in the fourth session of the fifty-first parliament of the united kingdom of great britain and northern ireland commencing on the twenty-seventh day of april in the forty-first year of the reign of




SECOND VOLUME OF SESSION 1995--96 House of Lords

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Tuesday, 9th January 1996.

Reassembling after the Christmas Recess, the House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Norwich.

Lord McNally

Tom McNally, Esquire, having been created Baron McNally, of Blackpool in the County of Lancashire, for life--Was, in his robes, introduced between the Lord Addington and the Lord Tope.

Lord Broughshane --Sat first in Parliament after the death of his brother.

EC Jobs Study Proposal: Cost

Lord Bruce of Donington asked Her Majesty's Government:

    Whether they support the European Commission proposal (COM (95) 250 final) for the establishment, at a cost of £47.2 million over four years, of permanent systems "for observing, monitoring and exchanging information on employment systems, and ways in which new jobs could be created".

The Minister of State, Department for Education and Employment (Lord Henley): My Lords, there has been no substantive discussion of this proposal in the Social Affairs Council. When it is discussed in the Council, the Government will want to be satisfied that any programme that may be agreed is properly targeted and well managed and that the budget is no more than is necessary for any agreed purposes.

Lord Bruce of Donington: My Lords, I am most grateful to the noble Lord for that reply. Will he confirm

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that over the next four to five years, depending upon which construction is placed on the Government's explanatory memorandum, some £47.2 million is to be spent on trying to classify, interpret, compare and evaluate the plans that each member state has for encouraging employment in their respective countries and to set up records for that purpose? In view of the fact that there are already 1.4 million fewer people employed in the United Kingdom than there were five years ago, does the noble Lord not agree that the money may well be better spent on infrastructure and investment rather than on a ridiculous search for further work for officials of the Commission?

Lord Henley: My Lords, perhaps I may start by offering an apology to the noble Lord. The explanatory memorandum to which the noble Lord referred is somewhat misleading. At paragraph 10 it refers to "four years" whereas, as the noble Lord will be aware, at paragraph 1 it refers to "five years". I can assure the noble Lord that the period is in fact five years, not four years.

As Her Majesty's Government have said consistently, we believe that the Community has some role to play in helping to tackle unemployment. We believe that it has a role in promoting the exchange of information and in disseminating good practice. Therefore, I believe that many of our European colleagues have a great deal to learn from practice in this country and from the successes that we have had. I can assure the noble Lord that the programme of £47.2 million (57 million ecus) to which he referred is not one, as I made clear in my original Answer, that has yet been agreed to. It has not had any level of detailed discussion at the appropriate Council. Her Majesty's Government will not agree to it unless we believe that there is a rationalisation of existing activities which produces considerable savings. I can assure the noble Lord that we certainly would not agree to it unless we thought that it provided value for money.

Baroness Turner of Camden: My Lords, does the Minister agree that it is sensible to try to devise EU-wide plans for dealing with unemployment

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throughout the Community, especially in view of the fact that, in any case, the Government are committed by Article 2 of the Treaty to try to aim for,

    "a high level of employment and of social protection, the raising of the standard of living and quality of life, and economic and social cohesion among Member States"?

Does the Minister agree that other countries may also have something to teach us in that area?

Lord Henley: My Lords, as I believe I have made clear on a number of occasions, employment policy is very much the responsibility of individual member states. I said that I thought there was a role that the Commission and the Community could play in disseminating good practice. That is why I believe that many European countries could learn from us. They could look at our deregulated and flexible labour market; they could look at our low non-wage labour costs; and they could look at the sustained, non-inflationary growth we are experiencing.

Lord Stewartby: My Lords, when my noble friend the Minister or one of his ministerial colleagues attends the appropriate Council, will he suggest that a lot of money could be saved if, instead of all this spending on research, some of the more obvious lessons of the current situation, such as the excessive cost in Europe of employment as against other parts of the world and especially the Far East, were learnt? That is a far greater obstacle to the creation of new jobs than the sort of matters which those concerned would otherwise be investigating with all this Community money.

Lord Henley: My Lords, my noble friend is absolutely right. That is why I was keen to stress the relatively low non-wage labour costs that we experience in this country compared to our European partners. I believe that that is certainly something they could learn from us. And there are many other practices within the United Kingdom which could be usefully adopted by other countries.

Lord Bruce of Donington: My Lords, is the Minister aware that, in his observations on 18th December, the Prime Minister himself specifically eliminated the level of unemployment as one part of determining convergence? Is the Minister also aware that the circular to which he referred was followed by another on 10th November which elaborated the whole affair? Is the Minister further aware that if the Government were to adopt the correct procedure of releasing local government funds they could make some dent in the case of the 250,000 construction workers, both skilled and unskilled, whose unemployment is costing the country at present £2 billion per annum?

Lord Henley: My Lords, the noble Lord's latter point has nothing to do with the Question on the Order Paper and I do not believe that it would be the right way to go about trying to stimulate economic growth. It is not the job of government to create jobs; it is the job of government to create the right conditions in which the number of jobs will grow. That is why we have been pursuing the policy--and I put it again to the noble

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Lord--of a deregulated and flexible labour market, low non-wage labour costs and sustained low inflationary growth.

Lord Mackie of Benshie: My Lords, is not the most useful aspect of the programme the fact that it provides the noble Lord, Lord Bruce of Donington, with ammunition to keep us going for another five years?

Lord Henley: My Lords, that is really a question for the noble Lord, Lord Bruce of Donington, to answer. However, I shall certainly answer the questions put to me by the noble Lord.

Lord Pearson of Rannoch: My Lords, does my noble friend the Minister agree that nothing much can be done to improve employment in the Community until the other countries agree to abandon the absurd social chapter--so favoured by the Benches opposite--and join Her Majesty's Government in the kind of policies that they promote?

Lord Henley: My Lords, my noble friend is absolutely right to draw attention to the dangers of the social chapter. I believe that even the noble Lord, Lord Bruce, would agree with me that if the social chapter were adopted by this country it would provide a great deal more scope for the Community to centralise and harmonise in areas where Her Majesty's Government do not believe that it would be appropriate to do so. Indeed, those are matters which should be left to the principle of subsidiarity. Further, I believe that if we pursued the policy of adopting the social chapter, the likelihood would be of Community legislation in those areas being imposed upon the UK whether or not Her Majesty's Government or Parliament wished it. It would also lead to the increased costs we have mentioned on many occasions; it would damage labour market flexibility and lead to a loss of jobs.

Lord Richard: My Lords, did I hear the Minister right? Did he say that it was not the function of the Government to create jobs? Is that the policy of Her Majesty's Government?

Lord Henley: My Lords, it has never been the function of the Government to create jobs. It has always been the function of government to create the right conditions in which the number of jobs can grow.

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