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Mr. James Cran (Beverley): Keep a straight face.
Mr. Illsley: I have a perfectly straight face when I say that Labour will sign the social chapter.
It is clear that someone will always do the job for less; there will always be an employer who wants to pay less. In China, there are 1 billion people who will work for a few pence an hour. The way to achieve real competitiveness is not to cut costs by cutting pay, but by doing the job better than anyone else and concentrating on quality. If that is to be achieved, business will need a well-qualified, skilled and trained work force. That is what Labour will work to provide.
The proposals that I have outlined are part of Labour's aim of abolishing youth unemployment in Northern Ireland, which still remains a problem. We know that one in four of the registered unemployed in Northern Ireland is under 25 years of age. Labour is considering specific proposals to tackle youth unemployment, including the development of an environmental task force. We are considering lifting the 16-hour rule, which prevents young people from claiming benefit--if they are studying for more than 16 hours a week to improve their skills.
My attention was recently drawn to the problems faced by young people who are trying to improve their skills by studying at local colleges, but who are being targeted by the Department for Eduction and Employment, which is threatening to withdraw benefits unless they discontinue their courses. I have sought to raise the matter with the Secretary of State.
Labour will encourage all young people to continue in mainstream education and training. There is a new deal for the under-25s, which involves employers, the voluntary sector, education and the environmental task force, all of which would combine work and help to develop talent. We are examining how our proposals will work with Northern Ireland's existing training schemes, business and industry, recognising the problems of the interface between education and training systems and the world of work.
Achieving increased competitiveness and growth through investment, innovation and skills is economically necessary and socially responsible. Growth itself,
however, does not lead to the creation of jobs at a rate that will seriously tackle Northern Ireland's acute unemployment problem, especially long-term unemployment. Although Northern Ireland's level of unemployment is at its lowest for some years, it is worrying that the number of those who suffer long-term unemployment is still quite high. As I have said, 40 per cent. of those in that position are under 25 years of age.
Long-term unemployment remains much higher in Northern Ireland than in the rest of the United Kingdom. It is also higher than the levels that prevail in the rest of Europe. About half of Northern Ireland's unemployed have been out of a job for longer than three years. The comparable figure for the rest of the United Kingdom is about a third. About 53,000 people are unemployed in Northern Ireland.
The United Kingdom opted out of the social chapter in 1992, at Maastricht. The Government claimed that the social chapter would ruin economic competitiveness and destroy jobs. It appears that that view is not backed by industry as a whole. The chair of Northern Foods, Christopher Haskins, has said that
Increasingly, companies such as Coats Viyella and United Biscuits are implementing the terms of the social chapter voluntarily.
The Minister of State, Northern Ireland Office (Mr. Michael Ancram):
I have listened to the hon. Gentleman with great care and attention. He appears to have embarked on quoting distinguished industrialists and manufacturers. As we are debating the economy of Northern Ireland, will he quote a Northern Ireland industrialist who supports the social chapter?
Mr. Illsley:
I cannot produce the quotation that the Minister desires. I am sure, however, that, as with industrialists in the rest of the United Kingdom, there will be those in Northern Ireland, business men and industrialists, who support such a view of the social chapter.
Labour believes that we have nothing to fear for work, and everything to gain for workers, in the social chapter. In the past, we have taken our lead on the improvement of conditions for working people from Europe. In 1981, we accepted the Transfer of Undertakings (Protection of Employment) Regulations. European directives gave us the following additional safeguards at work: protecting the terms and conditions of workers when businesses change hands, equal retirement ages for men and women, the extension of sex discrimination legislation to cover enterprises that employ fewer than six people, equalising the upper age limit for redundancy for men and women, and the provision of 14 weeks' statutory maternity leave for women.
Those provisions, and those in the social chapter, are not inhibitors of productivity. On the contrary, productivity is increased by a well-motivated and reasonably secure work force. Employees who are riddled with job insecurity, fear of the future and low morale will lack commitment. A lack of commitment to employment standards brings with it the risk of turning Britain into the sweatshop of Europe.
The ACE programme--Action for Community Employment--was a desperately needed project that has been extremely successful. It gives the long-term unemployed up to a year's training in projects that will benefit the community. The scheme has become a unique part of local community infrastructure. It has served to support some of the most vulnerable people in society, such as the elderly, pre-school children and the unemployed, and about 40 per cent. of participants have gone on to full-time employment or further education. That percentage compares well with what has been achieved by training and enterprise councils by means of training-for-work programmes.
Last year, in the light of ACE's success, the Government chose to reduce their funding of the project by about 25 per cent. As a result of the way in which cuts were administered, many groups faced a 40 per cent. reduction in funding and having to reduce the amount of vital work that they do.
There was an extensive response from all the groups involved in the ACE programme, as well as from hon. Members representing Northern Ireland constituencies. All opposed the 25 per cent. cut. Most were not warned or consulted. As a result of the protest, £2 million-worth of transitional help has been identified by the Government. We have not been told, however, where that money has come from. In any event, it will not go far enough when set against the ACE scheme. Many full-time employees who are funded through the scheme will still be made redundant after cuts have been implemented.
The Government claim that the cuts are the result of a rapidly changing economic situation. They say that the community work programme will take the place of lost training provisions. They know, however, that the CWP is barely up and running. Far fewer people are being trained under it than was planned. The ACE cuts are economically and socially short sighted.
I give the example of Dungannon, which takes fifth place in the list of unemployment black spots in Northern Ireland. Of the job vacancies in Northern Ireland at present, only 3 per cent. are in the Dungannon area, yet the Dungannon development association alone is losing 40 to 50 jobs as a result of cuts to the ACE programme.
The pilot scheme of community work was launched in May 1995. The aim behind it is to target the long-term unemployed and provide them with meaningful paid work. The scheme, which is targeted in Fermanagh, Strabane and west Belfast, is designed to assist 1,000 people. I understand that, as yet, only 250 of the 1,000 places have been filled.
I shall deal now with two issues that I mentioned earlier--the problems of Northern Ireland's beef industry and electricity prices. As has been well documented, electricity prices in Northern Ireland are still some 20 per cent. higher than the average in Great Britain, and that is affecting the Northern Ireland economy. It is obvious that those who are considering inward investment will look closely at electricity prices when comparing the advantages of relocation in Northern Ireland and elsewhere in the UK. Many food processing concerns that are already in Northern Ireland have profit margins of about 2 to 3 per cent., which will be affected by any large increase in electricity prices.
There have been a number of reports on Northern Ireland electricity prices. Perhaps the best known is that of the Select Committee on Northern Ireland Affairs,
which drew attention to the problems caused by privatisation. The basis of those problems is the awarding of long-term contracts to the generators that require Northern Ireland Electricity to take all the electricity produced by those generators. Some 60 per cent. of final electricity charges in Northern Ireland results from payments to the generators; the remaining 40 per cent. relates to transmission and other costs, and produces substantial profits for Northern Ireland Electricity. I urge the Government to look closely both at power purchase agreements and at NIE's profitability.
The regulator of NIE, Douglas McIldoon, has issued a consultation document in which he makes suggestions and asks for ideas about how the problem might be addressed. It is clear, however, that the only way in which to address it is to examine the power purchase agreements--the contracts with the generators, some of which will last well into the next century. The lack of regulation of those contracts, and the lack of any requirement for the generators to pass efficiency gains to the transmission companies, have caused the high electricity prices. I hope that, as a result of the regulator's consultation document, the contracts can be referred to the Monopolies and Mergers Commission, or can be renegotiated.
Agriculture is one of the largest sectors of the Northern Ireland economy, if not the largest, and within that sector the beef industry is extremely important. A quick glance at some statistics shows just how important it is. The beef export trade is worth up to £500 million a year, and about 80 per cent. of beef from Northern Ireland is exported, much of it to Europe. More than 16,000 farms in Northern Ireland rely to some extent on cattle for the beef industry, and as many as 10,000 have herds of 10 or more. There are more than 3,000 jobs in beef processing in the Province.
Despite all that, Northern Ireland has a very low incidence of bovine spongiform encephalopathy: about1 per cent. of the incidence in the United Kingdom. The European ban on beef products, however, has had a devastating effect on the Northern Ireland economy. Because of the importance of agriculture to the economy, that effect has been far more marked in the small area of the Province than in the rest of the United Kingdom. As I have said, many Northern Ireland companies sell directly to Europe. There has also been a knock-on effect in the meat processing industry, in which jobs have been threatened. Those, too, are skilled jobs.
"the aspirations of the European Union's Social Chapter hold no fears for any responsible British company and the government should sign it."
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