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Mr. Deputy Speaker: Order. The hon. Gentleman's time is up.
6.1 pm
Ms Harriet Harman (Camberwell and Peckham): In this debate on the economy, I want to highlight the fact that the success of our economy depends to a great extent on the skills, creativity and capacity of our people. That is something which, over the years, my right hon. Friend the Chancellor has addressed--indeed, he addressed it this afternoon when he talked about the working families tax credit, the minimum wage and, above all, the new deal.
Whereas our economy used to depend on land and then on machinery, it now depends on what, in economic debates, we have come to call human capital. Therefore the family, where that human capital is nurtured, is critical to the economy. The issues that I want to raise tonight--the questions of work and the family--lie at the interface between economic and social policy.
The Government are determined to deliver a stable and growing economy. They want to support families, they want to tackle the problems of workless households, they want to tackle social exclusion, they are pledged to end child poverty, and they want equality of opportunity for women. The question of how families balance their work and their home commitments is central to delivering on all those issues.
There have been huge changes, both in the family and in the workplace. One of the most stunning changes is in the way children are being brought up. My generation were brought up by mothers who, for the most part, stayed at home when we were young. If our mothers did return to work, it was when the youngest child had started school. That has changed: mothers are redefining motherhood to be about providing for their children as well as caring for them. Now, most children are being brought up in families where both parents work, or by a working lone mother.
We know that the economy needs those women's work. We also know that the income coming into the household depends, to a great extent, on women's work. However, we should be concerned about the effect on children when they swap a mother who stays at home for one who goes out to work as well. That is why, through the Smith
Institute, I commissioned Heather Joshi to carry out longitudinal research into the effect on children of their mothers working when they were young.
The findings show the importance of giving mothers more choice about when and how they return to work after having a baby. No research should tell a mother what to do, but those research findings, which echo United States research, should inform our public policy. Following publication of the research, my postbag showed that real choice is what women want more than anything, especially when their babies are under 12 months old.
That is why I very much welcome the Chancellor's statement in paragraph 5.27 of the pre-Budget report:
Mr. Bercow:
I am listening intently to what the right hon. Lady is saying about the working families tax credit. Does she regard it as satisfactory that, because of the tapering of the child care element, in some cases people face a marginal tax rate as high as 46 per cent?
Ms Harman:
For parents in my constituency, the working families tax credit, which is just being introduced, will make a huge difference to low-income families who are in work but have not been well-off. Even more importantly, for many families it will make work pay. Not only will there be more income going into the household, we will not have the problem of children being brought up in households where no one is working--where they see a life of dependence on benefits and never understand the world of work. That is the principal objective of the working families tax credit, and one that I am certain it will meet. We are only just bringing the measure in, and of course it will be under constant review, but both the principle and the practice are important. It is disappointing, although predictable, that the Opposition Front-Bench spokesmen will not say whether they would abolish it.
The minimum wage and the working families tax credit are, as I have said, not just economic policy. The reason they are also family policy is because they mean that fathers and mothers will not have to work all hours just to make ends meet. The Chancellor has ensured the investment of hundreds of millions of pounds in the national child care strategy. The right to parental leave will, for the first time, give parents the right to take time off work when their children are ill.
The foundations have already been laid and the process of change is under way, but that needs to continue on the basis of partnership. There must be partnership between different Departments, especially between, on the one hand, the economic Departments--the Treasury and the Department of Trade and Industry--and on the other, the so-called social policy Departments--the Home Office, the Department of Social Security and the Department for Education and Employment.
We need that partnership between Departments, but we also need a partnership between Government and business, especially small business. A minority of
businesses remains opposed to any legislative change on principle, but I recognise that many businesses that are not opposed to the change in principle are none the less wary about their ability to cope with the pace of change. They already feel that they are coping with a lot because of the working time regulations, the introduction of working families tax credit, and the parental leave regulations. Government must play a role in ensuring that patterns of work change to recognise that women have family as well as work responsibilities. However, they must make those changes in a way that makes it as easy as possible for business, especially small business, to adapt.
We should learn from our experience of what works, such as the successful introduction of the minimum wage. Unfortunately, that is yet another issue on which we have heard no views this afternoon from those on the Opposition Front Bench. However, I believe that the minimum wage has been introduced successfully. As shadow employment spokesperson in opposition, when I took over responsibility for that portfolio I was faced by business wanting no legal minimum wage and by trade unions wanting a minimum wage at what I believed was an unrealistic rate. By establishing the policy of the Low Pay Commission, I made it clear that our objective involved business and unions working in partnership to agree on how that objective should be put into practice.
We should do the same with the new deal for families. We should make clear our objectives and our determination to make changes, but, as with the other new deals, involve business and unions in partnership to deliver the changes in the workplace that families need. A new deal for families could consider what can best be done by example, good practice and persuasion; what will need to be done by legislating for minimum standards; where Government financial support is necessary for employees or employers; and how we can use the partnership funds under the Employment Relations Act 1999 to pioneer new family friendly working.
A strong partnership could set a radical modern agenda to establish a workplace and a work force fit for the next century. I shall identify some areas where I think that a new deal for families could deliver change. No one really thinks that a woman should have to return to work when their baby is only 18 weeks old, yet financial support to replace a mother's earnings lasts for only 18 weeks. That limit was set in 1953 and it needs to be updated. I think that we should extend it for the first 12 months of a baby's life, at the very least for low-income families.
No one would argue that a woman should have to return to work when her baby is only six months old. However, maternity leave lasts for only six months. We should extend that, too, to 12 months. No one would argue either that nothing changes when a woman has a child, yet a woman has to return to her full-time job as though nothing has happened, when for her the whole world has changed. I think that the mother should have the right to return to work part-time if she wants to, as the Employment Committee recommended in its important report on part-time working.
No one would argue that the new right to parental leave should be only for the better off. I think that we should pay parental leave, which would implement a recommendation of the important report of the Select Committee on Social Security on parental leave. We should do that at least for low-income families.
We are putting millions of pounds into our radical reform programme for welfare to work, our hospitals and our schools, and that is right. However, it is time that we had substantial investment and radical reform of our maternity provision. I am talking not about public services, but about mothers who are part of the labour market but still the centre of their families. The work force has changed, our economy has changed and it is time that our maternity provision was changed too.
"The Government will also examine whether the Working Families' Tax Credit or other measures can give additional help to the mother who wishes to stay at home in the first months after her child is born."
That is also why I call on the Government today to establish a new deal for families. The Government have already laid the foundations for such a move. The minimum wage and the working families tax credit are not just economic policy, they are family policy.
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