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Column 846unemployment. We must look rather deeper than hints about a tax allowance for nannies, such as we have heard from the Opposition. I am fully aware that one must be conscious of sensitivities in discussing such matters. All hon. Members handling casework on the Child Support Agency have been made fully aware of that. We must be aware also that family policy matters touch on personal morality. Although all Members of this House are honourable, very few of us are candidates for sainthood. We should speak cautiously as a consequence.
We should bear it in mind also that we cannot legislate to provide for human affection, one to another. Having made those qualifications, I believe that Archbishop Habgood was right: the Government should seek, when it becomes possible, to provide an incentive for people to marry and to stay married, perhaps concentrating on families on lower income levels. It has been recognised by the Leader of the Opposition that it is within stable families with two parents present that children have the best chance of an upbringing which will allow them to develop their full potential.
In the past 10 years, the Government have taken many initiatives to tackle the problems spelt out in the Rowntree report and in this debate. I am confident that, not by sermons or indignant speakers, but by the application of practical intelligence in working out a policy day by day, year by year, the Government will continue to succeed in that common endeavour.
Mr. Denis MacShane (Rotherham): I hope that I shall not make an indignant speech, but I am certainly very angry about the quality of our debate so far. We have heard some remarkable interventions by Conservative Members. The hon. Member for Twickenham (Mr. Jessel) wanted the poor to improve their diet. The hon. Member for Aylesbury (Mr. Lidington), if I understood him correctly, suggested that the poor should be made to stay married. Presumably, the rich could gallivant and have what and whom they want. Before that, we heard the speech of the Secretary of State for Social Security. It was a weird mixture of old cliche s, such as lamp posts more for support than for illumination, and wonderful metaphors about lights from black holes, which suggests that the right hon. Gentleman knows as much about astrophysics as he does about social security.
The Rowntree report is the bubble that has come to the surface. It has finally exploded and revealed seething uncertainty, fear and anxiety about the growth of poverty in our society. I cannot believe that hon. Members can fail to acknowledge that fact.
This is an important, historical turning point. In 1979, the Conservative party, after a century of it being constructed by many different parties, inherited one nation, with all its frayed edges. When the Conservatives leave office--the sooner the better--they will bequeath two nations as their historical legacy. Those nations will be divided not just geographically. We have the problem of what might be called the M25 Administration--a Cabinet most of whose members represent constituencies
Column 847within commuting distance of London. Not one member of the Cabinet represents England's biggest county, Yorkshire.
Mr. MacShane: I said that the Conservative party inherited a tradition of one nation, although the tradition was frayed at the edges. I take the hon. Gentleman's point about developments in the 1970s; Opposition Members need not be proud of all of them. But the challenge is to rebuild one nation, not to drive the two sides further apart and create the two- nation Britain in which we live--two nations not simply geographically or politically, but two nations even within so many of our constituencies. There are also two nations as between the genders, and between the cultures of community and of greed.
The Conservative party came to office when family life still counted for something, but it has presided over the single biggest assault on family life. In a sense, the family has been seen as the metaphor for the nation this century. The statistics have already been mentioned--such as the number of divorces and single-parent families, and the growth in the number of illegitimate children. I believe strongly that the message from Archbishop Habgood is both good and timely: there are fiscal and social policies, many of them cost-neutral, which could be implemented to strengthen family life. As the Secretary of State said in his lecture in Northern Ireland, one of the most important problems today is the absence of the single wage earner--male or female, because modern family life is about partnership--able to provide an income on which a family can grow up in tranquillity and decency.
We need many more jobs for full-time male workers. I know that I shall be criticised by leading members of my own party, but I must court unpopularity by saying that the inability of the male breadwinner to earn a salary sufficient for a family to grow up on is a labour market problem that we have not dealt with. On the contrary, we have made earning such a salary all but impossible for so many of the half of the population who are not women.
The debate is split between social security and employment matters, yet the Chamber is not graced with the presence of the Secretary of State for Employment. No doubt he is off in some rich Swiss ski resort pontificating on various aspects of policy. What a pleasure it must have been. There he was in Davos--a place that ordinary Members of Parliament visit only to be sportsmen and to ski--telling us about our country's policy on the intergovernmental conference. He was Mr. Foreign Secretary there. Then he was Mr. Chancellor of the Exchequer and came back and told us what our policy on the single currency should be. I find it deplorable that he is not prepared to come down from planet Portillo, give up being the pontificator maximus of the Cabinet and defend in the House his labour market policy, which is the shame of the modern world.
The modern labour market is rather like an ecosystem; it is something that we must preserve, cherish, support and perhaps change. As has happened over the past 16 years, it can be put grossly out of kilter by elementary
Column 848blunders. Labour market policy is at the heart of the debate, of Britain's future and of both social cohesion and economic growth. Not many hon. Members have so far mentioned the example of the dynamic Asian economies, although I pay tribute to the hon. Member for Twickenham, who brought them into the debate. Those economies set out to achieve economic efficiency and found that they had created a more equal society. That is the paradox of the dynamic Asian economies--wage differentials, social and education policies, the total state ownership of all land, as in Hong Kong, leading to progressive housing policies, go hand in hand with--
Mr. MacShane: If the Secretary of State stays and hears all my speech, he will realise that I have strong views about the pay policies in those societies. I am nervous of suggesting that the Government should take on the ownership of all land in this country and simply lease it, but doing that has certainly made one of the most important contributions to the development of a stable economy in Hong Kong. The great development of social housing in Kowloon has allowed the workers of Hong Kong to feel that they have not simply been left at the margin of economic development.
As I said, labour market policy is at the heart of the discussion, so I find it deplorable that the Secretary of State for Employment is boycotting the debate; I did not realise that secondary picketing now extended to the Cabinet. We need a policy for pay--although admittedly the Conservatives have had a policy for pay since 1979; Mrs. Thatcher was undoubtedly the greatest free collective bargainer of all time. As a detached political scientist rather than a Labour Member of Parliament, I pay tribute to her.
Conservative Members have said, and have been right to say, that--apart from a tiny blip at the beginning of the 1990s, when we were in the exchange rate mechanism and the recession was biting--pay increases for the people who remain in full-time employment in the private sector have constantly outstripped inflation. However, that has had consequences. There has been a massive redistribution, not just from the bottom decile, full of all those accountants and taxi drivers who declare zero earnings and are thus included, but from all the weaker sections--the bottom 20 or 30 per cent. of society. The economic consequences of that were that in the 1980s, because the pay policy allowed the private sector significantly to outstrip inflation, our unit labour costs--the key to successful
exporting--outstripped those of all our main competitors; hence the growing trade gap and the collapse of so much of our export-led manufacturing industry. The pay gap has widened so grotesquely that even the Prime Minister has had to express concern about the pay awards to the chairmen of the privatised utilities.
The pay rise for Cedric Brown, who started life as a gas fitter in Rotherham and has never changed the company for which he works, means that he now earns nearly 100 times what one of his employees might earn. That ratio is far higher than those in our successful and dynamic competitor or partner economies--certainly far higher than that in any of the successful Asian economies.
Column 849In a Japanese company, it would be most unusual for the chief executive officer to earn more than 10 times the average pay of his employees.
Compare that with the chairman of Marks and Spencer, who has been set up to head the Confederation of British Industry, Institute of Directors, "turkeys will vote for Christmas" committee to examine how executive pay could be curbed. He is earning about 100 times what one of his employees would earn. That grotesque pay gap has finally woken public opinion to what has been happening in the past 15 years.
Mr. Michael Shersby (Uxbridge): Why is the hon. Gentleman concentrating on a comparatively small number of high-profile individuals in the private sector who make major contributions to the industries in which they serve? Has he anything to say, for example, about the huge salaries that are paid to certain sportsmen, media personalities and newscasters? We hear not a word of criticism about those people from Opposition Members.
I take the hon. Gentleman's point. All leadership is, in my judgment, about leadership by example. When a field marshal is earning 10 times more than a private, that is right. When the Prime Minister earns what he does, that is right also. But when people are earning 100, 120 or 200 times more than their employees--as has happened following the awards in the past three or four years in our banks and big companies--that is wrong, and it is rotting the sense of social cohesion, work loyalty and managerial efficiency that we need.
Mr. Peter Bottomley (Eltham): I realise that there will be more important parts of the hon. Gentleman's speech and of the debate, but will he mention by name who it was who, by salary and share options, contributed £80,000 to the successful campaign of the present leader of the Labour party? Have any of those people, their salaries and share options, ever been mentioned by any Labour spokesman?
Mr. MacShane: I may be open to correction, but I believe that Anita Roddick--who earns about £138,000--chipped in some money. She earns 10 to 12 times the average earnings of the people working in the Body Shop.
In the autumn, I presented a ten-minute Bill about the introduction of a maximum wage, and I suggested a ratio of 20 to one. To my horror, somebody wrote to The Daily Telegraph --he or she had not read my speech--to say that we needed a maximum wage ratio of 12 to one. For me to be outflanked on the left in the letters column of The Daily Telegraph symbolises how concerned the British people are about the issue.
The issue is not just pure poverty--it is not just the big issue of the people selling The Big Issue . Poverty in work is finally being taken seriously. Working hard used to be a way, if not to riches, at least to a decent standard of living. It is no longer. I pay tribute to the Under- Secretary for the honest replies that he sent me, which show that one in six blue-collar workers earn £150 a week or less. Some 2.5 million part-time workers earn less than £4 an hour. One in four women in manual jobs have gross pay of under £132 a week.
Column 850The majority of those people have to be subsidised by the Department of Social Security, and I would have thought that that was an extraordinary denial of Conservative economic policy. Massive Government handouts are subsidising firms to allow them to employ people on low wages.
The answer to that is, of course, the minimum wage. I am doubly grateful to the Under-Secretary, because he has sent me detailed figures. The Secretary of State for Social Security held up a visual aid earlier, but I shall not hold up mine. The figures show that in countries with a form of statutory minimum wage--including America, with a rate of £3, and France, Australia and Japan--the rate of employment growth between 1980 and 1990 was significantly higher than in the UK.
Between 1990 and 1993--here, the economic conditions were very different-- the rate of employment growth was again higher in most of those countries.
The Parliamentary Under-Secretary of State for Employment (Mr. Phillip Oppenheim): It would help if the hon. Gentleman quoted the correct figures. He has previously stated that employment growth in the UK over an economic cycle period was just over 1 per cent., but the correct figure is nearly 7 per cent. The hon. Gentleman should look over the economic cycle from 1979 to 1990, when Britain had a faster rate of employment growth than minimum wage countries such as France, Belgium and the Netherlands, which had a high minimum wage, as opposed to the United States and Japan, which had minimum wages so low that almost no one was paid at that level.
Mr. MacShane: I am grateful that, at long last, we have had that exchange. The Under-Secretary wrote two letters to The Guardian to put me right on the matter. I wrote one letter, and then a second one, which I faxed on paper with a House of Commons letterhead. The Guardian did not publish it. I can say now across the Floor that the Under-Secretary is fundamentally wrong. I do not have the time to read out all the figures, as other hon. Members want to speak. The United States has a statutory minimum wage of £3 an hour, but President Clinton wants to extend it. It is in fact going up, because our currency is going down as I speak.
Mr. Oppenheim: The minimum wage in the United States is £2.60, and it was hardly raised at all in the 1980s. When President Clinton came to power, he committed himself to raising it. Unfortunately, two years later he has still not done so because his Secretary of Labour, Robert Reich, said that it would threaten the recovery. Mr. Clinton waited until there was a Republican Congress and Senate before announcing that he would raise the minimum wage by all of 25 cents. I suspect that he knows in his heart of hearts that the Congress and Senate will throw it out. Why did not he raise it in the past two years when there was a Democrat Senate and Congress? I suspect that it was because even Democrats realise that the minimum wage destroys jobs.
Column 851where the minimum wage is set--at current exchange rates--at just under £3 an hour, the rate of employment growth from 1980 to 1990 was 18.4 per cent.
Mr. Wray: Does my hon. Friend agree that we would need a minimum wage of £6 or £7 an hour to deal with the misery that has been created by the Government? People have been left in debt with their mortgages, as they have had to pay 16 per cent. instead of the 8 per cent. rate when they first bought their houses. Has not that been caused by the Government?
Mr. MacShane: I am delighted to have an intervention from the most legendary Conservative Member, who must soon be in the Cabinet. The minimum wage will have to be set at a fair level that is not destructive to employment. It must be decided at a time when, in government, we see what the economic data are. It would be preposterous to set any particular figure now.
Working time is also causing much difficulty in our labour market. The figures that the Secretary of State for Social Security quoted did not show the amount of working time that workers have to put in for their wages. All the evidence suggests that working time has increased significantly, and it is another growing inequality in our society.
The Minister of State, Department of Trade and Industry boasted in a debate before Christmas about a factory that he had visited in Essex--it would be Essex--where men worked 65 hours a week. That is 120 years after Disraeli legislated for the 56-hour week in the 1870s. The 65-hour working week will make family life impossible and cause immense trouble with cohesion.
The amendment to the Opposition motion welcomes
"the high priority accorded by the Government to education and training".
I wish that the right hon. Member for Brent, North (Sir R. Boyson) were in his place. Yesterday I asked him, "Rhodes, what can we do to improve the quality of education in this country?" He answered that it was an impossible task, that we are 18 months behind all our main competitors in mathematics, that we have lost all sense of standards and that there is no cohesion in Government education policy. In some colleges of higher education, the A-level pass rates have fallen to about 25 per cent. They have to keep up their rolls and do so by keeping on students. Training budgets have been cut by one third. The Government claim in their amendment that
"employment is the best route to higher incomes".
As I showed when I cited the figures for fair pay, labour market policy must be based on partnership and on planning--as is the best company policy. It must be a labour market policy with some moral purpose. On the latter, it is deplorable that the Prime Minister appears to be snubbing the world social conference in Copenhagen next month, while every other world leader is acknowledging that employment and the labour market are issues that we must take far more seriously.
Column 852Planning, purpose and partnership are three concepts that are utterly inimical to the Conservative party. The worst poverty--the poverty that makes me angry--is the poverty of our nation's ambitions. When I was born, three years after the war, we ranked fifth or sixth in the world for gross domestic product per capita. In the mid-1960s, when I left school, we were in the top 10. Italy had half our GDP per capita and Korea had an average per capita income of $250 per year. In some areas, Korea and Italy have overtaken us. We are now sinking into the second or third division of nations.
I am in the House because I have the ambition to put that right. We want a society in which ambition is encouraged and communities are ambitious. We want Britain to rise again, for all its people and, unlike the Conservative party, we want it to rise with all its people. That is Labour's ambition and its programme for the 21st century, and I hope that under Labour we shall once again live in one nation.
Several hon. Members rose --
Mr. James Clappison (Hertsmere): I welcome the opportunity to make a brief contribution. This debate calls for realism and I hope that I am being realistic in reflecting that life is not easy for people on benefits. Many of my constituents suffer similar, complex social problems to those to which other hon. Members referred.
The debate also calls for realism from the Opposition--realism about how they will deliver the high expectations that they set out in their motion. One of the telling points in this debate was when my hon. Friend the Member for City of Chester (Mr. Brandreth) asked the hon. Member for Glasgow, Garscadden (Mr. Dewar) how he would flesh out his proposals. There was no answer. The hon. Gentleman was short on delivery throughout his speech.
The debate also calls on Opposition Members to be realistic about something else. They talk of gaps, the redistribution of wealth, relative this and relative that. They must face the fact that there is irrefutable evidence that there has been a massive and widespread increase in prosperity and incomes during the past 15 years. We have heard much about evidence from "Social Trends", which is plainly evidence of people and ordinary families having access to items that were considered luxuries not long ago. I welcome the fact that people in the lowest decile of the population by income apparently have increasing access to such important items. It is a good thing.
The evidence goes beyond that. My right hon. Friend the Secretary of State mentioned the increase of 39 per cent. in the average incomes of non- pensioner households, which is reflected by a similar increase of 36 per cent. in median incomes for households, according to Department of Social Security figures.
I accept the caution that my hon. Friend the Member for Aylesbury (Mr. Lidington) offered about the Rowntree report and the way in which it was compiled. Even that report, on which the Opposition rely for so much else, shows that there was a substantial increase of 26 per cent. in median incomes between 1979 and 1981. I invite
Column 853Opposition Members, including the hon. Member for Birkenhead (Mr. Field), who is looking at the report, to exercise some caution. The hon. Gentleman may find that his fingers get burned.
The report surveys the period between 1961 and 1991 and estimates that, after taking housing costs into consideration, median incomes increased by a miserable 2 per cent. between 1974 and 1979. Opposition Members had better be careful when they refer to that report. They might provide evidence that people would be much worse off if the party which was in power from 1974 to 1979 had continued after that time with the policies that were impoverishing the nation by 1979.
Health has also improved. During the debate we have heard many misconceptions about the health of the nation--misconceptions based, to some extent, on the "Panorama" programme last night. It is important to make it clear that, in absolute terms, health and life expectancy have improved considerably. The figures for changes in relative positions on which the programme rested its case were for young men in certain small areas of the country. Throughout the country as a whole during the past 15 years, there has been a substantial increase in life expectancy--two years and six months for men and two years and one month for women. The hon. Member for Barrow and Furness (Mr. Hutton) gave figures for the northern region and for regional differences, but those were differences from the national average. There has still been an absolute improvement within that region. The hon. Gentleman is not in his place, but, if he looks again at the figures for 1978, he will find that the regional difference was much the same then as it was in 1994. There has been an absolute increase in life expectancy.
Infant mortality is another indicator; there have been great improvements during the past 15 years. The hon. Member for Bow and Poplar (Ms Gordon) spoke movingly and said how she cared about that subject. If she consults the latest figures from the Office of Population Censuses and Surveys, she will find that there has been an enormous reduction in infant mortality during the past 15 years. In fact, the reductions have been greatest in the lowest social class--a reduction of 56 per cent. in infant mortality for social class V. I welcome that achievement.
Although there obviously has been a widespread increase in prosperity, we need to tackle the issues that arise in respect of the bottom 10 per cent. of the population. I take note of the words of caution that were expressed about the way in which that figure has been analysed, and I agree strongly with my right hon. Friend the Secretary of State that it is important to consider the composition of the bottom 10 per cent. and to concentrate on ways of helping specific groups in it. Obviously, in the past 15 years, the number of unemployed people in that bottom 10 per cent. has increased; therefore, it is most important to concentrate help on those unemployed people, providing them with ways out of unemployment and back into high levels of income and prosperity.
I welcome the measures that my right hon. Friends have put in place to help the long-term unemployed specifically, and I do not pour cold water on proposals such as work trial and workstart, which are good ideas, which need to be considered carefully and implemented with great thought. I also do not pour as much cold water
Column 854as the hon. Member for Garscadden did on the increase in family premiums for unemployed people who want to enter full- time work. That is a valuable measure.
Beyond that, I have no doubt that the most important way of helping those unemployed people and helping people in the bottom 10 per cent. is to continue our policies, which are designed to bring about sustainable economic growth. We have not mentioned that sufficiently in the debate, but it is important that we continue sound economic management, which will provide the growth to return those unemployed people to work. That is our answer to the questions that were asked by Opposition Members about that bottom 10 per cent.
I turn now to what Opposition Members have said. What are their policies, we may ask, for helping the less well-off--those in greatest need? My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), in a thoughtful intervention, asked the hon. Member for Garscadden about that, and especially how he was going to pay for his aspirations. The hon. Gentleman, in an illuminating reply, began to speak about levels of executive pay.
We have returned to that theme repeatedly in the debate. The idea is held on the Opposition Benches that there is a pot of gold of executive pay and high earners, which can be raided to fulfil all the Labour party's social aspirations. My hon. Friend the Member for Aylesbury disposed of that idea effectively in his careful analysis, but, if the Opposition will not take his word for it, will they take the word of a recent Chancellor, who wrote about the subject in his autobiography? He said:
"There will always be controversy about taxation, and, since it directly affects the interests of every individual, the argument is unlikely to be very objective. My own experience as Chancellor led me to certain general conclusions".
He said that one of those was that
"any substantial attempt to improve the lot of the poorest section of the population must now be at the expense of the average man and woman, since the very rich do not collectively earn enough to make much difference, and the average man does not nowadays want to punish those who earn little more than he, since he hopes ultimately to join them."
That is the answer to the arguments of the redistributionists. [Interruption.] The Opposition Members who are heckling may want to know that that Chancellor of the Exchequer was no other than the former Member for Leeds, East, Lord Healey. He knew a thing or two about taxation. Perhaps new Labour needs to learn a few lessons from old Healey, although all Conservative Members remember the painful price that we paid for those lessons in taxation.
The right hon. Member for Sedgefield (Mr. Blair) has expressed his ideas for helping the less well-off and for creating employment. In a recent interview for She magazine, which is described as "the magazine for women who juggle their lives," he said, in response to a pressing interviewer, that tax relief on nannies was one of the things that the Labour party was considering, although he said that he was cautious about that. I think that he is right to be cautious, because, although there may be some interest in that subject in some parts of Islington and certain other quarters, I do not think that it will have the hon. Member for Bolsover (Mr. Skinner) going into the Lobby dancing with glee. I think that he is right--
Column 8557.13 pm
Mr. Dafydd Wigley (Caernarfon): I am grateful for the opportunity to speak, and I welcome the way in which the issues of poverty and long-term unemployment have been brought together, because there is no doubt that the two are linked. Coming as I do from Wales, I know that we have had a history for many years of difficult areas that suffer from unemployment and its accompanying problems.
Those problems appeared to be improving for a time, but now we seem to be slipping back rapidly. The problems, which were witnessed decades ago, of real, biting poverty, hitting not only individuals but communities, are returning, especially in the old industrial areas. That is happening in my constituency, the slate quarry constituency, and especially in some of the old coal mining areas--the valleys of Glamorgan and Gwent and the old steel towns down there. People there have become out of work; there is no alternative work; the work that may be available is often poorly paid, part -time work; and the standard of living is deteriorating rapidly. That hits the quality of the physical environment in those areas and has an impact on people's health and well-being.
That surely must be, in part at least, a moral question, not simply an economic one. We have unemployment in Wales of slightly less than 10 per cent. I believe that it is absolutely wrong that the whole burden of the depression should fall on to the shoulders of the last 10 per cent. in the job scale. I further believe that it would be possible to bring those people into work if a concerted effort were made to do so. I accept that that may well mean higher taxation, and it may well mean higher taxation on average earnings, and not only at the very top. I believe that that bullet must be bitten, for social as well as economic reasons.
In Wales, we have watched our gross domestic product per capita drift back in comparison to the figures for the United Kingdom as a whole. In 1977, our GDP per capita was 87 per cent. of that of the UK; it had decreased to 83 per cent. by 1992. Wales has the lowest GDP per capita of any part of the UK, and the counties of Gwynedd, Dyfed and Mid Glamorgan have a smaller GDP per capita than the Irish Republic. The Irish Republic has a greater GDP per worker than Wales as a whole, and soon it will have a greater GDP than Wales as a whole. The Irish Republic is succeeding, while policies in Wales obviously are not succeeding.
Among the factors that bring about the small amount of income per head are unemployment, to which I referred a moment ago, and high inactivity rates, which are highlighted not only in the Rowntree report but in "The Geography of Poverty and Wealth" by Anne Green, published in July 1994. That report shows that many of the areas with the greatest inactivity rate are in Wales. About 300 areas throughout the UK were rated on their degree of inactivity. Ten of the 12 worst are in Wales. They are Rhondda, Afan, Cynon, Merthyr Tydfil, Blaenau Gwent, Rhymney valley, Llanelli, Neath, Dinefwr and Islwyn. Eight of the worst 10 areas for women's inactivity are in Wales. They are Rhondda, Merthyr, Afan, south Pembrokeshire, Blaenau Gwent, Rhymney valley, Cynon and Ynys Mo n. We are at the worst end of the queue on a whole row of indicators concerned with inactivity.
Column 856Other dimensions contribute to the poverty that is rampant in many of those old industrial areas--illness and disability. In the constituencies in the Mid Glamorgan area--Merthyr, the Rhymney valley, the Caerphilly constituency, Cynon, Rhondda and Pontypridd- -there are about 17,000 unemployed people and 34,000 people on invalidity benefit. That is largely the result of the effects of old industry. Those factors, together with low activity rates--which some people have in common --lead to the very low incomes on which families must live.
In addition, there are demographic factors. There are older families, sometimes as a result of young people having left the area to seek work. There is a preponderance of older people who depend on state pensions. In Wales last summer, the unemployment rate for 16 and 17-year-olds was 28 per cent. Of those, 89 per cent. had no income whatever. All those factors contribute to the problems that we face.
It is no use saying that, provided that we give those at the top enough money, there will be a trickle-down factor. In Wales, we simply get a trickle-out factor.
Money that goes to those at the top of commerce or industry goes outside Wales and does not trickle down into the Welsh economy. Incidentally, the trickle-down factor does not even work to a great extent within the United Kingdom economy because those with the highest earnings often spend them overseas on items such as holidays and they do not necessarily work through the economy.
It is all very well criticising and explaining the problem, but what can we do about it? We must create jobs to do the work that needs to be done in our communities. There is scope for some 100,000 jobs in Wales. Goodness only knows, the environment needs tidying up and protecting for the future. We need community nurses and even bath nurses and home helps to assist people who, 10 years ago, may have been in institutional care and have difficulty in surviving at home. Work is also needed in terms of pollution control, water quality programmes, education and training, and police and security. Although jobs exist in those areas, they do not command an expenditure capacity that will immediately create extra jobs. We therefore need public sector intervention not only to create jobs in the categories that I mentioned but to stimulate projects such as the cabling of Wales for the Internet development, which will be important in future years.
Given that unemployment costs on average £9,000 a year when expenditure and taxation are deducted, by spending an additional £4, 000 a year to bring unemployed people back into work to undertake the much needed social, environmental and infrastructure work in all our communities, we could solve some of the economic and social problems that face us. I admit that that would cost some £400 million a year in Wales and a rolling programme might cost a similar amount in capital terms. That would mean a couple of pence in the pound on income tax, a slightly greater borrowing requirement, and some extra money from the private sector.
Column 857That is a challenge to not only the Government but the Labour party. If we are to deliver the programmes that are needed in terms of training, facilities, social work and the environment, we must pay for it. There is no soft option; we must bite the bullet. If it costs a couple of pence extra on income tax--not just for the very rich but for average wage earners--to bring people into work and carry out the work that is needed in our communities, the Labour party as well as the Government must face that fact. Morally, we should be prepared to pay that, because it is wrong to have 100,000 people on the dole in Wales, becoming long-term unemployed because there is no short-term work available.
That is a challenge to this and any other Government and I hope that both sides of the House will bite the bullet.
Mr. Alan Duncan (Rutland and Melton): I apologise for not being present earlier in the debate, but I have been sitting on the Standing Committee that is studying the Disability Discrimination Bill. As soon as it adjourned, I felt the urge to race back to the Chamber, if only to fend off the charges of the hon. Member for Glasgow, Garscadden (Mr. Dewar) that I am somehow a Government stooge in everything that I say on this topic.
The hon. Gentleman would not allow be to rebut that charge and refused to take an intervention from me. I have learned why he was not prepared to take an intervention, interrupting a pattern to debates that we have both enjoyed on many encounters. It is because he, as a man of integrity and a master of his brief, who always enlightens the House with what he has to say on social security, is ashamed of the manner in which his Front Bench has hijacked an issue, distorted it and used it so viciously against the interests of the impoverished, whom he pretends to champion.
Contrary to the motion, everything that the hon. Gentleman said concerned inequality rather than poverty. He tries to parade inequality before the media to suggest that, somehow, those who have earned money are to blame for those who have not. Inequality is unconnected with poverty, but the hon. Gentleman knows that, in the current mood of politics, he can seize on a rich seam of grievance to play that political card.
The Labour party is covering up its lack of a policy to try to alleviate the poverty that should be the proper cause of our concern and focus of our attention. In discussing inequality and poverty, the hon. Gentleman links two unconnected phenomena to try to convey the impression, for his own purposes, that the one is to blame for the other: it is not.
The real issue, which the motion addresses but the hon. Gentleman did not, is poverty and it is separate from the question of what other people earn. The hon. Gentleman has raised the phantom of the issue of inequality before every camera prepared to point in his direction. If one had listened to what he said, one would have heard many an attack on inequality but no solution to the problem of poverty--except, perhaps, one, which was more of the same. Where the hon. Gentleman and I differ is in trying to study and assess the origins of poverty. One of the main causes of poverty is the very policy that he would like to
Column 858see more of. That is why, from a sedentary position I said to him, "Socialism." Contrary to what Beveridge envisaged, the workings of the welfare state have gradually impoverished many people, particularly in Scotland.
Mr. Graham: I shall be courteous and give way to the hon. Gentleman if he wishes to intervene in my speech. Does he realise that, from 1979 to the present day, Strathclyde alone lost nearly half its manufacturing jobs under his Conservative Government? The Government have done nothing to encourage folk to work by stimulating the economy and providing enough money for companies to keep their business.