HC Deb 12 December 1995 vol 268 cc818-9
2. Mr. John Marshall

To ask the Secretary of State for Social Security what incentives to work will be included in his reforms of the unemployment benefits. [3567]

The Minister for Social Security and Disabled People (Mr. Alistair Burt)

The key theme of our reforms is helping people back to work. Measures include the jobseeker's allowance, the back to work bonus and the scheme known as employment on trial, which will be extended to enable up to 200,000 people a year to try unfamiliar work without the fear of losing benefit if they give it up after a reasonable trial. We have a number of other measures.

Mr. Marshall

Does my hon. Friend agree that the greatest incentive to work is a low level of tax, and that those who are seeking an incentive to work should compare the reality of a tax system in which one in four pay only 20 per cent. with the mindless mirage of the promise of a 10 per cent. tax rate, accompanied by massive increases in expenditure?

Mr. Burt

The nation and the House remain confused about how the sums produced by the Opposition would add up. The Government's employment measures have seen United Kingdom unemployment fall by 710,000 since its peak. That is a record of which most other countries in Europe would be proud, and it has much to do with our fiscal measures and our control of tax and public expenditure.

Mr. Hardy

Does the Minister approve of situations in which supporters of the Government can boast that they pay their workers less than £1 an hour? Is that fair on the workers, and is it fair on the subsidising taxpayer?

Mr. Burt

I do not think that any of us condone poor pay. The Government believe that a job is better than no job, and that those who pay properly get a proper response from their employees. We do not want to see artificial barriers created, such as the minimum wage, that prevent people from coming into jobs. That is the sort of sensible package that most of my colleagues support.

Mr. Dykes

More important than tax cuts, does my hon. Friend agree that the most important incentive to work is a plentiful supply of new jobs? As the market mechanism will not supply all the new jobs in any economic system, including the mixed capitalist system, it is the Government's job to stimulate the economy to provide new jobs. Will my hon. Friend introduce the reforms in a caring way to ensure that the vast majority of people who are not unemployed through their own fault are not penalised?

Mr. Burt

My hon. Friend speaks a great deal of truth. The Government have ensured that there are very few barriers to people coming into employment, and we have used the benefit system and in-work benefits to increase the number of people in work. For example, some 300,000 people have moved from income support into work, and have obtained family credit. The mixture of controlling taxes and public expenditure and of preventing barriers to work distinguishes the Government from the Opposition, and distinguishes our economy from those of so many of our partners in Europe.

Ms Lynne

As the Government and the Front Bench of the Labour party are committed to some sort of workfare, will the Minister tell the House whether he honestly feels that it is acceptable to starve people into submission by withdrawing their benefits? Surely it would be better to create proper jobs and proper training.

Mr. Burt

I do not think that we are signing up to workfare or starving anybody into work. The Government want an economy that will encourage the creation of jobs. Despite the hon. Lady's frequent protestations and her demands for increased public expenditure, I recall very few job-creation measures coming from her or her colleagues.