House of Commons Hansard Debates for 20 Nov 1992

Column 550

"if any would not work, neither should he eat. For we hear that there are some which walk among you disorderly, working not at all, but are busy bodies."

I like the idea of busy-bodies meddling--it reminds me of the Liberal and Labour local government politicians in my constituency. From the roots of that letter from St. Paul derive not only the idea that people have a responsibility towards the society of which they are a member, and vice versa, but the whole idea of the dignity of work. In the last century, at the time of the pre-Raphaelites, work was dignified in art and in literature. Indeed, the Church of England used to have almost a theology of work. People would regard work as an essential part of human dignity. Now I fear, the more negative aspects of the modern world are being emphasised by leading figures in our society.

It is important to realise that my hon. Friend the Member for Norfolk, North is, in important part, trying to re-establish the important concept that is deeply rooted in our traditions--that people should work and that they should be given the opportunity to work. They will respond to that opportunity because work, in itself, has moral value. Essentially, it is better and kinder for people to be doing something than to become used to doing nothing. Workfare, in its broad sense, offers the prospect of work and the dignity that goes with it.

We should not say that, for example, tree planting, the cleaning of canals, environmental work reclaiming wastelands or helping the handicapped and the elderly is not fit work--it is fit and important work which should be done be people throughout the country. As my hon. Friend said, his proposal is not a job-creating scheme because there is plenty of work that needs to be done.

If my hon. Friend's scheme were to be implemented it would help to ease the great fear of unemployment. People in my constituency are experiencing unemployment for the first time. When they first went into work they never thought that they would find themselves in that position. Even those who are not unemployed generally know of people in their families or living in their streets who are in that position. We must recognise that the fear of unemployment has spread throughout the country and throughout all social classes. That fear could be alleviated if people knew that if they lost their jobs there would still be something useful for them to do and they would not simply be facing acres of empty space.

Mr. Tony Banks : The hon. Gentleman says that people in his constituency are in fear of unemployment. Knowing his constituency as I do, and knowing that it includes Windsor castle, can he say whether anybody at Windsor castle shares that fear?

Mr. Trend : I am sure that the hon. Gentleman does not expect me to deal with that point.

Workfare offers the state a shift to, as they say in Sweden, the employment principle. I warmly welcome that. It offers a shift away from financing unemployment to finding employment. For the individual, it offers the dignity that goes with having useful work to do and it offers the opportunity to get something for something, rather than something for nothing.

My hon. Friend the Member for Havant spoke about the new age travellers who were a prominent part of our summer. I have no objection to people travelling around the countryside. Before the war Vaughan Williams used to do that. No doubt he walked in fields, sat down on a

Column 551

farmer's land and ate a sandwich. Perhaps he listened to a lark ascending and thought, "That's a good idea." But I object to people who despoil the countryside, perhaps ruining archaeological remains, breaking the law, outrageously camping on private property--and then expecting me to pay for it.

There is a great deal of support outside the House for the concept that I shall call reciprocal obligations. Full Employment UK published a report resulting from two consultations in my constituency at St. George's house, which is part of the castle. It is called "A New Policy Framework for Unemployed Adults" and it was published last year. It includes many points and it is another way of viewing the general concept of what we are discussing today. One point that it makes is that there should be automatic referral to a new community benefit programme. I understand that "community benefit" is the phrase used by my right hon. Friend the President of the Board of Trade when he writes about the matter.

The report suggests that there should be a last resort sector for those who have either been failed by the system or have themselves failed the system. The report contains an open-ended obligation. Some do not think that that is the right approach. We must accept that there are different approaches, and one of the key elements that distinguishes them is when or whether unemployment benefit should be stopped. That is a hard subject to discuss, but it must be faced. It is probably an essential part of the classic workfare theory--if I may call it that--that we must take seriously the prospect of stopping benefits at a certain point. If that were to be the case, in return--as part of the reciprocal obligations--the state would have to take seriously the level at which it funded the workfare programme. It is very much to the credit of my hon. Friend the Member for Norfolk, North that he is exceedingly realistic in his excellent pamphlet on that point. All schemes that come before the House have to be tested for the costs that they would incur. I have some anxieties that even my hon. Friend's staged approach to introducing a full workfare system would incur considerable costs.

I have some other minor anxieties about my hon. Friend's scheme. One is that if a minimum income of £100 a week is established, it may in time become seen as a minimum wage--the floor below which people would believe that they should not fall. There is a minimum income in the present structure of benefits, below which people cannot fall, but there is a danger that, as people are used to the present system, they will regard the new system as a doubling of the minimum wage.

Mr. Ralph Howell : As my hon. Friend acknowledged, a minimum income operates for every individual in the country. Every individual can have support. That counters my hon. Friend's concern about the £100 being regarded as a minimum wage.

Mr. Trend : I am grateful for that clarification.

Another of my anxieties is that in some circumstances the workfare scheme could become part of what one might call the Mussolini approach to politics --the building of autostrada and the digging of holes and filling them in. It is a feature of totalitarian Governments throughout the world this century--one thinks of Mao's China or Stalin's

Column 552

Soviet Union--that they send work gangs out simply to keep them out of what the Government of those countries regard as mischief. I do not sugest that my hon. Friend's programme of workfare has any features that could develop into the Mussolini approach. However, in a general sense, caution is needed in a free society not to place too many obligations on people or restrict their freedom of choice. From reading my hon. Friend's pamphlet closely, I know that his scheme is not a cheap labour scheme. In the pamphlet he made an important point that he did not mention today. His scheme would be voluntary. We should emphasise that.

I hope that I have expressed great support for the idea of workfare. It is valuable and should be examined further. I wish to deal with the employment and social security aspects of the present position. I welcomed the announcement made by the Department of Employment after the autumn statement this year that all people who have been unemployed for a year and do not take up other offers of help will be required to attend a job plan workshop. That is a step in the right direction. After people have been unemployed for a certain length of time, stock will be taken of their position and they will be given advice. It will be a moment to take tough decisions on difficult cases.

The announcement contained another important element. The training for work programme will replace the existing employment training and employment action programmes. It will be delivered through the training and enterprise councils. It is expected that 320,000 adults next year will be offered an opportunity to improve and update skills and learn new skills.

"or do work of benefit to the local community."

The programme is still in its early stages. It refers back to schemes that the Government have run in past years. It is important that in the context of the training for work programme, we should consider in greater depth useful work that might be done by people who are unemployed.

The present social security position is interesting. On 12 November my right hon. Friend the Secretary of State for Social Security made a statement following the autumn statement. It contained another welcome announcement. Regulations are to be laid to withdraw income support from those who are not even actively seeking work. My right hon. Friend made those remarks in the context of fraud. He hoped that savings of about £1 billion each year would be made when his proposals had been put into action.

I see the Secretary of State's announcement in the context of a new package that enshrines many of the concepts of workfare. The future might hold an arrangement whereby the unemployed are at least offered training or socially useful work. They should not be paid to do nothing. They should be given a basic-plus for their work. However, payment should be cut off for some people in certain circumstances. We should approach the problem from two ends, and if we did so our approach would have many of the characteristics of workfare. The concept of workfare has a strong appeal. If I have achieved anything, I hope that I have stressed that the ideas of my hon. Friend the Member for Norfolk, North have an important moral purpose. I appreciate the practical difficulties in such a scheme, and he has been realistic about them. The appeal of the idea is that it offers people the dignity of work and self-respect and gives the

Column 553

state a chance to finance employment and not unemployment. The difficulties are such that, even if we were to move transitionally towards workfare, we probably would not start from the motion. We must find a way to include the advantages of the workfare scheme in Government policy.

Cost is the second difficulty, and it would be almost irresponsible of the Government to move to what one might call the harder aspects of workfare, unless they were prepared to make the money available to ensure that the system worked properly.

The Government's proposals will bring greater discipline and precision to what we mean by the reasonable bargain between the individual and the state. I urge them to keep the essentials of the proposals of my hon. Friend the Member for Norfolk, North in the front of their minds, because there is so much to be recommended in them.

12.36 pm

Mr. Tony Banks (Newham, North-West) : I remember Sir Alan Glyn, the predecessor of the hon. Member for Windsor and Maidenhead (Mr. Trend). As Dr. Glyn, he was regarded with great affection in the House ; we all have a fund of Dr. Glyn stories. I used to get on well with him, but I had one abiding fear--I had collapsed in the House, and was coming round to consciousness to be greeted by the vision of Dr. Glyn, about to descend on me to give me the kiss of life--not a pretty thought ; but he was a man for whom the House had great regard.

The hon. Member for Windsor and Maidenhead spoke for some time about Beveridge, but he did not describe some of the things that Beveridge meant to us and to the country. Beveridge was an interventionist, and I find it almost inconceivable, given his interventionist stance, to hear him quoted approvingly by Conservative Members of Parliament, especially those from the remaining Thatcherite wing of the party.

I made notes as the hon. Member for Windsor and Maidenhead spoke. Beveridge saw the state as enabler. He anticipated and looked forward to full employment and that is the biggest difference between Beveridge and Conservative Members--and some Opposition Members. In recent years, some people have accepted that full employment is not achievable in economic or political terms, whereas it used to be one of the areas of consensus between the two major parties ; that objective was set out in our respective election manifestos. There also used to be competition on housing between the two parties--both in government and in opposition. They used to say, "We built more houses than you did." I liked that argument--it was like an auction--and I would like both parties, whether in government or in opposition, to list the achievement of full employment and the building of homes as programmes in their manifestos. The two are inextricably linked.

Mr. Ralph Howell : It seems that we are now having a bit of an auction as to who has the greater regard for Beveridge.

Surely the hon. Gentleman must appreciate that one of the cornerstones of Beveridge's proposals for the unemployed was that unemployment benefit could not be paid indefinitely and that, after either three months or six

Column 554

months, that benefit should cease and work be offered. If a young person did not have a job, he was offered training, but he was never encouraged to take benefit alone.

Mr. Banks : I accept what the hon. Gentleman says, but he should remember what I said earlier--that theory works much better when full employment is the objective. Given the present economic situation, the hon. Gentleman has put forward not an alternative to full employment but a camouflage for unemployment.

If real jobs were on offer, the situation might be different. I am not talking about the £2.50-an-hour jobs of which the hon. Gentleman spoke. It is totally unacceptable for people to receive such an hourly rate, but many people currently exist on such pay. If there were genuine full employment and genuine jobs available, I would have great sympathy for the hon. Gentleman's proposals for those people who refused a proper job and did not take advantage of the training they had received at the expense of the state. We are not in such a situation today.

Mr. Ralph Howell : The hon. Gentleman is totally out of touch. When this matter is discussed in the media, I get many letters from unemployed people who are desperate to take up the £2.50-an-hour jobs that I have suggested. Whenever this matter has been discussed at election time in my constituency, my constituents have criticised me and said, "You have been talking about this for years. Why on earth can we not have those jobs that you have suggested?"

If the Beveridge proposals were in operation today, we would not be worried about the 2.9 million people who are unemployed, because fewer than 900,000 people would be unemployed for more than three months. In fact, there would not be as many unemployed people as that had we put the Beveridge report into practice in full in 1948.

Mr. Banks : A combination of Keynes and Beveridge would be ideal, but that does not take into account current circumstances. The hon. Gentleman is seeking to rewrite the Beveridge report to suit the 1990s, when that report was written in the 1940s and dealt with a completely different situation. The world has moved on, but not to the benefit of working-class people in terms of job availability and the way in which they are treated by the state.

The hon. Member for Norfolk, North (Mr. Howell) is trying to cover up the economic failings of the Government with a scheme that might be okay if we had a genuine, interventionist, Keynesian Government and the prospect of full employment, but that is not the case. I listened very carefully to what the hon. Gentleman said. I respect his views, because he has been proven right in this House on more than one occasion. He likes to give the impression of being a simple farmer from Norfolk, but he is anything but that. Quite a long time ago, the hon. Gentleman suggested replacing, or paying for, poll tax with VAT. Later, the Government were looking for a way out of an appalling mess into which they had got themselves, and produced a variant of the hon. Gentleman's suggestion.

I feel sure that what the hon. Gentleman is now talking about is on the cards, especially with the present Government in power. I say that because they have nowhere else to go. Unemployment is so high in Britain that it is pushing up the public sector borrowing requirement to the point at which they will have deal with it directly in terms of benefits.

Column 555

Conservative Members may say that that has not happened yet, even though it had been anticipated. That is true, and I agree that many Opposition Members anticipated that something would be said in the autumn statement about not increasing the range of benefits in line with inflation. The Chancellor led us to believe that he might say something along those lines, but then adroitly drew back so that his supporters could cheer. But they are cheering temporarily, because there is almost an imperative in Government economic policy to go down that road.

I was pulled up by your predecessor in the Chair, Mr. Deputy Speaker, for having one of my apoplectic fits in a sedentary position. Knowing what a hard man you are, I am glad you were not in the Chair at the time ; had you been, I doubt whether I would have been called to take part in the debate. I confess that I got angry as I heard from Conservative Members the sort of terminology one gets used to hearing from them--about the dependency culture and a "something for nothing" society. I recall the Secretary of State for Social Security saying much the same at the Conservative party conference and receiving cheap cheers from the blue-rinsed and red-necked hordes.

I am referring to the sort of terminology that really annoys my hon. Friends and me. When Tories talk about a "something for nothing" society, they are really talking about people on income support, unemployment and housing benefit and so on. They never seem to talk about the real parasites who live in our society and operate in the economy. I refer to the currency and commodity speculators and those who did so much damage to the Government's economic policy on black Wednesday, when we were forced to take the pound out of the exchange rate mechanism. Those are the real "something for nothing" merchants : the people who make money out of money and who cause or exacerbate economic crises.

They could not have succeeded as they did on black Wednesday if the British economy had not been so structurally and fundamentally weak. Speculators will always try a run against currencies--they did it in France a little later--but so long as the underlying economy is strong, they cannot succeed. The knew how weak the British economy was. I have no time for them. They are the "something for nothing" merchants with whom I would deal, and it is time for the Government to recognise the damage that they inflict on economic policy. The Government should produce a Europewide method of dealing with those parasites.

Mr. Gorst : May I help the hon. Gentleman to return to the bipartisan benevolence which I know exists as a strain in his political personality? Will he give us the benefit not so much of his distaste for the present Government's actions as an indication of where he believes the scheme has any merit, if he believes it has? If he finds flaws in it, perhaps he will constructively offer advice about how it might be made more palatable to him.

Mr. Banks : The hon. Gentleman asks the question in a gentle way, and I assure him that I have a fund of good advice for Conservative Members, although I doubt they would heed any of it. I shall make some suggestions later. This is probably not the sort of debate in which to go into the intricacies of a proposal that at present I consider to be inappropriate.

Column 556

The proposal of the hon. Member for Norfolk, North is, as the motion says,

"That this House recognises that unemployment is nearly three million and rising ; considers that unemployment is wasteful and soul destroying".

The real issue is about unemployment, so I shall deal with why this country has such high unemployment and what we should do about it. I might find the hon. Gentleman's scheme attractive if people looking for work could contemplate full employment, or as near as one can get to full employment. There is no such thing as full employment, because there will always be people in the process of changing jobs or being retrained.

Insufficient retraining is done in this country. If we look at other European countries we see how many times people are retrained during the course of a productive economic life. It does not happen like that in this country.

Yesterday I was giving out prizes at Sarah Bornell's school--an excellent girls' school in Newham--and discussing the situation that used to exist when I was at school and when the hon. Member for Norfolk, North and other Conservative Members were at school. We had options and could choose what job we wanted to go for. At university, too, different careers were open to us, and the world was full of far greater promise than it is now.

Now, all we can offer people is, if not a lifetime on the dole, certainly the prospect of going immediately from school, college or university on to the dole and then drawing benefit. People do not have the opportunity to decide which area of economic activity they want to enter and how they want to be trained.

Mr. Ralph Howell : It is difficult to follow the hon. Gentleman's argument. This country and the whole world have a problem, but he simply describes what it was like so many years ago. It must be right to address the problem and to find a way to solve it. If my proposals are not acceptable, where are his proposals?

Mr. Banks : I hope to get on to the many proposals I have in the next hour or so. I am not just reminiscing for the sake of it, although old men tend to do so these days.

I often hear Conservative Members talking about how bad things were when the Labour Government had to call in the International Monetary Fund because of economic problems, so I took the precaution of going to the Library for a set of statistics comparing today with 1976-77. They are very interesting. It is not that long ago--certainly well within the memory of the hon. Member for Norfolk, North. When the IMF was called in, the unemployment rate was 4.3 per cent. ; it is now 10 per cent. and rising. In June 1976, 7 million people were employed in manufacturing industry ; in June 1992, there were 4.4 million. Unemployment has been caused by the fact that manufacturing industry has been decimated by the Conservative Government's policies. The hon. Member for Norfolk, North may say, "Hang on, this recession is all over Europe." That may be so now, but we have been in a recession for far longer than any other European country, and unemployment is still rising faster here than in any other of our Community partners. They are just entering a recession, whereas we have been in one and shall now go from recession into slump. One has only to look at this morning's newspapers. The Times headlines say : "British Rail axes 5,000 on black day for jobs". The Guardian says : "10,000 hit in swathe of job cuts". That is

Column 557

what is going on in this country and the hon. Gentleman should deal with the failure of his Government's economic policies, rather than looking around at ways of sticking plaster and a few bits of gum over the real problem of unemployment.

Mr. Nirj Joseph Deva (Brentford and Isleworth) : The hon. Gentleman correctly talked about the IMF having to be called in, but does he agree that it had to be called in because the then Labour Government had totally mismanaged the economy?

Mr. Banks : I shall tell the hon. Gentleman something else. The statistics show that things were immeasurably better in 1976-77 than they are in the 1992-93 tax year. Between-- [Interruption.] The hon. Member for Sutton and Cheam (Lady Olga Maitland) jumps up and down like a demented jack-in-the-box. I shall give way to her in a moment.

Since 1979-80, the Government have had the benefit of no less than £110 billion-worth of receipts from North sea oil and gas. That is the patrimony that has been squandered by the Government. We have experienced economic failure when we were the only country in Europe, other than Norway, that was entirely energy-independent. To have received £110 billion and to have wasted those moneys is criminal.

Mr. McLoughlin : Was it by virtue of the hon. Gentleman's support for the autumn statement of my right hon. Friend the Chancellor of the Exchequer that the Opposition did not vote against it yesterday? My right hon. Friend has done an incredible job in protecting public investment, whereas the Labour Government slashed capital spending.

Mr. Banks : I do not think that the Minister can draw any great comfort from cock-up theory of history. Had there been a reliable and experienced Whip such as myself on duty last night, the cock-up would not have occurred. In the end, a Division would not have swayed the Government from their position. It was a slightly unfortunate accident, but, in comparison with the Government's breathtaking economic incompetence, it was a fairly minor matter.

Lady Olga Maitland : The hon. Gentleman has referred to the economy in the 1970s. The Labour party lost the 1979 general election because of the disastrous state of the economy at that time, and a Labour Government will never be re-elected.

Mr. Banks : The hon. Lady has made an extremely cerebral point in a characteristic fashion. In politics, the word "never" is not one which she or anyone else should use. In the interests of greater accuracy, as we say in the House, I shall send the hon. Lady a copy of the letter that I received from the Library. I would not want her arguments spoilt by having the facts in front of her, but if she reads the letter she will learn how better things were in 1976 than they are now.

Mr. Clifton-Brown : As for accuracy, it is nonsense to say that £110 billion has been squandered by the Government. How many new road schemes, new schools and hospitals and other forms of public investment have there been over the past 12 years?

Column 558

Mr. Banks : It is indeed inaccurate to say £110 million. It is £110 billion.

So much more could have been done. If any of us had received a comparable sum--I am not talking about billions of pounds--we would have invested it with care. Instead, North sea oil revenues and capital receipts from the privatisation of nationalised industries have been used to keep people on the dole. Every person who is unemployed costs the country about £9,000 in terms of benefit and lost taxation. That is our money, not the Government's. It belongs to us all, and I want my money to be spent wisely, not squandered. There is a practical solution to the problem we face. A good investment is to get people back to work. When they are at work, there is an immediate gain, because it is not necessary to pay them benefits. If they have real jobs and earn a decent wage, they can go out and spend some of their money. That should be fairly simple, even for the hon. Gentleman--

Mr. Clifton-Brown : The hon. Gentleman misrepresents me--I said £110 billion, not million. If he does not believe that investment in schools, roads and hospitals is investment in our nation, I do not know what is. Will he tell us one policy of his that would enable us to achieve the full employment that he is talking about?

Mr. Banks : I can think of many. It is all a question of investment. Some economists recently wrote in an article in the Financial Times that, when it comes to worthwhile investment, it does not matter where the money comes from. A good investment is as good for public as for private money. It is the ideological fixation of the Conservatives that prevents them from realising that. I want my money spent wisely and invested properly. The Chancellor failed in the autumn statement to say anything constructive about the £5.1 billion-worth of accumulated capital receipts that local authorities hold from the sale of council houses. He did say that they can use 100 per cent. of those receipts from now on. This is a bad time to be selling property ; why not use the accumulated receipts to create work? Linking our earlier arguments, that would also do something about homelessness.

Large numbers of people living in sub-standard accommodation, private and public, and many others are homeless. There are also unemployed construction workers. One does not need a PhD in economics to realise that these factors should be brought together to solve a number of problems--

Lady Olga Maitland rose --

Mr. Banks : One problem that cannot be solved is the agitation of the hon. Lady, to whom I give way yet again.

Lady Olga Maitland : The hon. Gentleman has spoken of homelessness in his constituency. We all know that thousands of people are living in sub -standard accommodation or are homeless in his constituency because its left-wing-controlled Labour authority is so hopelessly inefficient that it squanders money and refuses to go in for joint venture schemes which would provide homes and stimulate the economy--

Mr. Deputy Speaker (Mr. Michael Morris) : Order. We are getting beyond the scope of the motion now.

Column 559

Mr. Banks : I will relate my remarks to the motion, which is about unemployment. My point is that, by dealing with the homeless, we can create jobs in the construction industry. When a local authority starts to build, it puts money into the private sector.

The ignorance of the hon. Member for Sutton and Cheam is so profound that it beggars belief. The only way to deal with the problem is to make her come and see my borough--possibly a visit to which neither of us will look forward, but in the interests of my future sanity, it has to be done.

Mr. Deputy Speaker : Order. The House rises at 3 pm. Perhaps the hon. Gentleman and the hon. Lady can then go elsewhere ; meanwhile, can we get back to the motion?

Mr. Banks : I am sorry, Mr. Deputy Speaker. It is just that, by 3 o'clock, I may have been turned into a homicidal maniac by the hon. Lady.

It is nonsense to suggest that my borough does not go in for joint ventures. We enter into them all the time with the private sector, particularly in construction. I shall send the hon. Lady details afterwards. Newham has close relations with the private sector. We are not ideological, and we have no objections to it. The trouble is that Conservative Members are ideologically fixated. All we hear is, "Labour councils bad, Tory councils good." So let us move on. People with such a simplistic view of life should not be in politics. There must be work with the private sector. It is the people who work in the private sector who live in my constituency and want the jobs. The hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) asked me how we can create more jobs. In Newham, it would help if the Government made a definitive announcement about the Jubilee line, instead of waiting for £400 million from the bank. As I said, investment is just as good for public money as it is for private money if it is sound in the first place.

Secondly, the construction of a railway station at Stratford for the channel tunnel link would bring jobs to an area in which the railway can play a traditional role.

It may be constructed by the private sector, but it would provide jobs for my constituents. I am not ideologically fixated--unlike the hon. Member for Sutton and Cheam.

Mr. McLoughlin : The hon. Gentleman ought to acknowledge the amount of Government money that has gone into his borough, including the successful application not long ago for city challenge. The hon. Gentleman suggests that we take a simplistic view of Labour councils versus Tory councils, but the hon. Gentleman takes a simplistic view of Tory Governments.

Mr. Banks : The Minister does me less than justice. The Minister for Housing and Planning, who visited my constituency for city challenge is a man for whom I have some regard. I have known him for many years--since the days when he was on Lambeth council, together with the Prime Minister. That council provides a distinguished training ground for Tory politicians. I say thank you to the Under-Secretary of State--I will always thank a Government who provide jobs and initiative in my borough. I am not sure that city challenge is the way to do that. The trouble with competitions-- [Interruption.] I notice that the Minister for Housing and Planning has just entered the Chamber--he will be pleased to hear that I

Column 560

have just referred to him in the most affectionate terms. He will be able to confirm my sentiment, and confirm that when he visited Newham, I thanked him--and he spoke approvingly of some of our initiatives.

We do not have a hang-up, and we will thank the Government for action that they take, but we also have a right to criticise if we believe that the Government are doing something wrong. The Under-Secretary of State and Conservative Members know that I am fair--harsh in my criticism, but warm in my praise, and I praised the Minister when he visited my borough.

The hon. Member for Norfolk, North is anticipating. I said before that he is a man ahead of his time. As he commented, there is nothing new about what we are seeing now--there is nothing new under the sun. We are simply seeing a variant of the workhouse, and something like the bankers' ramp of the 1930s. That always happens when expenditure seems out of control. The Government operate in the area in which they have the most influence--the payments of benefits. I fully expect to see more people like Lord Tebbit espousing the views that the hon. Gentleman holds, for all the wrong reasons.

The hon. Member for Norfolk, North is right to say that unemployment is a curse, but it has always been created by Government policies, though undoubtedly exacerbated by problems throughout the whole of Europe. However, we have been longer in recession than any other European country-- and we are likely to remain longer in recession and to go into slump unless something more dramatic is done than the Chancellor's tinkering in his autumn statement.

Britain has some of the lowest unemployment benefit rates in the whole Community. In other Community states, unemployment benefit is related to previous pay. In this country, only a flat rate is paid. That is a pretty dismal view if one's income falls from average earnings of £300 plus to the £43 a week unemployment benefit paid to a single person. That is only 14 per cent. of the skilled rate, which is a dramatic fall. That is not true of every case, but that is the scale of the drama that can be experienced by people being in work and then out of work.

Mr. Clifton-Brown : Earlier, I asked the hon. Gentleman to suggest one measure that would return this country to full employment. I hope that he will respond before he resumes his seat.

Mr. Banks : I am chucking them in as I go along. I have already mentioned the £5.1 billion of accumulated capital receipts, construction industry, Jubilee line, and channel tunnel link. This morning, I listened on the radio to the hon. Member for Christchurch (Mr. Adley), who is an acknowledged railway buff. He made a good point on the "Today" programme. My wife and I were listening to the radio, and I said to her, "You would not believe that he was a Tory MP." The hon. Gentleman said that we should imagine ourselves going along on Victorian railway lines, yet travelling alongside roads which have only just been built--or at least, roads which were built in the 20th century.

In many respects we are still living off the Victorian infrastructure. So much investment in the infrastructure needs to be made. Spending money in that way is investment. I know that Conservative Members will say that such investment increases the public sector borrowing requirement and the percentage of debt in relation to the

Column 561

gross domestic product. But we have one of the lowest public debt percentages in Europe. We have the capacity to invest. We spend money when we give it out in transfer payments--benefits. But we invest money when we use it for the infrastructure and for retraining. The hon. Member for Cirencester and Tewksbury doubtless has many schemes of his own, but we should say to ourselves, "Our society has inherited infrastructure from wise decisions made in the past, and we should add to that stock." That is what we do in our private homes, if we are lucky enough to have them. If we can do that as individuals why can we not do it as a country? There are many ways of dealing with the matter.

The hon. Member for Havant (Mr. Willetts) made a characteristically thoughtful speech, saying that it was not the Government's job to bring together the idle hand and the unmet need. He said that that was the job of the labour market. If it were happening I might have some sympathy with the hon. Gentleman--but it is not happening. The free market does not work. It is "voodoo economics" as George Bush once memorably described Reagan's policy--and he might just as well have been describing Baroness Thatcher's policy. Voodoo economics has not worked. If it had worked I would say that there must be something in it.

Unemployment is so high in this country. The official figure is 3 million, and we must take into account the fact that there have been 19 or 20 changes in the method of calculating the unemployment statistics. If we returned to the original 1982 basis for the calculation there would be 4 million people unemployed in this country. Unarguably, on statistical grounds, 1 million of those people would be long-term unemployed. If someone tells me that that is a sign of economic success I shall ask that person what failure would be. If he replied that failure was 1976-77, the International Monetary Fund and the Labour Government, I should refer him to the Library, and the letter in my possession.

What worries me so much about present Government policies is the fact that we are looking at abysmal failure. Conservative Members do not seem to grasp the depth of the recession, nor how fatal it could be for this country. We could reach a point at which recovery would be impossible. Even if the long-awaited green shoots appear and flower into something, the underlying strength of the economy is poor, and manufacturing industry has been decimated over the past 13 years. What would happen if there were any growth in the economy, and any increase in demand? We all know the answer. We would suck in imports. This country's propensity to import is enormous-- far greater than that of the United States, for example.

If we suck in imports that will further exacerbate the balance of payments, and cause the pound to fall even further, which will cause the Chancellor of the Exchequer to come back and say, "I must stick up interest rates to protect the pound."

Those are futile economies ; they are the economics of the madhouse, as they say. This is the madhouse, and I am beginning to feel like an inmate-- and perhaps to sound like one.

I must say to the hon. Member for Havant, although he is no longer here, that the Japanese have seen through those theories. They have announced an investment

Column 562

programme costing $87 billion. The Japanese are not known to throw their money around wilfully. I suggest that if the Japanese have decided that such an investment programme is a good thing, it is at least worth considering for this country.

I do not believe that Conservative Members have grasped the scale of our economic problems. At the end of the Chancellor's autumn statement they were waving their Order Papers. Why on earth they should do that, when every one of the Chancellor's previous predictions has been wrong, I do not know. I have not the faintest idea why they should think that he will get this one right. Even if he were to get it right it would not make any difference. Watching Conservative Members last Thursday was like watching serried ranks of lemmings waving their Order Papers before plunging over the side of a cliff. If it were only the inhabitants of the Conservative Benches who were plunging over the cliff I should not mind ; I should quite welcome large numbers of them going over--I mean no ill intent. But it will not be Conservative Members who lose their jobs--or at least, not immediately. They may not lose their jobs until the next election.

As we go further into recession it will be people in my constituency who lose their jobs. Some 18.6 per cent. of my constituents are unemployed. That is the problem in the London borough of Newham. The worse the recession gets, the worse it gets for Newham. Anyone who thinks that I draw any satisfaction or comfort from the failure of Government economic policies does not understand how seriously I view the problems of my constituency.

I see signs of extreme anxiety among Ministers as they do their calculations about timing. I hope that they are better at their calculations on the timing of the debate than they are at their calculations on the economy. They probably stand a better chance on the former. I realise that other Conservative Members also wish to speak.

Until the Government really grasp the depth of the horror facing the British economy, and until they get off their ideological hobby horse and start realising that, if investment is good, it is as good for the public sector to invest as it is for the private sector, they have learnt nothing and forgotten nothing.

The days ahead for this country look exceedingly bleak. The only chink of light is the election of a Labour Government. Unlike the hon. Member for Sutton and Cheam, I never say never, because I believe that a Labour Government will be elected as a result of the economic problems forced on the country by the inept policies of the Government whom she supports.

1.15 pm

Next Section

Home Page