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Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 4:24 pm on 20th April 2004.

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Photo of Angela Eagle Angela Eagle Labour, Wallasey 4:24 pm, 20th April 2004

The Select Committee will consider those issues, and I hope that we will be able to give the House a detailed report. In principle, the establishment of the devolved Governments and, in the English regions, of regional development agencies and, possibly, devolved assemblies shows the way in terms of creating institutions with a regional focus to deal with local issues. Sometimes, disparities in productivity, wages and employment levels within a region are even wider than disparities between different regions. Fairness and equal opportunities must apply more effectively throughout our whole economy.

The first phase of labour market policy is encompassed by the Chancellor's extremely good record on employment creation, which has increased the number of jobs in the economy and banished the scourge of persistent mass unemployment that did so much damage in the Conservative years. The next challenge is to refine, deepen and improve our labour market policies to take account of some of the issues of quality, access to opportunity, high productivity and high-wage jobs throughout the country.

If we look at how those achievements have been gained, we see the way forward in terms of deepening our labour market policy to create more fairness. We should applaud the role played on the demand side by the generally stable macro-economic conditions that have allowed jobs to be created in record numbers—and, incidentally, saved some £3 billion annually in unemployment benefit payments, which is now being put to far better use. We should also applaud supply side reforms such as the introduction and increasing of the national minimum wage and its extension to 16 to 18-year-olds.

The tax credits system has helped millions of people, as has the national minimum wage. Facilitating self-employment is important in the context of the new diversity of employment issues. The new deal has also been an effective instrument on the supply side. Together, those measures have made work pay and removed the practical and psychological barriers to the labour market that many people who had been excluded from it experience.

We now need to introduce the second phase of our labour market policies. We must deepen and strengthen them and move entirely from the understandable initial concern with the quantity of the jobs created to focus on their quality. We must concentrate on facilitating moves from low skilled work to higher skilled and higher paid work, which adds more value to the UK's economic performance overall and creates a fairer and more equal distribution of opportunity and income.

The Bill's enabling clauses facilitate the gear shift from the quantity to the quality of jobs. For example, on the supply side, clauses 25 and 26 maintain a low tax regime for businesses, enabling them to continue to focus on creating more employment, which is also, hopefully, quality employment. Clause 78 makes child care vouchers tax relievable, which enables the enhancement of lone parent job prospects. Clause 79 allows employers to invest in their employees' skill acquisition by loaning them computer equipment without tax liabilities. That helps to upskill employees.

The measure provides for increases in capital allowances for small businesses that wish to invest in plant and machinery, which would enhance skills or value added by re-equipping the existing plant. There are many other tax incentives on the supply side and my right hon. Friend the Chief Secretary outlined some of them in his opening remarks. They will create a more benevolent environment for investment in highly skilled, quality employment.

On a broader scale, the Budget documents contain more detail about the new deal for skills, which strengthens learning opportunities for many people who are currently without NVQ level 2 or equivalent qualifications. The new deal has done a remarkable job in removing barriers to work from those who were disadvantaged in the labour market. Clearly, it should not be abolished, as the Conservative party wants, but broadened and refined to assist those who continue to face barriers to employment to take the plunge and get into work.

The recent skills strategy paper, with its welcome focus on upskilling for the low skilled and the expansion of the employer training pilot, which was announced in the Budget, will help to bolster the drive for quality jobs. I should like the pilots to be extended countrywide as quickly as is practicable.

I welcome the Budget's focus on policies to get economically inactive people who want jobs back into work. Achieving an increase in employment and opportunities for disadvantaged groups in the labour market is key to our approach to fairness and equal opportunities. The new disability rights Bill, which will be introduced soon, will assist disabled people. Equal pay provisions will assist lone parents who have child care and continuing tax credits. Ethnic minorities need equal access to training and skills opportunities and protection against discrimination when they enter the labour market. Much remains to be done on that. People who are over 50 face discrimination in the labour market and the protections against age discrimination, which were agreed in the European Union, have yet to be implemented. The low skilled clearly need to be assisted through an enhanced skills agenda to set them on the road to higher paid, more productive employment.

I welcome the welfare reforms that were announced and covered in some detail in the Red Book. They facilitate the move to sustainable work and opportunities for those who have been inactive through disability or illness.

The experience of work, work-life balance and rights at work have been equally important in improving the quality of jobs and opportunities, which in turn will make our economy more productive. It is also important that, in areas where there are still problems of discrimination, self-organisation and strong trade union organisation allow people to fight low pay, arbitrary treatment or bullying in the workplace. I therefore welcome some of the moves that have been announced recently on freedom from bullying campaigns.

The next phase for Labour's employment policy should involve a deepening of quality in the labour market, and a deepening of rights, opportunities and chances. I am glad to say that, judging by the announcements in the Budget documents—particularly on the skills agenda and on some of the supply side issues that I have mentioned—the Chancellor and his Treasury colleagues are well aware of the need to proceed in that direction. We have solved the problems relating to the quantity of jobs in the economy; we now need to focus much more on quality.

Labour market flexibility should mean a highly skilled work force who are adaptable, ready to retrain or move, and eager to work. It should not mean a casualised, low-paid, alienated work force with no rights and no commitment to an employer. The Bill and the Budget have recognised that basic truth and begun to put in place the policies that we need in order to ensure that flexibility means good, high-value opportunities and well-paid jobs that will benefit our economy and our levels of social justice and prosperity.