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Mrs. Fyfe: Will the Secretary of State give way?
Mr. Lilley: If the hon. Lady were to provide an answer to my question, I would give way. But as I fear she will not, perhaps she can wait until I have finished this point.
High unemployment is the result of measures such as the minimum wage, the social chapter and greater union power--precisely the measures advocated by the hon. Member for Peckham. But if she wants to know the answer, she does not need to wait until she has found it and put it in her speech. She can go straight to the OECD, which recently reported that the reason why we have a relatively superior performance in our labour market and in unemployment to countries on the continent is our structural reforms, such as privatisation, lower tax and deregulation--every one of which she has opposed.
Mrs. Fyfe:
Is the Secretary of State aware that only 41 per cent. of lone mothers in Britain work, but that 82 per cent. of lone mothers in France work? Is that because they are less workshy in France, or does it have something to do with the French state system of work availability?
Mr. Lilley:
It may have something to do with work requirements in those countries, but it is due above all to differences in the age of children. A recent study compared the position in this country with that in other countries, and the biggest single reason why this country differs from the others is that we have had a large increase in lone parenthood. A large part of that increase has been made up of never-married mothers, who typically have much younger children than those who become lone parents through divorce. Those with children under five tend not to work in most countries, and we have a higher proportion of those children than other countries.
Mr. Alan Howarth (Stratford-on-Avon):
The Secretary of State has been scathing about the minimum wage. How does he justify his policy of not only permitting but encouraging employers to pay wages below
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Mr. Lilley:
When he sat on this side of the House, no one was more enthusiastic about helping people into work through in-work benefits than the hon. Member for Stratford-on-Avon (Mr. Howarth). Now that he sits on the Labour Benches, he has abandoned his reasonable and sensible attitude that wages are determined by the ability of people to contribute value to the process of production, and not by the virtue or evil of employers. Therefore, wages are not affected by changing laws but by improving the productivity and the economic performance of the country. That is what we are doing and why we are successful in creating jobs.
Mr. Lilley:
The hon. Gentleman has had the opportunity to discuss this question on both sides of the House, and I do not intend to allow him to give both sides of the question again.
Mr. David Shaw (Dover):
My right hon. Friend has given an impressive elucidation of why we are creating jobs and other countries, such as France, are not. May I point out that a number of young people have come to my constituency from northern France to get jobs? They have all told me that they do not have a hope of getting a job in northern France because of socialist policies.
Mr. Lilley:
My hon. Friend makes a potent point, and he is absolutely right.
The one concrete proposal that the Opposition have put forward to help with unemployment is to finance, by means of a one-off windfall tax, the creation of 250,000 artificial jobs for young people for one year only. It is a temporary scheme which, by some unexplained miracle, is supposed to produce a permanent solution to youth unemployment. It is incumbent upon the Opposition to tell us what will happen after that one-year windfall tax money runs out. Can the hon. Member for Peckham give me a single example from anywhere in the world where a one-off scheme for one year has created permanent jobs and solved the unemployment problem? She cannot, because there is no such example. Any serious measures to reduce unemployment must be financed and sustained on a durable basis.
The other success area that enables us to keep down the growth of social security while maintaining decent provision for our people is in the sphere of pensions. On average, pensioners' incomes are now about 50 per cent. higher than they were in 1979. We have achieved that partly through our success in encouraging people to provide for their own retirement. Britain now has £600 billion in funded private pension schemes--more than all the money invested to meet the costs of future pensions in all the other countries in the European Union put together.
Recently, the Select Committee on Social Security suggested that we might come under pressure to help pay for unfunded pensions on the continent. I can promise the House that we will not let our assets be combined with continental liabilities. But Labour has always said that it
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Labour also poses a threat to the basic state pension, and it has said that it will cut the pension to pay for allowing people to draw it from the age of 60. The Government Actuary says that Labour's policy would result in the pension being £20 a week lower for the rest of people's lives. Can the hon. Member for Peckham confirm what she said in a letter to me--that she does anticipate a lower basic state pension? She wrote to me in confidence, but I have given that opinion wider circulation. She will not confirm it to the House, and that speaks volumes for the openness that Labour intends to display to the electorate.
Over the past three years, Labour has criticised every reform that I have introduced. Collectively, those reforms will save £6 billion during the next Parliament. That is an extra £6 billion that taxpayers would have had to find had Labour's opposition been successful. But Labour has not just opposed our saving measures--it has proposed extra spending of its own. My right hon. Friend the Chief Secretary to the Treasury has set out more than £5 billion of additional spending proposals on social security which have been made by the Labour party and costed by us. So that is £6 billion plus £5 billion to make a total of £11 billion a year. That is the cost of letting new Labour loose on social security.
The measures announced this week will produce savings of more than £1 billion a year by the end of the century, in addition to those previously announced. They will maintain the real level of benefits, protect the most vulnerable, make treatment of couples and lone parents fairer, tackle fraud and curb the main areas of growth.
Ms Harriet Harman (Peckham):
On Tuesday, we heard a last gasp Budget from a failed and discredited Government; 22 Tory tax increases will have cost the typical British family £2,125 more in tax by the time of the next general election. Ordinary families have to pay more of their hard-earned money in taxes to pay for the Government's failure. Nowhere is that failure clearer than in the welfare state.
The cost to the public purse has risen, and life for those on benefits is becoming harder and more degrading. The Tories are hitting the taxpayer and, far from protecting the poor, they are hitting them, too; they failed on welfare because they failed on work. The Government have failed to tackle poverty and unemployment and there are now almost 14 million people in poverty, compared with only 5 million in 1979.
Children in particular have suffered. Official Government figures show that one in three children is now born into poverty.
Mr. David Shaw:
Is not the simple point that the hon. Lady is trying to make that the Labour Government were so mean in 1979 that they would not pay benefits to a
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Ms Harman:
Then, we had a nation at work, not a nation on benefits. Now, increasingly, we have a nation on benefits--[Interruption.]
Mr. Deputy Speaker (Sir Geoffrey Lofthouse):
Order. The Secretary of State had a reasonable hearing and I would suggest, especially to the hon. Member for Dover (Mr. Shaw), that the hon. Member for Peckham (Ms Harman), who speaks for the Opposition, should have the same.
Ms Harman:
Thank you, Mr. Deputy Speaker.
One in five non-pensioner households now has no one in work. The Government have failed the unemployed, especially the long-term unemployed. We know that the longer people are out of work, the harder it is for them to get a job; 400,000 people have been jobless for more than two years. It costs the public purse £9,000 a year to keep someone trapped in unemployment. The total cost of long-term unemployment is £3.6 billion a year.
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