§ The Prime Minister (Mr. Tony Blair)
With permission, Madam Speaker, I shall make a statement about the special European Council on employment in Luxembourg on 21 November, which I attended with my right hon. Friend the Foreign Secretary. The Council conclusions have been placed in the Library.
Unemployment in Europe represents not only personal tragedy on a huge scale but a tremendous waste of economic talent and potential. At the Amsterdam European Council in June, jobs were given the top priority that they should always have had. We agreed a new treaty framework for action on employment: the employment chapter.
The aim was a co-ordinated strategy to promote a skilled, trained and adaptable work force and flexible labour markets responsive to economic change. At Luxembourg, the first time that the European Council has met just to discuss jobs, we decided how to put that Amsterdam aim into effect.
Let me make it clear at the outset that we are not creating new European Union competences or, indeed, new European Union spending programmes, although we have agreed some useful redeployment of existing resources. We can agree at European level the broad lines of a practical approach to job creation. We can commit ourselves to finding and following best practice wherever appropriate. We therefore sought and agreed a set of common, practical objectives to be enshrined in non-binding guidelines for national employment policies.
At the heart of Europe's new approach is the need to create the right macro-economic framework and to move more rapidly on the structural reform of labour markets. Removing barriers to the completion of the single market remains crucial, but the role of small firms in creating jobs is now recognised as central, as is the need to create a simpler regulatory and administrative environment for business. Those are all ideas which we have promoted and to which we can subscribe whole-heartedly.
There were three points at the heart of our discussions. First, we need an adaptable and skilled work force responsive to economic change. The emphasis must be on education, skills, technology, and an active employment service. We need flexibility, in the sense not of hire and fire management, but of businesses and employees being able to respond to new and changing economic conditions.
Secondly, we need entrepreneurship, especially in small businesses. That is where many of the new jobs that we need must come from, and we must nurture the sector.
Thirdly, we must tackle structural unemployment. That cannot be lowered simply by demand management. We want neither laissez-faire nor old-style state intervention, but targeted measures specifically directed at the long-term and young unemployed.
Under adaptability, the Council endorsed the idea of modernising work organisation, including flexible working arrangements to help companies to be both productive and competitive. In an important step forward, it also agreed to examine any new regulations, to make sure that they reduce barriers to employment and help labour markets adapt to structural economic changes. That was a particular initiative of ours.
634 Under entrepreneurship, the focus was the vital role of small and medium-sized enterprises. It was agreed that member states should make starting and running businesses easier by reducing the overhead costs and administrative burdens, in particular those of taking on extra staff. More widely, it was agreed that taxation and benefit systems should be made more employment-friendly; for example, by reducing the tax burden on both labour and other non-wage labour costs, where they are at levels that hinder job creation. Some countries are keen to consider the reduction of VAT on labour-intensive services not exposed to cross-border competition.
To tackle structural unemployment, the Council agreed an approach based on employability. There should be specific commitments to improve the ability of individuals to get and retain jobs, with special emphasis on youth and long-term unemployment. In particular, all member states undertook to offer a fresh start, in terms of training or similar measures, to all young people unemployed for six months, and to all adults unemployed for 12 months. A specific target of 20 per cent. was set for the number of unemployed in total benefiting from active measures to improve their employability. There was also extra emphasis on ensuring that young people do not leave the school system too early and inadequately equipped for the jobs market.
The Council also emphasised the importance of equal opportunities. In particular, there should be commitments aimed at tackling gender inequality, making it easier for parents to reconcile work and family life, and addressing the problems of the disabled in the workplace.
The guidelines setting out those practical objectives and commitments in more detail will be adopted by the end of the year. It will then be for member states to prepare national action plans on how they intend converting them into action. The plans will be subject to scrutiny by other partners. Each member state will be able to apply them in accordance with national circumstances but will be expected to address all the objectives in one way or another. We will review progress first at the Cardiff European Council in June.
The Luxembourg Council also welcomed extra mobilisation of the resources of the European investment bank to improve economic performance. One billion ecu from the bank's reserves will be used over three years to finance new initiatives to help high-tech small and medium-sized businesses: 125 million ecu of that has already been earmarked for a new European technology facility. The EIB is also starting to lend in the health, education and environment sectors, and is stepping up its support for trans-European network projects.
In addition, the European Council agreed in principle to redeploy 450 million ecu from the existing European budget over three years to help job creation, again particularly supporting innovative and job-creating small and medium-sized enterprises.
Those financial measures will be helpful, but, of course, they play only a supporting role: reform of labour and product markets is the real key to improving Europe's employment performance.
The jobs summit marks Europe's commitment to a new approach to create jobs and security for the future—not the old-fashioned free-for-all resulting in widespread social exclusion, nor loading more costs and regulations 635 onto business, but a third way: investing in people, in their skills, in small businesses, and setting a stable long-term framework for business and industry to plan for the future and create jobs. Education and training are the keys. The so-called European social model is being refocused, based on a modern approach of reform, flexibility and investment in people. We aim to involve both sides of industry fully in that approach.
We will use the UK presidency next year to ensure that this is carried through in order to make a real difference to employment, employability and social inclusion. Luxembourg agreed an approach for the long term. Effective follow-up is vital and will happen.
At Amsterdam, we showed how a united British Government with a clear direction in Europe could make Britain's voice heard. At Luxembourg, we showed how a constructive British approach could result in a new direction on tackling unemployment; an approach based on competitiveness, employability and reform, combining job creation with a fair and cohesive society.
We recognised at a European level the terrible personal damage which occurs each time an individual who is willing and anxious to find work is still unable to do so through no fault of his or her own. That is why this Labour Government are working for a Europe that is working for jobs. This approach is right for Britain, right for Europe and right for the people of Europe.
§ Mr. William Hague (Richmond, Yorks)
I thank the Prime Minister for his statement. The Opposition welcome the concept of a European summit focused wholly on jobs, and we welcome the recognition that Europe should aim for flexible labour markets responsive to economic change.
Did the Prime Minister describe the achievements of the British people over the past 18 years, which have led to an unemployment rate way below the European average? Does he agree that there is a huge amount to be learned from the UK experience over the past 18 years, and that those who opposed the measures that we took must now be regretting it?
We agree with the sentiments expressed at the summit and with many of the objectives. However, does the Prime Minister understand that we are entitled to be a little suspicious of a summit which both the British and French Governments claim as a triumph, when they arrived with completely different agendas? Can he give more evidence that other countries will adopt more flexible labour market policies? What specific measures does he expect them to adopt? Can he give any evidence that he is committed to flexible labour market policies, given the contrast between the guidelines to which he signed up and the policies that he is pursuing at home?
The Prime Minister talked about reducing barriers to employment, and we all agree with that. How can we square that with what the Minister of State, Department of Trade and Industry said last week, when advocating the minimum wage at its most onerous? Only last Thursday, the Minister saidThere will be no sectoral, regional or company derogations and it will be available from day one of employment."—[Official Report, 20 November 1997; Vol. 301, c. 441.]Which will the Prime Minister choose—Government policy or the European guidelines?
636 The Prime Minister talked about entrepreneurship, and we all agree with that. How does he square that with signing up to the social chapter, making him unable to stop new burdens being imposed on small businesses by extending works councils to them? Which will he choose—the policy or the guidelines? The summit guidelines talked aboutmaking the taxation system more employment friendlyand we all agree with that. Does the Prime Minister realise that companies now have to pay higher contributions because of the new tax on their pension funds imposed by the Chancellor? Which will he choose—the policy or the guidelines?
The summit guidelines finished with a call topromote the integration of people with disabilities into working lifeand I particularly welcome that sentiment. However, are not the Government trying to cut benefits for disabled people, which often give them the help that they need to be independent and to go to work? Which will the Prime Minister choose—his policy or the European guidelines?
How convinced is the Prime Minister that other countries will follow the spirit of the guidelines when there is precious little evidence that he himself will do so?
The presidency conclusions call for clear objectives for each country. Can the Prime Minister tell us what the objectives for Britain will be? Will he endorse the target set by the Minister for employment that the current trend rate of decline in unemployment should improve further?
Can the Prime Minister explain some of the language used in the presidency conclusions? What has he agreed to in signing up to the idea of bringing an end to unfair tax competition? What does this mean for British companies? What has he agreed to in signing up to the creation of an expert working party to guard against the economic effects of industrial change? What has he agreed to in signing up to a six-monthly meeting of social partners and Heads of Government before European Council meetings? Does he expect that to lift burdens on business?
The Prime Minister says that new regulations will be examined to make sure they help labour markets adapt. What about looking at all the old regulations across the continent which have kept millions out of work?
The Prime Minister talks of national plans being subject to scrutiny by other partners. Does that mean that other countries will be able to interfere in our employment policies, or does he optimistically assume that it will only be us interfering in theirs?
Will the Prime Minister confirm that the idea of this summit originated with the French Government's worries that economic and monetary union could make their serious jobs problems even worse? Can he confirm that there is a widespread fear in Europe that a single currency could bring more unemployment in the next few years? Does he believe that all the advocates of a single currency in the near future are also committed to the essential corollary of making labour markets more flexible?
In summary, we agree with the objective of ending the old ways of state intervention, corporatism and over-burdensome regulation for companies, but does the Prime Minister realise that many people will find it hard to understand how that fits with signing the social chapter, 637 compulsory union recognition, adopting the employment chapter and bringing in the minimum wage, all of which are more likely to destroy jobs than to create them?
§ The Prime Minister
All I can say is, thank goodness the right hon. Gentleman was not negotiating for us at the employment summit. He and his colleagues still have absolutely no idea why they lost the general election. They have no idea why one of their former hon. Friends is now sitting on the Government side. They have totally lost touch with mainstream, one-nation values, which people believe now reside in the Labour party, not the Conservative party.
I shall deal with the points that the right hon. Gentleman made. First, he said that he supported the summit. Before the election, the Conservatives opposed the new employment chapter under which the summit was held. They opposed the very idea of this summit, which was not a French idea: actually, it was a British idea which came from the Government.
Secondly, if the right hon. Gentleman examines the figures, he will see that we have problems with long-term and youth unemployment. They are being addressed by the new deal for the young and long-term unemployed, which was also opposed by the Conservative party. We inherited a situation in which 20 per cent. of non-pensioner households with people of working age were without work. That it is precisely why it is important that we are not complacent about this problem from Britain's perspective, but realise that we still have a lot to do.
Thirdly, the right hon. Gentleman said that no specific proposals were made. There are specific proposals, not just in the guidelines for the long-term and youth unemployed, but in the 1 billion ecu programme for small and medium-sized enterprises and the 400 million ecu programme for specific job and skills programmes for the unemployed.
Fourthly, the right hon. Gentleman gave us the usual litany about the social chapter and asked how it can be squared with the guidelines. It can be squared very easily. Most people in Europe—indeed, most sensible people in the world—do not believe that there is anything inconsistent in having a highly effective, efficient work force and treating people with minimum standards of fairness. Unlike the Conservative party, they do not have a problem with that. The social chapter has two parts so far: the first allows companies that operate Europewide to consult their work force, and the second gives unpaid, parental leave to people who have just had a birth in the family. Why it is thought those measures are so terrible and will hamper British industry, I do not know. As far as I am aware, business is perfectly happy with them.
As for disability benefit cuts, it was the former Government who undermined disability benefit provision, not us.
On unfair tax competition, the right hon. Gentleman has again got it wrong. Discussion has been going on for a long time—under the previous Administration as well as ours—to try to prevent specific benefits from being given to non-resident companies in the tax treatment of those companies in particular countries. British companies are victims of that problem, rather than perpetrators, so it is 638 in our interest to be part of those discussions. All that is being suggested is that a Europewide code of conduct should be drawn up: it is not a proposal for legislation.
§ The Prime Minister
It is not the same thing—it is different.
Finally, on the national action plans that each country is supposed to draw up, we have been at the forefront because the whole purpose of what we are trying to achieve is to refocus attention in Europe away from some of the older methods of assisting job creation and on to the things that will make people more employable in today's labour markets, in particular education in skills and technology and help for small businesses. That is precisely the agenda of the Government here at home. It helps us if that is the agenda abroad as well. I must point out to the Leader of the Opposition and his hon. Friends that there is a tremendous opportunity for Britain to get that agenda accepted at the moment, but it will be accepted only if it is advanced constructively and sensibly.
§ Mr. Rhodri Morgan (Cardiff, West)
One of the omissions from the jobs summit was the job-creation significance of north American and far eastern investment in Europe's regional development areas. Therefore, was there a special study at the summit of the Irish Republic's tremendous success in 1996, when it won more new green-field, inward investment projects than all the United Kingdom's assisted areas put together, by an emphasis on the quality of its labour force and environment and not on low wages and deregulated labour markets?
§ The Prime Minister
My hon. Friend will know that we have received a lot of inward investment here and we continue to do so. However, he is entirely right in that we do not want people to come here for reasons of low wages and, by and large, that is not why they are coming. They want to come here. If we can show that we have an educated and skilled work force that is adaptable to the forces of economic change and if we can make the improvements in our education and welfare systems that the Government are undertaking, we can attract more inward investment to this country and not less.
§ Mr. A. J. Beith (Berwick-upon-Tweed)
While welcoming the involvement of the European investment bank in new lending and the emphasis on small business, labour market flexibility and a genuine internal market, may I ask when we will get the comparable statistics of which the statement speaks, so that we can compare properly unemployment figures in our and neighbouring countries, bearing in mind what the previous Government did to the employment figures?
Does the Prime Minister recognise that regional funds will continue to be vital to the older industrial areas, such as the coal mining and textile areas in Britain, if we are to create jobs there and that the amount of increased investment that we will need in education and training is beyond anything that has been committed so far?
639 Finally, does the right hon. Gentleman fully support the wording in the presidential statement, for which 1 presume he is also responsible, that proceeding to the third stage of economic and monetary union will indeed be conducive to stability, growth and employment?
§ The Prime Minister
In relation to the figures given and to comparable figures, the national action plans should provide some basis for proper comparison, although I agree that there is a longer-term problem in that statistics are compiled in different ways in the individual countries. There is a separate European initiative to bring those statistics into line with one another, which is on-going, as they say. In due course, we should get a better series of comparable statistics than those we have.
On industrial restructuring, there is a very different approach here, which is to accept that there will be restructuring in Europe. Obviously there can be a debate about how far monetary union will be conducive to economic stability, but the one thing that people are sure about is that with a single currency in Europe there will undoubtedly be enormous transparency of costs. That will of itself force an enormous amount of restructuring. The approach set out here is not to try to ward off that restructuring, but instead to cope with it by bringing new investment into the areas where it is taking place and ensuring that we have the measures in place for the long-term unemployed in particular, who will require retraining in the longer term.
As for education and investment, I do not want to go over what we say at every Question Time on Wednesday, but we are putting a substantial additional sum of money into our schools next year with the school repairs programme of £1.3 billion. If the right hon. Gentleman will forgive me for pointing it out once again, that is more money than the Liberal Democrats asked for before the election.
Mr. TamDalyell (Linlithgow)
Did any of the Prime Minister's European colleagues offer so much as a scintilla of regret that we were not joining the single currency in 1999?
§ Mr. James Paice (South-East Cambridgeshire)
To what does the Prime Minister attribute the fall in British unemployment?
§ The Prime Minister
Yes. It is correct that British unemployment has come down, though I have to say that there are still other countries in Europe that are committed to the social chapter. Indeed, they have a minimum wage and have lower unemployment rates than in Britain. We have always said that we must focus on those households with people of non-pensioner age which have nobody working. That is why I say that we still have a long way to go in this country, which is why we have introduced the new deal for the unemployed.
§ Ms Diane Abbott (Hackney, North and Stoke Newington)
If the Prime Minister supports one of the 640 aims of the jobs summit, which is to encourage previously excluded groups to go back to work, why are the Government introducing cuts in child benefit to single mothers, proposed by the Conservatives when they were in government? Because they affect single mothers who are out of work, as well as those who are in work, they will tend to act as a disincentive to their returning to work.
§ The Prime Minister
I do not think that Conservative Members are in a position to put those questions to us, as they were the ones who introduced the benefit cuts. If my hon. Friend looks at the Budget proposals put forward by the Chancellor in July, she will see that single parents are given specific additional help with child care to help them find work. Measures are being put in place to take people off benefit and into work. However, it is extremely important that we keep within the tough spending guidelines that we have set, because they are right. Whatever irresponsibility may have occurred on the part of the previous Government, it does not occur here.
§ Mrs. Angela Browning (Tiverton and Honiton)
If the Prime Minister thinks that the minimum wage has nothing to do with unemployment figures, to what does he attribute the high youth unemployment in France and particularly in Spain, where it is nearly 40 per cent? Does he think that the minimum wage has nothing whatever to do with unemployment?
§ The Prime Minister
If one looks at France, for example, a criticism that we have made is that if the minimum wage is applied in full, even to young people in training, it can cause problems for young people. That is why we have said that that will not happen here. There are many countries with lower unemployment rates than Britain that have minimum wages. Austria, the Netherlands and the United States of America all have minimum wages but lower unemployment rates than Britain. It is important to introduce a minimum wage sensibly and make it part of a general system of reform, so that this country does not end up, as we did under the previous Government, spending £3 billion a year through family credit subsidising low pay. That is not a sensible use of public resources. It is far better to introduce a proper minimum wage and ensure that people are paid at the proper rate for the job.
§ Mr. Dennis Skinner (Bolsover)
Does my right hon. Friend agree that, in view of what has been happening in the Asian economies in the past few months and particularly the past few days, we want to hear no lectures of the kind that we heard constantly from the last Government about using undiluted market forces to resolve the problems of the economy and particularly jobs? Many areas of Britain—some 20 or 30 in total— used to have old smokestack industries that were closed by the Tory Government, who are still downsizing the Tory party. Even if there were an economic upturn over and above what is happening today, there is a legacy in each of those areas: the last five or six years of pit closures meant that hardly a single miner had another job to go to, and the social fabric is in decay. We need to deal with those issues, not by means of a European job summit but through old-fashioned intervention from this Labour 641 Government to make sure that those areas and pit villages, where as many as 40 per cent. of people are unemployed, have a chance to work again.
§ The Prime Minister
I agree with my hon. Friend. Inevitably, no matter how well the economy is doing in general terms, some areas will be left behind by industrial restructuring and change. That is why the jobs summit focused specifically, as a separate item almost, on those who will be long-term unemployed and who cannot get back into work simply because of the general upturn in economic circumstances. Of course, that is why we have the welfare to work new deal programme here. It is precisely to help to tackle some of those pockets of structural long-term and youth unemployment. It is precisely by investing in their skills and through additional resources to improve the education system that we shall give those people a better chance and a better opportunity.
That is what I would call the third way. It is not old-style intervention, but it is intervention and a recognition that markets fail. We should live in a market economy and we want a dynamic market economy, but in some areas the market will fail. One of the things that mark out the Government from their predecessor is that we recognise that, and are prepared to intervene where that is necessary.
§ Mrs. Margaret Ewing (Moray)
Was there any consideration at the summit of the issue of structural funds? They have been extremely important in areas such as mine, which benefits from objective 1 and objective 5b in the creation of employment. What is the Government's attitude to the continuation of structural funds and will the Prime Minister guarantee that this matter will at least be discussed in Cardiff in June?
§ The Prime Minister
Yes, I can give the hon. Lady that assurance. Paragraph 34 of the European Council's conclusions deals with structural funds. In essence, it says that it is important that we reform those structural funds; that will be necessary as part of the process of enlargement and to make sure that the money goes to the areas in which it is really needed. It is also important to recognise that it made a clear commitment in principle to continuing the basis of structural funds for the future.
§ Mr. Gordon Marsden (Blackpool, South)
In welcoming the Prime Minister's statement, may I ask whether he agrees that, both in philosophy and in specific direction, the summit is tied in very much in accord with the Government's policies? Will he ask his Ministers at European level and specifically at Government level to take into account the question of flexibility of seasonal employment, which is a major issue in my constituency and in many others?
§ The Prime Minister
I think that people recognise that seasonal employment, particularly in areas such as the one that my hon. Friend represents, is a particular subject which needs care and attention. Of course he is right to say that the measures that we have outlined at the European summit chime in very much with the Government's priorities both in terms of the new deal for 642 the long-term and young unemployed, and in the treatment of small businesses. This Government have cut corporation tax and taxation on small businesses to their lowest ever level. That is precisely the right direction for Europe to go as well.
§ Mr. Eric Forth (Bromley and Chislehurst)
The Prime Minister has rightly emphasised the importance of reducing the cost burden on business, and particularly on small and medium-sized businesses. Will he remind the House how he thinks that that objective will be served by, for example, the Chancellor's recent measures on pensions, which are bound to increase the cost burden on businesses? The minimum wage, if it is to have the effect that the Prime Minister and the Government want to claim in social terms, must surely also have the effect of increasing business costs.
§ The Prime Minister
As I have just said, it was this Government who cut corporation tax for business and particularly for small businesses. In July, we took the measures that were necessary to bring the structural budget deficit under control. We did that because the worst thing that could happen for business and in particular for small businesses is to go through an economic cycle of boom and bust as has happened many times in the past. I know from the conversations that I had with small businesses at the end of the 1980s and in the early 1990s, that the worst thing that happened to them was that they were plunged from a boom into a deeper recession than they had ever known. Many of them went out of business. Stability for them and prudence in public finances—prudent monetary policy—are absolutely essential.
As for the minimum wage, I think that many small businesses will welcome the fact that they will compete on the basis of some minimum standards of fairness. Of course it must be set at a proper and sensible level, but if it is set at that level we shall find, as people in the United States and elsewhere find, that it is of assistance to businesses, not a burden on them.
§ Mr. John Hutton (Barrow and Furness)
I welcome my right hon. Friend's statement and the sensible measures that were agreed at the jobs summit in Luxembourg, but does he agree that it is a matter of regret that the Opposition have expressed their continuing opposition to improvements in the social dialogue between employers and employees in the European Union?
§ The Prime Minister
Yes, I agree with that entirely. Raucous scorn greets any mention of discussing things with the social partners—with employers and unions. I should have thought that it was perfectly sensible that, before a European summit on jobs, we discuss with both sides of industry how this programme should be carried through. Why that is going to be detrimental to the interests of the European economy, I do not know. What is surely important is that, if we are making structural change in Europe, we try to take both sides of industry with us, that we listen to their concerns about some of the costs and burdens that they face, and that we consider 643 how we might remove them. Our meeting with employers and unions before the summit was constructive and we will meet them again before our summit in Cardiff.
§ Sir Peter Tapsell (Louth and Horncastle)
Will the right hon. Gentleman tell the House what the minimum wage rate is in the United States and the reasons why the Clinton Administration have kept it so low that it is almost irrelevant?
§ The Prime Minister
No, I do not believe that that is true at all. Indeed, before the last presidential election, there was agreement even between the republicans and the democrats to raise the minimum wage. If the hon. Gentleman considers the recent work that has come out of the United States, he will find that most people believe that having some form of minimum wage assists the way in which the labour market functions. I am sorry to say to Conservative Members that they will be left behind on this issue as they have been on many others.
§ Mr. Barry Jones (Alyn and Deeside)
Can the Prime Minister tell us whether the jobs summit discussed the renewed challenge by the Boeing corporation to the European Airbus consortium? Is it possible for him to say when the Government will decide on the application by British Aerospace for launch aid on a new version of the A340? May I tell him that 2,800 of my constituents make the wings for Airbus aircraft, and hope that the application might go forward and that jobs are not exported abroad?
§ The Prime Minister
Of course the application for launch aid must be considered in the normal way and I would not want to comment on that at this stage. But our support for the Airbus project is well known and total. We believe that Britain has an important role to play in that, but, of course, all applications for launch aid must go through the normal business of determining whether they meet the criteria. We welcome those skilled jobs and the work by the British work force in relation to Airbus and of course we will do everything that we can to keep them.
§ Mr. John Wilkinson (Ruislip-Northwood)
Does the right hon. Gentleman believe that the process of artificial convergence to achieve the criteria for establishing a single currency within certain core countries in the European Union has benefited employment? Is it not true that, on the evidence, the opposite seems to be the case? This winter, the federal German republic will have unemployment of probably 5 million and Spain's unemployment rate is at 20 per cent. In this country, is it not true that an independent central bank has masterminded four out of the five interest rate increases that have taken place under this Administration?
§ The Prime Minister
No, I cannot agree with that. Interest rates have had to go up since the election. They should have gone up before the election. That was the clear and obvious advice because an incipient inflation problem was back in the system again. The last thing that we should do is repeat the mistakes at the end of the 1980s and in the early 1990s, when, under Tory boom-and-bust policies, interest rates went to 15 per cent. and stayed there for almost a year. We have to avoid that. The best way of doing so and the best way for this country's future 644 is to ensure that interest rate decisions are taken not on a political, short-term basis, but on a genuine assessment of the right monetary policy for this country.
In relation to convergence in the rest of Europe, of course other countries would dispute what the hon. Gentleman has said. All I can say is that, at present, their interest rate and inflation rate performance is low. Britain is in a different stage of the economic cycle and in a different position. That is one of the reasons for our position on monetary union, but each country has to decide what is in its best interest.
§ Mr. Harry Barnes (North-East Derbyshire)
Did the jobs summit deal with the paradox of investment: it is required to create new jobs, but it can, on occasions, get rid of old jobs? It is needed for competitive purposes, but, unless it takes place within a framework of intervention, there will be problems about whether the investment delivers more jobs in the long run. [Interruption.]
§ The Prime Minister
What my hon. Friend has said is sensible, contrary to what Conservative Members think. It is important that we recognise that we need high levels of investment, which is precisely why we want a stable long-term economic strategy, both for this country and for Europe. Obviously, some of that investment—if it is in new technology, for example—can displace jobs. The answer is not to fail to put in the new technology; it is to focus, as the employment summit did, precisely on what is needed: reskilling, better education, lifelong learning and ensuring that when people do become unemployed they have the chance to get a fresh job. I should have thought that that was a sensible approach.
§ Mr. Jonathan Sayeed (Mid-Bedfordshire)
Can the Prime Minister say whether non-wage labour costs will increase under his Government?
§ The Prime Minister
We have made a specific commitment here to try to keep them as low as possible, and that is precisely what we will do.
§ Mr. Hugh Bayley (City of York)
Does my right hon. Friend share my feeling of dismay that when he comes to the House to make a statement about what this Government and other Governments in Europe are doing to create job opportunities for young unemployed people, the Opposition resort to howls of derision and jeers? Does he agree that every time an hon. Member crosses the Floor of the House from the Opposition side to our Benches, he leaves behind a Tory rump both leaner and meaner?
Does my right hon. Friend further agree that an economy the size of Europe has the potential to be as successful an engine for creating jobs as the economy of the United States of America, which, under President Clinton and with a minimum wage, has created so very many more jobs than have been created in Europe, with Europe not pulling together? Now that we are pulling together, will we see the benefits in Europe?
§ The Prime Minister:
My hon. Friend is absolutely right in his description of what happens with the Opposition. I find it extraordinary that they should disparage the idea of a European jobs summit that focuses on some of the issues of long-term youth unemployment. If they look at the figures, they will realise that it is not 645 true that Britain is miles ahead of everyone else. There are countries with lower rates of long-term unemployment, with lower rates of youth unemployment and with lower overall rates of unemployment. It is true that the measures that we take will improve that position enormously, but it is also true that there is a long way that we need to go.
It is tremendously important that we are in Europe, able to play a constructive role and able to provide leadership and direction, not just for our own country, but for Europe. The single market is tremendously important for British business and British jobs. It is in our interests to be able to complete that single market and to be able to play a leading role and influence the rest of Europe in our own direction—but we cannot do that if the country is represented by people who simply continue shrilly and irrelevantly to shout against Europe rather than get in and make it work.
§ Mr. Michael Fallon (Sevenoaks)
How can the Prime Minister boast in Luxembourg about ending burdensome regulation when he is sentencing British companies to compulsory new laws under the social chapter? Does his earlier answer suggest that neither of the existing directives nor any of the four proposed directives under the social chapter will impose any cost on British business?
§ The Prime Minister
What the directives do is allow a perfectly fair framework of employment regulations in this country.
§ The Prime Minister
Is the hon. Gentleman saying that the unpaid parental leave directive, which gives people a bit of unpaid parental leave, will destroy British industry? The hon. Gentleman also refers to a directive that allows consultation with people in companies with 1,000 or more employees operating on a Europewide basis. Before the election, when the Conservative Government had opted out of the social chapter, British companies were joining it because they found it sensible to do so. I remember that, during the election campaign, the hon. Member and other Conservative Members said that if we signed the social chapter 500,000 jobs would leave Britain. That was nonsense. However, he and his hon. Friends continue to say that with all the certainty and conviction of mediaeval school men, which is precisely what they are becoming.
§ Dr. Howard Stoate (Dartford)
Will my right hon. Friend agree with me that the new Labour Government's attitude towards training and education will help to inspire employers to create the 50,000 new jobs expected in Kent's Thamesside, which includes my constituency?
§ The Prime Minister
Yes, that is absolutely right. By focusing on raising education standards, we raise the value of human capital, thereby raising the performance of the overall economy.
§ Mr. David Prior .(North Norfolk)
Does the Prime Minister accept that joining a European single currency will inevitably lead to high levels of regional unemployment? Was that discussed at the summit?
§ The Prime Minister
No, I do not accept that. It will depend on whether a single currency is successful. If it is successful, I do not believe that what the hon. Gentleman describes will occur.