HC Deb 27 March 1996 vol 274 cc1084-99

`.—Not later than 1st November 1996, the Treasury shall prepare and lay before Parliament a report which assesses the impact of the provisions of this Act and of the Budget measures introduced on 28th November 1995 on employment and job insecurity in the United Kingdom.'.—[Mr. Andrew Smith.]

Brought up, and read the First time.

6.45 pm
Mr. Andrew Smith (Oxford, East)

I beg to move, That the clause be read a Second time.

The new clause calls for a report to be made on the effects of the Budget and the Finance Bill on employment and job insecurity. We see this as part of the focus that this country needs on employment generation and tackling job insecurity. We are arguing that the measures in the Budget and the Finance Bill should be assessed for their effects on jobs and on helping people into jobs in a far more comprehensive and purposeful way than happens at present. We believe that the "Financial Statement and Budget Report"—the Red Book—which quite properly devotes substantial space to the effect of the Budget's tax and public spending proposals on revenue yields and costs, borrowing and the public finances, ought also to evaluate the employment implications.

That is especially important at present, when Britain has not only 2.2 million unemployed, but 800,000 long-term unemployed and 600,000 young unemployed. Even when unemployment has fallen, there has not been a corresponding increase in employment. Job insecurity has become a more pressing concern for millions of people, and Conservative Members would do well to remember that when they attempt to boast about the Government's record on unemployment.

If Conservative Members want an explanation why the so-called feel-good factor remains so elusive, they need look no further than the fact that, on top of the Government's betrayal on tax promises and on top of last year's fall in living standards—the sharpest for 14 years—we still have not only high unemployment, but many people in work suffering downward mobility and insecurity, and people riddled with anxiety about how long their job will last and what will happen if they lose it.

It is true that there are already some contributions on the labour market within the "Financial Statement and Budget Report". For example, in annex B to chapter 3 of last year's Red Book, there are some interesting remarks by the Treasury's panel of independent advisers that some Conservative Members seem to ignore when making claims about unemployment. For example, on page 61 it says: The recovery in the labour market appears to be losing momentum. Employment growth has slowed, and the rate of decline of unemployment has slowed sharply. There follows an analysis of the dismal employment record in this recovery compared with previous recoveries, concluding that it is clear that there has been a substantial increase in numbers counted as economically inactive … the peculiar feature of the recovery … is that participation has not picked up. Although it is helpful to have that evaluation of the labour market from the panel, the new clause argues that we should go beyond that and focus attention much more closely on the employment implications of the Budget measures themselves. For example, it would be useful to have a broad report on the composition of the labour market, categorised by tenure in terms of part-time, full-time, temporary and self-employed employment. Each category could be analysed in terms of qualification for employment rights and turnover within the category.

At present, those in full-time work qualify for full rights after two years of service, and that requirement rises to five years for those in part-time work. It would therefore be important to include an analysis of turnover within each category and between categories, so that the extent of job insecurity can be properly ascertained.

As well as analysis of the labour market broken down into those categories, it would be useful to assess the direct effects of the Budget on new jobs. Employment creation should be broken down in the same way as the fuller picture of the labour market to keep track of any headway being made on countering job insecurity and encouraging quality employment.

On a more specific basis, the impact of Budget changes in tax, expenditure or national insurance could be more directly assessed in terms of jobs and employment. For example, in this year's Red Book, the revenue implications for the extension of the rebate on employers' national insurance contributions for the long-term unemployed are listed on page 107. They are costed at £5 million in 1996–97 and 1997–98 and £10 million in 1998–99, but there is no mention of the corresponding impact on alleviating long-term unemployment within the Red Book—the very purpose that is argued for the measure.

In future years, that could with benefit be factored in for specific taxation and expenditure measures. In addition, the much broader impact on employment of Government policies on taxation, national insurance contributions and employment rights in the tenure and distribution of the labour market, both for existing jobs and for those newly created, could be included. We want that information not merely for the better analysis of what is happening, but to focus attention on the need for action if unemployment and job insecurity are to be tackled with real effect.

Since the publication of the Red Book last November, the picture has worsened further. Unemployment rose last month for the first time in two years, to reach more than 2.2 million. Not only is mass unemployment a symptom of Tory Britain, but, under the present Government, the 1990s have become a decade of mass downward mobility and insecurity. Many of those who have jobs are insecure in them and overshadowed by the threat of redundancy. Many are having to move into lower-paid jobs, with less secure contracts and conditions.

What is more, whatever the convenience and attraction of part-time work for many employees, which we recognise, according to the March labour force survey, nearly half the men in part-time work say that they work part-time because they cannot get a full-time job. The facts speak for themselves. Our analysis has revealed that more than 8 million people have had at least one spell of unemployment since the last general election. This year, more than 2 million new people are likely to experience a spell of unemployment, and, since the Prime Minister took office in 1990, no fewer than 10 million people have experienced one or more spells of unemployment. That is one in four of the working population.

Mr. Nigel Forman (Carshalton and Wallington)

So that we get the figures in context, can the hon. Gentleman tell the House the average length of the period of unemployment that those 8 million people experienced?

Mr. Smith

I do not have the figure to hand, but any period of unemployment is too long for those who suffer it. The aim of public policy in the area—the role of the state in assisting the individual—should be to help to equip them with the skills to ensure that they can get back into quality employment as quickly as possible. In that sense, the true measure of the success of policies to counter unemployment is not merely, where appropriate, to attenuate the rate at which people are losing jobs, but to ensure that, when they do lose them, they are in a position to get back into jobs.

The tragedy at the moment is that 2.2 million people are unemployed, another 2 million are likely to experience a spell of unemployment this year, and there are 800,000 long-term unemployed, who have been out of work for more than a year, and 600,000 young unemployed, for whom I hope the whole House would agree there is a case for priority action.

In practice, the Government's record on these matters matches neither their claims nor the needs of the country. We hear many comparisons with the rest of the European Union from Conservative Members, yet the United Kingdom's record on job generation since 1979 has been the worst among the major European countries. To take a wider comparison—these figures are based on a parliamentary answer—employment in the United States has grown 21 times faster than that in the United Kingdom since 1979, and in Japan it has grown 18 times faster.

As we know, unemployment has more than doubled under this Government. Since the last general election, there has been no increase in full-time or permanent employment.

Mr. Forman

Taking up the comparison with the United States, does the hon. Gentleman concede that most experts agree that one of the main reasons why the United States has generated more jobs than this country in that period, and far more than our partners on the continent is that it has a more deregulated labour market, with a more flexible attitude—more akin to our attitude than that of countries on the continent?

Mr. Smith

I would not equate the words "flexible labour market" with a deregulated labour market in quite the way that the hon. Gentleman does, and there are many people in the United States who would not do so either. For example, to draw on the analysis of the operation of minimum wage legislation there, studies demonstrate that, where that wage has been increased—contrary to the arguments that many Conservative Members put forward—it has not led to a rise in unemployment. On the contrary, in the industries covered, it has led to a rise in employment. It is a mistake, therefore, for the hon. Gentleman to equate a flexible labour market, or an acceptably flexible market, with blanket deregulation.

In a modern labour market, of course we want flexibility, but we also want civilised conditions for the work force and proper support from the Government to equip people for success and to help them to meet the challenges that confront us all in a rapidly changing world. Judged by their record throughout their time in office, Conservative Members and their Government fail that test.

As we have pointed out a number of times since the Prime Minister took office, there are 1 million fewer people in jobs. Male unemployment in the United Kingdom is higher than the European average. On the Government's own figures, the financial cost of unemployment is more than £20 billion a year to the taxpayer, and that is before one counts the human cost of the misery and insecurity attached to unemployment, which has rocketed under this Government.

The truth is also that, under this Government, more people are suffering insecurity and downward mobility. Just as Britain has fallen from 13th to 18th down the world prosperity league, so millions of people are sliding down the personal prosperity league. That downward mobility is a scar across the face of Britain in the 1990s. That is why we have argued for measures to help people from welfare into work and off benefit into jobs.

The public will not be persuaded by the Government's credentials when they do not take up our proposals to help the young and the long-term unemployed into work. Instead, the Prime Minister threatens to withdraw employment rights from millions of workers in small businesses thereby exacerbating the crisis of insecurity that he should be seeking to solve. The Government have taken no action on the measures that we have suggested to help people off welfare into work. Instead, they are cutting the training budget and have abolished the community action programme, which only a year earlier they boasted was providing 40,000 quality, paid places for the some of the most vulnerable people in our society.

7 pm

The Finance Bill has failed to address the disastrous unemployment and job insecurity in Britain. Our proposals for welfare-to-work, investment, skills and public-private partnership have made clear our commitment to act where the Government have failed to act. Our policy statements make it clear that our commitment to a medium-term objective of raising the trend rate of growth, with low inflation, will be accompanied by an annual statement of the implications for employment of our policies and the ways in which they can be increased.

Mr. Jack

The hon. Gentleman fleetingly mentioned his target for growth. I would be most interested if he could tell us what it would be in numerical terms.

Mr. Smith

I said that we would have a medium-term strategy to raise the trend rate of growth, which under the Conservative Government since 1979, has been 1.9 per cent. including oil and 1.7 per cent. excluding it—one of the worst records of any industrialised country. Britain can and must do better and with Labour, it will. It is in that spirit that we bring new clause 1 before Parliament tonight. If the Government were serious about tackling the crisis of unemployment and job insecurity, a sensible first move would be to support new clause 1, publish the report that we call for and to act on it to ensure that each and every Budget measure generates work and eases the chronic problem of job insecurity that afflicts so many millions of people.

Mr. Forman

I am grateful to you, Madam Speaker, for calling me in this crowded debate. I wish to comment on new clause 1 and on the speech of the hon. Member for Oxford, East (Mr. Smith). I am sure that he really knows—he is more sensible than he appears—that Government strategies do not create new jobs, but that enterprising firms and individuals do. To answer my hon. Friend the Financial Secretary by saying that the Labour party does not have a target for growth but has a strategy, as if that were a guarantee of job prospects for people without jobs, is a grievous error that would mislead our people, if ever they were unfortunate enough to have a Labour Government. The Labour party is wise not to have a target, because such things usually end in tears, as happened with the national plan and George Brown in 1965.

There is no need for the sort of report that new clause 1 demands. The debate gives the Labour party an opportunity to indulge its normal habit of scaremongering on the important and sensitive question of job insecurity. I do not deny that there is much job insecurity. That is evident to all hon. Members from our surgeries and from what we read and learn about. The question is how best to deal with that psychological and real problem and how best to address the concerns of people who feel insecure.

Insecurity matters most for those who are out of work and finding it difficult to get back into work. I am glad that the Government are bringing forward a range of measures, both in this Budget and in other aspects of policy, which are designed to create jobs and make people feel more confident about their lives. I draw the attention of the hon. Member for Oxford, East to the measures that are summarised right at the beginning of the Red Book under the heading, "Encouraging enterprise and helping business". For example, there is the reduction of the small companies rate of corporation tax to 24p rather than 25p.

Mr. Andrew Smith

Does not it make my point that jobs, unemployment and work insecurity are not mentioned in that list of Budget measures?

Mr. Forman

The benefit to people who have those problems derives from concrete measures, in the Budget and elsewhere, and not necessarily from more paragraphs that recognise the problem. My right hon. and learned Friend the Chancellor of the Exchequer, in his Mais lecture some time ago, made it clear that this is an important problem that the Government are addressing. I was trying to convey that the Government have taken practical measures. There is more help for businesses facing higher rate bills following last year's revaluation. We have mentioned already that employers' national insurance contributions are to be cut by £500 million from April 1997.

More importantly, the Finance Bill, and the Budget from which it flows, created the macro-economic and market conditions in which it has been possible for my right hon. and learned Friend the Chancellor further to cut interest rates. A prudent Budget and the effects of reduced interest rates, which are lower than they were at the time of the Budget, help to create new jobs and underpin the strength of the economic recovery, which mercifully, has been carried forward on a largely non-inflationary basis.

First, the Finance Bill contains useful measures that are designed to address the problems in the labour market. Secondly, the Budget has facilitated, through its fiscal prudence, a cut in interest rates. Thirdly, the background to the labour market is not as bleak or unsatisfactory as the hon. Member for Oxford, East implied. Paragraph 3.44 of the Red Book shows that although there was a period when the number of economically active people in Britain fell by more than 110,000, between the winters of 1992–93 and 1994–95, it has since risen by more than 140,000. Indeed, it is rising again partly because more people are being attracted into the labour force by the better job prospects to which I have already referred. Having gone through something of a trough, the labour market is manifestly improving. As it improves, so people will feel more secure about their employment prospects.

The hon. Member for Oxford, East talked about part-time work, but he must know that the majority of people in part-time work do it because it suits them, especially women with young children of school age, who want jobs with hours that fit in with their parental responsibilities. However, that is not confined to that group. That preference is increasingly true of the older worker, the professional or other worker in what Charles Handy calls the third age. People of my age, aged over 45 or 50, often find that their needs are well met by what Charles Handy calls a portfolio of employment activity, some of it self-employed, some of it employed.

Mr. Andrew Smith

Does the hon. Gentleman recall that I acknowledged that part-time work was convenient and attractive for many workers? That is not a reason to deny part-time workers full employment rights in the way in which Conservative Members are inclined to. Equally, I pointed out—and this is in the March labour force survey—that more than half the men working part time do so because they cannot find full-time jobs.

Mr. Forman

I am sure that we shall have to assist people to retrain and to reskill as a result of the technological changes that are taking place. That is a social priority that the Government are keen to address.

The hon. Member for Oxford, East prayed in aid the American experience and he contrasted it favourably with that of this country in terms of job creation. However, I said by way of intervention that the United States has been able to create more jobs more consistently over a longer period because it has a flexible labour market. The American Government recognised the fact that the unemployed would rather have even a relatively low-paid job than no job at all. One of the phenomena of the labour market—it is the real tragedy of the 800,000 long-term unemployed in this country—is that the longer one is unemployed, the less employable one becomes.

It is vital that people should be registered as unemployed for only a short time. The efforts of the Government and of the private and public agencies should be directed at getting people back to work as quickly as possible. Mercifully, the figures suggest that most people are unemployed for only a short duration. It might be helpful if my hon. Friend the Financial Secretary, in winding up this brief debate, could inform the House and the hon. Gentleman about the average duration of unemployment in this country. I believe that the figure is about three months. I am not saying that those three months are not an awkward time for those who are unemployed, but that is to be expected in a flexible labour market where there is a considerable turnover of jobs and much activity. That was the situation under previous Governments and it is likely to continue into the future.

The argument advanced by the hon. Member for Oxford, East could be regarded as scaremongering, and I do not believe that new clause 1 would serve any constructive purpose.

Mr. Tipping

New clause 1 is important because it provides an opportunity to check the theory against the practice and to measure the rhetoric against the reality. The new clause seeks to measure the Budget and to assess its impact. My hon. Friend the Member for Oxford, East (Mr. Smith) talked about the national perspective and about job insecurity. I shall refer to job insecurity on a smaller scale as it affects the coalfield communities.

It is slightly more than three years since the then President of the Board of Trade announced the closure of the coal industry as we knew it around the country. It is important to examine the consequences of that decision and the insecurity felt by those who lost their jobs as a result of the rundown of the industry and by their families.

In 1980, there were 40,000 miners in Nottinghamshire: today there are about 3,000. Much work has been done within coalfield communities to discover the plight of those who lost their jobs. Their situation is extremely insecure—the figures speak for themselves. Several research studies have been conducted in that area—I recall the work done by the Coalfield Communities Campaign and by Derbyshire county council. They have shown that 50 per cent. of former miners have not found jobs since October 1992.

The hon. Member for Carshalton and Wallington (Mr. Forman) referred to the length of time that people are unemployed. Some ex-miners have been unemployed for more than three years, and the jobs that they find are not nearly as secure as their former occupations. Former miners typically earn 50 per cent. of the salaries that they received while working in the industry.

We must introduce measures to create jobs. I agree entirely that we must support firms and new industry, as they are the job creators. The simple fact is that that is not happening. New clause 1 will question the Government's good intentions: it is a means of testing budgetary measures to see whether they will achieve their purpose.

7.15 pm

Unemployment has fallen by 17 per cent. nationally since October 1992. However, in the Mansfield travel-towork area, unemployment has fallen by only 7.5 per cent. and in the Worksop travel-to-work area—another coalfield community—unemployment has not decreased at all. The gap between affluent areas and those of disadvantage and deprivation is widening. The Government aspire to change all that, and the Budget aims to foster a climate for creating jobs. I do not wish to be pessimistic, but I share the sense of desolation that permeates coalfield communities: they believe that in November this year, the unemployment figures will not be any better.

We must find job-creating measures. I am extremely disappointed that the community action programme has been scrapped. It is a young programme that gives people the opportunity to come off welfare and into work. As well as denying those opportunities, its abolition leaves a big gap in the work of voluntary organisations.

At the time of the Budget announcement, I said that in some parts it could be better and that in other parts it was a green Budget. We could revamp the community action programme and give people the opportunity to do environmental work. Mr. Deputy Speaker, you know about the dereliction that has occurred in coalfield communities: a revamped community action programme could benefit the environment and lift the landscape.

One budgetary measure aims to reduce the money that is spent on the home energy efficiency scheme. We should look at the consequences of that decision for employment—for example, we know from answers to parliamentary questions that 200,000 fewer homes will be insulated. If the community action programme were thought out properly and geared towards conservation measures, it could create many hundreds of thousands of jobs for young people. It is important to introduce new programmes and to measure their achievements.

Job creation is not simply a matter for the Government: it will be achieved through partnership, and we must explore what budgetary measures will make that partnership work. I view the new clause as both a signpost and a milestone. It shows the way forward for the objectives that the Budget wants to achieve and it measures them at a later date. Therefore, I have no hesitation in welcoming the new clause, because I know that if we were to change rhetoric into reality in that way, we could create jobs in coalfield communities and across the country.

Mr. Jack

This is a welcome opportunity for the Government to reply in the context of the Budget and to put on record some of the benefits that will flow from it into the labour market. It was somewhat rich to hear the hon. Member for Oxford, East (Mr. Smith) propose his new clause, particularly when his party subscribes to the minimum wage and the social chapter—both of which, by universal claim by all analysts, would have a depreciating effect on creating jobs in this country.

One of the things that I have noticed during the passage of the Finance Bill is that the Labour party, if it is in doubt as to what its policies are, asks the Government to produce a report on some aspect of the subject of its concern—we have had that on shipping, on housing investment trusts and on one or two other issues. The Government are now asked to produce a report on the employment impact of the Budget.

If Labour Members had asked for a report on what we had done about boosting confidence and job security in my right hon. and learned Friend the Chancellor's Budget, I might well have been inclined to say, "Yes, I can produce a report and I can give it to you here and now"—it would have been a copy of my right hon. and learned Friend's Budget speech. Sadly, those are not the terms of the new clause.

I refer to the minimum wage. This week a MORI poll showed that approximately one third of employers would expect to lay off people if the minimum wage was around £4—that is a devastating indictment of the Labour party's policies. This week I happened to watch "Newsnight", and I listened very carefully to what the shadow Chancellor had to say about the problem.

Mr. Andrew Smith

And he was very good.

Mr. Jack

If he was very good, I am sure that he was chastened by what Mr. Michael Swift—who is currently being assisted by the Department for Education and Employment in his search for a job—said when he came to London to hear what the shadow Chancellor had to say. After hearing those ideas, Mr. Swift—who was formerly with Anglian Water—said: At present I cannot see anything radical in today's announcement from the new Labour party at all. Mr. David Urp—another gentleman who was working hard; a former export consultant—said: I see it as a very positive point, but I do not see there being a full package here. That is not exactly a ringing endorsement of the employment policies put forward by the hon. Member for Oxford, East, in support of the analysis that he asks us to do. In any Budget, it is the sum total of its effects on the totality of the labour market that matters—there are complex interactions. He has asked us to produce a piece of exacting analysis, but that misses the way in which the real world works.

I shall give the hon. Gentleman the headlines of the report that I should like to write. I pick up the point that my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) raised, when he reminded hon. Members that the landfill tax had given us the flexibility to reduce employers' national insurance charges by 0.2 of 1 per cent.—putting something like £500 million back in the hands of employers, which will no doubt assist them.

I refer to the income tax changes that we made in relation to the rate and the allowances. They have given a real boost to the incentive to work. I refer to the small companies corporation tax rate, which improves the profitability and the return of small companies. Clause 137 of the Finance Bill extends tax relief on vocational training for people over the age of 30. That is another contribution in the Budget to boost prospects and job security.

My hon. Friend the Member for Carshalton and Wallington raised some interesting points. He talked about the speed of turnover in the labour market, to which I shall refer in a moment. In response to his specific questions, one in four people are unemployed for less than one month, one in two people are unemployed for less than three months, and two in three people are unemployed for less than six months. That shows that there is fairly rapid turnover in the labour market. The hon. Member for Oxford, East said that up to 8 million people had been touched by unemployment.

Mr. Andrew Smith

It is 8.7 million people.

Mr. Jack

Yes, 8.7 million people. The figures show that while people may have been touched by unemployment—we all have sympathy for those who lose their jobs; we want to see them back in work quickly—the policies that the Government have put forward, particularly their many forms of assistance for the unemployed through the work of jobcentres, get them back to work quickly.

The nature of that work has been raised in the debate. It is interesting to note that, in the European Union, 10.9 per cent. of the work force is on temporary contracts and in this country only 6.3 per cent. of the work force is on such contracts. The United States was mentioned. The average job tenure in the United Kingdom is significantly above that in the United States. Characteristics of our labour force are beneficial. I refer to the proportion of the population that has claimed for benefits in the past five years. It has remained remarkably stable compared with the late 1980s. While job insecurity is a proper subject to discuss, when one compares the facts, one sees that it may have been somewhat distorted.

I think that I ought to send the hon. Member for Oxford, East a copy of a booklet that I have in my hand—in fact, I shall send him a copy; he deserves it after asking for a report from the Government. Perhaps I am cheating slightly, because a report has already been produced. It comes out every month, and is a remarkable little booklet called, "The U.K. at work: Key facts". I commend it to the hon. Gentleman, and I make no apology for quoting one or two facts from it. The booklet states: U.K. has had the strongest recovery since 1993 of any major European economy. It reminds us of the effects of that—more than 600,000 have come off the unemployment register during that time. The booklet states further: Each year about 6 million jobs become vacant. On any one day there are 300,000 vacancies available. If hon. Members are looking at the structure of the labour market, they should let the booklet speak for itself. It states: Workforce in employment has increased by 2.0 million since March 1983. 1.3 million more self-employed than in 1979. If that is not a testament to the good economic policies being followed by the Government in their Budget, I do not know what is.

Youth unemployment was mentioned. Sadly, it is 15.7 per cent.—it must be lower, and we are working hard to achieve that. However, the European Community average is 20.8 per cent., and youth unemployment in the United Kingdom is lower than in Spain, Italy, Ireland, France and Belgium. We can be duly proud of that record.

The community action programme has been raised, and I shall pick up on that point. It has been cut back because unemployment is reducing. I refer to training for work, 1–2–1, job interview guarantee, work trial and job plan—I could go on. We have funded a whole range of policies through the Budget, and through the spending proposals of my right hon. Friend the Chief Secretary to the Treasury, which have enabled us to support people so that they can get back into work in the way that I have identified.

The booklet "The U.K. at work: Key facts" gives the lie to anyone who attacks the Government on the subject of employment prospects. At the back of the booklet are some excellent examples of things such as inward investment and new job-creating activities throughout the length and breadth of the country. Indeed, the constituency of the right hon. Member for Sedgefield (Mr. Blair) has benefited from our being No. 1 for inward investment, which is helping to create jobs. That would not have happened if we had not had a Budget and a financial policy that attracted inward investment.

The right hon. Member for Sedgefield is gaining 300 jobs with Black and Decker. The hon. Member for Dunfermline, East (Mr. Brown) has Lex mark International coming in, with an average investment of £31.5 million and 500 new jobs. The hon. Member for Livingston (Mr. Cook) is hiding his light under a bushel on unemployment—2,000 new jobs are coming in. I could go on. If it were not for the Government's policies, which are a report in themselves of our success in employment, I could not attest to such achievements.

It is a remarkable situation. The hon. Member for Oxford, East chastised us in terms. Sadly, in one month unemployment went up, but—since the December 1992 peak—unemployment in total has declined by 764,900. The work force in employment rose by 68,000 in one quarter in 1995 compared with a year earlier. Manufacturing employment was up in January by 6,000 on a year earlier. The labour market does change. It has to be flexible in a modern economy, but I hope that the House will see that all that we have done has boosted job opportunities.

On job insecurity, I shall conclude with one fact, because there is little hard evidence that jobs have become less secure, despite some people's perceptions. The 1994 labour force survey showed that almost two thirds of men aged between 30 and 49 had held their present jobs for more than five years, and that figure was little changed from 10 years before. We understand the problem of unemployment and we are working hard to deal with it. The record that I have put before the House attests to that.

7.30 pm
Mr. Andrew Smith

It is a tragedy that the Financial Secretary and the Government did not respond with the seriousness that our proposal warranted, just as they have not tackled the unemployment and job insecurity crisis that the country faces with the seriousness that it deserves. It was clear from the Financial Secretary's speech that, if he were to produce a report on the employment consequences of the Budget, it would be a short document indeed. In fact, in his presentation, he could not get beyond the headlines and even then he barely mentioned actual job generation.

The Financial Secretary made some European comparisons and some reference to the social chapter and the minimum wage. It is interesting that, of the 17 countries that are higher than Britain in the world prosperity league—the league in which we have fallen from 17th to 18th under the Government—all the eight European Union countries that are higher than us have signed the social chapter. Of the 17 countries above us, no fewer than 15 operate a minimum wage policy. That shows the fallacy of the Financial Secretary's arguments on those points.

We welcome inward investment and we want to encourage it and the jobs that it brings. But why do not the Government look at the total picture on investment? Has Britain's share of total European. Union investment gone up since 1979? No, it has gone down since 1979. The share of total European investment is lower on the most recent figures than it was in 1979—so much for the Financial Secretary's claims and so much for the Government's record.

The Conservatives have failed on unemployment and on job insecurity because they have failed on investment, training and skills and on building up the country's economic and social fabric. It is time that they made way for a Government who would bring forward the reports that we have proposed, who would act on them, and who would start to tackle the devastating crisis of unemployment and job insecurity that afflicts so many millions in this country.

Question put, That the clause be read a Second time:—

The House divided: Ayes 226, Noes 294.

Division No. 89] [7.33 pm
Abbott, Ms Diane Bennett, Andrew F
Adams, Mrs Irene Benton, Joe
Ainsworth, Robert (Cov'try NE) Bermingham, Gerald
Allen, Graham Berry, Roger
Alton, David Betts, Clive
Anderson, Donald (Swansea E) Blunkett, David
Anderson, Ms Janet (Ros'dale) Boateng, Paul
Armstrong, Hilary Bradley, Keith
Austin-Walker, John Bray, Dr Jeremy
Banks, Tony (Newham NW) Brown, N (N'c'tle upon Tyne E)
Barnes, Harry Burden, Richard
Battle, John Caborn, Richard
Bayley, Hugh Callaghan, Jim
Beckett, Rt Hon Margaret Campbell, Mrs Anne (C'bridge)
Bell, Stuart Campbell, Ronnie (Blyth V)
Benn, Rt Hon Tony Campbell-Savours, D N
Canavan, Dennis Jackson, Glenda (H'stead)
Cann, Jamie Jackson, Helen (Shef'ld, H)
Church, Judith Jamieson, David
Clapham, Michael Janner, Greville
Clark, Dr David (South Shields) Jones, Barry (Alyn and D'side)
Clarke, Eric (Midlothian) Jones, Jon Owen (Cardiff C)
Clarke, Tom (Monklands W) Jones, Lynne (B'ham S O)
Clelland, David Jones, Martyn (Clwyd, SW)
Clwyd, Mrs Ann Jowell, Tessa
Coffey, Ann Keen, Alan
Cohen, Harry Khabra, Piara S
Connarty, Michael Kilfoyle, Peter
Cook, Frank (Stockton N) Lestor, Joan (Eccles)
Cook, Robin (Livingston) Lewis, Terry
Corbett, Robin Liddell, Mrs Helen
Corston, Jean Litherland, Robert
Cousins, Jim Livingstone, Ken
Cummings, John Lloyd, Tony (Stretford)
Cunningham, Jim (Covy SE) Llwyd, Elfyn
Cunningham, Roseanna Loyden, Eddie
Dalyell, Tam McAllion, John
Darling, Alistair McAvoy, Thomas
Davidson, Ian McCartney, Ian
Davies, Bryan (Oldham C'tral) McCartney, Robert
Davies, Rt Hon Denzil (Llanelli) Macdonald, Calum
Davies, Ron (Caerphilly) McFall, John
Davis, Terry (B'ham, H'dge H'l) McKelvey, William
Denham, John McLeish, Henry
Dixon, Don McMaster, Gordon
Dobson, Frank McNamara, Kevin
Dowd, Jim MacShane, Denis
Dunwoody, Mrs Gwyneth McWilliam, John
Eagle, Ms Angela Madden, Max
Etherington, Bill Mahon, Alice
Evans, John (St Helens N) Marek, Dr John
Evang, Mrs Margaret Marshall, David (Shettleston)
Fatchett, Derek Marshall, Jim (Leicester, S)
Field, Frank (Birkenhead) Martin, Michael J (Springburn)
Flynn, Paul Martlew, Eric
Foster, Rt Hon Derek Maxton, John
Foulkes, George Meale, Alan
Fyfe, Maria Michael, Alun
Galbraith, Sam Michie, Bill (Sheffield Heeley)
Gapes, Mike Milburn, Alan
George, Bruce Mitchell, Austin (Gt Grimsby)
Gerrard, Neil Moonie, Dr Lewis
Godman, Dr Norman A Morgan, Rhodri
Godsiff, Roger Morley, Elliot
Golding, Mrs Llin Morris, Rt Hon Alfred (Wy'nshawe)
Gordon, Mildred Morris, Rt Hon John (Aberavon)
Graham, Thomas Mowlam, Marjorie
Grant, Bernie (Tottenham) Mudie, George
Griffiths, Nigel (Edinburgh S) Mullin, Chris
Griffiths, Win (Bridgend) Murphy, Paul
Gunnell, John Oakes, Rt Hon Gordon
Hain, Peter O'Brien, Mike (N W'kshire)
Hall, Mike O'Brien, William (Normanton)
Hanson, David Olner, Bill
Henderson, Doug Pearson, Ian
Heppell, John Pickthall, Colin
Hill, Keith (Streatham) Pike, Peter L
Hinchliffe, David Pope, Greg
Hodge, Margaret Powell, Ray (Ogmore)
Hoey, Kate Prescott, Rt Hon John
Home Robertson, John Primarolo, Dawn
Hood, Jimmy Purchase, Ken
Hoon, Geoffrey Quin, Ms Joyce
Howarth, Alan (Strat'rd-on-A) Radice, Giles
Howarth, George (Knowsley North) Randall, Stuart
Howells, Dr Kim (Pontypridd) Raynsford, Nick
Hoyle, Doug Reid, Dr John
Hughes, Kevin (Doncaster N) Robertson, George (Hamilton)
Hughes, Robert (Aberdeen N) Robinson, Geoffrey (Co'try NW)
Hutton, John Robinson, Peter (Belfast E)
Illsley, Eric Roche, Mrs Barbara
Ingram, Adam Rooney, Terry
Ross, Ernie (Dundee W) Tipping, Paddy
Rowlands, Ted Touhig, Don
Ruddock, Joan Trickett, Jon
Salmond, Alex Turner, Dennis
Sedgemore, Brian Vaz, Keith
Sheerman, Barry Walker, Rt Hon Sir Harold
Sheldon, Rt Hon Robert Walley, Joan
Shore, Rt Hon Peter Wardell, Gareth (Gower)
Short, Clare Wareing, Robert N
Simpson, Alan Watson, Mike
Skinner, Dennis Welsh, Andrew
Smith, Andrew (Oxford E) Wicks, Malcolm
Smith, Llew (Blaenau Gwent) Williams, Rt Hon Alan (Sw'n W)
Soley, Clive Williams, Alan W. (Carmarthen)
Spearing, Nigel Wilson, Brian
Spellar, John Worthington, Tony
Squire, Rachel (Dunfermline W) Wray, Jimmy
Steinberg, Gerry Wright, Dr Tony
Stevenson, George Young, David (Bolton SE)
Stott, Roger
Sutcliffe, Gerry Tellers for the Ayes:
Taylor, Mrs Ann (Dewsbury) Mrs. Jane Kennedy and
Timms, Stephen Mr. Malcolm Chisholm.
Ainsworth, Peter (East Surrey) Clarke, Rt Hon Kenneth (Ru'clif)
Aitken, Rt Hon Jonathan Clifton-Brown, Geoffrey
Alexander, Richard Coe, Sebastian
Alison, Rt Hon Michael (Selby) Colvin, Michael
Allason, Rupert (Torbay) Congdon, David
Amess, David Conway, Derek
Arnold, Jacques (Gravesham) Coombs, Anthony (Wyre For'st)
Arnold, Sir Thomas (Hazel Grv) Coombs, Simon (Swindon)
Ashby, David Cope, Rt Hon Sir John
Atkins, Rt Hon Robert Cormack, Sir Patrick
Atkinson, David (Bour'mouth E) Couchman, James
Atkinson, Peter (Hexham) Cran, James
Baker, Rt Hon Kenneth (Mole V) Currie, Mrs Edwina (S D'by'ire)
Baker, Nicholas (North Dorset) Curry, David (Skipton & Ripon)
Baldry, Tony Davies, Quentin (Stamford)
Banks, Matthew (Southport) Davis, David (Boothferry)
Banks, Robert (Harrogate) Day, Stephen
Bates, Michael Deva, Nirj Joseph
Batiste, Spencer Devlin, Tim
Beggs, Roy Dicks, Terry
Bellingham, Henry Dorrell, Rt Hon Stephen
Bendall, Vivian Douglas-Hamilton, Lord James
Beresford, Sir Paul Dover, Den
Biffen, Rt Hon John Duncan-Smith, Iain
Body, Sir Richard Dunn, Bob
Bonsor, Sir Nicholas Durant, Sir Anthony
Boswell, Tim Dykes, Hugh
Bottomley, Rt Hon Virginia Elletson, Harold
Bowis, John Evans, David (Welwyn Hatfield)
Boyson, Rt Hon Sir Rhodes Evans, Jonathan (Brecon)
Brandreth, Gyles Evans, Nigel (Ribble Valley)
Brazier, Julian Evans, Roger (Monmouth)
Brooke, Rt Hon Peter Evennett, David
Brown, M (Brigg & Cl'thorpes) Faber, David
Browning, Mrs Angela Fabricant, Michael
Bruce, Ian (South Dorset) Fenner, Dame Peggy
Budgen, Nicholas Field, Barry (Isle of Wight)
Burns, Simon Fishburn, Dudley
Burt, Alistair Forman, Nigel
Butler, Peter Forsyth, Rt Hon Michael (Stirling)
Butterfill, John Forsythe, Clifford (S Antrim)
Carlisle, John (Luton North) Forth, Eric
Carlisle, Sir Kenneth (Lincoln) Fowler, Rt Hon Sir Norman
Carrington, Matthew Fox, Dr Liam (Woodspring)
Carttiss, Michael Fox, Rt Hon Sir Marcus (Shipley)
Cash, William Freeman, Rt Hon Roger
Channon, Rt Hon Paul French, Douglas
Chapman, Sir Sydney Fry, Sir Peter
Churchill, Mr Gale, Roger
Clappison, James Gallie, Phil
Clark, Dr Michael (Rochford) Gardiner, Sir George
Garnier, Edward Marlow, Tony
Gill, Christopher Marshall, John (Hendon S)
Gillan, Cheryl Martin, David (Portsmouth S)
Goodlad, Rt Hon Alastair Mawhinney, Rt Hon Dr Brian
Goodson-Wickes, Dr Charles Mayhew, Rt Hon Sir Patrick
Gorman, Mrs Teresa Mellor, Rt Hon David
Gorst, Sir John Merchant, Piers
Grant, Sir A (SW Cambs) Mills, Iain
Greenway, Harry (Ealing N) Mitchell, Andrew (Gedling)
Greenway, John (Ryedale) Mitchell, Sir David (NW Hants)
Griffiths, Peter (Portsmouth, N) Moate, Sir Roger
Grylls, Sir Michael Molyneaux, Rt Hon Sir James
Gummer, Rt Hon John Selwyn Monro, Rt Hon Sir Hector
Hague, Rt Hon William 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
Hargreaves, Andrew Nicholls, Patrick
Harris, David Nicholson, David (Taunton)
Hawkins, Nick Norris, Steve
Hawksley, Warren Onslow, Rt Hon Sir Cranley
Hayes, Jerry Oppenheim, Phillip
Heald, Oliver Ottaway, Richard
Heathcoat-Amory, Rt Hon David Page, Richard
Hendry, Charles Paice, James
Heseltine, Rt Hon Michael Patnick, Sir Irvine
Hicks, Robert Pawsey, James
Higgins, Rt Hon Sir Terence Peacock, Mrs Elizabeth
Hogg, Rt Hon Douglas (G'tham) Pickles, Eric
Horam, John Porter, Barry (Wirral S)
Hordern, Rt Hon Sir Peter Porter, David (Waveney)
Howell, Rt Hon David (G'dford) Portillo, Rt Hon Michael
Howell, Sir Ralph (N Norfolk) Powell, William (Corby)
Hughes, Robert G (Harrow W) Rathbone, Tim
Hunt, Rt Hon David (Wirral W) Redwood, Rt Hon John
Hunt, Sir John (Ravensbourne) Renton, Rt Hon Tim
Hunter, Andrew Richards, Rod
Hurd, Rt Hon Douglas Riddick, Graham
Jack, Michael Robathan, Andrew
Jackson, Robert (Wantage) Roberts, Rt Hon Sir Wyn
Jenkin, Bernard Robertson, Raymond (Ab'd'n S)
Jessel, Toby Robinson, Mark (Somerton)
Johnson Smith, Sir Geoffrey Roe, Mrs Marion (Broxbourne)
Jones, Robert B (W Hertfdshr) Ross, William (E Londonderry)
Kellett-Bowman, Dame Elaine Rowe, Andrew (Mid Kent)
Key, Robert Rumbold, Rt Hon Dame Angela
Kirkhope, Timothy Sackville, Tom
Knapman, Roger Sainsbury, Rt Hon Sir Timothy
Knight, Mrs Angela (Erewash) Scott, Rt Hon Sir Nicholas
Knight, Rt Hon Greg (Derby N) Shaw, David (Dover)
Knight, Dame Jill (Bir'm E'st'n) Shaw, Sir Giles (Pudsey)
Kynoch, George (Kincardine) Shephard, Rt Hon Gillian
Lait, Mrs Jacqui Shepherd, Sir Colin (Hereford)
Lang, Rt Hon Ian Shepherd, Richard (Aldridge)
Lawrence, Sir Ivan Shersby, Sir Michael
Legg, Barry Sims, Roger
Leigh, Edward Skeet, Sir Trevor
Lennox-Boyd, Sir Mark Smith, Tim (Beaconsfield)
Lester, Sir James (Broxtowe) Smyth, The Reverend Martin
Lidington, David Soames, Nicholas
Lilley, Rt Hon Peter Spicer, Sir James (W Dorset)
Lloyd, Rt Hon Sir Peter (Fareham) Spicer, Sir Michael (S Worcs)
Lord, Michael Spink, Dr Robert
Luff, Peter Spring, Richard
Lyell, Rt Hon Sir Nicholas Sproat, Iain
MacGregor, Rt Hon John Squire, Robin (Hornchurch)
MacKay, Andrew Stanley, Rt Hon Sir John
Maclean, Rt Hon David Steen, Anthony
McNair-Wilson, Sir Patrick Stephen, Michael
Maginnis, Ken Stewart, Allan
Maitland, Lady Olga Streeter, Gary
Major, Rt Hon John Sumberg, David
Malone, Gerald Sweeney, Walter
Mans, Keith Sykes, John
Marland, Paul Tapsell, Sir Peter
Taylor, Ian (Esher) Walker, Bill (N Tayside)
Taylor, Rt Hon John D (Strgfd) Waller, Gary
Taylor, John M (Solihull) Ward, John
Taylor, Sir Teddy (Southend, E) Wardle, Charles (Bexhill)
Temple-Morris, Peter Waterson, Nigel
Thomason, Roy Watts, John
Thompson, Patrick (Norwich N) Wells, Bowen
Thornton, Sir Malcolm Whitney, Ray
Thumham, Peter Whittingdale, John
Townend, John (Bridlington) Widdecombe, Ann
Townsend, Cyril D (Bexl'yh'th) Wiggin, Sir Jerry
Tracey, Richard Wilkinson, John
Tredinnick, David Willetts, David
Trend, Michael Winterton, Mrs Ann (Congleton)
Trimble, David Winterton, Nicholas (Macc'f'ld)
Trotter, Neville Wolfson, Mark
Twinn, Dr Ian Yeo, Tim
Vaughan, Sir Gerard Young, Rt Hon Sir George
Viggers, Peter
Waldegrave, Rt Hon William Tellers for the Noes:
Walden, George Mr. Timothy Wood and
Walker, A Cecil (Belfast N) Mr. Patrick McLoughlin.

Question accordingly negatived.

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