House of Commons Hansard Debates for 2 Dec 1993

Mr. Gummer : My hon. Friend is right that the increase is about 11.7 per cent. for Eastbourne and 12.2 per cent. for Wealden. In both cases there is a high proportion of older people and there are necessary alterations because of the number of day visitors to Eastbourne. That is a fairer

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representation of the needs of Eastbourne. I am pleased that my hon. Friend has acknowledged it and thank him for his remarks.

Mr. Nigel Spearing (Newham, South) : Does the Secretary of State realise that his statement will be regarded by the people of Newham as one of the most unjust and harsh statements that he has made? He has just admitted that the SSA for Newham will be reduced by up to 2 per cent. and that that of his hon. Friend the Member for Eastbourne (Mr. Waterson) will be increased by 10 per cent. Is he aware that the London boroughs of Hackney, Tower Hamlets and Newham are three of the most deprived in the country? Can he tell us about homelessness? Does he not realise that £11 million of expenditure has to be taken out of the expenditure for the other services? Yet he has not taken much account of that because he did not deny the charges that my hon. Friend the Member for Newham, North- East (Mr. Leighton) made a few minutes ago. Does he realise that his 40- minute lecture to us in West Ham town hall about partnership is just empty claptrap when there is that type of deal?

Mr. Gummer : I would have expected better of the hon. Gentleman. I have heard him debate many times and he has always tried to be assiduous in his comparisons. I do not think that he has mentioned that the SSA per head in Newham is £1,143 and that in Eastbourne it is £120. It seems to me that that represents a fundamental recognition that Newham is to get an enormous extra amount of money.

Mr. Spearing : Education.

Mr. Gummer : I have to tell the hon. Gentleman that, even if spending on education is taken into account, a considerable amount of extra money goes into Newham, because of its difficulties. But when we compare Newham-- [Interruption.] The Labour Front-Bench spokesman is right to say that we should compare like with like, and compare Newham not with Eastbourne but with places similar to itself, such as other London boroughs. The fact is that, applying the same criteria, when the deprivation is measured and all the figures are added up, Barking, which is not a million miles from Newham, has an increase of 11.8 per cent., whereas Newham has a decrease. I did not invent that ; it happens as a result of applying the same criteria. Opposition Members have wanted us to use those criteria for many years, and it is not acceptable for the boroughs that are adversely affected by those criteria to complain while Labour Members whose boroughs benefit hardly say thank you.

Mr. Michael Bates (Langbaurgh) : Will my right hon. Friend confirm that the increase in the SSA for Langbaurgh, a Labour-controlled authority, is an unparalleled 20 per cent. this year? My constituents will appreciate that, as they have appreciated the courteous and thorough way in which my right hon. Friend and his colleagues have conducted the negotiations over the SSA this year. Does my right hon. Friend agree that the generous settlement will mean that there is no excuse for Langbaurgh council not to get a grip on its finances, and no excuse for any increase whatever next year for the long-suffering council tax payers of Langbaurgh?

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Mr. Gummer : Langbaurgh does not have a reputation as a well-run authority, so I hope that my hon. Friend will continue his pressure, and tell the council that we have recognised its particular difficulties, which he has often graphically described to me, and that the formula now takes account of them. The council is therefore now in a position to complete its half of the bargain--that is, to become a more tightly run authority and to use its money more effectively, thus demanding less from the people who pay its council tax.

Mr. Doug Henderson (Newcastle upon Tyne, North) : I was worried by the Secretary of State's response to the question asked by my hon. Friend the Member for Wallsend (Mr. Byers). The right hon. Gentleman appeared to tell the House that it was inappropriate to compare next year's budget with this year's expenditure. I should have thought that there were enough Members on his side of the House who could have advised him on financial matters and accountancy procedures, and told him that no company in the land would prepare a budget for next year without considering this year's expenditure.

Is it not irresponsible for the Government to say that it is not fair to compare next year's budget with real current expenditure? Does not the current level of spending determine the level of police services, fire services, education services and social services? If there are cuts in the budget, those services will suffer. Will the Secretary of State not own up to the fact that the real impact of the financial settlement that he has announced will be cuts in services and jobs, and that he expects local authority employees to bear the full burden of his surrender to the Treasury?

Mr. Gummer : If the hon. Gentleman wants to make a comparison with business, I might point out that most businesses will be looking for ways to save on overheads this year ; they are not looking forward to the 2.3 per cent. increase that local government is being offered. The hon. Gentleman will probably realise that at such a time as this businesses will deal with the problems that arise when we are coming out of recession by seeking to tighten their belts more than the Government have suggested. The figures are not such as to make local authorities throw their hats in the air, but they expected the settlement to be a good deal tougher. They did not expect an increase of 2.3 per cent. I must tell the hon. Gentleman that every year the outturn figure is higher than the total standard spending. We need to compare like with like. The first rule for reading any kind of balance sheet is to compare this year's figure with last year's figure, but one must ensure that those figures refer to the same things. To compare this year's figure with last year's figure, when wholly different factors were involved, does not lead to sensible accounting. Perhaps that is why all Labour Governments get themselves into a financial mess. Perhaps that is what the Labour party has been doing all along the line, and it still has not learnt.

BILL PRESENTED

Coal Industry

Mr. Secretary Heseltine, supported by the Prime Minister, Mr. Chancellor of the Exchequer, Mr. Secretary Gummer, Mr. Secretary Hunt, Mr. Secretary Lang, Mr. Secretary Mayhew, Mr. Secretary Redwood and Mr. Tim Eggar, presented a Bill to provide for the establishment and

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functions of a body to be known as the Coal Authority ; to provide for the restructuring of the coal industry, for transfers of the property, rights and liabilities of the British Coal Corporation and its wholly-owned subsidiaries to the other persons and for the dissolution of that Corporation ; to abolish the Domestic Coal Consumers' Council ; to make provision for the licensing of coal-mining operations and provision otherwise in relation to the carrying on of such operations ; to amend the Coal Mining Subsidence Act 1991 and the Opencast Coal Act 1958 ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time tomorrow, and to be printed. [Bill 4.]

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Orders of the Day

WAYS AND MEANS

Order read for resuming adjourned debate on Question [30 November].

AMENDMENT OF THE LAW

Motion made, and Question proposed,

That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance ; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide--

(a) for zero-rating or exempting any supply, acquisition or importation :

(b) for refunding any amount of tax ;

(d) for relief other than relief applying to goods of whatever description or services of whatever description.-- [Mr. Kenneth Clarke.]

Question again proposed.

Budget Resolutions and Economic Situation

5.5 pm

The Secretary of State for Employment (Mr. David Hunt) : I warmly welcome my right hon. and learned Friend the Chancellor's statement. He has emphasised the progress already made towards our central goal--the achievement of sustained non-inflationary growth. We have not wavered from that goal in difficult times, and we shall not depart from it now, especially as recovery is so well under way. My right hon. and learned Friend is to be congratulated on the skill with which he has constructed his first Budget. I am especially pleased that he has enabled me to announce today the details of our new scheme for apprenticeships and credits, in which I am pleased to say that my Department will invest £1.25 billion over a three-year period, in addition to expenditure of £900 million on youth training over the same period.

Training is not some homogeneous good to be hurled indiscriminately at young people. To be really worth while, it must be based on mutual responsibility and a high level of motivation. In the social market economy, both employers and employees should take clear responsibility for their development. Training is in the best interests of the individuals who receive it, and it is in the best interests of the companies that employ them, which is why industry's investment in training held up so well during the recession. However, we can always do more to strengthen the incentive to train and to reaffirm the key mutual commitment between the trainee and the qualified to the key technician and supervisor levels. They, in turn, need high-quality work-based training, to defined standards ; in other words, we want all the good features of traditional apprenticeships leading to a recognised qualification, and modernised to avoid time serving.

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I am today inviting training and enterprise councils to prepare to offer a full range of modern apprenticeships to young people in all parts of the country. I am also asking them to prepare to offer youth credits to all young people who leave school at 16 or 17 by 1995, so that credits will be the mechanism to give young people access to modern apprenticeships, as well as to other forms of work-based training.

I am also inviting industry training organisations to work up model schemes of training to national vocational qualification level 3 or above. As the House will know, that is equivalent to A-level standard. Those schemes will describe what young people can expect to achieve and set out clearly the milestones on the way to becoming qualified.

I want apprenticeships to be developed in all sorts of sectors and occupations. Of course, we need modern apprenticeships in engineering. We want electronics and mechanical engineering skills to be brought together, for example. We also want new, modern apprenticeships in areas such as financial services, in hotel and leisure management, in catering, in distribution, in the care sector and in science-based technology industries such as biotechnology. We want apprenticeships in information technology, as it applies across a whole range of sectors and right across the chemical, petrochemical and plastics industries.

I also want to involve small and medium-sized employers as well as big employers. I want to see apprenticeships offered equally to young women as well as to young men. The modern apprenticeship needs to be open to every young person to whom it would be of benefit. I want every apprentice to sign an apprenticeship pledge with an employer. That will clearly set out the training the apprentice can expect to receive, and what, in turn, the employer will expect by way of progress and it will enshrine the commitment of each party to see the training through to successful completion. Ideally, it will set out an intended path to a job once the apprenticeship has been successfully completed.

I want to see apprenticeships on offer to the school leavers of 1995 and I want to be able to run pilot schemes in 1994. That will be a challenge because there is a great deal of work that needs to be done and many people will need to play a part. Today, I have written to invite all the main organisations to come in for consultations, including, of course, the national council of the training and enterprise councils and the Confederation of British Industry. I have written to the Trades Union Congress, the National Council for Education and Training Targets and the National Council for Industry Training Organisations. I look forward to receiving their views and also to seeing the first training models that industry will develop in consultation with my Department as soon as possible.

Mr. John Prescott (Kingston upon Hull, East) : Is the Secretary of State admitting a failure in Government policy on apprenticeships, because in 1979, according to his Department's figures, there were 367 proper apprentices, as he describes them, and in the past year there were 240, after he had dismantled 26 training boards? Was that a failure of policy and is the right hon. Gentleman attempting to correct it in a "back to basics" approach?

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Mr. Hunt : No, I am not. I do not accept that at all. I do not want to engage in a negative discussion. I could describe in graphic terms how the old, male and trade union-dominated apprenticeship system was destroyed, but I shall not look to the past. If the only area of disagreement between myself and the hon. Gentleman is to be the past, then I look forward to the future with him. I noticed that the hon. Member for Stretford (Mr. Lloyd) spoke in the debate on national education and training targets and I have made it clear that I am prepared to extend the same invitation to him and his colleagues so that we can talk through how best to introduce the new, modern system of apprentice-ships. I also extend that invitation to the other parties.

Instead of looking back, we can look forward. Thanks to the labour market flexibility, we can look forward with much more confidence than ever before. I believe that the atmosphere is right for an initiative of that sort and I invite all-party agreement on that point.

Mr. David Madel (Bedfordshire, South-West) : My right hon. Friend referred to the employers' responsibility in the welcome work-based training opportunity for young people. If an employer runs into financial difficulty and cannot run the training, is there to be a back-up system whereby work-based training can be resumed elsewhere?

Mr. Hunt : I am setting out the framework and funding of the scheme today. I am perfectly prepared to state clearly that the Government will invest £1.25 billion in credits and apprenticeships over the next three years. Obviously, it will now be up to employers to respond with the detailed structures that they believe best suit their industries and companies.

My hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) raised one special problem which I will, of course, consider, but I cannot hold out any hope of immediate alleviation of that problem because we want the maximum number of apprenticeships to be agreed with industries and employers. It is up to them to come forward with the way in which they would like to proceed.

It may help my hon. Friend to know that I expect that the new programme will build up to about 150,000 apprentices in training at any one time under the new, modern apprenticeship system. The financial settlement that my right hon. and learned Friend the Chancellor has allowed gives a real increase in the funds available. Our average investment in guidance and training for young people will rise in real terms by 25 per cent. over the three years. That is a measure of the importance that we attach to apprenticeships in a tough year for public expenditure. Like health and education, training is a clear priority for the Government.

My right hon. and learned Friend's Budget has already resulted in several messages of support, including a telephone call from the new director general of the Engineering Employers Federation which represents 5,000 engineering companies. He welcomed the announcement of

"modern apprenticeships that are linked to achievements and competences"

and I believe that his view is echoed across the country. I look forward to working with others who are keen to make the new apprenticeships a success.

Mr. Alex Carlile (Montgomery) : So that the House can assess the right hon. Gentleman's apparently welcome announcement, would either he or the Minister replying to

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the debate tell the House whether his apprenticeship scheme involves additional spending by the Department of Employment? If that is so, how much will it be and where will the cuts in the Department of Employment's budget come from, as outlined on page 117 of the Red Book?

Mr. Hunt : At the moment, there is a rising number of young people staying on at school--a few years ago, the figure was 48 per cent. and it is now 71 per cent. As a result, the youth training programme is declining substantially and it is underspending this year, as I have just revealed in a parliamentary answer, and is likely to underspend further next year. My right hon. and learned Friend the Chancellor's Budget has allowed me not to impose the cuts which would have obviously followed, but to introduce a new, modern apprenticeship scheme to run alongside the youth training scheme and, in addition, to provide a rising tide of expenditure. That is the simple answer to the hon. and learned Gentleman's question and I am perfectly prepared to invite him and his colleagues to see me to go through matters in more detail.

The key to modern apprenticeships, for which I believe many right hon. and hon. Members on both sides of the House have been pressing, is the qualification to NVQ level 3, which is equivalent to A-level. Provided the scheme is a success--I hope that everyone will work to make it a success, as the preliminary signs are good--we shall see more than 40,000 youngsters on that scheme every year working to NVQ level 3--more than three times the present number in factories, businesses and companies. We have an increasing gap at technician and craft level and we intend to more than meet that need in the economy.

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury) : Does my right hon. Friend recognise that the proposal is an investment in our young people for the future which will be of benefit to all businesses for many decades to come?

Mr. Hunt : Yes. I agree with my hon. Friend that it is a tremendous investment in the future. It is no use the Labour party trying to downgrade NVQ level 3 to NVQ level 2. We are talking about a new skill target which is the equivalent of A-level. I want 150,000 new apprentices to reach that A-level standard in NVQs as soon as the scheme is up and running. I believe that all hon. Members will recognise the significance of that when they pause to think about it for a moment.

Ms Angela Eagle (Wallasey) : Will the Secretary of State comment on speculation in the press today that the cuts in unemployment benefit and the potential gathering together of the administrative arrangements for the payment of income support and of the new job seeker's allowance will lead to the abolition of the Department of Employment, which will make a fundamental difference to the administration of some of the schemes about which he is talking? Has the right hon. Gentleman really co-operated with the Chancellor of the Exchequer to abolish his own job?

Mr. Hunt : I am disappointed that my constituency neighbour, the hon. Member for Wallasey (Ms Eagle), should so quickly seek to urge me to do myself out of a job. Any structures within Government are, of course, a matter for my right hon. Friend the Prime Minister. I believe very strongly that the new modern apprenticeship system and the fact that the Department of Employment is right at the

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heart of Government economic policy are good indications of the importance that the Government attach to employment and training policies, as I have just said.

Mr. Mark Wolfson (Sevenoaks) : Does my right hon. Friend agree, in speaking further on the welcome news, that there is also a social dimension, which will benefit the country, in increasing the number of apprenticeships for young people? What will be the driving force in determining how many people go into particular apprenticeships? Will the job prospect at the end of an apprenticeship be a key factor?

Mr. Hunt : I agree with my hon. Friend. The key consideration in the new scheme is the ability to extend it and to spread it to a number of industries that do not have a tradition of apprenticeships as well as to the industries that have. With the old-style apprenticeships, the emphasis was very much on time serving. The emphasis in the new modern scheme is on reaching NVQ level 3, the equivalent of A-level.

Much will depend, to answer my hon. Friend's point, on the models and schemes coming forward. Much will depend on which industries and which employers seize the initiative now and work closely with the organisations involved and with the training and enterprise councils. I shall, of course, talk to the Trades Union Congress about how best to extend those schemes in the way that it feels is right. Bill Jordan plays a key role in NACETT. He has already made it clear that we need such a scheme, which I am happy to discuss with him, if we are to meet the ambitious national training and education targets. I was also pleased that my right hon. and learned Friend the Chancellor was able to refer in his Budget statement to the fact that unemployment is already down by 137,000 this year. By contrast, I have been asked by a number of my right hon. and hon. Friends whether I will look up the equivalent figures for the rest of the European Union. I can reveal them to the House now. In the past 12 months, unemployment registers in the European Union as a whole rose by 1.6 million. There is only one country in the Community where unemployment is now below the European Union average and falling. That country is the United Kingdom.

Mr. Prescott : I am sure that the House is grateful for that information ; we welcome any reduction in unemployment. I have looked at the figures for the 14 years under the Government. I must tell the Secretary of State that the number of years for which our figures have been below the European average is three plus one--four altogether. Those are the only times this country has been below the European average level for unemployment.

Mr. Hunt : I suppose that that comment makes a change from the comments made by the hon. Member for Holborn and St. Pancras (Mr. Dobson). He used to say that we were fiddling the figures whereas the hon. Member for Kingston upon Hull, East (Mr. Prescott) now says that we are fiddling with figures. However much the hon. Gentleman may try to make a noise in the Chamber, he cannot deny the fact that unemployment in the United Kingdom has fallen by 137,000 this year whereas it has gone up in the rest of Europe by 1.6 million. Last month, I was able to announce a fall in unemployment of 49, 000. In France, Mr. Giraud had to announce an increase of 40,000. In Germany, Dr. Blum

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had to announce an October increase of 56,000. Even in Spain, with its smaller population, Mr. Martinez announced an increase of 56,000 in October.

Ms Glenda Jackson (Hampstead and Highgate) : The Secretary of State referred to figures. I am sure that he will not dispute figures emanating from the Department of Employment--the quarterly employment estimates for November 1993. The Department says that the number of people in employment had fallen by 508,000 from June 1992 to June 1993, and that in October 1993 the number out of work for more than two years was 42 per cent. higher than in October 1992 and 92.7 per cent. higher than in October 1990.

Mr. Hunt : I am not sure why I gave way to the hon. Lady. She omitted to mention two key statistics. I shall answer her question, but I shall then not give way for a little while. The first key statistic is that, last quarter, long-term unemployment fell for the first time in three years by 10,000. Secondly, according to the latest available statistics, the work force in employment rose over the three months by 42,000. That is an upgraded figure.

Let us get the whole matter into context and recognise how right my right hon. and learned Friend the Chancellor was when he reminded the House that unemployment was falling right across the United Kingdom. It is falling in every region of the United Kingdom and it is falling for both men and women. Two thirds of those who become unemployed leave the register within six months. Most welcome of all is last quarter's fall in the number of long-term unemployed people, which I have just mentioned to the hon. Member for Hampstead and Highgate (Ms Jackson). That offers real hope to all unemployed individuals that the misery of unemployment will soon be behind them. The figures are remarkable.

The House may well ask why unemployment is falling at this time. I believe that there are four reasons. First, the recovery started in the first half of 1992. Since then, our gross domestic product has increased for six quarters in succession and it is now up by 2.4 per cent. over the period.

Secondly, the population of working age is stable and there are no longer large numbers of people coming on to the labour market. I remind the House that, over the past 10 years, the number of people in work in the United Kingdom has increased by 1.3 million. There are now 1.3 million more people in work than there were 10 years ago. As output rises, employers take on more staff, and unemployed people are the main source of additional recruits.

Thirdly, the labour market is now much more flexible. Deregulation and curbs on the abuse of trade union power mean that employers have the confidence to recruit people quickly to keep pace with increasing sales and output.

Fourthly, my Department offers more help than ever before to get people back into work. There are now 1.5 million opportunities on offer to unemployed people, and they work. Last month alone, 487,000 people left claimant unemployment, which is the highest monthly figure ever recorded. Those are the reasons unemployment is falling, and in a modern, open economy, by far the best contribution that Governments can make to prosperity is to promote supply-side measures to help industries to be

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more competitive. That is why the Department stands centre stage as part of the Government's economic strategy.

We are contributing all the time to job creation through our systematic deregulation and our progress in improving the United Kingdom training system. Continuing to reduce unemployment is a priority in my right hon. and learned Friend's Budget. From next April, the lowest rates of national insurance will fall by a full percentage point, so reducing non-wage costs- -already among the lowest in Europe--by £1 billion in a full year. That will benefit all employers.

It is evident in the modern economy that small and medium-sized enterprises are the real engines of job creation. Small firms also need to be encouraged to invest in training their employees. I have, therefore, today announced three new measures to encourage smaller companies to boost their training efforts.

First, I am developing with three high street banks--Barclays, Clydesdale and the Co-op--arrangements for career development loans to be extended to small firms. Firms will benefit from an interest-free holiday during the period of training, and the Government will guarantee the loans. Once the necessary arrangements have been made, loans of up to £125,000 will be available from early in the next financial year.

Secondly, I am giving special help to small firms to achieve the Investors in People standard. I shall remove the requirement on those with fewer than 50 employees to make a matching contribution when working towards Investors in People.

Thirdly, I know that employee development programmes of the kind developed by Ford have proved remarkably successful, giving people control of funds for their training. Many training and enterprise councils are already supporting companies in developing such arrangements. I want TECs to encourage them further, in particular in small companies or groups of companies.

Taken together, the measures form a powerful set of incentives for small firms. They are good news for small firms and they are excellent news for all those who are looking for work.

Dr. Jeremy Bray (Motherwell, South) : The Secretary of State has been properly exercised in his office by announcing the new Government policies. Is he aware that when he was talking about announcing unemployment figures he made a slip of the tongue? It is not his job to announce unemployment figures ; they are announced by statisticians in his Department. Government statisticians are having the greatest difficulty in re-establishing the integrity of Government statistics and trying to establish that it is not Ministers who are constantly cooking the books. Will the right hon. Gentleman therefore make it clear that it was not he who announced the unemployment statistics, but the statisticians in his Department?

Mr. Hunt : The only reason statisticians find their position undermined is that the antics of Opposition Members cast doubt on the statistics.

Mr. Bruce Grocott (The Wrekin) : The Secretary of State said that the key reason for what he described as the "improving" position is the increased flexibility of the labour market. On behalf of many thousands of people, I put it to him, with all the urgency that I can muster, that

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what he sees as flexibility of the labour market is seen by many thousands of people as casualisation of the labour market. I know of firms in the midlands that lay off 100 people on one day and the next day offer most of them short-term contracts. I know of a youngster who has worked for the same firm for one and a half years on the basis of 70-odd weekly contracts. Is that the way in which the Secretary of State wants the labour market to develop? That is deeply damaging not only to individuals but to the stability and security of our society.

Mr. Hunt : I do not accept any of that. I wanted to give the hon. Member for Kingston upon Hull, East an opportunity to get into the debate, but I will not be able to do that if there are lengthy interventions from hon. Members who get upset if I do not give way. If the hon. Member for The Wrekin (Mr. Grocott) looks at the labour force survey, he will find that the accusations of substantial increases in temporary and casual work are completely without foundation. The number of permanent jobs is increasing-- there are now more than 20 million. The hon. Gentleman does his area a grave injustice by seeking to paint an alternative picture that has no truth and foundation whatever as a general statement of policy. My right hon. and learned Friend the Chancellor announced several initiatives to improve the operation of the labour market. The new job seeker's allowance, to be introduced in two and a half years' time, will be an important step forward in the help that we provide for unemployed people. The name of the new benefit demonstrates a shift in focus ; we are making it clearer than ever before that people will get benefit because they are seeking work, not because they are passively unemployed.

Everyone who is genuinely looking for work will be entitled to the new benefit for as long as he or she needs it. Those who have paid the requisite national insurance contributions will be entitled to a personal allowance for six months, regardless of their income, their partner's income or any savings.

At the heart of the new job seeker's allowance is new clarity about a principle that has underpinned our system of support for job seekers from Beveridge onwards : the principle of mutual responsibility between the state and the unemployed individual. Ms Glenda Jackson rose --

Mr. Hunt : I have given way to the hon. Lady already.

Just as the state has a responsibility to support unemployed individuals, individuals have a responsibility to make every effort to find new work.

To make that duty clear from the start, we shall be introducing, with the job seeker's allowance, a job seeker's agreement. Each claimant will have to reach an agreement with his employment service adviser, identifying from the outset the steps that he will be taking to get back to work. He will then have to put that into action. Last year we introduced job plan workshops. They have already given positive help to more than 112,000 people, with a success rate of more than 90 per cent. Building on that, I am today announcing a new restart course for those who have been out of work for more than two years.

I am also introducing three new pilot schemes in advance of the introduction of the job seeker's allowance. We shall pilot a job finder's grant, paying up to £200 to people who find work after being unemployed for two

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years or more, to help with the initial expenses of returning to work. We shall be setting up two further pilots to test new approaches to getting young people back to work as quickly as possible. Those measures will further improve our help to job seekers.

I very much welcome the Chancellor's announcement introducing, from October next year, new disregards for child care costs in working out families' entitlements to family credit, disability working allowance, housing benefit and council tax benefit. That will help 150,000 families, and it will make more explicit the Beveridge principle that the best way off benefits is into work.

That could be worth up to £28 a week in family credit alone, and will provide a powerful incentive for families to move back into work and be better off. It will particularly help those lone parents who want to work but have found that child care costs represent a barrier. That is in addition to the £45 million programme run by the TECs, under my Department, for out of school child care. That programme will create 50,000 new child care places.

The Government attach the highest possible priority to increasing the number of jobs, reducing unemployment and looking after those who most need help. But it is industry and enterprise that create jobs. Everyone of working age should be given every incentive and every opportunity to contribute. Economic growth on its own is not enough. Much of the industrialised world has discovered the phenomenon of jobless growth, and Europe is particularly afflicted. Between 1979 and 1989--the Organisation for Economic Co-operation and Development economic cycle--the United States economy grew by 32 per cent. and the number of jobs grew by 18 per cent. In the same period, the economy in Europe grew by 24 per cent. but generated only 4 per cent. more jobs. As a result, unemployment in Europe has now reached 19 million, and it continues to rise. In general, it is where labour markets are most flexible that jobs are created. The United Kingdom has the most deregulated labour market in Europe and we have more of our people in jobs than any other major country in Europe.

When my right hon. Friend the Prime Minister went to Maastricht, he was presented with a social protocol that would have given European trade unions a direct role in legislating and opened the door to a whole raft of expensive burdens on business. That would be bad for Britain and bad for Europe, so my right hon. Friend had the courage to refuse to sign up to it.

Last month, the leader of the Labour party--I am pleased to see him here-- was presented with a proposal for a statutory 35-hour week in the United Kingdom. That would cost our industries £20,000 million a year and prevent 14 million of our citizens from working hours that they want to work. That would be a very bad thing indeed. The right hon. and learned Member for Monklands, East (Mr. Smith) has said so himself.

I have to apologise to the socialists because I have done them an injustice, for there is an opt-out at the end of their manifesto. It is for a country whose Conservative leadership fought long and hard to be excluded from the most intrusive European legislation. The socialists recognise that, and an opt-out was agreed. Lucky old Denmark.

The Labour party did not fight for an opt-out. Its leader just signed up, on the basis of sign first, ask questions later. Having signed up in Brussels, the Labour leader now claims to have experienced a mystical conversion on his

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aeroplane home. The hon. Member for Kingston upon Hull, East now says that there is a difference between the words "must" and "could". I agree that there is. I have the official document, distributed at the press conference at which the hon. Gentleman was present, and the word "must" is there. His leader signed up for "must" and not for "could". That is the difference.

The hon. Member for Kingston upon Hull, East has now given me a version that substitutes "could" for "must". Could he not go a step further? Could he not substitute "ought not to" for "must"? Perhaps it would be easier to say "must not". The charter which I have here, which is the unexpurgated version, states clearly :

"These measures must include a substantial cut in working time, to ensure a better division of the available work."

I know that Labour Members pretend that the document does not exist, but it does. Let me quote Glyn Ford, Member of the European Parliament, who has said that the Members of the European Parliament are going to campaign in favour of a 35-hour week across the EC. So, Labour still clings to the discredited social protocol.

Our partners, right across Europe, are abandoning that protocol and everything for which it stands. Increasingly, they recognise that there is a connection between job creation and deregulation and they are coming to see the social protocol as an expensive luxury. As Britain leads Europe out of recession, the argument is moving our way. Flexible labour markets and high standards of education and training are widely acknowledged as the twin routes to success. Modern apprenticeships, the new schemes for small firms and the job seeker's allowance are all part of an on-going revolution that will continue to release the enterprise of our people and create jobs for them. I commend the Budget, which is a Budget for jobs, to the House.

Mr. William Cash (Stafford) : On a point of order, Madam Deputy Speaker. In an otherwise superb speech, my right hon. Friend the Secretary of State for Employment used, as have other Ministers, the expression "European Union" in rather an extravagant and broad manne statement on the Government's policy in respect of the use of the expressions "European Union" and "European Community". He said : "Government policy is to use the term European Community' when describing matters specific to that pillar and to use the term European Union' when referring to all three pillars collectively or to matters specific to the two inter-governmental pillars outside the Community."

Would you be good enough, Madam Deputy Speaker, to take account of that when the expression "European Union" is used in the rather loose manner employed by the BBC and the Financial Times and now by some Ministers?

Madam Deputy Speaker : The hon. Member has made his point, but it is not a point of order for the Chair. Mercifully, the Chair is not responsible for the accuracy or otherwise of what hon. Members say.

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Mr. John Prescott (Kingston upon Hull, East) : The Secretary of State has been kind enough to say that he might have to leave before the end of the debate because his wife is going into hospital for an operation. I am sure that the House will join me in offering best wishes to his wife, and to him. I shall fully understand if he has to leave the debate. I hope that he will understand that I shall be harsh in my criticism of his Department. The debate is a bit of a surprise, because I thought that it would come on Monday. Things have changed rapidly.

I am delighted to see the Chancellor here with us as we debate the Budget. I recall that we both took part in a debate in 1987, when he was Paymaster General, in which he defended the so-called Budget for jobs. Unemployment has increased by about 1 million since then, although he told us that that Budget would be successful. He told us that there would be more firms, but there are 100,000 fewer than there were then. He told us that there would be an explosion in training, but there are 100,000 fewer places. Those were the predictions that he made as Paymaster General.

The right hon. and learned Gentleman was right about one thing. He said that there would be considerable growth in the economy. There was indeed a massive growth in the economy, with an increase of more than 1 million jobs, showing that if the Government feel that it is a priority they can create many jobs. The trouble was that it was one of those dashes for jobs- -the booms and busts--so much associated with Tory Governments. Then the brake was put on--not on the expenses or wages of Members of Parliament, but on the unemployed. After that boom came the general election, and then 1 million people were thrown back on the dole. This Budget is designed to do something similar. Rather than dealing with the problems of today, it is designed to deal with any problems that might arise before the 1996 elections. However, I shall address myself to the problems of today. The Budget is not a Budget for jobs. On his own admission, the Secretary of State expects it to create more unemployment. It is not a Budget for industrial investment. That will not be enhanced by the policies. It is not a Budget for ordinary people. It is a Budget for the City. If there is any doubt about that, I will quote a paper not known as a Labour paper--the Evening Standard. On Tuesday, I picked up the "West End Final", which said, "£15 billion share boost". That was while the Chancellor was speaking. Within half an hour of his sitting down, another "West End Final" was rushed out, which said, "£18 billion share boost". I picked up the Evening Standard again today and it said :

"Nearly £25 billion has been added to the value of the shares since Chancellor Kenneth Clarke's Budget on Tuesday".

That is what the Budget is about--welcoming the City back to the casino economy. Nothing has changed in our economy, but all those people dealing in stocks and shares have decided that they can make a killing out of what the Chancellor has done. It is all about a City judgment.

I noticed that during his speech the Chancellor had a smile playing on his lips when he said that he was prepared to exempt wine for Christmas. When the people in the City are drinking their champagne and toasting the Chancellor, I hope that they will bear in mind the price of what they have done to the country.

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