House of Commons Hansard Debates for 20 Nov 1992

Mr. John Gorst (Hendon, North) : I have a sneaking feeling that the speech by the hon. Member for Newham, North-West (Mr. Banks) was yesterday's speech. I am not suggesting that it was out of order, although it clearly bordered on that, but I believe that it would have been more appropriate in the debate on the autumn statement than it was today. I imagine that the hon. Gentleman was giving way to frustration. However, it is always enjoyable to listen to his vehemence, vigour and invective, laced as it always is with a great deal of humour.

The House and those of us who have sat through the debate today will be grateful to my hon. Friend the Member for Norfolk, North (Mr. Howell). He has tried to produce a positive and constructive approach to the

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problem of unemployment. Whether the specific changes he suggests are right is less important than that his general approach should be accepted by the Government, examined and then, in the light of that examination, acted on. I hope that in that spirit--the spirit in which speeches have been made by Conservative and Opposition Members--we shall realise that we are reviewing the possibilities for the future rather than engaging in an analysis of the present.

In that spirit, I turn to one suggestion that is worthy of consideration, not in place of, or as an alternative to, present policy, but as an extension to it. The hon. Member for Jarrow (Mr. Dixon) will recall that we were members of the Select Committee on Employment which visited Japan in 1986. The hon. Gentleman may be able to remind me of details or to correct me on specifics of the suggestion to which I want my hon. Friend the Minister to give serious consideration.

In 1986, we visited the Kawasaki heavy industries company which was a large manufacturer involved not only in making motor cycles, but in building ships. Shipbuilding then was suffering from world surpluses and seemed to be in terminal decline. Fortunately for Kawasaki, the Japanese Government operated a scheme to protect lifetime work forces from being broken up and thrown on to the unemployment heap, which would have been negative and barren.

The idea of the scheme was that the company should retain its workers so that they should not become an unproductive burden on society. The scheme involved the Government declaring a particular industry--in this case, shipbuilding--to be obsolescent, and subsidising firms for the extent of their wage bill for up to two years. During that time, approved projects that were already in the pipeline--though perhaps many years from fruition- -could be pursued, and the firm would retrain its work force to build, say, helicopters rather than ships.

The great advantage of the scheme was that, instead of the work force being broken up and people being made redundant and turned into an unproductive non-wealth creating burden on the state, they were being positively retrained--perhaps at the same expense as if they had been drawing unemployment benefit and perhaps at slightly greater or slightly less expense.

I urge the Government to examine such schemes. I readily concede that they might not help us to deal with the obsolescence of the mining industry because, by their very nature, such undertakings do not have research schemes that can be brought forward. Perhaps I should add that that shows the desirability of privatising wherever possible and encouraging privatised industries to develop such research projects, the risk being taken in the private as opposed to the public sector.

I hope that, in the context of the debate, my hon. Friend the Minister will bear in mind the fact that there is no dignity in people being in receipt of public support. As has already been said, there is great distress. Anything that can be done to retain people in active work is highly desirable, whether it is necessary as a consequence of recession, of obsolescence or of the cumulative mistakes made by this party or another party or by no one in particular in the handling of the economy.

I hope that my hon. Friend the Minister will believe that not only the scheme that I have outlined but the more detailed proposals advanced by my hon. Friend the

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Member for Norfolk, North are worthy of further consideration, and that something will be done about them not tomorrow but, if possible, this evening.

1.22 pm

Mr. Tony Lloyd (Stretford) : It is always a genuine pleasure to follow the hon. Member for Hendon, North (Mr. Gorst), who at least reflects on what he says in the House. I shall return to his remarks, but, before doing so, it is only right that I should congratulate the hon. Member for Norfolk, North (Mr. Howell), first, on winning the ballot and, secondly, on choosing a subject that goes to the very heart of our biggest single problem. The hon. Gentleman was absolutely right that the single most important issue facing Britain and western Europe is unemployment. We may differ over how we should tackle that problem, but we should not differ over the scale of the human misery that has been caused by the politics of unemployment for so many years.

I am not prepared to be charged with making partisan points when I say that I hold the Government and many of the policies that they have pursued for the past 13 years directly to blame for high unemployment and the human misery that it causes. To do otherwise would be to absolve those who have made some tragic decisions of their responsibility for that misery.

For all the time that I have been in the House and previously, my constituency has suffered from a high rate of unemployment. Many people think of unemployment as an inner-city problem. My constituents--like those of my hon. Friend the Member for Newham, North-West (Mr. Banks), who have similar backgrounds--are sometimes dismissed as having less value and fewer rights than others in our society. I deeply resent that, not just on behalf of my constituents but for myself, because I grew up in my constituency. Of course, I accept that the hon. Gentleman's motion shows that he does not support that view.

It is important that we recognise precisely what unemployment does within our communities and why the hon. Gentleman is right to seek solutions. Unemployment is brutally crippling our society. In my area--although this is not typical to Manchester--drugs are being sold on the streets on such a wide and open scale that it is leading both directly and indirectly to the most mean and callous of human behaviour. People are literally killing each other--not through the use of drugs, but through territorial wars. That comes down to the politics of unemployment being played out on the streets. Many years ago, someone in my constituency said that the people serving as role models for the youngsters were those who rode around in big cars wearing good suits--things that they had earned from the drugs trade. Therefore, no one in society should be surprised if those youngsters themselves came to believe that the only way that they could make progress was to follow that lesson. That point is fundamental to the way that we deal with the problem. As I have said, the Government historically share a great deal of responsibility for unemployment. Because of their general macro-economic incompetence and their specific incompetence in dealing with micro-economic solutions, they bear the responsibility for allowing the unemployment problem to continue.

During the past few years the rise in unemployment in Britain has been far in excess of that in other European

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countries. The days are long gone when I sat on the Front Bench and listened to the former Chancellor, Lord Lawson, mocking the Opposition. He said that the future of manufacturing industry was no longer of any interest because it was yesterday's industry and we were looking to the brave new world of the service industries. He said that it did not matter that there was a balance of payments deficit on manufactures, although we consistently cried that that was the politics of stupidity. One or two Conservative Members echoed our cry, but not enough to change Lord Lawson's mind.

The current Chancellor told the Treasury Select Committee "I do not believe in kick starting the economy by some artificial stimulus or device."

In the autumn statement, the right hon. Gentleman slightly changed his mind. However, if he believes his words to the Select Committee, not only is he wrong but he is wrong at the expense of just those people that the hon. Member for Norfolk, North is trying to help. The problems caused by the Government's ridiculous economic policies have led this country to its current financial state and the heavy social price that our people are paying.

It is important to recognise that it will be many, many years before the social malaise caused by mass unemployment works itself out of the system-- even if, in the short term, we can return to full employment. I can do no better than agree with my hon. Friend the Member for Newham, North-West, who emphatically made the point that if we want to return to Beveridge's debate about the future of Britain--going back not just decades but, technologically, generations--we must accept that Beveridge envisaged a society of full employment. The measures that Beveridge suggested were to be set in the context of a society which could offer effectively full employment.

Mr. Ralph Howell : I believe that Beveridge envisaged about 7.5 per cent. unemployment. He called that full employment.

Mr. Lloyd : Beveridge drew up the plans--on which both Labour and Conservative post-war Governments acted for some time--during the war years when people had returned to active work, whether war work or active service in the armed forces. Beveridge was among those who argued that post-war Governments should pursue the politics of full employment.

The Opposition believe that Britain must have a Government determined to pursue the politics of full employment and run the economy in a way that is consistent with that set of political decisions. Our fundamental problem in recent years has been that while the Government paid lip service to full employment, on every occasion they have made the needs of the unemployed and the requirement for full employment subsidiary to the other variables on which they chose to concentrate.

The hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) asked my hon. Friend the Member for Newham, North-West which single measure he would implement. That simple question showed the fixation with a magic solution which has bedevilled economic planning in Britain for 13 years. It was simple-minded monetarism

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for a long time. The Government pursued simple-minded solutions on every occasion, such as sticking with the ERM at the rate at which we entered or sticking with a policy to keep inflation down. Those so-called solutions failed to deliver the goods and did not maintain a balance between the different aspects of economic management which are all necessary.

Mr. Deva : In previous speeches much was said about investing billions of pounds in infrastructure. But not one word was said about inflation. Does the hon. Gentleman recognise that it is a fact of our economy that the control of inflation is an important requisite for competitiveness because we shall continue to compete against low inflation countries, especially in Europe? Will the hon. Gentleman say a few words about how he would control inflation and make the public expenditure programmes work?

Mr. Lloyd : The hon. Gentleman will understand that we are not willing to take lessons from a Government who claimed that they had cured inflation in the mid-1980s, yet saw inflation rise again dramatically when Nigel Lawson was Chancellor of the Exchequer. That happened with the full connivance of the then Prime Minister, Baroness Thatcher. Yet the same crass remedies were put into effect at a later stage and squeezed the lifeblood out of the economy. Even the Chancellor now uses a form of words which express his concern that he overdid monetary policy to such an extent that it squeezed the life out of the economy and caused the present recession and slump. That was the cause of at least a considerable part of the unemployment in our economy.

I remind the hon. Member for Cirencester and Tewkesbury that it is necessary to achieve some balance of economic management. We must accept that, if we are to pursue policies that are consistent with full employment, we cannot have a simple fixation with squeezing inflation down on each and every occasion, even when the measures used are no longer appropriate to either inflation or employment. That is the central issue. That is why the Government will never shake off the blame for the misery that they have caused to millions of our fellow citizens by putting them out of work.

It is ironic that we are having this debate at a time when in the past few days Blue Circle--one of the giant firms in the construction industry--has had to lay people off because there is no longer sufficient demand. British Rail has announced 5,000 job losses. A huge number of jobs will be lost because of Government policies and their failure to invest in modern infrastructure, as British Rail's senior management made clear. As a modern trading nation we should have been investing in the railways, whether or not that was good for jobs. The failure to do so has caused job losses. My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) mentioned 3,500 job losses at the Royal Bank of Scotland. Every job lost is a personal human tragedy and it is part of the daily litany of job haemorrhaging in our society.

Mr. Clifton-Brown : I understand that the Labour party gave pledges in its election manifesto that it would not increase public sector borrowing above that planned by my right hon. Friend the Chancellor, and the hon. Gentleman would also have had only limited tax increases. All his schemes involve spending public money, so where would he get it from?

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Mr. Lloyd : I cannot take lectures from an hon. Gentleman who has supported the Chancellor's pinball economic management, even for the short time that he has been in the House. If I were him, I would be ashamed to mention what the parties said at the election, given that the Chancellor has stood on his head during the six or eight months since then and it is doubtful whether he remembers what his party was committed to. Surely the hon. Gentleman does not want me to apologise for my party's pledges when the Government's management of the economy has been in total chaos. Even by the hon. Gentleman's standards, I think that that would be a little disingenous.

Mr. Clifton-Brown : Who won the election?

Mr. Tony Banks : The Sun won it.

Mr. Lloyd : My hon. Friend is very accurate. The Sun won it, but since that time, it has turned. My hon. Friend the Member for Newham, North -West is better at quick one liners--I am sure that he could think one up for me. I remember a headline in The Sun, which made clear what it thought of the Chancellor. Whatever value it saw in the Government in April has long since dissipated, as the Chancellor has proved his unfitness to manage the economy.

The debate is about unemployment and solutions to it, and it is instructive to set it within the context of present Government policy. Hon. Members on both sides of the Chamber will be interested to hear what the Minister has to say. I am sure that he will tell his hon. Friend the Member for Norfolk, North--as the Secretary of State did--that we cannot afford his proposed schemes, but he will also tell his hon. Friend not to worry because the Government are already doing a lot to deal with such problems.

I know that the hon. Member for Norfolk, North cares about the issue, and he must question the information that comes from the Treasury Benches. The Minister is not in a good position to rubbish the figures, because the Government are not prepared to publish any. The hon. Member for Norfolk, North will understand that, if I am to trust the Government, who, he says, will set up schemes to provide training or work for young people, I require an absolute guarantee--not a guarantee to be perjured when it suits Ministers at the Dispatch Box--that no one will suffer financially if such training fails. They must guarantee to get people into work after training. We must not merely provide Mickey Mouse training--it must raise skill levels for the trainee and add value for the nation or we may as well not pretend that it has any merit.

Let us examine what has happened to youth training. The money spent on it has been cut by about 7 per cent. in this financial year, which is not great evidence of any commitment to youth training schemes.

Mr. Deva : Will the hon. Gentleman give way?

Mr. Lloyd : Yes, but first I must ask some important questions to which I want the Minister to respond. Much as I respect the hon. Gentleman's views, I am sure that he will accept that we need to have the Minister's reasons on the record.

One of the problems with youth training is that the guarantee of that training has not been met. My hon. Friend the Member for Sedgefield (Mr. Blair) has conducted the only survey of the training and enterprise

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councils that has sought to find out the extent to which that guarantee is being met. The Minister will not answer questions on this matter because he says that the information is not available. Let me tell the House what my hon. Friend was told. Of the TECs that he surveyed, 55,000 young people were awaiting either training or a job, as guaranteed. That is an awful lot of young people. That survey was not comprehensive, because some of the TECs did not respond, but if we use it as a reliable estimate, it means that 75, 000 young people are being betrayed by the youth training programme. Some of those young people have been waiting for as long as nine months for either a job or training. That delay is not merely equivalent to a bureaucratic aberration--it represents the system's total failure to deliver its promises. Perhaps Conservative Members will now understand why we are so dubious about the Government's commitment to the scheme.

One of the consequences for 16 and 17-year-olds whose promise of training or employment has been broken is that they are denied any form of economic support. Conservative Members--I exempt those who were elected in April-- voted to take away income support for that group. At the time we were told that no one would suffer, because of that guarantee, but thousands of young people now have no form of economic support because that guarantee has not been met. They cannot claim any kind of benefit.

The failure to uphold that guarantee means that the promises given to the House have been cheated upon ; what is more, it is immoral because it has made paupers of our young people. I relate unemployment to anti-social behaviour and criminality and I lay some of the responsibility for that at the door of those who have failed to uphold that guarantee.

Mr. Deva : Youth training is an important programme. Does the hon. Gentleman agree that, currently, more than 250,000 people are given a guaranteed youth training place? We are the only country in Europe to offer such a guarantee. We are now spending more than £851 million a year on youth training. In 1979, however, when Labour was last in government, there were just 7,000 youth training places on offer.

Mr. Lloyd : The hon. Gentleman might care to cast his mind back to the rate of unemployment in 1979--the level of youth unemployment was far smaller then.

I am not against the idea of guaranteed training or employment, but that guarantee is absolutely meaningless for 75,000 people. Perhaps the hon. Gentleman can thus understand why I do not understand the point he is trying to make. It is true that in a different era that guarantee did not exist. However, the hon. Gentleman must note that when his party took away the right to income support from those young people, they gave a solid, copper-bottomed guarantee that no one would suffer, because training or employment would be available to all. Yet between 55,000 and 75,000 young people have been betrayed. The hon. Gentleman should stand up and say to Ministers, "I cannot stand up in public and justify this. You must start doing something about it." Unless Ministers act, I am sure that the hon. Gentleman will understand our diffidence towards schemes that contain any element of benefit reduction.

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The Government have launched other training schemes that are meant to underpin training and improve the skills of the nation. The budget for employment training, however, has been cut by 15 per cent. this year. That has not happened because the number of the long-term unemployed has gone down ; far from it, sadly that number has shot up. The hon. Member for Norfolk, North admitted that there are now more than 900,000 long-term unemployed people.

The long-term unemployed alone are costing the nation £8.5 billion a year. The hon. Member for Norfolk, North was right to refer to wasters of last resort because that is the most atrocious kind of waste. It is dreadful that the nation should throw billions of pounds into propping up unemployment. We see little for that money, considering, for example, what employment training achieves. Indeed, I fear that employment training has become something of a joke-- [Interruption.] I think that I heard the Government Whip, the hon. Member for Derby, North (Mr. Knight) say "Rubbish." I appreciate that he cannot take part in the debate. I trust that he will now insist that the Minister gives a good response to the points that I am making on employment training, or the Whip will have been betrayed in his vow of silence, since he expects his Minister to speak for him.

Employment training is now in such a poor state that the probability of someone finding work after being on an employment training course is almost no better than the probability of someone who has been unemployed for six months finding work. Only 19 per cent. of those who have been on employment training schemes get jobs-- [Interruption.] I am not surprised that the Minister should have a puzzled look on his face. He is puzzled because when I table questions to him on the subject, he cannot give me answers. The Department of Employment has no statistics. I challenge him to produce better figures, if he contradicts what I say.

My statistics come from reputable sources. If the Minister wants me to believe that employment training is better than I say it is, more work on the subject had better be done in his Department. On the other hand, rather than look for statistics that might prove helpful to the Government's propaganda case, they should put real effort into developing training schemes that genuinely help the unemployed. Fewer than a quarter of those on employment training schemes are gaining qualifications. The number has fallen in the past 12 months. The idea of employment training being badly organised, badly structured and offering low-quality training does not concern only those who are forced into the scheme. It concerns all who hold views on whether the nation is wasting its effort in terms of providing training for the unemployed and giving training that adds value for the nation as a whole. So the charge against the Government is that, from the point of view of employment training and youth training, they have failed the nation.

The Government have moved away from high-cost schemes such as employment training and are placing greater emphasis on low-cost schemes such as job search and the job interview guarantee. But fewer than 17 per cent. of people going in for job search find work. That is pathetic. The rate for the job interview guarantee is 29 per

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cent. When I asked the Minister recently about employment action, he said that the Department had no information about the job outturn. If the Minister is to have any credibility when defending Government programmes of that type, he must do better. At present, when he gives information it is awful, and when he cannot give information we are left to speculate that the situation is probably even worse. The hon. Member for Norfolk, North will appreciate that however well -meaning his ideas may be, we cannot trust the Government to deliver, their having failed in everything else they have done. Not only have they failed the unemployed, they have failed the nation. We cannot trust them even to delve into the type of scheme that the hon. Gentleman is suggesting, because we know that they would not be willing to make the resources available to fund it properly. To be fair to the hon. Gentleman, I should, from the Opposition Benches, comment on his scheme. While we do not accept every aspect of what he proposes--I shall explain our position--we appreciate that he is making a sincere attempt to examine the problem of mass unemployment and long-term unemployment and suggest something that might be done.

Some aspects of the hon. Gentleman's scheme have a role to play in the future of this country. However, I disagree fundamentally with his statement that unemployment is a permanent feature of this nation. The Labour party rejects the notion that we are a high unemployment society. Our society must recognise that the world of work is so important as a mechanism for distributing the country's economic wealth that a two-tier society--a first tier with those in permanent jobs and a second tier with those in devalued jobs--is socially unacceptable. Moreover, it is not politically necessary because we can begin to develop an economy that moves us back towards full employment.

Mr. Ralph Howell : May I try to correct the impression that I gave? I believe that unless the present system is fundamentally changed, the problem will continue to worsen. No political party and no system, other than a completely different one from the present system, could stop the problem increasing. If we tackle it in the fundamental way that I have described--I am grateful for the hon. Gentleman's support--we would take the weight of bureaucracy off the productive forces and could reach full employment.

Mr. Lloyd : The reason for the bureaucracy is that, if we have at any time nearly 3 million registered unemployed--in fact, 4 million unemployed--we are spending, simply in terms of the equation of benefits and lost taxation, some £25 billion a year, which is a phenomenal amount to throw down the black hole of unemployment. We must break out of that cycle, a point on which I am one with the hon. Gentleman. We disagree not about ends or even about why those ends would be so liberating for taxpayers and those of us in work, but about whether the specific means will directly achieve what he suggests.

Some aspects of the hon. Gentleman's scheme cause me difficulty. I do not mean to be unkind when I say that the hon. Gentleman slightly glossed over the aspect of compulsion. He may have been diverted by his hon. Friends. Although he talks about choice between his scheme and existing schemes, it is inevitable that any

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Government introducing such a scheme would be faced with either directing people into that form of work or stopping benefit. He said that there would be no unemployment benefit but simply benefits topping up the notional rate of work. When challenged, the hon. Gentleman partly conceded the point that there are technical reasons why that is not desirable. For those coming out of work, looking for work and returning to work, it is not sufficient to force them into the wrong type of work immediately when their talents could be better used elsewhere. They need a period of reflection and the time to look around. That point is not meant to be trivial ; it is an important point on which I insist.

I want to know more about how the scheme would work in practice. The hon. Gentleman said that people would either be in work or training. Apart from the long-term disabled and sick, other groups would find it difficult simply to be marshalled into the first job that became available. Those include people with responsibility for family members who need assistance. We would have to be careful to ensure that we did not drive people into poverty through the bureaucrats' misguided actions.

Until we move back towards a world in which people are in work, and until we have properly structured schemes, I see no purpose in trying to dragoon people. If we dragoon one person it will be at the expense of moving someone. It would therefore be a considerable time before the idea of compulsion becomes relevant. Until our economy can offer people real choice --real work, training or even participation in socially productive schemes- -the idea of compulsion will be difficult for us to accept as being helpful to the individual or society.

Mr. Ralph Howell : We are trying to solve the problem of unemployment. There is only one answer to it, and that is working. If the state were to be the employer of last resort, everyone would have the right to work and there would be no question of unemployment. If that work were available for anyone who did not have a normal job, there would be no more compulsion in accepting it than there is in holding down a normal job. After all, 90 per cent. of the working population have a normal job. Those people are compelled to get up in the morning, to travel to where they work and to do whatever they do. If they do not, they do not have a job. The position would be the same for those whom the state employed.

Mr. Lloyd : I understand what the hon. Gentleman says, but I could not accept a situation in which people who were presented with what they regarded as unacceptable choices would have no means of income maintenance were they to refuse to take up the opportunities presented to them. There must be proper choices, especially for young people, between adequate training and adequate employment. It is not enough to produce make-work Mickey Mouse schemes on the basis of "Take it ; leave it and you will have no income." It is that element of compulsion which the Opposition could not support.

Nor would we be prepared to support the creation of work that led to competition with other forms of work, where those engaged in some forms of work were paid at the market rate and others were regarded as devalued, compulsorily directed employees and paid much lower rates. There must be the notion of the rate for the job, whether the work be planting trees or anything else. The Opposition are not prepared to have staff at hospitals-- for

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example, cleaners and porters--come from an area of compulsion. We know that that would drive down wages. Indeed, the Government seek to do that already.

The hon. Member for Norfolk, North must understand our concerns. I shall bring my remarks to a conclusion because I know that the Minister needs time to respond on behalf of the Government. I shall do so also because there may be the chance for one or two other hon. Members to say a few words. I accept the sincerity with which the hon. Member for Norfolk, North has raised the matter. He is right to say that unemployment is the most important issue that the nation faces. A Government who refuse to listen to his words and to the same pleas from Opposition Members are a Government who are morally bankrupt.

Our charge against the Government is that they have been proved to be incompetent in planning the economy nationally and in making training schemes and work available at the micro level. They are technically incompetent. Even worse, they are not prepared to accept the social damage that unemployment is causing. They are not prepared even to examine what is on offer, whether they be the schemes advocated by the hon. Member for Norfolk, North or the suggestions that are made by the Opposition. The Government are trivialising the problem at the expense of us all. For these reasons we need a very different Government.

1.58 pm

The Parliamentary Under-Secretary of State for Employment (Mr. Patrick McLoughlin : I join all those who have congratulated my hon.Friend the Member for Norfolk, North (Mr. Howell) on the way in which he has approached the issue of unemployment and on the way in which he has brought it to the attention of the House. There have been many interesting speeches from all quarters. I would not want to refer specifically to individual Members. My colleagues have made some extremely important points and some of the contributions of Opposition Members have been worthy of consideration.

The right hon. Member for Manchester, Wythenshawe (Mr. Morris) told us about the problems that disabled people face finding work and about the implications that the workfare scheme might have for them. My hon. Friend the Member for Havant (Mr. Willetts) gave us a thoughtful speech on the wider implications of workfare. He mentioned some of what he thought would be the difficulties of implementing such a scheme.

The hon. Member for Ogmore (Mr. Powell) discussed the issue of Sunday trading. I am not in a position to respond to that, but I will draw his remarks to the attention of the Home Secretary.

My hon. Friend the Member for Windsor and Maidenhead (Mr. Trend) also discussed the implementation of a workfare scheme and pointed out why he thought more work needed to be done on it. My hon. Friend the Member for Hendon, North (Mr. Gorst) described what has happened in Japan. I shall certainly bear his point in mind.

I should like to reply to a couple of the points raised by the hon. Member for Stretford (Mr. Lloyd), but I do not want to focus too narrowly on the youth training guarantee, because I want to deal with the speech made by my hon. Friend the Member for Norfolk, North. When the Secretary of State for Employment met the TEC chairmen

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in July she made it clear to them that she attached great importance to the youth training guarantee. She told them that she believed that it should be their top priority.

This is a time of year when a great many young people flow off and on to the programme. It inevitably takes some time to sort out their needs ; when exam results come through, people sometimes change their minds about going to university, and so on.

The hon. Member for Stretford was wrong to talk about a cut in the youth training budget. The point is that more people are staying on at school, a fact which I would expect him to welcome. We all want more young people to stay on and get qualifications--academic or vocational. That should not be a cause for division between the parties.

There are certainly enough places in the youth training programme and we place tremendous importance on its availability to young people. It is estimated that 216,000 people are available for YT, but that there are 244,000 places.

My hon. Friend the Member for Norfolk, North has been a consistent advocate of workfare. When he has advocated other causes in the past, he has sometimes caught the Government's ear successfully. I well remember his saying that the community charge should be reduced by switching the burden to VAT, and he successfully persuaded the Government that that was the right way forward.

I am sure that my hon. Friend recalls other discussions and arguments of the past. One thinks of his conversations with Lords Carr and Tebbit, for instance. It is a pity that the three of them cannot meet now to see whether there is a meeting of minds. There would certainly be an interesting exchange of views.

My hon. Friend spoke today about his vision of a workfare scheme for this country. For many years he has been urging the Government to consider his proposal. I am sure that he is familiar with our response. The Government have often told him that we do not believe that unemployed people should have to work in return for their benefits. We have no plans to introduce a compulsory workfare scheme. I realise that my hon. Friend was not advocating such a scheme today, but it still might be helpful if I explained why I consider that a compulsory workfare scheme would be wrong--

Mr. Deputy Speaker : Order. The Minister must address the House, not his hon. Friend--smart though his suit is today.

Mr. McLoughlin : I apologise, Mr. Deputy Speaker.

I was explaining why I believe that we should not go down the road of the compulsory workfare scheme. The Government believe that there are already certain obligations on unemployed people, and that it is important for young people who are not working or in full-time education to be involved in training for work. That is why we guarantee an offer of training to young people if they need it. I am grateful to my hon. Friend the Member for Brentford and Isleworth (Mr. Deva) for pointing out the difference in the type and availability of schemes now available, compared with 1979. We will not take any

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lessons from Labour about the importance of training young people. We attach priority to it, and regard it as important.

In the same way, we believe that it is reasonable that adults who are unemployed and who wish to claim benefit should be obliged to be available for work and actively to seek it. Our system places clear responsibilities on unemployed people to seek work. That is a condition of benefit. Unemployment benefit claimants have a duty under the benefit rules to be available for work and actively to seek it, and the Government have a duty to ensure that claimants satisfy those conditions and to give them every possible help in returning to work.

In recent years, we have done much to develop understanding of the rights and responsibilities of those who claim benefit while seeking work. We aim to do more, but the Government should not force people to work if they cannot find their own work.

Then there is the detrimental effect of compulsory work schemes on the labour market and the economy. The Government's aim is to improve the efficiency and flexibility of the labour market. That encourages labour to move towards areas where it can be productive, helping the economy as a whole. A compulsory scheme which forces people to work in jobs that they do not want and does little to improve their skills or motivation does not enhance either the efficiency or the adaptability of the labour market.

One of the most worrying features of such schemes is, in my view, their impact on wage determination. Many proponents of such schemes have suggested that scheme participants should be paid an allowance well in excess of the benefit payments they receive. Indeed, my hon. Friend the Member for Norfolk, North suggested that workfare participants might receive a wage of £100 per week.

The fact that workfare was available for the unemployed at some guaranteed rate of pay would mean that level would effectively become a minimum wage. That point was well made by my hon. Friends the Members for Windsor and Maidenhead and for Sutton and Cheam (Lady Olga Maitland). Individuals, whether unemployed or employed would consider jobs, whether full time or part time, only if they paid more than that level.

What is more, there would be knock-on effects. Employed individuals would seek to increase their wages to a level which restored differentials over those in workfare placements. That would be likely to lead to upward pressure on pay levels, lower levels of employment, and higher levels of unemployment. Meanwhile, as I described earlier, the signals and incentives for unemployed people to find productive and profitable employment would be diminished, so the net effect would be a levelling down to a low-wage, low- productivity economy. The Government believe that a statutory minimum wage has no role to play in an efficient labour market, and can actively hold back the creation of jobs. That is one reason why we recently announced the abolition of the wages councils, to help increase the number of jobs available for the unemployed at wages that they choose to accept. Furthermore, if rates of pay were fixed substantially above benefit levels- -for example, the £100 per week that my hon. Friend has proposed--some individuals would have very strong incentives to join the scheme. They would include young people in school--though I accept my hon.

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Friend's argument for a differential rate for young people--further education, or training who would substantially increase their disposable income.

The introduction of a workfare scheme would increase the levels of benefit dependency, which the Government have fought hard to reduce. In addition to social security benefits, we have provided assistance to the lower paid by the reduction in the level of taxation from 33 to 25 per cent. and the introduction of a new band of 20 per cent.--which the Opposition opposed when my right hon. Friend the Chancellor of the Exchequer introduced it in this year's Budget. That is a further measure to encourage people on low incomes to be less dependent on benefit payments.

The "unemployment trap" can arise at the point at which a person would be as well off receiving benefit as working. The effects have been significantly alleviated in recent years, and now only a very small proportion of the working population receive as much or more in income support as they might receive in wages from full-time work. That point was dealt with well by my hon. Friend the Member for Havant, who pointed out the difficulties which would arise. The willingness of unemployed individuals to leave unemployment and look for work would be reduced if a workfare scheme were introduced. That was a problem which worried my hon. Friend the Member for Sutton and Cheam. Would somebody on a full workfare programme have sufficient time and availability to go and look for other jobs? Nobody would wish to see that problem arise.

I recognise the importance that my hon. Friend the Member for Norfolk, North attaches to the scheme, and the persistence with which he has promoted his ideas. I know that he attended a meeting at the Department this week to discuss a limited pilot for localised voluntary workfare schemes. We are further considering the feasibility of such a scheme, in the context of increasing the range of local flexibility within the Department's programme. All of that would fit in with my Department's policy of providing more localised services for the unemployed. We have now accepted that there is an area of development, and the training and enterprise councils have been introduced throughout the country. That is welcome.

We already have several programmes for unemployed people which enable them to carry out useful work on a voluntary basis for the benefit of the community. Employment action was introduced in 1991 specifically to enable unemployed people to maintain their skills by undertaking work of benefit to the local community--and nearly 60,000 people have already participated in it.

At this point I shall describe in more detail what is available. I should especially like to draw attention to the package outlined by my right hon. Friend the Secretary of State for Employment last week. We shall also discuss in more detail with my hon. Friend the Member for Norfolk, North the way in which a pilot scheme could be introduced on a local basis, and consider the scheme in the context of his constituency.

Mr. Tony Lloyd : I am grateful to the Minister for giving way to me, and I shall not intervene again because I appreciate that he is trying to cover a lot of ground.

When the Minister talks about employment action, and the 60,000 people who have been through it, is he aware that recently, in answer to a question from me, he was

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unable to say anything about the outcome of the scheme? We have a scheme which, the Minister boasts, puts bums on seats --but we do not know what happens as a result of it. That is ridiculous. Every time the Government realise that one of their pet schemes has failed, the Secretary of State, like her predecessors, stands up and announces a whole plethora of new schemes to replace the failures of the past. The Government then ask us to take on trust that the next lot of failures will at last succeed.

Mr. McLoughlin : I understand the hon. Gentleman's point, but employment action has made a valuable contribution. I have talked to people on the scheme, and seen it in operation, and I am convinced that it has made a worthwhile contribution.

I shall now deal with the important package of new measures announced last week by my right hon. Friend the Secretary of State in the light of the public expenditure survey settlement. I hope that some of what I say will go some way towards reassuring the hon. Gentleman that we have listened to what many people have said about the availability of training. We are determined to ensure that unemployed people continue to have the effective help that they need in order to find jobs.

The Secretary of State has conducted a full-scale review of employment and training programmes delivered through the TECs in England and Wales, through the local enterprise companies in Scotland, and through the Employment Service. The purpose of that review was to ensure that the right kind of assistance is available to unemployed people, and to ensure that the programmes delivering that assistance provide the best value for money.

The new package of employment and training measures arising from the review builds on the successful programmes that we are already offering to unemployed people. The package represents the widest range of help and the highest number of opportunities ever made available. There will be almost 500,000 more opportunities available in 1993-94 than there are in the current financial year. Furthermore, the new package of measures includes many of the recommendations put to the Secretary of State by the training and enterprise councils' working groups on adult training.

We firmly believe that the network of training and enterprise councils and the local enterprise companies, together with the Employment Service, is equipped to give positive and appropriate help to unemployed people in their own parts of the country. The new programme for adult unemployed people, to be delivered by the TECs and the LECs, is called "training for work". It will begin in April 1993. Training for work is a flexible and wide-ranging programme which will offer either skills training or temporary work opportunities. It will also offer shorter work preparation courses for those who need to brush up their existing skills to secure a job.

Training for work brings together two existing programmes : employment training and employment action. Those programmes have been effective in helping people become better able to move into permanent employment. The new unified programme will enable help to be provided which is aimed at meeting each person's individual needs. The focus of the programme is firmly on helping long-term unemployed people to get back to work. The precise mix of opportunities in each area will be for the TECs to decide on the basis of the needs and features of their local job market. I hope that training for work

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