Unemployment

§ Mr. Bob Clay (Sunderland, North)

I beg to move, That this House deplores the continuing level of unemployment in the United Kingdom and its devastating effect on individuals and communities in the North, Scotland, Wales, Merseyside, inner London, the Midlands and many other areas; believes that temporary schemes provide no permanent solution but instead pose an increasing threat of conscription into enforced cheap labour; further notes that recent events in Britain and around the world threaten further increases in unemployment and demonstrate the fundamental instability of the casino economies with their continuing cycles of boom and slump which cannot be fundamentally solved by adjustment in exchange rates, interest rates, privatisations or market forces; therefore calls for the adoption of socialist policies which place human need before profit, such as a massive expansion of socially useful jobs and services and a major reduction in working time, including a 35 hour week, longer holidays, earlier retirement and similar measures; and believes that this can only be achieved by public investment and ownership subject to democratic control, thus enabling the majority of people in communities and in regions, in workplaces and in national enterprises to plan a society of full employment. I am grateful for this opportunity, because I believe that the topic of unemployment has begun to be seen as something of a bore by the Government, and perhaps by some of their supporters. There is a danger that the view will begin to get around that the present disgraceful levels of unemployment are a permanent, God-given state of affairs. There is also a danger that unemployment will be seen and presented, especially by the Government and their supporters, as a local difficulty in one or two areas that can be massaged and marginally helped through certain schemes.

Although my own region in the north, to which I shall make several references, has the highest unemployment in Great Britain, I recognise that unemployment is not a local problem. Throughout the country there are similar problems, in some cases nearly as bad as those in the north.

It is interesting to read the document produced by the Library, last updated on 19 November, which lists unemployment by constituency in a league table. I note, for instance, that, according to the latest calculations, the highest unemployment in any British constituency is not in the north, the north-west or inner London, but in Birmingham, Small Heath. Another Birmingham constituency, Ladywood, has a fifth highest unemployment level. A number of Glasgow constituencies appear on the list: Maryhill, Central, Provan and Springburn. They come eighth, ninth, 10th and 11th, respectively. Sheffield, Central comes sixth.

Even London, which some regard as part of the prosperous south — the area that is, according to the Government, flowing with milk and honey—is well up in the first 30, with constituencies such as Bethnal Green and Stepney, Islington, North, Bow and Poplar, Vauxhall, Hackney, South and Shoreditch and Hackney, North and Stoke Newington. Inner London as a whole, which has a population of approximately 2.5 million—roughly the same as that of the entire northern region—had 175,000 unemployed at the last count. That is a rate of 14.4 per cent., nearly as high as the current northern rate.

Some will say that that appalling position is now being ameliorated by the creation of some new jobs. Occasionally, there are announcements of new inward 780 investment, even in regions as badly hit as mine. However, even today's announcement of new jobs from Nissan, some of which had already been announced as part of the phase 2 go-ahead given last year—I comment on that because I am sure that the Minister will; and, of course, every new job is more than welcome, and desperately needed — will bring the number of new jobs in my borough since 1980 to a total of slightly below 6.000. That compares with confirmed redundancies for the same period, according to the Department of Employment figures, of 22,938. Despite the inward investment, such as it is, and despite whatever new jobs have been created, there is a net loss of jobs in the borough of Sunderland of 16,000. That shows the scale of the problem with which we are faced.

In the Tyne and Wear area, of which Sunderland is a part, since 1979, when the Government were elected, until August 1987, the total number of confirmed redundancies was 98,784. With the recent closure that was announced at Huwoods, which made mining machinery, and the shipyard redundancies on the Tyne that have been announced, there will have been over 100,000 job losses. There is no sign that the problem is going away, and I am sure that the same difficulties prevail in many other parts of Britain.

The notion that the Government are trying to perpetrate — that we have a strengthening enterprise culture that relies on the private sector to provide jobs where the public sector has allegedly failed—is a myth. I could prove that with regard to my area, and 1 am sure that many other examples could be given from other parts of the country.

Our shipbuilding industry—the merchant building part of which is in public ownership — has contracted dreadfully, but at least there is some merchant shipbuilding left. The way in which the mining industry has contracted is appalling, but at least some of it is still left.

In my constituency, the failures of private enterprise are littered all around us. One of the major shipbuilding yards left in Britain, the Pallion yard, would not be there now were it not for my right hon. Friend the Member for Chesterfield (Mr. Benn), who, in a previous incarnation in 1975, faced with the collapse of Court Line Ltd. — a private enterprise company that had been milking its shipbuilding, repairing and marine engine interests to prop up a holiday company — took that yard arid other shipbuilding facilities into public ownership. That is the only reason why Pallion is still there now.

Plessey, which is a massive multinational company, is pulling out of Sunderland, killing off 3,500 jobs; that is the act of a ruthless multinational company. In the past couple of years a major private sector firm, Camrex Ltd., which had been in the area for 100 years and was a marine company, was bought out by a multinational company, Ruberoid plc, which then discovered that Canadian Pacific Ltd. had an insurance claim against Camrex, and deliberately bankrupted it, thus causing a massive loss of jobs to avoid a fairly dubious insurance claim.

Joplings foundry, which was another historic company in my constituency, was bought two years ago by an entrepreneur in the mould that Conservative Members praise to the hilt as an example of the new, dynamic enterprise culture, Mr. Andrew Cook. He said: I will buy this foundry and I can guarantee jobs and work." Within 781 days he closed it and offered employees work in another of his factories in Leeds. Within weeks of some of them going to Leeds, they were told that they were being sacked.

Any empirical analysis of the history of private enterprise in my area, and in many others, shows that one cannot have faith in the private sector and that, inadequate though it is in many ways, it is only public enterprise that has maintained jobs in the area.

§ Mr. Michael Fallon (Darlington)

Surely there is empirical evidence that at least 13 Japanese companies have moved into the north-east region that unemployment in the northern region has dropped by 25,000 over the past year and that self-employment has doubled over the past four years. Are those figures myths?

§ Mr. Clay

I will not be distracted and tempted into that sort of statistical debate. The hon. Gentleman represents a region that still has a total unemployment rate of 17 per cent. with nearly 200,000 people unemployed. I find it incredible that he has the audacity to claim that things are in some way looking up. I anticipated that such comments would be made by Conservative Members, so I have already said that one has only to look at the net job losses compared with the net gains to see that there is massive net loss overall.

§ Ms. Clare Short (Birmingham, Ladywood)

We all know that there has been a massive growth in self-employment. However, does my hon. Friend agree that the figures on the income of those who are self-employed show that the overwhelming bulk of them are on fantastically low incomes and that most have gone into self-employment through desperation rather than any great support for the enterprise economy that Conservative Members boast about?

§ Mr. Clay

I am grateful to my hon. Friend for making that point.

Another myth is the notion that most people who are self-employed are prosperous and expanding business people. However, my hon. Friends and I deal with the reality. On advice, people have taken some grant, such as an enterprise allowance, and put their redundancy money into an effort that often collapes within a year. I do not have the figures to hand, but recent parliamentary questions have shown that a remarkable percentage of the businesses that are set up fail within 12 months and many more fail within two years. It may be a moving target: at any given time, certain people are self-employed but, as with many other forms of employment such as the temporary schemes, they do not feel secure for the future.

I want to argue strongly that, even on the Government's figures, allowing for the 17, 18 or 19 fiddles that have been used since 1979 and the inadequate temporary schemes, many of those who are seen as being permanently and properly in work are in a position that leaves much to be desired. Many of those people live in permanent fear of losing their job. The figures I have given for the Tyne and Wear area show 100,000 redundancies. However, I cannot believe that that is, 100,000 separate individuals. Concealed within those figures there will be people — I can give examples — who have been made redundant two or three times. Many people do not know from week to week whether their jobs will be safe. That is not a satisfactory way for people to live their lives.

782 Another major problem concealed within the statistics is the large number of people, the gastarbeiters, from the north of England who are working away from home. Labour Members will be familiar with those who come to their surgeries and advice sessions and say, "I have finally found a job. It is low paid and it is not satisfactory but at least it is a job. I have had to move 200 miles and I could not even put a deposit on a house in the south of England or London even if I sold my home in Sunderland." More and more people are having to work away from home and cannot afford to take their families with them. That is a growing problem and it is an indictment of the Conservative party, which claims to be the party of the family.

Many young people seek work in London because of the misery in the area from which they come. There is still an illusion that the streets of London are paved with gold. That is a component of the London housing crisis and shows how unemployment in one area feeds the social problems of another. The London borough of Camden contains the station of King's Cross, St. Pancras and Euston and is a significant borough in that many young people arrive there from the north, Merseyside, Scotland and other areas looking for work. That borough spent £17 million this year alone on providing bed-and-breakfast accommodation. That is £17 million from a total housing budget of £66 million and a total revenue budget of £138 million. That is an extraordinary amount to spend on bedand-breakfast accommodation and is a classic example of how the London housing crisis is being fuelled by unemployment in other areas.

People in fear of losing their jobs because of bankruptcy, privatisation, takeover and rationalisation all form part of the figures the Government use to show how many people are in work. It is unreasonable and disgraceful that people should have to eke out their lives unable to make decisions about holidays, marriages, partnerships, buying homes or cars, buying consumer goods and furniture and supporting their children in higher education because the future of their employment is uncertain. Many working people in many areas are in that position.

Many of those who do not work not only face the problem of poverty but find that their health is affected. Recent surveys and statistical evidence have demonstrated that clearly. Richard Smith, the assistant editor of the British Medical Journal, detailed the link in a recent series of articles. He said: The unemployed tend to be more anxious, depressed, unhappy, dissatisfied, neurotic and worried, and they have lower confidence and sleep worse than the employed. K. A. Moser of City university studied the health of 6,000 unemployed men from 1971 to 1981. His figures show that, for every extra 100,000 unemployed men there will be 97 extra deaths among the men each year and 49 among their wives. If those calculations are correct, there have been many thousands of deaths as a result of unemployment since that time.

If my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) catches your eye, Mr. Speaker, I believe that she will speak about the temporary schemes. Therefore, I will not dwell on that for too long. However, I wish to comment on the notion that the community programme, youth training schemes and other Government schemes are some sort of solution. They are far from being a solution. I recall—I shall remember it 783 all my life—visiting Pallion Residents Enterprises in my constituency during the election campaign. It is a useful scheme. An old clothing factory has been rebuilt and it houses several training schemes, co-operatives and small businesses. I was asked questions by all of those who were working there on youth training schemes. It was the most extraordinary experience.

Those young people had no conception of what full-time permanent work meant. However much one tried to talk to them about policies that might some day, under a different Government, produce real long-term work for them, they showed no interest. They thought it was just pie-in-the-sky talk from politicians. They only wanted to ask questions about the different sorts of schemes. They asked what happened when one completed a scheme, how long it took to get on another scheme, what one scheme paid as opposed to another, how the different schemes could be improved, how they could move from YTS to the community programme and how that would affect their benefits. I was asked question after question and they were interested only in a world of schemes because that is what faces them as there are so few real jobs to be had.

§ Mr. Richard Holt (Langbaurgh)

Will the hon. Gentleman give way?

§ Mr. Clay

I will give way just this once.

§ Mr. Holt

Will the hon. Gentleman take on board the fact that, 10 days ago, I opened two YTS buildings in the north-east of England? The buildings had been operational for some time. In one, 100 per cent. job success has been achieved with those trained in the building industry. In the other, 92 per cent. have been successful elsewhere. To suggest that children in the north-east of England have no concept of full-time employment is to say that none has ever met a school teacher.

§ Mr. Clay

I made it clear that I was relating my experience which, sadly, is a familiar one. At least there is some improvement in that the hon. Gentleman is making such illustrations. This contrasts with his performance during the past few years, which involved continually taking newspapers from Buckinghamshire, where he used to live, to his constituency and telling people to apply for the jobs advertised in them.

§ Mr. Holt

Will the hon. Gentleman give way?

§ Mr. Clay

I said that I would give way once to the hon. Gentleman.

§ Mr. Holt

Will the hon. Gentleman give way?

§ Mr. Clay

No.

I remember the stories about some of the people who went on that fool's trail and were back within a few days. The hon. Gentleman did not publicise that as much as he publicised the advertisements.

§ Mr. Holt

On a point of order, Mr. Speaker.

§ Mr. Speaker

Is it a point of order or a point of disagreement?

§ Mr. Holt

It is a point of order, Mr. Speaker. Is it not normal for an hon. Member who names another hon. Member in the way I have been named by the hon. Member for Sunderland, North (Mr. Clay) to give way?

§ Mr. Speaker

The hon. Member for Langbaurgh (Mr Holt) intervened. I think that the hon. Member for 784 Sunderland, North (Mr. Clay) disagreed with what he said. It is for the hon. Member for Langbaurgh to seek to take part in the debate later.

§ Mr. Clay

Thank you, Mr. Speaker.

The hon. Member for Langbaurgh (Mr. Holt) once insulted Norman Lansbury a bus cleaner and a personal friend of mine, whom I had known for years when I lived in that constituency. The hon. Gentleman asked what a bus cleaner was doing as chair of a planning committee. Norman Lansbury did not have the opportunity to answer that point here, so the hon. Gentleman was lucky to be allowed one intervention.

§ Mr. Holt

Will the hon. Gentleman give way?

§ Mr. Clay

One of the obscenities of such high unemployment is that many people are overworking. I am not one of those who always calls for work, as though work were a virtue, a necessity and a perfect way of life. I recognise that work literally kills — the health and safety statistics are appalling — and that many of the deaths and serious accidents are caused by the stress and fatigue resulting from overwork as well as many other factors. I recognise that a great deal of work is dirty, dangerous, boring, repetitive and tiresome. That is why it is absurd that many people are unemployed whereas many others are overworking. The simple and logical action is to redistribute the work.

As examples of overwork, I cite the disgraceful and tragic position of Northumbria ambulance drivers recently. Of the 78 drivers in the reorganised Sunderland and Washington division of the Northumbria ambulance service, two have died from heart disease in the past 18 months and four have left because of coronary-related diseases and are permanently sick. This happened because the ambulance drivers suffered appalling stress. That is a tragedy not only for them but for all those in the National Health Service who depend on the ambulances. Why do not the authorities shorten their hours? Why not have more ambulance men and a better service? it is estimated that, in the Northumbria ambulance service as a whole, there is a 22 per cent. rate of illness or vacancy related to stress.

What is the position with nurses, especially in some specialties? There are nurses who work for agencies contracted to the NHS as well as working their straight NHS contracts. There are nurses working double shifts. But, at the same time, there are people who would queue up for jobs as nurses if the wages were not so appalling, thanks to the Government. Part of the appalling crisis of the NHS is the obscenity of understaffing while those nurses who are working work hours that cannot conceivably be safe for them, let alone for their patients.

§ Mr. Tim Janman (Thurrock)

Will the hon. Gentleman give way?

§ Mr. Clay

I want to continue.

§ Mr. Janman

It is one small point.

§ Mr. Clay

The hon. Gentleman should try to catch your eye later, Mr. Speaker.

The problems illustrated in the NHS apply to many types of shiftwork and to much of the public services. I remember, having worked in public transport, the ludicrous hours worked, with people starting work one week at half past 4 or 5 o'clock in the morning, driving through rush hour traffic in cities or rural areas, then 785 starting work another week at 2 o'clock in the afternoon, with their body clocks wrecked. This applies to many workers. It is ludicrous that in a modern society the people who work such shifts do not have their hours of work dramatically reduced.

Mrs. Elaine Kellett-Bowman (Lancaster)

rose—

§ Mr. Clay

That is why the present position in the coal industry is so important and why it is essential that Arthur Scargill succeeds in his campaign to be re-elected as president of the NUM. Essentially, he is fighting on that front and saying that it is ludicrous that miners should be asked to work longer shifts and a six-day week when, more than any other group, they should be talking about shorter shifts and a four-day week.

It is obscene that hon. Members on either side of the House — although, of course, it comes from Conservative Members—should pooh-pooh any of these suggestions when they have goodness knows how many months holiday a year. They do not even start until half past 2 in the afternoon, so they can go moonlighting in the morning, and work one of the shortest weeks in society. It is a central hypocrisy of society that the people who make the legislation can pay so little attention to the hours and conditions of others.

It is ironic that people in this country, which has the highest unemployment, work longer hours than any similar countries. Some interesting points about the length of time worked emerge from the International Labour Organisation statistics for the last year for which figures are available. The average working week of full-time employees in the United Kingdom was 42.8 hours in 1985, which includes overtime. The figures in other countries were: Canada 32.5 hours; United States 34.9 hours; Belgium 33.3 hours; and Spain — which, until recently, was regarded as one of the poorer countries of Europe —39.1 hours, nearly three hours less than in the United Kingdom. Even in West Germany, the allegedly hardworking industrious Germans put in an average week of 40.7 hours—more than two hours less than in the United Kingdom. In Australia it was 34.5 hours and in New Zealand 39.2 hours. There is not a significant country, whether the United States, or in Australasia, or western Europe, that compares with Britain.

One clear way to start to reduce unemployment in this country is to reduce working hours. It is a matter not just of reducing the working week but of providing longer holidays, earlier retirement on proper pay, and sabbaticals. Why can only a few people — usually the allegedly "well-educated", "professional" people — say that every five or even every 10 years they need a year out to think about things, to recharge their batteries, to go in a new direction and to reflect? Why should not those who work with their hands, get dirty, who risk their lives, go through the sweats—

Mrs. Kellett-Bowman

On a point of order, Mr. Speaker. The hon. Gentleman has already been speaking for half an hour in a short debate. Would it not be fair if he gave way to others?

§ Mr. Speaker

I have no authority to curtail speeches. However, this is a half-day debate and I am sure that the hon. Gentleman will bear in mind that many hon. Members, on both sides of the House, wish to take part.

§ Mr. Clay

Why should not all workers in our society have time off on pay — especially as we have high unemployment? A training programme that allowed people to take a year out on full pay at any time in their life to contemplate a different occupation or search for a new career would be a training programme that was worth looking at.

We can look to the European labour movement not only for examples of shorter hours but for examples of how to achieve them. As someone who was once naive enough to believe that the labour movement in West Germany was moderate, tame and employer-oriented, I was interested to learn that, as a result of a successful strike in 1984, IG Metall, the German steel and engineering worker's union managed to reduce its members' working week from 40 hours to 38½ hours and thus to create 100,000 jobs. Since then, the union has negotiated a 37-hour working week, which puts them well ahead of us. Nevertheless, it is preparing to launch another big offensive in the new year to achieve a 35-hour week. On the union's calculations, that will create another 100,000 jobs, which the union desperately needs.

One has only to look at recent press reports—for example, in The Guardian last Friday and in The Observer on Sunday—to discover the action that is being taken by German workers to protect jobs. The workers at a steel mill in Rheinhausen, which the Krupp company is attempting to close, are taking action. It is interesting to note that at Rheinhausen, in Duisburg, the steel complex of the Ruhr, steel jobs have been reduced from 58,000 to 40,000. The workers are saying, "That is enough." The steel industry in this country, and in many others, has been slashed to a much greater extent than that. Unfortunately, we have yet to see resistance such as the steelworkers in the Ruhr are putting up. The Guardian article states: Throughout the Ruhr, steelmen, supported by miners, teachers, postal workers and public service employees, blocked motorway access routes, occupied bridges across the Rhine, and set up road blocks, to demonstrate that the closure of the Krupp mill, with the loss of 6,000 jobs, would spell the beginning of the 'slow death of the Ruhr'. In Rheinhausen, Duisberg, and in seven other cities, shops, pubs, and cafes remained closed, schoolchildren were given the day off, post deliveries were scrapped and policemen helped to guide demonstrators and onlookers through the road blocks in an unprecedented display of solidarity. This comes from the moderate German working class. Mr. Frank Kwasny, a welder, said his trade union would not allow 'workers to be divided, as they were in Britain. We will stand together.' The Krupp management and political leaders have been somewhat taken aback by the unprecedented radicalism of the protesters, who earlier this week stormed the Villa Hugel, in Essen, the mansion that was once the home of the Krupp steel barons. About 60 protesters stormed into Hamburg stock exchange … throwing eggs and tomatoes, before traders repulsed them with a fire extinguisher, a spokesman said. We have some lessons to learn from the German working class, and not for the first time. The Deutsche Gewerkschaftsbund, the West German equivalent of the TUC, calculates in a very useful pamphlet called "Arbeit für Alle", which means work for everyone, that a 35-hour week throughout West Germany would create 1.4 million jobs. West Germany's working week is already two hours shorter than ours and its experience tells us about the number of jobs that could be created—not just by a shorter working week. If we had a shorter working week of 35 hours or thereabouts, reductions in hours for shift workers, earlier retirement on reasonable pay for those in 787 the most strenuous jobs and sabbaticals, we would reduce unemployment. That package of measures alone could reduce real unemployment by more than half.

§ Mr. David Sumberg (Bury, South)

Will the hon. Gentleman give way?

§ Mr. Clay

No, I want to get on.

Several Hon. Members

rose—

§ Mr. Eric S. Heffer (Liverpool, Walton)

On a point of order, Mr. Speaker. Hon. Members are complaining that my hon. Friend is going on for too long. It is his debate, and if he wanted to, he could speak for the entire time allowed and hon. Members could do nothing about it. He is perfectly entitled to do that.

§ Mr. Speaker

That is absolutely correct, but I hope that the hon. Member for Sunderland, North (Mr. Clay) will bear in mind that many of his own colleagues wish to participate.

§ Mr. Dennis Skinner (Bolsover)

rose—

§ Mr. Jeremy Corbyn (Islington, North)

It is a very good speech.

§ Mr. Clay

My speech would have been a few minutes shorter had there not been so many interventions, Mr. Speaker. I give way to my hon. Friend the Member for Bolsover (Mr. Skinner).

§ Mr. Skinner

My hon. Friend has referred to the number of hours worked in West Germany and to the possibility of even fewer hours being worked. Will he bear in mind that, although the West Germans work fewer hours than the British, West Germany has a balance of payments surplus of nearly $40 billion. The Labour party members who draw up the manifesto have not paid enough attention recently to reducing the number of hours worked, which would appeal to those in work and to those outside in the dole queue waiting for a job. I am pleased that my hon. Friend is drawing attention to that.

§ Mr. Clay

My hon. Friend has made the point that I was coming to far more eloquently than I could have done.

Mrs. Kellett-Bowman

On a point of order, Mr. Speaker.

§ Mr. Speaker

I hope that it is not about the length of speeches.

Mrs. Kellett-Bowman

Opposition Members have shown that they do not especially wish to speak. Perhaps you will take that into account when calling Conservative Members, Mr. Speaker.

§ Mr. Speaker

Mr. Clay.

§ Mr. Clay

My hon. Friend the Member for Bolsover referred to the extraordinary fact that, although the Germans work fewer hours, they have a massive balance of trade surplus. That was the point that I was coming to. I do not wish to dwell on it, It may be a subject for another debate and it has been discussed in the house before. It is extraordinary that, only a few weeks ago, some were arguing that popular capitalism and increased share ownership represented the answer to everything. They thought that the future looked rosy, but then came the crash that many people had expected. The slide in the dollar has made it more difficult for British companies to 788 export. All shipbuilding prices around the world are quoted in dollars, with the result that there has been a loss of competitiveness of about 25 per cent. for what is left of British shipbuilding since black Monday. That has affected my constituency and others.

Interest rates, oil prices and the pound are going up and down. When the pound goes up, it is good news for some and bad for others; when it goes down, it is good news for some and bad for others. The more that process continues, the more it demonstrates the instability of the system, which makes it quite impossible for enterprise to plan and for people to be secure. The final irony is that, according to today's edition of The Daily Telegraph, that great successful sector the City of London is predicting the loss of 50,000 jobs in the City as the result of the stock exchange crash. That figure was cited in The Daily Telegraph today. How much longer will this go on? That is the reality of the enterprise culture.

Many other things could be done to reduce unemployment. It would be useful for regions such as mine to have development agencies to cut through the bureaucracy facing what little investment there is at the moment. It would be useful if civil servants were dispersed more fairly round the country. It would he useful to have more generous and sensible Government grants. On that point, I take the opportunity to ask the Minister to comment on a piece in the Financial Times on 1 December this year headed Britain plans to limit regional aid". That will not be very helpful. The article says: The new discretionary policy will be much more to the liking of the Treasury. I am sure that if it will be more to the Treasury's liking it will mean less opportunity to create jobs in regions such as mine. I ask the Minister to come clean about the predictions in the Financial Times.

There are many policies which could produce more jobs in this country, but they depend on not leaving things to the private sector and the casino economy of the City. For example, it would make absolute sense to deal with the problem of acid rain, about which the Opposition have campaigned for so long. In September 1986, The Engineer calculated that if three flue gas de-acidification plants were manufactured in the United Kingdom, 30,000 man years' work would be created over a decade. Depending how one does the sums, that means about 3,000 jobs over 10 years. But that extraordinary opportunity is going begging due to the Government's lack of will.

So much needs to be done in our localities. A Government who consign so many people to full-time leisure through unemployment should allow local authorities to provide facilities. I compliment the much-maligned local authority in Liverpool which has built new leisure centres and swimming pools as well as housing. Instead of providing jobs in hypermarkets, which are springing up everywhere and competing with one another to sell consumer goods, we should build leisure complexes, libraries, and so on, so that jobs are created in socially useful ways. Nurseries are also desperately needed. I recently attended the opening of a dial-a-ride service in my constituency. That is part of the community programme. Why are the drivers of minibuses, which provide such a marvellous service for the disabled, not regarded as doing real jobs because they are on the community programme? It is ridiculous to change the drivers every few years. Those jobs should be permanent employment for trained people. 789 Public transport could be extended in many ways to get over the ridiculous congestion on the roads and the waste of precious resources. We need more rapid transit systems —not the yuppie expressway specials being built in the London docklands and threatened in other places, but the type of system that we have in Tyne and Wear and for which people in Manchester and elsewhere are asking.

I make no apology for saying that I do not regard many of our traditional industries as sunset industries. With regard to shipbuilding, for instance, the shipping market analysts Detnorske Veritas recently calculated that 250 million tonnes would need to be built in the next decade to replace old and inefficient tonnage and that further expansion of world trade would probably require a further 150 million tonnes. That is 400 million tonnes in the next decade. If the Government would give British Shipbuilders enough assistance to obtain even 1 per cent. of that total, the remaining merchant ship yards in Britain would be employed beyond their present capacity and could be expanded. We also need new coal-fired power stations as the basis of a sane energy policy. I could give many more examples.

Before Conservative Members start asking the usual question, I will spend a couple of minutes explaining where the money is to come from. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) has pointed out many times, when people start asking where the money is to come from, the real question is, "Where did the money go?" A Government who have allowed more than £70,000 million in capital to be transferred overseas since 1979 have a nerve asking the Opposition to explain themselves. I need not dwell on the wealth from North sea oil that has also been squandered. According to the July White Paper, which is available in the Library, in the last four years this country's net contribution to the Common Market has been £4,400 million. If we have that kind of money to spend on aid, we could do better than giving it to inefficient farmers. We should give it to the people of Ethiopia and Bangladesh and set up trading relationships with them which will benefit the British working class as well as those underdeveloped countries.

We live in an economic system in which the City of London can allegedly raise £5 billion for a private project to get people across the channel half an hour quicker. Why cannot the same amount be raised to build hospitals and schools and to create the work that we need? Whatever the various arguments about defence and weapons, whether nuclear or conventional, every million pounds spent on public transport, social services, teaching and other socially useful activities creates more jobs than if it is spent on conventional weapons, let alone nuclear weapons. Scrapping Trident is thus another way to create a great many jobs. We could then provide proper conversion programmes so that people at Swan Hunter and Barrow are not thrown out of work but have jobs which make full use of their skills in a socially useful way.

§ Mr. Bob Cryer (Bradford, South)

It is interesting that the Government are prepared to hive off jobs in public enterprise but when it comes to defence, which they and their Back Benchers regard as so important, they retain public ownership. They have not decided to sell off the Army to Securicor—

§ Ms. Clare Short

Give them time!

§ Mr. Cryer

—because the Government know, as we know, that the best way to organise facilities is through public ownership.

§ Mr. Clay

Again, my hon. Friend made the point more effectively than J could. As every Opposition Member knows, at whatever level one pitches it, the amount given away in tax handouts year after year to the very rich and super-rich would go a long way to fund the expansion of work and a return to full employment.

Above all, we must ask ourselves the following question. On recent figures—there is little dispute about this—more than half the money sloshing around in the City of London casino comes in one way or another from pension funds — deferred wages and salaries deducted week by week and month by month from working people's pay. Why have those people no democratic say in what happens to their pension funds? The simplest way to institute widespread public ownership would be to give those people the right to say that their contributions should not be invested in South Africa or in Californian real estate, or in oil when the contributors are coal miners, but in activities that will create jobs and develop industry in this country and in useful projects abroad. That can be achieved only if there is the will to take control of those financial institutions and to give people the democratic right to plan the use of their own money.

Finally, while we are considering where the money is to come from, we must consider the cost of unemployment. The unemployment unit, a highly reputable and reliable organisation, has calculated the cost of keeping people out of work. For the three constituencies in the borough of Sunderland, the cost is £161 million per year — £48 million in Houghton and Washington, £62 million in Sunderland, North, and £51 million in Sunderland, South. That is the cost of keeping people unemployed in terms of lost taxation, lost insurance contributions and the cost of benefits paid. That total of £161 million is more than the net revenue spending of the borough of Sunderland in a year. We are paying more to keep people unemployed than we are spending on education, social services and all the other things that the council has to do. That is the clearest evidence of the obscenity of maintaining people unemployed and then having the audacity to ask where the money will come from to do something about the situation.

It is perfectly possible to return to full employment. It is a question of the will and the policies and it comes down to an old Socialist philosophy. Humankind can put men on the moon, can carry out heart and lung transplants and can at least play around with the notion of star wars, SDI, and go to such advanced frontiers of technology. Why not use that technology to organise human relationships in a way that will ensure that people do not die of overwork and underwork and to create a society of full employment?

Britain's unemployment is the most appalling indictment of the Government and the capitalist system they stand for. The clearest illustration of the need for Socialism is the obscene situation of a world in crisis, millions starving and a mountain of misery at the dole queues while others are dying and becoming sick from overwork. It would be simple to organise society if it were not for the class interests represented by Conservative Members. If that were done, all the things that I have mentioned would be a miserable memory of the past.

§ The Minister for Employment (Mr. John Cope)

The hon. Member for Sunderland, North (Mr. Clay) has done the House a service by using his good fortune in the ballot to express his concern, which the Government share, about unemployment. However, he has exposed both his own and his party's prescriptions for dealing with it and we think that they are gravely mistaken. The hon. Gentleman's speech was wide-ranging and I would not earn the thanks of the House if I followed up all the points that he raised.

Unemployment is now firmly established on a downward trend. By October, it had fallen for 16 months in succession and by almost 500,000 — the largest sustained fall on record—to its lowest level for nearly five years. In the year to October the United Kingdom's unemployment rate fell by more than that of any other major industrialised country. It is now lower than the rate in France or in Belgium, and since June unemployment has fallen in every region of the country. Over the last six months it has been falling at the record rate of over 50,000 per month. The reason for that is that jobs are being created.

§ Mr. Max Madden (Bradford, West)

If the firm downward trend about which the Minister speaks continues, how long will it take to reach the unemployment total of 1979?

§ Mr. Cope

As the hon. Gentleman knows, we do not forecast unemployment and I do not propose to follow him down that road. If he does not like the unemployment figures, I shall give him the employment figures. Since March 1983 total jobs have increased by well over 1.3 million and that is more than in the whole of the rest of the European Community. This is the longest period of continuous employment growth in almost 30 years. What is more, this growth is gathering pace. The rate of increase in jobs has strengthened in each of the last five quarters. Last year alone the number of jobs grew by well over one third of a million. Those are real productive jobs created by customers, jobs that customers think are useful. Those are not Government-created jobs for which the hon. Gentleman's motion calls.

In his motion and in his speech the hon. Member for Sunderland, North spoke about socially useful jobs. He seemed to think that keeping the peace and the defence of Britain were not socially useful jobs. I entirely reject that idea. Unlike most of their critics, the Government have always known that unemployment could only be tackled through the creation of new jobs in the wealth-creating sector of the economy. We also knew, and know now, that new jobs would be forthcoming only if the economic climate favoured rather than penalised the process of wealth creation. To that end we have consistently pursued policies to stimulate and encourage enterprise. By these methods we can give more positive help in job finding to the long-term unemployed.

§ Mr. Holt

My hon. Friend talks about finding jobs. Does he agree that it was on my initiative that the joblink scheme was started? As a consequence, many people throughout Britain found employment. More important, from that little acorn the Government have now taken the scheme on board on a more permanent and proper basis. 792 They have taken up the advertising of jobs on television. Oracle television is shortly to take this up first of all in the Tyne-Tees area and then nationwide.

§ Mr. Cope

The scheme to which my hon. Friend refers was good and very helpful.

We have brought inflation down to levels not seen since the 1960s, have brought public spending firmly under control, and have reduced public borrowing to historically low levels. At the same time we have been able to improve incentives through the reduction and simplification of taxes. We have introduced a whole range of measures to promote the growth of small firms and of self-employment, which we welcome, because such small firms have created many of the new jobs.

§ Mr. Chris Mullin (Sunderland, South)

The Minister mentions the range of measures that the Government have introduced to help small firms. May I draw his attention to the case of Mrs. Eleanor Dalkin in my constituency, which is adjacent to the constituency of my hon. Friend the Member for Sunderland, North (Mr. Clay)? She is a model of the kind of enterprise that your Government allege they are determined to create.

§ Mr. Deputy Speaker (Mr. Harold Walker)

They are not my Government.

§ Mr. Mullin

Thank you, Mr. Deputy Speaker. I meant the Minister's Government. Mrs. Dalkin set up a factory in January and now employs 44 people. On a technicality she has been denied regional employment grant. In nine months she created employment for 44 people in a town where the unemployment rate is about 21 per cent. She was denied aid under the range of measures about which the Minister speaks.

§ Mr. Cope

I cannot respond precisely to the case that the hon. Gentleman mentions, but if he writes to me about the grant I shall certainly look into the matter. The lady that he mentions makes my point about the creation of jobs in small businesses. If she managed to create 44 jobs in nine months, she is doing very well. If she has been able to do it without a Government grant, so much the better.

The Government's policies have been successful and we have emerged from the world recession of the early 1980s into well over six years of continuous economic growth. In that time we have grown faster than any of our major European competitors, although, as the House knows, we previously languished at the bottom of the growth league during the 1960s and the 1970s. This year our growth is expected to outstrip that of all other major industrialised countries. Industrial production is at its highest ever level. Since 1980 manufacturing productivity has grown faster than that of any other major country. In the third quarter of this year it was nearly 7 per cent. higher than in the previous year.

Government policies and their effects have improved employment. The success of our policies and the sustained fall in unemployment have made both possible and necessary the development of our policies. That is why we shall concentrate more on, for example, training the longterm unemployed in new skills. At the same time, it also becomes easier to make sure that benefit goes to those who qualify and not to those who do not.

The Government recognise that unemployed people often need special help to compete for the jobs that are increasingly becoming available. This is especially the case 793 with the long-term unemployed, who have to cope with a combination of disadvantages, such as deteriorating skills, loss of motivation in looking for work and sometimes resistance from employers. That is why my Department has developed a comprehensive range of measures specifically aimed at the long-term unemployed. This year, my Department and the Manpower Services Commission are spending over £3 billion and providing more than a million opportunities on over 30 employment training and enterprise measures. This represents a comprehensive package of measures offering positive and practical help towards employment.

Of that sum, about £1.5 billion is being spent on schemes to help the long-term unemployed. Of this, we are spending, for example, £1 billion this year on the community programme, which has provided work experience for more than a million long-term unemployed people since its introduction in 1982. About 60 per cent. of the participants in the community programme go into a job under a year after leaving the programme. Under the restart programme, more than 2.3 million long-term unemployed people have been interviewed to assess the best means of helping them back on to the road to employment, but my right hon. Friend the Secretary of State has announced today a development of the restart programme.

From next April, we shall issue a questionnaire to all those claimants invited for their six-monthly restart interviews. The questionnaire will have two purposes. First, it aims to enhance the restart programme for the very many people who are genuinely unemployed and available for work. Currently, restart interviewers have, in a very brief space of time, to establish a rapport with the claimant, find out something about his or her qualifications, training and recent job-seeking efforts, identify a suitable employment or training opportunity and, in addition, seek to persuade the claimant to take it. By giving the interviewer the head start of knowing something more before the interview about those whom he or she is seeing, this questionnaire should enable more time to be spent on identifying the best opportunity available. The second purpose of the questionnaire is to enable a check to be made to ensure that claimants continue to satisfy the fundamental condition for receipt of benefit —that they are available for work. This new procedure will be launched in a small number of offices in February next year, before its national introduction at the end of April.

Another way in which we help the long-term unemployed is through our network of more than a thousand job clubs which give their members help and facilities for intensive job-hunting. Some 135,000 people will be helped through job clubs this year and about 60 per cent. of all those leaving job clubs will go into jobs. We have also introduced the ambitious new job training scheme to help long-term unemployed people gain the skills and qualifications needed to compete on the labour market—a massive investment in reskilling Britain.

However, it is time to take these programmes a stage further. The task ahead is to help long-term unemployed people in a more coherent way and our priority must be to help them meet the challenge of the steadily improving labour market through the provision of worthwhile training. That is why my right hon. Friend the Secretary 794 of State announced on 18 November that our present programmes for unemployed adults are to be brought together into a new training programme. From September next year, the new programme will offer up to 12 months' training to those who have been out of work for six months or more. By building on existing programmes, including the community programme and the new job training scheme, the new programme will be able to take us forward into the 1990s with a flexible and relevant range of training opportunities.

First and foremost, the new programme will be a training programme. It will include practical experience with employers and on projects. It will be tailored closely to the needs of individual praticipants as well as to those of the economy. The emphasis will be very much on practical training, ranging from basic working skills, including numeracy and literacy, to training at technician level. The new programme is all about quality training which will significantly improve the number of people moving on to permanent jobs when they leave.

Existing measures have helped to ensure that, in spite of all their difficulties, which we recognise, the long-term unemployed have shared fully in the benefits of an expanding labour market. In the year to October, the total number of people unemployed for more than a year fell by a record 169,000 to the lowest level for nearly four years. It is very pleasing to see that our hard work in helping the long-term unemployed is bearing fruit in this way. I am confident that this success will continue with the new programme we are introducing next year.

The fall in unemployment has also enabled us to see more clearly whether someone really qualifies for benefit and whether he or she is available for work. The House will know that the law on this subject has remained the same for very many years and it was last re-enacted by the Labour Government in 1975. When unemployment is high or rising, it is more difficult to detect cheating and to identify those who are not really looking for work, but now, particularly in the areas where the job market is strongest, we can do better. Until 1982, those on benefit had to register at jobcentres. Since then, a special form has been signed by claimants. At first, it was a simple declaration, but that was criticised, among others, by the Public Accounts Committee of this House and, as a result, a more elaborate questionnaire was introduced for new claimants to fill in. The House will wish to know that my right hon. Friend the Secretary of State has today replied to a question from my hon. Friend the Member for Bristol, North-West (Mr. Stern), giving details of changes in the procedure.

From 1 February next year, we are introducing a revised questionaire for all new claimants, asking for more information about the work that they are seeking and the steps that they are taking to find it. The new form seeks more information on such subjects as claimants' qualifications and experience and on the type of work being sought by them. We also intend to supplement the revised questionnaire as soon as possible after 1 February by providing new claimants, in areas of buoyant labour demand, with information about occupations in which jobs are immediately available. We see this as a particularly important means of bringing directly to the attention of more newly unemployed people the expanding job opportunities now available in many places.

§ Mr. Holt

Is my hon. Friend aware that recently, in the north-east of England, many people who were drawing benefit and working for private contractors have been fined? Will the Government consider fining those who cheat directly by being employees and those who cheat indirectly by acting as employers in this way?

§ Mr. Cope

We shall certainly consider that suggestion. I cannot tell my hon. Friend off the top of my head whether the matter has been considered before.

§ Mr. Skinner

rose—

§ Mr. Cope

I shall give way to the hon. Gentleman in a moment. It would be difficult for employers to know whether someone was claiming unemployment benefit while they were employed.

§ Mr. Skinner

It is clear to Opposition Members that the Minister's announcement is another turn of the screw against people who do not have a job and are not likely to get one in the place where they live. As the hon. Member for Langbaurgh (Mr. Holt) put forward a novel suggestion about those who are supposedly moonlighting, why does the Minister not apply that to those Tory Members who have four, five or six directorships, work in the law courts in the morning and turn up for Parliament only when it suits them? Some of them come in for only half the time. If that suggestion is applied to people at the lower end of the income scale, why should it not also be applied to Tory Members?

§ Mr. Cope

The conduct of individual Members of Parliament is no longer my direct responsibility.

§ Ms. Short

Following the intervention made by the hon. Member for Langbaurgh (Mr. Holt), I have been approached in my advice bureau by many people who have been driven down to the dole office by their employers to sign on because they are paying such low wages that people cannot survive on them. Mass fiddling is being pushed on to people by employers. I agree with the hon. Member for Langbaurgh. If people are to be penalised, such employers should be penalised too.

§ Mr. Cope

I should be interested in the hon. Lady's evidence of such fraud and cheating. I should be grateful for further particulars if she will supply them.

I have talked about improvements in unemployment generally. I also want to say something about Sunderland and the north-east. I originally came from the midlands. I now live near Bristol. As it happens, I have always had relations in the north-east. I have at least some idea of the economic and social strains that have been imposed on the hon. Gentleman's region by the decline, in real terms and in employment terms, of the great industries that have employed many people for over a century. I have also seen something of the efforts of successive Governments to help the region, even way back since the days of my noble Friend Lord Hailsham.

People talk in an oversimplified way of the differences between north and south. In fact, as we know, the situation is more patchy than that. The hon. Gentleman made that point. Of course, some regions are worse hit than others. Everybody recognises that fact and nobody is complacent about it. But we cannot help the north, however we define it, by holding back the south. We are helping the north-east. Financial asistance by our 796 Department, the Department of Trade and Industry and the Department of the Environment exceeded £1 billion in the last financial year, 1986–87.

Let me talk about Sunderland in particular. The hon. Gentleman will be aware that unemployment in his constituency fell by nearly 1,300 in the past year. In the Sunderland travel-to-work area there was a fall of over 3,400. Of course, unemployment remains too high, but we have been encouraged by that fall, and there are positive signs that it can and will continue. As has already been said, we are encouraging enterprise in Sunderland. Three local enterprise agencies operate in Sunderland.

§ Mr. Clay

I give the Minister one example of how the figures have gone down. An employer in Sunderland advertised work in the Sunderland Echo. Twenty people applied for and were given work. After a week, the employer said, "I cannot actually pay you what I told you I would pay you at the beginning of the week. From now on, you go and sign on. If you do not sign on, I shall not continue to employ you." In other words, the employer said, "If you do not fiddle, I shall sack you."

I regret that I cannot write to the Minister about the matter because, for obvious reasons, none of the 20 employees is prepared to give his or her name. That is an illustration of how the Minister is getting unemployment figures down.

§ Mr. Cope

That is not an illustration of how we are getting unemployment figures down; it is an illustration of how unemployment figures are staying up. The hon. Gentleman said that they stayed on the dole. The unemployment figures relating to the 20 to whom he referred have not come down. I should like to have further particulars. I cannot follow up an individual accusation of that kind unless I have particulars. I understand the hon. Gentleman's difficulty, but he must understand that it is also my difficulty.

Over 1,100 unemployed people in the south Tyne region are currently using the enterprise allowance scheme, which the hon. Gentleman mentioned, to solve their unemployment problem by setting up in business and creating their own jobs. Of course we know that not all businesses succeed, but two thirds or so do succeed, and they also employ other people.

An advanced electronics company is running projects and encouraging innovation and enterprise in information technology. In another project, the innovative factory for new technology is establishing a commercial factory unit on the same lines. It has initial backing from both national and local government and, incidentally, from the European Community. Local companies, too, are expanding. Grove Coles Cranes of Sunderland is investing £5 million. Freemans, the mail order firm, is creating new jobs in Washington. English Estates recently announced record levels of inquiries for factory space in its region.

The hon. Gentleman referred to inward and outward investment. One of the encouraging signs for the country as a whole as well as for the north-east is the way in which foreign firms have seen the potential in Britain. and particularly in the north-east. No fewer than 16 Japanese companies have invested in the north-east. That is part of a large total that has been invested in this country by overseas companies. That is an excellent sign of other people's confidence in the British economy.

§ Mr. Michael Grylls (Surrey, North-West)

I am carefully following what my hon. Friend has been saying about some growing companies. I refer to British companies rather than inward investment companies. Is he satisfied that banks are giving enough support to new businesses or existing businesses that wish to grow, possibly through the loan guarantee scheme, which could help them? If he is not satisfied, will he speak to the banks and establish whether they can give special help in difficult areas such as the north-east?

§ Mr. Cope

It always pays people to shop around the different banks if they are having trouble getting support from one bank. Bank managers vary in their responses to individual schemes. I regularly talk to regional and central banks to encourage them in the direction that my hon. Friend would wish them to follow.

Among the foreign companies to which I have talked, Komatsu recently announced an increase in employment at its Birtley earthmoving machinery plant. Of course, as the hon. Gentleman mentioned, Nissan is the biggest employer. It recently launched a night shift, bringing its total work force in Sunderland to over 1,000. There is more good news today, which I am glad to say that the hon. Member for Sunderland, North also welcomed. Today, my noble Friend the Secretary of State for Trade and Industry and the chairman of Nissan, Mr. Ishihara, signed heads of agreement for the expansion of Nissan's Sunderland plant to produce a second model of a small passenger car. It is a £216 million investment, involving about 1,000 extra jobs at the Sunderland site, plus 400 associated jobs by 1992. It is expected to produce an extra 100,000 cars a year, 60 per cent. of which will be for export. The cars will initially have a 60 per cent. local content, rising to 80 per cent. in 18 months. That is welcome news to us and, indeed, to the hon. Gentleman.

There is much encouraging news about, but, as I said, no one can be complacent. No one owes Britain a living. The problems that we are discussing will always need constant vigilance. We have to remain competitive. The hon. Gentleman touched on that matter and recognised the importance of competitiveness in the shipbuilding industry in his constituency. He recognised that we need to compete on world markets. That brings me to the last point I wish to raise which is about the effect of wage settlements on jobs.

Excessive wage growth, by pricing our goods out of international markets, destroys jobs. It undoubtedly contributed to the high level of unemployment in recent years. When we took office, settlements of 20 per cent. were not uncommon and inflation and unit wage costs were heading towards 20 per cent. or more. Since then, the situation has been transformed. Changes in attitudes towards pay bargaining have been a key factor in that transformation. I am glad to say that bargaining has become more realistic, less confrontational and more flexible. There is a greater awareness of the link between pay and jobs. But the problem has not completely disappeared. Earnings growth is currently 7.75 per cent., almost double the inflation rate. More importantly, it is well in excess of our major competitors. We cannot depend on productivity growth, good as that has been, continuing to absorb such high increases in real earnings. There are still too many pay bargainers who do not accept that pay increases must be earned, must be justified by efficiency and market considerations of performance, and must be 798 affordable. That is the central difficulty of the job of spreading ideas which the hon. Gentleman advanced, attractive as they are in many ways. Until pay increases are earned, growth in earnings and unit wage costs will threaten competitiveness, and that is still one of the most serious risks to jobs in Britain.

In his motion and in his speech, the hon. Member for Sunderland, North argued for greater public investment and public ownership, but lasting reductions in unemployment cannot be obtained by injecting huge extra sums of taxpayers' money into infrastructure spending or local authority make-work schemes. The Socialist policies for which the hon. Gentleman's motion calls are a recipe for economic disaster on any basis. If Opposition Members cannot see that, they should look at France, where not so long ago such a policy was tried and failed. Instead, we looked to the private, wealth-creating sector of the economy as the engine that would generate lasting jobs. We have been, and we are being, proved right in our prescription.

§ Ms. Clare Short (Birmingham, Ladywood)

I congratulate my hon. Friend the Member for Sunderland, North (Mr. Clay) on his luck in winning this opportunity to debate the serious problem of unemployment. His motion refers to the British economy as a casino economy. It is rarely understood by the public that we also have a casino House of Commons. The opportunity to raise motions, questions and private Members' Bills depends on a raffle in which most hon. Members, like people in all casinos, lose.

We are lucky that this afternoon my hon. Friend had the opportunity to introduce a very important motion and to make such a wide-ranging and important speech in which he analysed the real underlying problem of the British economy. His speech contrasts sharply with that of the Minister which concentrated on statistical boasts about the health of the British economy, which largely depended on the manipulation of unemployment statistics and statistics for the numbers of new jobs that have become available. Today, he announced a further ratchet in the pressures on those who are unemployed to be forced into low-paid jobs and compulsory work schemes. The Government claim to believe in freedom of choice, yet they are offering those who have no freedom to work compulsory make-work schemes which will not strengthen our economy or give people freedom or a decent income.

I do not intend to speak on all the issues raised by the motion, as my hon. Friend has already spoken so well. In the limited time available, I wish to put on record the serious criticism of Opposition Members and of many groups in society of the new adult training scheme that was announced by the Secretary of State on 18 November. It is our view that the scheme is unacceptable and will not work. I shall go into more detail about the range of forces in society that are opposed to the scheme, and I shall ask the Minister to think again about those proposals, which will only damage the interests of the unemployed. A new alliance in Britain is saying that we will not co-operate in the scheme, and we ask the Government to offer something better to the unemployed.

I want to put into context the seriousness of the way in which the Government are manipulating make-work schemes to cut wage levels in Britain. There is a real contrast between the way in which the Government and 799 Government supporters constantly crow about the health and vibrance of the British economy, and the experiences of Opposition Members who represent areas where unemployment is horrendously high and where those who can get work all too often work for incredibly low wages which mean that getting a job is hardly an escape from the poverty of unemployment.

Throughout our constituencies, we see the seediness, the decline in housing, the holes in the road and the uncollected rubbish Our economy is becoming a slum economy with high unemployment, low wages and poor quality public services. In my lifetime it has never been so bad, and I am sincerely shocked that it is so bad, yet Conservative Members boast that our economy is healthy and prosperous.

We must ask ourselves whether Conservative Members are being dishonest, whether they see what we see and pretend that it is not happening, or whether they live in a completely different world from ours and that of our constituents. I suspect that at times they are being dishonest, but that they spend most of their lives mixing with people who have done enormously well out of the Thatcherite intervention in the British economy.

There is no doubt that the best paid 20 per cent. in the British economy have never been better off. Their taxes have been cut and their incomes have gone up. Profits have gone up and people working in the City are doing very well. Britain imports more champagne than any other developed economy. There is a group of people who have done enormously well out of Thatcherism. However, there is an enormous group of people that goes beyond the 4 or 5 million unemployed. The figure was understated by 18 or 19 fiddles in the way in which unemployment figures are collected.

In Britain there are now 9 million people who are low paid, according to the Council of Europe decency threshold, which is an income of less than £126 per week. The proportion of poor and low-paid people working in our economy has grown and continues to grow. Those people face either unemployment or the poverty trap. That is the reality of the economy for most people who live in Britain. The slum economy, with low pay, low investment and poor training, is an unjust and unequal economy, which is also incredibly inefficient. When labour is very cheap and can be hired and fired, it is not worth investing and training. By constant pressure to cut wages, Britain is seeking to compete with the poorest countries of the world, a competition which we will never win and which bodes ill for the future of our economy.

The increase in poverty and poverty wages is partly a consequence of the massive growth in unemployment deliberately engineered by the Government to cut wage levels, but the Government have also taken a series of steps to push down the wages of the lowest paid. They include the Wages Act 1986 which reduced the protection of those people protected by wages councils, the abolition of the fair wages resolution and section 11 of the Employment Protection Act 1975, and the privatisation of public services. For cleaners, dinner ladies and low-paid workers in the public services, privatisation meant simply a cut in wages and fewer people doing the work. It is a wage-cutting measure that leads not to increased efficiency, but to poorly paid people being paid even less. Employers have been subsidised on condition that they pay workers low wages, such as with the young workers scheme, and the deliberate use of special employment measures to lever 800 down the wage expectations of the unemployed and the conditions that people can expect when they are in employment.

In regard to the youth training scheme, if the Government had continued to pay the rates that were paid before 1979, they would currently be paying more than £40 a week. We are now about to move from a position in which young people can choose to go on such a scheme, and because they have so few options and opportunities, they have massively chosen to go on the scheme, whatever its deficiencies. A minute number of people have refused a place, but still the Government are removing benefit entitlement from young people so that they are forced on to the scheme. The Government claim that people should have freedom of choice, but they are removing young people's right to shop around for a scheme which might lead them to a chance of a real job. Young people are being compelled while being paid ever less.

It is not that the Government are simply being nasty and vindictive, although they are being both; they are pursuing a strategy which entails using schemes to lever wage levels down. If they allow the supplementary benefit minimum to be the alternative for young people, they cannot cut the YTS allowance any further. That minimum is therefore to be reduced so that YTS allowances can be cut still further.

The Government tried this before when the right hon. Member for Chingford (Mr. Tebbit) was Secretary of State for Employment. We had a White Paper which said that YTS was to be made compulsory and that young people would be paid £15 a week. It caused uproar in all parts of society, including employers, who were not anxious to have conscripted and underpaid young people charging around their workplaces.

The Government had to back off. They have waited, made things worse, given young people less choice, and now they think that they can get away with it. They are taking powers in the Social Security Bill and the Employment Bill, both of which are in Committee, to force young people on to schemes, however inadequate they may be, irrespective of whether they provide training. They are removing from young people who cannot get a job the one option that they now enjoy—to study up to 21 hours a week and retain benefit. When anxious parents come to me asking about the future and telling me that their child has been offered only a place on a scheme but that the overwhelming majority do not get a job at 1 he end of it I tell them about the 21 hours' study option. 1t is crucial for poor parents that the student should have some income to enable him or her to gain qualifications and skills. That option is to be wiped out, however, because the Government are so determined to push down young people's wages.

§ Mrs. Alice Mahon (Halifax)

I am a member of the Committee which is considering the Social Security Bill. Is my hon. Friend aware that Opposition Members made a plea from the heart that benefit should not be withdrawn from young people who have been brought up in local authority care, and have experienced trauma and do not settle easily, and that the Minister turned us down? It is well known in social services circles that such children have difficulty settling, but the Minister would not make an exception for them.

§ Ms. Short

I had heard about that. It is worrying. I recently watched a television programme which showed 801 children under 16 and young people aged between 16 and 18 in the United States who live on the streets through prostitution or the sale of drugs. Many have grown up in care and been victims of sexual abuse. I fear that such conditions may apply here as a result of such a decision.

The Minister referred to the Secretary of State's announcement of 18 December. It outlined plans for a new compulsory work scheme for the adult unemployed. Such a scheme exists in the United States. It is called workfare. The intention is to force people to work for their benefits.

The Government have now announced the introduction of workfare to the United Kingdom. They are combining the budgets of the community programme and the job training scheme, which was introduced before the general election to try to encourage the unemployment figures to decline in the run-up to the election. It flopped because the offer was so bad. It was effectively an offer of work experience for benefit.

We are now offered a massively increased 600,000-place scheme which pays a few pounds—the exact amount has not been announced — on top of benefit. The Department of Health and Social Security tables make it clear that the cost of going to work—the bus fare, more expensive food at the workplace and different clothes—is £7 a week. It therefore costs £7 a week to be no better off.

The Government propose to pay a few pounds a week more than benefit for full-time work. The harm is not restricted to those people being denied choice; they will be used to compete with people in work and thus to drag down their wages. The Minister has announced more compulsion today. We have the Minister's new questionnaire, restart, the new availability for work test and powers which are to be taken in the Employment Bill. The latter provides that, once the scheme is r