Full Employment

Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 1st March 2007.

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Photo of Shona McIsaac Shona McIsaac PPS (Caroline Flint, Minister of State), Department of Health 10:30 am, 1st March 2007

What progress he has made towards his aim of achieving full employment.

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

There are 2.6 million more people in work than in 1997. There is higher employment in every region. Employment is at record levels and our pay announcements today will help to continue to increase employment in the economy.

Photo of Shona McIsaac Shona McIsaac PPS (Caroline Flint, Minister of State), Department of Health

I thank my right hon. Friend for that answer. Is he aware that in January 2000 the unemployment rate in the Cleethorpes constituency was running at 5.8 per cent., but that this January it was down to 3.4 per cent.? That is excellent news, although obviously more needs to be done to reduce that rate further. What effect does he think scrapping the new deal would have on maintaining full employment?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

To scrap the new deal would be to go against the advice of not only the Government—[Hon. Members: "Oh!"] Yes, but it would also be to go against the advice of the Conservative Chairman of the Public Accounts Committee, who said:

"The programme has been effective in reducing long-term youth unemployment", and that

"Clearly many young people have been helped by this programme and it has led to a fall in the overall level of long-term youth unemployment."

My hon. Friend cited figures for her constituency. If Conservative Front Benchers looked at the figures for their constituencies, they would see that, since 1997, unemployment is down by 48 per cent. in the constituency of the shadow Chancellor and by 33 per cent. in the constituency of the shadow Chief Secretary to the Treasury. In the other constituencies, the figures vary from 27 to 40 to 58 per cent. In each of their constituencies, unemployment is down. That is why they should support the new deal.

Photo of Julia Goldsworthy Julia Goldsworthy Shadow Chief Secretary To the Treasury, Treasury

Despite the progress on employment that the Chancellor describes, does he agree that income inequality is still a key issue to be addressed? Does he accept the findings of the Institute for Fiscal Studies, which points to growth in the top incomes as a driver of continued income inequality? Does he agree that that should be resolved through the taxation system, or does he think that it should be tackled through enforced charitable donations as one of his Cabinet colleagues has suggested?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I wish that the hon. Lady's party would support the tax credit system, which is helping people in work to get higher incomes. The minimum wage is effectively a minimum income when translated through the working tax credit to something like £7 an hour for work. Unfortunately, the Liberal party has failed to support the tax credit system. The hon. Lady talks about helping low-income workers, but if I remember rightly her party also opposed the minimum wage. Is it not time that the Liberal party think again— [Interruption.] The Liberals wanted a regionally varied minimum wage; they did not want the national minimum wage. They should go back to the drawing board on this as on other issues.

Photo of Gavin Strang Gavin Strang Labour, Edinburgh East

Following on from that, does my right hon. Friend agree that although one major reason why unemployment has fallen in recent years is his successful management of the economy, another factor is Labour's tax credits, which mean that work pays for families who, under the Conservatives, were better off on benefits?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I agree, and I can only quote the Conservative social justice policy group's mid-term report, which says:

"For the past 10 years, inflation has been low, the stop-go cycle has given way to continued economic growth and there has been full employment."

This has been

"a period of unprecedented prosperity."

I hope that the shadow Chancellor can at least endorse his own party's report.

Photo of Brooks Newmark Brooks Newmark Conservative, Braintree

Will the Chancellor acknowledge the important role that private equity plays in creating employment in this country? Will he press that point home to the GMB?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I am sorry that the hon. Gentleman has not been following Treasury questions. I said at the beginning that there is much evidence that the rate of job creation through private equity has been high. We have to distinguish between good companies which are long-termist and some companies that are too short-termist. I hope that he agrees that the measures that we are taking to try to increase long-term investment in the economy, based first of all on stability, are ones that he should support. That is why it is rather strange that Conservative Front Benchers want to change the macro-economic settlement that was agreed in 1997 and has given us the longest period of unprecedented growth in our history.

Photo of Barbara Keeley Barbara Keeley PPS (Mr Jim Murphy, Minister of State), Department for Work and Pensions

We know that access to affordable child care is often an issue if parents are to find employment. Although the number of registered child care places doubled by the end of 2006, some people in some parts of the country still find it an issue. What priority does my right hon. Friend attach to continuing, and increasing, funding for that affordable child care?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I accept that this is a priority, particularly for single parents going back into work. The rate of single parent employment has risen from 43 to 57 per cent. over the past few years and will continue to rise as a result of policies that we will roll out to all areas of the country. My hon. Friend mentioned support for child care. In 1997, when we came into power, child care help was given to only 50,000 families in this country. As a result of the tax credits that the Conservative party opposed, 300,000 families now have child care support—six times as many as previously. I do not believe that there are people who receive that child tax credit who will support Conservative plans to take it away.

Photo of Jeremy Hunt Jeremy Hunt Shadow Minister (Work and Pensions)

Given that the mother of a disabled child is seven times less likely to be in work than mothers of other children, and that half of all disabled children are growing up in or at the margins of poverty, what specific measures will the Chancellor introduce to end the poverty and benefits trap that makes it impossible for so many disabled people and their families to look for work?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I am pleased that the hon. Gentleman has asked that question, because I can tell him that a review is taking place of what help we can give to families with disabled children. Only last week I visited a carer who has been caring for 18 years for her disabled child and now wants to work. I was talking to her about how we could help to make it possible for her to do so. When the hon. Gentleman puts his question, he should acknowledge what is already being done. In his constituency there are 4,400 families benefiting from tax credits, including 8,000 children. I hope that he will make representations to the shadow Chancellor to keep child tax credits, and I hope that he will acknowledge that unemployment has fallen by 43 per cent. in his constituency since Labour came to power.

Photo of Jim Devine Jim Devine PPS (Rt Hon Rosie Winterton, Minister of State), Department of Health

Central to my right hon. Friend's economic success was giving independence to the Bank of England. Can the Bank of England set interest rates for foreign countries?

Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I think that my hon. Friend is referring to the proposals from the Scottish National party, but he should recognise that the party is fighting the Scottish Parliament elections on three separate proposals. One is to keep the British pound; one is to have a completely separate Scottish pound; and the other is to do what the Conservatives did with the exchange rate mechanism, and have a special relationship between a Scottish pound and an English pound. Each of those proposals— [Interruption.] We did not support the mechanism when it led to 15 per cent. interest rates under the Conservative Government through the total mismanagement of the economy. On the day we left the ERM, the present Leader of the Opposition was standing next to Lord Lamont, having to accept that the country had 15 per cent. interest rates for a whole year. We are certainly not going back to the failed policies of the Conservative Government.

B

Fuchsia.

Submitted by Bob Burnett