well-informed speech that we have come to expect from him every time. He had trouble with one phrase, when he referred to the "genuine crocodile tears" of Labour Members.
§ Mr. Arbuthnot
The hon. Gentleman suggests that it was a bogus sham. I think that my hon. Friend had difficulty with the phrase because of the girations of Labour policy on so many issues. Its policy on Europe could best be described as jerking from one extreme to another within a few years, at one moment leaving the European Community altogether and in the next being willing to sign up to anything for which the EC asks; at one moment supporting the closed shop and in the next denigrating it. The problem is that the Labour party dodges all the important European issues because its conversion to the EC is not so much skin deep as ruled purely by expediency.
Labour believes that it can hijack the EC towards the type of socialism that has been rejected throughout eastern Europe. In socialist France, unemployment is now higher than it has ever been in that country's history.
1228 Unemployment is rising in every European country except in Spain, but there it is twice as high as it is in Britain. In France and Spain—
§ Mr. Arbuthnot
—the national minimum wage of the type presented by the Labour party is one of the causes of their unemployment. The Minister will no doubt refer to the OECD report, which appears to have been dismissed by the hon. Gentleman.
In every EFTA and G7 country, unemployment is higher than it was a year ago. Unemployment is a consequence of various factors—of inflation and world recession—and not something that we can escape. We could make it worse by insisting on the sort of minimum conditions put forward by the Labour party, conditions that would disadvantage the very people whom Labour says they are designed to protect.
§ The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth)
This has been a good debate, as Friday debates often are. I thank and congratulate my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) for giving the House an opportunity to cover this important ground. It has elicited a number of interesting points on which we would do well to reflect. It may be significant that, as I have sat here throughout the debate, riveted as ever to the contributions that have been made, I have noticed no more than three Labour Members present at any point. At one time, a Liberal Member was present. That does not suggest the outrage that a perusal of Hansard might beguile readers into expecting. It is important to put that fully into context.
A good aspect of the debate, especially on this side of the House, has been the positive attitude towards the training and enterprise councils. Whether that attitude is as positive among Opposition Members remains to be seen. My hon. Friends well appreciate the nature of the role of the TECs. It has been a radical step for the Government to hand over large parts of the policies which, until now, have been centrally determined. The hon. Member for Tooting (Mr. Cox) seems to want everything to be centrally determined and his speech reflected the dying echoes of the old-style centralised Labour party that we all knew and, at one stage, loved in our way. We need to hear more about the Labour party's current attitude to TECs.
TECs are a vital part of the delivery of modern policies in a modern society. The fact that business men have volunteered to give up their time and expertise to TECs is a major new breakthrough in the delivery of policies at local level. We recognise the vital importance of policies being tailored to local needs. Handing them over to people outside government who know their local community has been a quantum leap in the delivery of Government policies in the important areas of training and skills.
For Opposition Members to paint a negative picture of TECs failing to do what they have been set up to do is not good enough, because, after all, they have been in existence for only two years. That is made worse by the fact that the network of London TECs has, in some cases, been in existence literally only for weeks. I should like hon. Members to give TECs not only their support but the time 1229 to develop their approach locally to see whether they can meet the high expectations that understandably now exist. They will certainly have the fullest support of my Department and the Government in that and I hope that they will have the fullest support of Opposition Members, too, although that has not come through in this debate. Perhaps we shall hear more about that once Opposition Members have reflected on the important role of TECs.
May I put some of the comments that have been made into a broader context. Disgraceful accusations were made by Opposition Members, including, I regret to say, the Chairman of the Select Committee on Employment, the hon. Member for Newham, North-East (Mr. Leighton), from whom I expected better. He suggested that the Government were engineering or conniving at a high level of unemployment. Such a suggestion is unworthy of the hon. Gentleman. How is it that, when this country has been going through a recession, which has been shared by countries throughout the world—not least the United States—our unemployment figures are lower than those of many other countries? For example, I had the privilege of visiting Australia last week, when I met a good friend of the hon. Member for Newham, North-East. Australia has had a Labour Government for some time, but unemployment there is higher than in the United Kingdom. Socialist France has higher unemployment than the United Kingdom and unemployment in socialist Spain is at least 50 per cent. higher than in this country. Those examples show, by clear implication, that those other Governments, who call themselves socialist and pursue policies similar to those which the Opposition would like to pursue, all have the same result. Yet we are accused of engineering high unemployment. The Opposition cannot have it both ways.
§ Mr. Tony Lloyd
Nor can the Minister. Does he dissent from the Chancellor's comment that unemployment is a price worth paying? How is it that 80 per cent. of the increase in unemployment in western Europe has been in Britain?
§ Mr. Forth
It is easy to answer the last question. It is because until recently this country had one of the lowest levels of unemployment in Europe, so the increase here has, regrettably, been greater. The hon. Gentleman's mathematical skills are letting him down today—perhaps I should not go too deeply into that in case we get into a tangle. However, it is important for us all to keep the matter in context.
There has been a recession; the Government have had to deal with the consequences and have implemented the policies necessary to help the unemployed. I hope that Opposition Members do not believe that Conservative Members neither understand nor care about the personal circumstances of those who, tragically, have lost their jobs. Nothing could be further from the truth.
There should be some recognition of the fact that the programmes that the Government have set up in the network of jobcentres, including restart, job clubs, job interview guarantees and all the programmes that they deliver through jobcentres or training and enterprise councils, help to alleviate the misery that comes with loss of employment. The fact that, even now, 50 per cent. of people who lose their jobs are back in work within three 1230 months is encouraging. That the long-term unemployment figures are much lower than they were bears testimony to the fact that many of our pledges and the policies that we have implemented are having a positive effect on the ground in relation to the individuals about whom Opposition Members spoke with such understandable feeling and passion.
Having made those general comments, I shall now address specific matters raised in the debate by Opposition Members. I turn first to my opposite number, the hon. Member for Stretford (Mr. Lloyd), who made some interesting statements, not least that relating to his spending commitments. His comments were useful because they provide us all with the opportunity to see what the Opposition have in mind and the approach that they will take in the run-up to the next election and if they were ever to be elected to government.
I shall leave to one side the figure that the hon. Gentleman gave somewhat glibly when he said that women in this country were underpaid by £21 billion. He had previously made much play of the fact that the Labour party wanted to do more than the Government to ensure that women were paid properly. I take that as the hon. Gentleman's first spending commitment, except that he is making it on behalf of employers and businesses. It was not a Government or taxpayer commitment, but a commitment being made by the hon. Gentleman on behalf of the private sector and employers. Therefore, the hon. Gentleman clocked up, for starters, a mere £21 billion burden on employers in the United Kingdom.
§ Mr. Tony Lloyd
The problem with the Minister's logic is that his colleague, the other Under-Secretary of State for Employment, the hon. Member for Wantage (Mr. Jackson) has recently gone on record saying that he believes that women should have pay parity with men in accordance with the law. Therefore, the Government would also have to fund the £21 billion differential.
§ Mr. Forth
I have not discussed with my hon. Friend the Parliamentary Under-Secretary whether he is pledging a £21 billion expenditure increase, but, having heard what the hon. Member for Stretford has said, I shall have a quiet word with my colleague to see whether he agrees.
We also heard of the commitment underlying the Opposition's desire for the full effects of the original text of the EC directive on pregnant women to be implemented. I was challenged about that—I do not know why, as I thought that the position was clear. When explaining this matter to the House, I shall have to explain to Opposition Members how the European Community works. I do not blame the Opposition for not understanding the issues as fully as we might hope, but, given their new-found support and desire for everything European, I thought that they might have developed a better understanding.
The process is as follows: the Commission makes proposals which are considered by the European Council and the Council of Ministers. During that process the proposals are amended—it is not impossible for them to be amended, although to hear Opposition Members speak one would think that the proposals went straight from Commission draft into law without an intermediate stage. Given the Opposition's desire to give increasing powers to 1231 the European Parliament and their lack of understanding of how the Council of Ministers works, we should perhaps excuse the lack of appreciation of the process.
The pregnant women directive was brought forward in one form by the Commission. In its original form, it would have involved a cost to the British taxpayer, to the Government and to employers of up to £500 million. The directive was then discussed at great length in the Council of Ministers. I attended the final meeting, at which the member states, guided by the Dutch presidency, came together behind a text that they found acceptable. I was prepared to support it. I abstained on a procedural matter because, as Opposition Members may recall, we had a reserve about the treaty base of the directive. I will not go into detail on that unless pressed to do so by Opposition Members.
The United Kingdom was alongside the presidency and almost all the other countries; it was the Italians who were out of step and who abstained because they were unhappy about the content of the directive. The key issue is that I was asked what effect the directive would have—
§ Mr. Forth
The Italians wanted more, as they always do. They want more of everything out of the European Community. The extent to which they adhere to the directives once they have got more out of them is a matter over which we shall draw a thick veil, because it is better not to go into it at this stage.
Opposition Members asked why there was so much mystery about what the pregnant women directive means. I commend to them an excellent publication from my Department called "People, Jobs and Progress". It gives a complete update—I will send the publication to Opposition Members—and a detailed account of the pregnant women directive as agreed by the European Community, including the United Kingdom. It is in print, there is no secret and there is nothing up my sleeve. We are proud of the result that we achieved.
A key factor is the burden on United Kingdom taxpayers and employers. We estimate, subject to detailed consideration, that the cost will be about £80 million. The original draft, to which the Opposition are pledged, would have involved £500 million. In addition to the £21 billion originally pledged, Opposition Members now pledge another £420 milion to add to the Labour party's expenditure total. We are doing quite well on that already.
The pledge shows the extent to which Opposition Members are now prepared to spend other people's money to bribe everyone in the run-up to the next election. It simply is not good enough. We will report back to the electorate at regular intervals.
The subject of the pregnant women directive leads me to the social action programme, of which the hon. Member for Tooting (Mr. Cox) made some play. He referred to the Council of Europe, but there is little difference for this purpose between the Community and the Council. I shall try to explain to the hon. Gentleman in particular why his continental friends are so wrong in what they say about the United Kingdom. We have always made it clear that we did not support the social charter in its original form because it breached the principles set out by the Heads of Government of the Community members in several important ways, not least that it ignored the principle of subsidiarity and the great diversity of traditions in the 1232 European Community member states. Worst of all, and relevant to this debate, the social charter in its original form ran counter to the avowed aim of all Heads of Government to maximise employment in the Community.
The whole thrust of this debate is that much of what is contained in the social action programme, which followed the social charter, would prejudice employment. That is why we are unhappy with large elements of it.
I hope that the hon. Member for Tooting will take my message back to his friends in the Council of Europe. The Government have always made it clear that we would be able and happy to support large parts of the social action programme. About 50 detailed matters, recommendations and directives were brought forward following the social charter and we have been able to support many of them. Contrary to what some people say, the Government have never exercised their veto in the Council of Ministers on any social action programme measure. As I have just explained to the House, we were part of the consensus which carried the pregnant women directive through the Council of Ministers. However, we have much difficulty on some matters. I shall give one or two examples, as both Labour and Liberal Democrat Members have said that, being good Europeans now, they support the social action programme 100 per cent. They said that before they even saw the details of the text. We like to read the text first and then make up our minds, but they supported it blind.
The first example is the working time directive, which is an attempt by the Community to prescribe not only how many hours per week people work and how much paid holiday and compensatory rest they should have and whether they can work a certain number of overtime hours after night work, but all the other things of which our continental partners seem so fond. The idea is to prescribe arbitrarily and artificially the shape and nature of people's work patterns.
Not only have we run our calculator over the figures, but we have consulted British industry, as we always do in such cases. It is estimated that in present circumstances the directive in anything like its present form would cost British industry about £5 billion. Opposition Members seem happy to heap such on-costs on to British employers.
We have asked all those involved in wealth creation and employment creation and they have told us that, in its present form, in which the Labour party supports it, the directive would be a disaster for this country.
§ Mr. Tony Lloyd
The Minister is aware that we totally reject the claim that the cost would be £5 billion. Nevertheless, will he make public the information on how that estimate was calculated?
§ Mr. Forth
The hon. Gentleman does not read the proceedings and reports of Committees of the House of Lords as closely as I thought he might. When his colleague who chairs the European Communities Sub-Committee in the House of Lords grilled me recently, I was asked that question and I gave all the details about how we worked out our costings on all the directives. That is a matter of public record and I shall let the hon. Gentleman have the figures. In return, will the hon. Gentleman tell me what calculations he has made of the impact and burden of the costs that the directive which he supports will impose on British industry? I invite him to let me have his detailed calculations. Shall we do a swap? He can have mine and if 1233 he will let me have his calculations I will send him, free and for nothing, quotations from employers about their reaction to the directive. I cannot say fairer than that.
Unless I am pressed to do so, I shall not talk in detail about the atypical work directive, or the directive on information and consulting employees, but the worrying feature of all such measures is that in adding to the burden of the cost of employment they would, in effect, prejudice employment levels, as some of my hon. Friends have said. My hon. Friend the Member for Wanstead and Woodford (Mr. Arbuthnot) stressed that aspect.
Surely that is what gives the lie to Opposition Members' crocodile tears—that is the second time that they have been mentioned today. Opposition Members never pause to think what happens in the real world when they, alone or in concert with their partners in the EC, set about devising more and more burdens to lay upon the wealth creating sector.
We are concerned about that, because we care about how people create jobs and employment. Every time Opposition Members dream up some new whimsy or device to create an artificial paradise, the real effect is to place more burdens on the wealth-creating sector, which inevitably prejudices opportunities for employment. What they want to do would have the opposite effect from what they say. That is the disastrous gap between the rhetoric and the real effect. I sometimes wish that Opposition Members would be more honest with themselves, with the House and with the electorate. Whenever they make promises and in whatever form those promises may appear— whether they be the spending promises that we have elicited from the hon. Member for Stretford, or the regulatory bureaucratic and interventionist devices to which they are wedded and which they apparently support when they emanate from the EC—the result is the same. It is more restrictions and burdens on business and, therefore, almost inevitably, fewer opportunities for business to employ people.
The same strand of argument runs through the debate about the statutory minimum wage. I pay tribute to the hon. Member for Stretford for being so open with the House. He said that, in his judgment, many people in Britain were paid less than he thought was right and that a Labour Government would have a role in stepping forward and dictating to all employers that they must pay everyone no less than a certain wage. The hon. Gentleman believes that that would be beneficial.
The hon. Gentleman should give a bit of thought to just how that process would work, particularly among small businesses and employers who employ perhaps only one or two people, bearing in mind the fact that 95 per cent. of all businesses in Britain have fewer than 20 employees. He should come along and visit a business operating at the margins in the recession—a business in difficulty, as I concede that many are. As the Minister responsible for small businesses, I know it better than most. What will be the result if one arbitrarily introduces a law which says that, from today, an employer must pay all his employees more than he has been paying most of them hitherto? Many firms will certainly reduce the number of people working for them and some may go out of business altogether.
1234 My hon. Friend the Member for Wanstead and Woodford must be correct that one cannot wave a wand and ensure that the 4 million people who will benefit from the law all get more money. I agree that some may be paid more, but many will lose their jobs and be paid nothing. That calculation must be made. If we are to be honest with the British electorate, we must make it clear that that is an essential part of the minimum wage argument.
§ Mr. Tony Lloyd
It is worth developing this important argument. The Minister is on record as saying that the existing wages councils may be abolished in the long run, but not yet. The councils provide a minimum wage for about 2.5 million people. If the Minister is right that most employers act honestly and behave properly towards their wages council-protected employees and given that he has decided not to abolish the wages councils, by his own logic, he is responsible for destroying jobs.
§ Mr. Forth
I regularly receive anguished letters from small businesses—mainly small retail businesses—telling me of the extreme difficulty in which the arbitrary awards made by the wages councils place them. I am giving great weight to what small businesses say and as time goes on we shall certainly consider the real effect of arbitrary wages council awards on small businesses and employment. Those arbitrary pay awards are almost certainly either reducing the number of people that firms can employ or, in some cases, driving firms out of business altogether. I am very conscious of that.
I want to refer to the Organisation for Economic Co-operation and Development, which the hon. Member for Stretford also mentioned. The hon. Gentleman made a claim that we have frequently heard—that the OECD has not criticised the French minimum wage for having caused adverse employment effects. The hon. Gentleman invited me to quote from the OECD document and I shall do so. Page 55 says:Indications are that the increase in the relative value of the SMIC in the 1980s is likely to have reduced employment levels, especially for youths …and the unskilled …the problem is substantially more severe for youths, older workers and the unskilled than others… The evidence is stronger that the overall compensation of the least qualified exceeds equilibrium levels and that this has been costly in terms of diminished employment. Furthermore, the national minimum wage seems to be in part responsible for this outcome.Nothing could be clearer. That is what the OECD, an impartial and expert body, said about the effect of the minimum wage in France. Those were the words that it used. Those are the concerns which Conservative Members have, but which Opposition Members are apparently not prepared to face. So anxious are they to bribe the electorate for their own jobs that they are not prepared to come clean about the effects of a statutory minimum wage.
§ Mr. Tony Lloyd
Will the Minister come absolutely clean? Will he make it clear that the report from which he quoted is not the report commissioned by the OECD specifically to examine minimum wages, commissioned and produced by Bazen and Martin, but is simply a country survey and a reinterpretation of existing data? There is a fundamental difference. One was an authentic and adequate study while the other was simply an opinion.
§ Mr. Forth
No, one is the official OECD document while the other is a document produced by two 1235 individuals. However eminent they may be, the documents have a different status. I would rather stick with the official document if the hon. Gentleman does not mind.
Industrial relations law is another worrying aspect of policy. I should have thought that it was beyond dispute that a sea change in industrial relations took place in the United Kingdom during the 1980s. Indeed, the hon. Member for Brecon and Radnor (Mr. Livsey) generously alluded to that. Almost no one denies that, through a series of progressive law reforms, we have given the trade unions their proper role in society and, more importantly., their proper relationship with their members. Further proposals are out for consultation at the moment. We want to move further in that direction. We want to make trade unions accountable to the law on the one hand and to their members on the other. The dramatic effect of such a policy over the years has been the enormous reduction in the number of days lost because of work stoppages.
For example, in 1979, 30 million days were lost because of work stoppages. In January 1979 alone, 3 million days were lost. Throughout 1990 fewer than 2 million days were lost. In the past 12 months only 750,000 days were lost and that is the lowest 12-month total for more than 50 years.
That is one explanation why this country has become such an attractive proposition for overseas investors. In 1988–89, the United Kingdom accounted for a far higher proportion of total inward investment of OECD countries into the EC than any other Community country. Thirty-nine per cent. of the investment into the European Community came to the United Kingdom. France had the next highest level with 14.5 per cent.
From 1988 to 1990, the United Kingdom accounted for 46 per cent. of American investment and 48 per cent. of Japanese investment. What better testimony could there be by hard-nosed business men from Japan and the United States looking for where best to invest in Europe than those figures, which show that they want to come here? They want to do that because of the excellence of this Government over the past 10 years—that goes without saying—and more importantly because of our tax regime, our labour law framework and our record on industrial disputes and how few of them we now have. That is why investment is coming to this country.
§ Mr. Livsey
Is the Minister aware that Wales attracts 20 per cent. of inward investment and that one reason for that is the progressive attitude of the Wales TUC and its general secretary, David Jenkins, who has negotiated single-union agreements and simplified trade union practice within manufacturing industry in Wales?
§ Mr. Forth
That is a very good point. I always pay tribute to the achievements of Wales. I had the pleasure of working and living in the Principality some years ago. The work of the Welsh Office, the Welsh Development Agency, many of the local authorities and other elements, as the hon. Member for Brecon and Radnor explained, show that it is possible to attract large quantities of investment into this country. Wales has been particularly successful in that regard. That is surely a lesson for us all.
§ Mr. Carrington
My hon. Friend has failed to mention the availability of a highly skilled and well-trained work force which is vital to attracting inward investment to this country. That is the best testimony of the success of the Government's policies in ensuring that our work force gets the skilled training that they need.
§ Mr. Forth
My hon. Friend makes a good, fair point, which is somewhat in contradiction to the rather gloomy view that has been typically taken by Opposition Members.
I give the figures to the House not only because they are impressive—indeed, they are—but to make the important point that were the labour law framework that we have developed gradually and progressively ever to be jeopardised, many of the benefits would disappear. What reaction do we hear from the Opposition? They are now going to turn back the clock. If we read their documents correctly, they are telling us, although not very loudly—really rather quietly and I can see why—that they propose to reintroduce the possibility of secondary picketing, one of the most damaging elements of labour law which we have finally got rid of in the past few years. The closed shop would make a reappearance. Special industrial courts would be set up of the kind that we thought we had seen the back of a decade ago.
A series of proposals is being made very quietly by Opposition Members which would cumulatively restore trade unions to the position that they enjoyed in the 1970s and before. If anything was better calculated to scare off investment coming into this country, I cannot think of it. Opposition Members have a lot to answer for in terms of the effect that their policy would have on employment levels in this country.
We are beginning to see a rather frightening prospect. Under a Labour Government there would be an accumulation of factors all pointing in the same direction. We would have higher taxation on individuals and companies. The payroll tax made a reappearance again today. We would also have costs imposed not through taxation but through regulation on the private sector. The £21 billion that the hon. Member for Stretford kindly mentioned is only a starting point. We would also have the costs imposed by European Community directives, of which Opposition Members are ardent supporters without ever having read them. I mentioned about £400 million for one directive alone, to say nothing of the £5 billion that we estimate that the working time directive would cost. We must add to all that the costs of the national minimum wage proposals which Opposition Members are to introduce. Just to complete that rather horrifying picture, we have the prospect of trade unions being given back powers which we thought they would never have again.
It does not take a vivid imagination to work out what the effect of all that would be. It would be disastrous for employment levels, competitiveness and the attractiveness of this country to overseas investors.
Opposition Members must come clean. We will help them to do the job, I assure them. Conservative Members have come absoulutely clean about expenditure—we cannot do otherwise; we are in government, therefore everybody knows what we spend, on what and how. In the run-up to the next election, Opposition Members will have to tell the electorate in terms and in detail the effects of their measures on companies, on the private sector, on the taxpayer and on inward investment and, therefore, the net result on levels of employment. I can think of few things more serious or disastrous for the people of this country, about whom we all care in our different ways, than the series of measures which will be brought before the electorate by the Opposition.
1237 The debate has given us an opportunity to glimpse what the Opposition have in mind. Interestingly, we heard almost nothing from Opposition Members about what their policies would mean. We saw a negative and sad—
§ Mr. Forth
I accept that the hon. Member for Brecon and Radnor gave us a glimpse of his party's policies, but we had nothing from Labour Members. Now we know why. They are so scared of what will happen when the electorate finally rumbles the results of their policies that they will not tell the House. We will tell the electorate. That is the beginning and the end of the debate. I congratulate my hon. Friend the Member for Shrewsbury and Atcham on bringing the debate before the House.
§ Mr. Gavin Strang (Edinburgh, East)
On a point of order, Madam Deputy Speaker. Is it not becoming clear that the Minister and the Whips are doing their best to prevent the next subject from being reached—that is, non-haemophiliacs who have become HIV-positive as a result of contaminated blood? Is there not a convention that the second motion on the Order Paper at least receives a certain amount of time? I ask you to protect us, Madam Deputy Speaker. More than 100 hon. Members have signed an early-day motion along those lines.
§ Madam Deputy Speaker (Miss Betty Boothroyd)
I understand the hon. Gentleman's frustration, but he knows that, under our procedures and Standing Orders, the first motion for debate on a Friday is allowed to run until 2.30 pm and that the Chair has no authority to end the debate before that time. Another hon. Member wishes to be called to speak in the debate on employment policies, so I must now call him. Mr. Matthew Carrington.
§ Mr. Matthew Carrington (Fulham)
I am most grateful to you, Madam Deputy Speaker, for calling me to speak to a subject that is of great relevance and extreme importance to my constituency of Fulham. As an inner-London constituency, it has suffered badly from the rise in unemployment caused by the recession. I am therefore grateful for the chance to say a few words about the problems that my constituents are facing and about the measures that need to be taken to make their lot so much easier.
Conservative Members take unemployment seriously. We are well aware of the tragedies it creates and the great problems it causes for families and for society as a whole. We do not take the subject lightly. I for one take this debate seriously, and I congratulate my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) on raising this important subject.
Unemployment in Fulham is far too high. Fortunately, it is not yet back to the level of 1986 or quite back to the level of 1987, but there is no question but that unemployment in the area has risen badly in the past few years and that it is now extremely high. Let us consider the reasons why unemployment has risen. I am talking now from an inner-London perspective, because unemployment in inner London has certain characteristics that are not usual in other parts of the country.
1238 There have been some major changes in the pattern of employment in my constituency in the past few decades. One great change is that the old manufacturing industries, which used to be so predominent in west London, have now almost completely disappeared. Consequently, many people who used to be employed in places such as Fulham power station cannot find jobs that will utilise the skills —sometimes the great skills—that they developed in their previous employment. I greatly welcome the Government's initiative to ensure that such people receive proper training so that they are reskilled and can find the new jobs that are still available and will continue to be available in inner London.
A recent survey has shown that there are two predominant sources of today's unemployment—the declines in the building and financial sectors. According to estimates, those two great declines have caused about 80 per cent. of the unemployment in my constituency and, given that 80 per cent. of our unemployment comes from just two sources, the problem cannot be eradicated by a quick fix. We cannot say that there is an easy solution to the problem of unemployment that would enable the people who have been thrown out of work in this recession to get back quickly into jobs.
It is not difficult to see why the decline in the building trade has caused so much unemployment. In many cases, house prices in inner London have gone down. They have certainly not been rising. Consequently, new building is not at its previous level and there are no longer the great building developments that used to employ many of my constituents. That problem will be solved only when the backlog of empty office space is used up and when the confidence to start new developments picks up, as will surely and shortly be the case now that we are seeing clear signs that our country is coming out of the savage and nasty recession that has affected London particularly badly.
The decline in the financial services market has caused a lot of unemployment for several reasons. Perhaps the most obvious is that that market expanded employment dramatically in anticipation of the big bang in 1987, when the financial services market was liberalised. A great deal of employment was created by the market activity in the financial sector, but even then it was seen to be clearly unsustainable.
Subsequently there was a major shake-up in the financial sector, and the effects were felt especially in the past 12 months. That caused a great deal of unemployment not only among lower-paid and clerical workers but among people who previously might have thought that they had a job for life. Highly paid and skilled people found suddenly that there was not the market activity in the financial sector to sustain their livelihood. They could not find new jobs when their existing employer made them redundant.
The loss of jobs has been tragic. Recovery will occur only as recovery comes to the City of London to create a great resurgence of employment. That will come partly from economic growth and partly from the same mechanism that will create a resurgence in the building industry. In London, the financial sector and the building industry in many ways go hand in hand. A great deal of office development in London was to cater for growth and anticipated growth in the financial sector. So the two causes of unemployment mesh together.
1239 I most keenly urge Ministers to be aware that the importance of London as a financial centre is not only one of the more esoteric aspects of the negotiations about a single currency in Maastricht but one which bears great relevance to the employment of my constituents and those in many other inner-London constituencies. The importance of London as Europe's financial centre cannot be overestimated. It is important for both Britain's macroeconomic position and the employment of many Londoners. It is vital that the agreement negotiated at Maastricht provides a solution that reinforces the pre-eminence of London as a major financial centre.
Employment in the City of London is at present in a trough. We need to bring more activities into London, to ensure that employment grows again to take up the people who wish to find employment in the financial sector. I congratulate the Government on already achieving one success in that.
The European Bank for Reconstruction and Development has been located in London. That was an achievement of which the Government rightly made much. It will bring prestige to London, especially in view of development in eastern Europe. The City will be able to play a role in the development of the economies which are going through such turmoil following the collapse of the Soviet Union.
A major development bank such as the EBRD will become provides employment for a great many people. It is a labour-intensive industry employing not only people with a high level of skills but people with minor clerical skills. It is a great achievement that that bank has come to London. I expect great growth in employment as a result of the bank's activities.
It is equally important that the putative European central bank—we do not know in what final form it will exist but the embryonic form is being negotiated at Maastricht—should also be located in London. If not, at least its major employment activities should be located in London. A central bank is also labour intensive. It is a bank of supervision. That involves a great deal of clerical 1240 work, observation of the financial sector and analysis of reports from it. It will issue forms which need to be filled in and processed. All those mundane chores provide vast amounts of employment, which would be attractive to many of my constituents and of great benefit to Britain.
I urge my right hon. and hon. Friends who are involved in the negotiations at Maastricht to emphasise that, whatever else comes out of the talks, it is vital that the European central bank should be located in London. That should be a major plank of our negotiating stance. It is vital.
One of the other major causes of unemployment in London is related to education. It is said that a high proportion—recent estimates suggest that it may be as high as 25 per cent. —of children leave primary school unable to read and write. We do not yet know how many children leave secondary schools in inner London unequipped with the skills they need to achieve even basic employment standards. It is unreasonable to expect employers to provide that training, although I know of a number of employers in my constituency and close by who do—
§ It being half-past Two o'clock, the debate stood adjourned.