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Ms Angela Eagle (Wallasey): Does the hon. Gentleman agree that the other part of the equation that we need to look at is the cost of the current level of unemployment and the cost of keeping those people doing nothing? Does he also agree that we tried very hard in our report to get the Government to give us an estimate of the cost? The cost ranged from a basic £10 billion a year--which is pure benefit payments--to as high as £24 billion.
Sir Ralph Howell: I shall refer to the details of the cost a little later in my speech. I beg the Government to take this matter seriously and to have an independent inquiry into the overall cost of the proposals--only then will we know whether they are practical. The Committee believes that we could save at least £5 billion per year, and probably considerably more.
It is obvious that the welfare state is out of control. In 1948, based on the Beveridge report, we set out on a welfare state system. However, the Beveridge report was never fully put into operation. If it had been, there would never have been any long-term unemployed. Beveridge said that after three months or six months--whichever was decided--benefit would cease and work would be offered. To be fair to the Attlee Government, they could not put the whole report into operation then because there were no unemployed. When unemployment did creep in, successive Governments should have done something about it.
We are in a extraordinary situation with the Right to Work Bill. An early-day motion has been supported by 70 of my hon. Friends, by 40 Labour Members, six Liberals and eight others, so we have cross-party support. We are causing the Front Benchers to think about the matter seriously. All three main parties have their heads firmly in the sand and they hope that the problem will go away, but it will not go away. The problem will worsen for as long as the welfare state is operated and we must stop spending money and receiving nothing for it in return.
Most people who are unemployed want to work. The cost of unemployment has already been mentioned and the Government admit that unemployment costs £13.5 billion a year. If we divide £13.5 billion by the number of unemployed--2.2 million--the cost is £6,000 a year each. If we also include the tax and national insurance of at least £1,000 that everyone would pay if they were earning £6,000 a year, the Treasury is losing at least £7,000 per person through unemployment. Society at large is getting nothing in return. Would not it be better for unemployed people to be doing something?
Unemployment carries further costs in stress, increased sickness, marriage break-up, crime and drug-taking and it is no good denying that there is a connection between crime and unemployment. Everybody should have an opportunity to work, everybody should have a right to work and everybody should have a right to the dignity of earning a living. We could deliver that and save at least £5 billion a year.
I shall explain how the Right to Work Bill would operate. The main obstacle is that the Government are determined not to accept a situation in which the state is the employer of last resort, but the state is the provider of last resort. Would not it be more sensible from everybody's point of view if the unemployed could do caring work, environmental work or minor infrastructure work--a variety of jobs that could be offered--for the general good of the nation? Fresh thinking is needed immediately.
The Bill states that the state should become the employer of last resort and should offer work to anybody who has no other work. That idea is not new. It was first introduced in the House in 1911 by Keir Hardie, who by that time was not top of the pops in the Labour party. A rehash of the Keir Hardie Bill was introduced again by a Member of Parliament named Enoch Edwards in 1912. My Right to Work Bill, 84 years later, comes from the opposite side of the House, although I am still as right-wing as I ever was. [Hon. Members: "No!"] We have formed a bridge across the House and it is time to accept that the state should be the employer of last resort.
We would ease into the new approach through workstart. I wish to pay tribute to my right hon. Friend the Secretary of State for Education and Employment, because the pilot workstart scheme was set up when she was in charge of the old Department of Employment. It has been highly successful in every respect, but sadly there has been no financial evaluation of it. I ask my hon. Friend the Minister of State to insist on an evaluation of the savings that must have been made by the workstart scheme.
Under workstart, the Government paid £60 to an employer who took somebody off the register for the first six months and £30 for the next six months. The average saving must have been about £75 a week on what the state paid someone to do nothing before. Workstart should be offered nationwide.
We should also introduce a non-worker payment. Some people will refuse to work and it should be possible to sack people from the right-to-work scheme if they try to abuse the scheme. The non-worker payment should be 25 per cent. of what is offered under the right-to-work scheme. We should also pay a parents' grant of £60 for the lower-paid. Any couple with an income of less than £180 a week would be eligible for a £60 grant, if one of them remained at home to look after their children.
Those are the provisions of the Right to Work Bill which has received support from both sides of the House. The Bill would not introduce American-style workfare. So often when this matter is discussed, the media talk of American-style workfare, but we would offer a real job to everybody who wishes to work so that everybody can have the opportunity to earn a living.
I shall spell out the financial terms. Everybody would have the right to work for 40 hours at £3 an hour, giving a maximum of £120 a week. That would also mean that
every couple would have access to £240 a week, so virtually no social security payments would be necessary to maintain any couple, married or not. Everybody would have the opportunity to earn £120 and that would get rid of the stigma of social security payments. There would be no fraud and no need for fraud squads for the simple reason that, unless people reported to work, they would not be paid. People could put in whatever amount of time they wished, up to 40 hours a week. I ask my hon. Friend to consider that as a way forward in Europe. I believe that the Government are right to opt out of the social chapter which is causing immense problems.
Mr. Ken Eastham (Manchester, Blackley):
Is there not a slight contradiction in the hon. Gentleman's remarks? A few moments ago he argued the case for a minimum wage of £3 an hour, but the Government say consistently that they oppose the introduction of a minimum wage under the social chapter.
Sir Ralph Howell:
The figure of £3 an hour would not be a minimum wage in a statutory sense--anyone who wanted to could work for less--but it would probably develop into one. I have no hang-ups about that, although perhaps the Government do. I am glad of the hon. Gentleman's intervention as it allows me to admit that I have pitched the figure at a low level. I have been talking about £3 an hour for about three years and perhaps it should be a little higher now. However, for the sake of convenience and so as not to confuse the issue, it is advisable to continue talking about £3 an hour. That would be easy to phase in and it would be less likely to upset the Government. I cannot understand why the Government have a problem with the idea of a minimum wage. We spend more than £2 billion supporting the low-paid, so we are bringing wages up to a statutory minimum in any event.
Returning to my earlier point, I think that the Government are correct to oppose the social chapter as it is now drawn. The Germans, the French and everyone else in Europe who is suffering as a result of the social chapter will find in time that they can no longer support it in that form. I ask the Government to take my proposals seriously. Would it not be better for Britain to rewrite the social chapter instead of sniping from the sidelines? This country has taken the lead many times before--I hope that we shall do so again today in the football--and it is time to rethink the question of the welfare state. Almost all countries copied our welfare system in the late 1940s, but it is no longer viable. It is unsupportable and it is time to rethink the whole system.
Mr. Frank Field (Birkenhead):
While listening to my hon. and learned Friend the Member for Leicester, West (Mr. Janner), who opened the debate, I recalled a comment by Jeremy Thorpe. Speaking about the other place, he said that here was evidence of life after death. The Government have wound up the Employment Select
My association with the hon. Member for North Norfolk (Sir R. Howell) goes back a long way. At one time I was in receipt of Cabinet papers about child benefit. The last Labour Government had slight difficulties introducing that benefit and, because I was worried that the special branch would raid my office and take those papers from me, I destroyed them. If I had not done so, I would have been able to look up the exact dates of two events.
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