Full Employment

HC Deb 16 October 2003 vol 411 cc243-7

4. Mr. Win Griffiths (Bridgend)

If he will make a statement on his aim to achieve full employment. [132057]

The Chancellor of the Exchequer (Mr. Gordon Brown)

Unemployment in Britain this year has been at its lowest since 1975. More people are in work than at any time in our history and our unemployment is lower than Japan, America, Germany, France and the whole of the euro area. Today, we are publishing our submission to the European review of employment and the pre-Budget report will contain measures to enhance the new deal, including measures to help people into self-employment and to start new businesses, as we advance to our goal of full employment.

Mr. Griffiths

I thank my right hon. Friend for the tremendous work that he has done at the Treasury and with other Ministers in promoting that policy of full employment. I was surprised that he did not mention the fact that for the first time ever the unemployment rate in some of the nations and regions of the UK, such as Wales, which has often been above the national average, is now below the average—all thanks to the policies that my right hon. Friend and his fellow Ministers have pursued.

Will my right hon. Friend undertake intensive negotiations with his European counterparts to ensure that the good work being done in this country can also be done in the rest of Europe and enable us to join the euro much earlier than is currently anticipated?

Mr. Brown

My hon. Friend is absolutely right about Wales. There have been 103,000 additional jobs created since 1997, and Welsh unemployment has fallen significantly, particularly among the young and the long-term unemployed.

As for the exportability of our proposals on employment, I have regular talks with my European Finance Minister colleagues. The French and German Finance Ministers signed a joint letter with me to our European colleagues, and we are proposing that the same incentives that are available in welfare to work and our new deal should be available in the rest of Europe. Equally, at the same time, we are promoting flexibility in the European labour markets, which is the means by which we can return to a position where full employment can be a realistic goal in Europe. It is unfortunate, however, that the one group of people who want to abolish the new deal is the modern Conservative party.

Mr. Mark Field (Cities of London and Westminster)

Perhaps the Chancellor would like to enlighten us about what proportion of the much-vaunted job growth of the past two years has been in the private, as opposed to the public, sector.

Mr. Brown

A significant part of the growth has been in the private sector. I think that, of the 1.7 million additional jobs that have been created, the vast majority are in the private sector. When the hon. Gentleman wishes to disparage the public sector and wishes to talk about pen-pushers in the public sector, let him remember that, among the additional jobs, are 50,000 nurses, 20,000 teachers, 90,000 classroom assistants and 10,000 doctors, all of whose jobs would be at risk under his policies.

Mr. George Mudie (Leeds, East)

I congratulate the Chancellor on the fact that for the first time in my constituency, under this Labour Administration, unemployment has halved in a very poor part of Leeds, but he will be aware that we are now entering a phase when, whether for reasons of age, health, lack of skills or drugs, it is becoming more difficult to put certain unemployed people into work. In his next Budget will he consider adding to his existing very good initiatives some imaginative, joined-up, targeted approaches to deal with those very difficult individuals to get them into work, so that they can enjoy the prosperity that work brings to families?

Mr. Brown

I commend my hon. Friend for his proposals for the Leeds community that are designed to create more jobs and more prosperity in areas of high unemployment. He is absolutely right that the focus of our employment policies must alter to help those who have been hard to employ, those with no skills whatsoever and those who have been in prison or had other experience that makes them unattractive to employers. We can help them and, equally, we must help more single parents back into work. The problem is that the one party that wishes to abolish the new deal for young people, the new deal for the long-term unemployed and the new deal for single parents is the Conservative party. The only new deal that the Conservatives want to keep is the new deal for the over-50s, perhaps because they may have to use it themselves soon.

Dr. Vincent Cable (Twickenham)

Does the Chancellor accept the arguments of the Governor of the Bank of England that, with unemployment at 1.5 million or 5 per cent., the Government are as close to full employment as they are likely to get, that there is therefore no spare capacity and that we can look forward to a decade of below-trend growth and rising interest rates? If there is a fallacy in the Government's argument, could the Chancellor tell us what it is?

Mr. Brown

First, may I welcome the hon. Gentleman to his new post as the shadow Chancellor from Twickenham? I have worked with him in the past. Indeed, we were in the same political party. We wrote together in the same publications. It may be that, at some point, I could share with the House his views of the Labour party's policy, which were very enthusiastic at that time, but perhaps that is for another day, Mr. Speaker.

When I gave the Mais lecture on full employment, which the hon. Gentleman will be interested in, I said that we could further reduce unemployment, not simply by maintaining macro-economic stability and enhancing the British economy's productivity, but by the supply-side measures that would include training people who could get jobs but who otherwise would not be able to get them and by exercising pay responsibility. Those are the conditions in which I believe we could create more jobs in the British economy and reduce unemployment further, so, unfortunately, I disagree with him on the first point. I believe that we can both create more jobs and reduce unemployment further, and our goal is full employment.

Mr. Dennis Skinner (Bolsover)

Does the Chancellor recall that about three years ago I asked him for £24 million to flatten the Shirebrook pit site to provide up to 2,000 jobs—more than the number who worked down the coal mine at the time? That construction is well under way, the road has been developed and things are looking well. I now have a further plan for the Markham Bolsover employment zone, which will cost about twice as much and will release an area for 5,000 jobs, just off the M1 at junction 29A. I hope that that is etched in his memory, and we will sort that out in the next couple of years.

Mr. Brown

I am grateful to my hon. Friend. It is always an expensive Question Time when he asks me a question. What has been done to create jobs in former mining areas, through the various initiatives in which Members have taken part, is not only commendable but is bringing prosperity to areas that had lost hope. I will certainly look at his further proposal without making financial commitments to it.

Mr. Skinner

Just the first tranche.

Mr. Brown

So my hon. Friend is not asking for £48 million at the moment, but only for a fraction of that. It is important that in every area of the country where unemployment is too high we take action. That is behind the proposal for 2,000 new enterprise areas, and his constituency will benefit from many of those.

Mr. Howard Flight (Arundel and South Downs)

In order to create sustainable full employment, I am sure that the Chancellor agrees about the importance of maintaining our business competitiveness, in which a key factor is the level of business taxation. The CBI's recent report produced from the Government's Red Book figures shows that since the Government came to power, and by 2006, there will be a cumulative increase in the tax burden on business of £54 billion. Government spin has been that the CBI figures are wrong. Will the Chancellor please explain why?

Mr. Brown

I am grateful that the shadow Chief Secretary is up to explain how we can create full employment without a new deal and by cutting public expenditure by 20 per cent. As for what business is saying about the Government, I do not think that he would like me to read out what Digby Jones said to the Conservative party conference [Interruption.] He does not like it, does he? Not only did he say that the Conservatives could no longer rely on the business community but that the Government had created the macro-economic stability that was the only basis on which we could have prosperity in this country. As for the CBI report, it says that, in 1995, taking everything into account, business taxation was 9.3 per cent. of public expenditure. It then says that, in 2003, business taxation is 8.9 per cent. of public expenditure. That is a fall, not a rise.

Mrs. Anne Campbell (Cambridge)

Does my right hon. Friend agree that a necessary prerequisite of full employment is an adequate supply of good-quality child care, which this Government have done more to provide than any other previous Government? That is the way to ensure that there is full employment for women as well as men.

Mr. Brown

My hon. Friend is absolutely right. I praise her for putting the issue on the agenda. Only one in nine of the child care places that are needed are currently available, and even though we have made huge advances, there is a great deal more to do. It is partly about the supply of child care places that the industry is capable of producing, and it is partly about making sure that resources are available to those who could otherwise not afford child care. In 1997, 40,000 people received the child care tax credit that we inherited. Today, that figure is 250,000, which is a sixfold increase. We are determined to do more. Parents should not have to face the choice between the children they love and the work that they must do without us being in a position to help them properly. That demands—as I hope that there would be—all-party support for child care expansion.

Sir Peter Tapsell (Louth and Horncastle)

As it remains the policy of the Labour Government to join the euro as soon as the Chancellor's five economic tests have allegedly been met, does he think that Britain could then continue to maintain a high level of employment, bearing in mind the very large rise in unemployment in both Germany and France since they joined the single European currency?

Mr. Brown

This is indeed one of our tests—the effect on employment. I reported and I will continue to report to the House about how that test is being met.

As for the single currency, the hon. Gentleman should realise that we are saying that we will make a decision on that in the national economic interest. The problem about his position and that of his party is that they would rule out a single currency even if it were in the national economic interest.