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Mr. Waldegrave: Will the right hon. Gentleman remind us who said that any fool knows that if we have a minimum wage there will be a shake-out of jobs?

Mr. Prescott: I will come to the minimum wage, but I made the quote. [Interruption.] I made the quote.

The Minister without Portfolio (Dr. Brian Mawhinney): You said it.

Mr. Prescott: Did the right hon. Gentleman not hear? "I" means me. I know that he may be getting confused, but "I" means me, John Prescott.

I should like to deal with unemployment first. I promise to come to the minimum wage. Of course we welcome people being able to get a job. If more people have been returning to work, we welcome that. Any fool would welcome that. However, it is hard to accept the Government's claims at face value. What they say is happening to the level of unemployment is hard to determine, because we cannot believe the figures. I believe that there are lies, damned lies and Tory statistics. That is true for most areas. After 32 changes to the count, no less an authority than the Royal Statistical Society has said:


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    Why should the public believe in figures that even Tory Ministers do not believe in?

Everybody knows that, as employment spokesman, I constantly attacked the figures and whether they could be believed. I offered to agree with the Government on putting some honesty back into the figures. Some changes were made, but even the figures now produced by the Government cannot be believed. The Minister of State, Department for Education and Employment made it clear when the most recent figures were announced that we could not believe half of them because of the special reasons that he gave. The employment figures and the level of unemployment are not as Ministers tell us. Apparently, Ministers feel moved to make it clear that we cannot believe the figures that are given. The Minister said:


    "The nearest we can come to is that about half these figures we are giving each month are genuine."

The Minister is saying that we should not believe the unemployment figures. I rest my case.

Mr. Barry Legg (Milton Keynes, South-West): I note that the right hon. Gentleman does not believe that the unemployment figures are accurate. What changes would a Labour Government make to unemployment statistics?

Mr. Prescott: The first would be to make them honest.

Mr. Legg: What would Labour do?

Mr. Prescott: I have made a number of proposals. The Minister is saying that the Government are having to adjust the figures to project what he thinks is the real level of unemployment. I have given Ministers a number of papers on the technical details of how to make the figures more honest. My record is clear. The fact that we cannot accept the published unemployment levels is one of the problems of getting any kind of movement towards honesty.

Tory Chancellors have often committed themselves to cutting public expenditure, so why have they failed to do it? Despite all the promises through every election, they have not done it. I would be interested to hear from the Deputy Prime Minister why they have not. Did the Tories con the electorate in every election when they said that they would cut public expenditure?

Mr. Waldegrave rose--

Mr. Prescott: The Deputy Prime Minister can think for himself. Would he care to tell us why he did not keep that promise?

The Deputy Prime Minister: What the right hon. Gentleman is saying is not true. The level of public expenditure as a proportion of GDP is falling and it is scheduled to reach our target figure of 40 per cent. We are on target for a balanced budget by the end of the century. If there was a shadow of doubt about the validity of our figures, the Labour party would not have accepted them.

Mr. Prescott: My question is based on the Government's figures. They are the same as they were in 1979. I want to know why they promised to cut public

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expenditure but did not do so. I have heard that promise constantly from Tory Members, but they have not done it. I could help the Deputy Prime Minister by explaining why they have not kept their promise; they are paying out huge sums for unemployment because of the failure of their policies. It is a simple answer, but it is difficult for the Deputy Prime Minister because he keeps talking about a successful economy.

Mr. Waldegrave rose--

Mr. Prescott: I will not give way again. [Hon. Members: "Oh."] All right then.

Mr. Waldegrave: This is an important point and I think that the right hon. Gentleman might have misunderstood the figures. Of course the figures have a cycle, which is based on a trend. The trend was upwards until the late 1970s and it is now clearly downwards. The peak was at 47 per cent. in the 1970s, 45 per cent. in the 1980s and 43 per cent. in the 1990s. No statistician doubts that the trend is downwards.

Mr. Prescott: Targets and trends, but in reality things are no different. I believe that the Chief Secretary to the Treasury is the man who told us that he wanted to achieve a figure of 35 per cent. for public expenditure. I do not know in what year he is predicting that that will be achieved, but in 18 years the Government have made no difference to the level. We have had ups and downs, but we have had ups and down in unemployment and every other economic indicator. It is called boom and slump and that is what we have seen from the Government.

The Deputy Prime Minister has talked about a black hole in the accounts and the waste of resources. Can he tell us why we are prepared to spend £450 million to privatise the railway system when, only this week, a report showed that it has cost us billions of pounds more than we have got back in receipts? Hon. Members laughed when I mentioned the railways earlier, but the reason for the high cost is that we have doubled the level of subsidy to the private sector. The Government said that that would not happen, but it is costing the taxpayer twice as much and we are paying out more than we get back in receipts. Would not it have been better to use those millions, or in some cases billions, of pounds to invest in the railway system instead of pursuing the ideology of privatisation?

The beef tax cost us £3.5 billion and the poll tax cost us £14 billion. That was a total waste of money. Many promises were made about the poll tax, but it cost us £14 billion. A total of £1.5 billion has been spent on extra bureaucracy in the health service. Those are all examples of waste.

Let me tell the Deputy Prime Minister about the minimum wage and the effect on jobs. Since I made the statement to which he referred earlier, a great deal of work has taken place in America and here which shows that my fears about higher unemployment are not true. If hon. Members want to see that research, I will send it to them.

There is another point about the minimum wage which I would have expected to concern Tory Members. I worked in kitchens as a commis chef and it was a wages council industry. I lived on wages council payments.

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The Government abolished the wages councils and deregulated. Despite what the Government have said, in those deregulated industries there has been a fall in wages and it has cost far more to pay for the wage subsidy needed to achieve what the Government have determined is a proper level of income. That has cost the taxpayer £3.5 billion.

Why do Tory Members not find it offensive to have to find £3.5 billion to pay to employers who hire people at rates of £1.50 an hour, telling them to nip along to the Department of Social Security to obtain the subsidy to make up their wage? The same employer under a regulated system was paying more and the taxpayer did not have to contribute. That is the hypocrisy involved in the Tories' view of the minimum wage. If they were concerned about the taxpayer, they should ask those questions.

Mr. Fabricant rose--

Mr. Prescott: I will not give way. I know about this because I have lived it. [Interruption.] All right, I will give way.

Mr. Fabricant: The right hon. Gentleman mentioned the model in the United States. He will be aware that the US model is a percentage of an average wage in the United States. That would be the equivalent of a minimum wage in the United Kingdom of about £2.50 per hour. Is that what the right hon. Gentleman is suggesting? What rate is he suggesting? That will determine the rate of unemployment.

Mr. Prescott: We have made it clear that the rate will be determined by the minimum wage commission that we will establish. [Interruption.] What is wrong with that? It is employers who have said that they would like to give evidence. They are concerned, as are the trade unions. We will establish a commission and when the rate is determined, we will come here and there will be a debate. We will be the Government then and you lot will be in opposition.

We see the distortion of many of Labour's plans. The Deputy Prime Minister has been talking about a Labour spending plan of £30 billion. Then, the Bill and Ben of the advertising industry announced on posters that the figure was £12 billion, but we are now back to £30 billion. I wish they would decide what the figure is. In our defence, I shall quote what was said by The Financial Times when we offered our rebuttal of the Tories' claims. It said that the charge that it is £30 billion is


We believe that the Tories are wrong to make such accusations about us. We wonder why the Chief Secretary to the Treasury always seems to be at the scene of the crime when these posters and pamphlets are launched. The right hon. Gentleman sometimes has to explain his position, which can be confusing, but I prefer the explanation given recently by the Secretary of State for Health. He made the mistake of talking about the Government's position on the single currency. He said that his "thought processes were blurred". That is a new approach and it could characterise many of those in the Government.

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Let me make it clear that there are no hidden Labour spending plans of either £30 billion or any other figure that the Tory party chooses to claim. The real question must be about the Tory figures. The Red Book assumes that there will be £4 billion from privatisation receipts. We do not know where those receipts will come from. The only thing mentioned by the Deputy Prime Minister was air traffic control.


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