Orders of the Day — Unemployment

Part of the debate – in the House of Commons at 12:00 am on 24 July 1978.

Alert me about debates like this

Photo of Mr Bob Mitchell Mr Bob Mitchell , Southampton, Itchen 12:00, 24 July 1978

I would rather see the right hon. and learned Member for Hex-ham on the Conservative Front Bench than many of the people who speak from it at the moment. The right hon. and learned Gentleman made a very interesting suggestion. He talked in a Keynesian sense about public works. He knows as well as I do what has happened in Luxembourg, which is only a small country. The Minister to whom we were speaking there the other day was boasting that only seven people in the whole of his country had been out of work for over a year. Luxembourg has suffered the same sort of recession that we have had in the steel industry, and Luxembourg is very dependent upon that industry. Instead of putting the steel workers on unemployment benefit, the Government have negotiated an agreement with the unions in the steel industry, as a result of which the many steel workers who would otherwise be redundant have been placed in public works jobs throughout the country. A substantial programme of public works—roads, bridges and so on—is being carried out at the moment. The difference in the wage rates paid to these workers has been made up, I understand, by the steel industry.

I do not know whether it would be possible in this country, with the division of responsibilities and labour that we have, to employ our steel workers in that sort of way when they are not required in the steel mills. But it is interesting to consider that example of what a small country has done in tackling unemployment.

We have been told about the figure of one and a half million unemployed in this country. I do not want to be misinterpreted in what I now say, but it is quite interesting that in several areas in which there is a considerable level of unemployment there are also a considerable number of unfilled vacancies. In my area there is a shortage of skilled men in several of the export industries. I am referring not only to skilled men but also to unskilled men.

There are several areas in which it is impossible to get men to do certain types of jobs. The reason is fairly simple. We tend to have in this country a low-wage economy. We tend lo have a large number of people employed at very low wages. As a result, the difference between what a man receives on unemployment benefit—particularly in the early period, when there is earnings-related benefit—and what he receives when he is at work can be very small indeed. There was an article on this topic in The Sunday Times only this week. It deal with unemployment in the Merseyside area.

There are people who say "What is the point of working when my social benefit is £40 a week and my maximum take-home pay is only £45 for a full week's work?" That does not mean that unemployment benefit is too high. It is not. It is related to a basic living standard. What it means is that the wages of many people in this country are far too low.

The hon. Member for Brentford and Isleworth talked about reducing taxation as one of the means to increase employment. I should have had some sympathy with him if he and his party had moved in this House for further reductions in taxation at the lower end of the scale, instead of wanting to reduce taxation at the higher levels. If he had moved to increase the figure from £750 to £1,000 or £1,250 for the lower rate of tax, I should probably have gone into the Lobby with him. But the Conservative Party did not do that. All the Conservative Party's tax changes were to help the better-off, not to help those at the lower end of the scale.