HC Deb 13 February 1992 vol 203 cc1092-4
2. Mr. Hinchliffe

To ask the Chancellor of the Exchequer if he will list those measures which he has taken since November 1990 to improve employment prospects.

The Chief Secretary to the Treasury (Mr. David Mellor)

Since November 1990. the Government have reduced interest rates by 3.per cent and price inflation has fallen by more than half. Underlying earnings growth has fallen to its lowest level for almost 25 years and economy-wide productivity has increased, helping push non-oil exports to record levels. The foundations have been laid for sustainable growth in both output and employment.

Mr. Hinchliffe

Has the Minister any understanding of the individual human tragedy of unemployment? Is he aware that today's increase is the 22nd consecutive monthly increase in unemployment? Does he know that since the Chancellor and the Prime Minister came to office, some 30,000 jobs, on average, have been lost every working day? Is not the Government's complacency on the matter scandalous and disgraceful?

Mr. Mellor

No, there is no complacency. Unemployment is a tragedy for the unemployed in Britain, just as it is for the greater number of unemployed in France and the United States. We have created a climate for recovery. The key question is not the one that the hon. Gentleman asked, but, rather, whose policies will be best able to put people back to work? The Labour party will have to deal with that issue.

Sir William Clark

Does my right hon. and learned Friend agree that far more people are in employment today than in 1979? Does he also agree that a minimum wage and higher taxation would lead to even greater unemployment?

Mr. Mellor

That is undoubtedly so. There are nearly 600,000 more jobs in the United Kingdom today than there were in 1979. My right hon. Friend will be aware that the Organisation for Economic Co-operation and Development said that between 1984 and 1990 the United Kingdom had by far the best job creation record of the larger European Community countries.

Mr. Beith

Why does not the Chief Secretary recognise that a period of high unemployment and recession is the best time to spend additional resources on investment in the fabric of our schools, homes and transport? That would put people back to work and give long-term benefits to the economy.

Mr. Mellor

The hon. Gentleman knows only too well that in his autumn statement my right hon. Friend the Chancellor was able to announce a £1.4 billion boost to the railways and London Transport and an increase of more than 10 per cent. in real terms for capital works on schools. In addition, for good measure, a substantial increase in the Government's commitment to hospital building was announced. Therefore, I am not sure that the hon. Gentleman has as good a point as he thought.

Sir Ian Stewart

Does my right hon. and learned Friend agree that the best way to provide improved employment prospects is to get inflation and interest rates down, as the Government have done so commendably in the past 18 months? The worst thing to do would be to impose swingeing increases in personal taxation of the sort advocated by the Labour party, because that would undermine the incentive and enterprise on which jobs depend.

Mr. Mellor

My right hon. Friend is quite right. As the Bank of England's recent quarterly bulletin made clear, the right environment for recovery is one of stable prices. For the Labour party, inflation is the word that dare not speak its name.

Mr. John Smith

Are not the truly appalling unemployment figures announced today—an increase of more than 53,000, taking the unemployment total to more than 2,600,000, even leaving out the thousands of job losses announced during the present month—ample proof that the Government's incompetent economic policies are certainly not working, but are causing severe hurt? Do the Chancellor and the Chief Secretary consider that the mounting job losses, with all the human tragedy that they bring, are a "price well worth paying"?

Mr. Mellor

It is quite clear that we have a climate for recovery in this country, with falling unit labour costs, inflation below the European Community average and interest rates fully competitive with those of our competitors. Once we get beyond the cheap debating point, has the right hon. and learned Gentleman thought about what the minimum wage will do to unemployment? Does he appreciate the nonsense of the proposal to increase taxation at this time of economic difficulty? The key question is: what impact would Labour policies have on unemployment and the economic well-being of the country? That is the question which the right hon. and learned Gentleman fails to address.