House of Commons Hansard Debates for 5 Jun 1991

Mr. Barry Porter (Wirral, South) : It is a great pleasure to follow the hon. Member for Monmouth (Mr. Edwards). He has shown a great commitment to his constituency, to his country and to his predecessor. I do not think that it is too excessive to say that his predecessor was a friend of mine. He was the deputy Chief Whip in this place. On one occasion, because of my views about one or two Government policies, he questioned my parentage, but in the nicest possible way.

I do not intend to question the Government's policy tonight, but I have been somewhat disappointed. I am sorry that I was unable to visit Monmouth, but after my appearance in Ribble Valley and what happened there, I thought that it was as well to keep away. I can understand the hon. Gentleman making his maiden speech on the health service, but I hope that he will excuse me if I do not follow him on that. I understood that the debate was on training and employment, but that is a matter for the hon. Gentleman. However, I had hoped for something rather better from the hon. Member for Sedgefield (Mr. Blair), whom I had hoped would address himself to that topic. I went to the great length for me of listening to what the hon. Gentleman said. As I understand it, he said that there is a recession and it is the Government's fault and that the London Business School and Cambridge Econometrics say that it will get worse. He then referred to the bit of the OECD forecast which happened to suit his argument, but not, I fear, to the rest. The OECD has the best possible record in forecasting. It gets it right more often than not. It suggests that there will be an increase in economic activity next year, a decrease in inflation and interest rates and that the United Kingdom economy will look rather better than it is at the moment. I do not pretend that it is wonderful at the moment, but then I never pretend that the Government can make things more wonderful or less miserable than most people. I am surprised that the hon. Gentleman, who has gone off for his dinner, should suggest that that is the case.

I waited with eager anticipation for the great miracle, but I waited in vain. We had no more than a garbled speech attacking the Government and their economic

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policies, and attacking my right hon. Friend the Secretary of State for making every possible effort to deal with the immediate problems of unemployment, whether they be short-term or long- term. I find it a little distasteful that a party which in the past has made something of a reputation, and probably a deserved reputation, for itself out of its concern for working men and women and their prospects of employment immediately and in the long term, should then imply, but no more than that, that there is some miracle cure whereby, on the election of a Labour Government, there will be no unemployment. I appreciate that that was not said "in terms", and I cannot be bothered to analyse what was said to Brian Walden a week last Tuesday. But that is not the point : I am talking about the impression that people receive--about general perceptions. I hope that other hon. Members will agree that it is unfair to suggest that any Government, whatever their political colour, can snap their fingers and cure the problem of unemployment.

Let us go back to 1979. I remember the Conservative party poster that told us "Labour Isn't Working" ; I suppose that we won the 1979 general election partly as a result of that poster. In those days, we all believed, or purported to believe, that Governments were capable of creating full employment. The Conservative Government believed that in 1970-71, when things started to go wrong--but we too were wrong, and we lost the election in 1974.

Let me tell the Labour party--if it does not mind my offering advice to "this great movement of ours"--that it cannot do it again. Would it not be better if, rather than Labour yah-booing across the Chamber and us boo- yahing back, the whole House admitted that at a time of perpetual change it is best not to pretend that we can solve the problems tomorrow? What we can use are the training systems outlined by the Secretary of State. Perhaps they could be better ; perhaps more money could be available ; perhaps other ideas could be advanced. But it does no one any good to say, "Your ideas are rubbish." It is clear from what the Secretary of State has said that the Conservative party has gone to enormous lengths to try to solve the unemployment problem, in both the long and the short term. I should have thought that it has done that as well as any party could have.

What positive contribution was made by the speech of the hon. Member for Sedgefield--not to the problem whether we win or lose the next election but to the problems of the people out there who really lose their jobs, and must face not only that but the possibility of their children losing theirs ? He did not say a word about that. Over the past 12 years, we have tried to do what we can. Let us get this into perspective. It is not as though the United Kingdom's problem were unique ; it is not, as has already been spelt out. No doubt the London Business School and the Liverpool School of Economics could explain why. Certainly there is no point in my boring the House with the statistics : we know that this is a problem that affects the western industrialised world.

What everyone should know, however, is that there is not a socialist solution to the problem of unemployment. I should have thought that that was self-evident, following the developments in central and eastern Europe. Moreover, I am sorry to have to tell Opposition Members that countries such as Japan and Taiwan, which employ vast numbers, do not do so by means of a minimum wage.

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I am merely asking Opposition Members to be realistic about one thing. There will not be a general election this month, or in October ; I trust that there will not be one until next spring. Can we get rid of the current hysteria and try to do something for the people we purport to represent--the unemployed ? The Secretary of State has admitted, very properly, that we loosened the reins too much in 1987. I cannot remember any Opposition Member saying at the time that it was all very wicked, although I may be wrong about that. The way out of the problem, however--for most of the unemployed, at any rate--is lower inflation, lower interest rates, an increase in economic activity and more profits. As someone once said--I forget the name now--"There is no other way."

8.55 pm

Mr. Ron Leighton (Newham, North-East) : It gives me great pleasure to congratulate my hon. Friend the Member for Monmouth (Mr. Edwards) on a fine and moving maiden speech. It was outstanding--the best maiden speech that I have ever heard. My hon. Friend is a worthy victor of an outstanding by-election, and we look forward to hearing him speak many times in the future.

The Select Committee on Employment published a report today on employment prospects, which I urge all hon. Members to read. I will not say much more about it, because I believe that we are to debate it on Estimates day ; suffice it to say that, according to the CBI, business optimism is now at its lowest for 10 years, and that the Institute of Directors told us that it had never known such bad employment numbers.

As all the witnesses agree, unemployment will rocket for the rest of the year, and will continue to do so next year--certainly until the next election, whether or not that takes place when the hon. Member for Wirral, South (Mr. Porter) said it would.

The Government are deliberately using unemployment as a weapon of economic policy. Deflation does not work in a mysterious way ; it works by causing unemployment. The blunt club of high interest rates imposed over a long period strangles the economy, deliberately induces recession and causes mass unemployment ; and, the Government hope, eventually reduces inflation.

Any fool can reduce inflation by inducing a recession. The successful policy is one that controls inflation while retaining a high level of employment. The present Government have failed to do that for 12 years. They say that their action is necessary to squeeze out inflation, but who put it there in the first place? We experienced one Government-induced recession in the early 1980s, which destroyed 20 per cent. of industry and inflicted unemployment of another 2 million to solve the problem of inflation. There has been a Conservative Government ever since. Why, then, has inflation returned? Because of the crass errors caused by Government economic mismanagement.

In 1988 there was a giveaway Budget, the "big bang" of financial deregulation and the consequent credit binge. Now, after all the pain and suffering of the early 1980s, we must go through it all again. There is no need for any of us to talk about the pain and human suffering that unemployment causes ; we have had a graphic and vivid illustration in the interview in Vanity Fair with the former

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Prime Minister, who explained exactly how much devastation it produces. After 12 years, the Government are squirming with embarrassment at their failure. The Prime Minister said that there would be no recession. When the recession came, he and the Chancellor said that it would be short and shallow. Now, the Chancellor claims to discern vague stirrings in the economy. Could anything be more pathetic?

We have had 12 years of Conservative Government, 12 years to get it right. We have had 12 years of the North sea oil bonanza and privatisation receipts, yet we have a country flat on its back, in deep recession, with the whole of its industry crying with pain. There are redundancies everywhere and unemployment will continue to rocket for as far ahead as anyone can see. We also have a yawning skills gap with our main competitors which is growing wider all the time, and the virtual collapse of training in many industries. In those circumstances, traditionally we look to the Department of Employment, which hitherto has been an honourable Department. However, we now find the repellant sight of the Secretary of State who oozes complacency and indifference to the unemployed with every utterance suggests that it does not matter and that things are not so bad. As a monetarist, instead of seeking an expansion of the economy, he seems to be urging his Cabinet colleagues to strangle the economy even further. Instead of standing up for his Department's budget, he lays down and encourages the Treasury to walk all over him. He has presided over huge cuts in the Department's budget for adult and youth training.

The previous Secretary of State used to laud employment training. He said :

"ET is the largest, most ambitious programme ever undertaken in its scope and the opportunity it offers."

It was intended to take 600,000 people in any one year. We all remember the propaganda at the time about fitting workers without jobs to jobs without workers. We do not hear much about that now. Instead, there are cuts in ET. The Secretary of State says that the unemployed do not need training.

The Secretary of State launched the training and enterprise councils. The launch was accompanied--he did not disagree with the figure I gave when I intervened during his speech--by large cuts in the budgets of TECs. What a way to encourage and bolster the voluntary activity of those who are giving their time to the TECs. He knows that at the time of the autumn statement the TEC chairman urged him not to cut the budget. Yet he announced a cut of £365 million of which he has now put back only one third. Since then, unemployment has rocketed for 14 consecutive months. The Secretary of State has not obtained a penny piece for the unemployed.

As a result of all that, there is a crisis within the TECs and among the training providers, almost all of whom are having to make many of their trainers redundant. Training for special needs in many parts of the country has come to a complete stop. Does the Secretary of State know that this afternoon the Select Committee took evidence from the National Association for the Care and Resettlement of Offenders? It announced that it is making 600 trainers redundant. I have a letter from a chief executive of a TEC which says that many TECs are doing nothing for women returners. It says that many TECs discriminate--the Secretary of State can have a copy of the letter if he wishes

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--against women returners because they would have to pay £50 child allowance. Where is the Secretary of State? Where is the battle for a counter-cyclical increase in his training budget? Does he care that training in many industries is collapsing?

For example, the bottom has fallen out of the construction industry. Many firms are going bust. Anyone who does not believe that should look at what is happening in docklands. Construction employers tell me that an extra 100,000 construction workers will be unemployed this year. Does the Secretary of State know that this year there has been a drop of 75 per cent. in apprentices registered in construction? Does he care about that, and is he doing anything about it?

I spoke to the printing employers yesterday. They are now renegotiating youth training with 82 TECs. That is a problem for them. They told me that this year, as a result of smaller cash incentives to firms which are suffering in the recession, there will be a 50 per cent. reduction in youth training in the printing industry. Does the Secretary of State tolerate it?

The country will face increased competition. Where is all the propaganda about gearing up for 1992? If we cut training in the printing industry by 50 per cent., the Germans will wipe the floor with us. They are doing so already. What will the Secretary of State do about that? When disasters and catastrophes are put under his nose, he pretends that he cannot see them and that they are not happening. In fact, he makes trite little comments suggesting that everything is all right. We had an example of that for half an hour this evening. Everything is not all right. It is going from bad to worse. As Secretary of State for Employment, it is his job to do something about it and to stand up and defend his Department's budget, which he is not doing.

I now deal with engineering. I have a document from the Engineering Employers Federation which states :

"present YT funding policies are reversing the important gains made in YTS."

The Government should be coming up with counter-cyclical expenditure on training, which is counter inflationary. However, instead of standing up and fighting its corner, the Department of Employment is actively conniving with the short-termism of the Treasury. That is what we have come to after 12 years of Conservative government. The Government have run the country into a quagmire, and youth training is certainly suffering. The Government are not honouring the youth training guarantee.

Not long ago, we were told that the most urgent problem seemed to be a 33 per cent. drop in the number of school leavers. Now, because of the recession, every budget is being cut and all recruitment is being stopped, and, instead of a shortage of youngsters, there is a surplus, despite the fact that there has been a drop of 33 per cent. Youngsters are now leaving school with no job, no YT place and no benefit. That is happening in my constituency and in the London borough of Newham as a whole.

I hope that the Minister of State is paying attention. During the previous Employment questions I asked him about youngsters who were leaving school in Newham with no YT place. He said that I was misinformed. I try not to be misinformed, so I went back to the borough of Newham and got the figures. At that time, there were 312 young people leaving school in Newham with no job and with no YT place. I immediately wrote a letter to the

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Minister of State, but I am still waiting for a reply. Why have I not received one and why have I had no apology? I was not ill-informed and I can tell him that the figure has increased. There are now 384 young people in Newham with no job and no YT place. I want him to answer and to reply to my letter.

The Minister might also note that unemployment in my constituency increased by 40 per cent. in the last 12 months. The training boards have been abolished, so there is now no statutory duty on employers to train. Instead, there are supposed to be voluntary industry training organisations, but whatever happened to those organisations? The truth is that most of them are ineffective, underfunded and understaffed--they are run by two men and a dog. What interest do the Government show in them? Virtually none at all.

I have a briefing from the organisation set up for engineering. It states that the Government show no interest in it, only in the TECs. It states :

"What it has not so far specifically done is to give the same active, high profile support for the job that the industry training organisations will do as it has for the important work of the TECs. Clear public commitment of this kind would strengthen the influence of the new bodies."

Where is the Government's commitment to the industry training organisations? There is none. It is patently and blatantly obvious that this is a Government of failure. There is a yawning and widening skills gap which the Government's inaction is compounding. The public have come to realise that we have a blinkered Government of dogma and false ideology who have failed. The public see the signs of that failure all around them in their everyday lives. They know that we, as a nation, can do better and that to do so we shall need a new Government. The people know that, and the Government know that the people know that. That is why the Government are frightened to have a general election, but they cannot put it off for ever. They must eventually meet their maker--the electorate--and when they do, they will surely reap retribution for the misery of the mass unemployment that they have inflicted on this country and for their failure to achieve an educated work force which will enable this country to compete in the modern world.

9.9 pm

Mr. Simon Coombs (Swindon) : It is always a great pleasure to follow the hon. Member for Newham, North-East (Mr. Leighton). He was in his usual characteristically lively form. He has the old socialist principle behind him that one must spend money on a problem and that the more money one spends on it, the more virile is one's attitude and one's position. When the hon. Gentleman calls the Government dogmatic, I remind him that the policies of the Labour party never change : it simply seeks to spend more and more of the taxpayers' money on any problem.

The Government reacted to the problems of the early 1980s by creating the training programme to which my right hon. and learned Friend the Secretary of State referred. Now they have taken the radical approach of examining that training programme to find out whether it is delivering value for money. They have changed their policy in order to concentrate more on advice and guidance for the unemployed, rather than imagining that people who have been trained once and lose their job need yet more training.

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The Opposition Front-Bench spokesmen should not fall into the trap of believing that only more and more training will solve the problems of the unemployed. They should not forget enterprise, which is in danger of being the Cinderella of the debate. They should not forget that the people who are losing their jobs at present, particularly in the south-east, already have a high level of skill and had been trained extensively in the work they did. The answer is not always that which the Opposition suggest in their dogmatic fashion. I come to the debate as one of the stars of the misery index--that is to say, the curious figures sent out every month by the hon. Member for Sedgefield (Mr. Blair). As I have the sixth largest constituency in the country, inevitably it has a fairly large raw unemployment figure. Fortunately, it is still lower than when I was first elected in 1983. However, I follow the logic of the hon. Member for Sedgefield up to this point. If indeed there is a direct correlation between the level of unemployment and the majority of hon. Members in the House, the fact that unemployment in my constituency is less than half what it was in 1983 when I won the seat leads me to the conclusion that I shall be returned at the general election, whenever it comes, with an increased majority. I do not know exactly how the reverse formula works, but I should have at least double the majority.

As I said in The Guardian this morning, people are not so naive as to judge a Government after 12 years on a single issue. Opposition Members who pin all their hopes on unemployment--it has been made clear in the debate that that is what they are doing--will find that the people of Britain are a little more subtle and sensitive in their judgments and will not be content simply to judge the Government on one set of figures, however inaccurately and misleadingly those figures are presented by the Opposition Front bench team. I wish to make a few remarks about the causes of the difficulties that we are experiencing in Britain. On Monday this week, I asked the Chancellor of the Duchy of Lancaster a question about the position of the banks, their attitude to small businesses and the rates of interest that they charge for loans. I am delighted to say that, within 24 hours, my hon. Friend the Member for Wyre Forest (Mr. Coombs) raised exactly the same point in Prime Minister's Question Time, when we learned the satisfying news that my right hon. Friend the Chancellor of the Exchequer would meet and talk to the leading clearing banks.

At a time when interest rates have fallen by 3.5 per cent. since last October, it is extraordinary that the banks have increased their interest rates and effective lending rates to small businesses in my constituency and elsewhere by as much as 6, 7 or 8 per cent. above the base rate now obtaining in Britain. The banks give as a reason the difficulties that they have experienced in lending to third-world countries. I accept that one must consider that argument, but when one is told that the interest charged to small business in my constituency and elsewhere must be kept high because such firms are a high risk, one asks which is the chicken and which is the egg. How does arbitrarily raising interest rates help to reduce the risk of small businesses going out of business and causing more unemployment? I hope that the discussions that are to take place between my right hon.

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Friend the Chancellor of the Exchequer and the banks will lead to a different attitude being taken by those lenders who have contributed in their way to some of the problems that this country currently faces.

In Swindon, I have the additional problem of the attitude adopted by the Labour-controlled council, which for the past five years has pursued a policy of preventing employment growth. The council argues that green undeveloped land on the outskirts of the town should be protected, and that, unless the town's infrastructure can catch up, it would be wrong to allow growth to continue. However, it does not argue that the growth that has occurred in my constituency over the past 20 years has turned it from a safe Labour seat into a Conservative seat. It would be unworthy of me even to suggest that that might have anything to do with the council's thinking. The consequence of the council's policies is that the additional jobs that could have been created by new companies moving into the town--in accordance with the pattern that was seen for 20 years without a break-- have come to an end. People who lost their jobs in the past 14 months do not have the hope of new employment that would exist but for the mistaken policy of the local Labour-controlled council.

As my right hon. and learned Friend said, there is more to offer the unemployed than training--but when the alternatives are read out, it creates only amusement on the Opposition Benches. The hon. Member for Sedgefield was present in the Chamber a moment ago, but now he is not. If he were in his place, he would have an opportunity to apologise to all those people working in the employment service who dedicate their best efforts to helping the unemployed with the interviews that the hon. Gentleman so mockingly denigrated. Labour has become the party of instant action--but instant action is nearly always the wrong action. Labour denounce the Government when they suggest that consultation could be useful or that they are considering an issue. Labour want only instant action. The instant action they want now is for large quantities of money to be thrown at the problem of the unemployed--although the Opposition's own shadow Chief Secretary to the Treasury says that they cannot have that money anyway.

There is some sense in talking to an unemployed person before sending him or her on a training course. There is some sense in finding out what skills he or she already has, and in trying to match the individual's needs to the job opportunities that exist. The White Paper on education and training for the 21st century that was published last week belies the Opposition's suggestion that the Government are running out of new ideas. That White Paper enthusiastically endorses the extension of training credit vouchers, which are being taken up all over the country with great interest-- particularly by those training and enterprise councils that are piloting the scheme.

I spoke last night to the chairman of the Bradford TEC, who said that, putting the purchasing power of a voucher in young people's hands was the best possible news because, for the first time, they are in control of their destiny. The scheme is being taken up enthusiastically in pilot areas, and I hope that my right hon. and learned Friend the Secretary of State will soon decide to extend it across the country, where it will be widely welcomed. The White Paper makes it clear that that is the direction in which the Government are going.

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I am delighted about the White Paper's commitment further to extend education compacts, which are the right way of bridging the gap between education and industry. Once again, it was bitterly opposed by the Opposition.

The Opposition's policies are designed only to increase unemployment. Had they been in power during the 1987 stock market crash, they would have reflated the economy far more than we did. The right hon. and learned Member for Monklands, East (Mr. Smith) was present earlier and was challenged about that ; he wriggled and giggled, but had no answer to the fact that, in November 1987, he clearly said that the Labour party would reflate the economy more than the Government. The effect would have been higher inflation. I do not suggest that a Labour party's reaction to ever higher inflation would have been a deflationary policy, but it would have led to a run on currency, which would have forced it into a high interest rate policy whether it liked it or not. The effect would have been higher deflation and a higher rise in unemployment. We would have been in a position to say to Labour Members, "You got it wrong," as they say to us, but let them never forget that, in late 1987, they believed that we should have gone further with the mistake that we made at that time. Labour Members are the last people to criticise us in that respect.

It is not only the policies that they advocated then that would be disastrous for this country. The national minimum wage is written off by almost everybody who takes an interest in the subject. Trade unionists are anxious to persuade the Labour party not to indulge in that policy. I ask the hon. Member for Fife, Central (Mr. McLeish) to read the collected thoughts of Mr. Gavin Laird and Mr. Bill Jordan, who are clear on the subject. They say, "Please don't do it." The shadow Chancellor, when asked about the effect of the national minimum wage, said "Maybe one or two people might lose their jobs." Does he not take any notice of what is said by the trade unions, who still seek to run the Labour party?

Mr. Dalyell : As the hon. Gentleman mentioned Mr. Gavin Laird and Mr. Bill Jordan, he will acknowledge that both were against that was done to the engineering industry training board. They believe in training as it was in the engineering industry, which was very beneficial to my constituency.

Mr. Coombs : I am grateful to the hon. Gentleman. I always listen carefully to what he has to say, but that was not germane to the point that I was developing. However, it shows that, once something is set in concrete, Opposition Members never seek to change it. No radical spirit is left in the Labour party. It can try only to preserve and conserve. Perhaps we should call it the Conservative party, because that is what it is. It has no ideas for the future only ideas of the past.

The right hon. and learned Member for Monklands, East intervened briefly from a sedentary position to say that 11 European countries support the social action programme, but that is not right. Eleven European countries signed the social charter, but if he studies debates in the European Community on the implementation of the charter by draft directives, he will see that there is growing concern about the implications of those proposals for employment. The Labour party's policies in the future, as in the past, will only drive up the level of unemployment, whereas

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Conservative policies, by reducing inflation and boosting competitiveness vis-a-vis our partners in Europe and elsewhere, will help to increase prosperity and reduce unemployment, which we rightly regard as a scourge. The Labour party does not understand that. It never has and it never will, because it does not understand the nature of competition.

Our policies are now working. Inflation is coming down and so are interest rates. On the strength of that, in due course, the next general election will be won by the present Government. 9.25 pm

Mr. Michael Carr (Ribble Valley) : It is clear that unemployment is now out of control. The Department of Employment's internal projections are reported as forecasting that 2.6 million people will be out of work by October, and most outside economists expect unemployment to rise above 3 million by March 1992. Moreover, the longer-term outlook is bleak, with unemployment likely to plateau at such levels under present policies. That is hardly a sign of bottoming out, and is certainly not a reason to predict an economic revival early next year. In view of the Prime Minister's grandiose early statements about a classless society, we might have been forgiven for thinking that the economic mismanagement of the Thatcher decade would be remedied forthwith. However, the announcement of a 40 per cent. cut in the employment training budget hardly seems an appropriate first step.

It is scandalous, when unemployment is rising faster than in any other EC country, that the Government saw fit to cut public funding of training. Under this Government, Britain is less skilled, less well educated and less well trained than all our major competitors. The unemployment figures in themselves are worrying, but they hide more sinister statistics. The real price of unemployment is increased poverty, a rise in homelessness, a deterioration in the nation's health, the deskilling of thousands of our citizens and the cost to the public purse. The Prime Minister has pledged that the Government will be a caring Government, yet his Chancellor of the Exchequer has let slip the fact that Government economic policy is deliberately adding to unemployment in order to reduce inflation. The Chancellor's remark that unemployment was a price "well worth paying" rightly shocked many people, and showed how little the Government are prepared to do to combat high and rising unemployment.

Liberal Democrats fully understand the importance of reducing inflation, but we do no accept that the price for that needs to be a return to mass unemployment. Other countries, such as Germany, the Netherlands, Japan and the United States, run their economies with lower unemployment and lower inflation, and avoid the high price that the Government seem prepared to pay.

The debate on unemployment in the recession has so far completely ignored the real-world price of unemployment. The most immediate effect of the rise in unemployment will be an increase in poverty. Not only unemployed people, but their families and those who depend on their wages will suffer.

In the 1970s, low pay was accepted as the root cause of poverty. However, figures based on Department of Social Security data were released last month by the Campaign for Work, and they clearly show that unemployment was a key characteristic of poverty in the 1980s. Those figures

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show that, although poverty is often, rightly, associated with groups such as pensioners, the disabled and lone parents, by far the most common characteristic of the poor is being out of work. Before unemployment finally started to fall after the previous recession, more than 50 per cent. of the poorest families were afflicted by unemployment. It is symptomatic of the way in which people are discussing unemployment in this recession that those figures have not been widely reported.

Such comprehensive figures for the previous recession have only become available in the past year or two, so it is unlikely that data for the effects on poverty of this recession will be available for some time. However, the clear message from the experience of the 1980s is that the recent increase in unemployment will put back the fight against poverty in Britain by several years if the present failure to tackle unemployment persists.

The Government compounded the misery of poverty and strengthened the link between it and unemployment through their social security and taxation policies of the 1980s. Those policies have resulted in a large reduction in the real value of safety net benefits and make poverty an increasing likelihood for many thousands more on the dole. Not only has the real value of unemployment and related benefits been cut since 1979 by about 5 per cent., but the benefit system itself has become more restictive in its regulations and has been starved of the resources that it needs for administrative efficiency. For much of the late 1980s, the Government's policy seemed to be to blame the unemployed for being out of work and then to penalise them through their social security policies.

Many other aspects of the Government's social security and taxation policies will mean that unemployment may be even more closely linked to poverty in this recession. The Government admit, for example, that the poll tax will be with us until at least 1993, with unemployed people liable for at least 20 per cent. of their poll tax bills. The unemployed will now pay water charges, whereas under the rate rebate and supplementary benefit system, they were protected. Such social security and taxation policy changes come on top of measures in other policy areas, which have tended to affect the unemployed disproportionately. Council house rents and rents for private accommodation have increased by well above the rate of inflation. Public transport has suffered from underfunding and from above-inflation price rises.

The evidence linking unemployment with policy could not be clearer ; nor can anyone have any doubts about the impact on the unemployed of various policy changes, especially in social security. In terms of poverty, the social costs of unemployment were high during the recession of the 1980s ; in this recession, they will be even higher.

In the 1980s and 1990s, homelessness has been closely associated with joblessness. Between 75 and 80 per cent. of homeless people are out of work. Although that may not be surprising, it is important to recognise the vicious circle that is immediately created. Once someone is trapped by homelessness, for whatever reason, employment is hard to come by. That in turn makes securing proper accommodation almost impossible.

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The figures for repossessions in 1990, when repossessions almost trebled to 43,890, illustrates the changing nature of home ownership since the last recession. As the Council of Mortgage Lenders has commented :

"Unemployment has proved of greater importance this time round and now accounts for almost 10 per cent. of (new) homelessness cases. This is an indication only of the cases where unemployment was cited as the direct cause of homelessness. In many of the other cases unemployment contributed quite substantially to the

family/relationship break-ups which account for 60 per cent. of homelessness."

Such evidence highlights the human misery that is caused by unemployment. Unemployment causes stress which in turn, causes family disputes which, in turn, can cause homelessness. The social costs of unemployment can be a vicious spiral of personal misfortune--a vicious spiral that leads to a deep national problem.

There is a general recognition that unemployment represents a deskilling processs, with individuals losing touch with the labour market and finding that their skills become less and less relevant to the market's needs. Those economic consequences are alarming enough, but they pale beside some of the health implications of long-term unemployment. Research is increasingly showing the damaging effects of unemployment on an individual's mental and physical health. The longitudinal study of the Office of Population Censuses and Surveys, which links death records with the 1971 and 1981 census data, reveals that the death rates of unemployed men and their wives were 21 per cent. above the national average. It is expected that that trend will be reaffirmed by this year's census. A link between suicides and unemployment has also been established. A study in Edinburgh from 1978 to 1982 showed that suicide attempts were 11 times more likely among unemployed people than those in work. The economic costs of unemployment are also many and varied. They include the direct cost of unemployment to the Exchequer through a higher number of claimants and lower tax receipts, as well as many indirect costs. Despite the meanness of current benefit policy, the social security costs of unemployment are high. The Department of Social Security's expenditure plans show that, for an increase of 100,000 in the number of unemployed, social security payments increase by £305 million.

We hear stories of training credits. They undoubtedly have some merit, but they must be seen in the context of the statistics I mentioned. In Sweden, £12,000 is committed to the training of each unemployed person. The Government are mooting a figure of £1,500. That shows that, in Sweden, unemployment is seen as an opportunity to retrain and reskill the work force. Unfortunately, the Government see unemployment as an economic necessity and as a political irritant. The loss to the economy of deskilling many members of the work force is particularly serious because the effects can last for years. We believe that training is the key to ensuring that the long-term levels of unemployment fall. Filling skills vacancies with skilled workers seems to be no longer the main aim of Government employment policies. The Government also seem reluctant to recognise the need to retrain those already in work. If Britain is to keep pace in the world economy, one that will increasingly demand a skilled and technologically advance work force, the Government must commit substantial funds to education and training now.

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9.36 pm

Mr. Henry McLeish (Fife, Central) : I pay tribute to my hon. Friend from Monmouth (Mr. Edwards) for his maiden speech. It was an eloquent, reasoned and dignified contribution, and we all welcome the fact that he mentioned, with fond memories, the previous Member for that constituency. We look forward to many contributions of that quality in the years to come.

This has been an interesting debate, as two worlds have collided in their perception of training and the unemployed in this country. The excellent speech from the Chairman of the Select Committee on Employment, my hon. Friend the Member for Newham, North-East (Mr. Leighton) injected a dose of reality into the debate, but I found the speech of the Secretary of State for Employment simply remarkable. We were treated to a story of no cuts-- just adjustments--the most comprehensive provision for the unemployed, record-breaking achievements, the best training provision this century and revolutionary methods. That world may be inhabited by the Secretary of State for Employment, but it is not inhabited by Labour Members and those outside the House.

The key issue is why, after creating unemployment, the Government are effectively doing nothing to help the unemployed. Why is it that, after acknowledging publicly the depth of the skills crisis, the Government have cut the training budget? Why is it that, after 12 years of Conservative government, Britain is less equipped than any nation in Europe to embrace the challenges, respond to the changes and improve our competitiveness in the new economic realities of the 1990s? Why are the Government unable and unwilling to tackle the issues which are immediate and urgent and which lie at the heart of Britain's future in the 21st century?

The debate has rightly focused on the importance of the recession. It has focused on the breaking of guarantees to young people and adults. It has focused on the selling out of the TECs after they were offered such a warm send-off. They were not advised that they would have no responsibilities or proper cash provision. We have focused on the scandal of special needs. It is morally objectionable for the Government to seek to cut funds from the schemes that provide not only skills but social support to the most vulnerable in the community. Will the Under-Secretary refer to that point?

Unemployment is a crisis. Put simply, Britain's labour market is in total disarray. That is the legacy of 12 wasted years in which the Government have been in office. We were not informed in their manifestos of 1979, 1983 and 1987 that mass unemployment would be a permanent characteristic of their economic policies. Rather, we were offered economic miracles and the Chancellor confirmed that we are experiencing one.

We were offered industrial renaissance, and the deposed former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher) talked about the rebirth of Britain. If that is the case, why are we in such an appalling economic mess, with recession deep, levels of economic activity low, and disillusionment with the Government's ability to cope so widespread?

I shall focus in the remaining few minutes on the Government's unemployment record. The Government cannot now trade excuses in public. They cannot blame scapegoats or find anyone on whom to pin the responsibilities that they have discharged so ineffectively

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over the past decade. Why is unemployment now rising faster in Britain than anywhere else in Europe? In Europe in the past year, unemployment among the under-25s has been, on average, 1 per cent., whereas in Britain it has been 32 per cent. Why has unemployment in Britain increased by 100 per cent. since 1979? Why have the number of vacancies slumped by over 26 per cent. and why have the number of people chasing each job increased by 136 per cent.? That does not smack of an economic miracle but of something quite different. Although the Government make great play with their employment growth record, which is the other side of the labour market coin, it is stripped of double jobbers and training places. The Government have created only 460,000 part-time jobs in 12 years. What kind of a record is that to be parading around Britain? It is the worst record of employment growth among OECD countries. I challenge the Government to respond to those statistics, because I always use their statistics, courtesy of the computer at the Department of Employment. The Labour party will continue to take advantage of that excellent facility. Why have we now lost 2,112,000 manufacturing jobs and 163,000 construction industry jobs? That does not smack of an economic miracle for those in manufacturing, who now find themselves with no future in that area.

Why have apprenticeships in the manufacturing industry slumped from 266,000 in 1979 to a miserable 87,000 in December 1990? The crisis in manufacturing is that training has been ripped out of it, and we now have very few apprenticeships, while countries such as Germany, France and Scandinavia are pushing forward. They see a future and they invest. In the early 1960s, in periods of Conservative Governments, there was always a slump in the number of vacancies. Why did we have the highest unemployment this April since the 1930s? It must be submitted that that is not the stuff of which miracles are made. Day in and day out, we are still told that the Government have created employment and that things are not so bad. This evening, the Secretary of State for Employment suggested that a commitment made in Scotland to eliminate unemployment was still on their agenda. If that is so, the Scots see little chance of it becoming a reality. To find a microcosm of the panic measures and the ineffectiveness of Government economic policy in this country, we need look no further than London, which we discussed earlier today. The conning of the capital by the Conservatives during the past decade is simply breathtaking. Why is it that, in London, vacancies have slumped by 75 per cent. in a decade? Why is it that unemployment has risen by 300 per cent.--not doubled, but trebled? Why has the number of people in London chasing each job increased by 1,000 per cent.? Londoners have been conned by a Government unwilling to tell the story that is now unfolding as we approach the general election.

Of course, the Government always respond by saying, "What about our jobs record?" What about it? Figures published by the Department suggest that, excluding training places, 40,000 jobs have been created in Britain's capital city in 10 years--4,000 jobs a year for a population of 6 million or 7 million. That is a simply breathtaking statistic when viewed in relation to the Government's claims made day in and day out.

We ask simple questions. Why is it that, faced with 2.6 million unemployed in October and possibly 3 million

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unemployed next year, the Government will provide no cash for a temporary work scheme? Why, when faced with a deepening skills crisis, will the Government not reinstate the £400 million cuts that have been made? Why, when the training and enterprise councils flagship is in danger of sinking, is there no funding or leadership from the Government? After 12 years, why do we have a labour market which is in disarray and has no strategic overview?

Mr. Geoffrey Dickens (Littleborough and Saddleworth) : Will the hon. Gentleman give way?

Mr. McLeish : No.

The answer to all those questions is no, no, no--because the Government simply do not care about what is happening. The Prime Minister has been attacked for his dithering. I can say with sincerity that the Secretary of State for Employment and his Ministers are dithering and drifting and not providing the direction that is badly needed in Britain.

Other Ministers have tried to help the unemployed. There have been various changes, including fiddling the figures and removing people from the unemployed figures. The restart scheme, which involved recycling, was introduced by Lord Young of Graffham. There was ridicule when it was suggested that we should train the workers without jobs to fill the jobs without workers. The removal, recycling and ridicule are now to be followed by amazing inactivity. Tonight, we have heard that our attack on the Government's employment record is hurting. The misery index has been mentioned, and we have heard overtures this evening to suggest that we should have a truce until next year. I offer Conservative Members a helpline. We are willing to listen to them and give them the statistics that the Government will not. If they phone my office, we shall not ask them to leave their name. They can remain anonymous : they need merely leave their majority and the number of their constituents on the dole--we shall do the rest.

We know that the Government's record on both jobs and unemployment is deplorable. We need a change of Government before we can tackle the problems ahead of us. The only unemployment that we want to see is among Ministers and Conservative Members. To that end, we shall fight and win the election, and give skills and the jobless a high priority in a Labour Government.

9.48 pm

The Parliamentary Under-Secretary of State for Employment (Mr. Robert Jackson) : I start by apologising for missing part of the speech of the hon. Member for Sedgefield (Mr. Blair). I know that he will accept my reason for not being here as I was returning from a visit to the Federal Republic of Germany, where I was studying training arrangements in that country. I answered many interested questions from the Germans about recent developments in our training policy, particularly training credits, which the Germans view positively and about which they were very encouraging.

I shall try to answer some of the questions posed by hon. Members during the debate, then offer one or two reflections on what is revealed by the exchanges on unemployment between the parties.

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I congratulate the hon. Member for Monmouth (Mr. Edwards) on his maiden speech and, as other hon. Members did, on the fitting words that he used about his distinguished predecessor. I must say that I disagreed with what he had to say about the minimum wage. He should attend to the question put by my right hon. and learned Friend the Secretary of State about the job destruction effects of a minimum wage to the hon. Member for Sedgefield--a question that was not answered. The hon. Gentleman should perhaps answer it ; I hope that he will take it seriously. He will find that it pays in this House to listen carefully to what each of us has to say and then to do intellectual justice to it.

My hon. Friend the Member for Wirral, South (Mr. Porter) made a thoughtful speech with whose tone and substance I very much agreed, but I shall return later to some of what he had to say.

The hon. Member for Newham, North-East (Mr. Leighton), the Chairman of the Select Committee, claimed that the youth training guarantee is not being honoured. I apologise for not yet having replied to his letter about YT opportunities in Newham. I shall ask for a draft tomorrow and reply as soon as I can thereafter. I emphasise that the Government are firmly committed to that youth training guarantee. This year we have increased spending on YT even though the number of young people has fallen by5 per cent. The hon. Gentleman's assertion about the guarantee cannot be true globally speaking, however, for the simple reason that we have not reached the end of the school year and thus do not yet know how many claims will have been made on YT. The hon. Member for Fife, Central (Mr. McLeish) referred to alleged breaches of the guarantee, too. That was a bit rich coming from a member of a party that failed when in power to offer any guarantees to the unemployed.

Mr. McLeish : Is the Minister prepared to state that there is no TEC area in the country in which the guarantee is not being honoured?

Mr. Jackson : I have already explained that that does not arise until we know how many school leavers there are. We are firmly committed to the guarantee, and we will discharge it.

I particularly agreed with the words of my hon. Friend the Member for Swindon (Mr. Coombs) about the Employment Service and its value in advising and counselling the unemployed. The mocking words of the hon. Member for Sedgefield about the service were a serious misjudgment. He will find that all the professionals in the field will confirm the value of this kind of assistance. Every month, the Employment Service places about 100,000 unemployed people in work, and Opposition Members would do well to support this work, not to denigrate it.

The hon. Member for Ribble Valley (Mr. Carr) went on at considerable length about things that we already know about unemployment, but he conspicuously failed to come up with positive suggestions about what to do about it--and I very much regret that. What I want to say next is perhaps a little unusual for a wind-up speech on an occasion such as this. One of the most interesting features of the debate has been the extent of the common ground between Government and Opposition. Some obvious common ground is to be found in our shared concern about unemployment and about the

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