THE JOBSEEKER'S AGREEMENT

HC Deb 22 March 1995 vol 257 cc400-38

Mr. McCartney

I beg to move amendment No. 1, in page 6, line 31, at end insert— '(6A) A jobseekers agreement may specify that a claimant need not be available for or seek, employment other than at a minimum prescribed amount of remuneration.'.

Madam Speaker

With this, it will be convenient to discuss amendment No. 2, in clause 16, page 14, line 32, at end insert— `(1A) Nothing in section 15, or in regulations under that section, shall be taken to prevent payment of a jobseekers allowance merely because the claimant refuses to seek or accept employment other than at the minimum amount of remuneration prescribed under section 7(6A) above.'.

Mr. McCartney

I exclude the hon. Member for Stratford-on-Avon (Mr. Howarth) from criticisms that I will make of his party in relation to the minimum wage and to in-work poverty. The hon. Gentleman has more than a fair record on those issues. It is pity that he was not a member of the Committee that considered the Bill. He would have assisted us greatly when Opposition Members moved the amendments to improve the Bill in relation to unemployed people.

The amendments have been tabled specifically to deal with minimum earnings. The reason we have done that, as I shall set out in detail, is the context of the debate. The Tory party is a party of fat-cat excess, exploitation and the dole—there can be no doubt about that. In 1993, directors in Britain's six top banks enjoyed salary increases of up to 181 per cent. Many of them made profits of more than £4.8 billion. That orgy of greed has resulted in the axing of 72,000 jobs since 1990, and the closure of 2,252 branches in the past five years.

The figures show how these godfathers of the bank boardrooms have been writing fat pay checks to themselves in the morning and redundancy notices to their employees in the afternoon. It is a scandal that pay has gone through the roof for top directors while thousands of their employees have faced a pay freeze or the sack. So what strategies do the Tories have for tackling the poverty trap? The answer is simply that they have none. They have turned Britain into a sweatshop. I want to set out the reasons why that is the case, and a diary of events on low pay.

The Committee sat for the first time on 24 January this year. Interestingly, that was the first occasion on which Mr. Cedric Brown of British Gas discussed with members of the Select Committee on Employment his views on fair remuneration at work. I pay tribute to my hon. Friend the Member for Wallasey (Ms Eagle). I am not someone who goes in for gongs or presentations, but my hon. Friend has been outstanding in her pursuit of greed in the boardroom at the expense of ordinary workers at the work place. Much of the exposure of the Conservative party's hypocrisy on these issues and its sham support for low-paid workers has been down to my hon. Friend.

On 1 February this year, my hon. Friend the Member for Peckham (Ms Harman), the shadow Secretary of State for Employment, released figures from the Government's own new earnings survey. They showed that Sir lain Vallance earned more in a day than 80 per cent. of Britons earn in a month—more than 17.3 million people had to work a month to earn what Sir Iain Vallance earns in a day. On 9 February, when the Committee was sitting, the Joseph Rowntree Foundation report on income and wealth stated that

low pay is a problem on unprecedented scales. The lowest 10 per cent. of hourly paid workers are earning less now than in 1975 while the top 10 per cent. are earning 50 per cent. more. On 14 February the Minister of State, Department of Employment, announced triumphantly to the Committee that considered the Bill that no lower income floor would exist to which an unemployed person could look for a safeguard against being offered a £1-an-hour job, or losing benefit. She trumpeted that as a triumph for the marketplace.

On 16 February, a Sweatshop of Europe report entitled, "What Future?" was published. It contained a detailed analysis of the jobs and pay rates offered by the careers and employment services, which are directly under the control of the Minister. The report highlighted the fact that young people had to work about eight weeks full time to earn what the head of British Telecom earned in one hour. The Minister's Department is offering people in Britain jobs where they have to work eight weeks to earn what the head of BT earns in one hour of one day. Despite that, she still trumpets with triumph her commitment to offering to the unemployed jobs that pay £1 an hour or less.

On 17 February, to their shame, Tory Ministers lined up to defend top pay awards and to attack the minimum wage proposals of my hon. Friend the Member for Peckham. On 21 February, the International Labour Organisation attacked deregulation and stated that that was not the pathway to greater job creation. It called on all Governments, and in particular this Government, to end poverty pay and to renew a commitment to full employment. The Government failed to respond to that by offering a debate in the House or even by offering the House a statement about their position on the ILO. The reason for that is that they do not want further to expose themselves publicly about their lack of commitment in relation to poverty pay. Their support for driving down wages further directly contravenes the ILO report.

On 1 March, the Secretary of State for Employment put clear blue water between himself and the Prime Minister when he defended mega pay rises and attacked a minimum wage, offering himself as a standard bearer of the politics of greed and privilege. I was unfortunate enough to be there listening to that diatribe of attacks on the low-paid in Britain.

On 7 March the banks were at it again, along with the privatised utilities. Jam, jam all the way for the rich and powerful, and dole, dole every day for more of the workers. There was a further scandalous announcement of mega pay rises and arrangements on pensions and share deals making them instant millionaires while workers were being made redundant, despite the fact that the profits were at the greatest level ever.

7 pm

On 15 March I issued a report highlighting the fact that privatised utility bosses have axed 126,000 jobs with another 82,000 to go in the next five years. So far, the jobs-to-dole strategy has cost the taxpayer £1 billion in benefit payments. That £1 billion of taxpayers' money has been used to strip out high-paid, high-quality jobs from the privatised utilities while the profits from those utilities go straight into the pockets of the few powerful people in charge of them. The Government responded by supporting that.

Mr. Michael Fabricant (Mid-Staffordshire)

Will the hon. Gentleman give way?

Mr. McCartney

I will give way in a moment.

On 17 March my hon. Friend the Member for Peckham published a further report saying that the axing of wages councils has led to a cut in wages and reduced levels of employment. That is a direct attack on the concept that the Secretary of State for Employment always parrots; that if wages are reduced, employment increases. That is entirely bogus and my hon. Friend the Member for Peckham proved that to be so.

Mr. Fabricant

Will the hon. Gentleman give way?

Mr. McCartney

I said that I would give way in a moment. The hon. Member for Mid-Staffordshire (Mr. Fabricant) has only just come into the Chamber. He was not around for the eight weeks during which we were discussing this issue in Committee. I will give way later.

On 20 March my hon. Friend the Member for Peckham published a further report highlighting the fact that over 3 million workers now earn less than the national insurance contribution of £57 per week. Of that number, a shameful 74 per cent. are women. It beggars belief that as we come to the next century so many people are earning less than £57 a week. Yet, the Government and their proposals in this Bill will force people to accept wage levels that are even lower than that.

Mr. Fabricant

The hon. Gentleman said that in the privatised industries money had been diverted into the pockets of the managers. That is a gross simplification. Does the hon. Gentleman accept that it is only since the privatisation of the water companies that they have begun to deal with the huge logjam of crumbling Victorian sewers? That is costing hundreds of millions of pounds and was not being dealt with when the industry was in state hands.

Mr. McCartney

It is interesting that the hon. Gentleman should defend the Government's position on private utilities and that he went further to promote the water industry, which, since privatisation, has made thousands of people redundant. There have been record levels of cut-offs and record levels of profit at the expense of those who require water for the basic necessities of life. The hon. Gentleman should apologise to the House for his views on this matter. What about his constituents who have to suffer under the yoke of privatised utilities such as water which are increasing charges at the same time—

Mr. Fabricant

rose—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. It might be advisable if we returned to the subject of the minimum wage.

Mr. McCartney

I apologise for allowing myself to be led down the wrong path. I will not do it again.

On 21 March the Secretaries of State for Employment and for Social Security tabled a new clause, which will he debated tomorrow, to cut hardship payments to unemployed 16 and 17-year-olds. It will confirm the £400 million cut in benefits for the unemployed.

There it is. That is the catalogue of Government support for greed and privilege which occurred during the weeks in which the Bill was in Committee. At the end of that, the Government's only response is to attack unemployed 16 and 17-year-olds and reduce further their ability to live on or below the breadline. Many of those young people whom the Government intend to attack are kids who have come out of care and who may have been physically or sexually abused. Some of them are children with relationship problems or who have mental health or other health problems. The Government's only response is to defend the fat cats and the privileges in privatised industry. Those 16 and 17-year-olds will have no training place and no proper job to go to. It is no wonder that today Lord Whitelaw said of the Government: This lot are a complete showerone of the worst Governments I can remember. Opposition Members could not agree more with those sentiments.

Where have the Government got us? We are now the sweatshop of Europe. We have the longest working hours, the least holidays, poorest pensions, lowest pay and highest levels of insecurity. The bottom tenth of the population are 17 per cent. worse off in absolute terms than when this lot came to power. The proportion of households living in poverty has trebled from 7 per cent. to 24 per cent. of the population since the late 1970s. A total of 328,000 people in Britain earn less than £1.50 an hour. Over 1 million people earn less than £2.50 an hour. Women have been badly hit by low pay—670,000 of them earn less than £2.50 an hour. In every part of Britain there is a serious low pay problem. Some of the worst affected areas are in regions such as Yorkshire, Humberside and the north. That coincides with high levels of structural unemployment. Those are the very areas that will be the worst affected by this Bill.

The Government do not just stop there. Between 1984 and 1994 there has been an increase of 1 million people holding down two and sometimes three jobs just to make ends meet, and a further 4.5 million people are earning so little that they live on or below the poverty line. The Government promote that as an excellent idea. They say that that is what people should do in a deregulated marketplace. They say that people should find themselves a second or third job in order to develop their skills and energies and that they should be thankful for it. Interestingly, in The Guardian today there is a little more insight into what the Government really mean about their friends having little extra earners in little jobs. Seamus Milne, the labour correspondent said: The £300,000-a-year chief executive of the privatised electricity generator Powergen left MPs investigating top corporate salaries speechless last night when he mentioned in passing he had three 'little jobs' on the side paying £36,000 a year. I must emphasise that they were "little jobs" on the side. Mr. Wallis took up share options of £876,194 last year and received a pension payment of £53,000. He stands to earn a £100,000 bonus. In defence of all that he said that the extra jobs were all 'done in my own time'. For one meeting a year he was paid £17,000 by the British Standards Institute. That is not a bad rate—

Mr. Deputy Speaker

Order. The hon. Gentleman is straying from the subject. He may be talking about that gentleman's minimum wage—I do not know—but he should return to the amendment under discussion.

Mr. McCartney

I was contrasting the Government's proposals in the Bill and their intention to drive down the position of the unemployed, who work for £1 an hour or less or run the risk of losing benefit, with their general policies in the labour market. The Bill supposedly provides opportunities for employment in the labour market.

My contention, as shown by the evidence I have put to the House, is that the Government have double standards—one standard for their friends and one for the unemployed. It is legitimate to say why we have tabled these amendments. We want to put the unemployed at least on a level playing field. It may be that the job that is being offered leaves them worse off than when they are on benefit. They may be driven further into poverty by having to accept an employment opportunity that none of the Conservative Members would accept for themselves or their family.

It is clear that Ministers would never accept those wage rates for the companies and individuals who support them, whether in the privatised industries, the private sector or the banking sector. It is legitimate to state precisely what the Government are doing with the Bill.

Ms Eagle

Did my hon. Friend notice that Mr. Giordarno and Mr. Cedric Brown of British Gas said in their evidence to the Select Committee that they would have no objection whatsoever to a minimum wage?

Mr. McCartney

It is interesting to note that a large and growing number of employers not only accept but promote the idea of minimum standards at work. Many companies which are involved in compulsory competitive tendering now recognise that one can maintain standards and opportunities in the marketplace for their goods and services only if they provide minimum standards of investment, training and education for the work force. Many companies now fear that, following the total deregulation of the labour market, competition will be on the basis of who can pay the least wages. Instead of investment in quality, there will simply be investment in the firms with the lowest wages. Companies will then be in an unfavourable position when trying to compete in the marketplace.

Mr. Fabricant

Will the hon. Gentleman give way?

Mr. McCartney

No, I shall not give way. The hon. Gentleman may be able to make a speech during the debate. [Interruption.] I gave way to him earlier, and I was sorry I did because of the stupidity of his remarks.

Mr. Fabricant

The hon. Gentleman did not answer my question.

Mr. McCartney

The hon. Gentleman has had an answer. If he does not like it, he can lump it.

Mr. Fabricant

The hon. Gentleman adopts the intellectual approach.

Mr. McCartney

It says a lot for the hon. Gentleman's intellect that he supports what is happening in the privatised utilities at the expense of those on low pay. If that is a sign of intellect, I am glad that I have my intellect and he has his.

The Government have got themselves into a position where on the one hand, their proposals will further undermine the right of the unemployed to seek a fair day's pay for a fair day's work, while on the other hand, they will allow employers—such as the bosses of the privatised utilities—to set wage levels for their own benefit. There will be huge wage levels and minimum levels of pay for the privatised bosses, while no minimum level is set at the lower end of the market, where it will be left to the market to drive wages down further. With that will go the rights of unemployed people to seek employment which will take them out of poverty, and not drive them further into it.

The Government's position is even more unsustainable when one looks at what the new JSA rules are doing to the incomes of people who are currently requiring benefits. Eighteen to 24-year-olds will lose £500 a year—a 20 per cent. cut—simply because they are under 25. They must still pay the same levels of national insurance contributions, tax, council tax and mortgage payments. But when it comes to their payments from the benefits system, the Government immediately make a cut in their income because of their age.

A person aged between 18 and 24 who has a partner working full time will have a 60 per cent. cut in benefit, and will lose £1,457 simply because of his age. Again, that is despite the fact that he pays the same level of contributions as people over 24. A 25-year-old with a partner working full time will lose 50 per cent. of his income, or £1,205. Someone aged 25 or over with £8,000 of savings—which can include, of course, any redundancy payments—and a non-working partner will lose 70 per cent. of his benefit, or £2,694.

The House should look at those figures alongside the Government's support for Mr. Wallis and his one day a week job which gives him extra spending money of £17,000 a year. It is no wonder that we ask about double standards in public life, and about the hypocrisy, mean-mindedness and tight-fistedness of the Government. The Government are blatantly cutting the benefit of the unemployed and kicking them in the teeth. They are asking the unemployed to pay the price of the Government's failed economic policies.

Ms Lynne

Would the Labour party reverse those cuts? I asked that question before, but I did not get a satisfactory reply.

7.15 pm

Mr. McCartney

If the hon. Lady and her party had bothered to serve for eight weeks on Committee, she would have had an answer to that question, and a lot of other answers as well. The Labour party has consistently tabled amendments and new clauses to defend the status quo and to try to challenge and defeat the Government on the Bill. The next two days of discussion on the Bill will be about the clear proposals from the Labour party to defend the rights of the unemployed. We cannot make our position any clearer. We have not spent the last eight weeks of our lives in Committee—without the support of a single Liberal Democrat—defending the rights of the unemployed, to come here and have a silly smart Alec question about what we will do at the next election.

We are desperate for the Government to announce a general election so that we can put our new proposals on the minimum wage and other issues before the British public. With every day that goes by without a general election, more people are ending up in poverty and unemployment, and more people are being exploited in the work place because of low wages. If the Government are really serious about the Labour party's position on policy issues, they should give us a general election.

I understand that right hon. Members in the Cabinet set themselves up a little sub-committee to look after Government gaffes. Their first mistake was to put the chairman of the Conservative party in charge of the gaffe committee.

The Government would seem to have no intention—either before the passage of the Bill or slightly after—of allowing us to put the issues to the British public. But they cannot run away for ever, and we await the day when we can put some different proposals to the public, not only on the minimum wage but on recreating a welfare state which takes people out of poverty and into work and which gives people access to a range of issues which the Government currently deny them.

Mr. Heald

Getting back to the amendment, what would be the minimum prescribed amount of remuneration."?

Mr. McCartney

The Government have three choices, and each time we asked the Government about them they failed to respond. The Government can—by regulation—say that the minimum would be a person's current unemployment benefit level, his current income support level or his current jobseeker's allowance level. We have asked questions about that, as the hon. Member for Hertfordshire, North (Mr. Heald) knows. The hon. Gentleman served on the Committee, and that is why I was prepared to give way to him.

We asked the Minister of State, who was so eager that she answered before I could get the question out. She said that there would be no level in respect of the protection of an individual in relation to the minimum level of salary which can be given in an offer of employment. Therefore, the three options available to the Government could offer protection for the unemployed going back to the work place.

Mr. Heald

Which option would the hon. Gentleman choose?

Mr. McCartney

If I were the Minister, I would not be putting the unemployed in the position in which the Government are putting them. No Labour Minister would force people into employment at wages of less than £1 an hour or take away their right to benefit. The hon. Member for Hertfordshire, North's support of the Government's proposals in Committee has been shameful.

Ms Eagle

Does my hon. Friend recall that the Parliamentary Under-Secretary of State for Employment, when asked about that very matter, said that the correct answer to question 18 of the jobsearch plan is the level of wages a person was earning in his last job?

Mr. McCartney

My hon. Friend is right, and when we challenged the Government on that, no answer was given.

Miss Widdecombe

The hon. Gentleman knows that he cannot say that no answer was given when I was challenged. I gave the Committee a full explanation of what happened. The hon. Gentleman will recall, as will the hon. Member for Wallasey (Ms Eagle), what happened that night. There was a great deal of yah-boo stuff coming from the Opposition Benches. There was chaos. One could hear the chaos several miles off. My hon. Friend was not allowed to complete his sentence. Far from being confused, had he been allowed to finish he would have said that the amount was someone's last salary within the permitted period. The hon. Gentleman was given that explanation in Committee.

Mr. McCartney

The Minister is absolutely consistent in the excuses that she gives for the mistake either by herself or by the Under-Secretary, her hon. Friend the Member for Amber Valley (Mr. Oppenheim). The fact is that the Government got themselves into a mess on that occasion. If I remember rightly, for her trial and tribulation in trying to trip around her hon. Friend's terrible error, we gave the Minister a Gotcha award on behalf of the rest of the Committee.

Ms Eagle

When my hon. Friend read the Hansard record of the response of the Under-Secretary of State for Employment did he notice the full stop at the end of the sentence?

Mr. McCartney

I do not want to discomfit the Minister any further. It is a difficult position when a Minister prays in aid a full stop or comma in respect of Government policy, but there we are. The Minister is right. She gave an explanation in Committee, but the problem was that all the members of the Committee laughed their heads off and we did not hear it all.

The Labour members of the Committee found the Government's position on this matter unacceptable. Through their labour market policies, the Government are trying to price the unemployed into low-paid work by denying them benefit. The unemployed have two choices, neither of which is acceptable. The choices are exploitation or the dole. The Government's proposals for JSA offer a simple choice.

Question 18 of the draft agreement on the jobsearch plan asks the claimant: What is the lowest wage you are willing to work for? There are even boxes in which to put the lowest hourly, weekly, monthly and annual wage rate. I do not think that Mr. Ed Wallis of PowerGen will be filling in the form, but it would be interesting if he did.

Ms Harriet Harman (Peckham)

The box is not big enough for all the noughts.

Mr. McCartney

My hon. Friend is right.

The Government's proposals for the jobseeker's agreement are different from what happened under unemployment benefit. JSA is not a daily benefit but a weekly benefit. In the jobseeker's agreement people have to sign up in advance for seven days a week at a minimum of 40 hours. If that is calculated in relation to the level of the jobseeker's allowance, it equates to about £1 an hour. The Government are giving a green light to poor employers in local markets to offer employment opportunities with pay at or around jobseeker's allowance rates. They will do so in the sure and certain knowledge that the Minister will offer up large numbers of unemployed people who will either have to take the job or lose their right to benefit.

Unemployed people will be criminalised. They can be fined and fined again. They have nil choice. It is either to have no income or to take the exploitative job. That is why the Government have made this proposal. It is a cowardly attempt further to manipulate local labour markets not by investing in quality training and job opportunities but simply by driving down pay to the lowest possible level.

Our position is in stark contrast to the response from the Under-Secretary of State for Employment, the hon. Member for Amber Valley. This is the hon. Gentleman who got the Minister into trouble in Committee. In a letter to the Financial Times on 23 December last, he stated that £2.70 was an extremely low level of pay. He can write that in the Financial Times, but as a Minister in the Department of Employment he backs the Government to the hilt when they are prepared to introduce the jobseeker's agreement and force people to work for not half but almost a third of that.

What is the Government's position? If £2.70 is extremely low, would the hon. Member for Hertfordshire, North support it, given that that is the position of an Employment Minister? People could legitimately say that offers of less than that could leave them considerably worse off. The Government should respond to that. Is that Government policy? Did the hon. Member for Amber Valley declare the Government's position on the minimum level of wages in the economy?

Mr. Fabricant

I am grateful to the hon. Gentleman for his generosity in giving way a second time. He quoted earlier the view of The Guardian on the minimum wage. While I have not read that article, I have read reports by the OECD which say that the single common cause for high unemployment levels in France and the Club Med countries is a minimum working wage. So what is the hon. Gentleman's policy and what is his response to the OECD, if not to The Guardian?

Mr. McCartney

I say two things to the hon. Gentleman. This is not a complaint. The article that I quoted from The Guardian was not about the minimum wage. It was about Mr. Wallis's personal position in relation to his minimum wage. As for the OECD, the report did not say what the hon. Gentleman said it said. The Government interpret it in the same way as they do the ILO report. Those reports make it clear that the Government's position is unsustainable in terms of the market.

The ILO report, which is less than a month old, has made it clear that the position of this and other Governments who promote free market policies to the extent of poverty pay is driving their economies in the wrong direction. In the long run, that will damage the economy as a whole. Academic research has also shown that, in countries that have a minimum wage, there is no net loss of employment opportunities. The Government have not been able to prove their case.

Does the hon. Member for Mid-Staffordshire believe that the Under-Secretary was correct? Does he believe that £2.70 is the level that the Government should choose in respect of the jobseeker's allowance? Does he think that that is a fair level? Does he think that that should be the floor?

Mr. Fabricant

I am concerned that people should have jobs. It is pointless to set a minimum working wage if it creates unemployment. Would the hon. Gentleman's party welcome the creation of unemployment?

Mr. McCartney

We are the only country in Europe that does not have statutory pay protection. Ours is the only country out of 100 ILO signatories that is opposed to providing minimum pay protection for its work force. The bulk of empirical evidence shows that the impact of minimum wages on unemployment is insignificant. That evidence comes from studies by the ILO on the minimum wage throughout the world. The Government do not have a case for opposing the minimum wage. They are opposed to people having fair standards, wages and conditions of work. The Government have set their face against that.

It is interesting to note that the hon. Member for Mid-Staffordshire did not support the Under-Secretary's view. I shall be interested to hear whether the Minister of State supports the Under-Secretary. The excuse that she gave in Committee—that the hon. Gentleman was shouted down by yah-boos—does not stand up. He wrote the letter in the closeted, quiet atmosphere of the Department of Employment and sent it off after due consideration. The Minister can give no excuse for what her hon. Friend believed about extremely low levels of pay.

The Government have every intention of taking wage levels in Britain to the lowest possible point, regardless of the social and economic consequences. They have no desire to see any wage protection for workers in Britain. It suits the Government to have high levels of unemployment because they create a market in which unscrupulous employers can call the tune. There is a trough for the wealthy fat cats to eat and gorge themselves in and for millions there is a trough of despair. That is what the Government's policies offer.

A national minimum wage would get people back to work, off benefits and out of the poverty trap. It beggars belief, but, as we approach a new millennium, earnings inequality in the United Kingdom economy is greater than at any time since 1866. For the bottom quarter of wage earners, earnings fell in comparison with average pay by 10 per cent. The earnings of the upper 25 per cent. rose by 11 per cent. The earnings of the top 10 per cent. of earners have risen by a staggering 50 per cent. Wages councils for 4.5 million people were abolished by the Government in 1993–94.

Mr. Heald

I am still trying to find out what the minimum prescribed amount of remuneration is. Is the hon. Gentleman saying that it will be equal to the statutory minimum wage that the Labour party would introduce as an incoming Government? If so, is he talking about £4.05 an hour for 40 hours a week—£160 a week—as the minimum amount that would entitle a claimant to refuse a job?

Mr. McCartney

During the eight weeks in Committee, I know that the hon. Gentleman found it difficult to come to terms with the fact that he was in the Committee to defend the Government's position and that we were debating a Government Bill.

The Secretary of State for Social Security (Mr. Peter Lilley)

This is an Opposition amendment.

7.30 pm

Mr. McCartney

The Secretary of State must contain himself a moment longer. The position is this. The Government have four choices on this amendment and I will repeat them: employment benefit level, income support level, jobseeker's allowance level and the £2.70 suggested by the Under-Secretary in the Financial Times. I have given the hon. Member for Hertfordshire, North four choices. Given that the Bill will be law before the next general election, if he wants a debate in the general election campaign about the minimum wage and any changes that an incoming Labour Government would make to social security, I shall be delighted to come to his constituency to help remove him. I have no problems with that.

As regards the Bill and what happens if it becomes law this summer, the Government must make choices and so far they have chosen to offer people £1 an hour or less. The amendment gives them four opportunities. I will make it easy for the hon. Member for Hertfordshire, North. Which opportunity does he choose? Which one would he agree with? I see that he is smiling, but he will need to do better than that—he cannot buy food with a smile. What choice will he make? I will give him four opportunities—one out of four, two out of four, what is it to be? What is his choice?

Mr. Heald

I am grateful to the hon. Gentleman for giving me another opportunity. The choice that he is offering is totally bogus because the potential law that we spent eight weeks debating does not make choices of that sort. It says that it is up to the claimant to show good cause, and he knows that. Will he finally answer the question and say that the minimum prescribed amount of remuneration would be the same as Labour's figure for a statutory minimum wage—that is, £4 an hour?

Mr. McCartney

The hon. Gentleman has surpassed himself as he has given us a fifth choice, which is no floor. The position is clear—the Government are not prepared to defend people from having to accept £1 or £1.50 an hour, or less. Theirs is a total zero position.

Miss Widdecombe

This is an Opposition amendment and presumably its purpose is to make clear what they want in the Bill. The hon. Gentleman consistently refused to make it clear throughout the Committee and the beginnings of this debate. What does he want us to do and what is his choice of the five, six, seven or eight options? Will he specify that figure in that box?

Mr. McCartney

The hon. Lady is being rather disingenuous with me. During the passage of the Bill, I gave her the options. From the moment that she got out of the trap and made it clear that there would be a zero rate for the unemployed and that the sky is the limit for the public utility bosses, she has had opportunities. In this debate, I have given her a fourth opportunity to agree with the Under-Secretary, the hon. Member for Amber Valley. I would call it a draw if I got anything out of this debate that improved the situation for the unemployed from zero. I give the hon. Lady another opportunity to come to the Dispatch Box to support her hon. Friend's assertion in the Financial Times. Does she agree that that should be the minimum floor?

Miss Widdecombe

My hon. Friend has not suggested a minimum floor as regards the Bill. All I want to hear from the hon. Gentleman is the figure—whether for an unemployed agricultural worker or an unemployed ex-boss of a public utility—that he wants in that box under the Bill. What is he asking for?

Mr. McCartney

I am going to have to give the hon. Lady a lesson about her own Bill. An unemployed ex-head of a public utility would not qualify because of his capital resources—he would probably retire with about £2 billion of taxpayers' money in the bank, so the question does not apply.

The Minister cannot use the excuse that the Under-Secretary has been misquoted. He took the opportunity, in his own time, to submit the letter to the Financial Times. She either agrees with him or she does not. I will repeat his remarks. On 23 December last, he stated that £2.70 is an extremely low level. That is the position of her junior Minister. That being the case, how can the Government accept a zero position in the Bill for the unemployed? It is clear that the hon. Lady—

Mr. Heald

On a point of order, Mr. Deputy Speaker. Is it in order for the Opposition to table an amendment and for no guidance to be given in the speech for the Opposition about the essential point—what the prescribed minimum amount of remuneration should be? If I may give an example—

Mr. Deputy Speaker

Order. The hon. Gentleman need not bother to give an example because it is not a point of order and the hon. Member for Makerfield (Mr. McCartney) is responsible for his speech.

Mr. McCartney

The hon. Member for Hertfordshire, North should know better than to challenge the Chair as it was obviously in order or we would not have been debating it. I should have thought that he would have learnt his lesson, as he got himself into hot water on more than one occasion in Committee with similar points. He is using yet another tactic, but he has failed to answer.

The Government are extremely embarrassed. They never expected that from the young boy Minister—he is the only Minister who went straight from a youth training scheme to be a Minister and he is the only person I know of who qualified and got a job out of the scheme. The "young Minister", as he was described in the last Employment questions, has put it on record—I assume that he is speaking for the Department as he is not speaking on his own—on behalf of the Government and of the Department, that he believes that £2.70 is an extremely low level. Opposition Members would all say, "Hear, hear."

What we find interesting is that, during the passage of the Bill, it has been obvious that the Minister of State believes that a zero rate or £1 an hour is not too low. There is a difference of about 66 per cent. between the hon. Lady and the Under-Secretary. I do not want to labour the point too much, but it is a further sign of Government confusion over minimum wages and standards at work. I see that the Philadelphia lawyer is coming to the Dispatch Box.

Mr. Roger Evans

The question that I want an answer to is this—the hon. Gentleman may not want to give a figure, but he used the phrase a minimum prescribed amount of remuneration in amendment No. 1. Is that the same figure as Labour's minimum wage? If it is, could he tell us, and if it is not, could he explain it?

Mr. McCartney

The hon. Gentleman must do better than that. I know that he can convince juries at the Old Bailey with his arguments, but that was a bit threadbare. We state clearly that there should be designation in regulations—[Interruption.] I cannot make it any clearer. Through the amendment, we are trying to ensure that there is a floor, so that an unemployed person can be defended against exploitation.

This Bill will be law before the next general election, when the Labour party will put forward its position on the minimum wage and a range of other issues. The Bill is a stop-gap between this and an incoming Labour Government, which there will undoubtedly be—we will get rid of the whole damn shower of them. The position is clear.

Does the hon. Member for Hertfordshire, North think that the Under-Secretary was right about £2.70 an hour? Does he think that he has put the Government's position? If so, we will call it a draw and we will accept that and designate it in the regulations. At least that would be better than what the Minister of State is saying—£1 an hour or nothing.

Mr. Evans

Do I take it from that evasion that, if there ever were a Labour Government, the figure that he is proposing for the minimum prescribed remuneration would be Labour's minimum wage?

Mr. McCartney

The Under-Secretary thinks that he is at the Old Bailey again. He seems to be rather troubled by the judge in this matter.

Mr. Heald

Answer yes or no.

Mr. McCartney

Let me tell the hon. Gentleman about yes or no. The Government must defend the Bill which, unamended, provides for a zero rate. Unemployed people can lose their right to benefit if they do not accept a job that pays £1 an hour or less. We have offered four options in that respect. I ask Tory Members again whether they would accept: a minimum level of unemployment benefit; income support; jobseeker's allowance; or the suggestion of the Under-Secretary of State for Employment of £2.70 an hour? For God's sake make up your mind and pick one of those four options before tens of thousands of unemployed people lose their right to benefit or are forced into skivvy jobs that leave them in in-work poverty at the end of the week.

In-work poverty affects millions of people. It is interesting to note that Tory Members have lost, within the confines of Government, the argument on the minimum wage. The Secretary of State for Employment is not here because he cannot take the embarrassment. The Minister of State and her hon. Friends wanted to get rid of the agricultural wages boards, which are the only statutory minimum pay boards left in Britain. They had to hold a public consultation on the matter and discovered that employers, employees and farming communities wanted to keep a minimum wage and minimum standards to protect their community from the onset of further poverty and to defend their local economies and local companies. The Secretary of State for Employment had to swallow that decision in Cabinet and his position was overturned.

So, the first time that public opinion was tested—it will probably be the only occasion between now and a general election—on the issue of a national minimum wage, the Government were defeated and had to climb down. I welcome the fact that a national minimum wage for agricultural workers is still protected. Tory Members have had to accept the principle and concept of a minimum wage, and the agricultural wages boards will continue to operate.

I wait to see whether the Minister will attempt tonight, by the back door or other means, to undermine the decision to continue the agricultural wages boards. May I put another question to her in respect of the jobseeker's agreement? In areas where agricultural wages board rates apply, what will be the position under the jobseeker's agreement of somebody who says, "I'm not prepared to accept a job below that rate."? The local labour market will have a floor agreed by the Government, as the agricultural wages board sets a statutory minimum floor in the local agricultural economy. What is the position of unemployed people in those areas? Will they be allowed, under the JSA, to insist that they will not accept wages below the level that the Government set under the agricultural wages board?

The Government were not in power when our right hon. Friend, Barbara Castle, put equal pay legislation on the statute book. The Tories screamed that millions of people would be made unemployed, industry would be laid to waste and destroyed, and the only casualty would be women. That has been proved to be a fallacy because women play an increasing part in the work force. The problem is that the equal pay legislation needs a little assistance because of the direct effect on low pay of the Government's market policies. Our proposals on a minimum wage will ensure that women have their rightful opportunity in the marketplace to take home a living wage.

The Labour party is proud to support a minimum wage policy and, during the run-up to the next general election, we shall increasingly promote and put forward that proposal effectively.

Mr. Jim Cunningham (Coventry, South-East)

On low pay, is my hon. Friend aware of the case in Coventry some months ago in which an individual was paid £1 an hour? When we took the matter up with the Secretary of State for Employment, the individual was told that he should claim benefits. The Government are thus protecting employers while abusing taxpayers by using taxpayers' money to subsidise bad employers.

Miss Widdecombe

indicated dissent.

Mr. Cunningham

The hon. Lady need not shake her head. If she wants a copy of the letter from the Secretary of State for Employment, I shall willingly send her one. That is the racket which the Government are perpetrating.

7.45 pm

Mr. McCartney

My hon. Friend is absolutely right. The Government are using in-work benefits not to lift people out of absolute poverty but to subsidise employers who are maintaining people in poverty. Not only do employers receive that incentive to pay poverty wages but, through the taxation system, they have huge tax rake-offs for their private income and capital at the expense of the low-paid. So it is a double whammy: if people work for a bad employer, the bad employer receives a subsidy to keep them on low pay, while his profits and personal income are hardly taxed at all. The vast majority of working people face a 7p in the pound tax rise, which is the highest tax hike in history. The Government have the worst record on tax of any Government ever, anywhere and at any time. They not only lie about taxation but pile it on as quickly as they can, especially on low-paid, middle-income and ordinary people.

Without a pay floor in the economy, low pay damages our economic prospects. It dampens consumer activity; leads to a high turnover of staff; weakens investment in training; and creates insufficient production by employers, who drive down wages to cut costs instead of improving investment in modern equipment and production methods. A statutory minimum wage would provide a floor to stop unfair exploitation. It would stop bad employers and corporate individuals having the subsidies that my hon. Friend the Member for Coventry, South-East (Mr. Cunningham) described a few moments ago.

Only in the two-nation Britain created by today's Tories can a massive taxpayers' subsidy to low-wage firms be considered sensible economics. If the Minister does not want to listen to me and to my hon. Friends, perhaps she will listen to the hon. Member for Stratford-on-Avon, who clearly stated that there was general agreement within the Cabinet on the need for the agricultural wages boards and that a minimum wage in farming should be applied because it was fair. He said that it did not cost jobs and that both employers and employees wanted to keep it. If that is the hon. Gentleman's position, it is time that the hon. Lady gave up her bile and prejudice against low-paid workers and gave unemployed people a fair crack of the whip and an opportunity for a fair day's pay for a fair day's work. I ask my hon. Friends to support the amendment.

Ms Rachel Squire (Dunfermline, West)

I totally support the excellent speech of my hon. Friend the Member for Makerfield (Mr. McCartney).

What has angered me most in Committee and in successive debates and Question Times in the House is how the Government and Tory Members preach about creating jobs and attack a minimum wage, when their party is full of people who have several jobs and think that the salary that they receive to serve in this place is insufficient. At the same time, they expect millions of people to live on poverty wages and accept any job, however low paid, that is offered to them. Tory Members are good at preaching about people who are workshy, but would they consider taking a job that paid £2.70 an hour or less?

The Government's employment policy and the Bill are all about creating a skivvy economy where hundreds of thousands of jobs are low paid and short term, while a few thousand people—like some retired Tory Ministers and the chairmen of the privatised public utilities—rake in up to £150,000 a year for just one day's work a week.

My hon. Friend the Member for Makerfield has already mentioned the evidence that was given yesterday to the Select Committee on Employment. Another fact that particularly angered me and should anger every hon. Member was the news that Michael Bett, the chairman of the Nurses and Midwives Pay Review Body that recommended the paltry, insulting increase of 1 per cent. to the thousands of people who devote their lives to caring for the population, has been offered £57,000 a year for a three-day week. If the Government are willing to offer that kind of remuneration to the thousands of my constituents who are unemployed, I am sure that they would be more than happy to accept it. If the Government want to tackle unemployment, perhaps they should limit the number of jobs that any one person can do, because it seems that just a few hundred people grab every job that is going.

The Bill, if it is unamended, will force people to accept wages of £2.70 an hour or less; otherwise their benefits will be stopped. Just in case anyone thinks that the Opposition are exaggerating about jobs that pay less than £2.70 an hour, let me quote three examples from my part of the world.

First, there was the recent case in the Strathclyde area of a taxi office controller, working a 54-hour week for £1.48 an hour. If that person became unemployed, would he really be expected to be willing to work for even less? The second case is that of a qualified hairdresser in the Fife area, whose take-home pay is £68. She and her partner would be better off living on income support, because they would then receive the great sum of £71.70 a week. I came across the third example of low pay when I opened my local jobcentre in Dunfermline in July—a week before the Government confirmed the closure of Rosyth naval base, which has put thousands more out of work. A security guard's job was advertised, which required the man or woman to make their own transport available and offered between £1.80 and £2 an hour.

Mr. Hartley Booth (Finchley)

The hon. Lady has cited examples of people on low wages, but is it not fair to say that they are entitled to family income supplement, which increases their income considerably?

Ms Squire

As far as I am aware, family income supplement disappeared some years ago and we now have family credit or income support. Because of the complexity and maze of rules concerning family credit and income support, many people on low wages are not entitled to either benefit.

The hon. Member for Finchley (Mr. Booth) leads me on to quote another example of a constituent who came to see me at my surgery at the weekend. He has worked for 29 years at Rosyth dockyard and is to be made compulsorily redundant. He has discovered that, first, because he is 55 years of age, he is not entitled, under current legislation, to unemployment benefit, even though he has paid all his life in the expectation that such benefit would be available to him. Secondly, he will not be eligible for income support because he will receive a pension of £79 a week. That is what he is expected to live on.

Some other Ministry of Defence Rosyth employees, who also face the prospect of redundancy, came to see me yesterday. They told me how shocked they were by the low level of income that people are required to live on.

In Scotland alone, 83,000 people earn less than £2.50 an hour and 24,000 people already earn less than £1.50 an hour. That is the type of wage for which people are expected to work. They are expected to accept such low-paid jobs or face the risk of losing benefit.

The Opposition have made it clear that we want to promote decency and decent pay and conditions for those who are in work and then, unfortunately, find themselves out of work. That is why we believe that it is only just that we should amend the Bill, so that men or women can refuse to work for poverty pay without having their benefits stopped.

My hon. Friend the Member for Makerfield has already mentioned that, under the Government, the gap between the highest and lowest-paid workers is greater than it has ever been since records began in 1886. The bottom 10 per cent. of full-time workers earn on average about one third of that earned by the top 10 per cent. In 1992, the richest 20 per cent. of the population had net income five times as great as the poorest 10 per cent. That disparity will have grown even larger in the intervening years. It seems that the Government are in favour of low pay, but we are not.

The Government claim that the unemployment rate is falling. I would argue that that is happening not because they have created decently paid jobs, but because they have encouraged low-paid and frequently part-time work. In the past 16 years, I have, time and again, seen jobs that once employed someone for between 30 and 40 hours a week split into three or four part-time jobs, which have left people with few if any employment rights and low pay. Since 1938—I mean 1978; it just feels like 1938 sometimes—the number of part-time jobs has risen by 32 per cent. while the number of full-time ones has dropped by about 13 per cent. In Scotland, the number of part-time jobs has gone up by 9,900, but the price we have paid is the loss of 7,600 full-time ones. One must question the reality of job creation.

In my part of Scotland, Fife region already has the highest unemployment rate of Scotland at 11.2 per cent., while one of my district council electoral wards is already approaching an unemployment rate of 20.7 per cent. The Bill will bring no hope to those unemployed people.

Low pay puts a burden on the taxpayer because the profits of low-paying employers are subsidised through family credit. I believe that the system of tackling wage poverty by top-up benefits is economically inefficient.

I shall now mention some of the arguments that have been made about a minimum wage. First, it has been argued that it will lead to job loss. There is little real evidence to demonstrate that. Before the previous general election, the independent organisation Industrial Relations Services carried out a survey of 527 firms, asking them what they would think of a minimum wage set at half average earnings. Nearly two thirds of those questioned said that it would not increase the organisation's pay bill, and a further 30 per cent. said that it would add less than 5 per cent. to the pay bill. Following the abolition of wages councils, we have not witnessed a growth in the very low-paid sector of employment, but jobs have been lost—notably, as many as 27,000 in the hotel and catering sector—and even lower wages have been paid.

8 pm

I remind Conservative Members that although minimum wages have little impact on employment, they affect the economy. Let me again take Scotland as an example, where 220,000 workers used to be covered by wages councils. Every 10p decrease in their wage levels since the abolition of wages councils will lose the Scottish economy £30 million. That policy damages the economy.

A second argument about the minimum wage is that it will lead to inflation and that the higher-paid will seek to maintain a differential. The Government should preach to those fat cats in the privatised utilities about seeking to maintain differentials, because they are the ones who constantly demand massive pay increases.

There is little evidence to show that maintaining differentials will affect the economy. Indeed, the Confederation of British Industry has estimated that a minimum wage set at half average earnings may add only 1.2 per cent. to the nation's wage bill.

The third argument that has been used against a minimum wage is that it will affect Britain's international competitiveness. Do the Government really suggest that we should adopt the employment practices of some countries in other parts of the world, where there continue to be children in full-time employment, where children work down mines and where workers are paid as little as 50p an hour?

Miss Widdecombe

Will the hon. Lady now tell us when any member of the Government has suggested any of those things? [Interruption.]

Ms Squire

It seems that the jobseeker's agreement and the Jobseekers Bill suggest that there is no problem with people working for as little as 50p an hour. That sort of level of pay puts pressure on families to suggest that their children and young people should find any job, however poorly paid.

Miss Widdecombe

But the hon. Lady mentioned a number of horrors, including child labour. Where does that come into the Bill?

Ms Squire

I am saying to the hon. Lady that she has refused to set a level below which she thinks that it will be unreasonable for anyone of any age to work, and that that appears to me to be imitating the employment practices which, tragically and unjustly, continue to exist in other parts of the world where children continue to be engaged in horrific manual labour and wages are as little as 50p an hour.

Mr. McCartney

It is a fact—the Minister of State knows it, and she has been disingenuous not to admit it in the debate—that, under the young person's jobseeker's agreement, if the Minister carries a set of proposals that the Government will set out after the Bill is passed, young people coming out of care will lose the right to any form of income. Those are young people, newly out of care. The truth is that the Government are attacking, and will tomorrow attack, the very young people whom the Minister of State says that she will defend.

Ms Squire

I thank my hon. Friend for those excellent arguments.

When the Government are considering ways in which to create decently paid employment, they should consider the fact that good companies do not make investment decisions based solely on labour costs; they consider other aspects to be important, such as a highly skilled and motivated work force, an efficient transport and communications network and good research and development. Those can be far more effective than low pay in attracting inward investment and helping to create jobs.

If the Government are serious about reducing unemployment, they should also alter, as my hon. Friend the Member for Makerfield said, their education and training policies, especially as reflected in the contents of the Bill. The Government should eliminate the contradictions created by existing rules rather than set up other barriers.

In conclusion, I hope, albeit faintly, that the Government will support the amendments. It appears that their employment strategy is designed simply to move people from unwaged poverty into waged poverty. That merely exchanges one set of problems for another.

Pay is probably the clearest signal that we give of the value and worth that is placed on a person's work. Without a minimum prescribed amount of remuneration, contained in our amendments Nos. 1 and 2, the only message that the Government will give to unemployed people, whatever their circumstances, is that they are of little or no value and little or no worth.

When I was considering what to say today, and flicking through some of my notes, I came across a quotation that very much describes what the Government are about. It is by someone called Thomas Paine who, I know, will be familiar, at least to Opposition Members. He said, more than 200 years ago: It is inhuman to talk of a million sterling a year, paid out of the public taxes of any country, for the support of any individual, while thousands who are forced to contribute thereto are pining with want and struggling with misery. Government does not consist in a contrast between prisons and palaces, between poverty and pomp. It is not instituted to rob the needy of his mite, and increase the wretchedness of the wretched. There never did, there never will and there never can exist a parliament possessed of the right of commanding forever how the world shall be governed. I am"— we are— contending for the rights of the living. That means that we support a minimum wage.

Mr. Heald

I listened with interest to the comments of the hon. Member for Dunfermline, West (Ms Squire). Starting with her quotation from Thomas Paine, I wonder whether she is prepared to accept that, 200 years ago, he was talking about a country with the workhouse and with the justices in charge of local government—a very different society, in which one could be hanged for stealing potatoes. Is the hon. Lady seriously saying that we live in such a society today?

Ms Eagle

Will the hon. Gentleman give way?

Mr. Heald

I am happy to give way, although somewhat earlier than usual.

Ms Eagle

I thank the hon. Gentleman for giving way; I could not contain myself.

Will the hon. Gentleman admit that, 200 years ago, when Thomas Paine was writing, so was Adam Smith? The Conservative party appears to be fixated on the writings of that economist.

Mr. Roger Evans

He was right.

Mr. Heald

I am grateful to the hon. Lady, and that sedentary intervention indicates that Adam Smith was right. However, I think that the hon. Lady should agree, although I am sure that she would not, that a sense of balance is needed in those things.

Mr. Richard Burden (Birmingham, Northfield)

Reading!

Mr. Heald

I am not reading.

I do not think that the hon. Member for Dunfermline, West gave us that sense of balance. She discussed the problems of unemployment in her constituency without mentioning that, in the past year, unemployment has decreased in her constituency by 10.4 per cent. The figures that she took would have suggested that the position throughout Scotland was becoming worse rather than better. In the past year, in Scotland, unemployment has decreased by 11.2 per cent. Twenty-eight thousand people net in Scotland this year are back in work. That is good news. The Scottish economy is improving—the hon. Lady knows that better than me.

The idea that we are discussing the subject against a background of worsening unemployment and no opportunities for young people is wrong. The hon. Member for Makerfield (Mr. McCartney) made a similar point, but unemployment in his constituency is down by more than 10 per cent. The level of unemployment in his constituency is 8.5 per cent., having gone down by almost 18 per cent. in the past year. Can he seriously argue that unemployment is getting worse, which is something that he said in one of his contributions?

Mr. McCartney

I want to correct the hon. Gentleman. It is not unemployment that is going down, but the claiming count. The hon. Gentleman should add to the claiming count the 2.4 million people who are economically inactive. The Government do not include them in the count; if they did, they would find that there are about 5 million people in Britain still looking for jobs and desperate for work. The Government are preventing them from working.

Mr. Heald

I am grateful to the hon. Gentleman for his contribution, which shows no sense of balance. As the hon. Gentleman would know if he had researched the matter—I think that he does know—the International Labour Organisation's figures, which have been described by the Trades Union Congress as utterly reliable, show almost exactly the same unemployment figures as the Government's own departmental figures.

What is more, is the hon. Gentleman really saying—I know that he cannot be—that the Labour party, in the unlikely event of its coming into government, would add those economically inactive people to the count? Of course a Labour Government would not. That would provide an inaccurate figure that would not reflect the true circumstances in this country. The ILO measure is different from the Government's measure in its formula, but the result is almost exactly the same: 2.4 million people are currently unemployed. The figure is too high, but it is falling fast.

The hon. Member for Dunfermline, West said that most of the jobs that have come on stream over the past year are part time. Not only is that inaccurate, but she should not forget that the people who are taking part-time work want part-time work. The Department of Employment survey of part-time workers showed that only 14 per cent. of them wanted full-time work.

Ms Rachel Squire

Will the hon. Gentleman give way?

Mr. Heald

I shall be happy to give way when I have finished my point.

If we consider full-time workers, as the survey did, we see that about one third of them would like to work part time. To suggest that people are being forced into part-time work is wholly inaccurate. Is it not about time that the Labour party started to address the serious issues on the basis of the facts?

Mr. Booth

Will my hon. Friend give way?

Mr. Heald

I shall give way to the hon. Member for Dunfermline, West, as I promised, and then to my hon. Friend.

Ms Squire

I certainly agree that there are people—the majority of them are women with family responsibilities—who look for part-time work. But they are looking for part-time work, not poverty wages, which is what they are frequently offered. I was also saying that full-time jobs are being replaced by low-paid, part-time work. If one talks to skilled engineering workers from dockyards and elsewhere, one finds that they are looking for full-time, not part-time, employment.

Mr. Heald

I am grateful to the hon. Lady for making that point. What people who are looking for work want is a job. All the evidence shows that if we were to introduce a guaranteed minimum wage—something for which she has argued—we would lose rather than gain jobs. Who is she to tell people what sort of jobs they should accept?

Mr. Keith Hill

Will the hon. Gentleman give way?

Mr. Heald

I must finish my point, and I have also promised my hon. Friend the Member for Finchley (Mr. Booth) that I will give way to him next.

Who are any of us to tell people what jobs they should take? Who are we to say that someone should not have taken that job, but another? That is nonsense. Each individual's circumstances are different. A particular worker may want to take a specific job for his or her own reasons.

Mr. Booth

Is my hon. Friend aware—from what he has said to the hon. Member for Dunfermline, West (Ms Squire) I think that perhaps he is—that thousands and thousands of people, particularly women, treat part-time jobs as freedom from the drudgery of the workplace at home? Is not the part-time job an expression of freedom—something that the Opposition are always prating about?

Mr. Heald

My hon. Friend makes his point in his own way.

The huge increase in women in work since 1984 is something of which this country should be proud because those women who wanted to work now have the opportunity to do so, and do so in large numbers. It is true that one of the reasons for the increase in part-time work is that many women want part-time work. There is no reason why they should not want it. It may fit in with their responsibilities to their children. Some men may like part-time work so that they can give a hand in the home as well. We in this place should support women who want to go out to work and take pride in the fact that they have been given that opportunity. We should not always try to knock them down, undercut them and say that they should not have taken a particular job and were silly to do so.

8.15 pm

Ms Eagle

I hope that the hon. Gentleman will support the recommendations of the Select Committee on Employment on mothers in employment, as he has just given a paean of praise to women in the work force. He asked, "Who are we to tell somebody what job to take?" Does he agree that that is what the Bill is all about? It is about telling people to take particular jobs on low wages or have their benefit denied. Who is he to make a point like that when it is the very point of the appalling legislation?

Mr. Heald

The hon. Lady makes my point for me. I am asking how we can say to someone who has taken a job that he or she should not have taken a particular job. I think that I made that point clearly. It is different if someone is paying a jobseeker's allowance, as the taxpayer is, or will be. The taxpayer is entitled to have his or her position protected, which is exactly what the Bill does.

It is not presumptuous to tell someone receiving the benefits of the taxpayer—we are the taxpayer's protectors—how we believe a proper, structured approach should be taken to job seeking. It is not presumptuous for us to say, "This is the advice that we are giving you and the agreement that we would like to make." If the person is not prepared to accept the terms on offer or suggested by the employment officer, the adjudication officer decides. If that is still not acceptable to the claimant, the matter can be sent to the social security appeal tribunal, which consists of the employer's representative, the employee's representative and a lawyer. There are further rights of appeal in the event that the appeal tribunal does not deal with the issue properly. The hon. Lady cannot say that the taxpayer's interests are being dealt with in anything other than a proper way.

Ms Eagle

The hon. Gentleman is trying to be reasonable. He talks about protecting the taxpayer's interests. Does he have something to say about the interests of the taxpayer who is currently subsidising low-paying employers to the tune of £1 billion a year—twice as much of the taxpayer's money as the Bill attempts to save with its vicious cuts? Why is there not some protection for the taxpayer on that side of the equation as well as the other side?

Mr. Heald

I am grateful to the hon. Lady, but time is short—it would be an extremely interesting argument to get into.

Miss Widdecombe

When my hon. Friend heard the intervention of the hon. Member for Wallasey (Ms Eagle), did it not sound to him extraordinarily as though she were proposing the abolition of family credit?

Mr. Heald

I am grateful to my hon. Friend as that is precisely one of the points that I wanted to make. That is not the first time in the debate that we have heard that line peddled. The hon. Member for Makerfield decried family credit in his speech and said that it was a disgrace. I thought that we were finally about to hear a commitment from the Labour party. Is it Labour party policy to abolish family credit? That would be a bold proposal by new Labour. I do not suppose for a minute that we will receive a clear answer tonight when we did not get one during the weeks of consideration in Committee.

The hon. Gentleman had the absolute temerity to stand at the Dispatch Box and pretend that the Labour party had something to say about tax, when week after week in Committee he ducked and weaved in an attempt to avoid making the commitments that were the only logical consequence of the amendments that he tabled. The Opposition's amendment talks about a "minimum prescribed amount". Have Opposition Members said what that amount will be? Will it be the same figure as Labour's guaranteed minimum wage? That does not help us much because the Opposition are not prepared to tell us what that figure is either.

The Labour party is humbug from beginning to end. Labour Members make criticism after criticism week after week, but they are not prepared to say what they would spend or when they would spend it. We have seen examples of that approach again tonight.

Unemployment in Britain is falling for a number of reasons, one of which is that the Government have put in place a structure which assists the jobseeker. The Bill builds on that structure and I believe that hon. Members should support it. The Opposition's amendment gives no information about what the Labour party would do—it does not even give the Government the benefit of the Opposition's advice on the issue. How on earth could anyone support it?

Mr. Burden

I was pleased when the hon. Member for Hertfordshire, North (Mr. Heald) got to his feet and I was delighted when he began to speak. I hope that many people outside this place will read his remarks, because he has done the Labour party a great service.

The hon. Gentleman talked a great deal about "forcing" people out of jobs. A central issue in the debate is whether it is reasonable for the Government to force people into jobs that pay poverty wages. Government Members must answer that question because it is their legislation. Even after a Second Reading debate and eight weeks of consideration in Committee, we have yet to hear what the Government consider to be a minimum reasonable rate of pay to expect people to work for without risking a deduction in benefit.

Government Members may disagree on that point, so I intend to go to the top in respect of the legislation. The Minister of State made her position clear in Committee and it is important to put it on the record on Report. She said: I have said until I am tired of saying it, that pay will not constitute a reason for refusing an offer of work. I know that that is not palatable to the Opposition. I have also said on record—it is already published in Hansard—that an unemployment adviser"— I thought that they were employment advisers— would take into account all prevailing circumstances".— [Official Report, Standing Committee B, 21 February 1995; c. 521.] We examined the prevailing circumstances that the Minister had in mind. We were pleased to learn that she did not intend to cut the current list. Health considerations were a prevailing circumstance that could be taken into account generally—but not in respect of pay. Religious conviction, conscientious conviction and caring responsibilities could be taken into account—although the Minister did not mention the cost of caring. If travelling costs associated with a job were considered excessive, they could be taken into account, as could excessive travelling time. But there was no mention of pay. The Minister did not answer the key question: what level of wages is it reasonable to expect people to work for? Anything goes for the Minister and the Government.

Are we trying to imagine problems that do not exist? Is there no problem with low rates of pay? Perhaps the problem existed once but it has now disappeared. The facts are that the problem does exist and that it is growing. Mention has been made in the debate of a survey conducted by the Manchester Low Pay Unit which found that one third of jobs offered wages below the national insurance threshold.

The Low Pay Network undertook a study entitled "After the Safety Net", based on a survey of 5,918 job vacancies at 128 jobcentres across the country. Of the 4,493 vacancies that gave a rate of pay, 36.5 per cent. paid less than they would have done if wages councils had still existed.

We are not talking about highly paid jobs; we are talking about jobs in catering, hotels, shops, hairdressing salons and clothes manufacturing. We are talking about rates of pay that the wages councils said were unlawful. Under the wages councils, it was unlawful to pay people less than about £2.50 per hour. When the Government were busy abolishing the wages councils, we posed the question, "Do you condone the fact that many employers are paying less than wages council rates?" Government Members replied, "Of course we do not condone the law being broken." So the Government abolished the law and legalised pay rates that had been unlawful under the wages councils.

Mr. Heald

I am grateful to the hon. Gentleman for giving way. Will he mention the 15 per cent. fall in unemployment in his constituency in the past year? Does he intend to examine subsections (7) and (8) of clause 7, which make it perfectly clear that the terms of a jobseeker's agreement are subject to the test of reasonableness, with a right of appeal not only to the adjudication officer but to the social security appeals tribunals? In those circumstances, how can he make those points?

Mr. Burden

The hon. Gentleman referred to my constituency. I know precisely what the unemployment situation is in Birmingham. It does not give me any joy that one in five people in Birmingham are unemployed. About half that number have been unemployed for more than a year—that is higher than the national average—and about 30 per cent. of them have been unemployed for more than two years. One quarter of young people in Birmingham are unemployed. I think that that is a problem and I would not use that tragedy to try to score political points.

The Government should be more concerned about doing something to address the unemployment problem and to create jobs. Government Members seek to blame the unemployed for their predicament. The unemployed are unemployed because there are no jobs, not because they are workshy. The community understands that and it is about time Government Members understood it as well.

Of course, it is not just a question of overall rates of pay. The hon. Member for Hertfordshire, North mentioned the expansion of part-time work and job insecurity in Britain. That is part of the backcloth to the debate. He referred to the number of jobs that have allegedly been created. The fact is that an average of 270 full-time jobs have been lost every day since 1992. That is a net figure; it takes into account the number of jobs created as well as those that have been lost.

It is true that there has been an expansion in part-time work. If people are unlucky enough to lose their job, there is a one-in-three chance that their next job will be part time. If people move into part-time work, they are twice as likely to lose their job within a year. The average pay for a part-time job is—

Ms Eagle

On a point of order, Mr. Deputy Speaker. Is it in order for civil servants to brief Back-Bench Members?

Mr. Deputy Speaker

It is completely out of order.

Mr. Heald

I apologise; the civil servants made that point to me.

Mr. Burden

The average pay of part-time workers is 70 per cent. less than that of full-time workers and, on average, a part-time job is 50 per cent. shorter than a full-time job, so when Conservative Members talk about the expansion of part-time working as if it were a one-way street or something for which people were crying out, perhaps they should look at the reality of part-time work for so many of our citizens.

Mr. Booth

I am grateful to the hon. Gentleman, who always gives way. Will he be as fair as he is wont to be? If he is to go through the parade of figures over the past few years, is it not right that he should point out that we have created 600,000 jobs in Britain in the past 18 months, when 2 million jobs have been lost in the rest of the European Union?

8.30 pm

Mr. Burden

If the hon. Gentleman does not understand how many jobs have been lost every day since 1992, I shall give him the figure in a few more ways. Let us go back to 1990 rather than 1992: since 1990 the number of jobs lost per day has been 579, which equates to the loss of about 24 full-time jobs every hour for the past five years.

Miss Widdecombe

I am most grateful to the hon. Gentleman. If, instead of comparing peaks and troughs, he looks at the matter over a complete economic cycle, will he admit that we have created 1.5 million jobs in Britain, a figure substantially higher than most of the rest of the industrialised world?

Mr. Burden

If the hon. Lady wants to look at a complete cycle, perhaps she should examine the level of unemployment in my constituency and others since the Conservative party came to power. She will see that the Government have destroyed many jobs.

I am pleased that the Minister intervened as I was talking about job insecurity. The philosophy of job insecurity has been encouraged not just by the Government but by her Department.

I received a letter from the hon. Lady today dated 19 March taking exception to the fact that, a week or two ago, I publicised the fact that an internal circular in her own Department—Employment Service personnel notice 5/95—was deliberately encouraging managers in the Employment Service to deprive temporary staff of their employment rights.

I shall quote from that letter as the hon. Lady was obviously quite put out by what I said. She wrote: I can assure you that the aim of the document is not to deny temporary workers their employment rights. On the contrary the notice aims to reinforce the principles underlying the Civil Service Order in Council. Obviously that circular, which instructs managers to make sure that temporary members of staff are not employed for longer than 51 weeks, had nothing to do with depriving temporary workers of their employment rights. Perhaps it was totally misrepresenting the intentions of the Employment Service. Was it? I shall quote from that particular circular.

Personnel notice 5/95 also encouraged managers to carry out employment checks on potential recruits to see whether they had worked for the Employment Service before. Why do managers have to carry out an employment check? There are various possible reasons. It could be for reference purposes. If somebody who had worked for the Employment Service before was a good member of staff, perhaps the service would want them back, but that is not why the circular urges managers to carry out employment checks. The reason is:

If it is not checked, we might later find that the individual has already worked for up to two years and might now be in the position of having enough service to qualify for a wide range of employment rights. There we have it in a nutshell: job insecurity, getting rid of employment rights and denying temporary workers employment rights is official Government policy. It is all linked together. Low pay, job insecurity and increasing casualisation of employment are all part of the Government's ideology. It is something to which we may object, and indeed we do. The Government may think that they can get away with that, but they might have some problems with this Bill under European law.

It is by no means certain that the Bill, if enacted, will be lawful under European law. As far as I know, the Government and Britain are still bound, or consider that they should be bound, by the European convention on human rights.

Article 4 of the European convention on human rights states: No-one shall be required to perform forced or compulsory labour. The article also sets out some exceptions to that rule which allow work to be done by prisoners and the military in times of emergency and include

any work or service which forms part of normal civic obligation". The Commission has decided in a number of cases that, in order to give rise to a violation of that article, the work must be involuntary, done in order to avoid the menace of a penalty, be unjust or oppressive and cause the victim unavoidable hardship. So there we have it: a violation occurs if a job is taken under the menace of a penalty. That is precisely what the Jobseekers Bill seeks to impose. It seeks to force people into jobs under the menace of the penalty of having their benefit deducted. Benefit sanctions are absolutely at the core and the heart of the Bill.

Tomorrow we shall debate new clause 6, which attempts to deal with another example of that compulsion or threat of penalty. Tomorrow we shall debate the Government's ambition to force young people to remain on training schemes even if the quality of the schemes is lousy and the Government are doing nothing for the young people. They are to be forced to stay on those schemes under the threat of removal of benefit.

The Bill is not only fatally flawed logically and blames the unemployed for their predicament but fails to create one single extra job to put people back into work. I am pleased to see the President of the Board of Trade—or the new leader of the Conservative party—coming into the Chamber.

The Bill also perpetuates the state's and the taxpayer's subsidising of low pay. I was interested to hear the hon. Member for Finchley (Mr. Booth) talk about how family credit can come into play to alleviate low pay. He is absolutely right; it does. It would be far better if employers who paid poverty wages were not subsidised by the taxpayer. There should be an obligation on employers to pay reasonable wages. It is not up to the taxpayer to subsidise poor employment practices, whether by private employers or by the Employment Service itself. In-work benefits cost the taxpayer many millions of pounds, as my hon. Friends have already said.

The Bill is not only flawed logically; it could be flawed legally. The United Kingdom has been before the European Court of Human Rights 47 times and has suffered 23 losses in 16 years. The Government could be heading for another defeat in relation to the Bill. At best, the Bill shows ignorance of the plight of the unemployed. At worst, it shows the Government's determination to cover up their own failures, to blame the unemployed for that and, in an unlawful manner, to impose on the unemployed penalties for problems which they have not caused and for which they should not expect to stand the price.

Mr. Terry Rooney (Bradford, North)

I am conscious of the time and the wide range of the debate so far, but certain points need to be made about the minimum wage. The absence of a minimum wage certainly contributes to economic inefficiency. The history of the textile trade—which is close to the hearts of the people of west Yorkshire—in the 1950s, 1960s and 1970s was of an industry that tried to compete on wage levels with the far east, with the consequence that hundreds of companies went out of existence and 57,000 jobs were lost in west Yorkshire. The textile companies that survived, prospered and remain today invested in technology, machinery, equipment and human capital—in training people and enhancing their skills—to increase their companies' capacity.

Low wages encourage the black economy. Anyone with experience of contract cleaning or contract packing companies knows that the names on the payrolls come from Disneyland. The vast majority of people working in those industries are colluding in a black economy, in which the employer does not pay national insurance contributions and employees often have alternative occupations.

Low wages also set the poverty trap, because people in receipt of family credit and living in rented accommodation are liable to a 94 per cent. clawback of any increase in their income. A person earning £120 per week and receiving family credit must increase his wages to more than £200 before enjoying any benefit. The Government are considering extending family credit to childless couples, which will broaden the net of the poverty trap.

During the passage of the Trade Union Reform and Employment Rights Act 1993, the right hon. Member for Stirling (Mr. Forsyth), who was the present Under-Secretary's predecessor, took part in almost a Dutch auction in a debate on the abolition of wages councils, when it was said that a wage of £2.75 per hour, or £2 or £1.50, was acceptable. It was only when the figure reached 70p per hour that the right hon. Member for Stirling wavered. He did not say that was bad, but if the figure had dropped to 60p, he would probably have been on our side.

Compare that with Home Office policy. Anyone in Britain with a spouse living abroad whom he seeks to bring into this country must have an income of £160 a week, and an additional £40 per week for each child involved. The Home Office requires a couple with two children to have an income of £240 per week. The right hon. Member for Stirling thought that an income of £28 a week for someone working 40 hours was acceptable. It is disgraceful that such policies operate. The Home Office supports the minimum wage, but the Department of Employment supports the opposite. A minimum wage brings dignity, economic prosperity and security to the employed, saves taxpayers' money and is economically efficient.

Mr. Chisholm

Unfortunately, time is again short. The new clause attacks the heart of the Bill, which is why there is no possibility of the Government accepting it. The Bill's apparent purpose is to reduce public expenditure by attacking benefits for the unemployed, but its underlying reason is to drive people into low-paid employment and, by increasing the pool of people in such employment, to drive low wages even lower.

Conservative Members get excited because figures are not quoted, but the principal question is whether there is to be a floor to wages. The Government have refused to put in a floor. The absence of one is bad for workers, bad for public finances, bad for demand in the economy, bad for economic efficiency and bad for jobs. We will take on the Conservatives over all the nonsense they talk about jobs being lost through a minimum wage. Many statistics prove how bad it is for workers not to have a wages floor, and I recommend that people read the new Labour party document published last week, which shows that 328,000 people earn less than £1.50 per hour for their work. Women are particularly badly affected. Three quarters of the 3 million people who earn below the national insurance threshold are women.

8.45 pm

The absence of a minimum wage is also bad for public finances. Conservatives make a fuss about our attitude to family credit. Of course it will not be abolished, but more of the strain should be taken by employers. The Conservatives are supposed to favour privatisation, so why do they not privatise family credit? That way, more would be paid by employers and less by the Government. That should appeal to the Government, because it would reduce public expenditure.

If more people earned more at the bottom of the income scale, that would increase demand in the economy, which would, in turn, create more jobs. Low wages also cause high staff turnover, which serves as a disincentive to train. Why should employers train staff who will not stay with them long? Low pay is a substitute for training and for developing new processes and products. That was the point of Winston Churchill's famous quotation in support of a wages floor 90 years ago.

We will continue until the general election to challenge the assertion that a wages floor is bad for jobs. It is bad for jobs not to have one. At the last general election, the Government peddled their lies, and no doubt the same lies are all ready for the next general election. When that time comes, we will dissect and demolish those arguments. I do not have time tonight, but I can offer a foretaste.

The Government assume that a minimum wage will bring changes at all income levels, but many studies have shown that segmentation of the labour market will not necessarily have knock-on effects for other wage levels. The methodology of some theoretical studies that say there will be job losses can be challenged. They merely add the amount of money necessary for a minimum wage as an increase in the average wages level and feed it into the computer, to produce job losses. If that were true, when equal pay legislation was enacted in the 1970s, there would have been declining employment; instead, there was a slight increase. Women's wages increased a little and more women were working.

The same is true of the agricultural wages board. Even the Government accept that, and studies by the London School of Economics show that a minimum wage level had no effect on jobs. That applies equally to wages councils. The Library background paper refers to studies by the LSE and others that show that the existence of those councils did not hold back employment. My hon. Friend the Member for Birmingham, Northfield (Mr. Burden) told us what happened after the wages councils were abolished. There is evidence that there were fewer jobs-18,000 in retailing and catering in the period immediately following the abolition of wages councils. At the same time, wages fell—which was, of course, the purpose of the legislation.

Europe was also mentioned, as was the Under-Secretary's letter following the question asked by my hon. Friend the Member for Rotherham (Mr. MacShane). Again, the Under-Secretary seemed to think that he disproved the point, because the figure for employment growth in the UK between 1980 and 1990 was 6.4 per cent.

It is interesting to look at the employment growth from 1980 through to 1993, which was what the question asked by my hon. Friend the Member for Rotherham was about. According to the Organisation for Economic Co-operation and Development, there is a slightly negative figure for the UK. Every other country about which my hon. Friend asked had a positive figure. In other words, all the countries that had some form of minimum wage legislation had a better employment growth record in that period.

I note that the same letter also makes the point about the low level of the minimum wage in the US. At least the US has accepted the principle, which is all we are asking the Government to do. A figure of $4.25 is quoted. If hon. Members refer to the study paper from the Library, they will find reference to another paper. Quite a lot of research on this has been done in America. When New Jersey, I believe, increased its minimum rate from $4.25 to something over $5, and the neighbouring state—I believe it is Pennsylvania—did not, there was a job increase in the state that increased its minimum wage. So why does the Conservative party not look at evidence from throughout the world, and, indeed, from this country, with agricultural wages boards and the wages councils, and see what has happened in practice, instead of inventing all the figures and feeding them through its computers?

There are, perhaps, reasons why that has happened in America, where minimum wages have increased, because in certain circumstances it is rational for employers not to hire new workers. Sometimes, it is rational for employers to keep output below the optimum, because sometimes they also have an interest in keeping wages low, and therefore having a pool of unemployed people in the labour market.

We in the Labour party are saying that there must be a floor for wages. There will be a market failure in our economic system if we do not have that floor. It will not cost jobs, and we shall go on saying that until the general election. We know that the Government do not have many cards to play in the next general election, so they will be scaring the electorate about the minimum wage as well as about Scotland, where I come from. We know all the scares that we will hear, but the Labour party started its campaign last week to tell the British people the truth about the minimum wage. That is the message that we shall get across so that the Government will not be able to scare people into voting for them again.

Miss Widdecombe

The standard of debate has deteriorated through the evening. We started off with an entirely sensible debate about disability provisions. We then had a debate which was total confusion and chaos because Opposition Members did not understand what was being proposed. Now, in our final debate, we have heard a rant of unreconstructed 1970s socialism from just about every Opposition Member who has contributed.

The first point to get across in this debate—although one might have been forgiven for wondering whether that is what it is—is about a proposed amendment which would write in that there must be specified levels of remuneration. The hon. Member for Dunfermline, West (Ms Squire) asked whether we would imitate countries that had child labour, low wages and so on. In fact, what we are going to imitate is our own existing system. In question 18 in relation to the jobseeker's allowance, the claimant is asked:

What is the lowest wage you are willing to work for? The Opposition talk as if we were introducing something scandalous in the Bill. By the end of the evening, we even heard about it being "unlawful" to introduce that under the Bill. Yet under the "Helping you back to work" plan that the Employment Service currently operates, question 27—I appreciate that the Opposition may have had difficulty getting as far as that—asks: What is the lowest amount before stoppages, etc. that you are willing to accept? There is absolutely no change.

Ms Eagle

Will the Minister give way?

Miss Widdecombe

I shall give way presently as I sympathise with the hon. Lady's obvious affliction, but I need to leave the hon. Member for Makerfield (Mr. McCartney) time to respond, so there is some pressure. I will take the hon. Lady's intervention presently, but first I want to finish this statement because it is crucial that people should understand—I believe that they have been badly misled by the Labour party, both in the House and outside—that this does not represent a change.

Ms Eagle

I thank the Minister for her generosity in giving way. I shall be quick. What would be an acceptable answer to question 18, which asks: What is the lowest wage you are willing to work for? What would be an acceptable answer to avoid an individual applying for the jobseeker's allowance being denied benefit for making an unreasonable claim on wage levels? Will the Minister answer that simple question?

Miss Widdecombe

I refer the hon. Lady to clauses 7 and 8, which are about reasonableness. I shall come to that presently. What is being suggested by the Opposition today is that we could even get down as far as having no pay. The hon. Member for Makerfield actually said that. Given that this is a straight carrying over of the present system, how many people are currently offered nothing and then lose their benefit? The only incidence that I know of somebody being offered nothing was when a jobcentre displayed a vacancy on behalf of the hon. and learned Member for Leicester, West (Mr. Janner), the Chairman of the Select Committee on Employment, when he was advertising for an assistant. I do not suppose for one moment that it would have been regarded as unreasonable if somebody had turned down that job on the basis that no pay was being offered. That is the whole point.

The Opposition are the scaremongers in this. They want people to believe, first, that there is a change and, secondly, that the policy would be unreasonably operated.

Mr. Burden

rose—

Miss Widdecombe

This will be the last intervention that I shall allow, so is the hon. Gentleman sure that he wants to intervene at this point?

Mr. Burden

I am very sure indeed. Is the Minister now saying, unlike what she said on 21 February, that pay could constitute a reason for refusing an offer of work?

Miss Widdecombe

What I was saying then—I understand that the hon. Gentleman may not have clicked on as quickly—was that no pay would constitute a clear reason. The hon. Member for Makerfield said specifically several times in his opening rant that nothing would count for these purposes.

One other thing that I have to correct concerns the hon. Member for Birmingham, Northfield (Mr. Burden), but he has just had his intervention, so that is bad luck. What he did not read out when quoting from my letter was the postscript, in which I said that it was a pity that he had not bothered to ask the Employment Department for an explanation before going public with his horror story.

There is no question whatever of the purpose of that circular being to deny people their employment rights. The policy of the civil service since 1870—there have been a few Labour Governments since then—has been that recruitment to permanent posts in the civil service is to be done through fair and open competition. To that end, the guidance for the civil service is that for temporary workers, after one year of employment, their employment must cease and the job must become open to fair and reasonable competition from outside—in which they, of course, can compete. The hon. Gentleman can show me no part of employment law in which 51 weeks is significant. It has nothing to do with employment law, but everything to do with civil service fair and open competition.

The hon. Gentleman then came to the other quote about managers ensuring that people have not accumulated two years. He read it as though it were something sinister. It cannot have escaped the hon. Gentleman's attention that people who had accumulated two years would have the full rights of permanent employees, which would cut off opening their jobs up to fair and open competition. The hon. Gentleman has endeavoured to raise a storm in a teacup, but it is cruel, misleading and a sign of how desperate the Opposition must be if they cannot come up with anything better than that.

Let me explain what will actually happen under our proposals, as opposed to the dreadful stories put about by the Opposition. As I have said, I do not think it reasonable for pay normally to constitute a ground for refusing an offer of work—but I emphasise the word "normally". Clause 16 continues the concept of the "permitted period" that the Government introduced in 1989: a claimant with a usual occupation has up to 13 weeks to refuse work outside that usual occupation and the rate of pay that he or she used to receive. The claimant will not be subject to a sanction in such circumstances.

9 pm

That system works in a sensible way. After the permitted period, claimants should start to widen their job search. I explained clearly in Committee that we were not interested in introducing a "cliff edge"; we do not suggest that, after 13 weeks and one day, someone who used to be a senior manager, for instance, should immediately seek work as a gardener, or take some other job that is wholly removed from his previous occupation. Of course unemployed people should be given a reasonable time in which to review their prospects. If the senior manager whom I have cited is still unemployed at the end of his permitted period, he might then be expected to start looking for a junior management or senior clerical position; but that is not to say that he must immediately take any job at any level.

Obviously, the Employment Service will be offering jobs and operating sanctions. Hon. Members' objections can be interpreted to mean only that they do not trust the ordinary individuals in the Employment Service who will implement the rules. I assure the House, as I have done before, that the Employment Service will not set out to offer people inappropriate jobs.

Having discussed the amendment, perhaps I can now examine the amazing claims that we have heard from the Opposition. First, they have consistently refused to tell us what the minimum wage will be. The Trades Union Congress wants to know what it will be; Conservative Members want to know what it will be; the country wants to know what it will be; businesses want to know what it will be; but still the Opposition will not tell us. Why is that? It is because they know that as soon as they do, the proper calculations on job losses will be done, and we shall then be able to estimate the size of what the deputy Leader of the Opposition has described as a shake-out. What will be shaken is people, and what they will be out of is jobs.

The Opposition have ignored the Government's creation of 1.5 million jobs over a complete employment cycle. They have ignored the fact that we have 40 per cent. of all inward investment into the European Union from the United States and Japan—and why is that? It is because we have a flexible labour market. The Opposition have ignored the OECD report, which said that the reason for the investment was our flexible labour market. They have ignored the report by the International Monetary Fund, which said that Europe should be considerably more flexible. They have ignored the fact that the take-home pay of the bottom 10 per cent. of full-time wage earners is 23 per cent. higher in real terms than it was in 1979. Indeed, the figure fell between 1975 and 1979.

Will the Opposition apologise for their record? Will they look happy, for once, about the 36 per cent. rise in average disposable income that has taken place since we came to power? Will they welcome the fact that, following the abolition of the main wages councils, the pay of employees covered by those councils increased by 3.7 per cent.? Will they look at the facts? Will they welcome what we have achieved? Will they tell us what their minimum wage will be, and what the number of job losses will be? If they are not prepared to do that, will they at least stop spreading horror stories, start telling the electorate the truth and start preparing for the same fate at the hands of the electorate as they have suffered since 1979?

Mr. McCartney

As is her wont when she is in trouble, the Minister ranted and raved. The fact is, however, that the Government's record on low pay is the worst in Europe. Ours is the only Government in Europe who make excuses for the ability of employees in privatised industries to earn £1 million overnight while others are forced to work for £1 an hour or less in other parts of the economy.

The Minister failed to give any answers about the Government's intentions in regard to the Bill. Before dealing with her speech, however, I should thank my hon. Friend the Member for Dunfermline, West (Ms Squire) for her eloquent testimony to the Government's abandonment of the defence communities in Dunfermline and other parts of Scotland. Her speech was a brilliant exposé of the Government's attack on workers who have contributed thousands of pounds in national insurance, and who then lose their right to benefit when they are made unemployed. In the Bill, the Government are taking the first steps towards abolition of the contributory benefits system.

The hon. Member for Hertfordshire, North (Mr. Heald) served on the Standing Committee and he served his Government well during those eight weeks. He had only one problem today: like many barristers, he tried to make a good job of a bad brief—a Conservative central office brief. He failed to accept that, according to the Government's own figures, between March and December last year 78 per cent.—eight out of 10—jobs created in the British economy were part-time jobs. In the past decade, the Government have destroyed 3 million full-time jobs. They are the only Government in the western world to have seen no net employment gain during that period: indeed, there has been a net loss.

My hon. Friend the Member for Birmingham, Northfield (Mr. Burden) presented a compelling argument in relation to the Government's proposals on low pay, and the way in which they are trying to use the unemployed to regulate the market by forcing down wages and allowing employers to engage in illegal practices and offer poverty pay. The Government's only purpose in abolishing the wages councils was to allow employers to pay wages which had previously been illegal. Under the present Government, poverty pay is legal: an employer can now pay £1.50 an hour without facing sanctions.

My hon. Friend the Member for Bradford, North (Mr. Rooney) made a well-researched speech about investment in training-related research and development. He also made a good point about family benefits and benefit clawbacks. Rather than taking people out of absolute poverty in work, the Government have left people in poverty while subsidising bad employers. That is the difference between the Labour party and the Government. We shall use family credit and in-work benefits to lift people out of absolute poverty. The Government use that to maintain them there and to provide subsidies for cowboy employers. We shall put an end to that situation.

My hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) argued eloquently for the principle of a wages floor in the economy. He was an articulate and enthusiastic supporter of a minimum wage, arguing that low pay was unfair and inefficient, and that a minimum wage was fair and efficient. The Minister, in her usual way, continued to dodge the issue. She has had several opportunities to respond and I ask her yet again: will she fix a wages floor?

Miss Widdecombe

No.

Mr. McCartney

I am glad that the hon. Lady said that. She fell for the trap, which was set in Committee. The refusal to set a wages floor will mean—and she has admitted it—that under the jobseeker's agreement people will lose their benefit if they turn down a job that pays £1 an hour. No wages floor has been set at jobseeker's allowance level, at income support level, or at unemployment benefit level—not even £2.70 per hour, which was the level set by the Under-Secretary of State for Employment in his letter to the Financial Times.

The Minister has made it clear that the Government intend to ensure that people will be driven from the unemployment register into the hands of employers paying £1 an hour or less. I call on my hon. Friends to reject the Government's position on poverty pay and unemployment, to vote for the amendment and to support the unemployed and people on low pay.

Question put, That the amendment be made:—

The House divided: Ayes 259, Noes 279.

Division No. 110]	[9.10 pm
AYES
Abbott, Ms Diane	Brown, N (N'c'tle upon Tyne E)
Adams, Mrs Irene	Bruce, Malcolm (Gordon)
Ainger, Nick	Burden, Richard
Ainsworth, Robert (Cov'try NE)	Byers, Stephen
Allen, Graham	Caborn, Richard
Alton, David	Callaghan, Jim
Anderson, Donald (Swansea E)	Campbell, Mrs Anne (C'bridge)
Armstrong, Hilary	Campbell, Ronnie (Blyth V)
Ashton, Joe	Campbell-Savours, D N
Austin-Walker, John	Canavan, Dennis
Banks, Tony (Newham NW)	Cann, Jamie
Barnes, Harry	Carlile, Alexander (Montgomery)
Barron, Kevin	Chidgey, David
Battle, John	Chisholm, Malcolm
Bayley, Hugh	Church, Judith
Beckett, Rt Hon Margaret	Clapham, Michael
Beggs, Roy	Clark, Dr David (South Shields)
Beith, Rt Hon A J	Clarke, Tom (Monklands W)
Bell, Stuart	Clelland, David
Benn, Rt Hon Tony	Clwyd, Mrs Ann
Bermingham, Gerald	Cohen, Harry
Berry, Roger	Connarty, Michael
Betts, Clive	Corbett, Robin
Blunkett, David	Corbyn, Jeremy
Boateng, Paul	Corston, Jean
Bradley, Keith	Cousins, Jim
Bray, Dr Jeremy	Cummings, John

Cunliffe, Lawrence	Jones, Lynne (B'ham S O)
Cunningham, Jim (Covy SE)	Jones, Martyn (Clwyd, SW)
Dafis, Cynog	Jones, Nigel (Cheltenham)
Dalyell, Tam	Jowell, Tessa
Darling, Alistair	Kaufman, Rt Hon Gerald
Davidson, Ian	Keen, Alan
Davies, Bryan (Oldham C'tral)	Kennedy, Charles (Ross,C&S)
Davies, Rt Hon Denzil (Llanelli)	Kennedy, Jane (Lpool Brdgn)
Davies, Ron (Caerphilly)	Khabra, Piara S
Dewar, Donald	Kilfoyle, Peter
Dixon, Don	Kirkwood, Archy
Dobson, Frank	Lewis, Terry
Donohoe, Brian H	Liddell, Mrs Helen
Dowd, Jim	Litherland, Robert
Dunnachie, Jimmy	Livingstone, Ken
Dunwoody, Mrs Gwyneth	Lloyd, Tony (Stretford)
Eagle, Ms Angela	Llwyd, Elfyn
Eastham, Ken	Loyden, Eddie
Enright, Derek	Lynne, Ms Liz
Etherington, Bill	McAllion, John
Evans, John (St Helens N)	McAvoy, Thomas
Fatchett, Derek	McCartney, Ian
Field, Frank (Birkenhead)	McCrea, The Reverend William
Fisher, Mark	Macdonald, Calum
Fynn, Paul	McFall, John
Foster, Rt Hon Derek	McKelvey, William
Foulkes, George	Mackinlay, Andrew
Fraser, John	McLeish, Henry
Fyfe, Maria	McMaster, Gordon
Galbraith, Sam	McNamara, Kevin
Galloway, George	MacShane, Denis
Gapes, Mike	McWilliam, John
Garrett, John	Madden, Max
George, Bruce	Maddock, Diana
Gerrard, Neil	Marek, Dr John
Gilbert, Rt Hon Dr John	Marshall, David (Shettleston)
Godman, Dr Norman A	Marshall, Jim (Leicester, S)
Godsiff, Roger	Martlew, Eric
Golding, Mrs Llin	Maxton, John
Gordon, Mildred	Meale, Alan
Graham, Thomas	Michael, Alun
Grant, Bernie (Tottenham)	Michie, Bill (Sheffield Heeley)
Griffiths, Nigel (Edinburgh S)	Michie, Mrs Ray (Argyll & Bute)
Griffiths, Win (Bridgend)	Milburn, Alan
Grocott, Bruce	Miller, Andrew
Gunnell, John	Mitchell, Austin (Gt Grimsby)
Hain, Peter	Moonie, Dr Lewis
Hall, Mike	Morgan, Rhodri
Hanson, David	Morley, Elliot
Harman, Ms Harriet	Morris, Estelle (B'ham Yardley)
Harvey, Nick	Morris, Rt Hon John (Aberavon)
Henderson, Doug	Mowlam, Marjorie
Heppell, John	Mudie, George
Hill, Keith (Streatham)	Mullin, Chris
Hinchliffe, David	Murphy, Paul
Hodge, Margaret	Oakes, Rt Hon Gordon
Hoey, Kate	O'Brien, Mike (N W'kshire)
Hogg, Norman (Cumbernauld)	O'Brien, William (Normanton)
Hood, Jimmy	O'Hara, Edward
Hoon, Geoffrey	Olner, Bill
Howarth, George (Knowsley North)	O'Neill, Martin
Howells, Dr. Kim (Pontypridd)	Orme, Rt Hon Stanley
Hoyle, Doug	Patchett, Terry
Hughes, Kevin (Doncaster N)	Pearson, Ian
Hughes, Robert (Aberdeen N)	Pickthall, Colin
Hughes, Roy (Newport E)	Pike, Peter L
Hutton, John	Pope, Greg
Illsley, Eric	Powell, Ray (Ogmore)
Ingram, Adam	Prentice, Bridget (Lew'm E)
Jackson, Glenda (H'stead)	Prentice, Gordon (Pendle)
Jackson, Helen (Shef'ld, H)	Primarolo, Dawn
Jamieson, David	Purchase, Ken
Janner, Greville	Quin, Ms Joyce
Jones, Barry (Alyn and D'side)	Radice, Giles
Jones, Ieuan Wyn (Ynys Mon)	Randall, Stuart
Jones, Jon Owen (Cardiff C)	Redmond, Martin

Reid, Dr John	Sutcliffe, Gerry
Rendel, David	Taylor, Mrs Ann (Dewsbury)
Robertson, George (Hamilton)	Taylor, Matthew (Truro)
Robinson, Geoffrey (Co'try NW)	Thompson, Jack (Wansbeck)
Roche, Mrs Barbara	Timms, Stephen
Rogers, Allan	Tipping, Paddy
Rooker, Jeff	Touhig, Don
Rooney, Terry	Turner, Dennis
Ross, Ernie (Dundee W)	Tyler, Paul
Ruddock, Joan	Vaz, Keitn
Sedgemore, Brian	Wallace, James
Sheerman, Barry	Walley, Joan
Sheldon, Rt Hon Robert	Wardel1, Gareth (Gower)
Shore, Rt Hon Peter	Wareing, Robert N
Short, Clare	Waston, Mike
Simpson, Alan	Welsh, Andrew
Skinner, Dennis	Wicks, Malcolm
Smith, Andrew (Oxford E)	Wigley, Dafydd
Smith, Chris (Isl'ton S & F'sbury)	Williams, Rt Hon Alan (Sw'n W)
Soley, Clive	Williams, Alan W (Carmarthen)
	Wise, Audrey
Spearing, Nigel	Worthington, Tony
Spellar, John	Wray, Jimmy
Squire, Rachel (Dunfermline W)	Wright, Dr Tony
Steel, Rt Hon Sir David	Young, David (Bolton SE)
Steinberg, Gerry
Stevenson, George	Tellers for the Ayes:
Stott, Roger	Mr. Eric Clarke and
Strang, Dr. Gavin	Mr. Joe Benton.

NOES
Ainsworth, Peter (East Surrey)	Chapman, Sydney
Aitken, Rt Hon Jonathan	Churchill, Mr
Alexander, Richard	Clappison, James
Alison, Rt Hon Michael (Selby)	Clark, Dr Michael (Rochford)
Allason, Rupert (Torbay)	Clarke, Rt Hon Kenneth (Ru'clif)
Amess, David	Coe, Sebastian
Arbuthnot, James	Congdon, David
Arnold, Jacques (Gravesham)	Conway, Derek
Arnold, Sir Thomas (Hazel Grv)	Coombs, Anthony (Wyre For'st)
Atkins, Robert	Coombs, Simon (Swindon)
Atkinson, David (Bour'mouth E)	Cope, Rt Hon Sir John
Atkinson, Peter (Hexham)	Cormack, Sir Patrick
Baker, Nicholas (North Dorset)	Couchman, James
Baldry, Tony	Cran, James
Banks, Matthew (Southport)	Currie, Mrs Edwina (S D'by'ire)
Banks, Robert (Harrogate)	Curry, David (Skipton & Ripon)
Bates, Michael	Davies, Quentin (Stamford)
Batiste, Spencer	Davis, David (Boothferry)
Bellingham, Henry	Day, Stephen
Bendall, Vivian	Deva, Nirj Joseph
Beresford, Sir Paul	Devlin, Tim
Body, Sir Richard	Dicks, Terry
Booth, Hartley	Dorrell, Rt Hon Stephen
Boswell, Tim	Douglas-Hamilton, Lord James
Bottomley, Rt Hon Virginia	Dover, Den
Bowden, Sir Andrew	Duncan, Alan
Boyes, Roland	Duncan-Smith, Iain
Boyson, Rt Hon Sir Rhodes	Dunn, Bob
Brandreth, Gyles	Durant, Sir Anthony
Brazier, Julian	Dykes, Hugh
Bright, Sir Graham	Elletson, Harold
Brooke, Rt Hon Peter	Emery, Rt Hon Sir Peter
Brown, M (Brigg & Cl'thorpes)	Evans, David (Welwyn Hatfield)
Browning, Mrs Angela	Evans, Jonathan (Brecon)
Bruce, Ian (Dorset)	Evans, Nigel (Ribble Valley)
Budgen, Nicholas	Evans, Roger (Monmouth)
Burns, Simon	Evennett, David
Burt, Alistair	Faber, David
Butcher, John	Fabricant, Michael
Butler, Peter	Fenner, Dame Peggy
Carlisle, John (Luton North)	Field, Barry (Isle of Wight)
Carlisle, Sir Kenneth (Lincoln)	Fishburn, Dudley
Carrington, Matthew	Forman, Nigel
Carttiss, Michael	Forsyth, Rt Hon Michael (Stirling)
Channon, Rt Hon Paul	Forth, Eric

Fox, Dr Liam (Woodspring)	McLoughlin, Patrick
Fox, Sir Marcus (Shipley)	McNair-Wilson, Sir Patrick
Freeman, Rt Hon Roger	Madel, Sir David
French, Douglas	Maitland, Lady Olga
Fry, Sir Peter	Malone, Gerald
Gale, Roger	Mans, Keith
Gallie, Phil	Marland, Paul
Gardiner, Sir George	Marshall, John (Hendon S)
Garnier, Edward	Marshall, Sir Michael (Arundel)
Gillan, Cheryl	Martin, David (Portsmouth S)
Goodson-Wickes, Dr Charles	Mates, Michael
Gorst, Sir John	Mawhinney, Rt Hon Dr Brian
Grant, Sir A (SW Cambs)	Mellor, Rt Hon David
Greenway, Harry (Ealing N)	Merchant, Piers
Greenway, John (Ryedale)	Mills, Iain
Griffiths, Peter (Portsmouth, N)	Mitchell, Andrew (Gedling)
Grylls, Sir Michael	Mitchell, Sir David (NW Hants)
Gummer, Rt Hon John Selwyn	Moate, Sir Roger
Hague, William	Monro, Sir Hector
Hamilton, Rt Hon Sir Archibald	Montgomery, Sir Fergus
Hamilton, Neil (Tatton)	Needham, Rt Hon Richard
Hampson, Dr Keith	Nelson, Anthony
Hanley, Rt Hon Jeremy	Neubert, Sir Michael
Hannam, Sir John	Newton, Rt Hon Tony
Harris, David	Nicholson, David (Taunton)
Haselhurst, Alan	Nicholson, Emma (Devon West)
Hawkins, Nick	Norris, Steve
Hawksley, Warren	Onslow, Rt Hon Sir Cranley
Hayes, Jerry	Oppenheim, Phillip
Heald, Oliver	Ottaway, Richard
Heathcoat-Amory, David	Paice, James
Hendry, Charles	Patnick, Sir Irvine
Heseltine, Rt Hon Michael	Pattie, Rt Hon Sir Geoffrey
Higgins, Rt Hon Sir Terence	Pawsey, James
Hill, James (Southampton Test)	Peacock, Mrs Elizabeth
Hogg, Rt Hon Douglas (G'tham)	Pickles, Eric
Horam, John	Porter, David (Waveney)
Hordern, Rt Hon Sir Peter	Portillo, Rt Hon Michael
Howard, Rt Hon Michael	Powell, William (Corby)
Howell, Rt Hon David (G'dford)	Rathbone, Tim
Hughes, Robert G (Harrow W)	Redwood, Rt Hon John
Hunt, Rt Hon David (Wirral W)	Renton, Rt Hon Tim
Hunt, Sir John (Ravensbourne)	Riddick, Graham
Hunter, Andrew	Rifkind, Rt Hon Malcolm
Jack, Michael	Robathan, Andrew
Jenkin, Bernard	Roberts, Rt Hon Sir Wyn
Jessel, Toby	Robertson, Raymond (Ab'd'n S)
Johnson Smith, Sir Geoffrey	Robinson, Mark (Somerton)
Jones, Gwilym (Cardiff N)	Roe, Mrs Marion (Broxbourne)
Jones, Robert B (W Hertfdshr)	Rumbold, Rt Hon Dame Angela
Jopling, Rt Hon Michael	Ryder, Rt Hon Richard
Kellett-Bowman, Dame Elaine	Sackville, Tom
Key, Robert	Scott, Rt Hon Sir Nicholas
King, Rt Hon Tom	Shaw, David (Dover)
Knapman, Roger	Shaw, Sir Giles (Pudsey)
Knight, Mrs Angela (Erewash)	Shephard, Rt Hon Gillian
Knight, Greg (Derby N)	Shepherd, Colin (Hereford)
Kynoch, George (Kincardine)	Shepherd, Richard (Aldridge)
Lait, Mrs Jacqui	Shersby, Michael
Lamont, Rt Hon Norman	Sims, Roger
Lang, Rt Hon Ian	Skeet, Sir Trevor
Lawrence, Sir Ivan	Smith, Sir Dudley (Warwick)
Legg, Barry	Smith, Tim (Beaconsfield)
Leigh, Edward	Soames, Nicholas
Lennox-Boyd, Sir Mark	Spencer, Sir Derek
Lester, Jim (Broxtowe)	Spicer, Sir James (W Dorset)
Lidington, David	Spicer, Michael (S Worcs)
Lightbown, David	Spink, Dr Robert
Lilley, Rt Hon Peter	Spring, Richard
Lloyd, Rt Hon Sir Peter (Fareham)	Sproat, Iain
Lord, Michael	Squire, Robin (Hornchurch)
Luff, Peter	Stanley, Rt Hon Sir John
Lyell, Rt Hon Sir Nicholas	Stern, Michael
MacGregor, Rt Hon John	Stewart, Allan
MacKay, Andrew	Streeter, Gary
Maclean, David	Sumberg, David

Sweeney, Walter	Ward, John
Tapsell, Sir Peter	Wardle, Charles (Bexhill)
Taylor, Ian (Esher)	Waterson, Nigel
Taylor, John M (Solihull)	Watts, John
Taylor, Sir Teddy (Southend, E)	Wells, Bowen
Temple-Morris, Peter	Wheeler, Rt Hon Sir John
Thompson, Patrick (Norwich N)	Whitney, Ray
Thomton, Sir Malcolm	WhittJngdale, John
Thumham, Peter	Widdecombe, Ann
Townend, John (Bridlington)	Wiggin, Sir Jerry
Townsend, Cyril D (Bexl'yh'th)	Wilkinson, John
Tracey, Richard	Wilshire, David
	Winterton, Mrs Ann (Congleton)
Tredinnick, David	Wolfson, Mark
Trend, Michael	Wood, Timothy
Trotter, Neville	Yeo, Tim
Twinn, Dr Ian	young, Rt Hon Sir George (Acton)
Vaughan, Sir Gerard
Waldegrave, Rt Hon William	Tellers for the Noes:
Walden, George	Mr. David Willetts and
Walker, Bill (N Tayside)	Mr. Timothy Kirkhope.

Question accordingly negatived.

Amendments made: No. 8, in page 6, line 35, after `referred ', insert 'forthwith'.

No. 9, in page 6, line 44, leave out first 'by' and insert `at the instigation of.

No. 10, in page 6, line 44, leave out second `by'—[Mr. Roger Evans.]