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Column 417once employed someone for between 30 and 40 hours a week split into three or four part-time jobs, which have left people with few if any employment rights and low pay. Since 1938--I mean 1978; it just feels like 1938 sometimes--the number of part-time jobs has risen by 32 per cent. while the number of full-time ones has dropped by about 13 per cent. In Scotland, the number of part-time jobs has gone up by 9,900, but the price we have paid is the loss of 7,600 full-time ones. One must question the reality of job creation.
In my part of Scotland, Fife region already has the highest unemployment rate of Scotland at 11.2 per cent., while one of my district council electoral wards is already approaching an unemployment rate of 20.7 per cent. The Bill will bring no hope to those unemployed people.
Low pay puts a burden on the taxpayer because the profits of low-paying employers are subsidised through family credit. I believe that the system of tackling wage poverty by top-up benefits is economically inefficient.
I shall now mention some of the arguments that have been made about a minimum wage. First, it has been argued that it will lead to job loss. There is little real evidence to demonstrate that. Before the previous general election, the independent organisation Industrial Relations Services carried out a survey of 527 firms, asking them what they would think of a minimum wage set at half average earnings. Nearly two thirds of those questioned said that it would not increase the organisation's pay bill, and a further 30 per cent. said that it would add less than 5 per cent. to the pay bill. Following the abolition of wages councils, we have not witnessed a growth in the very low-paid sector of employment, but jobs have been lost--notably, as many as 27,000 in the hotel and catering sector --and even lower wages have been paid.
I remind Conservative Members that although minimum wages have little impact on employment, they affect the economy. Let me again take Scotland as an example, where 220,000 workers used to be covered by wages councils. Every 10p decrease in their wage levels since the abolition of wages councils will lose the Scottish economy £30 million. That policy damages the economy.
A second argument about the minimum wage is that it will lead to inflation and that the higher-paid will seek to maintain a differential. The Government should preach to those fat cats in the privatised utilities about seeking to maintain differentials, because they are the ones who constantly demand massive pay increases. There is little evidence to show that maintaining differentials will affect the economy. Indeed, the Confederation of British Industry has estimated that a minimum wage set at half average earnings may add only 1.2 per cent. to the nation's wage bill. The third argument that has been used against a minimum wage is that it will affect Britain's international competitiveness. Do the Government really suggest that we should adopt the employment practices of some countries in other parts of the world, where there continue
Column 418to be children in full-time employment, where children work down mines and where workers are paid as little as 50p an hour?
Ms Squire: It seems that the jobseeker's agreement and the Jobseekers Bill suggest that there is no problem with people working for as little as 50p an hour. That sort of level of pay puts pressure on families to suggest that their children and young people should find any job, however poorly paid.
Ms Squire: I am saying to the hon. Lady that she has refused to set a level below which she thinks that it will be unreasonable for anyone of any age to work, and that that appears to me to be imitating the employment practices which, tragically and unjustly, continue to exist in other parts of the world where children continue to be engaged in horrific manual labour and wages are as little as 50p an hour.
Mr. McCartney: It is a fact--the Minister of State knows it, and she has been disingenuous not to admit it in the debate--that, under the young person's jobseeker's agreement, if the Minister carries a set of proposals that the Government will set out after the Bill is passed, young people coming out of care will lose the right to any form of income. Those are young people, newly out of care. The truth is that the Government are attacking, and will tomorrow attack, the very young people whom the Minister of State says that she will defend.
Ms Squire: I thank my hon. Friend for those excellent arguments. When the Government are considering ways in which to create decently paid employment, they should consider the fact that good companies do not make investment decisions based solely on labour costs; they consider other aspects to be important, such as a highly skilled and motivated work force, an efficient transport and communications network and good research and development. Those can be far more effective than low pay in attracting inward investment and helping to create jobs.
If the Government are serious about reducing unemployment, they should also alter, as my hon. Friend the Member for Makerfield said, their education and training policies, especially as reflected in the contents of the Bill. The Government should eliminate the contradictions created by existing rules rather than set up other barriers.
In conclusion, I hope, albeit faintly, that the Government will support the amendments. It appears that their employment strategy is designed simply to move people from unwaged poverty into waged poverty. That merely exchanges one set of problems for another. Pay is probably the clearest signal that we give of the value and worth that is placed on a person's work. Without a minimum prescribed amount of remuneration, contained in our amendments Nos. 1 and 2, the only
Column 419message that the Government will give to unemployed people, whatever their circumstances, is that they are of little or no value and little or no worth.
When I was considering what to say today, and flicking through some of my notes, I came across a quotation that very much describes what the Government are about. It is by someone called Thomas Paine who, I know, will be familiar, at least to Opposition Members. He said, more than 200 years ago:
"It is inhuman to talk of a million sterling a year, paid out of the public taxes of any country, for the support of any individual, while thousands who are forced to contribute thereto are pining with want and struggling with misery.
"Government does not consist in a contrast between prisons and palaces, between poverty and pomp.
It is not instituted to rob the needy of his mite, and increase the wretchedness of the wretched.
There never did, there never will and there never can exist a parliament possessed of the right of commanding forever how the world shall be governed. I am"--
"contending for the rights of the living."
That means that we support a minimum wage.
Mr. Heald: I listened with interest to the comments of the hon. Member for Dunfermline, West (Ms Squire). Starting with her quotation from Thomas Paine, I wonder whether she is prepared to accept that, 200 years ago, he was talking about a country with the workhouse and with the justices in charge of local government--a very different society, in which one could be hanged for stealing potatoes. Is the hon. Lady seriously saying that we live in such a society today?
Will the hon. Gentleman admit that, 200 years ago, when Thomas Paine was writing, so was Adam Smith? The Conservative party appears to be fixated on the writings of that economist.
Mr. Heald: I am grateful to the hon. Lady, and that sedentary intervention indicates that Adam Smith was right. However, I think that the hon. Lady should agree, although I am sure that she would not, that a sense of balance is needed in those things.
I do not think that the hon. Member for Dunfermline, West gave us that sense of balance. She discussed the problems of unemployment in her constituency without mentioning that, in the past year, unemployment has decreased in her constituency by 10.4 per cent. The figures that she took would have suggested that the position throughout Scotland was becoming worse rather than better. In the past year, in Scotland, unemployment has decreased by 11.2 per cent. Twenty-eight thousand
Column 420people net in Scotland this year are back in work. That is good news. The Scottish economy is improving--the hon. Lady knows that better than me.
The idea that we are discussing the subject against a background of worsening unemployment and no opportunities for young people is wrong. The hon. Member for Makerfield (Mr. McCartney) made a similar point, but unemployment in his constituency is down by more than 10 per cent. The level of unemployment in his constituency is 8.5 per cent., having gone down by almost 18 per cent. in the past year. Can he seriously argue that unemployment is getting worse, which is something that he said in one of his contributions?
Mr. McCartney: I want to correct the hon. Gentleman. It is not unemployment that is going down, but the claiming count. The hon. Gentleman should add to the claiming count the 2.4 million people who are economically inactive. The Government do not include them in the count; if they did, they would find that there are about 5 million people in Britain still looking for jobs and desperate for work. The Government are preventing them from working.
Mr. Heald: I am grateful to the hon. Gentleman for his contribution, which shows no sense of balance. As the hon. Gentleman would know if he had researched the matter--I think that he does know--the International Labour Organisation's figures, which have been described by the Trades Union Congress as utterly reliable, show almost exactly the same unemployment figures as the Government's own departmental figures.
What is more, is the hon. Gentleman really saying--I know that he cannot be --that the Labour party, in the unlikely event of its coming into government, would add those economically inactive people to the count? Of course a Labour Government would not. That would provide an inaccurate figure that would not reflect the true circumstances in this country. The ILO measure is different from the Government's measure in its formula, but the result is almost exactly the same: 2.4 million people are currently unemployed. The figure is too high, but it is falling fast.
The hon. Member for Dunfermline, West said that most of the jobs that have come on stream over the past year are part time. Not only is that inaccurate, but she should not forget that the people who are taking part- time work want part-time work. The Department of Employment survey of part- time workers showed that only 14 per cent. of them wanted full-time work.
If we consider full-time workers, as the survey did, we see that about one third of them would like to work part time. To suggest that people are being forced into part-time work is wholly inaccurate. Is it not about time that the Labour party started to address the serious issues on the basis of the facts?
Column 421Mr. Heald: I shall give way to the hon. Member for Dunfermline, West, as I promised, and then to my hon. Friend.
Ms Squire: I certainly agree that there are people--the majority of them are women with family responsibilities--who look for part-time work. But they are looking for part-time work, not poverty wages, which is what they are frequently offered. I was also saying that full-time jobs are being replaced by low-paid, part-time work. If one talks to skilled engineering workers from dockyards and elsewhere, one finds that they are looking for full-time, not part-time, employment.
Mr. Heald: I am grateful to the hon. Lady for making that point. What people who are looking for work want is a job. All the evidence shows that if we were to introduce a guaranteed minimum wage--something for which she has argued--we would lose rather than gain jobs. Who is she to tell people what sort of jobs they should accept?
Who are any of us to tell people what jobs they should take? Who are we to say that someone should not have taken that job, but another? That is nonsense. Each individual's circumstances are different. A particular worker may want to take a specific job for his or her own reasons.
Mr. Booth: Is my hon. Friend aware--from what he has said to the hon. Member for Dunfermline, West (Ms Squire) I think that perhaps he is-- that thousands and thousands of people, particularly women, treat part-time jobs as freedom from the drudgery of the workplace at home? Is not the part -time job an expression of freedom--something that the Opposition are always prating about?
Mr. Heald: My hon. Friend makes his point in his own way. The huge increase in women in work since 1984 is something of which this country should be proud because those women who wanted to work now have the opportunity to do so, and do so in large numbers. It is true that one of the reasons for the increase in part-time work is that many women want part -time work. There is no reason why they should not want it. It may fit in with their responsibilities to their children. Some men may like part-time work so that they can give a hand in the home as well. We in this place should support women who want to go out to work and take pride in the fact that they have been given that opportunity. We should not always try to knock them down, undercut them and say that they should not have taken a particular job and were silly to do so.
Ms Eagle: I hope that the hon. Gentleman will support the recommendations of the Select Committee on Employment on mothers in employment, as he has just given a paean of praise to women in the work force. He asked, "Who are we to tell somebody what job to take?" Does he agree that that is what the Bill is all about? It is about telling people to take particular jobs on low wages
Column 422or have their benefit denied. Who is he to make a point like that when it is the very point of the appalling legislation?
Mr. Heald: The hon. Lady makes my point for me. I am asking how we can say to someone who has taken a job that he or she should not have taken a particular job. I think that I made that point clearly. It is different if someone is paying a jobseeker's allowance, as the taxpayer is, or will be. The taxpayer is entitled to have his or her position protected, which is exactly what the Bill does.
It is not presumptuous to tell someone receiving the benefits of the taxpayer--we are the taxpayer's protectors--how we believe a proper, structured approach should be taken to job seeking. It is not presumptuous for us to say, "This is the advice that we are giving you and the agreement that we would like to make." If the person is not prepared to accept the terms on offer or suggested by the employment officer, the adjudication officer decides. If that is still not acceptable to the claimant, the matter can be sent to the social security appeal tribunal, which consists of the employer's representative, the employee's representative and a lawyer. There are further rights of appeal in the event that the appeal tribunal does not deal with the issue properly. The hon. Lady cannot say that the taxpayer's interests are being dealt with in anything other than a proper way.
Ms Eagle: The hon. Gentleman is trying to be reasonable. He talks about protecting the taxpayer's interests. Does he have something to say about the interests of the taxpayer who is currently subsidising low-paying employers to the tune of £1 billion a year--twice as much of the taxpayer's money as the Bill attempts to save with its vicious cuts? Why is there not some protection for the taxpayer on that side of the equation as well as the other side?
Miss Widdecombe: When my hon. Friend heard the intervention of the hon. Member for Wallasey (Ms Eagle), did it not sound to him extraordinarily as though she were proposing the abolition of family credit?
Mr. Heald: I am grateful to my hon. Friend as that is precisely one of the points that I wanted to make. That is not the first time in the debate that we have heard that line peddled. The hon. Member for Makerfield decried family credit in his speech and said that it was a disgrace. I thought that we were finally about to hear a commitment from the Labour party. Is it Labour party policy to abolish family credit? That would be a bold proposal by new Labour. I do not suppose for a minute that we will receive a clear answer tonight when we did not get one during the weeks of consideration in Committee.
The hon. Gentleman had the absolute temerity to stand at the Dispatch Box and pretend that the Labour party had something to say about tax, when week after week in Committee he ducked and weaved in an attempt to avoid making the commitments that were the only logical consequence of the amendments that he tabled. The Opposition's amendment talks about a "minimum prescribed amount". Have Opposition Members said what that amount will be? Will it be the same figure as
Column 423Labour's guaranteed minimum wage? That does not help us much because the Opposition are not prepared to tell us what that figure is either.
The Labour party is humbug from beginning to end. Labour Members make criticism after criticism week after week, but they are not prepared to say what they would spend or when they would spend it. We have seen examples of that approach again tonight.
Unemployment in Britain is falling for a number of reasons, one of which is that the Government have put in place a structure which assists the jobseeker. The Bill builds on that structure and I believe that hon. Members should support it. The Opposition's amendment gives no information about what the Labour party would do--it does not even give the Government the benefit of the Opposition's advice on the issue. How on earth could anyone support it?
Mr. Burden: I was pleased when the hon. Member for Hertfordshire, North (Mr. Heald) got to his feet and I was delighted when he began to speak. I hope that many people outside this place will read his remarks, because he has done the Labour party a great service. The hon. Gentleman talked a great deal about "forcing" people out of jobs. A central issue in the debate is whether it is reasonable for the Government to force people into jobs that pay poverty wages. Government Members must answer that question because it is their legislation. Even after a Second Reading debate and eight weeks of consideration in Committee, we have yet to hear what the Government consider to be a minimum reasonable rate of pay to expect people to work for without risking a deduction in benefit.
Government Members may disagree on that point, so I intend to go to the top in respect of the legislation. The Minister of State made her position clear in Committee and it is important to put it on the record on Report. She said:
"I have said until I am tired of saying it, that pay will not constitute a reason for refusing an offer of work. I know that that is not palatable to the Opposition. I have also said on record--it is already published in Hansard --that an unemployment adviser"-- I thought that they were employment advisers--
"would take into account all prevailing circumstances".--[ Official Report, Standing Committee B , 21 February 1995; c. 521.] We examined the prevailing circumstances that the Minister had in mind. We were pleased to learn that she did not intend to cut the current list. Health considerations were a prevailing circumstance that could be taken into account generally--but not in respect of pay. Religious conviction, conscientious conviction and caring responsibilities could be taken into account--although the Minister did not mention the cost of caring. If travelling costs associated with a job were considered excessive, they could be taken into account, as could excessive travelling time. But there was no mention of pay. The Minister did not answer the key question: what level of wages is it reasonable to expect people to work for? Anything goes for the Minister and the Government.
Are we trying to imagine problems that do not exist? Is there no problem with low rates of pay? Perhaps the problem existed once but it has now disappeared. The facts are that the problem does exist and that it is growing. Mention has been made in the debate of a survey
Column 424conducted by the Manchester Low Pay Unit which found that one third of jobs offered wages below the national insurance threshold. The Low Pay Network undertook a study entitled "After the Safety Net", based on a survey of 5,918 job vacancies at 128 jobcentres across the country. Of the 4,493 vacancies that gave a rate of pay, 36.5 per cent. paid less than they would have done if wages councils had still existed.
We are not talking about highly paid jobs; we are talking about jobs in catering, hotels, shops, hairdressing salons and clothes manufacturing. We are talking about rates of pay that the wages councils said were unlawful. Under the wages councils, it was unlawful to pay people less than about £2.50 per hour. When the Government were busy abolishing the wages councils, we posed the question, "Do you condone the fact that many employers are paying less than wages council rates?" Government Members replied, "Of course we do not condone the law being broken." So the Government abolished the law and legalised pay rates that had been unlawful under the wages councils.
Mr. Heald: I am grateful to the hon. Gentleman for giving way. Will he mention the 15 per cent. fall in unemployment in his constituency in the past year? Does he intend to examine subsections (7) and (8) of clause 7, which make it perfectly clear that the terms of a jobseeker's agreement are subject to the test of reasonableness, with a right of appeal not only to the adjudication officer but to the social security appeals tribunals? In those circumstances, how can he make those points?
Mr. Burden: The hon. Gentleman referred to my constituency. I know precisely what the unemployment situation is in Birmingham. It does not give me any joy that one in five people in Birmingham are unemployed. About half that number have been unemployed for more than a year--that is higher than the national average--and about 30 per cent. of them have been unemployed for more than two years. One quarter of young people in Birmingham are unemployed. I think that that is a problem and I would not use that tragedy to try to score political points.
The Government should be more concerned about doing something to address the unemployment problem and to create jobs. Government Members seek to blame the unemployed for their predicament. The unemployed are unemployed because there are no jobs, not because they are workshy. The community understands that and it is about time Government Members understood it as well.
Of course, it is not just a question of overall rates of pay. The hon. Member for Hertfordshire, North mentioned the expansion of part-time work and job insecurity in Britain. That is part of the backcloth to the debate. He referred to the number of jobs that have allegedly been created. The fact is that an average of 270 full-time jobs have been lost every day since 1992. That is a net figure; it takes into account the number of jobs created as well as those that have been lost.
It is true that there has been an expansion in part-time work. If people are unlucky enough to lose their job, there is a one-in-three chance that their next job will be part
Column 425time. If people move into part-time work, they are twice as likely to lose their job within a year. The average pay for a part-time job is--
Mr. Burden: The average pay of part-time workers is 70 per cent. less than that of full-time workers and, on average, a part-time job is 50 per cent. shorter than a full-time job, so when Conservative Members talk about the expansion of part-time working as if it were a one-way street or something for which people were crying out, perhaps they should look at the reality of part-time work for so many of our citizens.
Mr. Booth: I am grateful to the hon. Gentleman, who always gives way. Will he be as fair as he is wont to be? If he is to go through the parade of figures over the past few years, is it not right that he should point out that we have created 600,000 jobs in Britain in the past 18 months, when 2 million jobs have been lost in the rest of the European Union?
Mr. Burden: If the hon. Gentleman does not understand how many jobs have been lost every day since 1992, I shall give him the figure in a few more ways. Let us go back to 1990 rather than 1992: since 1990 the number of jobs lost per day has been 579, which equates to the loss of about 24 full-time jobs every hour for the past five years.
Miss Widdecombe: I am most grateful to the hon. Gentleman. If, instead of comparing peaks and troughs, he looks at the matter over a complete economic cycle, will he admit that we have created 1.5 million jobs in Britain, a figure substantially higher than most of the rest of the industrialised world?
Mr. Burden: If the hon. Lady wants to look at a complete cycle, perhaps she should examine the level of unemployment in my constituency and others since the Conservative party came to power. She will see that the Government have destroyed many jobs. I am pleased that the Minister intervened as I was talking about job insecurity. The philosophy of job insecurity has been encouraged not just by the Government but by her Department.
I received a letter from the hon. Lady today dated 19 March taking exception to the fact that, a week or two ago, I publicised the fact that an internal circular in her own Department--Employment Service personnel notice 5/95--was deliberately encouraging managers in the Employment Service to deprive temporary staff of their employment rights.
I shall quote from that letter as the hon. Lady was obviously quite put out by what I said. She wrote:
Column 426"I can assure you that the aim of the document is not to deny temporary workers their employment rights. On the contrary the notice aims to reinforce the principles underlying the Civil Service Order in Council."
Obviously that circular, which instructs managers to make sure that temporary members of staff are not employed for longer than 51 weeks, had nothing to do with depriving temporary workers of their employment rights. Perhaps it was totally misrepresenting the intentions of the Employment Service. Was it? I shall quote from that particular circular.
Personnel notice 5/95 also encouraged managers to carry out employment checks on potential recruits to see whether they had worked for the Employment Service before. Why do managers have to carry out an employment check? There are various possible reasons. It could be for reference purposes. If somebody who had worked for the Employment Service before was a good member of staff, perhaps the service would want them back, but that is not why the circular urges managers to carry out employment checks. The reason is:
"If it is not checked, we might later find that the individual has already worked for up to two years and might now be in the position of having enough service to qualify for a wide range of employment rights."
There we have it in a nutshell: job insecurity, getting rid of employment rights and denying temporary workers employment rights is official Government policy. It is all linked together. Low pay, job insecurity and increasing casualisation of employment are all part of the Government's ideology. It is something to which we may object, and indeed we do. The Government may think that they can get away with that, but they might have some problems with this Bill under European law.
It is by no means certain that the Bill, if enacted, will be lawful under European law. As far as I know, the Government and Britain are still bound, or consider that they should be bound, by the European convention on human rights.
Article 4 of the European convention on human rights states: "No-one shall be required to perform forced or compulsory labour."
The article also sets out some exceptions to that rule which allow work to be done by prisoners and the military in times of emergency and include
"any work or service which forms part of normal civic obligation".
The Commission has decided in a number of cases that, in order to give rise to a violation of that article, the work must be involuntary, done in order to avoid the menace of a penalty, be unjust or oppressive and cause the victim unavoidable hardship. So there we have it: a violation occurs if a job is taken under the menace of a penalty. That is precisely what the Jobseekers Bill seeks to impose. It seeks to force people into jobs under the menace of the penalty of having their benefit deducted. Benefit sanctions are absolutely at the core and the heart of the Bill.
Tomorrow we shall debate new clause 6, which attempts to deal with another example of that compulsion or threat of penalty. Tomorrow we shall debate the Government's ambition to force young people to remain on training schemes even if the quality of the schemes is lousy and the Government are doing nothing for the young people. They are to be forced to stay on those schemes under the threat of removal of benefit.