PARLIAMENT ARY DEBA TES
IN THE THIRD SESSION OF THE FIFTY-FIRST PARLIAMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
[WHICH OPENED 27 APRIL 1992]
FORTY-THIRD YEAR OF THE REIGN OF
HER MAJESTY QUEEN ELIZABETH II
SIXTH SERIESVOLUME 252 THIRD VOLUME OF SESSION 1994-95
The Parliamentary Under-Secretary of State for Employment (Mr. Phillip Oppenheim): The latest available figures show that, in November 1994, seasonally adjusted claimant unemployment in London stood at 307,800 for men and 106,800 for women. In each case, this represents a reduction of about 10 per cent. on a year ago.
Mr. Cox: Whatever the Minister may say, is he aware that Greater London has one of the highest unemployment rates of any region in the United Kingdom and that vast numbers of people are seeking the few jobs that exist? Exactly what are Government policies for Greater London to create meaningful employment, in view of the countless thousands of jobs that have been lost year by year since 1979?
Column 21970s. I think we all accept that unemployment in London is too high, as it is elsewhere in most parts of the developed western world. The only way to cure that is to improve the competitiveness and productivity of our economy, as we are doing, to produce more high- quality, better-paid jobs for our people.
Mr. John Marshall: Does my hon. Friend think that unemployment in Greater London would increase or be reduced if we adopted the social chapter, a national minimum wage or even clause IV, which seems to have some residual popularity in the Labour party?
Mr. Oppenheim: Almost every survey from the Organisation for Economic Co-operation and Development, the European Commission and the International Monetary Fund shows that a minimum wage has an adverse effect on job creation. If the hon. Member for Peckham (Ms Harman) is serious about that policy, I challenge her to tell the House at what level she would set a minimum wage and what she would do about the problem of differentials.
Mr. Chidgey: Will the Minister confirm that surveys have shown that more than 80 per cent. of participants in workstart pilot schemes in London and elsewhere are likely to be offered permanent jobs? Does he agree that that is clear and concrete evidence of the need urgently to establish a working benefits transfer programme across the nation to get the long-term unemployed back into work?
Mr. Oppenheim: One of the good features of what is happening in London is that the number of very long-term unemployed people has fallen by about one half since 1987. There are a number of reasons for that, but one of the main ones is the effect of the very well-targeted Government schemes to help the very long-term unemployed, who have particular problems, to get back into work.
Mr. Waller: I thank my hon. Friend for that encouraging information. There is great variety in the level of qualifications that young people may obtain. Is my hon. Friend able to give more detailed data about the quality and level of qualifications that young people participating in youth training schemes can obtain?
Mr. Paice: I can assure my hon. Friend that there is substantial evidence that the level of qualifications being achieved through youth training is increasing year by year. A greater proportion are achieving national vocational qualifications, NVQs, at levels 2, 3 and 4. In addition, I assure my hon. Friend that when modern apprenticeships are fully up and running, they will lead to another substantial jump in the levels achieved.
Mr. Gerrard: I am sure that we would all welcome an increase in the number of people obtaining qualifications. However, in his answer the Minister did not quote the figures. One of the stated aims of youth training is to enable young people to obtain NVQs at level 2 or above. How many are attaining level 2 and how many are getting above that level?
Mr. Paice: I do not have the precise figure, but I can tell the hon. Gentleman something much more significant: more than 50 per cent. of all those leaving youth training, at any time after starting it, obtain jobs. That is the major importance of youth training. Of those who complete the training, 67 per cent. obtain jobs. That is a clear indication that youth training works for the vast majority of young people, as shown by surveys of them.
The Secretary of State for Employment (Mr. Michael Portillo): The jobseeker's agreement will reflect the responsibilities of the Employment Service and of the person seeking work so as to focus efforts and incentives on getting back to work.
Mr. Hawkins: I thank my right hon. Friend for that answer. Will he confirm that the question of limiting contributory benefits to six months is extremely important, and that the public want to know how both parties stand on it? Will he also confirm that, when the hon. Member for Peckham (Ms Harman) was asked about it three times on this morning's "Today" programme, she declined to say what her policy was?
Column 4substitution of a six-month contributory period for a 12-month period, but if that is indeed the basis of their attack, surely they should be in a position to say that they would reverse the position if their party were in power. Three times the hon. Member for Peckham (Ms Harman) refused the opportunity to say that that was the case; three times I thought I heard a cock crow. It was just like yesterday, when the Leader of the Opposition was bleating about the privatisation of railways. He would not say that he would renationalise them.
Mr. Portillo: The hon. Gentleman knows that we must use our resources as best we can to focus benefit on those who need it most. He is one of the people who have made that point most consistently over the years. We need to focus the money that we have on helping those who are in most need, and I hope that the hon. Gentleman will support us this afternoon.
Mr. Matthew Banks: In view of the answer that he has just given, will my right hon. Friend make it absolutely clear that as he seeks to simplify an individually tailored job search, he and his Department will not lose sight of the vital principle of continuing to provide the most where the need is greatest?
Mr. Portillo: That should be an important principle and, indeed, I believe that hon. Members in all parties now agree on it. In future, we need to be able to provide a welfare state that we can afford and be proud of. That means that we must take care that the amount by which welfare state spending rises does not outstrip the economy's ability to pay. We shall have to make important choices, and direct benefits towards those who need them most. That is why it is so disappointing that the Commission on Social Justice, having agreed with the general proposition, has come up with proposals to raise public spending by £7 billion. That is no way forward for the welfare state, or for the Labour party.
4. Mr. Kevin Hughes: To ask the Secretary of State for Employment how much his Department is spending on training for work in 1994-95; and what the level of planned spending is in 1995-96 in today's prices.
Mr. Hughes: How does the Secretary of State justify cutting the training for work budget, when he knows very well that there is a skill shortage and business people are crying out for skilled workers? What does he say to the people in my area--more than 1, 000--who will lose out because of his cuts?
Mr. Portillo: I do not believe that people in the hon. Gentleman's area will lose out. I am making better use of public money, and the number of people who will obtain jobs from training for work will increase. It is estimated that 100,000 will obtain jobs this year, 104,000 next year and 116,000 the year after. I am providing a new range of opportunities for the long-term
Column 5unemployed. Training is not the only thing: jobs matter more to the long-term unemployed than training for the sake of training. Moreover, the hon. Gentleman should not forget that the amount of Government spending on training will always be dwarfed--and rightly so--by the £20 billion that industry spends on it.
Mr. Barron: Does the Secretary of State recognise that, because of cuts in the training budget, training and enterprise councils and training providers do not know where they stand and that, consequently, employers cannot plan for the future? Is it not clear that our successful companies and successful competitive countries have built their economic efficiency by having minimum standards in training? Why do not the Government accept that the market alone cannot build economic efficiency and that they must take action to ensure that minimum standards are in place throughout the British economy? Why do we have a new study today saying that we are in a position of having to train people for the sake of it? Why do not the Government train people for jobs and train the economy to utilise those people?
Mr. Portillo: It is rather silly to say that people do not know where they stand, when I have just given the figures and when I gave the figures at the time of the Budget. People know exactly where they stand. Before the Budget, they already knew that we had announced a £325 million programme to improve the competitiveness of this country under the competitiveness White Paper. At that time, one of the things that we introduced was the modern apprenticeship scheme, precisely to ensure that people could acquire the skills, under the training of an employer, that employers needed.
The whole focus of the Government's policy is to ensure that employees' skills are the skills that business needs. The only people who can tell us what business needs are business people. That is why the main emphasis on training in the British economy will always be provided by industry and not by the Government. What the Government spend, however, must be spent well, and we will have more jobs for less money. The hon. Gentleman should be happy about that.
The Minister of State, Department of Employment (Miss Ann Widdecombe): My right hon. Friend announced on 20 December 1994 tha having carefully considered the position following the House of Lords judgment, the Government have decided to remove all hours of work thresholds from employment protection legislation. Appropriate regulations will shortly be laid before Parliament under section 2(2) of the European Communities Act 1972.
Ms Eagle: Will the Minister now admit that that welcome change is long overdue and that it is only the first victory in Opposition Members' fight to guarantee minimum standards for people at work? Will she take this opportunity to congratulate the Equal Opportunities
Column 6Commission on bringing and winning this case and will she reassure the House that the Government have no intention of undermining or abolishing the commission for doing such a good job?
Miss Widdecombe: There will be no victory whatever for part-time workers if, as a result of the ruling and of our implementation of it, part -time job opportunities decrease. That will be a loss for part-time workers. I hope that the hon. Lady will be as loud in her welcome for the measure if it proves to have that effect, because the electorate will then be able to understand exactly what they are in for if there is ever a Labour Government--which is unlikely. The Government have never had any plans to abolish the Equal Opportunities Commission. I gather that that is just another Labour party scare story and it goes to prove what I have long suspected: new Labour is simply a few superficial new statements and all the old immorality and scaring of the vulnerable.
Mrs. Peacock: Is my hon. Friend aware that many mothers with school- age children greatly welcome part-time work? It enables them to work, to contribute to their household budget and to look after their children, which many of us think is a good idea. It also helps our manufacturing industry to produce more goods to sell as exports and in the home market.
Miss Widdecombe: Indeed. It is precisely because Britain has a flexible labour market that it enjoys nearly one third of all part-time jobs in Europe. The vast majority of those jobs are of benefit to women. We know that 85 per cent. of people who work part time do not do so because they cannot find a full-time job. It is, therefore, our policies that have liberated women to enable them to combine work and family life and the Labour party's policies that would make it impossible for women to make that choice. Perhaps women will note that.
Mr. McCartney: The Minister should be at the Dispatch Box apologising for another defeat in the United Kingdom courts. It is only the British Government who oppose decent minimum standards in the workplace. Employers and employees accept the need for those standards and it is only the Minister and her right hon. and hon. Friends who do not.
Since the Government have accepted the House of Lords decision, will the Government be organising a national campaign among employers to distribute material and information packages to part-time workers to advise them of their rights in the workplace so that they can take advantage of the House of Lords ruling? What does the Minister say to the 3.7 million part-time women workers in this country who earn less than the Council of Europe decency threshold? Does she not believe that they are entitled to decent pay for a decent day's work?
Miss Widdecombe: The hon. Gentleman suggests that I should apologise. The only apologies due are from the Labour party, for its total disregard for the creation of work opportunities, for its total disregard for the expansion of opportunities for women and for its total disregard for the effects of the flexibility of our labour market on the percentage of our work force. Will the Labour party congratulate us on the fact that
Column 7we have the third highest percentage of the work force in work? Will it congratulate us on having among the largest numbers of part-time opportunities and on the narrowing of the gap between the pay of women and men? Will the Labour party congratulate us on all that and apologise for its own stale, useless policies?
Mr. Couchman: Has my hon. Friend's Department yet had time to research the number of opportunities for part-time work that may be lost as a result of this decision from Europe? Has she had time to consult the leaders of those sections of commerce and industry that have particularly high numbers of part-time workers, such as in shops and in the hotel and catering trade, in which I recently had an interest?
Miss Widdecombe: My hon. Friend has raised an extremely important point. We are cognisant of the likely adverse effects of this judgment. That is why we have made it clear that we will monitor those effects carefully; if we believe that such adverse effects are clearly discernible and are upheld, we will consider again whether we have objective justification for our previous policy.
Ms Quin: I, too, welcome the Government's climbdown on part-time workers. In light of the information that the Minister has just provided, will she tell me why Denmark and Holland both have a higher proportion of part-time workers than we have, yet they have higher levels of employment protection and accept the social chapter?
Across Europe as a whole, there is a clear correlation between regulation and part-time job opportunities: the southern member states have high regulation and the least number of part-time jobs; Denmark and Britain, which have the most liberal regimes for part-time workers, have the highest. If the hon. Lady had done her homework, she would know that in Holland that is a result of the fact that the benefits system allows benefits to be claimed, particularly in respect of invalidity, when part- time work is undertaken. Regulation of the labour market right across Europe, as has been acknowledged by a study by the Organisation for Economic Co-operation and Development, has an adverse impact on jobs, not a favourable one.
Mr. Anthony Coombs: I very much regret the action that the Government have been forced to take and recognise what my hon. Friend the Minister has said in that regulation is the enemy of jobs, both part time and full time. Is my hon. Friend aware that a company in the manufacturing sector in my constituency which employs 150 people told me only this week that, as a result of the imposition of EC regulations, its costs
Column 8have increased by £33,000 a year, thus making it much more difficult to compete in export markets? Is my hon. Friend continuing to give evidence to the deregulation unit to ensure that that sort of nonsensical and unnecessary regulation does not happen?
Miss Widdecombe: I can also give clear confirmation that, wherever possible, we shall resist any unnecessary imposition of social legislation coming from Europe. Indeed, it is precisely because we are doing so that unemployment is falling faster in Britain than in other EC countries. It is precisely because we are resisting that we have such a buoyant economy and, in light of the period that we have been through, British businesses and workers should now think very carefully before consigning their future to the all-embracing social chapter policies proposed by the Opposition.
Mr. Paice: If employers respond as we expect, around 70,000 young people each year in England will gain a national vocational qualification level 3 or higher through modern apprenticeships and accelerated modern apprenticeships.
Mr. Shepherd: Does my hon. Friend agree that modern apprenticeship schemes are just what many bright young people and, indeed, employers need today? Will he commend the training and enterprise councils that have made progress in that direction with such success and will he redouble his efforts to bring together employers and TECs in areas where progress has not been made so that the success can be consolidated?
Mr. Paice: Yes, Madam Speaker. My hon. Friend speaks from a position of great advantage because HAWTEC, the TEC in his area, not only was one of the first to receive a three-year licence but is one of those closely involved in the development of a prototype modern apprenticeship in retail management. That is a great step forward and an example that should be followed by all TECs. We are doing everything we can to ensure that the prototypes will be increased by 42 extra sectors this autumn and that there will be plenty of opportunities for everyone who wishes to follow a modern apprenticeship in the future.
Mr. Fraser: Does the Minister realise that south London has experienced not only the bankruptcy of skill centres but the insolvency of its training and enterprise council and cuts? What effect will that have on young people's training and what example are the Government setting to those young people in how they run their affairs?
Mr. Paice: The decision to bring in the receivers to the South Thames TEC was regrettable, but necessary to protect taxpayers and trainees. The hon. Gentleman should be aware that we have already given a commitment that we shall do everything that we can to ensure that training programmes are not interrupted and that training providers are guaranteed funding for the
Column 9next three months for programmes that they have already contracted. We are discussing with local authorities and others how the provision of training in that area will continue after 1 April. The hon. Gentleman should not expect any diminution in the training effort in the South Thames area, in any other part of London or in the country as a whole.
Mr. Madden: As the Secretary of State likes to pose as a Tory thinker who never misses an opportunity to attack the statutory minimum wage and its impact on employment, is it not extraordinary that he is so reluctant to commission an independent study so that we can test that argument objectively? Could it be that he is anxious to ensure that facts do not spoil his pseudo-intellectual political rant?
Mr. Oppenheim: I could point the hon. Gentleman to any number of independent studies, ranging from that of the International Monetary Fund to the European Commission's White Paper on competitiveness, which point to the minimum wage as a destroyer of jobs in Europe. However, we do not have to look to independent surveys; we have only to look at the facts. Youth unemployment in France is twice that of the United Kingdom and in Spain youth unemployment is three times our level. Is that what the hon. Gentleman wants for Britain?
Mr. Ottaway: It is not so much the existence of the minimum wage that destroys jobs, but the level at which it is set. Is not the problem with the Opposition's proposals that they always bounce round a figure that is far too high?
Mr. Oppenheim: My hon. Friend is right. I find it absolutely astonishing that the Opposition spokeswoman can come to the House proposing a policy of a minimum wage without telling the House the level at which it would be introduced and what the Opposition would do about differentials. Until she is able to do that, the minimum wage policy will be nothing more than a cynical ploy designed to trick the less well-off into believing that there is some easy, pat way to raise living standards with no cost to the economy. There is not.
Ms Harman: Why has the Secretary of State for Employment ducked out of answering the question asked today by my hon. Friend the Member for Bradford, West (Mr. Madden) about the minimum wage? Is it because he was overruled by the Cabinet when it decided to keep the agricultural wages board? Does not that reluctant decision by the Government vindicate what Labour has said all
Column 10along about the minimum wage--that it protects good employers from being undercut by the bad, that it ensures fairness at work and that it does not cost jobs?
Mr. Oppenheim: The only person who is ducking questions is the hon. Lady. She had a perfect opportunity just now to tell the House the level at which she would introduce the minimum wage and what she would do about the differentials. The House should not take my word for the problems that the minimum wage would cause. It should take the words of Lord Healey, who said recently:
"don't kid yourselves. The minimum wage is something on which unions will build differentials . . . therefore, the minimum wage becomes a floor on which to build a new tower."
Lord Healey said that two months ago. He can see sense; why cannot the hon. Lady?
Mr. Peter Bottomley: Will my hon. Friend try some independent research by agreeing with the unions to halve the rate of pay for 16-year- olds in a Government Department--perhaps his own--to see whether, as the pay is halved from £90, the number of 16-year-olds employed doubles, or increases even further?
Mr. Oppenheim: I am not sure that that is necessarily a course that we would like to follow. I say to my hon. Friend and to Opposition Members that, of course, all of us, on both sides of the House, would like people, especially at the low end, to be better paid. The question is how to achieve that. We say that we should invest in education, invest in skills and make people more productive so that we can afford to pay them more in a sustainable way. The Opposition say that we should pay them more regardless of productivity. That would result in low pay being replaced by no pay.
Mr. Portillo: We are pursuing a number of programmes that make it more worth while for people who have been unemployed for a long time to take a job without fear of being worse off and we are providing employers with financial incentives to give such people jobs.
Mr. Kennedy: Is the Secretary of State aware that in an area such as Easter Ross in the Scottish highlands, an area of concern to me and to my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), where there is not much market access to a diversity of jobs because of the concentration of dependence on oil and oil-related industries, long-term unemployment is now very deep rooted? Many people there are finding it impossible to be competitive in the labour market or to enjoy access to the labour market. How can the Secretary of State believe that in that increasingly hopeless situation for many people, the jobseeker's allowance will be of any benefit?
Mr. Portillo: The position is not, as the hon. Gentleman puts it, increasingly hopeless. Even in his own constituency, unemployment has come down by 10 per cent. since December 1992. That underlines the point that jobs will be created in a sustained period of recovery;
Column 11that involves the Government pursuing policies of low inflation, controlling their spending and controlling their borrowing. I have been concentrating on helping people over what I call the job hump--helping them to see that when they go into a job after a long period of being unemployed, they will be better off. That is why, for example, the Chancellor of the Exchequer announced in the Budget that people's housing benefit payments will be sustained for four weeks when they take a job and that is why we made it more attractive to employers to take on people who are long-term unemployed by giving them a one-year holiday on their national insurance contributions if they take on people who have been out of a job for two years or more.
Mr. Forman: Has my right hon. Friend assessed the difference between the proportion of long-term unemployed at the end of the recent recession, from which we have now emerged, and the proportion of long-term unemployed at the end of the recession in the early 1980s? Can any lessons be drawn from those two experiences?
Mr. Portillo: Figures obviously change from time to time and I am slightly cautious about drawing too much of a lesson from the figures to which my hon. Friend refers. I draw a lesson from the fact that long-term unemployment in this country is about 35 per cent. of the total and that the average for Europe is about 42 per cent. of the total. I therefore believe that, as in the other things that we have been discussing today, greater labour-market flexibility and active measures taken by the Employment Service directed at the long-term unemployed not only help to bring down unemployment generally, but ensure that long-term unemployment is a lesser proportion of the total unemployment in this country than elsewhere.
Mr. Hain: Can the Minister confirm that according to the labour force survey and other statistics provided by his Department, the fall in full-time unemployment--admirable of course--between March 1993 and September 1994 of 200,000 was matched by a rise in full-time employment of just 30,000? In other words, 170,000 full-time workers have disappeared from the dole queues into the twilight world of, at best, full-time work, or casual or part-time work; or just as likely on to income support and sickness benefit? Why does not he admit that the Government's employment policy is a total fraud?
Mr. Oppenheim: I have to say that I am with the Trades Union Congress on this. As the hon. Gentleman knows, there are two different measures of unemployment and employment. One is the claimant count, the other is the International Labour Organisation international standard labour force survey, which the
Column 12TUC said recently was "wholly reliable". If there were some great fiddling of the figures, one would think that the labour force survey total would differ significantly from the claimant count total. But the figures are almost exactly the same, which blows a huge hole in the Opposition's argument that the claimant figures are a fiddle.
Miss Widdecombe: As I said earlier when the question was somewhat pre-empted, the Government have no plans to seek changes to the legislation which defines the Equal Opportunities Commission's responsibilities and duties.
Mrs. Mahon: Will the Minister congratulate the Equal Opportunities Commission on its support of part-time workers and of minimum standards? Will he comment on the leaked memo which implies that the Equal Opportunities Commission is a rent-a-quote organisation and that it could be merged with other equality agencies? Does not she realise that if that downgrading were to happen, the Minister and the Government would be seen as being malicious and spiteful towards an independent organisation which supports Labour's minimum wage and Labour's fight for decent standards for all workers?
Miss Widdecombe: Having made it very clear that those changes are not going to take place, I do not think that it is a question of whether the Government are malicious and spiteful, but that there is rather a lot of malice and spite in deliberately trying to muddy waters which have been made quite clear--there are no such changes. If the hon. Lady relied on statements, questions and good homework, instead of merely on leaked, stolen documents, she might do rather better.