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families that go without the essential things in life, such as three meals a day, toys and out-of-school activities. The list could go on and on. When we know that poverty is one of the biggest growth industries in Britain, we know that the Government simply are not working--at least not in the interests of all our people.About 4 million people would gain from the minimum wage that the Labour Government would introduce. If the Minister has not heard it before, this is another commitment for him--4 million people would gain. Half of them would gain at least £10 a week and another quarter at least £20 a week. About 40 per cent. of Britain's adult women part-time workers would benefit from Labour's proposal for a minimum wage.
We are not running away from the moral and social justification for introducing that minimum wage, because it is an outrage in our society that no such thing exists. It is an interesting curiousity that the nearest thing that we have to a minimum wage was introduced by Winston Churchill that one-time Conservative Prime Minister, in an earlier political guise. That fact is of great fascination to Labour Members whose view of Winston Churchill might otherwise be differently coloured.
We know that more than 10 million people in Britain are low paid according to the Council of Europe's decency threshold. The gap between the top 20 per cent. and the bottom 20 per cent. of men working full-time has never been wider in the past 100 years than it is today. One million people in work claim means-tested benefits. For all the reasons that I have given, we are determined to introduce a minimum wage that will offer decent protection to decent people whom I, my hon. Friends and, indeed, Conservative Members represent. We hear scaremongering that a minimum wage will destroy jobs. We heard the same thing when the Labour Government introduced the Equal Pay Act 1970. Conservative Members and their predecessors came out with the same sorry story that paying women acceptable wages equal to men's wages would destroy jobs. It did not happen. Instead, there was a steady growth in the number of women in employment in Britain. Empirical studies of what happened when a minimum wage was introduced in France show that it did not destroy the economic base of France.
Mr. Lloyd : The Minister can refer to the definitive report prepared for the Organisation for Economic Co-operation and Development by Martin and Bazen, which made it clear that there was no loss of jobs among adult workers and no evidence of loss of jobs among youth workers.
Empirical models give a different tale from the hysterical claims of the Secretary of State for Employment. He started by claiming that a statutory minimum wage would result in three quarters of a million jobs losses. Then, perhaps a little frightened by his own rhetoric but thinking that he might as well be hanged for a sheep as for a lamb, he increased the figure to 1 million. Then, in a fit of excess, he ratcheted it up to a full 2 million job losses.
Everyone who has examined the issue with any professional respectability thinks that the Secretary of State is simply off his head. Having lost out to the Treasury on training, lost face with the British public by failing to recreate a climate of industrial expansion and lost out
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politically to his colleagues in Cabinet, he is in need of a political success. He hoped that he would have such a success on the minimum wage. He simply will not achieve it, because the British public share the view of the Labour party that social decency and economic efficiency are assisted by a minimum wage which gives all our people a long-term secure role for them in the labour market. This has been an interesting debate, because there is such a sharp contrast between Opposition Members and those who support the Government in their view of the future of Britain. Conservative Members see Britain as a low-pay, low- cost centre of production. They see our future as merely an offshore island for foreign investment which guarantees some tenuous future in the European Community. Opposition Members believe that the British people have the basic talents and abilities which, with investment in their skills and a programme committed to training, will allow us to map out a better, more secure and more dignified future not for only those already in work but for the many people who will join the labour market in years to come. It will not be long before the Minister will be able to continue his ideological rantings, but this time he will do so from not the security of the Department of Employment but from the Front or Back Benches of a Conservative Opposition.1.22 pm
Mr. James Arbuthnot (Wanstead and Woodford) : I begin by congratulating my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway), if congratulating is the correct expression. I often wonder whether being successful in the ballot is a matter for congratulation or commiseration. I suspect that in many cases--and perhaps in that of my hon. Friend because, as he said, he has a severe cold--it is a matter for commiseration.
My hon. Friend has chosen a particularly important subject for today's debate, and I congratulate him on that. We have had a most interesting debate, in which several hon. Members have taken part. I do not want to take too long, but I should like to refer to some of the points made by the Member for Newham, North-East (Mr. Leighton). He suggested that I should visit my local training and enterprise council, the London East TEC. As it happens, I was there only last Friday. This debate is an opportunity for me to pay tribute, as he did, to the excellent management skills and work of Iain MacKinnon and his task force. They do valuable work and are led by a good group of people.
I disagree with the impression of London East TEC that the hon. Member for Newham, North-East gave. Far from bumping along on the bottom, desperate for money, it is in good heart. The deputy chief executive of London East TEC wrote in an article :
"LETEC is proving to be an essential catalyst to the economic rejuvenation of the London East area. We are not just watching from the sidelines, but rather are rolling our sleeves up and getting involved not just in getting local people back into work, but in keeping them there. The young people of the London east area will have enormous opportunities in the future. We must ensure that they are equipped to grasp them."
I was heartened to see that one of the slogans on London East TEC's letterhead is :
"Our vision is that by the year 2000, the East side of London should be as prosperous as the West side"--
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that seems to be an excellent vision for London East TEC. It continues :"Our mission is to help local people and local businesses to share fully in that new prosperity."
The TEC is well equipped to achieve precisely those aims and that is something which we very much hope to see.
Mr. Leighton : I am pleased that, like me, the hon. Gentleman is liaising closely with London East TEC. It may have told him that although 2 per cent. of the country's population is in its area it receives only 1 per cent. of the expenditure on TEC programmes. I hope that he will help to rectify that situation.
In the documents that the hon. Gentleman is quoting from, did he notice the statement that unemployment in the TEC area has risen by 81 per cent. since March 1990, by 57 per cent. since November 1990 and that the highest rise was in Waltham Forest--is his own constituency, I believe--where it rose by 6.5 per cent.?
Mr. Arbuthnot : The hon. Gentleman will forgive me if I say that he has the same problem with me that I have with the Whips Office. Sometimes they confuse me with the hon. Member for Walthamstow (Mr. Summerson)--I am the hon. Member for Wanstead and Woodford, and unemployment in my constituency has not risen to quite the extent that he suggests.
I was quoting a different document from the leaflet that the hon. Member for Newham, North-East has. It says :
"On Monday 7 October LETEC hosted the national press launch for the new Employment Action programme. The launch was headed by the Secretary of State for Employment. LETEC requested 1,000 places but were allocated 800. We were of course disappointed. None-the-less, we are determined to fill those places by the New Year and then go back to the Department of Employment for more."
London East TEC is obviously not getting everything that it would like, and the hon. Member for Newham, North-East and I will be pressing for more spending to cure the ills of unemployment in our area. We both work for our area in different ways with our different policies.
London East TEC is doing an extremely good job. For example, it is taking steps to discover what local employers and businesses need and want from their employees. One example is the recent survey of 1,500 local business people. LETEC is using the information acquired in that survey, along with other research information to develop its training and enterprise support initiatives.
During the next few months and years, we must avoid continuing in the trap that we were in before. When this bout of unemployment is over, or when unemployment is declining, we must avoid children leaving school with no idea of the skills that they will need to work properly in the jobs that they will want, and in the jobs that will be available. Education has to be the key to that.
I welcomed the computer initiative in schools, which has brought so much innovation to our schools, from the primary age up. Last night I visited the Queen Mary and Westfield college in the Mile End road and I was told that it was soon to have a level of computers of almost one work station for every six students. That is most impressive. One of the problems that the college told me about is that school children are leaving school with more computer literacy than the university teachers, so university teachers are having to run hard simply to keep up with the people they are teaching.
There is always a problem with education providing for skills in information technology. It has always been
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noticed that information technology skills, of which we shall need more and more in the coming years, have tended to lag behind the demand for those skills. Perhaps it is not surprising, because those demands change so much and so often.To return to some of the initiatives London East TEC has introduced, it has set up a series of education and business partnerships. Employers now come to schools and colleges to talk about what they need from their employees, and pupils go to their potential future work places and gain considerable valuable work experience. Another plan is to help a minimum of 10 local students find a job with companies in east London before those students go on to university or a polytechnic. The scheme is called Year in Industry and it is operated by Top Business Links--a company which helps businesses to communicate with schools. Obviously, that is extremely valuable. It improves the experience of the students themselves and the businesses' experience of the type of people coming out of the schools. It provides links between businesses and students so that students know what the businesses need and the businesses know how they can influence the schools. A year of a different sort of experience before university or polytechnic is valuable. It builds a sort of dedication, a work ethic, which is valuable at a university or a polytechnic.
Part of today's debate has been about an increase in unemployment which has hit this country like so many others. It is good news that the increase in unemployment in this country last month was the lowest for almost a year. I hope that that means that the trend is that we shall plateau soon and thereafter we shall see unemployment reducing. If that is true, as I hope it is, it may well be that the long-term trend of unemployment, which has seen troughs and peaks rising over the past 30 or 40 years with every trough and every peak getting higher, will turn round so that the peak of unemployment will be considerably lower than the last peak of unemployment. The hon. Members for Stretford (Mr. Lloyd) and for Newham, North-East gave a telling and effective account of what happens during unemployment--of the destructive, demoralising and damaging effect on individuals who are unemployed. Of course they were both right. We must never dismiss the problem of unemployment as unimportant. The fear of unemployment is hitting everywhere, particularly in the south-east. It is hitting even my constituency in a way it has not done for many years.
What follows from that is that the last thing we should do is to introduce policies that are almost specifically designed simply to increase unemployment. We must not impose minimum wages on businesses, whether or not they can afford them. The hon. Member for Stretford said that 4 million people would gain from the imposition of a minimum wage. He is assuming that all those people now paid below what his party would bring in as a minimum wage would keep their jobs. The opposite would be the case. Many businesses would be unable to afford people at a higher rate. In any event, the Labour party's suggestion of a minimum wage is in itself rather obscure and bizarre. As I understand it, it is tied to the average and would therefore not only be relatively high at £3.40 but would increase as the average wage itself increased. With each
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increase in the average rate of pay, the minimum wage itself would have to go up and it would be for ever chasing its own tail.Mr. Tony Lloyd : Perhaps I can help the hon. Gentleman. It will be tied to the median, which is not the same as the average. It is simply a mid-point on the range and would not be affected by changes in the minimum wage.
Mr. Arbuthnot : From what I understand, even an amount tied to the median would be affected because if the lowest wage were increased to £3.40 per hour, the median would have to rise.
Mr. Tony Lloyd : I shall put the matter in simple terms. The median, the mid-point in a series of numbers such as 2,2,5,6 and 7, is defined as being the difference between 2 and 7, which is 3.5. If we alter the figures 2 and 2 to 3.5, the middle figure of 5 would remain unaltered because it is independent of the bottom figures.
Mr. Arbuthnot : I do not understand the hon. Gentleman's mathematics and I slightly doubt whether he does.
Mr. Matthew Carrington (Fulham) : I am extremely confused. I studied mathematics for some years at school and I have not totally forgotten all of them. The median is not the mid-point between the first number and the last. It is where the largest number of items in a sample comes to, whereas the average is obviously the sample multiplied by the number of items. The hon. Member for Stretford (Mr. Lloyd) is obviously extremely confused. The median has a precise mathematical definition which is absolutely right, and my hon. Friend is correct in saying that the median is bound to alter if the number at the bottom of the scale is changed. That will alter the average as well in a different way, but it is bound to alter the median. Perhaps the hon. Member for Stretford wishes to define median in a non- mathematical sense.
Mr. Arbuthnot : I am grateful to my hon. Friend for sorting out at least the hon. Gentleman's mathematics with obvious skill and knowledge.
Another aspect of the policies that Labour is pledged to implement and which would only increase the damaging effects of unemployment is the imposition of high taxes. It would impose taxes on business and individuals which would discourage enterprise and discourage people from trying to work hard. It would discourage profit and perhaps take us back to that nadir of Labour party policy when Shirley Williams was able to say with some pride that profit levels were the lowest they had been for years.
As the hon. Member for Stretford said, Labour would impose a training levy of 0.5 per cent. of the payroll. That is nothing more or less than a direct payroll tax on jobs. It is like the selective employment tax that a Labour Government introduced many years ago. Every Labour Government, except one, since 1929, has doubled unemployment, and the exception increased unemployment by only 50 per cent. Therefore, it was not surprising that when I intervened on the hon. Member for Newham, North-East he was a little coy about referring to his party's record on unemployment.
The hon. Member for Newham, North-East made an interesting speech. He put forward the proposition that adherence to the exchange rate mechanism is what causes
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unemployment in socialist France and socialist Spain. But adherence to the exchange rate mechanism is one of the policies not only of the Conservative party but of the Labour party. While the hon. Gentleman's speech was interesting if idiosyncratic, he appears to join us in condemning the employment policies of the Labour party.Mr. Leighton : The hon. Gentleman says that a training levy is the same as a selective employment tax. How could he be so confused? The previous selective employment tax went to the Treasury. If a firm spends 0.5 per cent. on training, it does not pay the tax. We have heard that Nissan is spending about 15 per cent. of its payroll on training, and it is an extremely successful company. All successful companies spend much more than 0.5 per cent. on training. The only criticism one might make of the Labour party's proposal is that it is not large enough. So the hon. Gentleman should not get nervous about 0.5 per cent. of payroll being spent on training. If he really supports the work of the east London TEC, he should not be saying that firms should not spend 0.5 per cent. on training.
Mr. Arbuthnot : My answer to that long intervention is that I did not say that a payroll tax was the same as the selective employment tax. I said that the payroll levy that the Labour party would introduce would have the effect of being a tax on jobs, in precisely the way that the selective employment tax had the effect of being directly a tax on jobs. They are both ways of discouraging firms from taking additional people on to their payrolls.
I applaud Nissan for having a high training budget, but decisions of that type must be taken by companies. The Government can encourage firms to train more, but for the Government to impose taxes on companies to insist that they train more does not take into account the effects, demands and needs of different industries. People who see that high training encourages success, as obviously it does for Nissan, will follow the designs and needs of the marketplace and will themselves introduce high training. Levies on the payroll will not have that effect.
My hon. Friend the Member for Battersea (Mr. Bowis) made the sort of eloquent and well-informed speech that we have come to expect from him every time. He had trouble with one phrase, when he referred to the "genuine crocodile tears" of Labour Members.
Mr. Leighton : It was a bogus sham.
Mr. Arbuthnot : The hon. Gentleman suggests that it was a bogus sham. I think that my hon. Friend had difficulty with the phrase because of the girations of Labour policy on so many issues. Its policy on Europe could best be described as jerking from one extreme to another within a few years, at one moment leaving the European Community altogether and in the next being willing to sign up to anything for which the EC asks ; at one moment supporting the closed shop and in the next denigrating it. The problem is that the Labour party dodges all the important European issues because its conversion to the EC is not so much skin deep as ruled purely by expediency. Labour believes that it can hijack the EC towards the type of socialism that has been rejected throughout eastern Europe. In socialist France, unemployment is now higher than it has ever been in that country's history.
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Unemployment is rising in every European country except in Spain, but there it is twice as high as it is in Britain. In France and Spain--Mr. Leighton : What about Germany?
Mr. Arbuthnot : --the national minimum wage of the type presented by the Labour party is one of the causes of their unemployment. The Minister will no doubt refer to the OECD report, which appears to have been dismissed by the hon. Gentleman.
In every EFTA and G7 country, unemployment is higher than it was a year ago. Unemployment is a consequence of various factors--of inflation and world recession--and not something that we can escape. We could make it worse by insisting on the sort of minimum conditions put forward by the Labour party, conditions that would disadvantage the very people whom Labour says they are designed to protect. 1.44 pm
The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth) : This has been a good debate, as Friday debates often are. Ithank and congratulate my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) for giving the House an opportunity to cover this important ground. It has elicited a number of interesting points on which we would do well to reflect. It may be significant that, as I have sat here throughout the debate, riveted as ever to the contributions that have been made, I have noticed no more than three Labour Members present at any point. At one time, a Liberal Member was present. That does not suggest the outrage that a perusal of Hansard might beguile readers into expecting. It is important to put that fully into context.
A good aspect of the debate, especially on this side of the House, has been the positive attitude towards the training and enterprise councils. Whether that attitude is as positive among Opposition Members remains to be seen. My hon. Friends well appreciate the nature of the role of the TECs. It has been a radical step for the Government to hand over large parts of the policies which, until now, have been centrally determined. The hon. Member for Tooting (Mr. Cox) seems to want everything to be centrally determined and his speech reflected the dying echoes of the old-style centralised Labour party that we all knew and, at one stage, loved in our way. We need to hear more about the Labour party's current attitude to TECs.
TECs are a vital part of the delivery of modern policies in a modern society. The fact that business men have volunteered to give up their time and expertise to TECs is a major new breakthrough in the delivery of policies at local level. We recognise the vital importance of policies being tailored to local needs. Handing them over to people outside government who know their local community has been a quantum leap in the delivery of Government policies in the important areas of training and skills.
For Opposition Members to paint a negative picture of TECs failing to do what they have been set up to do is not good enough, because, after all, they have been in existence for only two years. That is made worse by the fact that the network of London TECs has, in some cases, been in existence literally only for weeks. I should like hon. Members to give TECs not only their support but the time
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to develop their approach locally to see whether they can meet the high expectations that understandably now exist. They will certainly have the fullest support of my Department and the Government in that and I hope that they will have the fullest support of Opposition Members, too, although that has not come through in this debate. Perhaps we shall hear more about that once Opposition Members have reflected on the important role of TECs.May I put some of the comments that have been made into a broader context. Disgraceful accusations were made by Opposition Members, including, I regret to say, the Chairman of the Select Committee on Employment, the hon. Member for Newham, North-East (Mr. Leighton), from whom I expected better. He suggested that the Government were engineering or conniving at a high level of unemployment. Such a suggestion is unworthy of the hon. Gentleman. How is it that, when this country has been going through a recession, which has been shared by countries throughout the world--not least the United States--our unemployment figures are lower than those of many other countries ? For example, I had the privilege of visiting Australia last week, when I met a good friend of the hon. Member for Newham, North-East. Australia has had a Labour Government for some time, but unemployment there is higher than in the United Kingdom. Socialist France has higher unemployment than the United Kingdom and unemployment in socialist Spain is at least 50 per cent. higher than in this country. Those examples show, by clear implication, that those other Governments, who call themselves socialist and pursue policies similar to those which the Opposition would like to pursue, all have the same result. Yet we are accused of engineering high unemployment. The Opposition cannot have it both ways.
Mr. Tony Lloyd : Nor can the Minister. Does he dissent from the Chancellor's comment that unemployment is a price worth paying ? How is it that 80 per cent. of the increase in unemployment in western Europe has been in Britain ?
Mr. Forth : It is easy to answer the last question. It is because until recently this country had one of the lowest levels of unemployment in Europe, so the increase here has, regrettably, been greater. The hon. Gentleman's mathematical skills are letting him down today--perhaps I should not go too deeply into that in case we get into a tangle. However, it is important for us all to keep the matter in context.
There has been a recession ; the Government have had to deal with the consequences and have implemented the policies necessary to help the unemployed. I hope that Opposition Members do not believe that Conservative Members neither understand nor care about the personal circumstances of those who, tragically, have lost their jobs. Nothing could be further from the truth.
There should be some recognition of the fact that the programmes that the Government have set up in the network of jobcentres, including restart, job clubs, job interview guarantees and all the programmes that they deliver through jobcentres or training and enterprise councils, help to alleviate the misery that comes with loss of employment. The fact that, even now, 50 per cent. of people who lose their jobs are back in work within three
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months is encouraging. That the long-term unemployment figures are much lower than they were bears testimony to the fact that many of our pledges and the policies that we have implemented are having a positive effect on the ground in relation to the individuals about whom Opposition Members spoke with such understandable feeling and passion.Having made those general comments, I shall now address specific matters raised in the debate by Opposition Members. I turn first to my opposite number, the hon. Member for Stretford (Mr. Lloyd), who made some interesting statements, not least that relating to his spending commitments. His comments were useful because they provide us all with the opportunity to see what the Opposition have in mind and the approach that they will take in the run-up to the next election and if they were ever to be elected to government. I shall leave to one side the figure that the hon. Gentleman gave somewhat glibly when he said that women in this country were underpaid by £21 billion. He had previously made much play of the fact that the Labour party wanted to do more than the Government to ensure that women were paid properly. I take that as the hon. Gentleman's first spending commitment, except that he is making it on behalf of employers and businesses. It was not a Government or taxpayer commitment, but a commitment being made by the hon. Gentleman on behalf of the private sector and employers. Therefore, the hon. Gentleman clocked up, for starters, a mere £21 billion burden on employers in the United Kingdom.
Mr. Tony Lloyd : The problem with the Minister's logic is that his colleague, the other Under-Secretary of State for Employment, the hon. Member for Wantage (Mr. Jackson) has recently gone on record saying that he believes that women should have pay parity with men in accordance with the law. Therefore, the Government would also have to fund the £21 billion differential.
Mr. Forth : I have not discussed with my hon. Friend the Parliamentary Under-Secretary whether he is pledging a £21 billion expenditure increase, but, having heard what the hon. Member for Stretford has said, I shall have a quiet word with my colleague to see whether he agrees.
We also heard of the commitment underlying the Opposition's desire for the full effects of the original text of the EC directive on pregnant women to be implemented. I was challenged about that--I do not know why, as I thought that the position was clear. When explaining this matter to the House, I shall have to explain to Opposition Members how the European Community works. I do not blame the Opposition for not understanding the issues as fully as we might hope, but, given their new-found support and desire for everything European, I thought that they might have developed a better understanding.
The process is as follows : the Commission makes proposals which are considered by the European Council and the Council of Ministers. During that process the proposals are amended--it is not impossible for them to be amended, although to hear Opposition Members speak one would think that the proposals went straight from Commission draft into law without an intermediate stage. Given the Opposition's desire to give increasing powers to
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the European Parliament and their lack of understanding of how the Council of Ministers works, we should perhaps excuse the lack of appreciation of the process.The pregnant women directive was brought forward in one form by the Commission. In its original form, it would have involved a cost to the British taxpayer, to the Government and to employers of up to £500 million. The directive was then discussed at great length in the Council of Ministers. I attended the final meeting, at which the member states, guided by the Dutch presidency, came together behind a text that they found acceptable. I was prepared to support it. I abstained on a procedural matter because, as Opposition Members may recall, we had a reserve about the treaty base of the directive. I will not go into detail on that unless pressed to do so by Opposition Members.
The United Kingdom was alongside the presidency and almost all the other countries ; it was the Italians who were out of step and who abstained because they were unhappy about the content of the directive. The key issue is that I was asked what effect the directive would have--
Mr. Leighton : What did the Italians want?
Mr. Forth : The Italians wanted more, as they always do. They want more of everything out of the European Community. The extent to which they adhere to the directives once they have got more out of them is a matter over which we shall draw a thick veil, because it is better not to go into it at this stage.
Opposition Members asked why there was so much mystery about what the pregnant women directive means. I commend to them an excellent publication from my Department called "People, Jobs and Progress". It gives a complete update--I will send the publication to Opposition Members--and a detailed account of the pregnant women directive as agreed by the European Community, including the United Kingdom. It is in print, there is no secret and there is nothing up my sleeve. We are proud of the result that we achieved.
A key factor is the burden on United Kingdom taxpayers and employers. We estimate, subject to detailed consideration, that the cost will be about £80 million. The original draft, to which the Opposition are pledged, would have involved £500 million. In addition to the £21 billion originally pledged, Opposition Members now pledge another £420 milion to add to the Labour party's expenditure total. We are doing quite well on that already.
The pledge shows the extent to which Opposition Members are now prepared to spend other people's money to bribe everyone in the run-up to the next election. It simply is not good enough. We will report back to the electorate at regular intervals.
The subject of the pregnant women directive leads me to the social action programme, of which the hon. Member for Tooting (Mr. Cox) made some play. He referred to the Council of Europe, but there is little difference for this purpose between the Community and the Council. I shall try to explain to the hon. Gentleman in particular why his continental friends are so wrong in what they say about the United Kingdom. We have always made it clear that we did not support the social charter in its original form because it breached the principles set out by the Heads of Government of the Community members in several important ways, not least that it ignored the principle of subsidiarity and the great diversity of traditions in the
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European Community member states. Worst of all, and relevant to this debate, the social charter in its original form ran counter to the avowed aim of all Heads of Government to maximise employment in the Community.The whole thrust of this debate is that much of what is contained in the social action programme, which followed the social charter, would prejudice employment. That is why we are unhappy with large elements of it.
I hope that the hon. Member for Tooting will take my message back to his friends in the Council of Europe. The Government have always made it clear that we would be able and happy to support large parts of the social action programme. About 50 detailed matters, recommendations and directives were brought forward following the social charter and we have been able to support many of them. Contrary to what some people say, the Government have never exercised their veto in the Council of Ministers on any social action programme measure. As I have just explained to the House, we were part of the consensus which carried the pregnant women directive through the Council of Ministers. However, we have much difficulty on some matters. I shall give one or two examples, as both Labour and Liberal Democrat Members have said that, being good Europeans now, they support the social action programme 100 per cent. They said that before they even saw the details of the text. We like to read the text first and then make up our minds, but they supported it blind. The first example is the working time directive, which is an attempt by the Community to prescribe not only how many hours per week people work and how much paid holiday and compensatory rest they should have and whether they can work a certain number of overtime hours after night work, but all the other things of which our continental partners seem so fond. The idea is to prescribe arbitrarily and artificially the shape and nature of people's work patterns.
Not only have we run our calculator over the figures, but we have consulted British industry, as we always do in such cases. It is estimated that in present circumstances the directive in anything like its present form would cost British industry about £5 billion. Opposition Members seem happy to heap such on-costs on to British employers.
We have asked all those involved in wealth creation and employment creation and they have told us that, in its present form, in which the Labour party supports it, the directive would be a disaster for this country.
Mr. Tony Lloyd : The Minister is aware that we totally reject the claim that the cost would be £5 billion. Nevertheless, will he make public the information on how that estimate was calculated?
Mr. Forth : The hon. Gentleman does not read the proceedings and reports of Committees of the House of Lords as closely as I thought he might. When his colleague who chairs the European Communities Sub-Committee in the House of Lords grilled me recently, I was asked that question and I gave all the details about how we worked out our costings on all the directives. That is a matter of public record and I shall let the hon. Gentleman have the figures. In return, will the hon. Gentleman tell me what calculations he has made of the impact and burden of the costs that the directive which he supports will impose on British industry? I invite him to let me have his detailed calculations. Shall we do a swap? He can have mine and if
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he will let me have his calculations I will send him, free and for nothing, quotations from employers about their reaction to the directive. I cannot say fairer than that.Unless I am pressed to do so, I shall not talk in detail about the atypical work directive, or the directive on information and consulting employees, but the worrying feature of all such measures is that in adding to the burden of the cost of employment they would, in effect, prejudice employment levels, as some of my hon. Friends have said. My hon. Friend the Member for Wanstead and Woodford (Mr. Arbuthnot) stressed that aspect.
Surely that is what gives the lie to Opposition Members' crocodile tears-- that is the second time that they have been mentioned today. Opposition Members never pause to think what happens in the real world when they, alone or in concert with their partners in the EC, set about devising more and more burdens to lay upon the wealth creating sector.
We are concerned about that, because we care about how people create jobs and employment. Every time Opposition Members dream up some new whimsy or device to create an artificial paradise, the real effect is to place more burdens on the wealth-creating sector, which inevitably prejudices opportunities for employment. What they want to do would have the opposite effect from what they say. That is the disastrous gap between the rhetoric and the real effect. I sometimes wish that Opposition Members would be more honest with themselves, with the House and with the electorate. Whenever they make promises and in whatever form those promises may appear--whether they be the spending promises that we have elicited from the hon. Member for Stretford, or the regulatory bureaucratic and interventionist devices to which they are wedded and which they apparently support when they emanate from the EC--the result is the same. It is more restrictions and burdens on business and, therefore, almost inevitably, fewer opportunities for business to employ people.
The same strand of argument runs through the debate about the statutory minimum wage. I pay tribute to the hon. Member for Stretford for being so open with the House. He said that, in his judgment, many people in Britain were paid less than he thought was right and that a Labour Government would have a role in stepping forward and dictating to all employers that they must pay everyone no less than a certain wage. The hon. Gentleman believes that that would be beneficial.
The hon. Gentleman should give a bit of thought to just how that process would work, particularly among small businesses and employers who employ perhaps only one or two people, bearing in mind the fact that 95 per cent. of all businesses in Britain have fewer than 20 employees. He should come along and visit a business operating at the margins in the recession--a business in difficulty, as I concede that many are. As the Minister responsible for small businesses, I know it better than most. What will be the result if one arbitrarily introduces a law which says that, from today, an employer must pay all his employees more than he has been paying most of them hitherto? Many firms will certainly reduce the number of people working for them and some may go out of business altogether.
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My hon. Friend the Member for Wanstead and Woodford must be correct that one cannot wave a wand and ensure that the 4 million people who will benefit from the law all get more money. I agree that some may be paid more, but many will lose their jobs and be paid nothing. That calculation must be made. If we are to be honest with the British electorate, we must make it clear that that is an essential part of the minimum wage argument.Mr. Tony Lloyd : It is worth developing this important argument. The Minister is on record as saying that the existing wages councils may be abolished in the long run, but not yet. The councils provide a minimum wage for about 2.5 million people. If the Minister is right that most employers act honestly and behave properly towards their wages council-protected employees and given that he has decided not to abolish the wages councils, by his own logic, he is responsible for destroying jobs.
Mr. Forth : I regularly receive anguished letters from small businesses--mainly small retail businesses--telling me of the extreme difficulty in which the arbitrary awards made by the wages councils place them. I am giving great weight to what small businesses say and as time goes on we shall certainly consider the real effect of arbitrary wages council awards on small businesses and employment. Those arbitrary pay awards are almost certainly either reducing the number of people that firms can employ or, in some cases, driving firms out of business altogether. I am very conscious of that. I want to refer to the Organisation for Economic Co-operation and Development, which the hon. Member for Stretford also mentioned. The hon. Gentleman made a claim that we have frequently heard-- that the OECD has not criticised the French minimum wage for having caused adverse employment effects. The hon. Gentleman invited me to quote from the OECD document and I shall do so. Page 55 says :
"Indications are that the increase in the relative value of the SMIC in the 1980s is likely to have reduced employment levels, especially for youths and the unskilled the problem is substantially more severe for youths, older workers and the unskilled than others The evidence is stronger that the overall compensation of the least qualified exceeds equilibrium levels and that this has been costly in terms of diminished employment. Furthermore, the national minimum wage seems to be in part responsible for this outcome."
Nothing could be clearer. That is what the OECD, an impartial and expert body, said about the effect of the minimum wage in France. Those were the words that it used. Those are the concerns which Conservative Members have, but which Opposition Members are apparently not prepared to face. So anxious are they to bribe the electorate for their own jobs that they are not prepared to come clean about the effects of a statutory minimum wage.
Mr. Tony Lloyd : Will the Minister come absolutely clean? Will he make it clear that the report from which he quoted is not the report commissioned by the OECD specifically to examine minimum wages, commissioned and produced by Bazen and Martin, but is simply a country survey and a reinterpretation of existing data? There is a fundamental difference. One was an authentic and adequate study while the other was simply an opinion.
Mr. Forth : No, one is the official OECD document while the other is a document produced by two
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individuals. However eminent they may be, the documents have a different status. I would rather stick with the official document if the hon. Gentleman does not mind.Industrial relations law is another worrying aspect of policy. I should have thought that it was beyond dispute that a sea change in industrial relations took place in the United Kingdom during the 1980s. Indeed, the hon. Member for Brecon and Radnor (Mr. Livsey) generously alluded to that. Almost no one denies that, through a series of progressive law reforms, we have given the trade unions their proper role in society and, more importantly, their proper relationship with their members. Further proposals are out for consultation at the moment. We want to move further in that direction. We want to make trade unions accountable to the law on the one hand and to their members on the other. The dramatic effect of such a policy over the years has been the enormous reduction in the number of days lost because of work stoppages.
For example, in 1979, 30 million days were lost because of work stoppages. In January 1979 alone, 3 million days were lost. Throughout 1990 fewer than 2 million days were lost. In the past 12 months only 750,000 days were lost and that is the lowest 12-month total for more than 50 years.
That is one explanation why this country has become such an attractive proposition for overseas investors. In 1988-89, the United Kingdom accounted for a far higher proportion of total inward investment of OECD countries into the EC than any other Community country. Thirty-nine per cent. of the investment into the European Community came to the United Kingdom. France had the next highest level with 14.5 per cent.
From 1988 to 1990, the United Kingdom accounted for 46 per cent. of American investment and 48 per cent. of Japanese investment. What better testimony could there be by hard-nosed business men from Japan and the United States looking for where best to invest in Europe than those figures, which show that they want to come here? They want to do that because of the excellence of this Government over the past 10 years--that goes without saying--and more importantly because of our tax regime, our labour law framework and our record on industrial disputes and how few of them we now have. That is why investment is coming to this country.
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