The Secretary of State for Employment (Mr. Michael Howard) : The results of a review of the whole of my Department's spending plans were published in the Chancellor's autumn statement. The public expenditure settlement provides both the resources needed for training programmes and the flexibility to deploy those resources to best effect.
Ms. Short : Will the Secretary of State confirm that unemployment is rising and set to rise further, that there are skill shortages throughout Britain and that Britain is massively less skilled than our European competitors? Given that situation, how can he possibly defend the £300 million cut in real terms in his Department's budget set out in the autumn statement? Is not that a disaster for our future competitiveness in Europe?
Mr. Howard : The hon. Lady has misunderstood the position. We are increasing planned spending on youth training, increasing spending on TVEI- -the technical and vocational education initiative--and we have been reviewing the way in which we can most effectively help the long-term unemployed. We are making available up to 100,000 places in job clubs and on job interview guarantee schemes as well as introducing other ways in which to help the long-term unemployed more effectively. We shall still be spending some £750 million next year on employment training.
Mr. Rowe : Does my right hon. and learned Friend agree that, throughout his welcome experiment on training and enterprise councils, one of the principal difficulties that the chairmen have brought to his attention has been the lack of flexibility in the way in which they can apply their funds? I hope that he will accept from me a warm welcome to his recent proposals to free up the use of funds to give the chairmen much greater responsibility.
Mr. Howard : I am grateful to my hon. Friend. He is absolutely right about the importance of the flexibility for which the TECs have been asking. His warm welcome for that flexibility has been echoed by the chairmen of the TECs. The TECs are now well beyond the experimental
Column 432stage. There are 82 in place across the country, forming a complete network, and no fewer than half of them--41-- are now fully operational.
Mr. Blair : With the worst balance of payments deficit in this country's history, with skill shortages in every tradeable sector of industry and with the single European market nearly upon us, which of our main competitors would even contemplate cutting £500 million from their training budgets in the next two years? If that is not for them, why is it for us in the Secretary of State's plans?
Mr. Howard : The hon. Gentleman should look more carefully at the statement that has been made and devote his attention to the increased resources that have been made available for training our young people and giving them the necessary skills. He should also reflect on the fact that he has totally failed to persuade the shadow Chief Secretary that training should be one of the two priority areas to which the Labour party is prepared to commit extra spending. The hon. Gentleman ought to put up or shut up.
Mr. Beaumont-Dark rose --
Mr. Beaumont-Dark : It is not just the money that the Government spend which matters, because, lamentably, the trade unions and industry do not spend enough money on training their own seed-corn labour for the future. Government money should be spent on encouraging industry and the unions to back labour training schemes because they are the people who will produce for tomorrow.
Mr. Howard : My hon. Friend is absolutely right to identify the importance of investment in training by employers. That investment has been steadily increasing, but I agree that it needs to increase even further. The TECs, as employer-led bodies in local areas, are in an unrivalled position to persuade fellow employers to do what needs to be done to increase their investment in training and to ensure that that investment is deployed even more effectively than it has been up to now.
The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth) : The Government will continue to give priority to maintaininthe best possible business environment and, in particular, the control of inflation and the reduction of unnecessary controls and red tape. This will benefit all small businesses, whether they are established or just starting up. At local level, training and enterprise councils are taking over responsibility for the
Column 433delivery of many enterprise support schemes and are ideally placed to ensure that such support is geared to the needs of local businesses.
Mr. Vaz : None of that will give any comfort to those who currently run small businesses, especially in the textile and footwear sector. Is the Minister aware that one job is lost every 30 minutes in each of those industries? Is he further aware that if that trend continues, there will not be a British textile and footwear industry left by the turn of the century? When shall we have reasonable, decent proposals from the Minister rather than the nonsense that he has talked today?
Mr. Forth : The hon. Gentleman must get tired of peddling stories of doom and gloom. It is regrettable that he is unable to say something positive even about the industries for which he alleges great support. It is encouraging to note that, even in the present difficult economic climate, there is a remarkable resurgence of new industry, with new people coming forward and new businesses being set up. That is what we are encouraging and shall continue to encourage and one of these days it will receive acknowledgement from the Opposition.
Mr. Steen : It is not so much expansion but survival that is important for village shops. In my constituency, 12 village shops have closed since the introduction of the uniform business rate. Will my right hon. Friend comment on the maintenance of existing shops and small firms rather than the expansion of those that have not yet come into being?
Mr. Forth : My hon. Friend raises the important issue of the need to make a distinction, of which I am aware, between encouraging new small businesses--we are remarkably successful at doing that--and the position of existing businesses, in the retail sector and elsewhere. The uniform business rate has had varying effects in different parts of the country, as was the intention from the start. My colleagues at the Department of the Environment have taken great care to try to ensure that the burden of the uniform business rate is limited to the extent that it affects businesses adversely. I hope that the businesses in my hon. Friend's constituency will come to my Department for advice and help, which is available in many different ways, so that they have the best possible chance not just of surviving but of prospering.
Mr. Wallace : Does the Minister accept that the loss of transitional relief under the uniform business rate when businesses move premises can not only restrict expansion but make it difficult for businesses in difficulties to scale down? What assessment has his Department made of that and has the hon. Gentleman made any representations on the subject to the Secretary of State for the Environment?
Mr. Forth : The hon. Gentleman is tempting me on to territory on to which I dare not stray-- [Hon. Members :-- "Why not?"]--because another Government Department is responsible for that, as Opposition Members well know. [Interruption.] I am in touch with my colleagues at the Department of the Environment constantly to monitor the varying effects of the uniform business rate on small businesses. If hon. Members contact me with details of specific cases, I undertake to raise them with my colleagues in that Department to see what can best be done. [Interruption.]
Mr. Wilkinson : At this time of undoubted recession, when small businesses are being hit particularly hard, it is important for them to be able to retain the greatest proportion possible of their hard-earned profits. Will my hon. Friend discuss with the Chancellor of the Exchequer the possibility in the next Budget of introducing relief against corporation tax on the first £500,000 of the profits of small businesses?
Mr. Forth : The one thing that I cannot undertake to discuss with my right hon. Friend the Chancellor is the word used by my hon. Friend, which I certainly would not dream of discussing with the Chancellor. My hon. Friend raised an important point and I hope that he will agree that we have gone a long way to ensuring that small businesses have one of the lowest rates of both personal and corporate taxation in the developed world, with the favourable rate for small businesses. Our remarkable success in setting up small businesses has reflected that in full. I am making representations on behalf of the small business community to our friends in the Treasury. I shall think carefully about my hon. Friend's helpful suggestion.
Mr. Forth : In 1979 there were 158 wages inspectors. The greatly simplified wages orders resulting from the Wages Act 1986 allowed the then complement of 120 inspectors to be adjusted to the present total of 71. There are currently 70 inspectors in post.
Mr. Banks : May I say how much I agree with your strictures about barracking, Mr. Speaker? It is disgraceful, just like the figures given by the Minister. It is no surprise that so many employers break the law in view of the small number of inspectors. Why are the Government so soft and selective on law breaking? Apparently it is okay for Rupert Murdoch to break the law, seemingly with the connivance of the Prime Minister, and it was all right in 1989 for 5, 528 employers to underpay workers in wages council sectors. Why are the Government soft on those law breakers? Is it because robbing the workers is no crime in the Tory book?
Mr. Forth : The hon. Gentleman, perhaps uncharacteristically, displays an appalling lack of knowledge as to how the system works. The truth is that 96 to 97 per cent. of workers are paid the statutory minimum or above, so the non-compliance rate is low. The crucial factor is that not only do inspectors target employers and premises to ensure that they home in on those that they suspect may be in breach of the regulations, but when they find them, they use methods of persuasion and information-- [Hon. Members :-- "Ah!"]. The hon. Gentleman may have a blood lust for prosecutions--
Column 435regulations. That is a far more fruitful way of approaching the issue than that which the hon. Gentleman seems to favour.
Mr. Favell : As 57 wages inspectors to inspect the wages of more than 20 million people must be but a drop in the bucket, would not it be a good idea to clear away the whole system and save the taxpayer some money?
"I have decided not to proceed with the abolition of the councils for the present."
he went on to say, and this may be of some consolation to my hon. Friend--
"I therefore intend to keep its operation under close review."--[ Official Report, 6 March 1990 ; Vol. 168, c. 541. ]
That is as far as I can go at present to satisfy my hon. Friend.
Mr. Tony Lloyd : Has not the Minister just let the cat out of the bag? Is not the reason why we do not have a prosecution policy for underpayment and why there are so few inspections of premises and wages inspectors the fact that the Government intend to let the wages council system wither on the vine? The Minister accuses my hon. Friend the Member for Newham, North-West (Mr. Banks) of being wrong, but the Minister is being outright misleading, because the reality is that 30 per cent. of firms visited were found to be underpaying their employees in one form or another. Is it not about time that the party of law and order made the law work in everyone's interests? When low pay in this country is a growing problem, as it is, Ministers have a responsibility to do something practical, get the inspectors in and get the prosecutions coming.
Mr. Forth : The hon. Gentleman obviously formulated his supplementary question before I gave my earlier answer, as he is apparently unaware of what I said to his hon. Friend the Member for Newham, North-West (Mr. Banks). I shall therefore repeat it. The inspectors target their visits on those whom they suspect may not be paying the minima, which is why the non-compliance rate among those targeted is the higher figure that he mentioned, but the overall rate is as I stated earlier. The total non- compliance rate among employers is small. We and the inspectors believe that using persuasion and information is a much better way of dealing with the problem than blundering in with fines and penalties on small businesses which could be put out of business. There is no point in putting people out of business and destroying jobs in an effort to apply minimum wage levels.
Mr. John Marshall : Does my hon. Friend agree that minimum wage legislation can only create unemployment among those receiving low wages, who are among the most vulnerable in our society? Is he therefore surprised by the Opposition's enthusiasm to introduce such legislation?
Mr. Forth : Indeed, it is worse than my hon. Friend suggests. The truth is that if there were a statutory minimum wage of 50 per cent. of average pay, which I understand may be the policy of the Labour party, my Department estimates that 750,000 jobs could disappear as
Column 436a result. If the Opposition want to be responsible for the destruction of 750,000 jobs that must be on their heads --it certainly will not be on ours.
The Parliamentary Under-Secretary of State for Employment (Mr. Robert Jackson) : I know that the hon. Lady has important and valuable experience in this area. In the consultative document, "Employment and Training for People with Disabilities", we announced plans for an improved employment rehabilitation service involving local assessment teams and rehabilitation agents sup-ported by a reduced, but substantial, network of centres. No decisions on closure of particular centres will be taken until comments have been received on how best the plans might be implemented.
Mrs. Heal : I recognise the establishment of the mobile assessment teams, which I see as complementary to the existing network of centres. The consultative document makes no reference to the importance of the three residential centres, Egham, Preston and Leicester. Does the Secretary of State regard those centres as essential to the convenience and well-being of disabled people, especially the more severely disabled, and to facilitating their entry into employment? After the next election the Minister and some of his colleagues may welcome the opportunity of assessment for alternative employment.
Mr. Jackson : I do not know whether we shall have the opportunity to take advantage of the hon. Lady's kind offer, but there will continue to be a need for residential facilities, whether provided directly from the centre or by agents under contract, which is the general philosophy being applied in this area.
Mr. Cash : Irrespective of my hon. Friend's comments on the contribution of the hon. Member for Mid-Staffordshire (Mrs. Heal), will he confirm that the Minister for Social Security and Disabled People this morning reaffirmed the Government's commitment to the disabled with a substantial increase in grants and allowances and that the Government are looking after the disabled in the way that they would expect?
It is important for the House to understand the background in relation to employment rehabilitation and ASSET centres. There are only about 30 of them, which means that about one third of the population have facilities beyond daily travelling distance. That is why we are planning to diversify and extend the network of provision to make facilities more widely available geographically.
Mr. Leighton : Does the Minister accept that the Government are spending less this year on training, including rehabilitation, than they did last year and that they will spend less next year than this year? When seeking to justify that, will he mention unemployment, which is
Column 437rising and will rise further as a result of joining the exchange rate mechanism? Does he accept that the Government's protestations about training will have no credibility so long as the Department acquiesces in cutting the training budget? The job of the Department is to defend that budget against the Treasury, not to acquiesce in cutting it, as it has done for two years.
Mr. Jackson : I cannot agree with the hon. Gentleman that joining the exchange rate mechanism will necessarily lead to increased unemployment. That will depend greatly on what happens in wage settlements and negotiations in the labour market, so there is a clear message for people there. Disabled people under training will continue to be part of the guarantee and aim groups in relation to employment training and we shall continue to fund the training of such groups.
Miss Emma Nicholson : Does my hon. Friend agree that, as usual, the Opposition parties have got it wrong? The purpose of training is not training per se but finding people jobs at the end of training. In that context, is my hon. Friend's Department considering new ways of determining which training schemes are most effective in terms of job finding afterwards? Does he agree that such schemes need not by any means be the most expensive, as budgets are no indication of employment at the end of the day?
Mr. Jackson : My hon. Friend is quite right. That is one of the thoughts behind the flexibility that my right hon. and learned Friend the Secretary of State has negotiated for the training and enterprise councils. That flexibility will enable a much greater range of experimentation to take place at local level, which will be led by people who are in contact with local labour markets. To return to the question posed by the hon. Member for Mid-Staffordshire (Mrs. Heal), the basic purpose of our changes is not just to increase the geographical coverage of the facilities but to enable us to tap into the wide range of expertise that exists in voluntary bodies and we shall try to ensure that it is made more available to assist disabled people into better and more appropriate forms of employment.
Mr. Forth : I have announced today that, as part of my Department's general policy to promote small firms, funding has been made available to provide short-term pump-priming support for projects submitted by the co- operative sector. This will be available over the next two financial years specifically for good quality innovative projects to promote co-operatives or to develop business training, advice and other strategies to improve the business performance and competitiveness of co-operatives.
Mr. Michael : I welcome the coincidence of that announcement and my question. Is the Minister aware of the welcome that was given to two commitments by his predecessor, the first being money for the co-ordination of co-operative development work following the demise of the Co-operative Development Agency, and the second being the promotion of co-operative initiatives by the
Column 438training and enterprise councils? Will he assure the House that he will pursue those two undertakings during his tenure of office?
Mr. Forth : I am grateful to the hon. Gentleman for his acknowledgement of the follow-up to the commitment given by one of my predecessors. I assure the hon. Gentleman that in the guidance to the training and enterprise councils there is explicit acknowledgment of their continuing responsibility to work in this area as part of the follow-up commitment that we gave earlier in the year. I am delighted to be able to give the hon. Gentleman that assurance.
Mr. David Davis : Will my hon. Friend take some care in this area? I remind him of unfortunate precedents, particularly that of the Triumph motor cycle co-operative which, if anything, accelerated the departure of the motor cycle industry from Britain.
Mr. Forth : My hon. Friend makes an important point. I emphasise that there is no intention to encourage such overblown and grandiose schemes. As my hon. Friend probably heard, I deliberately used the words "good quality innovative projects" and went on to emphasise elements such as business training and advice. I think that I can give my hon. Friend the assurance that he seeks--there is no way in which we shall get involved in the kind of disasters that overtook the Labour party when in government.
Mr. Howard : The work force in employment in the United Kingdom stood at 27,346,000 in June 1990 and 25,365,000 in June 1979--an increase of just under 2 million over the period during which this Government have been in office.
Mr. Greenway : Many people choose to take part-time jobs, but such jobs are now under threat because of European Community directives on part- time and temporary workers. Will my right hon. and learned Friend confirm that the European Commission is proposing that all part-time staff who work more than eight hours a week will have to pay national insurance? If that is true, does my right hon. and learned Friend agree that it is a tax on jobs which could devastate the rural economy and that all hon. Members should unite to oppose it?
Mr. Howard : My hon. Friend is right, but he has identified only part of the damage that the European Commission's proposals would inflict on prospects for employment. The costs on employers, in addition to the costs on employees to which my hon. Friend referred, would run into billions of pounds. That is why we are endeavouring to persuade the Commission and other member states of the damage that these proposals would do to employment throughout the Community.
Mr. Ashley : Is the Secretary of State aware that the number of registered disabled people out of work has more than doubled since 1979 and that this is mainly his fault, because he failed to implement the 3 per cent. quota system
Column 439and in some ways is condoning law breaking? As he is letting down disabled people, what does he propose to do about finding jobs for them?
Mr. Howard : The right hon. Gentleman will know that the difficulty with the quota system is that there are insufficient numbers of registered disabled people to allow employers to fill the quota. This is one matter on which we consulted in producing our recent consultation document, of which I know the right hon. Gentleman is aware. In direct answer to his question, I can say that, as I am sure he will be pleased to know, as part of the package announced last week, unemployed disabled people are to be included among the aim group for the purposes of eligibility for employment training. I am sure that many more of them will take advantage of those opportunities and will acquire jobs as a result.
Sir Dudley Smith : Is my right hon. and learned Friend aware that one of the more heartening aspects of the situation is the number of people over the age of 50 who are in full-time employment? Is he aware that, at long last, British industry and commerce have recognised the value of older people and that, by and large, most are doing excellent jobs?
Mr. Howard : My hon. Friend is right. Employers are increasingly coming to recognise the value of workers aged over 50. They are getting jobs in increasing numbers and I expect that trend to continue.
Mr. Howard : The hon. Gentleman makes an important point. We have been concentrating our efforts in these matters on employers who are suspected of acting in collusion with workers and encouraging workers to break the law in this way. Our efforts are achieving considerable success and have resulted in many prosecutions.
8. Mr. Barry Field : To ask the Secretary of State for Employment what is the latest estimate he has as to the level of tourism-related employment in Britain ; and what the figure was three years ago.
Mr. Field : Is not this excellent record entirely due to the efforts of my hon. Friend? Will he confirm that, just ahead of the Isle of Wight, Great Britain ranks fifth in the world for earnings from overseas tourism? Is not it a signpost to encourage the Government in their endeavours to introduce quality into the United Kingdom product that tonight the English tourist board will be presenting the "England for excellence" award?
Mr. Forth : Yes. Few in the House are more qualified to speak on the matter than my hon. Friend, whose constituency leads the way, in the rest of England and the United Kingdom, in our efforts to attract tourists, which are ever more successful. This pleases me, particularly with my responsibility for small businesses, and I pay tribute to
Column 440our colleague, Viscount Ullswater, who is responsible for tourism in my Department. I am grateful for my hon. Friend's comments and let us hope that the efforts will continue, both in his constituency and throughout the realm.
Mr. Cryer : Is not it true that there is a deficit in invisible earnings, which have become truly invisible under this Government? Jobs in tourism are no substitute for jobs with good training in manufacturing industry which, under the Government, have been reduced by over 2 million. That has helped us to a record balance of trade deficit not met by the increase in tourism. When will the Government improve and increase manufacturing industry and restore some of the 2 million jobs that they have thrown on the scrap heap?
Mr. Forth : I regret and deprecate what the hon. Gentleman has said, on two important grounds. One is that the hon. Gentleman has hidden in what he said the welcome fact that our people are sufficiently prosperous that they decide, in ever-greater numbers, to exercise their freedom to take holidays abroad. The hon. Gentleman's remarks are a disgraceful slander on all those who do such excellent work in tourism and I am surprised that he should bring himself to make them.
As my hon. Friend the Member for Isle of Wight (Mr. Field) said, an increasing number of people are undertaking quality jobs, providing a quality product and boosting overseas earnings. If the hon. Gentleman and the Opposition do not understand that, they are even less fit for government than I thought.
Mr. Ian Bruce : May I welcome my hon. Friend to the Government Front Bench wearing his current hat? Bradford--the hon. Member for Bradford, South (Mr. Cryer) did not even mention the city which he represents in part --has demonstrated that the market has changed in terms of jobs and opportunities and that people want to spend money and leisure time on tourist-related activities. Bradford constituents, and my constituents in Dorset, South have shown that many new and excellent jobs can be created, to the delight of the many people from overseas and from the United Kingdom who enjoy the facilities that they provide.
Mr. Forth : It is a sign of the times that my hon. Friend the Member for Dorset, South (Mr. Bruce) had to say what the hon. Member for Bradford, South (Mr. Cryer) should have said. That Conservative Members have to do the job of Labour Members is no more than a sign of the times.
Mr. Jackson : My Department's full range of employment, enterprise and training measures is available in Lambeth to help unemployed people and others to find new jobs, to retrain or to set up businesses of their own.
We also have our specialist inner city initiatives, which operate in the borough, including the inner London jobs team and an inner city officer based in Brixton. In addition, under the urban programme the borough has been allocated £9.28 million in 1990-91.
Mr. Fraser : Is the Minister aware that Lambeth has the highest unemployment in London and a large black population and that racial discrimination is always injurious to employment opportunities? Is the hon. Gentleman further aware that some employment agencies connive at racial discrimination? Has the Minister's attention been drawn to a particular allegation that Eileen Dupont of Conservative party central office gave a requirement to employment agencies that she wanted only English-rose type secretaries and to the discrimination that is implicit in that requirement? Will the hon. Gentleman investigate the matter and ensure that both the Conservative party and the Government promote principle, not prejudice?
The hon. Gentleman will be the first to recognise the importance of the achievement of a 19.4 per cent. fall in long-term unemployment over the past 12 months in the Lambeth area. Racial discrimination in employment is serious and the hon. Gentleman has made some allegations. I invite him to provide me with more detail, perhaps in writing, after the end of questions.
10. Mr. Flynn : To ask the Secretary of State for Employment what is his most recent estimate of the total of the work force who are employed in more than one job and are thus counted twice in the employment statistics.
However, the labour force survey estimated that 708,000 people held a second job as an employee in the spring of 1989.
Mr. Flynn : Do the Government agree that there is as much truth in their job statistics as there was in the claim, made in 1945 from a bunker by Josef Goebbels just before he took cyanide, that Germany was about to win the war? Before the Government exit in similar circumstances and in a similar fashion, will the right hon. and learned Gentleman confess that counting 750,000 double-jobbers twice, including 1 million non-existent self-employed in the totals and multiplying the value of part-time jobs twice corrupts the Government's job statistics into a meaningless, propagandist fantasy?
Mr. Howard : Before the hon. Gentleman engaged in such far-fetched fantasies, he would have done well to check the fact that there has been no change from the practice followed by previous Governments in these respects. However we calculate the figures, there are more people in work now than there have ever been. Opposition Members should be welcoming that fact instead of constantly trying to decry it.
Mr. Harry Greenway : When my right hon. and learned Friend is considering the employment statistics, will he bear in mind the case of Terry Deane of Ealing, who was refused employment by the then Labour Ealing council