House of Commons

Wednesday 7th July 2010 Commons Chamber

Wednesday 7 July 2010

The House met at half-past Eleven o’clock

Prayers

Wednesday 7th July 2010 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 7th July 2010 Commons Chamber

The Secretary of State was asked—

[Andrew Stephenson (Pendle) (Con)]

1. What aid his Department has provided for economic development and good governance in Pakistan in the last 12 months; and if he will make a statement.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

In the last 12 months, my Department has provided aid to Pakistan to help to put more children into school, improve macro-economic stability and support the efficient and effective delivery of basic services.

[Andrew Stephenson]

I thank my right hon. Friend for that answer. Oxfam has said that 1 million Pakistanis fleeing from fighting remain in overcrowded camps and depend on emergency relief to survive. What is being done to help internally displaced persons and refugees in Pakistan?

[Mr Mitchell]

My hon. Friend is right to identify that particular problem in Pakistan, and it was one of the problems I specifically looked at when I was in Pakistan some three weeks ago. My hon. Friend will know from his own very close relationship with members of the Pakistani diaspora in Britain that, as the Oxfam report makes clear, extensive work is being done in all the affected regions of Pakistan, but we are looking at our whole programme to see whether there is anything more we can do.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Does the Secretary of State agree that, although the aid for Pakistan is welcome, the Pakistani authorities must realise that the appalling murder, persecution and torture of the Ahmadiyya Muslims in Lahore, with the complicity of the authorities, must cease?

[Mr Mitchell]

The hon. Gentleman is a Birmingham Member of Parliament, as am I, and, like me, he will have received representations from the diaspora in Birmingham on that specific point. I had the chance to visit Lahore in January, and I will carefully consider what he has said and see whether additional action is required.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

2. What steps he is taking to ensure transparency of his Department’s expenditure on aid.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

I launched the aid transparency guarantee on 3 June, which will ensure that UK and developing country citizens have full information about British aid.

[Nadhim Zahawi]

I am sure my right hon. Friend is aware of recent surveys showing that, in these difficult times, public support for international aid is waning. Does he agree that if we are to win the argument for his Department’s budget in the court of public opinion, we have to ensure that the transparency agenda is linked to achieving the goals of the Ministry of Defence and the Foreign Office?

[Mr Mitchell]

My hon. Friend makes a good point, and it is always important to underline that there is strong cross-party commitment to this important budget partly for moral reasons, but also because it is very much in our national self-interest. My hon. Friend will have heard the words of the Foreign Secretary and myself about the importance of wiring more closely together defence, diplomacy and development, and he has my assurance that we will continue to do that with great care.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

In last Thursday’s debate, the Secretary of State was transparent enough to admit that he did not yet know how the extra £200 million for Afghanistan announced by the Prime Minister will be spent. Given the question asked by the hon. Member for Stratford-on-Avon (Nadhim Zahawi) and the increasing speculation that DFID money in Afghanistan will be spent on things over which the Secretary of State’s Department has no control, can he tell the House whether the Foreign Secretary—or, indeed, the Defence Secretary—has made any suggestions to him as to how that £200 million should be spent?

[Mr Mitchell]

The hon. Gentleman will understand that a Government who are properly co-ordinated and working together will discuss all these matters to make sure that, as I have said, we wire together in the best possible interests defence, diplomacy and development. However, as the hon. Gentleman is well aware, as he has been a junior DFID Minister, the OECD Development Assistance Committee rules are what pertain in the spending of money on development, and the coalition Government have confirmed what his Government said: those rules will persist.

[Malcolm Bruce (Gordon) (LD)]

I welcome my right hon. Friend’s initiative in setting up a more effective watchdog for transparency and accountability and to publish what DFID funds in more detail from January. That will provide a welcome reinforcement of the value of our aid. May I also say that the Select Committees are very anxious to start their work and anything he can do to ensure that they are constituted will help to enable the International Development Committee to take evidence from him next Thursday so we can expand on these issues?

[Mr Mitchell]

I am grateful to the Chair of the International Development Committee for his comments. He knows a great deal about these matters. The transparency guarantee is enormously important, first in reassuring British taxpayers by enabling them to see where the money is being spent and that it is being well spent; and secondly, in assisting in the building of civic society to ensure that people in the countries we are trying to help can hold their own political leaders to account. I look forward to discussing next week with his Committee these and other matters, especially independent evaluation.

[Mary Creagh (Wakefield) (Lab)]

3. What funding his Department plans to allocate to the media high council in Rwanda in 2011-12.

[The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien)]

The UN-led programme of support to six oversight institutions in Rwanda, including the media high council, comes to an end in this financial year. There are no plans for further DFID support.

[Mary Creagh]

I thank the Minister for that reply, and I am relieved to hear that we will not be funding the media high council given that it has recently suspended Rwanda’s two leading independent newspapers, Umuseso and Umuvugizi, and given that a leading Rwandan journalist, Jean-Léonard Rugambage, was murdered in Rwanda in June. Will the Minister make urgent representations, through his Department, to the Rwandan authorities and make sure that we fund things that promote freedom of speech, particularly in the run-up to the elections?

[Mr O'Brien]

I am grateful to the hon. Lady for highlighting these issues. I assure her that when I visited Rwanda between 15 and 17 June I raised these very matters at all levels, including the very highest levels, in the various meetings I had. It is important that as part of the general support that DFID gives to help the Rwandan people, we press for the opening up of political space and that we make sure that pertains up to the election. My right hon. Friend the Secretary of State will take the opportunity, later this week in a meeting with the Rwandan high commissioner, to press the issues that the hon. Lady has rightly identified.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

4.. What support his Department has provided to the 1GOAL Education for All summit on 7 July 2010 in South Africa.

[The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien)]

DFID has given the 1GOAL campaign £804,800 so far and will give a further £195,200 this financial year. In addition, DFID offered support to the Government of South Africa for a summit during this World cup, and we have received an invitation to that summit this very morning. It will take place this Sunday and we are considering who should attend.

[Luciana Berger]

I am grateful to the Minister for his reply. There have been a great many goals in this World cup, but signing up to a road map to deliver education to 72 million children around the world by the next World cup could be the greatest goal. How will he ensure that the momentum of today’s education campaign summit is not lost between now and Brazil 2014?

[Mr O'Brien]

I am grateful to the hon. Lady for her excellent question. She, like all hon. Members across the House and particularly Her Majesty’s Government through DFID, is passionate about the need to boost education, particularly for the millions who have yet to receive the benefit of a primary education. There are few bigger prizes to grasp, and she is right to say that we need to maintain the momentum of the 1GOAL campaign, which we have been very pleased to support. The summit that is about to take place should help to boost that momentum and we shall do all we can to help to maintain it.

[Iain Stewart (Milton Keynes South) (Con)]

Will the Minister join me in congratulating the pupils and staff of Eaton Mill primary school in my constituency, who, like those in many schools up and down the country, have made an enormous effort to raise awareness of the 1GOAL project and the aims of improving education throughout Africa?

[Mr O'Brien]

I am delighted to join my hon. Friend in congratulating the school in his constituency that has so eagerly taken part in this campaign. About 8,000 schools in the United Kingdom have asked for supporter packs from the 1GOAL campaign, so it has had a real impact. There have also been lesson plans and other activities for schoolchildren and I dare say that many Members across the House have had similar experiences to my hon. Friend. That is a measure of the impact and success of the campaign to date.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

I welcome the Minister’s support for the 1GOAL summit, and I hope that he or one of his ministerial colleagues will accept the invitation that has been extended to the ministerial team. The Secretary of State has repeatedly told the House in recent weeks that he is focused on outcomes, so will the Minister tell me what steps, if any, he will take in the coming weeks and months to help to finance the removal of school fees, for how many children and in which countries?

[Mr O'Brien]

As part of the broad attempt to ensure that the millennium development goals are met, we are keen to do everything we can to boost access to education. What matters is what works, and we need to push very hard in a number of countries through programmes to ensure, if we can, that user fees are removed. In some areas vouchers could be used, but the main thing is to focus on what works, and we are certainly focused on that.

[Mr Alexander]

I note the lack of detail in the Minister’s response, and that he mentions vouchers. Does he still intend to implement his plans for voucher schemes, which were described by the director of UNESCO’s global monitoring report on education as

“using vulnerable people to advance an ideologically loaded, market-based vision for education, which would exclude millions of kids from school”?

[Mr O'Brien]

I am only interested in what works, and of course the precise detail will come out of the bilateral aid review that we are undertaking, of which the right hon. Gentleman is aware. Of course we will be happy to try to ensure that we learn the lessons of the experience for which he was responsible as regards the use of vouchers, particularly in relation to maternal health in south-east Asia.

[Julian Smith (Skipton and Ripon) (Con)]

5. If he will conduct a review of the effectiveness of his Department’s programmes in Caribbean countries.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

Yes, we will. My right hon. Friend the Secretary of State has commissioned a review of DFID’s bilateral aid programme to ensure we target UK aid where it is needed most and where it will make the most impact. The Caribbean programme will be included in that review.

[Julian Smith]

Much of the Caribbean is very poor, and it is currently being carved up by countries such as Taiwan, China and Venezuela. May I urge my right hon. Friend to recall the historical Commonwealth links and huge good will towards Britain in that region as he develops his policy in this area?

[Mr Duncan]

We do indeed have strong historical links with the Caribbean. This Government, rather unlike our predecessors, very much value our links with the Commonwealth and fully recognise our responsibilities to the overseas territories, including those in the Caribbean. We give support especially to combat crime and insecurity as well as the effects of climate change, and we stand ready to help in the event of any natural disaster.

[Jim Shannon (Strangford) (DUP)]

In relation to international development and the money that goes to the Caribbean countries, illegal trade in children from Haiti to the Dominican Republic has taken place and has been very apparent in the news in the last while. Can we use our influence to ensure that the money available through international development goes to stop that trade?

[Mr Duncan]

That is exactly part of our reforms. We take these issues extremely seriously and they will be a very important part of the priorities we allocate when we spend our aid in such countries.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

6. What aid his Department is planning to provide to Colombia in 2010-11; and if he will make a statement.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

DFID does not provide direct financial assistance to the Government of Columbia. We provide aid primarily through multilateral organisations, including the European Commission and the World Bank. In addition, DFID supports a number of projects through non-governmental organisations to support human rights and poverty reduction. We are, of course, reviewing our programme and Colombia will be part of that.

[Jim Sheridan]

I thank the Minister for that response. Will he assure the House that any direct or indirect aid is channelled through humanitarian groups such as the International Red Cross? He is aware that Columbia is an extremely dangerous place to be for those who oppose the regime and, just recently, President-elect Santos ordered his troops to dress up in International Red Cross uniforms to carry out illegal activities. I am sure that the International Red Cross would welcome the opportunity to meet the Minister to talk through this issue.

[Mr Duncan]

I am grateful to the hon. Gentleman for raising this point because it is extremely important. My right hon. Friend the Secretary of State will meet the head of the International Red Cross next week and this will be a significant matter on the agenda for that meeting.

[Albert Owen (Ynys Môn) (Lab)]

7. Whether he plans to bring forward legislative proposals in this Session of Parliament to ensure that 0.7% of gross national income is spent on aid.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

The Government are fully committed to our pledge to spend 0.7% of national income on aid from 2013, as defined by the rules of the OECD Development Assistance Committee, and to enshrine that commitment in law. We are looking into the best way to proceed and will inform the House when a decision has been taken.

[Albert Owen]

I am grateful to the Secretary of State and I share his view that our aid commitment is both a moral imperative and in the UK national interest. Will he be more specific, however? The legislation that he is talking about will not cost the Chancellor a lot of money, so it will be easy to bring forward very quickly. Is he not a little worried that his Back Benchers might not be with him 100%, as many of them are uncomfortable ring-fencing his Department’s money?

[Mr Mitchell]

I do not know of any Back Bencher who is not a strong supporter of this law. I share with the hon. Gentleman a frustration about the length of time it is taking to bring forward the legislation, but he will have seen the wise words of the Select Committee Chair in the debate last week when he made it clear that it would be sensible to look carefully at the precise terms of the law. There is some gentle disagreement among members of the development community and it is obviously right for us to consider all these matters before proceeding.

[Philip Davies (Shipley) (Con)]

The Secretary of State will recognise the concern about recent newspaper reports of the amount of his Department’s budget that was spent on trade unions in this country and other politically correct causes. Given also the money that goes to China and India, and other money wasted by the EU, does he not accept that all that taken together undermines the case for the 0.7% requirement, particularly in this age of austerity?

[Mr Mitchell]

My hon. Friend makes an important point about value for money and the effectiveness of British aid. That is why we have set up our bilateral review of every place where Britain is spending this important budget, so that we can be sure, as I said earlier, that for every £1 of hard-pressed taxpayers’ money, we are really getting 100p of value. He specifically mentions China. He will know that, on the day that the Government took office, we announced that we would stop all aid to China. The bilateral review is of course looking at India.

On trade unions, I would make two points. First, trade unions spend overseas money well on building the capacity of societies to hold their leaders and politicians to account. What is wrong, in my view, is funding development awareness. Sadly, the former Secretary of State felt it was right to spend hundreds of thousands of pounds of British aid and development money on supporting Brazilian dance groups—

[Mr Speaker]

Order. We are grateful to the Secretary of State, but we do not need any more; the answer is simply too long.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

8. What objectives he has set for the forthcoming UN millennium development goals summit in New York.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

The Government aim to reach international agreement on an action agenda to achieve the MDGs by 2015. That will require developed and developing countries to make results-based policy and financial commitments, including on the most off-track MDGs, such as those on maternal and child health.

[Mr McCann]

We know that the Prime Minister will be unable to attend the UN MDG summit in New York because of his impending paternity leave. I congratulate him on taking advantage of that family-friendly policy, championed by trade unions and many Opposition Members. Now that the Deputy Prime Minister will take over those duties in New York, how many times has the Secretary of State personally discussed the objectives for the forthcoming summit in New York with him?

[Mr Mitchell]

I have discussed the matter frequently with the Deputy Prime Minister. Indeed, shortly after this Question Time, I will hold a meeting with him specifically on that. The country is fortunate that the Deputy Prime Minister, with his deep knowledge of these matters, will go the MDG summit.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I know that my right hon. Friend is aware of the recent UN report on the lack of progress on some MDGs that cites unmet commitments, inadequate resources and a lack of focus and accountability. As he is so interested in this subject, what further lead can he give at the New York summit later this year so that we make better progress?

[Mr Mitchell]

I had the opportunity to speak at the UN last week, specifically on the importance of injecting real vigour and energy into trying to ensure that we have a proper road map for progress in the last five years of the MDGs. [Interruption.] They have produced a real opportunity to reduce poverty and hunger around the world, and I am certain that the extensive work that will be done in the run-up to September will be effective in achieving that. [Interruption.]

[Mr Speaker]

Order. Far too many private conversations are taking place in the Chamber. It is very discourteous both to the Member asking the question and to the Minister, however strong a voice he or she may have, answering the question. We need a bit of order.

[Julie Hilling (Bolton West) (Lab)]

9. Whether his Department plans to provide funding for tackling climate change other than by means of official development assistance from 2013.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

Decisions on UK international climate change finance will be determined through the comprehensive spending review.

[Julie Hilling]

I find that answer somewhat difficult at the moment. Clearly, we need to know what will happen in terms of any such division: will there be separate funding for climate change, or will all the money come from the international aid budget?

[Mr Mitchell]

The hon. Lady will know that the fast start funding for climate change, which will come from the development budget—something that was confirmed by the previous Government when they were in office—takes up to 2012, but I hope she will understand that long-term decisions on climate change funding will need to come from the comprehensive spending review, and that work is happening at the moment.

[Mr Gregory Campbell (East Londonderry) (DUP)]

What account will the Minister take of the increasingly emerging conflict of interest and information on climate change as he develops the development goals?

[Mr Mitchell]

I am not sure that I recognise the hon. Gentleman’s point about disagreements on the basic science. I think there is agreement on the basic science, and an authoritative Dutch report published this morning underlines that very point. I would be happy to engage with the hon. Gentleman on what those doubts are, perhaps by letter.

[Penny Mordaunt (Portsmouth North) (Con)]

10. What mechanism is used by his Department to decide what funding to provide to projects.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

All project proposals are developed within agreed strategies, discussed with relevant partners, and subject to careful appraisal. We are reviewing all major spending areas to ensure that they represent value for money.

[Penny Mordaunt]

In the case of countries in receipt of UK aid that also have considerable wealth and are pursuing an aggressive economic growth strategy, such as India, what mechanisms will also be in place to encourage and support them to ensure that they sort out their social problems in an equally aggressive manner?

[Mr Mitchell]

My hon. Friend makes an important point that is at the heart of the bilateral review of British aid spending, which we are conducting at the moment. She specifically mentions India, but India is different from China in that an Indian’s average income is only a third that of a Chinese. India has more poor people than the whole of sub-Saharan Africa, and, through the Commonwealth, we have deep links with India. We will consider all these matters in the context of that bilateral review. [Interruption.]

[Mr Speaker]

Order. I appeal to the House to calm down. A number of Members, including very senior and distinguished Members, are conducting animated conversations from a sedentary position, but I want to hear Andrew Gwynne.

[Andrew Gwynne (Denton and Reddish) (Lab)]

11. When he plans to assess the effectiveness of the operation of the Debt Relief (Developing Countries) Act 2010; and if he will make a statement.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

I acknowledge the success of the hon. Member in initiating this important Act, which is a key part of action against so-called vulture funds. It means that UK courts of law can no longer be used to pursue excessive claims against some of the poorest countries on their historic debts, ensuring that resources are available to tackle poverty. We will review the effectiveness of this new Act before the sunset clause expires next June.

[Andrew Gwynne]

May I take this opportunity to place on record my thanks and appreciation to Sally Keeble, who successfully steered the Bill through while I was recovering from illness? Given the importance of this legislation to the 40 most indebted countries, will the Minister please ensure that it continues so that these important measures remain in place in the UK and that never again will a British court be used to take the third-world debts from these countries?

[Mr Duncan]

I acknowledge the work of the hon. Gentleman and the former hon. Lady in putting the legislation on the statute book. It was there as a result of the wash-up in the last Parliament, and so enjoyed cross-party agreement. The Act has been in place for only a month, and we will examine its effectiveness in the hope that it can be shown to work and can be renewed in the future.

[Richard Ottaway (Croydon South) (Con)]

12. What his most recent assessment is of the effectiveness of his Department's contribution to the achievement of the millennium development goal on the eradication of extreme poverty and hunger.

[The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien)]

While globally MDG 1 is the most on-track MDG, we recognise that in Africa and some parts of Asia it is still well off track. DFID is fully committed to meeting the target. For example, in Ethiopia we are helping 7.5 million people to access more and better-quality food, and in Bangladesh we are providing 1 million people with agricultural services, helping to increase incomes by 50%.

[Richard Ottaway]

Is not the most effective way of achieving those millennium development goals to stabilise world population growth? What focus is his Department giving to that programme?

[Mr O'Brien]

I congratulate my hon. Friend on his election as Chair of the Select Committee on Foreign Affairs, and I pay tribute to his expertise in the House on population, and, above all, to his recognition that, as part of all our reviews and DIFD programmes, we are embedding the choice for women to decide whether and when to have children, and to ensure that that helps to underpin not just MDG 1 but many of the other MDGs.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

As the millennium development goals have been developed, what financial and technical support will the Department give to the newly created UN Women’s Agency to make a genuine difference to women in poverty in the third world? It is well recognised that direct help for women is the best bet for both families and communities.

[Mr O'Brien]

We pressed for that to take place, and I am aware that the candidates who will be considered for the post are well forward in the process. We are encouraged that that is going to be taking place, and it has our full support.

[Mr Mark Williams (Ceredigion) (LD)]

13. What steps he is taking to seek to ensure that the millennium development goals relating to education are met.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

Achieving the millennium development goals, including those for education, is at the heart of the Government’s development policy. We are reviewing all our programmes to ensure we focus on those that deliver maximum value for money.

[Mr Williams]

I thank the Secretary of State for that response, but may I also commend to him the Global Campaign for Education’s work on this matter, in particular its request that the UK Government commit themselves to a 10-year sector plan for education? If there is one thing that education needs, particularly primary education, it is stability in those funding streams.

[Mr Mitchell]

The hon. Gentleman makes an important point about consistency and clarity of funding, and we will be looking at all these points in connection with the bilateral review of how we spend money in each of our target countries. As he knows, an important conference is taking place this weekend in South Africa, which I hope a Minister will be able to attend.

The Prime Minister was asked—

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

Q1. If he will list his official engagements for Wednesday 7 July.

[The Prime Minister (Mr David Cameron)]

As the House will be aware, today is the fifth anniversary of the 7 July terrorist attacks on central London. I am sure that everyone in the House and people in the country will remember where they were, and what they were doing, when that dreadful news came through. Our hearts should go out to the families and friends of those who died. They will never be forgotten. Our thoughts are also with those who were injured, physically and mentally, by the dreadful events of that day. It was a dreadful day, but it was also a day that will remain—I believe—a symbol of the enduring bravery of the British people.

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

[Alun Michael]

Will the Prime Minister join me in congratulating the people of Somaliland on the successful, peaceful and transparent election of a new President? As the Somaliland republic has now been a beacon of democracy in Africa for nearly 20 years, will the Prime Minister ensure that the UK keeps its promise to increase engagement with a new Government with democratic credentials?

[The Prime Minister]

The right hon. Gentleman is right to raise this important issue concerning an area of the world of enormous importance for our own security. I join him in welcoming the peaceful and credible elections in Somaliland. They are an example of genuine democracy in an area of the world not noted for it. The UK provided funding for election supervision, and we are keen to engage with the new Government. I believe, and I am sure the whole House would agree, that the key is to prevent terrorist groups from establishing a foothold in Somaliland, as they have done in Somalia. That is vital, and, yes, the Government will continue to engage.

[Mr James Gray (North Wiltshire) (Con)]

The Prime Minister will not be surprised to hear that I intend to continue campaigning to keep the Hercules fleet at RAF Lyneham in my constituency as long as I can. However, if, at the end of the day, it moves to Brize Norton in his constituency, and takes with it the jobs and economic prosperity that go with it, will he at least use all his good offices to ensure that we find some way of bringing jobs and economic prosperity back into the vacated site at Lyneham?

[The Prime Minister]

My hon. Friend has fought a long and noble campaign on this issue, and has made very strong arguments—I know how strong they are, because every time I get into a Hercules, whether in Afghanistan or elsewhere, the pilots always immediately complain about having to move from his constituency to mine. He makes a good point about economic development, and we will ensure that, if this goes ahead, we will see good, strong economic development in his constituency.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

I support what the Prime Minister has said on the fifth anniversary of the terrible 7/7 bombings. Today we remember those who were killed and injured, and their families and friends. We pay tribute to the emergency services, which responded with such care and such courage, and we stand with the Government in our determination to defeat those who would bring terror to our streets.

There has been a lot of progress on tackling domestic violence, but still every year hundreds of thousands of women are victims of it. Many of the perpetrators are sent to prison—rightly, in my view—but now the Justice Secretary has embarked on a sentencing review, and has suggested that short sentences do not work. However, often what is needed in domestic violence cases is not rehabilitation, but a clear message to the perpetrator that it must not be repeated, and a clear message to the victim that the justice system takes this seriously. That is what a short sentence can do. Will the Prime Minister confirm that the sentencing review will not stop magistrates giving short prison sentences for domestic violence?

[The Prime Minister]

First, I thank the right hon. and learned Lady for what she said about the anniversary and the tribute that she rightly paid to the emergency services, which played an unbelievably brilliant role on that day, and to the many people who helped them.

The right hon. and learned Lady is absolutely right to raise the issue of domestic violence. For too many years it was an issue that police forces and prosecutors did not deal with properly, and to be fair to the last Government, good progress has been made over the past decade. I agree that there are occasions when short sentences are required, and indeed the Lord Chancellor takes exactly the same view. He said in the speech—[Interruption.] It is very important to read the speech, not just the headline. He said:

“In my opinion, abolishing all short-term sentences altogether…would be a step too far. We need penalties for the anti-social…recidivist.”

We need to ensure that magistrates have that power, but the review is important to try to ensure that we get this right.

[Ms Harman]

I thank the Prime Minister for that reassurance. It is reassuring that the promise that the Liberal Democrats made at the election is not going to be carried forward. I notice that the Justice Secretary is not looking very cheerful; perhaps he should go down to Ronnie Scott’s to cheer himself up.

May I congratulate the Prime Minister on, instead of listening to his new partner, listening to his mother? In the election he told us that his mother was a magistrate and that she told him that magistrates needed the power of short sentences. Quite often, it is the right thing for somebody not to listen to their new partner but to listen to their mother, so I am glad that he has done that on this occasion.

I turn to something else mentioned in the election campaign. The Prime Minister said that any Minister who comes to him with cuts to front-line services

“will be sent straight back to their department to go away and think again.”

Does that apply to the Home Secretary?

[The Prime Minister]

First, may I say that in my experience there are very few people more cheerful than the Lord Chancellor. He is celebrating his 40th anniversary in this House, and he likes to point out that he was elected before the Chancellor of the Exchequer was born. He brings enormous experience and good humour to all our counsels.

I am delighted that the right hon. and learned Lady has brought up the issue of my mother, who served on the Newbury bench for many, many years. I have to say that one of the biggest challenges she had—[Interruption.] As well as me, one of the biggest challenges that she had, and one of the reasons why she needed to hand out so many short sentences, was badly behaved CND protestors outside Greenham Common. [Interruption.] I do not know whether the right hon. and learned Lady was there. Anyway, if she wants to have more episodes of “Listen With Mother”, I am very happy for that at any time she would like.

On the Home Office, of course we have to make savings. We have to make savings across Government. It is not going to be easy, but absolutely we must ensure that we do everything we can to protect the front line. However, I simply do not believe that when we look at the Home Office budget there are not examples of waste and inefficiency and things that we can do better. The right hon. and learned Lady went into the election calling for 20% cuts in every Department. That was her policy—a policy of 5% cuts each year. Ours is 6% cuts each year, so these are Labour cuts as well.

[Ms Harman]

We went into the election very clear about protecting police numbers. I am asking the Prime Minister a straightforward question, which he has so far failed to answer. At Prime Minister’s questions, he was asked by my hon. Friend the Member for Westminster North (Ms Buck) this very simple, straightforward question:

“Will there be fewer police officers at the end of this Parliament”—[Official Report, 23 June 2010; Vol. 512, c. 287.]—

compared with now? He skirted around her question and did not answer it. Will he answer it now?

[The Prime Minister]

Of course there will be difficult decisions, but let me—[Hon. Members: “Ah!”] A simple question was put to the shadow Home Secretary before the last election. [Interruption.] Wait for it:

“Andrew Neil: Can you guarantee if you form…the next government that police numbers won’t fall?

Alan Johnson: No”.

[Ms Harman]

But my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) went on to say—I think that that was selective quoting—that we would guarantee the funding that would ensure police numbers and the numbers of police community support officers. We were absolutely clear about that. The Prime Minister’s Lib Dem partners said that they would have 3,000 more police officers on the beat, while he said that he would protect front-line services. Is either of those promises going to be kept? People who are concerned about crime want to know.

[The Prime Minister]

There is nothing selective about the word no. That is what the shadow Home Secretary said when he was asked whether he could guarantee that there would be no cuts in police numbers. Let us remember why we are here. We have a £155 billion budget deficit. The Labour party went into the last election promising 50% cuts in capital spending and 20% cuts in departmental spending. We are clearing up the mess that Labour made. I sat at the G20 table last weekend and, looking round the table, thought, “Who’s got the biggest budget deficit? Is it Brazil? No. Is it Spain? No. Is it Argentina? No.” Labour left us in a situation where we get lectured by Argentina on the state of our budget deficit.

[Ms Harman]

If the right hon. Gentleman had read the Office for Budget Responsibility report, he would have seen that its forecast for Government borrowing was lower than the forecast that we made before the election—if he had read it, he would probably also have found that the Chair would not have resigned immediately after being appointed. Is it not clear that these are the Government’s crime policies—that the right hon. Gentleman is threatening to take away the police officers people want on the beat, cutting down the right of local residents to CCTV and making it harder for the police to use DNA evidence? Those are his policies. Let me ask him a straightforward question: does he think that those policies are more likely to make crime go down or go up?

[The Prime Minister]

The point is that under the last Government violent crime and gun crime went through the roof. The right hon. and learned Lady—[Interruption.] They almost doubled.

[David Miliband (South Shields) (Lab)]

indicated dissent.

[The Prime Minister]

The shadow Foreign Secretary is shouting and shaking his head. Gun crime and violent crime almost doubled under the last Government. There is going to be a rush of new Labour memoirs coming up, so perhaps hon. Members should start with the report of the spin doctor who worked for the last Prime Minister, who—

[Mr Speaker]

Order. No, we will not bother with that.

[Ms Harman]

rose—

[Hon. Members]

Hear, hear!

[Mr Speaker]

Order. I am very clear what is in order and what is not, and that is the end of the matter.

[Ms Harman]

Before the election, we were hearing all about tougher policies and more police from the Conservatives; now all that seems to have sailed off with those prison ships that the right hon. Gentleman was promising to buy. We were clear: we said when we first came into government that we would bring crime down, and we did. Will he promise that under his Government he will keep crime coming down? If he will not make that promise, it is only because he knows, as we all know, that his policies will put crime up.

[The Prime Minister]

Mr Speaker, I was only trying to boost sales.

I can promise the right hon. and learned Lady one thing: I will not be wandering round my constituency in a stab-proof vest. That is what it came to under the last Government. Gun crime went up, violent crime went up, reoffending of prisoners went up, every prison place cost £45,000, more than 10% of prisoners should not have been there because they are foreigners, half of them are on drugs and 40% of them commit a crime on the way out of prison. That is the record that we have inherited, and that is what we will be clearing up.

[Mr John Baron (Basildon and Billericay) (Con)]

The latest report from the US Department of Defence to Congress highlighted the speed and decisiveness of insurgent propaganda in Afghanistan as a key threat to allied forces. What can the coalition do to counter this threat, given that the longer it goes on, the harder our task becomes?

[The Prime Minister]

My hon. Friend makes an important point, which is that we are not just fighting a war on the ground; there is a propaganda war as well. We have to demonstrate the progress we are making in training up the Afghan army and the Afghan police, and in spreading security and governance across Afghanistan—particularly, in our case, in southern Afghanistan. I can tell my hon. Friend that we will be publishing a monthly update and having quarterly statements in the House to ensure that we keep the British public fully informed and on side as we take difficult decisions in this conflict.

[Jim McGovern (Dundee West) (Lab)]

Q2. In the run-up to the general election, the Conservatives claimed to be the party that would support small businesses, yet in their first Budget they cancelled tax breaks for the computer games industry, which is crucial to my constituency. Can the Prime Minister tell not only me and the House but the hundreds of people in Dundee who are employed in the computer games industry and the students who study at Abertay university exactly why his Chancellor feels that that tax break was poorly targeted?

[The Prime Minister]

We believe that what matters is having low tax rates, and what we did in the Budget—which the House voted on last night—was to cut the small company rate of corporation tax back down to 20p from 22p and set out a path for getting corporation tax down to 24% by the end of this Parliament. That would give us one of the lowest tax rates in the G8, the G20 or anywhere in Europe. That is what we will benefit from, but I note that the Labour party voted against those tax reductions.

[Mr James Arbuthnot (North East Hampshire) (Con)]

Q3. How can my right hon. Friend reassure my constituents about the planning system? Under the last Government, my local councils turned down some massive developments such as the Pyestock mega depot, only to have those decisions overturned by Ministers who had never even visited the site. How can we re-engage local people in these local decisions?

[The Prime Minister]

I want to reassure my right hon. Friend, because it is right that local authorities should be taking decisions that affect people and that those decisions should be taken as locally as possible. We are scrapping the targets and the bureaucracy that we inherited from the Labour party. I can tell him that, since the election, we have managed to scrap the new unitary councils; the comprehensive area assessments have gone; regional spatial strategies—gone; regional assemblies—gone; home information packs—gone; and Labour’s ports tax and bins tax have both gone.

[Mr Nigel Dodds (Belfast North) (DUP)]

If the respect agenda is to mean anything, surely it should include proper consultation with the devolved Governments and legislatures on fundamental constitutional and political reform, which affects all parts of the United Kingdom and will affect the composition of the devolved legislatures. Will the Prime Minister therefore undertake urgently to enter into discussions with the representatives of the devolved Administrations and, if necessary, revise his proposals in the light of what they have to say? Let us have a proper respect agenda.

[The Prime Minister]

Of course these discussions need to take place, and they will take place—[Interruption.] Let me answer the question very directly, because I listened very carefully to the statement by the Deputy Prime Minister, my right hon. Friend the Member for Sheffield, Hallam (Mr Clegg) on this issue. The date and the nature of the referendum are Westminster Parliament issues and it is right that they should be brought before the Westminster Parliament first; it does not make sense to take them in front of other Parliaments and Assemblies first. That is the way to do it—[Interruption.]

[Mr Speaker]

Order. Members should not shout at the Prime Minister in that way. First of all, it is rude. Secondly, it delays the progress of our proceedings, and we really must not have it.

[Julian Sturdy (York Outer) (Con)]

Q4. Can the Prime Minister reassure concerned Equitable Life victims in my constituency that the Government remain committed to ensuring justice for policyholders?

[The Prime Minister]

I can certainly give my hon. Friend that reassurance. We are committed to a Bill in this Session. This needs to happen. It was in 2008 that the parliamentary ombudsman referred to a “decade of regulatory failure”. The fact that we have had to wait until now for this to be done is wrong. The last Government had plenty of opportunities to grip this, but I am afraid that, in quite a cynical way, they were just waiting and waiting, so that more of the Equitable Life policyholders were dying off. That is disgraceful, and we need to get this done.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

Last Saturday afternoon, I joined the community of Stonehouse in my constituency to welcome home Sergeant Gary Jamieson. Sergeant Jamieson, from the Scots Guards, lost both legs and his left arm in an explosion in Afghanistan. The most humbling aspect of meeting Sergeant Jamieson was his distinct lack of bitterness. He fully supports the mission in Afghanistan, and strongly believes that the British forces there are making a difference. May I ask the Prime Minister to join me in paying tribute to a true British hero, and does he agree that the most fitting way in which to pay tribute to those who have made the ultimate sacrifice, and those who have suffered the most terrible injuries, is to stay in Afghanistan until the job is done?

[The Prime Minister]

I certainly join the hon. Gentleman in paying the tribute that he has rightly paid to Sergeant Jamieson and to all who have served. Anyone who has met some of the soldiers—when visiting Headley Court, or elsewhere—who have lost limbs in combat, through improvised explosive devices or in other ways, cannot help being incredibly impressed by their spirit and bravery, and their determination to go on and live as full lives as possible.

We have set out very clearly what we want to achieve in Afghanistan. This is the key year, when we surge up the military forces and surge up the political pressure. My right hon. Friend the Secretary of State for Defence will make a statement later today about how we can best do that, and how we can ensure that our forces are properly spread across Helmand province so that we can really have the effect that we want.

Let me be clear. Do I think that we should be there, in a combat role or in significant numbers, in five years’ time? No, I do not. This is the time to get the job done, and the plan that we have envisages our ensuring that we will not be in Afghanistan in 2015. We have already been in Helmand for four or five years, and, obviously, we have been in Afghanistan since 2001. It is time to maximise the pressure now, and then to bring our forces home as we train the Afghan army and police force to do the job that needs to be done, which is to keep the country secure. That is our goal, that is in our national security interest, and that is what we will do.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

Q5. Park home owners are often elderly and vulnerable, and some suffer greatly as a result of the actions of a small minority of site owners. They suffer threats, intimidation and neglect. Will the Prime Minister meet a small delegation, and me, so that we can discuss how park home owners may be better protected?

[The Prime Minister]

I have every sympathy with what the hon. Lady has said. I suspect that many Members—including me—have encountered problems with park home owners who have been really badly treated by, frankly, pretty disreputable site owners. We all know of cases in which people who want to sell are put under pressure, and the rules are used to prevent them from obtaining fair value. It is not right, and it is not fair. The Minister for Housing, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), is looking into the issue, and I think it is probably best for the hon. Lady to meet him in order to ensure that we have robust rules and the right approach, so that the rights of park home owners are respected.

[Mr Chuka Umunna (Streatham) (Lab)]

On Friday, my constituent Zac Olumegbon was murdered in a planned attack close to his school. He was just 15, and I know that the thoughts of the entire House will be with his family at this very difficult time. He was the 13th teenager to lose a life needlessly in our capital city. Can the Prime Minister tell me, the rest of the House and the country what his Government are doing, and will be doing, to stop this happening in our communities?

[The Prime Minister]

The hon. Gentleman is absolutely right to raise that case, about which everyone will have read. It is absolutely horrific, and it seemed so planned and premeditated. It is appalling to think that things like this happen on our streets. What will we do about it? I think that we need short-term measures, and then much longer-term measures as well.

In terms of the sentencing review, it is clear to me that we need to send the strongest possible signal that carrying a knife on our streets is just unacceptable. We need to send the signal that it is not a defensive measure, that it is not a cool thing to do, that it should not happen, and that the punishment will be tough. That, in my view, is the short-term measure that we need. As for the longer-term measures, we must do more to strengthen communities, to strengthen families, and to give people an alternative to the gangs towards which they will otherwise be drawn. Too many young people join a gang because they do not have other networks, help, respect and hope in their lives. That is a long-term agenda, it is an agenda that I know is shared on both sides of the House, and we must pursue it.

[Mr James Clappison (Hertsmere) (Con)]

Q6. Can my right hon. Friend give an assurance that he will resist further moves towards economic governance of the United Kingdom by the European Union, and that we will not see the vetting of our Budget plans by the European Commission before those plans are presented to the House?

[The Prime Minister]

My hon. Friend is entirely right. The UK Budget should be shown to the UK Parliament—the Westminster Parliament—before it is shown to anyone else, and that will always be the case under this Government. I am pleased to report that subsequent to the publication of our Budget, a number of international bodies—such as the OECD, the EU, the G8 and the G20—have recognised that it is an extremely good Budget that will help to put this country back on track.

[Mr William Bain (Glasgow North East) (Lab)]

Can the Prime Minister give the House a clear pledge today on child poverty? Will there be fewer children in this country living in relative poverty by the end of this Parliament—yes or no?

[The Prime Minister]

We are absolutely committed to meeting the child poverty targets. I remind the hon. Gentleman that this Budget, despite all its difficulties, does not add a single family to child poverty, in contrast to the last Government, who put up child poverty by 100,000—[Interruption.] They shake their heads. Check the figures and come back to me.

[Mr Robert Buckland (South Swindon) (Con)]

Q7. Will my right hon. Friend give an assurance that all new academies that will be set up will be obliged to accept children with special educational needs?

[The Prime Minister]

I can absolutely give my hon. Friend that assurance. Academies will be required to ensure that pupils with special educational needs are admitted on the same basis as other schools. Children with special educational needs have special needs, and a compassionate, decent and tolerant country will ensure that they get the help, support, education and love that they need.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

The chief executive of Sheffield Forgemasters, Dr Graham Honeyman, was last year presented with a lifetime achievement award by the Institute of Directors, but various Government Front Benchers have made unwarranted personal attacks on him in the media. Will the Prime Minister apologise now for those unjustified attacks on a highly regarded business man?

[The Prime Minister]

I am sorry to disagree with the hon. Lady, but no one has made an attack. This is an excellent company. The question is whether it is an appropriate use of taxpayers’ money to give it to a business that could raise that money by diluting its shareholding. Labour simply does not understand. It handed out money before the election without asking whether it was value for money. No wonder we are in such a complete mess.

[Roger Williams (Brecon and Radnorshire) (LD)]

Q8. The UK has a splendid reputation for the quality of its agricultural science and research, and these skills will be needed to face up to the challenges of climate change and an increasing world population. Will the Prime Minister confirm that Government and EU policy decisions on such matters will be taken on the basis of sound science and proportionate regulation?

[The Prime Minister]

I know that the hon. Gentleman is a member of the all-party group on science and technology in agriculture. These are difficult issues, but my view is that we should be guided by the science. We should also be guided by what consumers want, and it is vital that we have accurate labelling. That will really be the key to ensuring that we make progress with this issue in a way that keeps the public on side and allows them to understand what it is that they are buying and consuming.

[Mr David Anderson (Blaydon) (Lab)]

The whole House will be aware of and concerned by the ongoing incident in the north-east. The killing of Chris Brown and the wounding of Samantha Stobbart took place in my town of Birtley, and our thoughts and prayers should go out to their families and friends, and to PC David Rathband and his folk. Can the Prime Minister update the House on this issue, and can he assure us that all lessons will be learned from this incident? Can we especially look again at getting guns off our streets?

[The Prime Minister]

The hon. Gentleman is right to raise this case, and the whole country is thinking of those who have lost their lives and those who have been injured. It is a horrific case. I do not think that it is right now to start to talk about learning lessons: this is an ongoing case. The Home Secretary has been briefed by the chief constable and I know that the House and the country will wish the police well in their search for this individual, so that we can put a stop to the horrendous spree that is taking place.

[Dan Rogerson (North Cornwall) (LD)]

Q9. Voting by non-resident home owners in regions such as Cornwall is becoming a contentious issue. Councils are not checking whether people are voting in two locations in the same election, and local residents are worried that sometimes election results might be skewed. Will the Prime Minister meet me, or invite one of his ministerial colleagues to do so, to discuss this issue?

[The Prime Minister]

I am very happy that one of my colleagues should have a meeting with the hon. Gentleman. It is important that we make sure that electoral registers are accurate. It is also important to recognise that it is an offence to vote at a general election in two different places. However, I think that there are problems with saying whether second home owners can vote. I think that a number of hon. Members might take rather a dim view, as some of them might not be able to vote in their own constituencies, but I am happy for the hon. Gentleman to have a meeting with the Minister responsible for electoral registration.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Q10. What discussions he has had with ministerial colleagues on the future funding of the decent homes programme.

[The Prime Minister]

First, may I welcome the hon. Lady to the House?

Good quality social housing is vital, especially in areas such as her constituency. It is completely unacceptable today that 58% of the housing in her constituency is not of a decent standard. We have a huge backlog of work to be carried out. We have ploughed £170 million back into social housing schemes this financial year, which the last Government promised but did not fund. Clearly, the decent homes programme will have to be looked at in the spending review, but I understand the force of argument in her constituency particularly.

[Rushanara Ali]

I thank the Prime Minister for that reply. Is he aware that some 7,000 council homes in Tower Hamlets still need to be brought up to the decent homes standard? The previous Government committed £220 million towards addressing the problem. Will his Government honour that commitment to my constituents?

[The Prime Minister]

As I said, we have filled in some of the black hole left by the last Government because a promise of extra spending was made but the money was not found. While we made the £6 billion-worth of cuts to start sorting out the finances, we used some of the saved money to fill in the black hole so that those social housing schemes could go ahead. Clearly, the decent homes programme is important. We have to make sure that it provides value for money, but the hon. Lady’s constituency has very great needs, with so many substandard houses.

[Gloria De Piero (Ashfield) (Lab)]

Q11. My nine-year-old constituent, Paisley Ward, says that she and her brother learned to swim because it was free. Paisley is worried that her little sister will not be able to learn because this Government want to charge. In her letter, Paisley says, “please, please stop this madness”. Will the Prime Minister listen to Paisley and have a rethink?

[The Prime Minister]

First, may I congratulate the hon. Lady? Many people in this country think that this is a good time to leave politics and go into the media. May I congratulate someone who left the warmth of the GMTV sofa in order to sit on a green Bench here?

The hon. Lady raises an important case, but I have to tell her that not all Labour councils were able to deliver the free swimming pledge. I am afraid that this is one of the things, like many others, that it will not always be possible to guarantee in the incredibly straitened times that we are living in, when we have a £155 billion budget deficit to deal with.

Blockade of Gaza

Wednesday 7th July 2010 Commons Chamber

Mr Mark Williams (Ceredigion) (LD)

- Hansard - - Excerpts

I have a petition on behalf of Mrs Elizabeth Morley and other constituents from Ceredigion on the subject of the Israeli blockade of Gaza.

The petition states:

The Petition of the people of Ceredigion,

Declares that the Petitioners believe that the Government should take all actions within its power to end the blockade of Gaza.

The Petitioners therefore request that the House of Commons urges the Government to condemn the blockade on Gaza and Israel’s attack on peace activists in international waters; and urges the Government to demand of Israel the release of all activists detained and to urge all international institutions, including the UN, the EU and human rights agencies and organisations to work towards ending Israeli impunity.

And your Petitioners, as in duty bound, will ever pray.

[P000842]

Afghanistan

Wednesday 7th July 2010 Commons Chamber

12:32

[The Secretary of State for Defence (Dr Liam Fox)]

Mr Speaker, I am pleased to have this opportunity to update the House on our operations in Afghanistan. As the Prime Minister has said, we intend to make regular updates to the House.

As this is a complex subject, I have made maps available to assist hon. Members. I am grateful to you for your support, Mr Speaker. These are now available in the Vote Office, and the Whips on both sides of the House are distributing them. In addition, I will obviously be happy to arrange further briefings at the Ministry of Defence, should Members find them useful.

The Prime Minister reminded us today of the ongoing sacrifices made by our armed forces in Afghanistan. In the face of such losses, we should be in no doubt about the importance of the mission—particularly today, the fifth anniversary of the London bombings in 2005. It is vital to our national security that we have a stable Afghanistan that is able to maintain its own security and prevent al-Qaeda from returning.

As I made clear in Washington last week, we are a committed member of the international coalition of 46 countries in Afghanistan. We have a clear political strategy, and a clear military counter-insurgency plan to support it. The focus now is on delivering, and we can be confident that General Petraeus will build on the considerable success of General McChrystal.

We face many challenges. Progress has been slower in some areas than others, particularly on the political side. We can expect success in counter-insurgency to be gradual, cumulative and hard won, but there has, nevertheless, been considerable progress. Through a UK lens, it would be easy to assume that all of Afghanistan is like Helmand. In fact, many parts of the country are largely secure, with low levels of violence. In Kabul, the Afghans themselves have assumed responsibility for security, and have proved themselves capable of dealing with the localised threats that have emerged.

We are also making good progress on building up the Afghan security forces, so that this pattern can be repeated elsewhere. The Afghan army has been growing steadily over the years—and by 20% in recent months—to about 130,000 troops now. We are playing our part, and the Government have recently approved the expenditure of up to £189 million on new surveillance, communications and logistics equipment for our bases, as part of Britain’s ongoing commitment to support the effective partnering of the Afghan security forces.

In southern Afghanistan, the story of this year has been one of the Afghans themselves increasingly coming to the fore in the fight against the insurgency. In Kandahar, and under the direct oversight of President Karzai, Afghan security forces are leading operations as part of a rising tide of security in order to set the conditions for improved Afghan governance. In Helmand, Afghan and international security assistance force units have together succeeded in expanding the authority of the Afghan Government to 11 out of the 14 districts, by driving insurgent fighters out of the population centres of Babaji and Nad-e-Ali, while consolidating previous gains in Lashkar Gah, Now Zad, Nawa and Gereshk. The situation in Marjah remains challenging, but counter-insurgencies are about progressively winning the confidence of the local people, and the US Marines are well placed to succeed.

Elsewhere in central Helmand, where our presence is more established, we have seen considerable success. In Nad-e-Ali, British troops have been operating alongside the Afghans to secure the district centre and allow unfettered access to local roads Improved security is allowing effective governance to flourish and trade to grow. In May, for example, around 3,000 Nad-e-Ali residents elected a more representative district community council. ISAF now intends to reinforce this success. For that reason, I have accepted an ISAF request for a temporary deployment of elements of our theatre reserve battalion, the 2nd Battalion the Duke of Lancaster’s Regiment. The theatre reserve battalion is a standing force based in Cyprus, which I have instructed should be used only for time-limited deployments to fulfil specific tasks. This deployment will meet those criteria. The additional forces will be used to give commanders additional flexibility to reinforce progress in central Helmand this summer.

In a counter-insurgency campaign, the people are the prize. It is hugely important that we strike the right balance between the numbers of the civilian population and the size of the security forces available to protect them. The Prime Minister and I regularly argued in opposition that British troops in Helmand were too thinly spread and that we had insufficient force densities for effective counter-insurgency. That is why we welcome the arrival of more than 18,000 US Marines, whose presence is allowing us to deliver a better and more realistic distribution of tasks within the international coalition.

As the House is aware, ISAF has already transferred security responsibility for Musa Qala and Kajaki to US forces, who are building on our achievements there. Lieutenant General Rodriguez, ISAF’s operational commander, will today announce the next phase of this process—I understand that he will do so within the next hour. ISAF intends to restructure its forces in the Farah and Nimroz provinces so that it can consolidate a US marine brigade in northern Helmand, which will assume responsibility for security in Sangin later this year. This will simplify current command arrangements and enable UK troops to be redeployed to reinforce progress in the key districts of central Helmand. The theatre reserve battalion will then withdraw. The result will be a coherent and equitable division of the main populated areas of Helmand between three brigade-sized forces, with the US in the north and south, and the UK-led Task Force Helmand, alongside our Danish and Estonian allies, in the central population belt.

We have been closely consulted by ISAF, and fully support this plan. In Sangin, UK forces have made huge progress in the face of great adversity. The district centre has been transformed. Helmand, as a whole, is a safer place as a result of our endeavours and sacrifices there. I am sure that the whole House will join me in paying tribute to those who have lost their lives in Sangin, and those who continue to serve there.

The operations in Afghanistan, though geographically distant, are of vital importance to our national security. On the ground, we continue to make progress. There will be hard days ahead, but the further changes that I have announced will mean more manpower and greater focus for the key terrain of central Helmand. We have the right strategy, and we are determined to succeed. I commend this statement to the House.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

I thank the Defence Secretary for his statement, for early sight of it and for the indications that he gave me yesterday about the broad outline of what he was going to say today. That is good news for our ability to continue to support, from all parts of the House, our forces’ operations in Helmand province.

I welcome what the Defence Secretary said about his commitment to regular updates to the House, and his offer of briefings in the Ministry of Defence, but will he consider continuing the direct military briefings that started last year for Members here at the House of Commons? They were appreciated by Members on both sides, and I know that the all-party Army group has written to him and asked him to continue them. If he could, that would be appreciated. I know that it is onerous in terms of his time, but I ask him to consider doing so.

I totally agree about the purpose of the mission. Our forces are in Afghanistan to protect our national security and to keep us safe. The right hon. Gentleman says that we have a clear counter-insurgency plan and the military tactics to support that plan, but he knows that there is some concern and confusion over whether there are deadlines. Will the Government do their level best to clear up that confusion, so that people know the exact commitments? Is our combat mission in Afghanistan to continue on a conditions-based footing until the Afghan forces can take over, as was the situation, or is there a very clear deadline from the new Government stating that our combat mission will end on a particular date, irrespective of the conditions in Afghanistan? It is enormously important to clear up that point.

The right hon. Gentleman felt the need to say that, in opposition, he and the current Prime Minister repeatedly said that there were issues of force density, but I ask him to accept that it was not only he in opposition who felt the need to concentrate on and deal with force densities, because we in government had exactly the same priorities. Before force densities could be addressed, however, we needed to have someone to hand those districts on to, so, before the arrival of the American uplift, we could not hand on Musa Qala, Kajaki or Sangin to anyone other than the Taliban. Thankfully, the American uplift now gives us an opportunity to rebalance our forces in Afghanistan, and we have been doing that for some time. I understand that his announcement today is simply a continuation of an ongoing process. Does that effectively end the need for force rebalancing? In the British area of operations, do we now have the same ratio of forces to population as the Americans have on their side of the line?

The right hon. Gentleman said that Marjah is very challenging. Does he intend to deploy elements, as he said, of the theatre reserve battalion to the American—Marjah—area of operations? If so, for how long, and in what numbers? He says “elements”. Does that mean the whole theatre reserve battalion? Do we now, effectively, have no reserve for the rest of the deployment, or are some elements of the theatre reserve battalion still available to cover other contingencies that might arise?

We had already agreed in principle to hand command in Sangin over to the American brigade. I understand that the Secretary of State is now saying that it is not only in terms of command—the Americans themselves will take over in Sangin. When will that happen? Has he any idea what forces will be deployed, and in what numbers, into the Sangin area?

Does the Secretary of State accept that there will be mixed emotions, and pretty deep emotions, among many elements of our armed forces who have served in Helmand—not only those who have experienced injury, but those who have lost loved ones, which includes families back here, and everybody who has served in the most dangerous part of our theatre of operations? Our forces went out there on a daily basis to patrol, fully knowing the risks that they faced, and the whole House must pay tribute to the immense bravery, courage and resilience that they have shown over a period of time. They have achieved some considerable improvements in Sangin, but I think that the Defence Secretary will accept that we are still handing on a challenge. We have not got as far as we ideally would have hoped to get in Helmand before this hand-on.

[Dr Fox]

I am very grateful to the right hon. Gentleman for his support for the specific proposals that I have set out today and for his general support on the mission in Afghanistan. He was very generous with the briefings that he made available to the Opposition when he was in government, and we will continue the same courtesy. I also fully intend to continue the briefings for Members of Parliament begun under the previous Government; they are very valuable. In addition, as I said, if we are able to provide more detailed briefings in the Ministry of Defence, we are happy to do so. We should not, in any way, shape or form, be shy about providing any Member of this House with the information they require to make better sense of what is happening in this most important national security mission.

The shadow Secretary of State is entirely correct that it took until the American surge was fully under way for us to be better able to have sensible force densities. He asked me directly about comparisons between the British and Americans. Combat Team North has a population of 441,000, which is 37% of the population; Task Force Helmand has 388,000, or 32%; and Combat Team South has 370,000, or 31%. These are much better matches in terms of force density. He asks if this will effectively be it. Well, not necessarily, as there will be changes in the mission, but we will want to continue this pattern, or shape, in terms of force density. As he says, we have reached the end point, at least for now, of a process that began some time ago.

On the size of the theatre reserve, we will have some 300 personnel, and they will stay there until October. The size of the current UK force is about 1,000—I think that the exact number is 1,008. The exact number that the Americans put in will of course be for their commanders to determine in terms of the security situation that they find.

As regards 2015, I can only repeat what the Prime Minister has said—that British troops will not be there in a combat role, or in significant numbers, in five years’ time, but we can expect them to still be there in a training role. There will be a continued need for us to ensure that the quality of the Afghan national security forces is adequate. I echo the point that he made by saying that we are very fortunate in this country to have a volunteer Army—people who are willing to put their life and limb at risk on a voluntary basis for the security of this country, its people and its interests. We are deeply honoured and privileged to have such people in our armed forces.

[Mr James Arbuthnot (North East Hampshire) (Con)]

I welcome my right hon. Friend’s statement and particularly what he said about the ratio of troops to local population.

General McChrystal instigated a change of policy so that our troops should fire only when they were absolutely sure that Afghan civilians would not be put at risk. Inevitably, that put our troops at a greater degree of risk, but with the longer-term aim of maintaining the support of the local population. Is any change to that policy being considered?

[Dr Fox]

As my right hon. Friend knows, we do not discuss rules of engagement specifically, but it is true that the protection of the population was given a higher priority as part of General McChrystal’s counter-insurgency strategy. That will continue.

[Derek Twigg (Halton) (Lab)]

Although I am not completely convinced about the reasons for the movements that the Secretary of State described today, in fairness, I do not have the facts and intelligence that he has. I am also concerned about the Prime Minister’s statement that we should be out of Afghanistan in five years, which has been repeated. Will that statement encourage or discourage the Taliban in their operations against our forces?

[Dr Fox]

We intend to follow the strategy through. We believe that it is the correct strategy, and that it is likely to produce success in the time scales outlined. I should reiterate to the hon. Gentleman that General McChrystal initially assessed that the Afghan national security forces would be able to take on the role themselves in 2013. We amended that as part of the strategy, to 2014, because we believe that that is a more realistic target. What the Prime Minister set out is entirely consistent with the strategy. The Afghan national security forces can be expected to take full control of their own security by 2014, as set out in the strategy by General McChrystal.

[Patrick Mercer (Newark) (Con)]

Five years ago to the day, we were attacked not by Afghans, but by Yorkshiremen. They were trained not in Afghanistan, but in Pakistan and the Lake district. The previous Government insisted on telling us that conventional military operations would somehow impede that sort of attack in future, but that is clearly nonsense. Will the Secretary of State come to the Dispatch Box and explain that we are involved in a regional war that stretches right the way from Iran to Russia, that that is as much about fighting for Pakistan’s stability as Afghanistan’s stability, and that the lives and blood of our servicemen and women are being shed in a crucial cause?

[Dr Fox]

I am very grateful to my hon. Friend for the points he makes, which will resonate across the House. It is clear—as it always has been, to the credit of the previous Government—that this is not just about Afghanistan, but about Pakistan. Increasingly, on both sides of the Atlantic and throughout the international coalition, it is recognised that we are dealing with a regional problem, and that without success in Pakistan and the full co-operation of the Pakistani authorities in dealing with the Pakistan Taliban and the Afghan Taliban, we would find the mission in Afghanistan much more difficult.

I am happy to reiterate my hon. Friend’s points. This is a vital national security mission. We cannot simply wish it away. If I could make one wish, it would be that all countries in the international coalition show the same resolve displayed by our armed forces in burden sharing effectively, with the minimum of caveats, to ensure that we are absolutely able to deliver the maximum effect for the international coalition’s mission.

[Mr David Winnick (Walsall North) (Lab)]

I disagree with the broad consensus on Afghanistan, and have done so for some time. Is the Secretary of State aware that the question every Member of the House should ask whenever they sit in the Chamber is this: how many more British soldiers—I pay tribute to their bravery—will die or be seriously injured before the talks begin with the enemy? General Richards, the most senior British general, says that such talks are more or less inevitable. I believe that the war is unwinnable, and that it does not help in the fight against terrorism; other hon. Members say that the war is essential in that.

[Dr Fox]

There are a number of points to make in response to the hon. Gentleman. I fully accept that he has long held the view that the war was not justified, but we must agree to disagree on that. I believe that it is a vital national security mission for this country. There has never been any doubt that ultimately there must be a political element. The international coalition, the previous Government and this Government have always held the view that we cannot win the wider regional conflict in Afghanistan and Pakistan by military means alone.

There is difficulty in determining who is reconcilable to the Afghan constitution and Government and who is not—that is an ongoing process—but I fundamentally disagree with the hon. Gentleman. The measure of a conflict or war is not the number of those who, sadly, die, but whether we succeed in our mission and strategy. I believe that we should at all times see our armed forces not as victims, but as champions of the freedoms and security that they are trying to bring for our country. I am sure that that is how they would like to be seen: as victors, not victims.

[Dr Julian Lewis (New Forest East) (Con)]

My right hon. Friend is undoubtedly the right man in the right role, and he is loyally defending a strategy even though it might not be the right one. Does he accept that there is a fundamental tension between classic counter-insurgency warfare down among the people, which takes many years to bring to a conclusion, and the statement made by the Foreign Secretary yesterday? He said that

“there will not be British troops in a combat role or in significant numbers in Afghanistan in five years’ time”—[Official Report, 6 July 2010; Vol. 513, c. 168.]

If we are not to sacrifice our strategic interests in the area, will the Defence Secretary hold himself open to the possibility that a plan B might be necessary if plan A does not work out on schedule?

[Dr Fox]

The Government believe, in alliance with the United States and the other members of the international coalition, that we have the correct strategy. We believe that the counter-insurgency aim of protecting the population, and of providing them with security so that there is a space for better governance, is the correct strategy.

There is a difference between our national security mission to ensure that Afghanistan can develop in a way that enables the Afghan forces to look after their own security, and the wider mission of reconstruction and development—that is complementary to, but not the same as, the national security mission—which will have to be undertaken for a very long time, given the social state of Afghanistan.

[Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)]

I support the Secretary of State’s response to the hon. Member for Walsall North (Mr Winnick). On the question of dialogue with the Taliban, we need to be clear that it would be entirely unacceptable for us to discuss the future of Afghanistan with them at the same time as they are killing our soldiers in that country. Should not we draw on the lessons from Northern Ireland and other theatres of conflict? We should require a clear and unequivocal ceasefire by the Taliban and some degree of commitment to non-violent principles before there can be any question of dialogue with them.

[Dr Fox]

Although in principle I do not disagree with the right hon. Gentleman, we must be clear what we are dealing with. The Taliban covers a broad range of different groupings—there is no single Taliban commander or a Taliban army with a Taliban uniform—and it is advantageous to find the groups among them who are reconcilable to the process, and to bring them on board to create a critical mass of support. That can only help us in our wider counter-insurgency aims. We should also reflect on the terms we use—not just “the Taliban”, but “the insurgency”—and ask whether there are a number of discrete insurgencies rather than just one, just as there are a number of discrete groups that we tend to call “the Taliban.” If the House accepts that we are dealing with greater complexity than is sometimes described, we might find it easier to understand the complexity of some of the solutions that we and the Afghan Government must find.

[Bob Russell (Colchester) (LD)]

The Afghan national army is now larger than the British Army. The Secretary of State referred to the international coalition of 46 countries in Afghanistan. I pay tribute to Denmark and Estonia, but the simple fact is that none of our major European allies have had troops on the ground in Helmand province. Bearing in mind that soldiers from 16 Air Assault Brigade will this September make their third deployment to Helmand, will he confirm that the new surveillance equipment will include additional unmanned aerial vehicles, because they must be a great way of identifying insurgents and those planting improvised explosive devices?

[Dr Fox]

My hon. Friend is correct. We have to make available the full range of ways in which we can deal with IEDs, including UAVs. The subject of our NATO allies has been raised by previous Defence Secretaries, and I raised it at the NATO ministerial meeting, where there was what I would have called when I was in the Foreign Office a full and frank exchange of views on burden sharing in NATO. I would flag up just one issue, however. As we move into the transition phase in Afghanistan, with districts being handed over to the Afghan Government, it would be very unwise for the alliance to believe that that was an excuse for it to leave Afghanistan, or for any members of the alliance to do so and thereby leave only a small number of countries in the most difficult areas. During the transition period, it is essential that we look to have a NATO strategy that ensures that burden-sharing continues to the end of the mission, and that there is not an easy bail-out for those who just happen to have been in some of the quieter areas.

[Jeremy Corbyn (Islington North) (Lab)]

This October will be the ninth anniversary of the deployment of British troops into Afghanistan, 300 of whom have died. Thousands of Afghan people have also died, and the war has spread over into Pakistan and is in danger of spreading into other countries as well. What on earth would the Secretary of State say constitutes victory in Afghanistan, before the withdrawal inevitably takes place?

[Dr Fox]

“Victory” is a word I do not use; I talk instead about success in Afghanistan. On the national security mission we have set ourselves, I would describe success as a stable enough Afghanistan that is able to manage its own internal and external security without the need for external intervention. There is of course the Pakistani problem to be dealt with as well, which will require us to give considerable help in a number of different areas to the Government of Pakistan. There is not going to be a moment when we can hoist up a flag say, “This is a victory.” There will be ways in which we measure success in terms of national security, but the regional problems are likely to continue for some time, and if we are serious about the national security of the United Kingdom we cannot simply turn a blind eye and wish them away.

[Mr Edward Leigh (Gainsborough) (Con)]

Does the Secretary of State agree, however, that we went into Afghanistan on the wrong premise? We were told we were going there to protect Londoners going to work. We now know that al-Qaeda has moved most of its operations to Pakistan, and that most of the Taliban whom we kill die within 20 miles of where they were born, so why are we there? Is it to hold territory, which nobody has ever succeeded in doing in Afghanistan—not even the Soviets with 240,000 people? If it is to fight a dirty war and keep heads down, why do we not place more reliance on special forces, rather than let the British Army carry on bleeding to death?

[Dr Fox]

My hon. Friend knows that we never comment whatsoever on special forces and what they do, but we are in Afghanistan to give the Afghan Government space to develop the skills in governance and security, so that when we do leave we do not leave behind an ungoverned space into which, as a security vacuum, elements of transnational terrorism are once again drawn.

I sometimes wonder whether the general public remember the chronology correctly. I was in the United States last week, where a woman said to me, “If we hadn’t been in Afghanistan, we would never have had 9/11.” We need to remember that we did not seek this confrontation; it was brought to our streets and cities against our will. We did not seek this conflict, but we will see it through to its conclusion.

[Ann Clwyd (Cynon Valley) (Lab)]

This morning some of us met Staffan de Mistura, the United Nations special representative in Afghanistan, who pointed out the importance of the mission to women in Afghanistan. They have returned to the professions and to the schools, and that should not be underestimated. Perhaps there are never enough women in the Ministry of Defence, because this point is never made in the Chamber.

[Dr Fox]

As I said, we are providing the security environment in which the Afghan Government can, over time, develop not only their own security structures but better governance, and part of that better governance has to be a full understanding of human rights, and that human rights apply irrespective of race or creed or gender.

[David Tredinnick (Bosworth) (Con)]

Many years ago during the Gulf war, I accused the BBC of being the Baghdad broadcasting corporation. I am very concerned that there is now a similar situation with the Taliban, in that they are getting far too high a profile. The news this morning is that, apparently, it is a defeat that we are moving troops around in Sangin. Does my right hon. Friend agree that the media must be very responsible when reporting propaganda from our enemies, and that they need to take a close look at this?

[Dr Fox]

I think it is good counsel for the BBC and the media generally, and for Members of the House, that we use reasonable language and are balanced in our views when discussing this issue. We have a large number of serving men and women in Afghanistan, and they will listen to what we say and to what the media say. That is also true of those who are our enemies in that part of the world. Clarity and honesty would be two very useful tools. I also think, however, that we need to use information. For that reason, I have asked a group of our national newspaper editors to come to the MOD in the near future for a detailed briefing, simply in order that they can understand the facts on the ground and get them first hand from the military, so that there is no excuse for misreporting the facts in future.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Can the Secretary of State update us on the progress that has been made in recruiting to the Afghan national police force, which is just as important as the army?

[Dr Fox]

Good progress has been made on the number of Afghan national police, but to be frank with the hon. Lady, that is not really my concern. My concern is the quality of the recruits to the Afghan national police, and what we need to do is not to have them recruited and then trained, but trained and then put in place. That is a vital mission for the whole of the international coalition. The issue was widely discussed at the NATO ministerial meeting at a number of different levels, and I think there is growing acceptance that providing policing and law and order, not at a Supreme Court level but in terms of dispute resolution and effective policing at the very lowest level, is one of the ways to deny the political and social space that the Taliban will otherwise occupy.

[Caroline Dinenage (Gosport) (Con)]

From the British perspective, progress in Afghanistan is often measured through the lens of Helmand. Is that a fair reflection of the security situation across the whole country?

[Dr Fox]

All countries tend to see Afghanistan in different ways depending on the focus of their national media. There are countries that see Kandahar as being Afghanistan, and there are countries that see Kabul as being Afghanistan. We tend to see Helmand as being Afghanistan. It is useful if people understand that across the country as a whole, a lot of progress has been made on security. Those Members who have been travelling to Afghanistan over a period of time will have noticed that, for example, in Kabul there is a great difference in the security arrangements and how easy it is to move around the city. Clearly, that has not yet spread to enough parts of the country, but we are getting close to transition. While it is understandable that we and our media focus on our casualties and the fatalities that we, very sadly, have taken, we also need to show the other side of the ledger to the public—the successes being achieved in Afghanistan. That is vital if we are to maintain public support, which is a very important part of our resilience in a democracy.

[Mr David Hanson (Delyn) (Lab)]

Unusually, I find myself in agreement with the hon. Member for New Forest East (Dr Lewis) on these matters. Can the Secretary of State tell the House how many of our 46 coalition partners have set a date for the end of combat operations, and if he were a Taliban commander in Helmand, would he be more encouraged or less encouraged to continue his insurgency knowing that such a date had been set?

[Dr Fox]

I think the best way to deal with the elements of the Taliban is to show our commitment to the strategy itself—to show that we are willing to put the forces on the ground and that we are in full support of the strategy as set out by General McChrystal and now being carried forward by General Petraeus. I hope the increase in US troop numbers and some of the movements I have set out today will leave our enemies in Afghanistan in no doubt as to our seriousness about taking and holding territory and improving security on behalf of the Afghan Government.

[Mr Oliver Heald (North East Hertfordshire) (Con)]

I welcome my right hon. Friend’s statement. Does he agree that the challenge in Afghanistan is to turn military success into “hearts and minds” success on the ground, so that the public there see some advantage from our military success? In doing that, we will achieve two things: we will make it less likely that it will be a training ground for terrorists, and more likely that we will get a political settlement.

[Dr Fox]

My hon. Friend is absolutely correct. As I said earlier, it is not possible to separate entirely the military elements from the wider political elements. Indeed, the whole point of the counter-insurgency strategy is people-centric: it is there to give greater security to the people of Afghanistan and to give them greater confidence in the ability of their Government to provide that security later. When we are making some of these arguments, we must also remember that as we win what he describes as the “hearts and minds” battle in the counter-insurgency strategy, that also provides us with better intelligence. The greater the proportion of the Afghan population who feel secure, the more likely we are to get information that will tell us who is planting IEDs and where. That is what ultimately happened in Iraq, and that counter-insurgency strategy and those same themes will apply in Afghanistan.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for his statement. One of my concerns, which has been voiced by other Members, is about media speculation. Some of the papers referred to retreat today, but there is no retreat: the fact is that some soldiers’ tour of duty is coming to an end. Will he state clearly to everyone, including those in the media who perhaps do not have the ears to listen but who need to listen, that what is being done is tactical and is not being done for any other reason? Earlier, the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) spoke about his constituent who had lost two legs and an arm, and about his great courage. One could not fail to be touched by his comments. On behalf of the soldiers who have returned injured and the 99 who have died, we need a commitment from the media to support the troops in the way that we clearly have.

[Dr Fox]

What I have announced today makes complete military and strategic sense. It is what commanders in ISAF wanted to happen to make full use of the forces that we have. Our forces in Sangin have done a wonderful job, as will the US Marines after them. When our forces leave Sangin and move into central Helmand, they will do so with their heads held high, rightly proud of their achievements. Any attempt by anyone to describe that as a retreat is quite contemptible.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

I pay tribute to my old regiment, the 1st Battalion Scots Guards, who are currently serving in Helmand province and who will be not only delighted but encouraged by the fact that the redeployment will bring better focus. Working closely with the United States makes them remember that they are not alone. Is it only the US that is going into Sangin, or will other international partners be joining in that redeployment?

[Dr Fox]

It will be the United States that goes into Sangin, but to enable US forces to be fully deployable to Sangin, other nations will be taking up some of the territory currently occupied by the US. I hope my hon. Friend understands that, although I am aware of which forces they are, I have been asked by ISAF commanding forces not to say who they are yet.

[Hugh Bayley (York Central) (Lab)]

I am reassured to hear the Secretary of State repeating the Government’s support for the comprehensive approach. We will not find security in Afghanistan and be able to leave until the Government of Afghanistan, nationally, regionally and locally, are respected and trusted by the Afghan people; it is they who have to win the hearts and minds of the people. What is the governor of Helmand province doing to reach out to all sections of the non-insurgent population and their political leaders to incorporate them in government? What is being done to start talks with those sections within the insurgency who can be talked into laying down their arms and joining constitutional government?

[Dr Fox]

I have met the governor in Helmand on several occasions, and he is one of the most impressive and bravest politicians in Afghanistan. Despite a number of attempts having been made on his life, he continues to get out among the population. A good example of the projects he has been spearheading includes the distribution of wheat seed and fertiliser, which I personally saw him being involved with.

The hon. Gentleman is correct that it is not only the governance of Kabul that will matter, but the governance at ground level. As I said to the hon. Member for Birmingham, Edgbaston (Ms Stuart) earlier, simple issues such as dispute resolution at the very lowest level will be required if we are to deny the Taliban the space they will otherwise occupy. We need to be very clear that if we are not there, they will be, and we have to make some of those small details available. When I spoke to a farmer—I think I have mentioned this in the House before—he said, “When I sold poppy, I was given a farm price by the Taliban and I sold it at the farm gates. When I take wheat to market, I have to go through several checkpoints and it costs me money every time I go through a checkpoint.” It is the small things on the ground that we sometimes have to focus on and get right if we are to have wider success in the big strategic picture.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

May I ask the Secretary of State how splitting Regional Command South assists with the ISAF mission in Afghanistan?

[Dr Fox]

This was simply a common-sense approach to have greater clarity in our command structures given the increased size of the force, and it has shown just how well the coalition is now working together. I remember criticisms being made in the House in the early part of the deployment in Afghanistan that there were too many command structures, and that no one was talking to anyone else. Anyone who has spoken to General Parker or General Carter recently will have discovered that we have very clear lines of communication and command. That has been a major improvement over the years in what is happening in Afghanistan.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I thank the right hon. Gentleman for giving this update on what is going on in Afghanistan. I am a little encouraged by what he says will be the likely situation in 2015, but can he assure the House that every possible diplomatic avenue will now be pursued with the greatest possible vigour, so that we can come out of there as soon as possible?

[Dr Fox]

It is very important that our concentration, diplomatically, is on getting all the parts of the international coalition to do everything they can to support the success of the mission. It is also important, as I said earlier, that as we move to transition, we do not have a coalition in which some members think it is permissible for them to leave without making any further contribution. There will be a very important diplomatic effort in the months ahead to hold the international coalition together, so that we see through this strategy to a successful conclusion.

[Mr James Gray (North Wiltshire) (Con)]

I very much welcome today’s statement and the focus on central Helmand that it implies. If I have understood the Secretary of State correctly, the deployment of the theatre reserve battalion will effectively mean an increase in our forces on the ground in Afghanistan of about 10%, which will be of concern to some people. Will he confirm that that deployment will simply be until the Americans take over in Sangin, when the battalion will be withdrawn, so that effectively, the number of our troops will remain the same as the current number?

[Dr Fox]

It is likely that the uplift in the UK numbers from the reserve will be about 300, or possibly a little less, and they will remain there until October. That is when we intend to withdraw them.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

May I press the Secretary of State further on the ongoing combat role of our troops? He will keep his options open, will he not? If in three, four or five years’ time there continues to be a need for a significant number of British troops in a combat role, he will be prepared to keep them there, will he not?

[Dr Fox]

I do not intend to give any comfort to the Taliban by talking about what might happen if we are not successful. We intend to see this mission through, to do what is required to put in the numbers needed to make the mission a success, to ensure that the equipment is there and to play our full part in the international coalition. We intend that the strategy as set out by General McChrystal will be met within the time scale he set out.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I join the rest of the House in paying tribute to the courage and commitment of our forces, the burden of which is reinforced by this redeployment, which shows what they have undertaken on their own so far. Will the Secretary of State outline what effect the new military reconfiguration will have on the provincial reconstruction team and on engagement with civilian communities in those areas?

[Dr Fox]

The provincial reconstruction team will continue as it is. I am very grateful to my hon. Friend for giving me this opportunity, which I should perhaps have taken earlier, to praise the work of the PRT. Its success will be central to the long-term stability of, and thereby the governance support for, the security situation. It is a leading example of what is possible and is internationally admired.

[Sajid Javid (Bromsgrove) (Con)]

I welcome the statement from my right hon. Friend. What efforts are being made to encourage the Pakistan armed forces to take greater responsibility for Taliban activity south of the border with Helmand?

[Dr Fox]

Every effort is made, including substantial talks undertaken by the Foreign Secretary in Pakistan recently. All contacts at a political, diplomatic and military level are used constantly to emphasise to the Government of Pakistan the importance of their role in dealing with this wider security issue. As has been mentioned already, this is not simply a problem that relates to Afghanistan within its own borders. There is a regional element and unless we have the full co-operation of Pakistan and success in Pakistan, any success we might achieve in security in Afghanistan would naturally be undermined. We take every opportunity to tell the Government of Pakistan that we stand ready to help them in their important contribution to this mission.

[Mr John Baron (Basildon and Billericay) (Con)]

My right hon. Friend will be fully aware that for there to be any sort of success in Afghanistan, we need to win the propaganda war, yet the latest report to Congress from the US Department of Defence clearly highlights that we are not succeeding on this front. What more can we do to turn this around? Success in a counter-insurgency war can soon become a pyrrhic victory if we do not carry the people with us.

[Dr Fox]

One of the elements of asymmetry so often talked about is the fact that, whereas we, in a democracy, must take our people with us, the Taliban do not have the problem of having to influence democratic opinion. It is vital, as my hon. Friend says, that we should do so. It is incumbent on us in this House, on the Government as a whole, on the media and on our armed forces to show the British public that there are two sides to the ledger. Yes, we have fatalities and casualties, but there is also success. We are beginning to see greater stability across much of Afghanistan. As my hon. Friend the Member for Gosport (Caroline Dinenage) said earlier, if we stopped viewing things entirely through the prism of Helmand and started to view them across the country as a whole, perhaps the electorate in this country would get a better and more accurate picture.

[Dan Byles (North Warwickshire) (Con)]

Does my right hon. Friend agree that, given that the Taliban continue to draw their funding from the illegal drugs trade, we must tackle them successfully on all fronts—not only militarily, politically and diplomatically, but economically too—by getting to grips with the illegal drugs trade and cutting off their funding at source?

[Dr Fox]

I agree with my hon. Friend that dealing with the drugs trade has to be part of the long-term way in which we improve stability, security and governance in Afghanistan. If we are to do that, we must find alternative incomes for some of the poorest people on the planet. Until we can provide alternative incomes for those who are basically subsistence farmers, in many ways, we are unlikely to win hearts and minds—or, indeed, the economic case that my hon. Friend so correctly points out.

Points of Order

Wednesday 7th July 2010 Commons Chamber

13:23

[Vernon Coaker (Gedling) (Lab)]

On a point of order, Mr Speaker. Are you aware that the BBC is reporting that the Education Secretary is to apologise for the inaccuracies in the information given to this House on Monday about cuts to the school building programme? Are you aware of such an apology and has the Secretary of State made any representations to you about making it to the House? I ask this because the BBC reports that the apology is to be in the form of a letter to you, Mr Speaker. Surely any such apology should be made in this Chamber. Chaos on Monday has turned into farce on Wednesday.

[Mr Speaker]

I am grateful to the hon. Gentleman and for a few minutes’ advance notice of that point of order. In response to his first point about whether I am aware of the BBC news report, the answer is an unequivocal yes, for the simple reason that he apprised me of his point of order. The second point that I would make is that I have had no communication from the Secretary of State on this matter, so I am reading the report in the way that anybody else might read it. It is of course always open to Ministers to come to the House to make statements, including to make apologies if they deem it appropriate. I have a sense already that it would be regarded by Members as more helpful in these circumstances and perhaps more apposite if the relevant Minister were to seek to come to the House to make a statement. I should emphasise that we have an important Opposition day debate to follow, and that such a statement, if it were to be made today, would have to be made after the Opposition day debate.

As for revealing matters to the media before revealing them to the House, including revealing an intention to say something at a later stage, my ruling stands. If people have things to say, they should come to the House to say them. The House expects to hear before anybody else does. I hope that that is a satisfactory response.

[Dr Julian Lewis (New Forest East) (Con)]

rose—

[Mr Speaker]

The hon. Member for New Forest East (Dr Lewis) looks as though he is overflowing with enthusiasm. I am quite concerned about him and I think we had better hear what he has to say.

[Dr Lewis]

Thank you very much, Mr Speaker, for your customary indulgence. Further to that point of order, is it in order for me to inquire whether the shadow Minister who raised that point of order informed the Minister concerned that he was going to mention him from the Dispatch Box on this occasion?

[Mr Speaker]

The hon. Gentleman may ask that. I do not know the answer, but there is no breach of order if a Member comes to raise a point of order about someone else without notifying that person first. The hon. Gentleman is a very courteous man—I will have known him for 27 years in October of this year—and he might well expect that as a matter of courtesy there would be advance notification, but there is no obligation to notify. He has put his views on the record and contributed enthusiastically to our exchanges.

[Mr Tom Watson (West Bromwich East) (Lab)]

Further to that point of order, Mr Speaker. As you know, a number of schools in my constituency have been affected by this misleading information. I tried to phone the Secretary of State yesterday, but he was not courteous enough to return my call. I heard Mr Andrew Neil announce that the Secretary of State was going to apologise for this matter and I assumed that he would do so to the House. Do we have any remedy to try to ascertain what the Secretary of State is doing? I have already cancelled a meeting to come here and it would be unfair and discourteous if he made Members cancel any other meetings.

[Mr Speaker]

There are a couple of points to make in response to the hon. Gentleman. The first is that the Secretary of State is an extremely busy person and it is not for me to comment on the nature or frequency of telephone conversations that he has. I can say only for myself that if the hon. Gentleman were to telephone me, I would always be delighted to hear from him and would regard it as a matter of some priority to have a telephone conversation with him. Secondly, I think that I have made the overall position very clear and people on the Treasury Bench will have heard it. What I am saying, in short, is that if the Secretary of State has something to say to Members, he should say it here. If he has something to say to me, he could usefully say it here and it would be a jolly good thing if he came to the House to make a statement at a suitable time—that is, at or shortly after 7 o’clock.

[Kevin Brennan (Cardiff West) (Lab)]

On a point of order, Mr Speaker. During his statement on Monday, in column 35 of Hansard, in answer to my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), the Deputy Prime Minister indicated that the reason why he had not consulted the devolved Administrations about the parts of his constitutional proposals that affect the devolved Administrations of the United Kingdom was that it was necessary for him to announce them to this House first. That was repeated today by the Prime Minister at Prime Minister’s Question Time. Will you confirm, Mr Speaker, that it is perfectly in order—on a Government-to-Government basis through the UK civil service, which exists for that purpose—for the Prime Minister or Deputy Prime Minister to discuss proposals affecting the devolved Administrations with Ministers on a ministerial basis prior to making an announcement to this House? In fact, in the case of Northern Ireland, if they did not do that, one could not imagine the consequences.

[Mr Speaker]

I am very sorry to disappoint the hon. Gentleman, but although I listened with interest to his point of order the truth of the matter—he might think it a sad truth—is that it is not a matter for the Chair.

[Chris Bryant (Rhondda) (Lab)]

rose—

[Mr Speaker]

The day would not be complete without a point of order from the hon. Gentleman.

[Chris Bryant]

On a point of order, Mr Speaker. I am sure that you will be aware that the House of Commons Disqualification Act 1975 stipulates that only 95 Ministers, including Whips, may sit and vote in the House of Commons at any time. In addition, “Erskine May” recognises only two kinds of Whips: Government Whips and Opposition Whips. Until yesterday morning, only 95 Members were Ministers, but three additional Lib Dems were appointed as Whips yesterday. That takes us to the number of 98. The Act makes it very clear that those additional three people cannot sit or vote in the House of Commons—unless they are not Government Whips, but Opposition Whips.

[Mr Speaker]

As always, I am engaged, not to say fascinated, by the product of the hon. Gentleman’s lucubrations. I will look into the matter, but I am sure that the House will eagerly await, with bated breath and beads of sweat on its collective brow, any thoughts that I may have thereafter. The appetite for points of order has now been satisfied.

Opposition Day

Wednesday 7th July 2010 Commons Chamber

[3rd Allotted Day]

Jobs and the Unemployed

Wednesday 7th July 2010 Commons Chamber

[Mr Speaker]

I inform the House that I have selected the amendment in the name of the Prime Minister.

13:31

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

I beg to move,

That this House notes with grave concern that the emergency budget will increase unemployment; calls on the Government to publish the HM Treasury analysis of jobs that will be lost in the public and private sector; condemns the Government’s decision to axe the Future Jobs Fund, the Youth Guarantee and the Jobseeker’s Guarantee, scrapping hundreds of thousands of jobs and training places for the unemployed; further notes that the Government is cutting employment support to help people into jobs at a time when growth is still fragile; regrets that the role of the voluntary sector in helping people into work is at risk; further notes that the current claimant count is half the level it was in the 1980s and 1990s as a result of the support and investment the previous Government provided for jobs and getting people back to work; further notes the cost to communities and the economy of long-term unemployment; and condemns the Government’s decision to abolish regional development agencies with potentially damaging consequences for regional economies at a time when the recovery is not yet assured.

Mr Speaker, you said in response to the points of order that Secretaries of State are busy, but that it is very important that Ministers are accountable to the House. At 11.45 this morning, I took a call from the Secretary of State for Work and Pensions, who is not in the House today. He rang to tell me that he would not be here today and that he would not answer the debate because he is speaking to civil servants. Instead of giving a speech to Parliament, he has gone to speak to a London conference for civil servants. He has decided that he cannot rearrange making that speech, despite the fact that he is speaking at a three-day conference organised by the same civil servants who work for and answer to Ministers and advise them on the importance of answering to the House. So the Secretary of State for Work and Pensions has chosen to turn his back on Parliament and the debate. A debate in Parliament on support for jobs and the unemployed is clearly not important enough for him.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

Will the right hon. Lady confirm to the House that, during no fewer than three of the last six Opposition day debates held under the previous Government earlier this year, the Secretary of State in the previous Labour Government failed to appear in the House?

[Yvette Cooper]

The right hon. Gentleman will know that, on many occasions, the then Opposition did not put up their shadow Cabinet Minister to open the debates. He will also know that Members have given reasons for not attending. I was ready to take the call from the Secretary of State, had he told me that he had a family emergency, a health problem or a European event to attend. The Minister has an engagement in Brussels, and I understand that he will therefore not be here for the close of the debate. I completely understand that; of course, he must fulfil his international responsibilities. Of course, we recognise such responsibilities, but to choose to attend a three-day conference for the very hour at which the Secretary of State should be present in the House to discuss support for jobs and the unemployed is a dereliction of his duty not only to the House, but to the unemployed he should be trying to help.

We think that this is an important subject. That is why we have chosen it for our third Opposition day debate. This month, many young people will leave school, college or university, and they are looking for their first jobs. It is not an easy time to look for work. We have just come through the worst global recession for many generations, and across Britain as in many other countries, many people have been hit by job losses and unemployment as a result.

Next week, the June unemployment figures will be published. The House will know that the International Labour Organisation unemployment figure currently stands at 2.47 million, more than 500,000 less than many experts predicted when the recession and financial crisis started and more than 500,000 less, too, than in the 1980s and 1990s recessions. The claimant count is 4.6%—less than half the 10% that it reached in the ’80s and ’90s recessions and almost 750,000 less than expected in last year’s Budget, thus saving us £15 billion over the next few years.

Of course, those figures are too high, families are still struggling and we need to bring down unemployment, but it is worth understanding why unemployment has been kept lower during this recession, because it reflects the work that businesses and employees have done to protect jobs. People have been working fewer hours, often cushioned by tax credits—a cushion that Government Members now want to take away. To help to save jobs, businesses have cut other costs. The fact that unemployment has been kept lower reflects the extra support for the economy—the VAT cut, the public sector construction contracts, the car scrappage scheme and the maintenance of public spending and public sector jobs through the recession—all opposed by the Conservative and Liberal Democrat parties. It reflects, too, the extra help to get people back to work faster than in previous recessions—the youth guarantee, the extra education training places, the stronger jobseekers’ regime run by Jobcentre Plus—all support that the new Government now want to take away.

I pay tribute to the work that Jobcentre Plus did during the recession to help as many people as possible to get back to work much faster than in previous recessions, but this is a dangerous time. Too many people, especially young people, are still struggling to find work. If we look at the lessons from history, we see that this is the time when the labour market is at its most fragile. This is the time, just as the economy is coming out of recession, when there is most risk of people getting stuck in long-term unemployment. If we look at what happened in the 1990s, we see that it was a long time before unemployment started to come down after the recession finished. Youth unemployment rose for 18 months after the recession finished. If we look at what happened in the 1980s, we see that unemployment rose for years after the recession finished. Youth unemployment rose for four years after the recession finished.

[Helen Jones (Warrington North) (Lab)]

On youth unemployment, has my right hon. Friend noticed the total absence of Liberal Democrat Members from this debate? Does she believe that they are unwilling to come to the House to defend their complicity in scrapping the future jobs fund?

[Yvette Cooper]

My hon. Friend makes an important point. In fact, the welfare spokesperson for the Liberal Democrats said that his party had no plans to cut the future jobs fund and, indeed, that it supported help to get young people into work. He is not here either, despite the fact that he is a Minister in the Department that is responding to the debate.

In the ’80s and ’90s, the then Conservative Government turned their back on the unemployed, particularly the young unemployed, and unemployment rose for years as a result. But unemployment scars. Unemployment causes people problems for years to come. If people lose their jobs and cannot get back to work quickly, they can find it much harder to get back into jobs, even when the economy is growing again. That is what happened in the 1980s. It took a long time to get new job growth in many communities across the country, and by the time that we did, many people had been scarred for life and some have never worked again.

[Toby Perkins (Chesterfield) (Lab)]

Does my right hon. Friend share my fear that the problem basically is that the Conservative party believes that the only reason people are unemployed is that benefits are too generous, that we do not need job creation projects and that all they need do is to cut benefits and, somehow, unemployment will magic itself away?

[Yvette Cooper]

The troubling approach that the new Tory-Liberal Government are taking is to cut the help to get people back into jobs and to cut their benefits when they cannot get back into work. The Secretary of State has claimed to be concerned about intergenerational poverty and worklessness, but the truth is that many of the problems that the Government worry about have their roots in the unemployment and hopelessness of communities without work in the 1980s. If they are really serious about tackling long-term poverty, they should act to prevent long-term unemployment now. They talk about broken Britain, but the truth is that their party broke Britain in the 1980s and now they are trying to do the same thing again. Let us look at their actions in the first four weeks: cuts of £1.2 billion in support that was getting people back to work; cuts in the future jobs fund; cuts in the youth guarantee and in help for the long-term unemployed just when they need it most; and a Budget that cuts the number of jobs in the economy so that there are fewer jobs than there would have been, not just next year but in every year for the rest of the Parliament too.

[Mr Oliver Heald (North East Hertfordshire) (Con)]

Many of the previous Government’s measures helped some people into work, but the 3 million workless households where no adults of working age were working were barely touched in the Labour years. It is all very well to talk about the 1980s, but what was happening between 1997 and the last election? Precious little. Many of those people never saw anybody from Jobcentre Plus or anyone else. They were just left to stew.

[Yvette Cooper]

I can tell the hon. Gentleman what happened after 1997. In fact, there was a reduction of 350,000 in the number of people claiming inactive benefits, as a result of the extra support that was put in. That was in strong contrast to the early ’90s recession when we saw an increase of more than 450,000 in the number of people on incapacity benefits. In this recession, we have had a reduction of more than 70,000 in the number of people claiming those long-term sickness benefits, despite the difficulties in the world economy.

[Miss Anne Begg (Aberdeen South) (Lab)]

One reason why young people find it so difficult to get into work is that they do not have experience, and the future jobs fund and the youth guarantee were very good for young people because they gave them that experience and made them much more employable. Has my right hon. Friend done any analysis of the effect on these young people of the scrapping of both those schemes?

[Yvette Cooper]

My hon. Friend is right. She obviously brings great experience to the field, having been a member of the Select Committee on Work and Pensions for many years. She is now its Chair, and I look forward to hearing more of her views on this in the House. We have been talking to many young people about the impact of cutting the future jobs fund. Yesterday afternoon, I met 10 young people who have just started work thanks to the future jobs fund. They are all working for charities and social enterprises, have jobs in fundraising, in office work, in organising charity events and in repairs and maintenance, and some had fantastic jobs in creative design. Several are graduates who had struggled to find work because of the recession. Many had tried unpaid internships and voluntary work—anything to get a foot in the door. It was only the future jobs fund that had made the real difference to them. One of them said to me, “It’s a life saver.” Another said, “It’s given me confidence. It’s a proper job. It’s a huge boost to put this on my CV.” A young woman I spoke to in my constituency who was training to be a car mechanic, thanks to the future jobs fund, told me, “I tried and tried to get something, and this is just like the light at the end of the tunnel. In fact, it’s the only opportunity I’ve been given. I don’t understand why they want to cut it.”

[Kevin Brennan (Cardiff West) (Lab)]

On that point, my right hon. Friend might be interested to know that a constituent recently came to see me at my surgery who had been offered through the future jobs fund an opportunity to work by the Royal National Institute of Blind People, and on arrival at Jobcentre Plus was bitterly disappointed to be told that the list was closed because of the Government’s decision to cut the future jobs fund, and now faces the prospect of not having an opportunity that would otherwise have been available. Is it not ironic that with all the talk of a big society, jobs that would have been available to people in the third sector are now being cut by the Government?

[Yvette Cooper]

My hon. Friend is right. This is happening now to young people throughout the country. One of the young women I talked to yesterday also told me about a job with the London Wildlife Trust. It had asked her if she would be interested in working for it through the future jobs fund, and when she contacted them to say yes, it said, “Sorry, too late. The programme is closed.”

Ministers try to claim that there are no cuts in these jobs. The Secretary of State said:

“we are not cutting any jobs at all. We are saying that we will stop the part of the programme relating to jobs that were not contracted for.”—[Official Report, 14 June 2010; Vol. 511, c. 584.]

According to the Secretary of State, if the contract has not been signed, it has not really been cut. He says that these were only notional jobs. The trouble is that he has not cut notional money. He has cut real money—£290 million this year, and hundreds of millions of pounds in future years. That money would have funded 90,000 future jobs fund jobs for 90,000 people—real people who will struggle longer on the dole as a result.

[Chris Grayling]

Before the election, the previous Administration were planning public spending cuts of £50 billion. Where did the right hon. Lady expect to make those cuts in the Department that she was then heading?

[Yvette Cooper]

We were clear that the best way to cut welfare spending was to get more people into work. The very fact of getting people into jobs was cutting £15 billion from welfare bills over the next few years. That is substantially more of an impact than the right hon. Gentleman could possibly have by cheese-paring bits from employment programmes that end up putting more people on the dole and pushing up the bills for unemployment. That, in the end, is the right hon. Gentleman’s problem.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Does my right hon. Friend agree that the pressures placed on the private and public sectors in recent weeks will deliver a potential skills shortage in the UK? Without investment in our young people today, we will have a skills shortage tomorrow, which will be detrimental to our growth in future years.

[Yvette Cooper]

My hon. Friend is right. This is about investing in our future, because this is about the young people who will support us all for very many years to come. If we do not give them the start in life that they need, if we do not give them the work experience that they need to get into jobs, if we leave too many of them stuck on the dole for years, we will pay the bills that result from their being unemployed for years and we will lose their potential skills and talents that could contribute to our economy for many years to come.

[Richard Fuller (Bedford) (Con)]

Is not the biggest burden on the young people about whom the right hon. Lady talks so eloquently the massive debts that her Government left behind? They are already shackled by the previous Government’s policies, and that will be a burden on them and their employment opportunities for the future.

[Yvette Cooper]

If those young people cannot get jobs, if they end up stuck on the dole for years—that is what happened to young people whom I left school with in the 1980s—that will devastate their entire future. They will struggle to get work for many years to come and that will push up the deficit. The hon. Gentleman seems to fail to understand that if unemployment is high, that pushes up the bills for unemployment benefits and cuts the number of people who are working in good jobs and paying their taxes, not just this year and next, but for many years to come.

[Richard Fuller]

In my constituency, the unemployment rate doubled under the last Administration. In the last 10 years, unemployment has gone up. We recognise in Bedford and Kempston that we need small businesses to create the jobs that will employ people, not just in five years’ time, but in five months’ time. The one thing that small businesses in my constituency want is to know that the Government have control over the deficit, that their taxes will be down, and that regulation will be reduced. Surely that is the way in which we can create jobs.

[Yvette Cooper]

Unfortunately for the hon. Gentleman, if we cut the deficit at the pace and scale that his party wants, that will make it harder for businesses. It will make it harder for small businesses and companies across the economy. His party’s own appointed Office for Budget Responsibility confirms that. It says that there will be fewer jobs in the economy, not just next year, but each year for the rest of this Parliament as a result of the Budget. It is hitting businesses and employers throughout the country, making it harder for them to take people on. That is the complete fallacy in the arguments of Conservative Members. They are stuck in the mentality of not just the 1980s, but the 1930s, which says that so long as the deficit is cut, things will suddenly be hunky-dory. It will not. It cuts jobs and makes it harder for people to get back into work, and it pushes up the costs of failure too. That is what is so irresponsible.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I have a lot of sympathy with the right hon. Lady’s argument and she is right to stress the fragility of the economic recovery at the present time and the fact that the Budget proposals will cut jobs, but I am sure that she is aware that the previous Government imposed cuts of £400 million on the devolved Scottish Government in the very teeth of the recession, knowing that it would cost jobs and jeopardise recovery. If her argument holds water now, why did it not hold water then?

[Yvette Cooper]

In fact, the additional support we put in through things such as the future jobs funds and support for the economy helped Scotland. Indeed, Scotland benefited from thousands of future jobs fund jobs, which were funded by the Government, in addition to the money that went directly to the devolved Administrations. Every part of the Government had to make efficiency savings, and unfortunately the Scottish Administration consistently set themselves efficiency targets considerably lower than those set and met in Whitehall Departments across government. It was fair to expect the Scottish Administration to pay their fair share and to contribute to those efficiency savings.

We believed, however, that it was right to keep supporting jobs in Scotland through things such as the future jobs fund, which is why the Association of Chief Executives of Voluntary Organisations said, in response to the cuts in the future jobs fund:

“We know of many third sector organisations in Yorkshire who were ready to place people into jobs and were mid-way through bidding for FJF money to make that possible when the funding was cut. Among the placements that were to be created were jobs to support women in the community through a Women’s Refuge. Now those women won’t get the extra support and Yorkshire won’t get the extra jobs.”

Real jobs in Yorkshire gone—because of the Secretary of State’s plan!

[Miss Begg]

It is third sector providers who often help to get people facing particular barriers into work. It is hard enough for young people to get into work anyway, but if they have barriers such as drug dependency or homelessness, it is particularly difficult. The future jobs fund was being used by organisations such as Aberdeen Foyer in my constituency to get those marginalised youngsters into work and to break that cycle of poverty, which the hon. Member for North East Hertfordshire (Mr Heald), who sits with me on the Work and Pensions Committee, talked about earlier.

[Yvette Cooper]

My hon. Friend is right, which is why all young people, no matter what the difficulties they face, should have a guarantee of a job, training or support to get into work. She might also be interested to know that significant numbers of the people going into the future jobs fund were disabled, so it was providing additional support for people who might have found it more difficult to get their first job elsewhere in the economy and to get that start and get into work.

The former Chief Secretary to the Treasury, the right hon. Member for Yeovil (Mr Laws), told the House that DWP officials had advised that the future jobs fund was not effective and not working. That is not what young people and voluntary sector providers are telling us. For example, the Scottish Council for Voluntary Organisations said:

“It is obviously very disappointing that the Future Jobs Fund is not continuing as it was a highly successful initiative which was popular with employers and employees”.

Angie Wilcox, whom I met, from the Manor residents association in Hartlepool, said that

“in one area alone, manor residents have recruited 118 young people, of which the first 17 finished their six months last month, all 17 secured sustained employment...This is a vital programme that must stay”.

So what advice did DWP officials really give to the Treasury? The Employment Minister, the right hon. Member for Epsom and Ewell (Chris Grayling), has so far refused to publish any advice or evidence that it is not effective. That is because, in the end, he does not have any. He has commissioned a detailed evaluation of the future jobs fund for 2011, so there is no evidence to show that the fund is not working and plenty of testimony from young people and employers across the country that it is transforming people’s lives. The Government did not talk to a single voluntary sector provider before they axed the fund, and they did not talk to a single young person on the fund before they made their decisions—actually, the Prime Minister did. He talked to young people at a social enterprise in Liverpool, and told them he would keep the fund. He said that

“it is a good scheme, and good schemes we will keep.”

Was he setting out to deceive those young people, or does he just not care about the broken promises from the election?

The Employment Minister has, I understand, been back to that same corner of Liverpool to see the same social enterprise. He has told us in previous responses that he has not received any representations about the decision to cut the future jobs fund. Yet someone who was at the meeting said that

“when Chris Grayling visited Everton on the 26 May we raised with him the very negative impact cutting the Future Jobs Fund will have and 2 local people said the difference having a future jobs fund position was already having on their lives, their self esteem and their long term job prospects...We asked him specifically about whether his replacement scheme was going to give at least the minimum wage. He couldn’t guarantee that at all...The FJF has already made a big difference to us in Everton... Young people on the FJF have got their heads back up and are going for it.”

So what other excuses have the Government given us for cutting the future jobs fund and the support for the unemployed? The Secretary of State claimed on 8 June that the cost of the programme was “running out of control”. That is rubbish—it is a fixed-cost programme. It costs just over £6,000 per job and is paid when the job is delivered. Furthermore, the taxpayer saves six months of benefits too. It is a fixed cost, so it cannot escalate out of control.

The difference between us is that we want 90,000 people in jobs. The Government would rather have them on the dole than pay for the extra support that those young people and long-term unemployed need. So, from next year, they are cutting the rest of the guarantee. In total, they are cutting £1.2 billion from support for the unemployed—and they tell us it is all right because there is going to be a Work programme. But where is it? The soonest the Secretary of State will be able to deliver it is next summer, but what about the people in the meantime who need support and help? What about the young people leaving school, college or university this summer who need help? What about the people who have been unemployed for six months and who need support now? Yet now is the time when he is cutting future jobs fund opportunities in favour of a Work programme that cannot be in place for at least another 12 months.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

rose—

[Yvette Cooper]

I shall give way. Perhaps the hon. Gentleman can provide some clarity on that point.

[Nadhim Zahawi]

The right hon. Lady talks about the young people coming out of schools and colleges. Did she think about them when she was in government and borrowing £500 million a day? Did she think about their future while the Government were borrowing £100 for every £300 they were spending?

[Yvette Cooper]

Had we not increased borrowing during the recession, we would have seen recession turn into slump, millions of people on the dole being scarred for life, and huge increases in repossessions. Unless the hon. Gentleman is prepared to support the economy and growth, he will never see the deficit come down. The best way to get the deficit down is to keep the economy growing, and the only way to get us through the recession was to support the economy at a very difficult time. He seems to want to return to the madness of the 1930s when economies across the world were pushed into depression and slump as a result of the kind of narrow-minded, short-term policies that he is now advocating.

[Nadhim Zahawi]

I have to come back on that point. Your policies have mortgaged and remortgaged the future of those young children, so for you to stand up and say that without borrowing you cannot sustain the recovery is inaccurate. You have to admit that borrowing £500 million a day—not a week or a month—is unsustainable.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. May I remind Members to use the third person? When Members refer to “you”, it means me. I have just been accused of a few things that I do not own up to.

[Yvette Cooper]

The hon. Member for Stratford-on-Avon (Nadhim Zahawi) should learn a few lessons from economic history. He should look at what happened not just in the 1980s, when there was not the same scale of world recession, but in the 1930s and at the orthodox views being put forward then by Bank of England Governors and senior politicians and the devastating consequences that they had. Keynes was led to write his general theory because of the deeply destructive approach that so many people in senior positions took and the consequences that devastated the lives of millions of people who were pushed into unemployment and poverty. Businesses were destroyed for many years as a result of that approach—the approach that the Conservatives seem to want to go back to.

I agree that borrowing needs to come down, and of course we need to ensure that the deficit comes down in a steady and sensible way as the economy recovers. However, by cutting an extra £40 billion for ideological reasons in a way that will hit jobs and the economy, the Conservatives are turning their back on the unemployed. Ministers need to tell us what they will do to help young people this summer. What are they going to do to reassure parents that their sons and daughters will not be stuck on the dole for more than a year? All that they promise is a Work programme sometime in the future, with incentives for private sector companies to help people find work but no guarantees to young people or anyone else that they will actually get work. There are no jobs for them to go to.

Ministers also want people to move house to help the labour market, but it is not clear where they want them to move to. The Secretary of State has said that he wants the unemployed to move to more affluent areas where there are more jobs. In fact, if they do not and they are out of work for a year, their housing benefit will be cut. At the same time, the Government are telling working people on housing benefit in affluent areas that they have to move to cheaper areas because their rents are too high. If they do not, their housing benefit will be cut, too. The Secretary of State is telling my constituents that if they do not move south to get a job he will cut their benefit, and his own constituents that if they do not move north to get a cheaper home he will cut their benefit too. Presumably they can wave at each other as they pass somewhere along the A1.

The Secretary of State wants people to give up cheaper housing to find work, but he also wants people to give up work to find cheaper housing. He is telling people to get on their bikes, but with no clue about where they are supposed to go. That is the same Secretary of State who said last year that he wanted to maintain community ties. He said:

“It is getting more and more difficult for parents in some poorer backgrounds…that extended family link is often severed by the fact that they can’t get living near their parents.”

Yet those are the very same community ties that the Government’s policies on employment and housing would rip up right now. They are cutting help for people to get jobs and cutting their benefits too.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Does my right hon. Friend agree that the Government’s contention appears to be that the future jobs fund is simply training without a job guarantee? Is that not just snobbery, as they do not put forward the same argument—nor should they—that people accessing degrees should have a guaranteed job outcome? Quite simply, is it not true that the Tories have never believed in parity of esteem between vocational and academic training routes and still believe that unemployment is a price worth paying?

[Yvette Cooper]

My hon. Friend is right. I know that his constituency was hit very badly in the 1980s as a result of the decisions that previous Conservative Governments took, and that that is why he feels so strongly that we should not take those decisions again. We have to do everything possible to help people back into work.

The Guardian has even reported that Ministers want jobcentres to give out charities’ food vouchers, so now they are turning the clock back not just to the 1980s but to the 1930s. It is looking less like welfare to work and more like welfare to the workhouse.

[Miss Begg]

Before my right hon. Friend moves off the subject of housing benefit, I wish to mention that Aberdeen is one of the areas where there are jobs—unemployment in my constituency is 2.6%, which is higher than we would like but relatively low. The problem is that rents are high. A constituent who came to see me on Friday is finding things very difficult, because in the private rented sector she is already subsidising her rent despite being on full housing benefit. It is therefore impossible for people to move into Aberdeen to get a house and a job without falling foul of the Catch-22 situation that my right hon. Friend describes.

[Yvette Cooper]

My hon. Friend is right, and that is why it is difficult to reform housing benefit without considering the consequences for the labour market. The two things should be examined together, not in isolation in a way that can have destructive consequences.

[Esther McVey (Wirral West) (Con)]

May I confirm that the matter has nothing to do with snobbery but is about the best way to handle the situation? Can the right hon. Lady confirm that at present, the number of 18 to 24-year-olds not in education, employment or training is at its highest, at 837,000?

[Yvette Cooper]

If the hon. Lady is concerned about young people who are not in education, training or employment, why on earth is she supporting her party’s decision to cut the future jobs fund and help for young people to get into jobs? The number of 18 to 24-year-olds who are on the dole is about half the level that it was in previous recessions.

[Esther McVey]

I think there needs to be clarity of purpose on a way forward; you have left us with a record deficit—[Hon. Members: “She.”] Sorry; the right hon. Lady’s Government have left us with a record deficit, and new times require new measures. Working together, we will provide clarity and look for greater apprenticeship schemes.

[Yvette Cooper]

rose—

[Sarah Newton (Truro and Falmouth) (Con)]

Will the right hon. Lady give way?

[Yvette Cooper]

I advise the hon. Lady that asking me to give way and answer another question when I have not yet answered the first is probably not the best way to get her question answered.

I ask the hon. Member for Wirral West (Esther McVey) where is this Work programme and this extra support? All that we see so far is £1.2 billion-worth of cuts. There are cuts to the future jobs fund, a programme that is already in place and delivering real opportunities. She should go and talk to the voluntary sector providers in her constituency and constituencies across the country about the great work that they are doing. Social enterprises, charities and organisations in the public and social sectors are doing some great things to give young people a chance, and her party wants to pull the plug on that. That would be madness at a time when young people need our help.

[Sarah Newton]

I wish to return to the right hon. Lady’s point about giving out food vouchers. What is compassionate about a benefits system that is leaving people hungry in their hour of need? Voluntary organisations in my constituency, such as Church organisations providing food banks, are barred from offering vital necessities to people in jobcentres who are literally starving. That is ridiculous when people are going hungry.

[Yvette Cooper]

I am interested that the hon. Lady is concerned that people are not getting enough support and believes that they should have more help. I wonder why on earth, then, she has voted for a Budget that cuts £11 billion from benefit support for those on the lowest incomes in the country. What she is arguing for are cuts in Government and taxpayer support, and for people simply to depend on charities instead. That would be a return to the Victorian approach of the workhouse and the pre-Beveridge, pre-welfare state approach of not supporting families across the country, which would be deeply unfair. There may not be the type of charity that she happens to have in her constituency in every constituency and working with every jobcentre in the country. We in the Labour party believe that we should support people, which is why we have not proposed cutting benefits by uprating them only by the level of the consumer prices index, which will take £5.8 billion out of the value of benefits for some of the lowest-income people in this country.

[Chris Grayling]

Can the right hon. Lady confirm to the House that before the election, she did not at any stage give serious consideration to increasing benefits in line with CPI? Can she make it clear once and for all—did she consider that or did she not?

[Yvette Cooper]

I can say very clearly to the right hon. Gentleman that my view was always that it would be unacceptable to increase benefits in line with CPI. I wish to make that very clear, and I am sure that papers will testify to that effect. It will be unfair on people such as those who are severely disabled or on the lowest incomes, who will see the real value of their support cut by hundreds of pounds over the next few years. For the Minister to try to defend the Budget as “progressive” when it will hit people who are severely disabled and cannot work, people who are on carer’s allowance and some of the most vulnerable people in the country who may be struggling to support their families, is a distortion of the meaning of the word.

Welfare to work does not work anywhere in the country if there is no work for people to go to. That is the real tragedy of this new Government. At a time when growth is fragile and too many people are out of work, they have introduced a Budget that cuts growth and jobs. It is shocking.

Even on the assumptions of the Government’s own appointees in the Office for Budget Responsibility, this emergency Budget means that there will be more than 100,000 fewer jobs in the economy, and not just this year. There will be fewer jobs every year for the lifetime of the Parliament as a result of the Budget. The Budget cuts consumption, through the VAT hike and benefit cuts; it cuts Government spending; and it hits private and public sector jobs. The Budget will also push up the bills of unemployment. Even on the optimistic assumptions of the Office for Budget Responsibility, the taxpayer will fork out around £2 billion on unemployment over the course of this Parliament as a result of the Budget. That is £2 billion that we could have spent on the future jobs funds, school buildings or other support to help people into work.

[Naomi Long (Belfast East) (Alliance)]

Does the right hon. Lady agree that that is merely the thin end of the wedge? Many of the young people who find themselves unemployed and many of the communities where unemployment is ingrained are also more reliant on other benefits and public services such as health. The mental health and well-being implications for those communities are enormous, but they have not been factored into those calculations.

[Yvette Cooper]

The hon. Lady is right. We are having this discussion in the light of the Budget measures and the initial cuts in support for jobs, but we know that there are spending cuts to come as part of the spending review, to which the Government have added £17 billion to the amount to be cut from Departments. The consequence is that the Government’s policies will keep more people on the dole, not fewer, and more people out of work, not fewer. That is what the Budget does, and that is on an optimistic reading, because we know that the Treasury’s real assessment is worse.

The only reason why the Government think that employment will be growing at all is that they are counting on around 2.5 million net jobs being created in the private sector over the next five years. However, that is something that John Philpott of the Chartered Institute of Personnel and Development and other respected economists have said is simply unrealistic. The Government are living in cloud cuckoo land. In fact, the Financial Times survey of major private sector employers found that none was planning to increase recruitment on a large scale just because the public sector was cutting back. Arriva said:

“We are not planning a recruitment drive any time soon. Everybody is watching their costs at the moment.”

Today’s KPMG survey found that the number of new recruits is at a seven-month low, just at a time when it should be increasing. Business confidence has been hit by the Budget and the austerity approach that the Government have been pursuing.

The Government have abolished the regional development agencies, which were supporting jobs in the regions, and cut Building Schools for the Future and other capital projects that were supporting construction jobs. The Government are hitting jobs in the public sector and the private sector, all at a time when the economy is still weak. They say that this is unavoidable, but that is simply untrue. They do not need to cut £40 billion extra from the economy; they have chosen to do so, even though that will cut jobs and hurt the unemployed. The Government do not need to cut the help for the unemployed that is getting them into jobs; they have chosen to do so, even though it will increase long-term unemployment. They do not need to push up the costs of unemployment; they have chosen to do so, even though that will cost us more. They do not need to scar young people for years to come; they have chosen to do so, just as they did in the ’80s and ’90s.

Why are the Government doing that? It is because they say that they have to get the deficit down. Why are they introducing a savage Budget to cut the number of jobs in the economy? They say that that has to be done because of the scale on which they want to get the deficit down and the pace at which they want to do it. In the 1990s, the Conservatives said that unemployment was a price worth paying to get inflation down. Now they are saying that unemployment is a price worth paying to get the deficit down. However, unemployment is not a price worth paying; unemployment will stop the deficit coming down. This year’s school leavers will pay the price, our young people will pay the price, and we will all pay the price for many years to come. Unemployment is not a price worth paying. It is time that the Government ditched the failed ideology of the 1980s and the 1930s, and supported jobs for the future. That is what our party will do, and I commend the motion to the House.

14:14

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“welcomes the emergency budget which will tackle the unprecedented legacy of debt over the next five years by reducing borrowing from a projected £149 billion this year to just £20 billion in 2015- 16; notes the Office for Budget Responsibility’s projection that unemployment will fall in every year of this Parliament as a result of the Government’s policies to stimulate private sector employment by reversing the damaging increase planned for employer national insurance contributions, introducing a £1 billion Regional Growth Fund, reducing the corporation and small profits tax rates and increasing the Enterprise Finance Guarantee, resulting in the creation of a projected two million new private sector jobs by 2015-16; further welcomes moves to implement a single work programme that will provide personalised support to help people move into sustained employment, to introduce a £1,000 increase in income tax personal allowances which will incentivise work, to reform the benefits system to ensure that work pays and to provide 50,000 new apprenticeships and 10,000 new university places for young people, thus stimulating growth, delivering jobs and creating a fairer society for all.”

May I start by passing on the apologies of my right hon. Friend the Secretary of State to the House? Despite what the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) said, he has an important job to do in helping to lead our public sector out of the mess in which the previous Government left it, and he has an important leadership role with the people who will help him to do that. I am sorry that the right hon. Lady is disappointed to be debating against me this afternoon. I am rather pleased, frankly, to be debating against her and I was impressed by her lively form. I somehow think that the wrong member of her household is running a Labour leadership campaign.

Listening to the right hon. Lady, one would think that the past decade had been one of economic triumph and effective employment policies, and that the previous Government had left behind a golden legacy of wise and effective policies. Well, they did not. What they left behind was an economic hangover that we will all be dealing with for years to come, and I am not referring just to the huge deficits or the huge planned spending cuts that Labour had lined up. Indeed, one would think from listening to her this afternoon that the previous Government had no plans to cut spending. Actually, the opposite was the case. What they did not do was give us any detail whatever on where that money was going to be saved.

If we look back over the previous 13 years, the story is a pretty sorry one, with 400,000 more unemployed people today than when Labour came to power in 1997, a higher level of young people not in education or employment, and a lower proportion of people in work. Over that period, Labour spent billions of pounds on projects to try to get people back into work. They spent billions through the recession on supported programmes, but things have actually got worse. What we on the Government Benches know is that long-term sustainable jobs are created by the private sector, not by Government schemes.

Even when jobs were being created over that decade, Labour completely failed in its mission of trying to get people into work. Large numbers of people managed to come into the UK from overseas and find jobs, yet through the years of Labour Government, we consistently had some 5 million people stranded on out-of-work benefits. Many of them could have worked and many of them should have worked, but under Labour it just never happened. So much for “Things can only get better”.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

A particularly poisonous legacy of the previous Government and their economic failure was the plight of young people. We now have 1 million young people who are NEET—not in employment, education or training—but even before the credit crunch came, there were as many people NEET at the end of that period of economic growth—albeit unsustainable growth, as we now find—as there were when Labour came to power. The previous Government let down young people, scarring them for life. We now have 1 million young people unemployed because of Labour, yet we have had no apology. What we need is this Government to sort out the mess that the previous Government left behind.

[Chris Grayling]

My hon. Friend is absolutely right, and I would ask the House this question. Why would we take Labour Members seriously on youth unemployment when they had such a terrible record on youth unemployment over 13 years in government? What we saw from Labour in office was at best incompetence, at worst a wilful disregard for taxpayers’ money, and a failure to understand how to create long-term sustainable jobs in the economy.

[Mr Wayne David (Caerphilly) (Lab)]

Has the right hon. Gentleman made any estimate of how unemployment will increase because of his Government’s policies?

[Chris Grayling]

We have taken a decision—and rightly so—to push out of Government the job of economic forecasting. That is the purpose of the Office for Budget Responsibility. Its analysis, independent of Government, is that unemployment will fall and employment will rise as a result of the decisions that we have taken in the Budget. That is the direction in which we should be heading.

Those in the previous Government cannot simply blame the recession for this mess. Despite 10 years in power, even before the global banking crisis started, more than 15% of our children—1.75 million children—lived in households where no one worked. We have one of the worst rates of workless households in the EU. I am therefore delighted to take on the right hon. Member for Normanton, Pontefract and Castleford on employment today, and to remind the House and this country what a terrible record the previous Government had in their 13 years in office.

There were fewer jobs in manufacturing. We have heard a lot of talk today about the 1980s, but let us be clear: the big drop in manufacturing employment in this country and the big slump in the proportion of the economy taken up by manufacturing took place under the Labour Government, between 1997 and 2010. Labour should be ashamed of the previous Government’s calamitous record on supporting manufacturing business in this country and creating a regulatory environment that drove so many firms out of business and overseas. The previous Government constantly missed their targets on apprenticeships. We heard again and again of how they were going to deliver hundreds of thousands of apprenticeships, but they never hit their targets. They spent massive amounts on employment programmes—designed in Whitehall but ineffective in practice—and they left the biggest deficit in our peacetime history. After all those promises about ending boom and bust, Labour finished with the longest recession in the western world.

[Toby Perkins]

The right hon. Gentleman mentioned that some programmes were ineffective. One of the programmes that he has cut is the future jobs fund. I tabled a written question about that for his Department, but it was completely unable to tell me how many jobs had been created in my constituency. As the Department obviously does not know whether the future jobs fund was successful or not—it is too early—and as it is unable to provide any evidence that it was not, why does the right hon. Gentleman not just admit that cutting the scheme was a decision made for ideological reasons rather than because it was not working?

[Chris Grayling]

What we sent to the hon. Gentleman in the written answer was the details of the future jobs fund placements in his area. We have to be careful with taxpayers’ money, and it would therefore not have been prudent to collect data down to constituency level. However, the information is there for him to see, and when he looks at those data, he will see that the success of the future jobs fund in creating jobs has been consistently below target all the way through.

Let me lay to rest one myth today. We have not stopped the future jobs fund. Tens of thousands of additional places will be created over the next few months under the future jobs fund. We have said, however, that we need to take tough decisions in the light of the mess left behind by the previous Government. Also, by next spring, we will be bringing on stream the Work programme, which we believe will provide long-term support for those who are looking to get back into work. I shall say a bit more about that in a moment.

[Mr Heald]

Does my right hon. Friend agree that the overall picture of Labour’s employment schemes shows that they helped into work the people with the highest levels of skill, and people aged between 25 and 49, and that a vast population was simply left behind that could not compete with the people who were coming into this country and taking the jobs that were on offer?

[Chris Grayling]

My hon. Friend makes an important point. What we learned from the new deals was that people were simply cycled round and round. They went through the system again and again because they were not placed in sustainable employment. That is one of the problems with Labour’s approach.

Let me tackle the issue of the future jobs fund head on, because we have heard a lot today about Labour’s flagship scheme. Around 100,000 future jobs fund jobs are still being created under the current scheme, costing up to £6,500 each. As the right hon. Lady said, most of them are in the public and voluntary sector. I could be wrong, but my idea of sustainable employment is not a six-month work placement in the public and voluntary sector. It is about getting people into long-term roles in the private sector, which can provide a long-term career for them. That is why our emphasis has been on creating apprenticeships, and 50,000 new apprenticeships have been created in a very early move by this Government.

[Mr David Lammy (Tottenham) (Lab)]

Is it not insulting to people who work in the voluntary and public sector to imply in this House that those are not real jobs? Would the right hon. Gentleman like to withdraw that last statement?

[Chris Grayling]

That is not what I said. The right hon. Gentleman clearly was not listening. A six-month work placement in the public and voluntary sector with no guarantee of a job offer at the end of it, and no certainty that the role will involve the kind of skills development that an apprenticeship would offer, is a poor relation compared with the programme of apprenticeships launched under this Government.

[Mr Lammy]

I know that the right hon. Gentleman is an educated man. He has said that the country is in a recession. Is it not axiomatic that, in recession, private companies tend not to invest in employment? The purpose of the future jobs fund was precisely to create employment in the public sector, because the Government had leverage over the public sector.

[Chris Grayling]

But the way that we will create long-term jobs for the future will be to revitalise and energise our private sector. The reality is that the Labour party went into the general election campaign promising to increase the tax on employment and to make it more expensive for the private sector to employ people. How can the right hon. Gentleman think that that is a route to long-term sustainable growth and opportunity for employment in this country?

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

May I ask the right hon. Gentleman whether there will be a job guarantee with the 50,000 placements that will be arranged under the apprenticeship programme? Also, where is the logic in making people wait so long? There are still many unemployed people in my constituency. After someone has been unemployed for six months, the private sector will treat them as long-term unemployed. How can it be right to leave people waiting until next spring before giving them something to work on?

[Chris Grayling]

I know that the hon. Lady is a new Member, and she might not be aware of the changes made by the previous Government. One of the things they did was to extend the period that people had to wait before they could receive support on employment programmes. In the case of young people between the ages of 16 and 25, the period was extended from six months to 12 months. I agree with her that things need to happen sooner, and one of the things we will do in the Work programme is to give that support sooner.

The coalition Government are committed to supporting people in sustainable employment, providing opportunities that will provide skills, open doors and help people to stay in work. Our goal is not to get people off the unemployment register temporarily, but to work with them to achieve a goal of lasting employment. That means plotting a different course. The same tired old policies will not work. For too long, economic growth in Britain has been unbalanced, driven by the accumulation of unsustainable debt and a bulging public sector. We have been forced to deal with the largest public spending deficit in peacetime history, and the crisis in the eurozone has shown that the consequences of not acting are severe.

[Yvette Cooper]

I have heard what the Minister is saying, but how does he account for the fact that, in 2012-13 and 2013-14, employment will be 110,000 lower as a result of his Budget than it would otherwise have been, according to the assessment of the Office for Budget Responsibility? If there are fewer jobs in the economy, how on earth does he think young people are going to get more of them?

[Chris Grayling]

If the right hon. Lady looks at the figures, she will see that the OBR is forecasting an increase in employment of 1.5 million jobs in the wake of the Budget over the next few years. My goal, and the goal of this Administration, should be to ensure that as many of those jobs as possible go to people who are on benefits, many of whom have been on benefits long term. The big mistake of the past decade when jobs were being created was that that simply did not happen.

[Yvette Cooper]

Again, I ask the right hon. Gentleman to confirm the OBR’s forecast that, as a result of this Budget, employment will be lower. Before the Budget, it forecast 29.47 million jobs in the economy for 2012-13; after the Budget, it forecast 29.36 million jobs for the same year. Will he confirm that the consequence of his Budget will be to cut the number of jobs in the economy?

[Chris Grayling]

The right hon. Lady has continued to operate on the basis that the public sector could somehow remain as it was, and that we could carry on spending the same amounts of money. She does not seem to understand the consequences of carrying on with the same level of deficit. They would include higher costs for business and higher interest rates. We can see the consequences in the eurozone of not getting to grips with the deficit. We are interested in creating long-term, sustainable employment, which is why we want to deliver schemes and support that will encourage the private sector to grow and develop. That will not happen if we maintain a deficit, however.

[Yvette Cooper]

But will the Minister confirm that the reason for the lower number of jobs forecast for 2012-13 is that the private sector will have been hit by the consequences of his Budget?

[Chris Grayling]

Last week, the right hon. Lady was criticising us for theoretically planning job reductions in the public sector. She cannot have it both ways. We cannot have an increase in employment, a fall in unemployment and a fall in public sector employment without the private sector beginning to take people on again. This might be a point of difference between us, and I can accept that, but I believe that, over the next 10 years, we shall need a successful, flourishing private sector that can create sustainable jobs. I am sorry that the Labour party appears to be reverting to type in believing that the public sector can somehow carry it all. This is a point of difference between us, but I believe that we will not create opportunities for those young people unless we have proper, sustainable private sector employment.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Will the right hon. Gentleman give way?

[Chris Grayling]

If the hon. Lady will forgive me, I would like to make some progress.

We will introduce radical reform and follow policies that will encourage growth and development in the private sector. We will also radically reform welfare, with a real focus on helping people to find sustainable work. We will reform the benefits system so that work pays. We will tackle endemic worklessness and the intergenerational cycles of disadvantage that it creates. We will halt the tragic waste of human potential that exists when people are out of work. When I listen to Labour Members talking about unemployment, I simply remember their record over the past 10 years, and those 5 million people who have consistently been on benefits.

Next year, we will launch the Work programme to provide a coherent package of support for people who are out of work, regardless of the barriers that they face or the benefits that they claim. We will end the programme complexity that we have seen over the past decade, and replace all the paraphernalia of programmes with a single, integrated package of support. It will not be a one-size-fits-all scheme, however, because we have had too many such schemes from Whitehall. We will trust the professionals on the ground who deliver back-to-work support to find the right way of delivering that support to individuals. We will look to investors in the private, public and voluntary sectors to provide the support, and we will judge the organisations that participate on their success rate.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Of course I want whatever new scheme the Minister comes up with to succeed, but does he share my concern about the possibility that the private contractors whom he wants to employ will charge more for their services because the changes the Government have made in the Budget will result in fewer jobs in the economy than there would otherwise have been?

[Chris Grayling]

That is not my concern. My concern is to ensure that, if the OBR forecasts are correct and we see employment growth amounting to 1.5 million more jobs in the next few years, we do not make the same mistake in government as the hon. Gentleman’s party did and fail to get people off benefits and into work to take those jobs. I do not want to see a steady and unchanging level of millions and millions of people on out-of-work benefits over the course of a decade while jobs are created around them, effectively operating outside our mainstream society. That must change. I want opportunity for those people. I want to see them back in employment. I am sure the hon. Gentleman shares that goal, but what we aim to do is make it happen this time around.

[Miss Begg]

I am sure the Minister is well aware that the increase in the number of people claiming incapacity benefit is a result of mental health problems. He may also know that, in response to most surveys, 60% of employers say that they would not employ someone who has had a mental health problem. How will the Government solve that conundrum?

[Chris Grayling]

The hon. Lady has made an important point, which I am sure her Committee will want to address. In fact, I was going to refer to the work capability assessment. These are important issues, and we clearly face a big challenge. There are 2.2 million people on old-style incapacity benefit, and we must do all we can to help as many of them as possible to return to work. Of course, not all of those people will be able to work and many will need to continue to receive unconditional support throughout their lives; but every organisation I have ever worked with, come across or talked to that works with people with disabilities and long-term sickness problems would like to see more of them back at work. We all believe that work will help those people, and I am determined that this part of the Work programme will make a huge difference to them.

[Toby Perkins]

rose—

[Chris Grayling]

I will give way once more, but then I really must make some progress.

[Toby Perkins]

I am grateful to the Minister, who has raised the important issue of people on incapacity benefit and the large number of people with mental health problems. Given his belief that the solution to those problems lies in the private sector, is he aware of many private sector employers who are rushing to employ people with a history of mental health problems or with a serious history of incapacity problems?

[Chris Grayling]

The key to supporting people with mental health problems and other disability issues is winning the confidence of employers, and the role that can be played by providers—whether in the private or the voluntary sector—in forging relationships with employers. I believe that as that relationship strengthens, as people start to obtain work placements and as employers start to work with some of those who have been on incapacity benefit, employers will become more ready and willing to provide extra opportunities.

I have no doubt that many businesses in this country want to do the right thing. I believe that, in general, members of our society recognise that we cannot go on with the same number of people stranded on incapacity benefit. I am confident that if we get the programme right and deliver effective back-to-work support for those people, the opportunities will be there and will grow as time goes by. I know there is consensus across the House on this proposal. We came up with it originally, and the previous Government adopted it. Now we are taking it forward, and we will work hard to refine the work capability assessment to ensure that we get it right. I look forward to working with the Select Committee and the hon. Member for Aberdeen South (Miss Begg) to achieve that. It is fundamentally important that we actually make a difference to those people, about a quarter of whom have claimed incapacity benefit for more than 12 years. That has had a devastating impact on the people themselves, and it is a burden we have had to carry as a society. We must do all we can to help as many as possible of those people to make something better of their lives.

All that, of course, is in addition to the support that will continue to be provided by Jobcentre Plus. I agree with the right hon. Member for Normanton, Pontefract and Castleford that its staff do a first-rate job, which in recent years they have done under great pressure. I am glad that that work is recognised on both sides of the House.

Our package of reforms is not just about getting people into a job, and it is not just about saving money; it is all about helping people to make more of their lives. We have heard so much from the Labour party in recent weeks about its policies and how they would have made all the difference, but I do not buy that; I do not think they are right. What we inherited from Labour was a series of commitments it could not afford and a series of plans that involved short-term solutions to its political problems, rather than long-term solutions for the individuals concerned and for our country. We need a fresh approach, which is why we believe so strongly in focusing on apprenticeships rather than the future jobs fund.

Apprenticeships provide an opportunity to learn new skills that are actually valued by employers. They give people a chance to learn a trade and to embark on a career, while also improving productivity and developing a talent pool. A Labour Member mentioned skills. I happen to believe that a well-run apprenticeship is a much better way of giving someone a platform for life. That is why we are spending £150 million on a programme involving 50,000 apprenticeships that can make a difference.

[Rushanara Ali]

rose—

[Chris Grayling]

I will give way once more, but then I must wind up my speech so that others have a chance to speak.

[Rushanara Ali]

May I ask once again whether there will be a job guarantee for those 50,000 apprentices? My question was not answered when I asked it earlier, and it is the kind of question to which my constituents want an answer. There is no point in people joining those programmes if there is no opportunity for them to get jobs when the programmes end.

[Chris Grayling]

We intend to continue the young person’s guarantee until the launch of the Work programme. However, there is no guarantee of a job at the end of any programme. The programmes are intended to create opportunities for employment. None of the last Government’s programmes involved a guarantee of a job at the end. The best we can do is to ensure that people are as work-ready as possible, and then try to provide an environment in which jobs are being created for which people can apply.

[Alison McGovern (Wirral South) (Lab)]

rose—

[Chris Grayling]

I said last time that I would give way only once more, but I will give way to the hon. Lady because I have not done so before. Then I must make progress and wind up my speech.

[Alison McGovern]

I am grateful to the Minister. It is fantastic that in my part of Wirral we saw a tenfold increase in the number of apprenticeships between 1997 and 2008. Does the Minister agree that the best thing we can do with apprenticeships—we all agree they are vitally important—is not to try to rewrite history or cut our way out of the recession, but to try to build business confidence so that investment in apprenticeships continues in my constituency and others?

[Chris Grayling]

One of the disappointing things about the last Administration was that we kept hearing the then Prime Minister make promises about numbers of apprenticeships. Year after year, we looked at how many had actually been delivered, and saw that they never hit the target. I hope we will not make the same mistake, and I believe that the 50,000 apprenticeships we have announced will make a difference to a large number people who will take them up as part of the Skills for the Future programme.

[Mary Creagh (Wakefield) (Lab)]

Will the Minister give way?

[Chris Grayling]

No; I am going to wind up my speech now.

I want to end by making a point about the overall context of our proposals. We are trying to create an environment in which business can grow, develop and flourish. The Budget was about that as well. The Chancellor announced measures to stimulate growth, including a reduction in the main rate of corporation tax and the rate of corporation tax for smaller companies, a reduction in the main and special rates of capital allowances, an increase in the enterprise finance guarantee, the creation of a growth capital fund, and the regional support with which we intend to help private sector employers to grow and develop in our regional areas. We also stopped the Labour jobs tax. All those measures are designed to create an environment in which small, medium-sized and larger businesses can grow, develop and create jobs in the next few years, and they have all been welcomed by business groups.

[Yvette Cooper]

Will the Minister give way?

[Chris Grayling]

Oh, go on.

[Yvette Cooper]

I thank the Minister for his generosity in allowing me to intervene again. He referred to support for the private sector and for private sector growth. Will he confirm that according to the OBR’s own assessment, in 2012-13 private sector employment will be 260,000 lower than it would have been under Labour’s Budget?

[Chris Grayling]

When will the right hon. Lady recognise that the Labour Budget was not affordable? It was taking the country down a path we could not afford. We have seen in the eurozone what happens if nations try to do things they cannot afford. Labour Members keep going on as if nothing had happened—as if all would somehow have been swimmingly good if they had returned to office, and all the problems would have been sorted out—but it is not like that. Labour Members are living in a fantasy land, but the reality is that business groups welcome what we have done.

Richard Lambert, director-general of the CBI, has said:

“There was clear recognition of the role that business needs to play in getting the economy back into shape, and generating the jobs and wealth needed to sustain economic recovery.”

The British Chambers of Commerce has said:

“The government’s decisive moves to cut the deficit will have positive effects on business and investor confidence. Even more importantly, the Chancellor's message that Britain is open for business will be welcomed by companies the length and breadth of the country, and across the globe."

That is what we need to do to create the environment in which Britain is a good place to do business again, and in which jobs are being created.

It has been interesting to listen to Labour today. To be honest, it has been like a Westminster version of “Life on Mars”. Suddenly we are back to the old Labour rhetoric of the past. They seem to believe that what we need is big Government to create jobs, and if we spend just a bit more all will be well. That is nonsense. We know that we need flourishing businesses if we are to create jobs for the future. We know that we need the right skills and technologies for the future. We also know that we need to ensure that everyone in our society has the chance to find the right opportunity for themselves. We heard some of those messages from new Labour in its heyday, but they were never followed through. We are all paying the price now. This Administration will not make the same mistakes that Labour made.

14:40

[Mary Creagh (Wakefield) (Lab)]

I was unable to intervene on the Minister of State on the role that big firms will play in creating the jobs of the future. I wondered whether he had seen the survey by the consultancy and accountancy firm Deloitte which concluded that big firms fear that a new recession will hit the UK. It said that business confidence has been knocked, in large part by the shroud-waving and fiscal hysteria from the Conservatives in creating the mood music for this draconian Budget. The survey of finance directors from 32 FTSE-100 companies and 93 UK companies accounting for 28% of the equity market showed that the net percentage of those who were more optimistic had dropped from 40% to 24%.

The hon. Member for Bedford (Richard Fuller) made a point about small business investment, but businesses need confidence if they are going to invest in the future. They will not invest in creating the jobs of the future if they are worried that this deflationary Budget, which will knock 1.3 million jobs out of the economy, will leave them high and dry. The money that they would otherwise invest could be kept for a rainy day or a potential future run on the bank.

[John Howell (Henley) (Con)]

The hon. Lady says that what business needs is confidence. I do not disagree, but most of all business needs money. It was her Government that deprived people of the money to make their businesses work.

[Mary Creagh]

That is an extraordinary allegation—that somehow the Labour Government took money away from businesses. I thought that it was the banks—[Interruption.] There was a failure of regulatory oversight, but it was not just in this country. It happened across the world. In future, economic historians will look at the psychological group-think that prevailed across the world in all Treasury departments. There was an economic orthodoxy that the level of growth was sustainable. In the end, the bubble burst and it was not sustainable, but we made the decision not to allow the collapse of a bank to mean that people lost their savings.

We also decided to follow the Keynesian route back to employment. For those Members on the other side of the House who are unaware of Keynesianism, I recommend an excellent article in The Independent by Robert Skidelsky, who was Keynes’s biographer. He is no left-wing madman: he is a sensible and respected economist. He has an interesting analysis of the Budget that makes sobering reading, and I recommend it to all hon. Members of whatever party.

[Mr Graham Stuart]

I am grateful to the hon. Lady for giving way. As ever, she speaks with passion if not on this occasion with quite so much knowledge. Business is struggling because when the economy was booming and it was necessary to curb the lending of the banks, the Labour Government did the opposite and loosened the conditions for lending. After the collapse, the Labour Government did the opposite and tightened the requirements on the banks so that they were unable to lend. That is how the Labour Government both fuelled the boom and boosted the bust and that is why business is struggling so much to recover from Labour’s disaster.

[Mary Creagh]

I am so grateful to the hon. Gentleman for that basic lesson in economics. He may not be aware of my past working as an adviser to small businesses and to MBAs at Cranfield university on how to set up small businesses. Our economic record between 1997 and 2005 was extremely good when it came to ensuring that new businesses were created—[Interruption.] Would he care to listen to my answer or does he just want to keep commenting from a sedentary position? He claims that we turned the tap on too fast and then turned it off. It is understandable that when Governments end up owning majority shares in banks, they want to ensure that credit flows to businesses—and we ensured that that was happening through the small firm loan guarantee scheme. Now, the banks are almost in a monopoly position, and we need more competition for high street banks and to change their risk aversion when it comes to lending to small businesses.

We are straying from the point, which is the effect of the Budget on unemployment. The OBR has had an extraordinary few weeks. It was set up and has published its little forecasts, but now suddenly Sir Alan Budd—who set it all up—is to leave. I have been in politics a few years now and when someone leaves unexpectedly, I try to work out why. Why is it that someone in a brand-new, start-up situation who wants to perform a public service is leaving? I wonder whether there has been a row. Perhaps in the future we will find out the real reason—perhaps that he was leant on for the employment figures, which are heroically optimistic. The OBR claims that more than 2 million jobs will be created in the private sector over the next five years, but John Philpott, the chief economist at the Chartered Institute for Personnel and Development, has said:

“There is not a hope in hell's chance of this happening. There would have to be extraordinarily strong private sector employment growth in a…much less conducive economic environment than it was during the boom.”

The hon. Member for Beverley and Holderness (Mr Stuart) says that we funded small businesses through the boom, but the OBR and the Treasury now claim that we will have a similar level of employment growth—another boom—but there is no credit to finance it and, by the way, they are cutting huge amounts out of the public sector. I will give way if any Member opposite can tell me how that will happen. I thought not.

[Mr David]

Does my hon. Friend agree that in many areas, including south Wales, there is a close relationship between the public sector and the private sector? Draconian cuts to the public sector will have knock-on effects on the private sector.

[Mary Creagh]

My hon. Friend makes a good point, and many skilled IT workers and other professionals will lose valuable public sector contracts as the so-called bureaucratic back-office functions are scaled back.

One of the ways in which the Minister proposes to help the unemployed is by laying off 2,000 jobcentre staff in the next few months. It takes a particular sort of genius to do that in a recession, and I bow to the greater knowledge of the Conservative Members. How will they help people back into work with fewer people on the front line?

[George Freeman (Mid Norfolk) (Con)]

rose—

[Mary Creagh]

I will give way to the hon. Gentleman; perhaps he can tell me.

[George Freeman]

I thank the hon. Lady for giving way to the greater prowess on this side of the House. I appreciated her comments earlier about the importance of the private sector. The fundamental truth in this debate is that the private sector does something that the public sector does not—it pays for the public sector. It pays for itself and its profits pay for the public sector. The hon. Lady nods, which is nice to see. As she worked in the private sector helping small businesses, does she agree that the biggest fear of people in the private sector is not cuts to the public sector, but the threat of a rising debt crisis with interest payments alone—now she shakes her head—forecast to rise to £67 billion a year? The effect that that would have on the sovereign debt crisis and the threat of rising interest rates could plunge this country into a serious economic crisis.

[Mary Creagh]

I thank the hon. Gentleman for his point. We are in danger of rehearsing the arguments that we had at great length on the Finance Bill last night. I chose not to speak in that debate, because otherwise it might have dragged on even later than it did. However, I do not think that someone running a corner shop in south Wales is worried about the interest payments on Government debt. Interest rates on Government debt are historically low, and the repayment period here for such debts is, at 14 years, longer than in the US and Greece.

Government Members need to be very careful about the shroud-waving that they have done in connection with the Greek fiscal deficit. The UK is in no way comparable to Greece, which is an island economy based on tourism—[Interruption.] If the hon. Member for Beverley and Holderness (Mr Stuart) listens, he might learn something. Greece has 178 different public sector pensions, and none of them is funded. In addition, matrilinear succession means that the wife inherits when a man dies, and that the daughter inherits when the widow dies. Trying to compare Greece to the UK is absolute madness.

[George Freeman]

Will the hon. Lady confirm first of all that I did not mention Greece? She has mentioned pensions, but the second thing that concerns the private sector is unfunded public sector pension liabilities, which also saddle the private sector economy. She seems to talk as though the public sector can somehow carry on spending money, but it is the private sector that has to pay for it.

[Mary Creagh]

In the end, we all end up paying for it. We made pension reforms to try and get people in the private sector to enrol in pension funds, because companies in that sector tend not to pay pensions or enrol their staff in stakeholder pensions. As a result, the taxpayer—the state—picks up the bill and we all end up paying for it. The important point is that the state is, in the end, the lender and the funder of last resort.

[Mr Graham Stuart]

Will the hon. Lady give way?

[Mary Creagh]

I will not take any more interventions, as this debate is turning into another Second Reading of the Finance Bill and I want to talk about unemployment and the future jobs fund.

In my constituency of Wakefield—which is well known to my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper)—700 places were allocated under the future jobs fund. We are not clear how many have survived the Government’s hatchet job, but I was privileged to welcome 50 young recruits to Wakefield council.

In addition, with my right hon. Friend I met three future jobs fund recruits at the Able project, an environmental scheme that uses a piece of disused land owned by Yorkshire Water that lies next to a sewage treatment works. One could not hope to find a less glamorous environment, but the project has created something very beautiful. Its organisers have worked with Nacro and the mental health trust to get people digging, growing, learning and being out in nature. The land is between a sewage works and a railway line, but it is an area of environmental beauty. The project has become a green business, coppicing the hazel and willow that grows there.

I met two young workers there, and we were able to buy some of the honey that they had made. They told me that they had had an apprenticeship but that the collapse of the business meant that they could not carry on. After six months on the dole, they were desperate to get something.

My right hon. Friend the Member for Normanton, Pontefract and Castleford and I made the visit in March, and the young workers told us that they did not know what was going to happen at the end of the six months. They asked us to try and make the period a year, as that would mean that they had a year’s experience under their belts. One young man was working visiting schools and showing children how to build nesting boxes.

The Able project is run by a third sector organisation, but I was aware that, at the end of his time there, the young man I had spoken to would have carpentry skills and experience of working with children. He was going to have all sorts of facts about nature and growing things at his disposal, with the result that a range of different organisations in the area could employ him.

I feel really heartbroken that that young man, the person whom I also met who is a support worker at Reconnect, a project that befriends older people across Wakefield who are at risk of isolation, mental health problems and loneliness, and the three people for whom I was trying to find work as wardens in Thornes park, are all now facing an extremely uncertain future.

[Richard Graham (Gloucester) (Con)]

Does the hon. Lady agree that one of the challenges for the future jobs fund is that, because the placements last only six months and have been taken up almost entirely by the public and charitable sectors, they do not provide future jobs? I have spoken to several charitable organisations in Gloucester, just as she has in her constituency. They have got people doing things very similar to what she has just described. They make the same points that she does, but they recognise that these are not apprenticeships. They are different: they do not provide jobs, but really just take people off the unemployment register for six months.

[Mary Creagh]

The point is that they are entry-level jobs. The future jobs fund takes people off the unemployment register for six months, but the important thing is that those people then have a CV that does not say, “I’ve been on the dole and I don’t know how to get up in the morning. I don’t know how to set an alarm because no one’s ever taught me. I’ve got used to staying in bed till half past 10 and then watching daytime TV.” Instead, their CVs say, “I’ve been doing something productive and am able to get myself to work. I’m committed and I’ve developed my communication skills.”

The young people involved may have failed at school and may not be academically successful. They need every chance that they can get: they may need a series of six-month placements to build up two years’ worth of experience, because it may take them much longer to enter the employment market than someone with an Oxbridge degree.

[Several hon. Members]

rose—

[Mary Creagh]

I have not finished, but I will give way to the hon. Member for Gloucester (Richard Graham).

[Richard Graham]

Does the hon. Lady agree that a real apprenticeship that lasts three years, like the 50,000 new apprenticeships that this coalition Government are committed to providing, is a much more genuine gateway to a real job than a series of six-month benefits and training programmes that has no real guarantee of leading anywhere?

[Mary Creagh]

I think that we should have both. I do not think that 50,000 apprenticeships will be enough; nor do I think that cutting Peter to spend money on Paul is a fair way to allocate resources.

[Steve Rotheram]

I am a product of something similar to the future jobs fund. In the late 1970s, there was something called a pre-apprenticeship scheme. I did six months on that and was very fortunate to complete it. The scheme was not just academic, as it gave me some transferable skills. It taught me to get out of bed and it led me, in later life, to do a master’s degree in contemporary urban renaissance. That is the sort of opportunity that the future jobs fund is providing.

[Mary Creagh]

I thank my hon. Friend for that intervention. He truly is a renaissance man, and I hope that many of the young people whom we met who got their entry-level work through the future jobs fund end up sitting on these green Benches. I hope that they can make the same incredible progress and journey that he has made in his life.

I turn now to the Work programme set out by the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling). I have a great deal of concern about it. In a speech on 27 May, the Secretary of State spoke about

“a single scheme that will offer targeted, personalised help for those who need it most, sooner rather than later”.

If it is a matter of sooner rather than later, why are we waiting until next year for it to come in? I suppose that that has to do with the fact that the Government want to set up what I presume is a national contract with large-scale training providers. I tried to intervene about this earlier, because the Government are asking those providers to bear the risk of training people even though their contract payments will depend on outcomes.

That raises a series of questions. First, at a time when deflation, very low growth or even a double-dip recession are all possible, why does the Minister think that the private sector will turn to the banks for loans to cover this training given that, as we heard earlier, the banks are averse to risk and not very good at lending? Output-related funding is currently calculated on the basis that it takes six or nine months to get a person into work and then 13 weeks to ensure that he or she has lasted in that job. Why does he think that organisations in the private sector such as Capita or BT will line up to take on the massive risk involved in training people and employing them, when there is such a huge amount of uncertainty?

I have another question for the Minister, and I will give way to him if he can answer. How does he think voluntary sector organisations such as Nacro—the National Association for the Care and Resettlement of Offenders—will be able to do this? Such organisations have specialist programmes working with the most difficult, hard to reach and disadvantaged people—prisoners, young offenders and ex-offenders. They have the benefit of being present in and running training courses in prison and are then able to offer some sort of continuity when the offender leaves. I am also thinking of providers such as Rathbone training, an organisation that I had the privilege of serving as a trustee for seven years. These are small-scale organisations—Rathbone’s turnover when I left it in 2005 was £40 million. Why does he think that they will go to the bank—or their trustees would say that they should go to the bank—and borrow up to £20 million at a time, with a personal guarantee of the trustees, who are jointly and severally liable, who are for a programme when it is not clear that they will get the rewards from it?

[Chris Grayling]

I am happy to intervene briefly to confirm two quick points for the hon. Lady. The first is that, as she will recognise, this is an established marketplace that has grown. What we are talking about, in particular, is scale as a result of the incapacity benefit migration. We are pushing the envelope further than it has been pushed before, but established principles are involved. She is right about protecting voluntary sector organisations. I would be making another speech if I explained the full detail of how to do that, but I can assure her that I regard those organisations as important as she does.

[Mary Creagh]

I am relieved to hear that, but I am afraid that that was not an answer and I am unable to wait for another speech from the right hon. Gentleman to hear these plans emerge. Let us consider the position of an organisation 90% of whose budget depends on public sector contracts. Organisations are planning next year’s budget now. They will be signing off budgets that need to be ready in February and the finance directors will be making those budgets ready in October, November and December. How will such an organisation make plans for 90% of its funding—that could be £35 million, or £37 million at 2005 prices—without knowing what the system and financing mechanism will be for voluntary sector bodies? If the right hon. Gentleman is to grant the voluntary sector privilege, will he not be in danger of doing something about which we have heard a lot—will he not be risking crowding out the private sector? I shall leave those thoughts hanging in the air.

Rathbone training works with teenagers who have had chaotic homes lives and who have encountered poverty and unemployment. Many of them have failed at school and many have had babies early in their lives. Rathbone carried out a survey of those young people, asking them which profession they would like to pursue. Everyone in the Chamber will probably be relieved to hear that only a handful wanted to be footballers, pop stars or WAGs. Instead, the majority of Rathbone trainees preferred more everyday jobs such as car mechanic or office worker. That was summed up by a 17-year-old lad from Newcastle, who said:

“I’m happy at the moment training to be a bricklayer.”

I just hope that he has a job to go to in the construction industry when he finishes his bricklayer training. On the current prognosis, I am sceptical about that happening.

I am concerned about the incapacity benefit reforms and the assertion that such a one-size-fits-all approach will be better. Why will it be better than programmes run by people in the public sector? I am not so sure that it will be. I am concerned that we are going around in a circle—we are going back to the 1980s, as my right hon. Friend the shadow Secretary of State said, and back to the 1930s. We are going into the failed Thatcherite schemes of the 1980s—a youth training scheme mark 2. In the current plans, however, there is no enterprise investment scheme—and that did exist in the 1980s. We have heard a lot about the need for a vibrant and flourishing small business sector, but these reforms contain nothing, as yet, that allows would-be entrepreneurs in constituencies such as Wakefield and Normanton, Pontefract and Castleford, as well as those in Liverpool, to set up their own businesses. I hope that the Minister, who is no longer in his place, will examine that.

[Mr Graham Stuart]

Does the hon. Lady regret the devastating effects on manufacturing of the past 13 years under the Labour Government? Does she have any thoughts on what can be done to encourage manufacturing? This is not just about construction and other private sector jobs, because we need to restore and rebuild manufacturing, which was growing in the last few years of the previous Conservative Government but has been devastated during the past 13 years under Labour.

[Mary Creagh]

I can perhaps turn the question around on the hon. Gentleman by asking him whether he regrets what happened to cities such as my birthplace of Coventry, where I grew up in the 1980s. All the car factories that I grew up around—the Massey Ferguson tractor plant, the Carbodies taxi plant and the Alvis plant, which used to make tanks, and the Coventry Chain Company—were all replaced, either by housing or by retail parks. The factories were all shut down during the short few years between 1984 and 1989, when thousands of incredibly skilled workers in those factories were lost. In addition, does he regret the fact that the previous Conservative Government shut down the coalfields of Wakefield, which could now be doing something to reduce our dependence on foreign energy supplies? I shall leave that matter for another debate.

I am concerned about the effect of benefit cuts on women. I am keen to hear from Conservative Members about the move to employment and support allowance and to jobseeker’s allowance. A little piece in the Red Book says, “After you have been on JSA for more than a year, your housing benefit is cut by 10%.” I am keen to hear from the Conservative Front-Bench team whether women with children—these children may be only a year old—will be affected by that proposal. If they are affected, that is an incredibly draconian policy.

I have no problem with women who have children going out to work. I am a mother of two children and I came back to work here when my child was six months old. I have no problem with encouraging mothers to get out of the home and into the workplace, and expecting them to begin the search for work when their child is three and has access to the free nursery place is very important. The idea that one can say to a mother with a babe in arms, “You have to put the baby into child care and go out to look for a job otherwise your housing benefit will be cut by 10%” is, as my right hon. Friend the shadow Secretary of State said, a return to the Victorian values of the workhouse and the notion of dividing the poor into two segments: the undeserving poor and the deserving poor. I leave that thought with hon. Members.

I shall now discuss the issues associated with people moving house to find work. I have no problem with mobility, because people should look around, think and open their horizons in the search for work; my parents are Irish and they came to this country on the boat—not on a bicycle—in the 1960s, finding gainful employment in Birmingham and then Coventry, where they settled and got married. However, we need to examine carefully the psychological impacts of asking people to leave their homes to look for work. One of the great untold stories of the Irish diaspora is the psychological impact that emigration has on the mental health, the alcohol dependency and the level of premature death of a particular community. The Irish are the only community whose life expectancy decreases upon emigration to this country. That is perhaps a little-known fact, and I can see the hon. Member for Beverley and Holderness (Mr Stuart) is thinking it through.

That is what happens when people move away from their communities, so it is very important that we ensure that we have the structures in place so that people can be supported if they want to move. I would turn the question around by asking another one. Let us consider what would happen if someone from Wakefield or a high unemployment area wanted to move in order to work, found themselves a job in London and went to one of the city centre local authorities, such as Hackney, Camden or Islington, asking to be put at the top of the housing waiting list. What would that do to the Islington, Camden and Hackney residents waiting to get out of overcrowded accommodation? How would seeing people coming in from outside and getting houses affect them? Would any such provision have to involve a minimum time that someone keeps a job? Would people have to stay in their job for three months, six months or a year? If they lost the job after 12 months through no fault of their own, could they keep the house or would they be expected to make the long train journey, or the long car journey back up the M1, to the city that they left?

I conclude by discussing unemployment and what it means to Opposition Members. For us, unemployment is not a theory, an abstract thing or a thing that has to be tackled. For us, unemployment is what happened to our families, friends, communities and, in the recessions of the ’80s and ’90s, ourselves. As for the idea of the big society, I say to Government Members that our society is not broken. Over 13 years, our Labour Government spent a lot of time, energy, money and thought trying to mend the broken society that Thatcher and Major bequeathed us in 1997.

In 1979 there were 1 million people on the dole, and the Conservative party won that year’s election with the posters of unemployment queues and the slogan, “Labour isn’t working”. Three years later, 3 million people were on the dole, a level of unemployment that had not been seen since the depression of the 1930s—a particular type of genius that the Conservative party has in pursuing flawed and deflationary economic policies.

I remember, during my childhood, coming down to breakfast and hearing the figure for the number of cities where riots had taken place in 1981, and I could not believe the number of places where people had spontaneously gone out and created mayhem and anarchy because they were tired of being left behind. I remember the songs, such as “One in 10”, about the one in 10 unemployed, and the song about my city of Coventry, “Ghost Town”. It was a ghost town. That is how I grew up, and I do not want any child or constituent of mine to grow up in a ghost town. Opposition Members will continue to focus on unemployment, because, as my right hon. Friend the Member for Normanton, Pontefract and Castleford said, for us it will never be a price worth paying.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. This is an important Opposition debate, and I want to give some gentle guidance. Hon. Members will be horrified to learn that we cannot go on until half-past 2 in the morning today, and that we intend to call the winding-up speeches at about half-past 6. If everyone wants to get in, and if people speak for wildly longer than 12 minutes, not everybody will be satisfied.

Also, I love interventions, which I think help the debate, but if they become mini speeches fewer people will get in. So, if we show some restraint, that will be very welcome to the entire House.

15:12

[Mr Oliver Heald (North East Hertfordshire) (Con)]

The House appreciated the passion with which the hon. Member for Wakefield (Mary Creagh) put her case, but if she were being frank she would accept that, in the 1960s, 1970s and, again, in the 1980s, this country faced some difficult economic problems. If she looks back at the history of interventions in the job market, she will see that since 1979 we have tried various options. Indeed, there has been some success in putting people back into work by using employment-market interventions, but I am sure that in her heart of hearts she will accept that we have let many people, particularly during the past 13 years, fall by the wayside.

The people who were getting jobs through Labour’s employment schemes had skills or were in the age bracket of 25 to 49 years old. Many other people became part of that workless group whereby 3 million homes had no adult of working age in work at all. Those people were not seen on programmes, and very few of them were seen at all, so we need to consider a programme that really challenges that situation and looks to provide the help that people need in all aspects of work. Too many schemes have been based on just one benefit: if people were on one particular benefit, there was a scheme for them; and if people were from one age group, there was a scheme for them. However, we need something that captures all the issues and removes all the barriers to employment, so that everybody gets a fair deal from the Government.

There are some encouraging signs in the labour market. The Chartered Institute for Personnel and Development’s latest quarterly survey shows for the first time in six quarters a plus 5 figure for the employment intentions of employers: they do intend to employ people. The figures for the south-east are particularly good, showing a strong intention to employ. Equally, Reed in Partnership, an excellent contracting company, has shown that the number of advertised vacancies is up by 5%, so there are some encouraging signs. However, the real question is whether the increase in private sector employment will be enough to deal with the undoubted fall in public sector employment and the likely redundancies there. That is the challenge for the next few years—to ensure that private sector employment increases sufficiently.

At The Times CEO summit last week, Sir John Rose, chief executive of Rolls-Royce, one of our best companies, was reported to have said that we as a country were very self-satisfied about the services boom in the Labour years, but that during that time manufacturing capability and competitiveness were on the slide. He noted that in higher education we are educating 7,000 people a year in media studies, at a time when China is educating technicians and people who will have skills in the nuclear industry. He rightly said that during that period we did not concentrate enough on investment in technical education at the secondary and tertiary levels, and that we need to address that issue if we are to have a future of success in the private sector.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

On Reed in Partnership’s job index, the hon. Gentleman mentioned the figure for growth, on which the organisation comments in its press release, but that growth is predominantly in financial services, accountancy and insurance. The index also states that, compared with February, the figure for this month in charity and voluntary work is minus 30 index points; in construction and property, it is minus 7; in engineering, it is minus 8; in health and medicine, it is minus 19; in scientific, it is minus 6; in social care, it is minus 8; and in training, it is minus 15. In the north-east—my area—the salary index has also fallen, so fewer jobs are being advertised for less money.

[Mr Heald]

I think the hon. Gentleman is wrong, because the headline figure shows an increase of 5% over the past six months, but he is right about the differences between sectors and regions. He makes an important point, which we should not ignore, and I shall return to it later in my remarks. However, Sir John Rose’s point was also well made. On the question of what needs to happen in this country, the role of apprenticeships should not be ignored, and 50,000 more apprenticeships are welcome, particularly given the good quality of education that they provide in technical areas.

In the latest CIPD survey, there is a lot of criticism of the abilities and work-readiness of our graduates, and there is a lot to be said for schemes such as internships, which get people ready for work so that they can do a good job as soon as they enter employment. I represent North East Hertfordshire, and a good thing about Hertfordshire is that we, as a county, have a series of institutions that are business-facing but educational. Our colleges are business-facing, and our university is well known as business-facing, which means that the county asks businesses what skills they need and our university provides the skilled workers. In terms of the employment service in Hertfordshire, if a graduate who is placed with a Hertfordshire company needs an extra skill, our university will teach them it, and our colleges all feed into that. It is no coincidence that we have the lowest number of NEETs in the country.

[Mrs Jenny Chapman (Darlington) (Lab)]

Teesside university, the university of the year, is basing itself in my constituency, and I am quite interested in the hon. Gentleman’s idea about graduates not being prepared for the workplace. Will he please identify exactly when in the history of university education employers said, “All our graduates are prepared for the workplace”? When was that golden age of preparedness?

[Mr Heald]

The hon. Lady makes an extremely good point, which is that we are not good enough as a country at preparing people for work. If we look at why we have so many workless families, and why employers are dissatisfied, it goes right back to the beginning—to school. The fact is that 40,000 young people leave school every year in this country who cannot read, write and add up properly. It is not good enough that we do not have the technical people we need in business coming through. This is a failure of the whole system that needs to be addressed. [Interruption.] The hon. Lady chunters, but Sir John Rose is probably one of the most eminent chief executive officers in the country, he is running a company that is a great success story, and he is right to highlight the need to do better on technical education and skills.

Over the years, we have had a range of employment programmes that have not succeeded as well as we would have hoped. A few years ago, the Work and Pensions Committee looked into what contractors can achieve. We did a major report on how the Department for Work and Pensions commissions employment programmes and the role of prime contractors. We were encouraged by the international examples. We looked at what had happened in Australia and visited the Netherlands to look at what was being done there. That seemed to show that contractors were able to provide programmes more cheaply, but also to get better results. Professor Finn, who was advising the Committee, found that Australia was achieving, through “contractorisation”, an improvement of about 10% in job readiness and people’s ability to find placements. In the Netherlands, we were told very strongly that the people who ran these contractor companies were able to specialise provided that they were given enough flexibility in respect of the barriers to employment that there have been and still are.

Looking at the picture overall, I have reached the view that as soon as a person is not working, and we are aware of that, they must be interviewed to find out what the barriers to employment are that they face and start to tackle them. If somebody has basic skills problems, we need to get on to that at an early stage and tackle it—and equally, if somebody needs child care or has a problem with addiction. These are all areas where action is required. In relation to the work capability assessment for incapacity benefit, a lot of people have not been seen for many years, and the on-flow that has been examined so far seems to suggest that many of them are capable of doing some kinds of work, but not necessarily all kinds. Those people need considerable help.

If we are to help people who have the classic problems suffered by those on incapacity benefit—musculoskeletal problems such as back injuries, and mental health problems such as stress, and worse—it is very important to get in with an early intervention. More can be done by employers, the NHS and the system as a whole—including, perhaps, the companies that provide insurance for people who are unable to work—in getting together to see whether they can do more to get this help in quickly. It is not acceptable that somebody of working age who has a back injury and needs physiotherapy has to wait 10 weeks for an appointment whereas if they were seen quickly they could get back to work. I ask the Minister whether it is possible to have liaison and discussion with the NHS, employers and insurance companies to try to do better in getting involved more quickly and stopping some of these conditions becoming chronic in the first place. With back problems, that means physiotherapy; with mental health problems, it may mean talking therapies as well as the drug treatments for depression of the sort that are available these days.

Yesterday, I talked to people at the National Ankylosing Spondylitis Society, who said that all too often they have to wait a long time for the treatment they need to deal with their condition. For people of working age, we need to prioritise their health and have something amounting to a national occupational health approach so that we do not end up with a lot of people who become chronically ill. It is well known that someone who has been out of work with a disability for two years is very unlikely to work again.

I welcome the Work programme. The criticisms that have been made of it are a little unfair, if I may say so. The fact is that the economy has been put into a terrible situation by the previous Government. The future jobs fund is a scheme that has only just started, and it is not as though it is not being replaced by something that is probably better—namely, more apprenticeships. It is a bit disingenuous to describe it as a jobs fund, as though these are permanent jobs, when they are really job placements for six months.

[Tom Blenkinsop]

Speaking of disingenuous elements, the Government’s amendment refers to

“policies to stimulate private sector employment by reversing the damaging increase planned for employer national insurance contributions”,

which implies that that was a jobs tax. Is it not really the case, particularly for the north-east, as I have been advised by the North East chamber of commerce and the Federation of Small Businesses in the north-east, that the real jobs tax is the VAT increase that the Government have proposed?

[Mr Heald]

If the hon. Gentleman thinks about when we got 2.5 million extra jobs in our economy in a three-year period, he will recall that it was under the Conservatives in the 1980s. That was done by allowing businesses to have lower taxes and to be less regulated—by really giving them a boost. We need to do something similar to help business and to get off its back. We also need to provide the technical training that Sir John Rose talks about, together with a scheme that helps the workless—the people who have been left behind in the plethora of employment schemes that we have had for the past 30 years.

[Tom Blenkinsop]

What about 1979?

[Mr Heald]

If the hon. Gentleman looks back at the mess that this country was in when the Conservatives came into office in 1979 after the Labour years, he will see that it was not an easy period to be in government. He must accept, surely, that if we can improve on what has gone before, that is the best thing to do. We need to listen to somebody who is a thoughtful CEO saying that we need better technical training; to look at the idea of apprenticeships as good-quality training, which we all agree about really; to try to have internships so that our graduates are job-ready; and, on top of that, to have a Work programme that does not leave anyone behind, that is streamlined, and that involves contractors sooner rather than later. Surely that is the wisdom of our time.

[Tom Blenkinsop]

Interestingly, the majority of men and women on site in the steel and chemical industries in my area are in either their late teens or early 20s, or in their late 40s or early 50s, which suggests an 18-year period when apprentices were not taken on.

[Mr Heald]

The hon. Gentleman is right that in periods of our history, both sides of industry have not distinguished themselves in supporting apprenticeships adequately. I do not know whether he agrees with that, but now is the time to do the right thing, and to support apprenticeships and technical education. We need a scheme that works on the Work programme side, and hopefully this country can come roaring back from the mess it was left in by the Labour Government.

15:28

[Gordon Banks (Ochil and South Perthshire) (Lab)]

It is a pleasure to follow the contribution of the hon. Member for North East Hertfordshire (Mr Heald), but I want to talk about the construction industry and my constituency, and I am sure we will come across other related matters. I refer the House to my declaration in the Register of Members’ Financial Interests.

I was involved in the construction industry for more than 30 years before I was elected to the House in 2005. Frankly, I am shocked at what has happened in the industry in the past few years, and I greatly fear what will hit us in the near future. I started my own business in 1986, so I have weathered a few storms, but I fear that the future has something terrible in store for the industry. If it is bad for the industry, it is bad for jobs.

In the past few years, the construction and housing sectors have contracted massively. With that contraction in activity has come a contraction in the number of jobs. When the banks went into meltdown, the previous Government reacted appropriately. There was action to protect investments and to support failing banks, and genuine attempts to get money back into the marketplace. Although that proved a little more difficult than I would have hoped, that positive action saved jobs. However, now we risk all that effort.

It was necessary for the public sector to step in when the private sector failed—let us not forget that that is what happened. My background is in the private sector, and I am proud of the UK’s private sector—or at least part of it. It should be a driver of growth and the major contributor to addressing our budget deficit, but how will that happen when the private sector remains very fragile and the public sector is faced with ill-thought-out, ideological cuts?

The construction sector is a good example of that. The industry has some 250,000 businesses and employs more than 2 million people in the UK, with turnover of about £6 billion. We had the second largest output in the European Union—I do not know whether we still do—and we all know the role that the industry has played in the UK’s progress in recent years. It is a private sector enterprise, but its clients are both public and private sector. Businesses generally need the construction sector to expand, as does the state, when they are intent on improving the quality of life of citizens.

There are vital sub-sets in the construction sector. Construction product companies have annual turnover of more than £40 billion and employ more than 650,000 people in 30,000 companies. In Scotland, almost 12% of the work force are employed in construction or in some form of building-related activity, whether as a joiner on site, a planner in a local authority office or a lorry driver delivering materials to a building site. Sadly, that is changing for the worse. All those jobs are under threat.

[Mr Graham Stuart]

One great mystery of the past 13 years is that there were record levels of immigration under the Labour Government and record lows in the number of houses built, particularly affordable housing units. I do not know the explanation for that, but I would be interested hear whether the hon. Gentleman, with his background in construction, has any thoughts on how we can increase the number of housing units in this country, so that we can tackle homelessness and boost the construction industry, jobs and employment.

[Gordon Banks]

I will address that in greater depth and detail in a few minutes, but the right solution is a joint public and private sector solution. The solution cannot be driven by one of those alone—it is not an either/or question.

The housing sector enjoyed some useful periods in recent years, prior to the recession. When it delivered large profits for many developers, it also delivered jobs in our economy. The sector was a driver for the economy, but the current situation in the private house building sector is absolutely desperate. There were 40,000 home loans in April 2010, which, if projected over a year, would be fewer than half a million. If that is the annual figure, it will be the lowest since 1974, yet the need for housing is ever growing, as the hon. Member for Beverley and Holderness (Mr Stuart) pointed out. Our desire to own our properties continues to grow, and we should encourage such aspirations.

To generate jobs in the housing construction sector, we need to increase the number of higher loan-to-value products, and reduce the 25%, 30% and 35% deposit demands from the mortgage industry. The mortgage products that were on offer before the recession were unsustainable, and we had the ridiculous situation of lenders lending 125% of the value of properties. Everybody has responsibility for that—the Government, lenders and borrowers—but I am concerned that the cuts in interest rates in the past few years have not been passed on to mortgage deals. That is stifling the market, and therefore costing jobs. Although interest rates are an issue, the loan-to-value ratio is the main problem.

[Catherine McKinnell]

Does my hon. Friend share the concern that a constituent of mine raised with me this weekend? He and other young people he knows who work in the public sector in Newcastle are all in fear of losing their jobs. They had planned to move house, but they have put that on hold because of that fear, and they know that many of their contemporaries are in the same situation. There is a real worry about great damage being caused to the housing market, particularly in my region.

[Gordon Banks]

That is very well put. It is a real problem and so, too, more broadly, is the effect of public sector cuts on the private sector. That will stop the private sector growing and providing the jobs and profits that the Conservatives expect it to create to get us out of the mess we are in.

We need to get to a sustainable level of 90% loan-to-value mortgages to generate jobs in the sector, but it does not stop there. If someone buys a new car they put fuel in it, and because of efficiencies it is probably a lot less than they had to put in their old car. However, people who buy a home spend additional money. Ask any retailer and they will say that they need a buoyant housing market, both new and second-hand, for the high street to be a busy place. Home buyers purchase carpets, furniture, white goods, televisions, curtains and more. This is therefore the one industry that directly feeds the spending of considerable sums of money into other sectors.

In 2007 there were 357,800 first-time buyer mortgages, and the Halifax produced data that suggested that the cost of furnishing and equipping a new property is about £6,000, so that equates to about £2.14 billion of high street spend from first-time buyers alone. If we multiply the original figure by the number of people in each property purchase chain, we see that the true amount of high street spend might be double or three times more. In short, support for jobs in the housing sector is delivered by the availability of appropriately priced mortgages, but that is lacking today.

Turning from housing to construction, I supported the last Government’s commitment to bring forward capital spending projects, and I should pay tribute to the councils in my constituency and the last Labour Scottish Executive, who delivered six new secondary schools in recent years, and the health board, which has delivered a new community hospital. I am also grateful for the introduction of rail services to Alloa and the new Clackmannanshire bridge.

All those projects were started under Labour. They are now finished, and because of the failure of the Scottish National party’s Scottish Futures Trust there is nothing coming along behind them to match the brick-for-brick commitment we have been given. We heard in the House just this week about the Government’s plans for the Building Schools for the Future programme, damaging our infrastructure, not giving children the best possible start and throwing people on to the scrap heap in what might be called the triple whammy. We need to invest in our infrastructure. Doing so improves the infrastructure, improves lives and creates jobs.

We also need an active home improvement market, but I fear that the recent announcement of the 20% VAT rate will decapitate what was beginning to look like a possible lifeline to the industry. The loss of 1.3 million jobs will not help either, but let me first deal with the VAT effect. Many Conservative Members derided the effectiveness of the last Government’s reduction of the VAT rate to 15%. They said it would be ineffective, but we all know that that was not the case.

There are real worries in the building industry about the new VAT rise. It will harm in many ways. First, it will chase people away from embarking on improvements, and in doing so it will cost revenue and jobs—and if it costs jobs, it will cost even more revenue. It will encourage a black market as people turn to cash-in-hand jobs to save that 20%, and what will that do? It will lead to a loss of revenue. Cash-strapped home owners will become increasingly vulnerable, and the £170 million that was estimated to be taken on the housing sector black market this year looks set to grow.

[Ian Lucas (Wrexham) (Lab)]

I am listening very closely to what my hon. Friend is saying. As a former Minister with responsibility for construction, I think the VAT increase on environmental improvements to homes is a major error, because it disincentivises people from making homes more energy-efficient. I cannot see a more short-sighted measure in the Budget.

[Gordon Banks]

My hon. Friend is right, and it is not just about the environmental or green side; it is also about quality of life. The quality of a property has a knock-on effect on children’s ability to grow up and learn, so there will be a negative effect all round. I am not sure that he, as a former Minister with responsibility for construction, will enjoy what I am about to say, but I think there is a strong argument for reducing VAT to stimulate the economy, just as the last Government did, but in a more targeted way. Reducing VAT to 5% on the labour element of home maintenance repair and improvement work could, as argued by Experian, create an extra 55,000 jobs this year alone. What the Government are doing will cost jobs. The views we have heard today about job growth are not shared by the Federation of Master Builders, which argues that 7,500 jobs will be lost in small and medium-sized enterprises in the construction sector this year alone as a result of the VAT increase. When the multiplier effect is taken into account, the effect on small and medium-sized construction companies in this year alone could be the loss of between 23,000 and 25,000 jobs.

There is another cause for concern. If firms go bust, close down and lay off workers, they will be in no position to train apprentices for the future.

[Jim Shannon (Strangford) (DUP)]

The hon. Gentleman mentions the construction industry, which I think is relevant to all hon. Members in the Chamber; it is certainly relevant to the area I represent. Does he agree that the Government should try in particular to help those aged 50 and over who have worked in the construction industry all their lives? They cannot get jobs anywhere else and find it hard to retrain.

[Gordon Banks]

I do agree, but I would much rather see them retained in the construction sector. There is a strong argument that the construction sector can drive economic growth in this country, and I would like the Government to take that forward.

As I said earlier when I intervened on my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), if we do not deliver skills learning for apprentices today, we will have a skills shortage in future and that will have an economic impact. That should not be tolerated, but we have to understand that struggling businesses do not take on apprentices; they survive day to day and fight day to day. The last thing they are thinking about is having an apprentice, because they are thinking about getting through the day without the bank phoning them.

When the construction industry loses jobs, there is a lack of focus on the resulting suffering because it does not affect 2,000 or 3,000 people all under one roof. They are in different places around the United Kingdom, and when jobs are lost, it is 20 jobs here and 40, 50 or 100 there. That makes it very difficult for the construction sector to show the impact of policies and to get through to the Government and people in general the impact of decisions. It is very easy to see what is happening when a car plant or a big manufacturing location is threatened with closure, but it is very difficult to take on board everything that is happening in the construction sector because it is so disparate and is spread throughout the UK.

Before I discuss my constituency, I make one last plea for the construction sector. It is vital for training, revenue and business growth, and it is vital for improving public services, which I want to improve. It is also vital for improving the quality of life of UK citizens. I strongly urge the Government to recognise that and to invest in it accordingly.

My constituency is quite large and varied, with a rural aspect to much of it. We have industry, of which we are very proud. Some of it is excellent. There are businesses such as Highland Spring, Vector Aerospace, Owens-Illinois and Diageo, and I want to focus on two of those, their interdependence and the impact of the VAT increase. Diageo has long had an interest and a presence in Clackmannanshire. The county is very proud of that business, as it is of Owens-Illinois—or the Glassworks as it is called locally. The interdependence is that one of the companies produces the packaging for the product that the other produces.

My concern is that the VAT increase will impact negatively on product sales, which will impact negatively on the requirement for packaging. If that occurs, the safety valve will be jobs. It is not rocket science—it is simple and straightforward. In my opinion, and as we heard yesterday, the recent reduction in the budget deficit is a result of increased tax take arising from businesses getting back on their feet, from people being in work and from a return to growth. The VAT increase puts all that at risk. It is regressive, hits the poorest hardest and will result in job losses. It will not deliver the revenue necessary for the Treasury, and it could have a negative effect that might deliver a downward spiral. The VAT increase coupled with the axing of the future jobs fund makes the outlook anything but secure.

We have discussed today why the future jobs fund has been cut, and I am afraid that I and my Opposition colleagues do not understand why it has been cut. We also do not understand why the Prime Minister, who thinks it is a good idea, has decided to cut it. It is interesting to see some Liberal Democrats in the House this afternoon, because they think that the future jobs fund is a good thing, too, but have played their part in cutting it. In fact, the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), said:

“We have no plans to change or reduce existing government commitments to the Future Jobs Fund. We believe that more help is needed for young people, not less”.

In Scotland, some 11,000 young people will be discarded as a result of the Prime Minister and the Lib Dems going back on their word. Much more can be said about the Government’s support for jobs—or lack of it—but I will end by saying this. The VAT increase will cost jobs, axing the future jobs fund will cost jobs, and failing to recognise the importance of the construction and housing sectors will cost jobs. They will all cost revenue, ruin lives and put the recovery at risk. None of them are a chance worth taking.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Before I call the next speaker, I would appreciate it if Members could try to aim for 11-minute speeches. If they do not, not everybody will get in. I did not want to put the clock on, but I am being tempted. I understand that Members have a lot to say, but I ask them not to forget, if they take interventions, that if they can stick to around 11 minutes I will be much happier.

15:48

[Elizabeth Truss (South West Norfolk) (Con)]

We have heard a lot of talk from the other side of the House about jobs and growth, but over the past 13 years we have seen illusory growth and illusory jobs that have been fuelled by public spending and paid for by unsustainable debt. Let me give an example: the National Audit Office published a report that suggested that between 2002 and 2007 the jobs created by regional development agencies cost £60,000 each. For every new job, the Government effectively spent £60,000. Such a level of public sector job creation is not the way that we will increase jobs in the long term.

There has also been a lot of talk about evidence, but if we consider the evidence of what creates growth and what creates jobs—I have looked at some international Treasury studies on this—we see that the most productive area of public spending as regards growth is infrastructure spending and the second most productive in terms of growth and jobs is education spending. That is where the Government should be focused and that is where we are rightly focused.

[Mr Lammy]

In the light of what the hon. Lady has just said, which was put very well, will she make representations to the Government about the closure of the Building Schools for the Future programme, which is at the centre of both education and infrastructure in this country?

[Elizabeth Truss]

The evidence suggests that the most productive education spending is that on the quality of teaching, not on the quality of the buildings. I am happy to discuss that further with the right hon. Gentleman, and I will do so by letter if he likes.

Moving on to the reports that demonstrate that infrastructure spending is the most effective way to spend, it is not just those in ivory towers who think that—indeed, the Library agrees—but local businesses in my constituency do, too. I asked them to give me their priorities for what the Government should do for South West Norfolk businesses. They said, “No. 1: improve the road and rail links. No. 2: get the performance up in our schools, so that we have the skills that we need locally.” That is what people say.

[Gavin Shuker (Luton South) (Lab/Co-op)]

In the light of what the hon. Lady has just said, will she say a few words about the cancellation of the A14 project, which is vital to her region and my region in the east of England?

[Elizabeth Truss]

I am in the process of making representations on the A11, which is a crucial project that would open up businesses in Norfolk. We should assess such projects—I shall come to this later in my speech—on the basis of economic return. We have a very small pot now, owing to what has happened and the money that has been spent in the past few years, and we need to use that pot wisely. I should like to see the evidence on those various roads and consider the highest rates of return. That is my answer to the hon. Gentleman’s point.

Given that businesses would like growth to be created in that way, so that they can create jobs, where have the last Government spent the money? Have they spent it on infrastructure? The World Economic Forum report suggests that Britain is sixth in terms of gross domestic product. Where do hon. Members think that we are on the infrastructure table after 13 years of Labour Government? We are thirty-fourth. That record has created the problems that we see: new jobs are not being created in the private sector because the money was not spent. Not only did the last Government fail to fix the roof while the sun was shining, they failed to fix the roads while the sun was shining, and we are left with that legacy. We are left with a difficult position. Not only are there potholes in our roads, but there is a huge hole in our budget. We must ensure that we spend on things that provide value for money.

[Gordon Banks]

Is the hon. Lady carrying on from where I left off and advocating significant investment in the construction industry? A simple yes or no would be good.

[Elizabeth Truss]

Such decisions should be based on the economic return, as I have said. That is how we should consider spending our money. The problem with the previous Government is that the money has gone on politically motivated white elephants, to gain good results in Government elections or to placate interest groups. We have not seen value for money.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

Is one of the other areas on which the previous Government wasted a huge amount of public money the most convoluted procurement processes for the spending of taxpayers’ money? That money should have been spent on the infrastructure that my hon. Friend has spoken about so well.

[Elizabeth Truss]

My hon. Friend is absolutely right. Not only was the analysis of where the money was spent incorrect, but the processes by which it was spent were cumbersome. I believe that the Building Schools for the Future process had nine stages. That has taken a lot of money that could have been used to create real jobs in our economy, by improving our infrastructure and education. I completely agree.

We have heard a lot of arguments from Opposition Members about how people would support a particular fund or a particular level of spending, but we have not seen a cost-benefit analysis. We have limited funds. We need to prove that those funds are better used on one project, such as the future jobs fund, or another project, whether that is the A14 or the A11. We have not seen such analysis. What we have heard from Opposition Members is a number of anecdotes. I do not think that anecdote is a good way to conduct government. We need to conduct government on the basis of evidence.

[John Howell]

Would my hon. Friend put the £13 billion spent on regional development agencies since 1999 in the same category as the white elephants that she has been describing?

[Elizabeth Truss]

I would. That is not to say that everything spent by RDAs was wrong. There have been many good projects. But the way it was spent and prioritised did not use Government money to its best effect. That is my point. That is why I want to see the Government assess projects on the basis of economic return, as I mentioned earlier to the hon. Member for Luton South (Gavin Shuker). I want the way in which the projects are assessed to be fully open and transparent, so that we can have a proper debate about the best way to spend our limited money.

It will be growth on the basis of real jobs and on the basis of decent infrastructure, good railways and roads, that will seal our economic future in the right direction, not pursuing the initiatives and schemes that we have seen time and again during the past 13 years, frittering away valuable money. It is our money, not the Government’s money. Ultimately, it is the money of all those in my constituency who pay taxes.

[Alison McGovern]

It is interesting to hear how fearful the hon. Lady is about incorrect spending on infrastructure projects and what she said about how the Labour Government wasted money. My region has seen great benefits from the improved infrastructure on the west coast main line, and we were looking forward to reconnecting the whole of our region, led by the RDA, with the Manchester rail hub. Will she call on Government Front-Bench Members to commit to those infrastructure projects? Will she acknowledge to the House that the money that was spent on infrastructure by the Labour Government was extremely helpful in resetting our national economy?

[Elizabeth Truss]

I am afraid that the hon. Lady’s intervention illustrates the problem with Labour Members. They present schemes, but there is no ex-post or ex-ante analysis of their economic benefits. The hon. Lady asks a question, but does not produce the evidence. Again, I would be happy to discuss that with her later, but she did not present the evidence. We must have debate. Not only are we talking about what we are putting in, we are also talking about the benefits that we get out. We need an economic policy that is based on the costs and benefits and that talks about the important areas of spending. I am pleased that the Chancellor in his Budget decided not to reduce capital spending further, but to make sure that it will go ahead so as to have a proper basis for economic growth and jobs in the future. That is the important area that we need to be looking at.

15:58

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I am delighted to follow the interesting speech of the hon. Member for South West Norfolk (Elizabeth Truss) on the need for an economic benefit analysis of every decision that is taken by Government. That is one of the factors that led to the devastation of many of the regions, because some things cannot be measured in pure economic benefit alone. There is also the social value of projects. That is why I want to address the House today on the disproportionate and unfair impact of Government spending cuts on the north-east of England—and, I am sure, on many other regions, but I speak for my own today.

In Newcastle upon Tyne North, we have many public sector workers, but we also have several major private employers, including Sage, Nestlé and Sanofi Aventis. Projects in recent years, such as Newcastle airport industrial estate, Newcastle Great Park developments and the development of many retail outlets, have diversified the local jobs market in Newcastle. None the less, many of my constituents are long-serving and dedicated public servants who stand to be directly and swiftly hit by the Lib-Con austerity drive.

In Newcastle upon Tyne North, the current situation has come as no surprise, because during the election campaign the now Prime Minister publicly identified the north-east as a region where spending was unsustainable and where public sector employment was simply too high. The first wave of public cuts were announced on 24 May, and now we have the ideologically motivated cuts laid down in the Budget.

[Jim Shannon]

It was not only Newcastle that was mentioned; it was also Northern Ireland. The Prime Minister was quick off the mark there. However, the level of public sector economic activity in Northern Ireland is almost 27%—5.2% above the UK average—and the dependence on public sector jobs is perhaps greater there than in other parts of the UK. I say to Government Members that it is important that the private sector is increased before anything happens to the public sector. I want everyone to be aware that the impact will be great, as the hon. Lady has said.

[Catherine McKinnell]

I thank the hon. Gentleman for his intervention. He is absolutely correct that those two regions were identified by the Prime Minister as specific targets for cuts. Recent announcements have made it clear that the future is particularly distressing for regions such as mine and that of the hon. Gentleman.

[Mr Timpson]

The hon. Lady suggests that the cuts announced in the Budget are ideologically driven, but does she accept that she stood on a manifesto promise at the last election to implement a 20% cut in departmental spending and a 50% cut in capital spending?

[Catherine McKinnell]

I thank the hon. Gentleman for highlighting the fact that the Labour Government stood on a manifesto accepting that cuts were necessary to reduce the deficit. That seems to be forgotten on many occasions when I and my hon. Friends are accused of not having announced any cuts.

[Gordon Banks]

Does my hon. Friend agree that we have seen a significant driver coming through—the 11% increase in the tax take this April-May compared with April-May last year—because of the growth in the economy? Does she also agree that growth is the best way to get the country out of recession and into growth, and to cut the deficit?

[Catherine McKinnell]

Absolutely, and I thank my hon. Friend for his intervention. It is notable that, since the emergency Budget that we debated yesterday was announced, the growth forecasts have reduced as a result of that Budget.

I return to the subject that I want to address today: the impact of the Budget on the north-east. Approximately 266,000 people in the north-east are employed as public servants—almost one in three workers—and many of those individuals, and the families they support, live in Newcastle and the surrounding areas. Large-scale redundancies in the public sector, which are now certain, will be disastrous for the city’s economy, which is, in turn, an engine for regional growth. The likely result will be lasting unemployment and an enforced exodus of talented professionals from what, during the past decade, has been a rapidly emerging region.

That is not the full picture, however. The public sector is so economically vital that it is not hard to imagine the impact of large-scale redundancies on private firms in the region. Simply throwing public sector workers out of their jobs will mean not only a loss of direct employment, but the devastation of private firms. More than in other areas of the country, such firms in my region depend upon revenue from public sector organisations.

That is directly linked to my next point, which is my deeply held opposition to the abolition of my region’s very popular and highly respected development agency, One NorthEast, which is located in my constituency on Newburn Riverside park. Owing to massive cuts in Government spending on regional development, combined with the Liberal-Conservative pledge to transfer RDAs’ functions to local authorities, the Government have announced, after damaging indecision and backtracking, that One NorthEast is to be abolished. Its closure will remove a vital local driver for recovery and eliminate a key means of building a stronger local private economy.

In March, the National Audit Office published its report on RDAs and concluded that £3.30 had been generated for every pound of Government funding given to them. A year ago, another investigation into RDA effectiveness, this time carried out by PricewaterhouseCoopers, showed that for every public pound invested there had been a return of £4.50 to the private sector. The ill-thought-out shunting and transfer of some of the RDAs’ roles—I presume not all of them—to under-resourced local authorities will be totally unworkable.

[Nadhim Zahawi]

The hon. Lady cites the PricewaterhouseCoopers report, but the Institute of Directors also produced a report on the RDAs, which showed that only 18% of directors thought that they made a contribution, and 60% thought that development would have taken place in the regions without the RDAs being in place. To cite selectively from PricewaterhouseCoopers is slightly misleading.

[Catherine McKinnell]

I thank the hon. Gentleman for his intervention, because it highlights my point that these issues cannot be examined as a whole across the UK. The situation in each region is incredibly different and unique, which is why the RDAs were so successful in particular parts of the country and why the removal of the north-east’s RDA, which is successful and which business leaders across the region accept as a major driving force in the private economy, is a travesty.

[Alison McGovern]

My hon. Friend makes a very important point. Does she agree that regions are different, and that the previous Government used the movement of public sector jobs to regions such as the north-east and the north-west partly to save costs to the public purse?

[Catherine McKinnell]

Absolutely, and my hon. Friend rightly draws attention to some of the worrying consequences that will come out of the Budget. It will drive up unemployment and difficulties and increase public spending, particularly in the regions.

[Gavin Shuker]

Within the context of the debate about the evidence basis for RDAs and the benefit that they give, does my hon. Friend agree that financial information about the amount of money that goes in and comes out of the public purse is a much better guide than ideological points about how people feel about regional development agencies?

[Catherine McKinnell]

I absolutely agree, and my hon. Friend makes his point very well indeed.

A large number of my constituents lack any formal educational qualifications. Such individuals, should they be already unemployed or, as is likely to happen in my region, should they be made redundant, will be hugely affected by the cuts announced to the DWP’s job creation and training schemes, which have been widely debated today. They will no longer have the necessary help to prepare themselves to take advantage of new opportunities arising from the eventual recovery, and that is especially concerning in relation to youth unemployment. The future jobs fund has been abandoned, and the £1,000 incentive for businesses to employ a person who has been unemployed for six months or more has been scrapped. Extended periods of unemployment and a lack of appropriate training mean that those vulnerable groups will be dangerously ill equipped to enter the future jobs market. The decision to ask the Department for Education to make huge cuts is also disproportionately damaging. It is clear that, because only 10,000 of the promised 20,000 extra university places are now available, access to higher education for state school pupils will inevitably be restricted.

[Jo Swinson (East Dunbartonshire) (LD)]

I am listening to the hon. Lady with great interest. She is clearly making a passionate case, expressing her genuine concerns about the cuts, but she mentioned ideological cuts. Does she really have no ideological problem with the debt interest that this county pays out every year potentially rising to as much as £70 billion? That would mean £70 billion not spent on public services and a debt for the next generation in the north-east and elsewhere to repay.

[Catherine McKinnell]

I do not have an ideological concern about the debt that is the current deficit, although I share the concern of all Labour Members that the deficit needs to be reduced. Fundamentally, however, it needs to be reduced in a way that does not throw thousands or millions of people on to the scrap heap, in the way that they were left there in the 1980s. I know that this is not taken very seriously by Government Members, but generations of people were left on the scrap heap.

[Mr David Anderson (Blaydon) (Lab)]

Will my hon. Friend give way on that point?

[Catherine McKinnell]

I think I need to make progress.

Finally, some additional cuts have been announced and, although they have perhaps not been talked about today, I believe that they will fundamentally affect future jobs and the ability of people in the north-east to take them up. I refer to the cuts to child tax credits. Although the Liberal-Conservative Government have announced a £150 increase in the per-child element of child tax credits, that is nothing but a fig leaf for the abolition not only of the Sure Start maternity grant, worth £500, but of the baby addition to the child tax credit and the health in pregnancy grant, as well as for the decision to reject Labour’s proposals for a £4 a week supplement—a toddler tax—for each child.

For people on low incomes, tax credits are fundamental to empowering families to support their children and ensure that they get the best start in life, thereby breaking the cycles of deprivation that we see in so many parts of the country, particularly the north-east. As the mother of two small children, I know from experience how vital financial help can be. To be honest, I have been stunned by the callous manner in which that help has simply been abandoned by the Liberal-Conservative Government. Some £3 billion-worth of cuts have been made to support for families. Such decisions will be devastating for parents, preventing them from getting out to work or creating either a work environment or the capacity to work in their households, thereby breaking the cycle of deprivation that can so often take hold in workless households.

Joined to the unfair rise in VAT—a tax that punishes the poor—those cuts will have an impact on unemployment and child poverty in my region, thereby causing further unemployment in the long term. The national economy remains weak, especially in areas of the country such as Newcastle, where large numbers of children, unemployed people and low-income families are already struggling and will struggle more under this Budget. They are the people who must be protected and not punished by the Government’s policies during this difficult time.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. Before I call the next speaker, I remind the House that I asked hon. Members to limit the amount of time they took. Can we try to stick to 10 minutes? Hon. Members should please not take as many interventions, because otherwise people will miss out. I did not want to turn the clock on, but I am getting more tempted by the minute.

16:14

[Esther McVey (Wirral West) (Con)]

I rise to speak in this debate concerned about youth unemployment and job prospects, and I do so as we discover that the number of 18 to 24-year-olds not in employment, education or training has reached an all-time high of 837,000. That is 17.6% of our 18 to 24-year-olds neither earning nor learning.

The previous Government did not meet their apprenticeship targets, but they did leave us with a record deficit. That is a disastrous combination for the next Government not only to pick up but to clear up. We have unfulfilled targets, sluggish economic growth and a record deficit—a triangular tragedy for youth and unemployment. In my patch of Wirral West, we have some of the worst unemployment rates for 16 to 24-year-olds in the north-west. We were ranked seventh worst of the 39 local authorities in September 2009. The number of my constituents claiming jobseeker’s allowance has risen in the last year, and we are also below the national average for 16 and 17-year-olds in education and work- based learning. It is particularly worrying that those who are not in education or employment now will continue along that path, and it is vital that the Government put every effort into getting young people into work and training as soon as possible after they leave the compulsory education system.

The cost to the economy of youth unemployment is not insignificant. According to estimates, each of these so-called NEETs who drop out of school at 16 will cost the taxpayer almost £97,000 over their lifetime, when their unemployment benefits and their inability to pay taxes are taken into account. We have heard a lot about the economy today, and about what unemployment costs the country, but I want to look beyond the economics of the situation to the well-being of each individual, and to their physical and mental health, their self-esteem and their morale. To stare into an unknown expanse of time, not knowing how it will be filled or paid for, erodes the soul and destroys the spirit. That suffering cannot be quantified, but it seeps into the common unconscious of our nation.

We already have some of the highest levels of youth unemployment in Europe, and we need to be creative about how we are going to get out of that situation. We need to think of a new way forward. I like to think that there is light at the end of the tunnel, and I would like to bring to the attention of the House the Wirral Apprentice programme, which is leading the way in the apprenticeships field. It has created more than 100 new opportunities for young people by offering private sector organisations an 18-month wage subsidy for a minimum two-year apprenticeship. Working with the National Apprenticeship Service, the Wirral Apprentice scheme is delivered by Wirral council’s children and young people’s department and provides a dedicated member of staff to support each business that takes part. It has been hugely successful, and it is now in its second year.

The Wirral Apprentice scheme is heavily oversubscribed, however. Last year, more than 1,000 people submitted 3,117 applications but fewer than 150 businesses took part. It does not take a genius to see that many people will be left without an apprenticeship. The scheme is oversubscribed and under-resourced. Such oversubscription is not specific to Wirral or the north-west; it is to be found throughout the whole country, and we need to look at what we are going to do about it.

[Alison McGovern]

As a Wirral MP, I totally back what the hon. Lady says about Wirral Apprentice—it is a cracking scheme—but how does she think her Government’s cuts to local authorities will help Wirral to keep that fantastic scheme going?

[Esther McVey]

The Government are planning to get best value for money. They want to increase the apprenticeship scheme across the country by 50,000, and they are planning to put a significant amount of money into it. That is what we need to do. We need to look at places where the apprenticeship scheme is working. As I have said, however, the scheme is oversubscribed and under-resourced and we need to look at that as well. Perhaps the hon. Lady and I can do that together with the Government. The scheme is working, but we need to expand it so that more people in Wirral, the north-west and the rest of the country can be fulfilled.

As the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes) recently said:

“Demand for apprenticeship places is growing and one of our priorities is to encourage more employers to participate. Apprenticeships are both a route to key competences for employees and a vital way to help employers”.

I should like to extend an invitation to the Minister or the Secretary of State to come to Wirral to see how the scheme is working, and also to use what limited funds we have put aside to extend apprenticeship schemes. We do not need a new generation of our youth not knowing how to fill their time or how to pay their way.

16:19

[Mr David Lammy (Tottenham) (Lab)]

It is a great pleasure to speak from the Back Benches under your chairmanship, Mr Deputy Speaker.

I hope that all of us in the House share a passionate commitment to what we might generally call human dignity. When we think about human dignity and where it comes from, we think of the component of family and love, and of how beneficial education and nurturing are as the centre of that human dignity. I think we would all agree, too, that for very many people purpose in life comes from employment, and in particular from skilled employment. I hope that all of us can agree on that basic principle.

Listening to what has been said this afternoon, I have reflected on my memory of standing at a bus shelter in Tottenham high road as an 18-year-old, wearing a suit a little cheaper than the one that I am wearing today and with a big Afro—looking a bit like the Michael Jackson figure before all the plastic surgery—and being approached by other people in the neighbourhood who imagined that I was there for one of two reasons: either I was on my way to the local magistrates court, or I was on my way to church. That was the context in which wearing a suit was seen in a community like that, back in the late 1980s and early 1990s. The dignity of work was something not experienced by far too many young people in that community.

In the 1980s, unemployment reached 20% and, in some parts of the community, 40%. When we came to power in 1997, it was at a record 28% in the constituency of Tottenham. Tottenham has the highest unemployment in London, but today the figure stands at just under 11%. This is paradoxical, but I sincerely wish the Government well in ensuring that we do not see another generation of, in particular, young people left floundering, feckless, restless and workless in communities like those that we saw before.

What concerns me about the Government’s policy is their ideological commitment to slashing the deficit so quickly. They seem to imagine that it is possible to take £113 billion out of the economy by means of cuts, and that if they cut the public sector, in a short space of time the private sector will move in to provide the necessary jobs. I have seen it done before; it did not work then, and I am not convinced that it will work now. I ask the Government to think again.

Many of us who are in the Chamber must remember the old youth training scheme—the YTS—run by the Manpower Services Commission. I recall that 58% of those on the scheme left before time, and that 50% of those who stayed ended up with no qualifications and no employment at all. It became a joke scheme, not just in this country but internationally. When I hear about the Work programme that will be presented to the House in a few months’ time, it has the imprint of the old YTS scheme. When I am asked to believe passionately in the 50,000 apprenticeships that the Government claim they will provide, I recall that this is the same party that left us with 67,000 apprenticeships in the entire country when they left office last time. We built the number of apprenticeships back up to 250,000, and it was hard because persuading the private sector to offer those apprenticeships took considerable effort.

When the Minister winds up, perhaps she can tell us how many apprenticeships the Government have been able to encourage the private sector to provide since the announcement of the 50,000. By what date will the 50,000 be provided? So far, I have seen only one apprenticeship, and that is the Chief Secretary to the Treasury. I look forward to the numbers that will join him, and to some of my constituents being able to take up these apprenticeships.

There are constituencies where, historically, the private sector has not been present as it has in other areas. My constituency is certainly one of those. Most of my constituents, since the beginning of the welfare state, have been employed in the public and voluntary sectors. That is where they have always looked for employment and I say, with no shame, that because of historic discrimination black and ethnic minority people in this country have always looked to the public sector. Through the race relations legislation in the 1970s, we brought the public sector into the frame to ensure that employment, so they have always looked to the public sector—the very public sector that is now being slashed.

The slashing of the public sector sits alongside the Conservatives’ proposals on higher education, which are a double whammy. Higher education is a key sector for economic growth, but it is not ring-fenced or protected. It is outside the commitments that the Government have made on health and schools, and it will see its budget cut by up to 40% in the spending review to come. One part of the coalition is committed to the abolition of fees and the other is probably committed to a marketplace in fees. The likely result is a quagmire, a gap that will not be filled, and the issue will be kicked into the long grass. That means that universities will not get the money and that the expansion we have seen in constituencies such as mine will not continue.

That is the outlook for higher education. We are unlikely to see a growth in apprenticeships—we do not know the time frame or how many are likely to be created. We also see the scrapping of the future jobs fund that was a buffer and an ideological commitment that we must stand by on this side of the House. We borrowed £1 billion to create the future jobs fund, working with the public and voluntary sector, to ensure that we did not see another wasted generation. We believed that that commitment to young people would mean growth in our economy—that it would come good. We believed that because we had seen the evidence, not least from after the war when we built the NHS. We saw the evidence in the new deal that was set up by Roosevelt in much harder times in the US. That was our commitment to young people and, in the Government’s first few days in office, it is gone. There will be a reduction in employment in constituencies like mine, and there is a real prospect that the 1980s and 1990s will visit our communities again.

I shall end on a tough point that I believe with conviction. Very sadly, in parts of our communities in London, there are young people who would pick up a knife and who have experienced really chaotic lives. Their parents are the same age as me, and they are precisely the people who were failed previously. That is the social consequence of this ideological mistake that the Government are set on. I ask them to think again.

16:31

[Zac Goldsmith (Richmond Park) (Con)]

I shall keep my speech brief, Mr Deputy Speaker, as instructed.

One key element of our response to the recession and the pressing need to create jobs has to be a recognition of the value of the green economy. I think that more or less all of us now accept that it would be a mistake to try and recreate the conditions that brought us the crisis in the first place, but we have an opportunity to raise from the wreck of an economy built on housing bubbles, uncontrolled public spending and financial services an alternative that is both stable and sustainable.

Whether or not we are concerned about climate change, it is worth recognising that clean technology is an emerging global market that is expected to be worth trillions of dollars in the coming decades. In fact, that market globally is already worth hundreds of billions of dollars. This is a massive opportunity for job creation, by any standards, and Britain should be at the forefront, but unfortunately we have just a 5% stake in those clean companies.

We should be a leader in innovation: we are not, and in the past decade we have seen virtually no sign of a coherent programme. We have seen no real investment in carbon capture and storage—

[Mr Anderson]

Does the hon. Gentleman recollect the closure in 1986 of this country’s coal mining industry by the Conservative Government? That included closing the most advance clean-coal technology site in the world—at Grimethorpe colliery in Barnsley.

[Zac Goldsmith]

I thank the hon. Gentleman for that intervention. Times change: the case now for clean coal has been renewed on the back of emerging evidence for climate change. If he does not mind, I will not go back 25 years, but I shall continue with a very brief description of what I regard as a huge failure over the past 10 years.

I mentioned carbon capture and storage, but there have been no effective incentives for home owners or organisations in the commercial sector to pursue energy efficiency. There have been virtually no incentives to develop renewable energy: as a result, we have seen virtually no progress over the last 13 years.

The CBI said last year that it is politics and policy, and not the recession, that have prevented green investment in the UK, and it pleaded with the Government to just “get on with it”. When Jonathon Porritt stepped down after nine years as the chair of the Sustainable Development Commission he also accused the Government of gross failure. He added, sarcastically, that the UK had become

“a world leader in green rhetoric.”

We should broaden our economic base to include more green technologies and more engineering and high-value manufacturing. We need to reconfigure our energy systems and find a way to wean ourselves off our dependence on imported hydrocarbons. That dependence is dangerous environmentally, economically and politically. We need to turn Britain into a world leader in green innovation, and we have the chance to do that now. In my view, the existing commitments of the coalition Government will set us absolutely on the right path

Paul King, chief executive of the UK Green Building Council, described the green deal as follows:

“This is a bold and welcome move. The biggest barrier to low carbon refurbishment—the upfront cost—is set to fall. Pay As You Save is a radical scheme, which could”

create

“at least 100,000 new jobs, saving money and conserving energy.”

The green deal is just one initiative, as the Chancellor has announced plans to create a green investment bank to facilitate investment from the private sector in new clean-energy technology companies. In addition to that, we have plans to create a number of large-scale marine energy parks. It is extraordinary that this country has 14,000 miles of coastline, yet we have barely begun to tap this extraordinarily valuable resource. We have plans—indeed, we have a commitment—to roll out smart meters and the feed-in tariff. If the example that Germany has shown us is to be believed, the feed-in tariff will lead to a revolution in decentralised energy and to huge job creation.

We have plans to lay out a national recharging network. It will trigger a shift, which we absolutely need, from the traditional, conventional car to electric vehicles and hybrid plug-ins. I realise that time is short, and I could cite endless examples of Government initiatives that will foster the shift we are going to see. At every stage of the shift, we will see huge opportunities for job creation and wealth creation, and we need to tap into those.

In green policies, as in most policies, the most powerful role the state can play is not to dictate or direct, but to empower. Instead of introducing a mind-numbing array of quangos, conflicting initiatives and schemes, all aimed at micro-managing our way towards a low-carbon future, we need to establish a clear framework, set the signals and let the market deliver. In truth, that is our only option. We cannot rely on public money because, as we all know, there is none. Instead, we have to find ways of ensuring that existing money flows in a new direction and if we are successful, we will prosper on the back of an economic recovery that might last. We will have done the right thing and we will be rewarded for having done so.

16:36

[Jack Dromey (Birmingham, Erdington) (Lab)]

Historically, Birmingham and the midlands was the industrial heartland of Britain. In the 1970s, the regional economy outperformed the national average, but in the 1980s Birmingham and the midlands was blitzed by the effects of the Conservative Government and 200,000 people lost their jobs, overwhelmingly in manufacturing. A proud region paid a terrible price. Sadly, decline has continued since, and the area has gone from being at the top of the league to the 7th best region on economic performance. If my region had matched the UK average on output per head, the regional economy would have benefited by an additional £16.5 billion.

The human cost of that long-term decline starting in the 1980s has been immense. Four of the five most deprived wards in Britain are in Birmingham, 10 of the 20 most deprived wards in Britain are in the midlands and the constituency I am proud to represent—Birmingham, Erdington—is the sixth most deprived in Britain. The statistics are stark and so, too, is the appalling human price that I see day in, day out in my constituency. Birmingham and Erdington both believe in a tradition of self-help, but the problems we face are incapable of resolution, other than through the role of good government. The role of government is not to wash its hands of responsibility for the unemployed, because that is a Pontius Pilate approach towards those who need the help of government.

I wish to focus on Advantage West Midlands, which is the most successful regional development agency in Britain; the National Audit Office’s recent report gave it a rating of four out of four, and for every £1 of public money spent, the regional economy benefits by £8.14. AWM is a constantly improving RDA with an outstanding track record. Sir Rod Eddington’s transport study said that its work on transport infrastructure was the best in Britain. The Treasury review of June 2009 said that AWM was the most cost-effective RDA in Britain. I have seen at first hand the power of its work. I remember that when Rover was saved from closure in 2000, it was thanks to what AWM did in diversifying the supply base that when Rover tragically went under in 2005, tens of thousands of jobs that would have gone in the supply chain in small and medium-sized enterprises were preserved. I, too, experienced that terrible day when 5,000 workers lost their jobs at Longbridge. Advantage West Midlands swung into action immediately, and in nine months, by way of effective programmes, 4,000 of those 5,000 workers had been found alternative employment.

The transformational change has been remarkable. The development of the Longbridge innovation centre and Bournville college has meant 10,000 new jobs and 1,450 new homes. The development of our regional infrastructure, with the New Street Gateway, the single-biggest investment by any regional development agency, involves £100 million of public money, but it levered in £2 billion of private sector investment, with enormous economic benefits, including 10,000 more jobs.

There have also been solutions for business. Since 2002, 5,000 manufacturing companies, overwhelmingly small and medium-sized enterprises, have benefited from the world-class advice of the Manufacturing Advisory Service, adding £150 million to their turnover. It is little wonder, therefore, that the midlands business community strongly supports Advantage West Midlands. The voice of the business community, Business Voice WM, having consulted its members in June, said to the Government, “Do not abolish the regional development agency. An intelligent debate about change and reform? Perhaps. But do not abolish the regional development agency.”

[John Howell]

How much of Advantage West Midland’s programme reflects the wishes of local councils, rather than those of central Government?

[Jack Dromey]

I shall come in a moment to why it is important to have a regional structure by way of co-ordinating local authorities, because sometimes the competing views and demands of local authorities do not necessarily work in the best interests of the regional economy.

I shall provide a practical example of why, right now, we need an effective regional development agency. There are 150,000 people working in the automotive cluster in the midlands—from the major manufacturers such as Jaguar and its plant in my constituency, through the machine tool, logistics and component companies, to the universities and research and development institutes. All work together in an effective cluster, with the regional development agency bringing together local authorities and the private sector to work in partnership and galvanise and consolidate that which is absolutely key to the success of our regional economy.

[Damian Collins (Folkestone and Hythe) (Con)]

Is there not an arbitrary nature to the structure of regional development agencies and the areas they cover? That automotive cluster would not include, for example, Cowley in Oxford, which is part of the south-east region. My constituency is also in that region, which covers an area stretching from Dover up to Oxford and Milton Keynes. Some of the structures do not necessarily fit the economic realities of local areas.

[Jack Dromey]

I accept that, and I am very familiar with Cowley because I have been to the plant there many times. However, if we want that automotive cluster to succeed, there is a simple reality to acknowledge. I am in discussions right now with Jaguar Land Rover about its decisions for the future. It says that the power and effectiveness of that automotive cluster is absolutely vital for its organisation, and in turn Advantage West Midlands is crucial to the cluster’s success.

Why destroy a success story and replace it with—what? I am all in favour of an intelligent debate about, for example, how one might have sub-regional arrangements in the midlands. Crucially, however, if we throw away the advantage of that regional, strategic approach, with it will go the co-ordination and initiative, working with strong business leadership, that has been absolutely key.

We need the Government to clarify their approach to the issue. I hope that during the debate the Minister will respond to that point, because there are mixed messages: on the one hand, the Secretary of State for Business, Innovation and Skills says that he is open-minded about the retention of a strong regional structure if that is the wish of the midlands; on the other hand, the Secretary of State for Communities and Local Government has taken an ideological position, which says, “We will wind up the RDA and not have a strategic approach, come what may.” We need clarity. I am in dialogue, right now, with local authorities, with the business community, and with many others who want that intelligent debate on what kind of structure we have for the future. Are the Government open to the retention of a strong regional strategy, which is what the midlands wants?

We have heard it said that according to the Treasury’s leaked documents, as yet unpublished, 1.3 million jobs will go, while the hope is to create 2.5 million new jobs. With the greatest respect, if we look at the history of job creation in Britain, believing that, in the current climate, with the savage cuts being made to public investment, 2.5 million jobs are going to flourish in the private sector is as respectable a view as that of the economist in the 1930s who argued that what caused the recession was sunspots that interfered with the mechanisms of the market and the minds of the bankers in the marketplace. The simple reality is that all informed sources, including the CIPD, have said, “There’s not a hope in hell.”

We look to the Government to respond constructively to the dialogue that we want on the future of Advantage West Midlands. We also want them to think again about some of the decisions that have been made: the abolition of the future jobs fund; the cutting back of the working neighbourhoods fund, with £4 million of cuts in Birmingham, the largest cut anywhere in Britain, despite the deprivation that we face; the cutting back of Connexions, with £2.7 million of cuts in Birmingham, the second largest cut in Britain; and the impact of the jobs tax—the VAT increase.

All this from a marriage of convenience—two parties that have come together. On the one hand, there is a party with a once great progressive tradition, the party of Lloyd George, Beveridge and Keynes; on the other, there is a Conservative party that once had a different tradition, that of Harold Macmillan, who, scarred by the memories of the 1930s, said, “Never again.” Sadly, in the 1980s the Conservative party, in the immortal words of Julian Critchley, got taken over by the garagistes, and in the 21st century it has been taken over by the bankers. Those parties are abandoning their own traditions whereby they remember the bitter period of the 1930s and know that if we walk away from the unemployed, this country pays a terrible price. The Con-Dem alliance may do that; this Labour party never will.

16:47

[Julian Sturdy (York Outer) (Con)]

I shall try to be brief, as I have been told, and I will certainly keep my comments shorter than some of the contributions made last night.

I am grateful for the opportunity to contribute to this debate on support for the numerous measures already taken by the new Government to assist the unemployed and encourage the creation of new jobs, particularly in the private sector. Let us be clear: we face an extremely difficult employment situation. The dire economic recession has seen unemployment jump to just under 2.5 million, while the number of inactive people of working age has increased to a record high of 8.2 million. To put it simply, we cannot continue to sustain such economic inactivity.

A new approach is required, and key to any lasting Government support will be the creation of an economic environment in which private enterprise can compete and invest with confidence. I therefore welcome many of the measures in the recent emergency Budget which are designed to do just that. For example, lowering corporation tax to 20% will attract new business investment to the UK while giving us the lowest rate of this form of taxation in the G7. Meanwhile, combining that move with the small business rate relief will benefit more than 500,000 businesses up and down the country. If we are serious about driving down unemployment, we must welcome such moves to drive up private sector competitiveness.

In addition, if we are to achieve true economic recovery, we must ensure that those areas of the country whose economies were unbalanced even before the recession receive additional focus and Government support in the recovery. The sad truth is that regional disparities grew under the Labour Government. In my region of Yorkshire and the Humber, workplace-based gross value added per head increased by only 18.5% between 1997 and 2008, compared with a 37% increase in London in the same period. Indeed, all northern cities experienced slower rates of economic growth than the rest of the UK in the past decade. Frankly, if the Labour Government’s aim was to support the economies of the north, they failed. In contrast, the new Government have already announced that a new £1 billion regional growth fund will be set up in 2011 to help those areas that will be especially affected by reductions in public spending.

Another unfortunate aspect of Labour’s legacy was to leave areas completely dependent on public sector employment. That cannot be allowed to happen again, and I urge the new Government to do all they can to encourage the transition to private sector-led investment and growth locally, regionally and nationally. Empowering local communities will involve empowering individual business owners. By providing small and medium-sized businesses outside London, the south-east and the east of England with tax relief on national insurance contributions, the Government are indeed encouraging small businesses to employ and expand in the next three years, particularly in the neglected areas I discussed.

In addition to providing support to business and encouraging private sector-led employment and growth, it is also necessary for the Government to provide support for those who find themselves unemployed. Measures must be taken to ensure that a negative cycle of dependency does not take hold in the areas that suffer the most unemployment. Support must be targeted and streamlined, because for too long, the previous Government’s various employment schemes were overly complicated, frustratingly bureaucratic and woefully inefficient. Owing to the number of schemes, people slipped through the net and were lost in the system or not contacted. The new Government’s Work programme needs to be accessible and straightforward, so that anyone who finds themselves unemployed can get the help and advice they need swiftly and effortlessly. Support for the unemployed must be personal, local and flexible, and it must put the individual first.

Launching the Work programme, delivering personalised support to the unemployed, cutting corporation tax and introducing regional growth funds are together the ingredients for a far more business-friendly environment in which our economic recovery can take place. The recovery, however, is far from secure, and it is essential that the Government continue to address unemployment and job creation with the same vigour and determination as they have shown to date. I strongly believe that the initial measures taken by the coalition are setting us on the right course. However, those policies need to be implemented swiftly and reviewed regularly if we are to have progress on the ground.

I urge the Government boldly to push forward on this crucial matter. We have inherited a horrendous financial situation, and only the most robust and ambitious policies will get us back on the road of rising employment, job creation, economic stability and long-term growth.

16:54

[Nick Smith (Blaenau Gwent) (Lab)]

I want to talk about jobs in south Wales, and the future jobs fund in particular. I do not believe the Government’s Budget will help boost employment in my constituency and in Wales. Instead, there is a great danger of the Budget reducing growth and increasing unemployment. Jobs are important in Blaenau Gwent. My constituency has the high unemployment rate of almost 12%. We used to rely on coal and steel, but those days are gone; now we need to develop a more balanced economy. We need green jobs, digital jobs and better services. We need to help those who have been unemployed back into work. We need the future jobs fund or a similar employment initiative, and, most importantly, we need it now.

Before I elaborate on my argument, however, I want to talk about an important event that took place in Blaenau Gwent last week. On Monday 28 June we commemorated the 50th anniversary of the Six Bells mining disaster. That commemoration was a tremendous event; thousands were there, including many relatives of the men killed that day. I met a Mrs Evans, a former senior nursing officer of the National Coal Board in Wales, who said that, apart from Aberfan, helping attend to the bodies taken from the pit that night was the worst evening of her career. Wayne Thomas, secretary of the south Wales National Union of Mineworkers told me that the wonderful steel and stone memorial is the biggest mines memorial in the country. I encourage Members to visit the Six Bells memorial, as it is a terrific reminder of the importance of coal and how it has sometimes left a tragic mark on our communities. It is a wonderful, evocative and powerful piece of art, and it is also a reminder that while coal is still part of the south Wales valleys, it will never again be the big employer it once was.

I had hoped that the Minister would talk today about policy plans that I would have found encouraging for Blaenau Gwent, but I have been disappointed by what I have heard. For me, the Government’s plans must include those that will deliver the programme. While Ministers have been quick to attack the future jobs fund, many important lessons have been learned from that project. That is certainly the case in Blaenau Gwent: that important initiative has been managed by our borough council and it has led to our streets being cleaner, our environment being cleaned up and our youngsters being kept out of trouble. Furthermore, the local people given work include redundant workers, those who find it hard to keep down a job and young teenage mums and dads. All those are groups that I would hope the Government would want to support back into employment and, in Blaenau Gwent, more than 500 people have, or will have, benefited from this initiative in recent months.

I must also say that I believe the Government have made a big mistake with their austerity Budget. At this difficult time, a better judgment would be to recognise that the best way to boost employment is to grow the economy, not cut it back. In south Wales, it is likely that the Government will find that the private sector is too weak to pick up the slack after Con-Dem cuts in the public sector. In the Financial Times last Wednesday it was reported that the private sector is not ready to employ the hundreds of thousands of public sector workers likely to be laid off as a result of Budget cuts. There was a study of 12 companies employing more than 375,000 people in various sectors, including household names like Morrisons, Jaguar, the Co-op and Arriva, and those companies said they had no plans to grow as the state shrinks.

Several companies have said that the financial situation is still too uncertain to consider recruiting. Experts such as Tim Leunig of the London School of Economics believe the economy is too frail for the private sector to grow and absorb jobs in the way it has in the past. That fatally undermines the Government’s argument. Mr Leunig has said:

“If the government thinks the private sector is automatically going to step into the gap left by the public sector, it is sadly mistaken.”

While there may be regional growth in the south-east, and the home counties may prosper early as we come out of recession, we need investment in Wales through the Assembly Government and local councils. We do not need a hope-and-a-prayer policy that somehow assumes the private sector will ride to the rescue, as all our experience in recent years has been that that will not happen.

I understand that the Government’s programme is not set to start until next summer. Also, it appears to include no guarantees that everyone will get work or training regardless of how hard to help they may be. Given what we know so far, it seems that this is an untested experiment on a large scale and carries considerable risk to the country and constituencies such as mine.

All this compares badly with Labour’s employment record. There are about half the number of young people signing on now than in the recessions under the Tories. Long-term youth unemployment is under a third of what it was when Labour came into office. Furthermore, because of Labour’s welfare reforms, investment in child care and family-friendly working policies, 365,000 more lone parents are in work now than in 1997. That good and important record will be undermined by the Government’s Budget.

Losing the future jobs fund is a mistake. It looks as though it will be followed by another initiative in the medium term, but in the meantime we will lose important momentum and delivery, and hundreds, if not thousands, of people will miss out. The Government should listen now to the agencies that are doing the hard yards on job delivery. The indications are that employment growth in the economy is still in the balance and that there is a real danger of much higher unemployment in the months ahead. I am grateful that the Under-Secretary of State for Wales has agreed to come to Blaenau Gwent in the coming months to talk about employment. That is generous of him, but if he is to make good on the Prime Minister’s recent fine words about this fantastic work programme, he has much to deliver on. In the meantime, some very good work and much good will is being squandered.

17:01

[Sarah Newton (Truro and Falmouth) (Con)]

Thank you for letting me join this important debate, Mr Deputy Speaker. I want to pick up where my hon. Friend the Member for North East Hertfordshire (Mr Heald) left off. He talked about the lessons that must be learned from the past regarding welfare-to-work programmes. It is a great pity that Opposition Members will not join the Government parties in what should be one of the most important challenges—uniting to make sure that people in this country get the work and employment they need. Taking the bold and decisive action of creating a single Work programme that will streamline and focus help for all those who need to get into work is essential.

Taking action on employment is about creating a fairer society and social justice. Work is the way out of poverty and dependency, and it helps people to reach their potential. The gaps in our society have grown in the past 13 years, and nowhere more starkly can the consequences be seen than in health inequalities. The Marmot review which was published in February clearly demonstrates the links between the social and economic circumstances of people and their health. Key to closing the gap in average life expectancy is improving people’s educational and work opportunities. We need to create an enabling society that maximises individual and community potential. The benefits of reducing health inequalities are economic as well as social. The review states:

“The cost of health inequalities can be measured in human terms, years of life lost and years of active life lost; and in economic terms, by the cost to the economy of additional illness. If everyone in England had the same death rates as the most advantaged, people who are currently dying prematurely as a result of health inequalities would, in total, have enjoyed between 1.3 and 2.5 million extra years of life. They would, in addition, have had a further 2.8 million years free of limiting illness or disability. It is estimated that inequality in illness accounts for productivity losses of £31-33 billion per year, lost taxes and higher welfare payments in the range of £20-32 billion per year, and additional NHS healthcare costs associated with inequality are well in excess of £5.5 billion per year.”

The current time of financial austerity is an opportunity—a time to plan to do things differently. The welfare state and the NHS were born in a time of austerity after the war. Today, we need to do the same and to have the same courage and determination to ensure the well-being of future generations.

17:04

[Chris Evans (Islwyn) (Lab/Co-op)]

Thank you, Mr Deputy Speaker, for calling me to speak in this debate, which is important not only for the country but for my constituency. When we face difficult economic times, the primary task of Government is to protect existing jobs and to provide all possible assistance to get people who are out of work back into employment. If not tackled, unemployment can have long-term effects on society. It destroys communities, ruins lives and tears the very heart and fabric of society.

I was brought up in the south Wales valleys and I well remember my first day at secondary school in 1987. I remember a teacher saying to me, “I’ve one tip for you, boy.” I said, “What’s that?” He said, “Have no ambition, because nobody from round here ever amounts to anything. If you’re lucky, you’ll have a job in a factory—if there are any factories left when you leave school—but most probably you’ll be signing on.” For me, that summed up the attitude of the Tory Government in the 1980s, and I have not come to this place to see that happen ever again.

I must tell the House that it has been only in the past few years that our communities in the valleys have begun to recover, with the confidence that new jobs bring. Without the right Government support to encourage job creation, we risk repeating the mistakes of the past. To ensure we develop the right environment for new jobs to be created, it is vital that we maintain growth.

The Government have been keen to express sympathy for those facing unemployment. For Ministers, describing unemployment as a “tragedy” and mentioning helping the “forgotten millions” of unemployed workers into jobs might come easy, but it is action that counts. In contrast to those sentiments, the Government’s main labour market policy so far has been to cut support for unemployed people. The Government claim that the measures they are taking are necessary—after all, their tough words about getting people off benefits and into work will be meaningless if there are no jobs to get people into.

To create real jobs we need real investment across the country. Getting unemployment down requires two things: businesses must offer more jobs and the unemployed must have the necessary skills to enable them to take the new jobs as they become available. That means that the Government must invest in people and create the environment in which the private sector can invest to create jobs. If we cut too quickly, we will leave no room for the Government to work with the private sector and make job creation possible. We need a real partnership between Government and the private sector. That requires the Government to spend money to create jobs. The question is how we can minimise job losses and prevent another lost generation in constituencies such as mine.

The Government believe that if they cut public sector employment and slash departmental spending, the private sector will ride to the rescue and fill the void. They seem to have forgotten, however, that many private sector jobs are dependent on Government contracts. If departmental spending is slashed, those contracts are vulnerable, as are the jobs that depend on them. If we do not think seriously about the scale of cuts, there is a real risk that they will remove vital support for private sector industry and, crucially, for private sector jobs. Equally, however, it is vital that as companies develop, their employees’ sets of skills develop, too.

That is where Train to Gain has been so important. Across the country, 1.3 million people go to work every day without the skills that they need to do their jobs well. That affects productivity and limits how successful those employees can be. Often, though, employers are unwilling or unable to provide the extra training needed for their staff to realise their potential. It is only when the Government offer assistance that training opportunities can be realised and employees can fulfil their potential. It is therefore critical to our economic future that we invest in training and upskilling our people. In the US, 80% of people in work have been back in a training situation since leaving school. In Germany and Japan, the figure is 56%, but it is only 30% here. That is the measure of how far we still have to travel to improve training and opportunities for our people.

Train to Gain benefits both employers, by increasing the abilities of their workers, and employees, by giving them the skills they need to succeed. That in turn is good for the whole country and for our economic future. The Welsh Assembly Government—the only Labour-led Administration in the UK—have introduced ProAct, a progressive scheme that offers funding for employee training and a wage subsidy while the training is being undertaken. Companies are eligible for ProAct money only when they are on short-time working and when, without ProAct funding, the company would have to consider redundancies. ProAct not only keeps people employed when they might otherwise be made redundant but gives employees a wider skills base, meaning that companies can use quiet periods to upskill their staff. That is precisely the sort of thing that should be happening across the United Kingdom. It has a positive impact for employers, employees and the wider economy.

In addition, to help employers to keep people in work, the Government also need to help those who are currently out of work. It is particularly important that we get young people who have never been employed into their first jobs. That is why the young person’s guarantee and the future jobs fund were so crucial, yet that flagship policy has been scrapped.

The Government claim that their new Work programme will meet the needs of unemployed workers. However, there are several flaws to that argument. Nearly 2.5 million people are unemployed now, and the impact of the cuts is that less support will be available to them and any other people who lose their jobs over the next year. In addition, the Work programme is essentially replacing the flexible new deal initiative. The experience provided by the future jobs fund and the guarantees was in addition to new deal measures. So far, no details are available on the funding for the Work programme. It seems likely that, even when it is introduced, overall investment in tackling unemployment may fall.

At the end of March 2011, the future jobs funds will have funded more than 100,000 jobs, the majority of which will have gone to 18 to 24-year-olds who have been out of work for six months. Given that the Secretary of State for Work and Pensions has said that he wants to get young people off benefits and into work, it absolutely beggars belief that one of the first acts was to cut a scheme that does exactly that.

I should like to take this opportunity to point out to the Secretary of State that, if people are to be asked to travel to find work, it is vital that transport links are good enough to support them in doing so. In south Wales, there is no train link between Newport and Islwyn. Although there are plans to establish such a link by opening the Gaer junction, there is still no timetable for doing so. I ask the Government to ensure that that project goes ahead, so that the people of Islwyn and Blaenau Gwent can commute to work in Newport and the surrounding areas.

We should be striving for growth, but the Budget will mean lower growth and more unemployment. The Government are making the wrong decisions in all those areas, and it shows me that they believe, as they believed in the 1980s, that unemployment is a price worth paying to cut the deficit. [Hon. Members: “Oh!”] Yes, they think that unemployment is a price worth paying.

[Nick de Bois (Enfield North) (Con)]

Will the hon. Gentleman give way?

[Chris Evans]

No, I am making progress.

Those of us who represent areas that lost out the last time that the Tories were in government know that the cost of unemployment is too high. I urge the Government to reconsider before they condemn areas such as mine to large-scale unemployment all over again.

17:12

[Margot James (Stourbridge) (Con)]

There have been quite a lot of references to history in this debate. In the first few hours, which I sat through and enjoyed, many such references were made, including by the shadow Secretary of State for Work and Pensions, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), who said that she left school in the 1980s and that many of her friends became unemployed in the early ’80s. As I was born a decade earlier, I had a ringside seat in the decades that led to the 1980s. Throughout the ’60s and ’70s, various Labour Governments presided over truly disastrous industrial intervention policies.

I, too, come from Coventry, as does the hon. Member for Wakefield (Mary Creagh), who also contributed to the history lessons in the debate. She will remember the creation of British Leyland, the demise of our car industry, the massive subsidies that those Labour Governments poured into failing companies and failing industries, combined with marginal personal tax rates of up to 98%. In the end of course, as we all know, the country had to be rescued by the International Monetary Fund. That is what led to unemployment in the 1980s, not the Governments led by Margaret Thatcher.

A pattern developed during those previous Labour Governments, just as it has done in the past 13 years, and it results in the end in rising unemployment. Every Labour Government, I believe, have left office with unemployment higher than when they came to office. We must not forget that in a debate on unemployment. Unemployment among the young is greater now than it was in 1997. During the past five years there has been a 72% rise in my constituency of people on jobseeker’s allowance, more than a quarter of whom are between the ages of 18 and 24. Much has been said about the tragedy of unemployment among this age group with which I agree.

[Alison McGovern]

Does the hon. Lady think that it is appropriate to compare unemployment in 1997 with unemployment today, at two completely different points in the economic cycle? That is not how economists would normally do it.

[Margot James]

The previous Government inherited falling unemployment in 1997, and it steadily increased during the first decade of this century. We have been through a couple of economic cycles during that time, but historically unemployment is always greater when a Labour Government leave office than when they arrive.

Rising unemployment under Labour Governments is always followed by a lot of well-meaning interventions to try to support people back into work. That is a laudable aim, with which we all agree, but it leads, as it has during the past five or six years, to a confusing array of individual benefit programmes that create a flourishing array of different funding streams and agencies, and they grow like Topsy. They beget a flourishing cottage industry of providers, all of which make money out of the taxpayer in trying to deliver the same services. It is imperative that the Government simplify, as they are doing, the 12 support-for-work programmes. I congratulate the new team on the steps that they have taken to integrate everything into a single get-back-to-work programme.

I do not want to be wholly negative about the interventions under the previous Government. I was a governor of Stourbridge further education college in my constituency, and a good programme was developed with Westfield, the company that manages the retail centre, and it was known as the retail academy. It took long-term unemployed people, such as women who had left the workplace to have a family, who had not been able to get back into work and who had lost their confidence. They did not have to lose their benefits. The programme was a 9-to-5 commitment, and more than half of them managed to get proper long-term jobs in the retail sector. I would not want to imply that all the individual programmes were a waste of money—of course some of them helped, and I am sure that we will learn from them—but simplification and better co-ordination is key, as another example that I want to share with the House demonstrates.

A few weeks ago, like me, some Members will have visited the manufacturing insight conference that took place just off Westminster Hall. I was struck by the story of a managing director of a small business in Lincolnshire employing about 30 people who wanted to access training for her finance staff. They wanted NVQ level 2 finance training, but in order to qualify she had to guarantee that eight people from her workplace would attend the course. She did not have eight people who needed the course, but there was only one provider that she could approach, and it was subcontracted by another provider that had the contract with the college.

All these providers and subcontracted providers take a slice of taxpayers’ money, which is another reason why we must simplify and codify the work, so that just one company or social enterprise is charging the taxpayer a fee for delivering a much-needed service. Business needs support, but it knows, for the most part, what it needs to employ people, and we must give companies much more direct access to the funding. They should not have to go through all these multiple layers of provision, and they should not have to go through regional development agencies, Business Link and so on—they should be able to access the vital help much more easily.

[Mr Stewart Jackson (Peterborough) (Con)]

Does my hon. Friend agree that laudable aims sometimes have perverse consequences? She will no doubt have come across people on the doorstep—usually women—who want to work more, but because of the extremely complex tax credit system built up by the former Government, it is simply not worth their while working. They therefore have an incentive to stay at home and remain on benefits, which cannot be right for them, their families or the wider community.

[Margot James]

I thank my hon. Friend for that excellent intervention. It is absolutely true. We have to create a situation in which people do not fall off the face of a cliff when they lose their benefits overnight, as soon as they take on a job for not that many hours a week. It is a poverty trap—it traps the children as well as the parents—so we have to address that. He raises an important matter.

We have talked a lot in this debate about various Government support initiatives with which we will continue under the new simplified Work programme. However, let us not forget that what the private sector really needs is a vibrant economy. First and foremost, that is what drives jobs. It is not rocket science: we need an educated and skilled work force; controlled immigration, so that businesses are not tempted simply to seize on quickly available, easy and cheap labour—we really must stop that—a benefits system that does not discourage people from going into work, as my hon. Friend the Member for Peterborough (Mr Jackson) said; and, above all, a low tax and a light regulatory regime that encourages investment, rewards risk and stimulates growth. That is our golden vision on the Conservative Benches, that is what we will deliver over five years, and that is what the Budget was all about.

I am pleased to say that, despite the dire economic circumstances we are having to deal with, and the deficit reduction plan that has been forced upon us, we are making great headway in creating the conditions for business that I just described. I will conclude by running through some of the excellent programmes that will drive the recovery. For a start, the employers’ national insurance increase will be tempered and the planned increase on the employers’ side will not go ahead. Although the employees’ side will go ahead, it will be compensated for by the raising of the nil rate on personal tax allowances. We are also looking at tax relief for small businesses, and the first 10 members of staff in any business will be exempt from national insurance contributions.

Whenever I do a survey of businesses in Stourbridge, I find that one of the biggest complaints is the cost of business rates, and by increasing the small business rate relief for one year from October, we will help an estimated 500,000 small businesses. Furthermore, as a west midlands Member, I can say with great passion that the regional growth fund and the commitment of £1 billion will help areas and communities particularly affected by the spending reductions forced upon us. There are other regional policies designed to correct the balance as far as we can. The number of jobs in the boom years created in London, the south-east and the east rose at 10 times the rate of new jobs everywhere else in the economy. Having come from the west midlands, worked for many years in London and gone back to the west midlands, it is deeply striking to me how we have almost become two nations. I am therefore delighted that my right hon. Friend the Chancellor of the Exchequer is so committed to helping regions outside London, the south-east and the east.

Finally, I wish to acknowledge the words of the Secretary of State for Business, Innovation and Skills, who has said that

“the Government’s role is to create the right business environment and the right skills base. The Government cannot simply keep writing out cheques.”

That is the nub of how we propose to stimulate the recovery that this country so urgently needs.

17:25

[Alison McGovern (Wirral South) (Lab)]

I wish to focus my remarks specifically on young people, and with that in mind I should like to comment on what my hon. Friend the Member for Islwyn (Chris Evans) said. Like him, I grew up in the 1980s in a part of the world where it sometimes felt as though very few people had any faith in us. That motivated many of us in the House who come from such parts of our country to stand for election and stand up for investment in young people today.

With that in mind, I wish to say a few words on business confidence and its importance for young people’s employment prospects. I was concerned to read about the Deloitte survey of FTSE 100 directors of finance that was reported this week. The report explained that those finance directors saw an increased probability of a double-dip recession, up five percentage points from a 33% to a 38% likelihood in the past three months. That was attributed to the Government’s policies. That concerns me, because the last thing that I want is falling business confidence that will cause this country similar problems to those that we saw in France and other European countries years ago. At times when business did not want to invest, people at the start of their careers were disproportionately affected, and young people suffered much more than others in their career progression in times of downturn. I call on the Government to guard against that.

In addition to the importance of business confidence and the Government demonstrating counter-cyclical measures, I have a few comments to make at a practical level. Throughout the election and since being elected to the House, I have been concerned about what is happening in my local Jobcentre Plus. The people who work at that centre in Bromborough, about a mile away from where I was born and grew up, work incredibly hard and responded very well throughout the recession to help people who had been made redundant and suffered unemployment.

Over recent months, there has been a real threat of that jobcentre losing some of its work force. They have built up their capacity and skills to try to encourage people back to work and to find the best avenues for them, but now the centre is working under the shadow of the threat of losing its work force and their skills when they are most needed. I call on the Government to consider the matter carefully and not cut away front-line Jobcentre Plus staff at the very time when we need them most.

Members have mentioned the future jobs fund. Although my right hon. Friend the shadow Secretary of State has already referred to the Prime Minister’s comments, it is appropriate for me to say again that when he visited Liverpool, he said that the future jobs fund was “a good scheme” and that

“we’ve got to help people who are unemployed for a long time and social enterprises like this help. It demonstrates where giving more power and control to projects like these works.”

I was struck by the comments made to me by my friend John, who is a trustee of an older people’s charity in Wirral. He told me about the two young men who came to work for the organisation, doing practical tasks in the building where the charity is housed, and described the confidence boost that this had given them and the important skills that they were learning. Those jobs would not necessarily be jobs for life, but they were going to keep the CVs of those young men consistent. That example, along with the evidence from the Prime Minister, shows that perhaps the Government could have thought more carefully about the future jobs fund. The Government’s decision, added to the loss of the young person’s guarantee, has caused me real concern about the prospects for young people in my constituency and the part of the world where I grew up.

I hope that the House will permit me a small amount of partisanship.

[Mr Stewart Jackson]

Before the hon. Lady continues, let me say that the House would be slightly more accommodating of her partisanship—which is no doubt coming—if she were willing to admit that the number of NEETs under her Government was the highest ever and that the further education capital programme was a calamitous disaster. The corollary of that negative news is that this Government are setting up 50,000 more apprenticeship places and expanding higher education. In the spirit of fairness, surely she can concede that her Government made mistakes and that this Government have new and fresh ideas.

[Alison McGovern]

I will certainly concede that any plans to increase the number of apprenticeships are welcome. Such plans are vital for my constituency and, I am sure, the hon. Gentleman’s constituency too. When I meet the people from Wirral borough council who work on the Wirral apprenticeship scheme and they tell me about the proactive way in which they have helped young people not in employment, education or training in my area, I can only applaud their work and hope that we will support them on a cross-party basis to continue that work. In that regard, where there are increases in the number of young people who face the threat of unemployment or who are not in employment, education or training, we all need to redouble our efforts and find what can be done. We are all aware of the potentially scarring impact of that not just on those young people, but on their families and communities.

The tenfold increase that we have seen in apprenticeships in Wirral since 1997, which I mentioned in an intervention, has been so welcome partly because of its intergenerational aspect and how it has built up our community. Parents no longer feel that the options for their young people are university or nothing very much. They are now starting to feel that there might be some options; so, to respond to the hon. Gentleman, as Members of this House we must redouble our efforts to focus on apprenticeships and encourage business to invest. However, that needs to involve the public and private sectors working hand in hand. It is important to recognise that we cannot expect those in the private sector to take a chance on young people where the public sector locally is not working alongside them.

As well as talking about those who go into apprenticeships, I want to say a few words about graduates. In this discussion about unemployment, we need to recognise that getting a degree these days is no magic bullet for securing a future career, and we must not pretend that it is. In fact, we need to encourage young people, both pre-university and while they are there, to gain the work-relevant skills that will assist them with their careers.

[Margot James]

Will the hon. Lady give way?

[Alison McGovern]

I will make a bit of progress, if that is okay.

We should recognise that the downturn that we have faced has been worse for graduates from lower-income backgrounds, and there are a few reasons for that. Graduates from lower-income backgrounds are much less likely to go on to further study. When I was studying philosophy at University college London, at a time when the economy was growing, I remember my tutor saying to me that downturns were always good for philosophy departments, because they kept hold of people who would otherwise have gone straight into the City, as their parents could pay for them to do a master’s degree or something like that for a few years.

We need to recognise that graduates from lower income backgrounds are less able to progress their careers, because they are less likely to have the informal networks that will help them as graduates to take the first steps into their careers. Unless we are able to rebuild business confidence, even graduates will continue to face difficulties. I return to my original point that the key to unlocking the problem of unemployment, especially among young people, is to improve business confidence and to ensure that the private sector and the public sector continue to invest in jobs.

In liaising with the CBI in the north-west on apprenticeships, I heard about companies in Wirral that were very keen to employ local young people. I talked to those companies at length about how we could support them in their endeavour to build new infrastructure in Wirral while training young people in my area. Those companies were working on vital infrastructure projects such as Building Schools for the Future, and the problem with the Government’s decision to cut the deficit more quickly than we would have liked is that the withdrawal of Government input into the economy will be counter-productive because those companies will no longer feel that they have the backing of the Government to hire young people and build up their skills.

[Jake Berry (Rossendale and Darwen) (Con)]

rose—

[Nick de Bois]

rose—

[Alison McGovern]

I should like to make some progress. I do not want to prevent others from speaking in the debate.

I fear that that withdrawal of Government input, especially in areas where the employment picture, though recovering, is historically fragile, will result in more people on the dole, which will make it even more difficult for us to reduce the deficit.

17:37

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

I want to talk about one of the biggest challenges that the coalition Government, the House and the country face: jobs and unemployment in our country, and what the Government can do to tackle them. The Opposition motion would be hard to support in any circumstances, but it would be more credible if it had started with an apology. Nearly 2.5 million people are now unemployed. To put that in perspective, that is 500,000 more than the entire population of Slovenia, a nation that we recently played in the World cup. That is a terrible figure, and also a terrible legacy to have inherited from the previous Government.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Will the hon. Gentleman give way?

[Nadhim Zahawi]

I will not, as I would like to make some headway in my speech.

Following the election of the new Government, it immediately became clear to us that we faced a series of immense challenges in tackling unemployment and worklessness. Let us be honest—those problems have not come about purely because of the recession. Over the past decade, the very fabric of this nation has been altered. This is now a nation of huge government and huge inefficiency, and one that does not do much for those looking for work. Instead, it seems to encourage those who do not want to work. Those factors have undermined this country’s competitiveness, its efficiency and—perhaps most importantly—its social fabric.

This is a self-aggravating situation. Those who are brought up in workless households are themselves more likely to experience worklessness, welfare dependency and poverty in later life. This is not an issue we can ignore. It is vital that we address the causes and begin to secure solutions to these enormous problems. That can be done by making changes to the way in which the welfare state is operated. My right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), the Secretary of State for Work and Pensions, alongside the right hon. Member for Birkenhead (Mr Field) and John Hutton, the former Member for Barrow and Furness, have the historical credibility and experience to make a real difference. Focusing on key issues such as the long-term unemployed and the high level of youth unemployment is critical.

Business is another key area in which a real impact can be made. Supporting our businesses and reducing the regulation that strangles them will lead to more opportunity and more jobs. That is a tried and tested solution and one that I, as a business man, will address shortly, but for now I feel that I cannot ignore the record of those sitting opposite me. After 13 years of a Labour Government, huge numbers of people are living off the welfare state. A whole swathe of society has been led to believe that the culture of aspiration and hard work on which Britain has long prided itself can be ignored in favour of welfare and idleness. Yet I do not blame those people, because it is the last Government who allowed that culture to become ingrained in the British psyche. It is the last Government who bloated not only the welfare state but the public sector. I would never accuse them of doing that for reasons of self-interest, but the questions have to be asked: why was it allowed to happen, and what can we do to rectify it?

Let me turn briefly to the figures, for they do not lie. As I mentioned earlier, unemployment is now just shy of 2.5 million, with nearly 1.5 million people claiming jobseeker’s allowance. We also have 1.7 million people who are long-term unemployed, having been without a job for at least 12 months. Of those, 1.4 million have been on out-of-work benefit for nine or more years; that is a deep rut that is hard to climb out of. I should also make it clear that that does not take account of the 2.6 million people in receipt of incapacity benefit and employment and support allowance. Ours is the nation with the highest number of workless households in Europe. There were 5.9 million working-age benefit claimants in November 2009, and we have an incapacity benefit system that makes it more likely that those on it will die or reach pension age, rather than getting another job after two years of claiming. That is the legacy we have been left.

The last Government have clearly failed. They led this great nation for 13 years, and that is the record that has been left. They may point to and blame the recession; they may claim that factors out of their control led to this situation; but I say no, they cannot so easily shirk the responsibility that the people of Britain placed on them in 1997. They claimed that they would take “Britain forward not back”, yet it is backwards that we have gone: back to the dole queue, back to unemployment, and back to poverty. It is now up to us, the coalition Government, to rectify the mistakes of the past and ensure that once again we “Get Britain working”.

Of course, an enormous number of areas must be discussed if we are both to understand and to begin to deal with this problem: the welfare system and what we can do to change and streamline it, the huge problem of youth unemployment, and what we can do to help lone parents back into work. But as a business man myself and a keen believer in the power that enterprise in the UK has in job creation, I intend to focus on that area. I am a firm believer in creating real jobs in the real economy. We have made it clear that a key element of our programme is boosting economic growth and, as a direct result, creating jobs to ensure that Britain has an economic climate in which private enterprise can compete and invest with confidence. It is vital that we ensure that jobs are available both for those looking for work, and for those whom we will try to get into work.

[Mr Stewart Jackson]

Does my hon. Friend agree with my comparison between what the Conservative party did in government in the 1980s, when they brought about a real transfer of wealth and capital to working people through shared ownership and the right to buy, and what the Labour Government did, which was to ossify social mobility and widen the gap between the richest and the poorest 10% in our country?

[Nadhim Zahawi]

My hon. Friend is right. One example is the way in which the gap between the south-east and the rest of the country has grown. Labour Members just do not seem to understand what it takes to create an enterprise economy.

[Mr Anderson]

Further to the point made by the hon. Member for Peterborough (Mr Jackson), a lot of people were made wealthy in the 1980s, and 200,000 coal miners got £20,000 to go on the dole queue—paid out of the public purse.

[Nadhim Zahawi]

And your point is? At the end of the day, you only have to look at the facts. The facts are that you have left us with a legacy of £500 million a day—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I did not leave anybody with a legacy of anything.

[Nadhim Zahawi]

It is not sustainable to follow the path of the previous Government and bloat the public sector. Business needs confidence to invest. Our first Budget last month has laid the groundwork for these aims. We will drop the headline rate of corporation tax by 1% each year for the next four years, lowering it to 24%. We have ended the disastrous jobs tax that the last Government tried to introduce for employers, a key policy in ensuring that our businesses once again begin to hire people.

The measures in this Budget are intended to give businesses the confidence to invest for the long term, and to reduce the burden of tax and regulation. One area where we need to, and can, do more, is in funding for business. If we expect business to take up the slack of the reduction in the size of government, we must send it a clear message on funding. There is a disconnect between what the banks are telling us regarding the amount they are lending and what businesses are experiencing and telling us about the access they have to funding. I hope that in my new role as a member of the Business, Innovation and Skills Committee we can spend some of our time inquiring as to how we can alter that dynamic.

[Nick de Bois]

Will my hon. Friend add to that the outrageous attack on many SMEs, with banks inflating margins for captive customers with nowhere else to go? Does he welcome the opportunity for competition in that marketplace?

[Nadhim Zahawi]

My hon. Friend is right, and that is one of the areas I am passionate about.

[Thomas Docherty]

I am deeply puzzled that the hon. Gentleman argues, on the one hand, for less intervention and regulation, and on the other that the privately owned banks have to be instructed to lend more money. Which argument is he making this evening?

[Nadhim Zahawi]

That is not the point I was making. If the hon. Gentleman had been listening carefully, he would have realised that my point is that we have to inquire into what is happening. I am not talking about instructions, but about understanding the dynamic so that we can create a similar environment to that in Silicon valley, for example, where people can get access to funding more easily than in our country.

As a business man, I also know first hand the damaging effects that over-burdening business with regulation has on British companies. It is imperative that we reduce regulation. The coalition Government aim to do just that. The level of regulation in this country is simply staggering, and another example of the top-down bureaucratic approach taken by the last Government. The Institute of Directors has estimated the annual cost of regulation to UK business at £80 billion, and has stated that the ever-increasing burden of paperwork hinders business from growing and, ultimately, creating jobs. That is why we have announced plans fundamentally to review all regulations scheduled for introduction over the coming year. We will put in place a system of sunset clauses so that regulations cease to be law after seven years, and we have also created the one in, one out rule to reduce for ever the regulation created in Whitehall. All of these are key measures in ensuring that our businesses have the opportunity to thrive and, more importantly, to hire.

The level of unemployment in this country is a huge problem, but I am confident that, with the new coalition Government in power, we can address and reduce it. This issue requires a complete set of solutions, all of which need to be implemented together in an effective and decisive manner.

If we balance the books of Government, hold down interest rates, encourage business to invest and reduce the regulation that strangles business, I believe that, at the very least, we will ensure that there are jobs available for those who want them and an economy that can support them.

I support the amendment to the motion.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. There are still several Members who wish to catch my eye. The Front-Bench speakers will be called at half-past 6, so the House will see that we have only 40 minutes or so. I hope, therefore, that hon. Members will show restraint and try not to go over six minutes, although the one maiden speech that is to be made may be slightly longer.

17:51

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Thank you for allowing me to speak, Mr Deputy Speaker.

I wanted to speak in this debate because employment is of such great concern in my constituency. It is absolutely vital that we invest in the talent of local people in different areas around the country, and that their talent is not wasted. The hopes and aspirations of people who want to contribute to our economy must not be cast aside in the way that I believe that this Government will do.

In Bethnal Green and Bow, unemployment is just under 11%, significantly higher than the national rate. The experiences of white working-class groups and of ethnic minority groups—especially those of British-Bangladeshi or Somali origin—are particularly challenging. They face the double whammy of trying to find work in difficult circumstances and in a difficult economic climate, but also of the social class barriers, and the ethnic penalties that are well documented by Cabinet Office research.

Unemployment in my constituency is faced by people who live only a stone’s throw from the City and Canary Wharf. They see the wealth and opportunities there, but struggle to reach them. Even during the boom years, unemployment was higher than the national rate, and youth and graduate unemployment were also high. Businesses in the City and Canary Wharf made efforts to recruit people, but not enough. We need the private sector, Government and local agencies to work together to create opportunities, and we need the Government to support those opportunities and enable that sort of cross-organisational working.

We also need the voluntary sector. Through organisations such as City Gateway in my constituency, and with the help of the future jobs fund and the working neighbourhoods fund, it has made enormous progress in trying to get people into work. Funding like that is an enabler, and we need that kind of support if we are to get people into work.

Tower Hamlets has managed to cut unemployment—not enough, but it has made significant progress. The current proposals stand to damage that progress. In my constituency, a lot of positive work is being done across sectors. I hope that this Government will look at ways to enable that to continue.

I am saddened that £1 million of the working neighbourhoods fund has already been cut. That is not a good sign. Figures show that 9.6% of young people are NEETs—that is, not in education, employment or training—and that is too high, but in Tower Hamlets we have managed to reduce that proportion to 6%. That is a fall of 40%, and it could not have happened without help from the Government, or without the September guarantee and the future jobs fund.

I remind the House that 8,500 young people across London managed to stay off the dole queue thanks to the help of Government interventions. I also appeal to the Government not to delay the introduction of the programme of setting up 50,000 apprenticeships that has been announced. If they do delay, it will be a case of “too little, too late”: we cannot afford to waste the talent and potential of people in this country.

The Conservative mantra in the 1980s was, “If it’s not hurting, it’s not working.” The unemployment rate then was very high, but that is not a price that is ever worth paying. I hope that people across the House recognise that. Research by Cardiff university found that unemployment was associated with a doubling of the suicide rate, so let us not forget the kind of damage that can be done, especially by unemployment of men.

[Jake Berry]

Does the hon. Lady agree that, after 13 years of a Labour Government, it is a disgrace that one in five people under the age of 24 are out of work? Does she think that has been a price worth paying for 13 years of a Labour Government?

[Rushanara Ali]

The Labour Government made every attempt to help people into work. There are great challenges and complex circumstances in helping and enabling people to work, but at least the Labour Government did not shirk their responsibility. At least they tried to support people, as Labour Governments will always do. I appeal to the coalition Government to try to provide support, so that people can achieve their potential. This is not about handouts; it is about giving a helping hand. That is the progressive route to supporting communities.

[Matthew Hancock (West Suffolk) (Con)]

rose—

[Rushanara Ali]

I am short of time, so I would like to make some progress and share the following example. At a recent employment fair in my constituency, 10,000 people were queuing up for jobs, but there were only 1,000 places at the work fair. That does not show that people are not interested in jobs or that people will sit idly by waiting for opportunities to come to them; they want to work, they want opportunities and they need support from the private sector, the Government and the voluntary sector. I hope that that is the spirit in which this Government will seek to work.

The cost of unemployment is ill health, depression and anxiety; it is many social consequences that we cannot afford. I regret that unemployment remains high for some sections and that some people continue to feel left behind. I acknowledge that my party did not achieve as much as it would have liked, but the fact is that my party never walked away from people who needed support in constituencies such as mine.

[Matthew Hancock]

I thank the hon. Lady for a very thoughtful speech. Will she join me in welcoming the new Government’s proposal to increase the number of apprenticeships, because she mentioned that earlier?

[Rushanara Ali]

I welcome any effort to try to help people to get work but, as I said in my earlier intervention, it is important to ensure that training programmes are meaningful. I would say that to my own party and my own Government—in fact, I lobbied my Government to keep making progress, because that is the right thing to do. The point is that there is no guarantee of a job at the end of this. Young people, with whom I have spent some years working, need to be convinced that when they get involved with these programmes, there will be a result and the programme is meaningful, not a fudge. That must be our focus. I welcome the 50,000 apprenticeship opportunities, but people will have to wait until next spring. What am I meant to say to my constituents, who have been waiting for help from this Government? We contributed support. The problem is that the recent announcements, whereby all this is to be left until next spring, are not good enough.

I wish to conclude by saying that we must not fail the challenge of trying to help people get into work. We must give them hope, we must realise their potential and we must help them to meet their aspirations. We have not seen evidence of investment in the aspiration that the Prime Minister talked so much about when he was campaigning. I hope that we will see that, and that this Government will not turn their back on the people who want to contribute to this society and this economy, and whose potential we need for economic growth. I hope that this coalition Government will deliver a progressive solution, not one that leaves people behind.

17:59

[George Freeman (Mid Norfolk) (Con)]

Thank you, Mr Deputy Speaker, for the opportunity to make my maiden speech in this important debate about jobs and unemployment. I take my seat in the shadow of three eminent predecessors, all of whom have been gracious enough, with some help from the Boundary Commission, to cede portions of their constituencies to the new Mid Norfolk constituency. They are my hon. Friend the Member for Broadland (Mr Simpson), who represented Mid Norfolk with great distinction, my hon. Friend the Member for South Norfolk (Mr Bacon) and the former Member for South West Norfolk, all of whom are held in the highest esteem locally and in this House.

Mr Deputy Speaker, you are no doubt thinking, “Where is Mid Norfolk?” Indeed, its boundaries have baffled many of its constituents since being redrawn. Centred on Dereham, the ancient heart of Norfolk, it includes the three market towns of Attleborough, Watton and Wymondham, and 110 charming villages. I should like to take the House on a quick—130-mile—tour that I have had the great pleasure to make by bicycle in stages over the past three years, in the spirit of past parliamentarians, such as most famously, William Cobbett, on horseback, and more latterly my hon. Friend the Member for Penrith and The Border (Rory Stewart), on foot. Following the instruction of the former Member for Chingford, and more recently the example of my right hon. Friend the Prime Minister—perhaps the only time that they have agreed—I opted to go by bike.

We start at The Crown in Colkirk, the northernmost point and only a few furlongs south of the magnificent Fakenham race course. We then pass through Beeston, home of a new micro-brewery and the excellent “Worth the Wait” ale, which I hope the House might feel is worth a glass after my maiden speech; Dereham, the capital, which received its charter in the 16th century; Swanton Morley, the home of the Light Dragoons, whom I know the House will want to thank for their brave service to our country; Hingham, the home of Abraham Lincoln’s family and the relaunched Lotus motor racing team; Wymondham, with its famous abbey, crucible of Robert Kett’s revolution and home to Wymondham college, a rare state boarding school, and Wymondham high—two of the top state schools in the country—Attleborough, home of Banham Poultry, our largest local business, and Liftshare, the world’s fastest-growing car-share company, set up in a former turkey shed by a local entrepreneur; and Watton, heart of the Wayland valley and home of the famous horse fair.

Eschewing the metropolitanism of Norwich, Fakenham, Thetford and Swaffham, which guard its perimeter, Mid Norfolk is the rural core of this most rural and historic county, a county that I need hardly remind the House has given us our first Prime Minister, Sir Robert Walpole, our greatest military hero, Horatio Nelson, and the seeds of the agricultural and, therefore, industrial revolution, courtesy of Coke of Holkham and “Turnip” Townshend. The turnip is a vegetable that has had a tricky press of late, but it is held in the very highest esteem in Norfolk.

My constituency has come of late to feel increasingly marginalised, however. Tackling that sense of marginalisation in order to unlock the talents and aspirations of its people is, and will remain, the central theme of my work as its MP. The people of Mid Norfolk feel marginalised by the decision-making process and too often forced to change in ways that they have neither chosen nor like. The small, local, voluntary and rural is all too often crowded out by the big, national, professional and urban. As reported this week, rural Britain has been especially hard hit by unemployment during this recession, and my constituency has pockets of rural deprivation which are often hidden and invisible to the passer-by. Pensioner poverty can be especially invisible.

Post offices, pubs and village shops close, while more and more people are forced to commute increasing distances from the mass housing estates that have been forced on our market towns and councils. In my three-year candidacy I insisted on another way. Opposition Members might call it a third way, but we call it the Norfolk way: a vision of a vibrant rural society based on a renaissance of rural enterprise; smaller pockets of mixed housing spread more fairly and sustainably; fast-growing small businesses and jobs back in our villages and towns; less commuting; a richer mix of ages; and blue and white-collar jobs in active communities.

Some may ask, “Where are those new jobs and businesses to come from?” Let me tell the House. Situated between Norwich and Cambridge are two of the world’s leading centres of scientific research and innovation in food, biomedicine and the clean technologies of which my hon. Friend the Member for Richmond Park (Zac Goldsmith) spoke earlier, all of which are so vital to the global challenges that we face, Mid Norfolk is perfectly positioned to become a hub of entrepreneurial activity and new jobs. With the world-leading John Innes centre, the Institute of Food Research, world-class agriculture and high-tech engineering along the A11 corridor, we can lead those new economic sectors on which we will increasingly depend.

As someone who came to politics after a 15-year career in creating new technology businesses, I hope to be able to put my experience to good use in that area. However, that revolution cannot happen without two essential things: new models of investment in infrastructure, including the A11, rural broadband and rail links, and some local leadership.

The stale post-war model of statist centralisation and dependence on the Whitehall handout has failed Norfolk and needs replacing if we are to have a sustainable recovery. The benefits of this empowerment and liberalism will not just be economic. Rural Britain is, I believe, the repository of some important virtues that our modern culture has neglected: a deep belief in self-help and responsibility; an insistence that everybody in a community has a role, and the rejection of a shallow media culture’s obsession with celebrity; and a love of the small, the different, and the local. These are qualities that are deeply rooted in the English character.

The people of Mid Norfolk sent me here to speak up for them, so I shall. My constituents, proud of those values, have found themselves increasingly powerless in the face of a tidal wave of legislation and “big government” from Europe, Whitehall, and unaccountable regional quangos. Many worry that our culture has been hijacked by an increasingly intolerant, politically correct “anything goes” multiculturalism which seems to have too little respect for the longer traditions of tolerance, personal freedom and responsibility embedded in our traditional heritage. By pumping the bellows of local empowerment, I believe that we can reignite the embers of a culture which can and should be allowed to coexist with metropolitan Britain, to mutual benefit.

At the heart of this manifesto is a big idea: that citizenship is forged not through dependence on the state as espoused by new Labour and its philosopher king, Anthony Giddens, but through the empowering act of the state granting responsibility to its citizens. That is the central idea which has brought me into politics as a Conservative, and which I am delighted is once again the idea at the heart of modern Conservatism and this coalition.

I hope that the House might allow me to close on a personal note. As no doubt for all hon. Members, taking my seat in this great House is the culmination of a long journey and a lifetime’s dream. I can recall very clearly when that seed was sown: coming here on a school trip aged 12, inspired by childhood stories of my great-uncle Gladstone. As the child of a broken and at that time unhappy home, I recall seeing the worn edges of the Dispatch Box and being struck by a deeply reassuring idea: that whoever and wherever you are in our country, there is a place where the nation takes responsibility for its affairs, a place where your problem matters, a place here, for you, whoever you are. I still believe there is no greater honour than to be sent here by a constituency to serve. I believe the public want to believe that too, and want this new Parliament to raise aloft the standard of a politics of which we can all be proud. I thank the people of Mid Norfolk for the chance to be part of that, and I thank the House for its patience this evening.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. Five Members are trying to get in; if they restrict themselves to five minutes, everybody will do so.

18:07

[Sheila Gilmore (Edinburgh East) (Lab)]

Thank you, Mr Deputy Speaker, for calling me to speak in this debate.

In the few weeks that I have been here, it feels a little as though I have walked into an Alice in Wonderland world where everything has been turned on its head. A lot of myth-making has been going on. If one says something often enough, even if it is not true, people will come to believe it. I have to say, as somebody who studied history, that we need to ask what sort of regimes are particularly good at doing that. I trust, and I am sure, that my constituents will not fall for these myths.

So what are the myths? Myth No. 1, which concerns a terribly important issue, is that Labour causes unemployment. Let us take 1997, and let us take 2010, after a major recession, and then allege that during the course of the Labour Government we have had high unemployment. If my constituents were asked which were the recent periods of long unemployment, they would not say the period from 1997 to 2008 but the periods of the 1980s and the 1990s—they know that full well. By the mid-part of this decade, we had reached a position in Edinburgh whereby unemployment had been virtually reduced to a hard-core minimum. We had a very healthy economy for all that time, so it is simply not true to suggest that we have had a period of Labour Government with high unemployment.

Neither is it true that we have the highest unemployment figures in Europe—I do not know where that that comes from. A year ago, my cousin from Spain came to visit and told me that he was very worried because Spain’s unemployment stood at 19% or 20%. That myth about our unemployment figures is another one that we must destroy.

Public support and funding makes a lot of the economic development in the Edinburgh area possible, but the Tory view is that public spending is a drag on, rather than an encouragement to, the economy. For example, the public spending and support we put into a wave power project in Leith docks—£4 million of public spending in past year—will create lots of employment, but nothing would have happened without that degree of public support. The offshore wind projects in the River Forth would not have happened without public support.

During the election campaign, a construction engineer in my constituency told me that he was seriously worried about school building projects drying up, because his firm had been associated with those nationally and in Scotland for all the years of the previous Labour Government. However, in 2007, the Scottish Government came under the control of the Scottish National party. They chose—they were not forced—not to use public-private partnership, which was Labour’s funding mechanism. As a result, they have been unable to start a single new school in my area, because they have not come up with another form of funding, meaning that my constituents’ employment prospects are much diminished. That was before public funding was cut further. If that construction engineer—he has always worked in the private sector—were asked whether he could manage without the public sector, he would say no.

Another big myth that is being perpetrated is that increased funding for welfare spending—I do not particularly like that term—means that it is all being spent on people who sit at home doing nothing. That is not true. One of the big triumphs of the Labour Government was to create a situation in which single parents, for example, can work. Single parents have been enabled to work, but only a very low proportion of them used to work, even compared with other countries, because the benefits system made it very difficult for them to do so. Tax credits, which come under the big heading of welfare spending, are designed specifically to let people work. That is what they are about. They are not about people sitting at home doing nothing. That is another myth.

I was interested to hear another hon. Member praise an academy project. We have set up similar projects in Edinburgh. I hear people talking about having a single, unitary, simplified form of training; the point is that it must be relevant to particular areas. Our training was in health care, because we had brand-new hospitals, but one size will not fit all.

Let us give up on the myths and talk about the reality. I hope that our prediction that things will not go well in the next few years does not come true, but my constituents are very afraid.

18:13

[John Howell (Henley) (Con)]

May I begin by paying tribute to my hon. Friend the Member for Mid Norfolk (George Freeman), whose maiden speech was erudite, sophisticated and entertaining? It has almost persuaded me to abandon my plan to go and live in the south of France in my retirement—when the date comes, a long time in the future—and instead to go and live in Norfolk.

I should like to talk about the words at the end of the Opposition motion and the decision

“to abolish regional development agencies”,

which the hon. Member for Birmingham, Erdington (Jack Dromey) and the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) mentioned in their speeches. We need to put RDAs into some sort of perspective. Between 1999 and 2008, RDAs cost £13 billion; salaries increased from £38 million to £120 million and running costs increased by 159%. PricewaterhouseCoopers said that the return was £4 for every £1 put in, but it is not clear whether that takes account of the increase in overhead costs. Either way, it is not a particularly interesting amount of return.

In addition, we should not forget the rather destructive way in which RDAs have gone about promoting areas overseas and reaching out for inward investment. The total cost of RDAs’ overseas activities in the seven years to 2008 was £24 million. Even Advantage West Midlands, which the hon. Member for Birmingham, Erdington much praised, has 11 offices overseas. There is wasteful competition between RDAs. Five RDAs have offices in China, which, as I have mentioned in the House before, prompted a rather indignant group of business men returning from China to complain that the Chinese do not understand the difference between the east and west midlands.

The creation of employment through the RDAs essentially happens through the regional economic strategies. We have all heard about the regional spatial strategies, but the regional economic strategies are their precursors. The RSSs are there to deliver in planning terms what the RESs deliver. I suspect very few Members have read, or even heard of, the RES for their own region. That is unsurprising; like the RSSs, the RESs are reflective not of a bottom-up approach, but of a top-down approach.

In my own region of the south-east—where I am asked to believe that the town of Henley has an enormous amount in common with the town of Dover—the concentration of resources on infrastructure has been around the Government’s agenda in Kent, whereas places such as Oxfordshire, which is an economic area in itself, have been left out of receiving any investment for many years. Such areas have had to fight to get what is due to them.

I agree that the RDAs have done some good work, but we must accept that most regions are artificial. They are political constructs, and there is no identity with the region. There is quite a lot of academic work on that, including papers by, among others, Hadjimichalis and Hudson, which I recommend to Members. Few regions have longevity or a common identity. The potential exception is the north-east, where there has been some argument for a common focus since the 1930s. The reality, however, is that the boundaries are artificial. Local Government Association research into the trading, travelling and working patterns of the British economy demonstrates that the principal sub-national economic unit is sub-regional, not regional. That was a good piece of analysis. The Labour approach to RDAs has, therefore, been part of the tired centralist agenda. It has ignored natural areas and, arguably, suppressed growth by focusing on a centralist agenda that ignores local flexibilities and opportunities.

Opposition Members tried to suggest that abolishing the RDAs would leave regions and sub-regions in a vacuum, but nothing could be further from the truth. We have proposed local economic partnerships, some of which may, if local councils and businesses wish, have similar configurations to the current RDAs. What is important is to give control back to local councils and business, and to liberate growth and local ideas. That challenge has been welcomed by local councils. I was interested to see press reports of 22 councils in Yorkshire and The Humber agreeing to support local economic partnerships, and, again, the LGA has shown there is huge support for that.

Local government is up for this. My own county has a very good vision of a technology arc from Oxford across to Cambridge. It does not need an RDA—or in this case, two RDAs—to tell it how to do that. There is no better quote with which to end my comments than one from the chairman of South East England Councils, the leader of Kent county council, Paul Carter, who said:

“The future is local. We need to strip away the old bureaucratic, regional structures quickly. Councils”—

in this case in the south-east—

“are ready and willing to take on the role of working with businesses.”

I think that is an extremely powerful route to real growth in our local economies.

18:19

[Mr David Anderson (Blaydon) (Lab)]

It is an old but true saying that if we do not learn the mistakes of history, we end up repeating them. For some Members of the House, this discussion is not just theoretical, because we have lived it—our families and our areas have lived it. My grandfather was sacked in 1926 for having the temerity to go on strike. He was blacklisted for eight years and died in poverty. My father was forced to go down the mines in 1935 as a 14-year-old at a time when, he has told me, miners were treated like slaves. People did not march from Jarrow to London just for the fun of it: they did it because the private sector had let them down.

In the 1930s, a miner was killed in the mines every six hours because of the success of the private sector. That was not because there was too much red tape, but because people did not invest in the mines. That is why, at the end of world war two, the people of this country, despite having a GDP-to-debt ratio of 262%—not 62%—did the right thing and threw that Government out. They then built a million houses, created the national health service and nationalised the major utilities and the railways. They did all that right and what was the result? In 1959, the Prime Minister said that this country had never had it so good—that was because of the things that Labour Governments had done in the 1940s and 1950s.

Unfortunately, in the next period there was general consensus in the country on one-nation Toryism. Of course, that was done away with in 1979 when Mrs Thatcher came along. She had a view of one-nation Tories from the Wash southwards and we ended up with people on the dole, mines closed, shipyards closed and steelworks closed. That was said to be a price worth paying only because the people represented by the Conservatives were not paying it. The price was paid by the people of my constituency and those of Scotland, Wales and other industrial areas while the yuppies in London were swanning around in their Porsches, drinking champagne and smoking big cigars. Conservative Members can smile because they were not there, but some of us were, and we were suffering. People struggled and saw communities going down the drain. People were burgled by their neighbours’ children and saw drugs in villages where there had been nothing but hard work for two centuries. We saw houses falling down that people had kept going for a hundred years. This is not a joke; it is serious stuff.

Hon. Members talk about unemployment—in the constituency where I lived before I became an MP, the highest unemployment rate in the past 13 years has been 7.8%, which is far too high, but in 1986, in the week that the mine I worked in was closed and 721 miners were put on the dole, the unemployment rate was 18.6%. The Conservatives should not come here lecturing us about unemployment when it is just some sort of theoretical debate they have had in the students union.

At the end of the 1980s, the public services were attacked, compulsory competitive tendering was introduced and people were put on wages of £1 an hour. We had a situation where people who had given their lives to organisations such as the health service were told, “We don’t want you any more—go and work for Joe Bloggs’ cleaning company.” People were underestimated and undervalued. The next thing was that the private sector came back in. We gave the utilities back to the private sector and we ended up with a utilities sector that was not fit for purpose. The reality is that we will probably end up with power cuts or running out of gas. Alternatively, we will end up, as the hon. Member for Richmond Park (Zac Goldsmith) suggested when he spoke so eloquently about green issues, being dependent on people like the Russians or the Ukrainians for gas and oil supplies. Why? It is because of lack of investment by private companies.

When Labour came back into power in 1997, we took action and used public money to put right some of those wrongs. We introduced the national minimum wage, we brought in rights for people at work and we introduced good-quality health and safety legislation that saves lives. We introduced regulations that stopped business people from exploiting people at work, and we should never move away from that or apologise for it. We also introduced the regional development agencies, which have not been successful in some regions—it is pointless to pretend otherwise—but the areas where they have been successful are probably those where they are needed more than anywhere else, such as in my region, where the RDA has been very successful. Taking RDAs away will cause a repeat of the past and will be the wrong way to go.

Some people say that we have no choice and that we are all in it together, but we do have a choice. We do not have to follow past accidents: we could introduce a financial transaction tax on the banks, we could take real action to attack tax avoidance and tax evasion, and we do not have to cut corporation tax. I know that it is highly unlikely that the Conservatives will want to do that, because they still want to be the party of business at the helm of the work force, but the Opposition will not stand for it. It is a shame that the hon. Members on the narrow Government side of the House—the Liberal Democrats—are supporting the other Government Members in doing that. They should be ashamed of what they are doing.

18:24

[Amber Rudd (Hastings and Rye) (Con)]

I have noticed this afternoon that there has been a lot of talk about young people in unemployment. Both my hon. Friend the Member for Wirral West (Esther McVey) and the hon. Member for Wirral South (Alison McGovern) were talking about that, and it is a common theme. It is one area that, I know, we all care about so much.

I was talking in Hastings, where we have very high levels of youth unemployment, to a young lady from Tressell training, which is a NEET—not in employment, education or training—college. I asked her what she was doing and she said that she was doing a training course, making a film about BMX bikes. I said, “That’s great. Do you do BMX biking yourself?” and she said, “No, I couldn’t possibly, because it’s dangerous and I’m pregnant.” My face fell, reflecting slightly what I thought about that, and she said, “No, don’t worry. I know what you’re thinking—you’re thinking I’m too young but I’m not, because I’m 16 next week.” She was reflecting something that we see a lot, and I do not think that it is a problem just in Hastings. A lot of young people are making a choice, because they look at the potential for jobs and do not see that it has anything to do with them.

In Hastings, 43% of the work force are in the public sector. To get into the public sector, people need qualifications. I welcome the comments made by the Secretary of State for Education today about the changes to education and the changes to our schools, which, I hope, will start to work with the lowest achievers and with the people who are struggling most. At the moment, I feel that we have a real problem with the young unemployed looking at the work force—they have no qualifications—and thinking, “That’s not for me.”

I have a radical proposal that I would like the Secretary of State and the Minister to consider. Instead of people going on to unemployment benefit—instead of their going on to the circuit of jobseeker’s allowance, then the flexible new deal and then, sometimes, back again—why not consider putting them on something new, which we could call “Vision for Jobs”, to give them purpose, work and training? In the example I am thinking of, people could start at 9 o’clock in the morning and be given two to three days of community service, one day of learning skills and one day of job search. They could be given pride in what they are trying to do by being given a weekly wage. In my vision, this weekly piece of paper would have on the right hand side “35 hours of meaningful work”, which would be set out, and—

[Mrs Mary Glindon (North Tyneside) (Lab)]

Will the hon. Lady give way?

[Amber Rudd]

Yes—actually, no, I will not give way.

On the left hand side, that slip would show what they had received—not just the jobseeker’s allowance but the council benefit and any credits that they might receive. Many young people do not know the full extent of the benefits they receive.

I know that such a scheme will be hard to deliver and that it is not straightforward, but I think that the current unemployment benefit system leaves young people to fend for themselves. It does not look after them. We need a new system. I ask those on the Front Bench and the Secretary of State to consider piloting such a scheme in Hastings. I know that he has had conversations with Tomorrow’s People and Debbie Scott, and she would be delighted to do that. We could make a change, and start it in Hastings.

18:28

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

I shall be brief, given the time available. May I begin by wishing the hon. Member for Mid Norfolk (George Freeman) all the best? He made an excellent maiden speech and I am sure that he will be a valuable addition to his Front Bench in the not-too-distant future if he continues at that pace of contribution.

In just over half an hour, the House has the opportunity to send a message to the country. On this side of the House, we know that Conservative Members are ideologically driven towards cuts. There is nothing new or fresh about their ideas. This is an opportunity in which they are revelling as they make cuts to programmes and policies that they have never liked and never supported.

Those Liberal Democrats who are sitting alongside their new best friends, however, need to hang their heads in shame. It is interesting to look at the roll of dishonour that lists the names of those Liberal Democrat Ministers who have signed this appalling amendment, which revels in a programme of cuts. Fife, Scotland and the whole of the United Kingdom is watching again and the Liberal Democrats must face up to reality—they cannot cosy up to their Conservative pals for the next five years without realising that the people of Britain will punish them for it at the next general election.

18:29

[Helen Goodman (Bishop Auckland) (Lab)]

I begin by congratulating the hon. Member for Mid Norfolk (George Freeman) on making a most amusing maiden speech. As far as I could tell, its gist was that Mid Norfolk was really big in the middle of the 18th century. I looked at “Dod’s” to find out a little more about him, and one of his recreations is hill walking, which is a shame: he will not get many opportunities to do that in Mid Norfolk.

I am proud to have belonged to a Government who decided to support young people through the recession, to have confidence in them, to invest in them and to back them. We knew that unemployment was not a price worth paying. We knew from our experience of the 1980s and 1990s what a scarring effect unemployment has and how the young are worst affected. However, it seems that this Government have learned nothing. Not only are they introducing huge cuts to public expenditure, with massive knock-on effects on private sector jobs, but they are freezing recruitment to the public sector, cutting the number of university places and now abolishing the future jobs fund.

The Tories and the Liberals said in the run-up to the general election that they were backing the future jobs fund and that they would continue with it, so I am sure that many voters will be extremely disappointed by the decision to abolish it. It is notable that not one Liberal Democrat has spoken in the debate. I assume that they are getting rather weary of their role as fig leaf to the Government. I am glad to see the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) in his place at last, but it is significant that the Liberal Democrats have been unable to face defending the amendment that the Government have tabled.

The Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) began without any acknowledgement of the fact that we faced the largest global recession since the second world war. He went on to talk about the proposals for the new Work programme, but there remain a huge number of practical questions, which he was completely unable to answer. What will happen in the gap between the time when no more people can be taken on by the future jobs fund and the time when the new scheme is introduced? What will happen to those people whose skills atrophy if they are unemployed? We are talking not just about people’s technical skills, but about their social skills, which are important if people are to maintain their morale and get another job.

My hon. Friend the Member for Wakefield (Mary Creagh) spoke about the importance of the private sector retaining its confidence and about the work that the future jobs fund has done in Wakefield, by creating 700 places for young people. She spoke about environmental projects, green businesses, young people learning to make honey and the skills that they were gaining. She pointed out the importance of apprenticeships. The Government keep telling us about the number of apprenticeships that they are creating, while conveniently forgetting that we trebled the number of apprenticeships in the past 13 years. My hon. Friend asked how the national contracts would work and how the providers would bear the risks. They are good questions, and more questions that the Minister was completely incapable of answering.

The hon. Member for North East Hertfordshire (Mr Heald) spoke about the problem of worklessness, the need for greater private sector employment and the importance of technological skills. He did not seem to be able to take into account the fact that the number of people on inactive benefits has fallen by 350,000 in the past 12 years. He did not seem to be aware of the fact that the Office for Budget Responsibility’s forecast shows that private sector employment will be lower in each of the next five years than was forecast before the Chancellor’s Budget.

The hon. Gentleman went on to talk about the importance of education and technology. I hope sincerely that he has a word with the Secretary of State for Education—he will have an opportunity to do so shortly—about the dire mistake that has been made in the cuts to the Building Schools for the Future programme that were announced earlier this week.

My hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) spoke about the importance of the construction industry. He has a great deal of experience of that, and he talked about how it was a driver for the economy.

[Mr Heald]

rose—

[Helen Goodman]

I am sorry, but I have to respond to 22 Members and I do not have much time.

The hon. Member for South West Norfolk (Elizabeth Truss) spoke about the importance of infrastructure and education spending, and about the great returns that there are from that. I hope that she will have a conversation with her right hon. Friend the Chancellor of the Exchequer and press on him the need to maintain spending on some of those.

My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) spoke about the issues in her constituency. She reminded the House that during the general election the Prime Minister said that he wanted to see cuts in the north. She was absolutely right. It was quite clear that if someone voted Cameron they would get cuts, and if someone voted Clegg they would get Cameron. She pointed out that a third of the workers in the north-east worked in the public sector, and that its efficiency can be improved by having more workers in low-cost areas.

The hon. Member for Wirral West (Esther McVey) spoke about the problem of NEETs and what needed to be done to increase apprenticeships. She spoke about a public-private partnership, which was picked up by my hon. Friend the Member for Wirral South (Alison McGovern), who pointed out that if spending in local authorities is maintained, it might be possible to continue with that.

My right hon. Friend the Member for Tottenham (Mr Lammy) gave a passionate speech about the importance of human dignity in considering all these issues. He also asked a number of questions, to which it would be interesting to hear the answers when the Minister replies—in particular, how many placements has the Minister succeeded in getting for the apprenticeships that Government Members keep trumpeting? My right hon. Friend also spoke about the connection between young people being able to work and the importance of keeping down antisocial behaviour and crime. He pointed to the huge gap between the reality and the Government’s rhetoric. We heard it even today in Prime Minister’s questions, when the Prime Minister said, in answer to a question from my hon. Friend the Member for Streatham (Mr Umunna), that he wanted a long-term strategy to engage young people. If he wants that, why is he abolishing the future jobs fund?

The hon. Member for Richmond Park (Zac Goldsmith) spoke extremely interestingly about the importance of moving to a low-carbon green economy, and he talked about how that should be done, but he left out one key thing, which is that one of the major barriers is a skills shortage. The future jobs fund had a green strand. Will he please press Ministers to have a green strand in their work?

My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) spoke with huge passion about his constituency and the role of the RDA in the west midlands. I can recall being in Birmingham and finding out about the partnerships that the DWP had with the RDA to build employment in that region. I hope that the Minister will be able to inform the House of what she said about the loss of that partner when her colleagues in the Department of Communities and Local Government came up with the proposal to abolish the RDA.

The hon. Member for York Outer (Julian Sturdy) spoke about the importance of the private sector and the need to see SMEs grow, and I think that the House would agree with that.

My hon. Friend the Member for Blaenau Gwent (Nick Smith) spoke about the need for new jobs in former mining areas. He spoke about the 50th anniversary of the Six Bells tragedy and the huge impact that mining still has on many communities. Hon. Members can come to the miners’ gala in Durham on Saturday, where they can enjoy the culture that flowed from the mining communities.

The hon. Member for Truro and Falmouth (Sarah Newton)—she does not seem to be in her place now— spoke about the importance of work and the Marmot report. I hope that Ministers listened to her and will appreciate the severe consequences for people’s health and mental health of soaring unemployment.

My hon. Friend the Member for Islwyn (Chris Evans) made a passionate speech about how the Tories treated his constituency in the 1980s and pointed out the great significance of Train to Gain, which is the programme being cut to finance the much trumpeted apprenticeships. The hon. Member for Stourbridge (Margot James) took us back to the 1960s and talked about what she perceived to be the waste in the contracting process. I hope that such waste will be reduced and less money will be spent on contractors in the new scheme that the Government will introduce. My hon. Friend the Member for Wirral South made a wide-ranging speech displaying a great understanding of the constituency she represents. She also spoke about the good work being done by Jobcentre Plus and the threat to the jobs of its staff. She mentioned how foolish that is at a time when these workers are most needed.

The hon. Member for Stratford-on-Avon (Nadhim Zahawi) said that business needs to be freed up. My hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) spoke about the imbalance between the number of jobs and the number of vacancies, and pointed to the scale of the problems we face. My hon. Friend the Member for Edinburgh East (Sheila Gilmore) made a myth-busting speech pointing out, in particular, that tax credits go to those in work, and help people to finance child care and take jobs. The hon. Member for Henley (John Howell) spoke about the regional development agencies and revealed, I am sorry to say, the complete ignorance of the Conservative party about some of the regions in the north and the significance of the RDAs, and its really foolish decision to take the same approach to the south of the country as to the north.

My hon. Friend the Member for Blaydon (Mr Anderson) made a passionate speech and pointed out that the question of unemployment is not a theoretical one, but about real people and real lives. The hon. Member for Hastings and Rye (Amber Rudd) began her speech with a story about a 16-year-old having a baby and her concerns about it. I wonder whether she has addressed with her hon. Friends the fact that the programmes to reduce teenage pregnancy are being cut. She then talked about her vision and spoke about what she wanted to see—it sounded rather as if she wanted a version of the youth guarantee, albeit a rather bureaucratic version. I point out to her that her hon. Friends have just abolished it. My hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) also spoke about the great importance of a sensible approach to tackling this problem.

What the Government have done is totally unjust. They are pulling away support precisely at the time of maximum need. Today, we have had a statement from the OECD stating that this is the moment in the recession when it is most important to have properly funded support. That is in addition to statements from local authorities, young people and the voluntary sector. We are seeing the wanton destruction of people’s lives. These are not numbers. The abolition of the youth guarantee and the future jobs fund demonstrates how little the Government care. They do not care about the young man and his partner who want to do their best for their new baby; they do not care about the mother anxious about what is going to happen to her children when they leave school; and they do not even care about the ex-soldier who wants some hope in his life. All those people currently benefit from the future jobs fund. This is why I urge all hon. Members to vote for the motion tonight and to reject the Government’s amendment.

18:44

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I start by commending Labour Members on securing this debate, because it gives us an opportunity to talk about something we think is integral to putting Britain back on the right tracks. It has been an interesting debate, but sadly, that probably has less to do with the quality of the facts from the Front-Bench team, and more to do with some of the theatrics and selective memories that have accompanied them. In the interests of everyone here, I hope that hon. Members will permit me to set the record straight, because we need to be absolutely clear about the legacy left by Labour after 13 years of failed policies.

The spin from the shadow Secretary of State simply does not match the facts. In the real world, almost 2.5 million people are unemployed across our country, and 1.4 million under-25s are not in employment, education or training. Some 2.2 million are currently languishing on old-style incapacity benefits, written off by the system that was designed to help them. Even before the recession, more than 15% of children were growing up in a household where no one worked. Income inequality is now at its highest level since records began.

[Yvette Cooper]

rose—

[Maria Miller]

I hope the right hon. Lady will forgive me for not letting her in, but I want to pay tribute to Members who have contributed to the debate today, as the hon. Member for Bishop Auckland (Helen Goodman) did.

We are now staring down the barrel of the largest peacetime deficit this country has even seen. That is Labour’s record loud and clear.

[Yvette Cooper]

rose—

[Maria Miller]

Okay, I will give way.

[Yvette Cooper]

Will the Minister confirm that the number of children in workless households fell between 1997 and 2010 from 2.3 million to 1.8 million?

[Maria Miller]

The fact that I would give back to the shadow Secretary of State is that we have the highest number of children living in workless households. If she is proud of that fact, she deserves to be on the Opposition Benches.

It was with some bemusement that I learned that the Opposition wanted to debate employment today, but it has been good to get some of the facts out. We have had a very wide-ranging debate with many thoughtful contributions, and I should like to take some time to pay tribute to those who have made them. First, of course, I have to pay tribute to my hon. Friend the Member for Mid Norfolk (George Freeman), who gave his maiden speech. It was, as I think all Members would agree, a fine, assured speech and in the very best traditions of the House. His constituents have in him a strong voice who clearly understands the issues, and he will certainly find a place here as an advocate of the Norfolk way, turnips or no turnips.

As I said, the debate has been wide-ranging, but my hon. Friend the Member for York Outer (Julian Sturdy) summed it up when he said that this Government have inherited a horrendous financial situation. This is a financial crisis that Labour knew was coming, which was why it had already identified the need for 20% cuts in Government budgets. Yet again, the shadow Secretary of State refused to identify where those cuts were going to come in her Department when she was challenged by the Minister of State, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling). She really will have little credibility until she answers that question—or did she think it would be right to continue to leave this country with the economic instability that debt creates?

The hon. Member for Wakefield (Mary Creagh) made a very thoughtful contribution and spoke at length about the importance of nurturing business, something in which we have a common interest. She was a lecturer at Cranfield School of Management and I worked in business for 17 years. Sometimes, theory and practice can be very different, but we both recognise that confidence is important when it comes to creating a stable business environment. That point was echoed by the hon. Member for Wirral South (Alison McGovern). Such confidence will come if we can show businesses in this country that we have Government debt under control and financial stability, and that we do not have the threat of a hike in job taxes, such as the Labour Government so clearly put forward.

The hon. Member for Wakefield raised a number of questions that I cannot go into in detail on now, but if there is anything she wants me to cover in more detail, perhaps we can speak later. She particularly mentioned Jobcentre Plus staff, and I can assure her that the head count will be reduced by freezing external recruitment and not extending fixed-term contracts when they come to an end.

A number of hon. Members mentioned apprenticeships, which are an important element of our strategy for tackling poverty and worklessness. My hon. Friend the Member for North East Hertfordshire (Mr Heald) talked eloquently about the role of apprenticeships in his constituency, and particularly the business-facing educational institutions in Hertfordshire that are pivotal in delivering the lowest level of NEETs in the country.

The right hon. Member for Tottenham (Mr Lammy) also talked about youth unemployment. I should perhaps remind him that we now have 1.4 million unemployed or inactive under-25-year-olds who are not in full-time education either, which is 250,000 more than in 1997. However, that is an issue we will address. He also talked about apprenticeships, which the right hon. Member for Normanton, Pontefract and Castleford discussed in her speech. She needs to have a bit more faith in British industry. Apprenticeships are at the heart of British industry. There are already 240,000 apprenticeships, and we are talking about raising that by 50,000 among small and medium-sized enterprises. That is an opportunity being delivered by this coalition Government, which I know people in my constituency are crying out for.

My hon. Friend the Member for Wirral West (Esther McVey) also raised the issue of apprenticeships, talking about the importance of getting young people back into work and the debilitating effects of worklessness. I know she will understand the importance of the Work programme in delivering for the people in her constituency.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Will the Minister give way?

[Maria Miller]

I am sorry—I hope the hon. Lady will forgive me—but we are quite short of time.

My hon. Friend the Member for South West Norfolk (Elizabeth Truss) talked about the role that debt-fuelled growth had played in the past 13 years, and the fact that regional development agencies had not been held to account rigorously enough on the returns they had delivered for the investments made. Those were points that my hon. Friend the Member for Henley (John Howell) also picked out in his thoughtful contribution. He pointed out that the future is local; I absolutely agree.

The hon. Member for Blaydon (Mr Anderson) also talked about regional development agencies. It was refreshing to hear that he understood that they have not always been successful. The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) talked about them as well. Perhaps I might point out to her that over the past eight years since they were created, the imbalance between the regions has got worse. Replacing regional development agencies will give us an opportunity to address that inequality through local enterprise partnerships, regional growth funds and all the policies we have already announced to try to reduce the inequalities that we see between the regions.

We have again had a great deal of discussion today about the future jobs fund, which was raised by the hon. Members for Bethnal Green and Bow (Rushanara Ali), for Islwyn (Chris Evans) and for Blaenau Gwent (Nick Smith). We therefore need to be clear again: we are not, contrary to what Opposition Front Benchers might assert, cancelling the future jobs fund, and they know that only too well. We are committed to delivering on the contracts that have already been awarded, but we will not award more contracts because the facts show that the future jobs fund does not work. It has not delivered the number of jobs it was intended to deliver. I fear that some of those who are crying foul on the issue are perhaps more concerned with putting a positive gloss on their legacy than with helping those who need help most.

The hon. Member for Edinburgh East (Sheila Gilmore) talked about myths, although I would challenge her on that and say that some of the things she talked about tend to fall into the category of myth themselves. After 13 years of Labour, the true fact is that the proportion of working-age people in a job is now lower than it was in 1997, while the figure for those unemployed is more than 400,000 higher. Those are facts, not myths, and I hope she will take account of that in her further contributions in this House.

We have had a number of excellent contributions to the debate. My hon. Friend the Member for Truro and Falmouth (Sarah Newton) talked about the importance of closing the gap in health inequalities. My hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) talked about the importance of getting Britain working and the need to streamline benefits. My hon. Friend the Member for Richmond Park (Zac Goldsmith) talked about job creation from green policies in a low-carbon future and intrinsically sustainable employment options, which I know he will champion well.

The hon. Member for Birmingham, Erdington (Jack Dromey) talked eloquently about the important role that manufacturing has to play in this country. As the granddaughter of a skilled tool-room worker from not too far from his constituency—the black country—I understand the passion with which he speaks. Our challenge is to ensure that UK manufacturing is competitive in the 21st century.

My hon. Friend the Member for Stourbridge (Margot James), in her usual eloquent and clear style, spoke graphically of the inflexibility of the employment programmes developed under Labour. I know she will join me in advocating the Work programme for its simplicity and for the support it will give to unemployed people. We have set out a clear plan to get Britain working. The Work programme will replace the hotch-potch of piecemeal welfare-to-work schemes that have so badly let down the hardest to help with an integrated package of personalised employment support.

My hon. Friend the Member for Hastings and Rye (Amber Rudd) advocated a similar approach in her contribution today. Providers will be paid by results, not promises. If they do not deliver people into sustainable work, they will not get paid. This will cut waste, and it will cut failure. No longer will benefit claimants have to wait until an arbitrary period of time has elapsed before they can receive more intensive support. No longer will they be denied the dynamism and ingenuity of private and voluntary sector organisations helping them into work.

[Mr Lammy]

Will the hon. Lady give way?

[Maria Miller]

If the right hon. Gentleman will forgive me, I will not as I have only four minutes left and I need to conclude my speech.

No longer will people be forced to turn down work on the basis that they would gain little more from employment. We aim to roll out the Work programme by next summer, and until then the Government will ensure that support is in place for unemployed people.

There has been a great deal of discussion today about the Office for Budget Responsibility forecasts. Again, we need to set the record straight. Growth in employment of 1.3 million is forecast over the next five years because of our plans. That figure is backed by the Chartered Institute of Personnel and Development. The previous Government’s plans were unsustainable, but we will ensure that our plans go on to provide more jobs into the future.

These are real measures to tackle systemic unemployment. They tackle its causes, they are efficient, and they are better calibrated towards challenging the indignities of dependency and worklessness. The changes will not be top-down, piecemeal or half-measured, and they will not be characterised by a pilot here or a trial there. The Work programme will be robust and comprehensive—an integrated package tailored to meet the needs of each person and responsive to their requirements. That is what people who do not have a job and want to work need.

I should like to thank Opposition Members for this opportunity to outline the way in which we will take this country out of the quagmire created by Labour. As my right hon. Friend the Member for Epsom and Ewell said, we have the support of many businesses, charities and providers of support services, as well as of many of those trapped on benefits. We have a governing coalition of two parties, united by our commitment to the role of work in tackling the causes of poverty, and by our deep disappointment with the lack of progress under Labour. This is the Government’s plan for jobs and our plan to increase employment. We will get people into work. That is what is good for Britain and for the people of Britain, and I have to say that it is about time too.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

18:59

Division 15

Ayes: 243

---

Labour: 232
Scottish National Party: 5
Plaid Cymru: 3
Social Democratic & Labour Party: 1
Independent: 1
Green Party: 1

Noes: 331

---

Conservative: 278
Liberal Democrat: 47
Democratic Unionist Party: 5

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

Question agreed to.

The Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House welcomes the emergency budget which will tackle the unprecedented legacy of debt over the next five years by reducing borrowing from a projected £149 billion this year to just £20 billion in 2015-16; notes the Office for Budget Responsibility’s projection that unemployment will fall in every year of this Parliament as a result of the Government’s policies to stimulate private sector employment by reversing the damaging increase planned for employer national insurance contributions, introducing a £1 billion Regional Growth Fund, reducing the corporation and small profits tax rates and increasing the Enterprise Finance Guarantee, resulting in the creation of a projected two million new private sector jobs by 2015-16; further welcomes moves to implement a single work programme that will provide personalised support to help people move into sustained employment, to introduce a £1,000 increase in income tax personal allowances which will incentivise work, to reform the benefits system to ensure that work pays and to provide 50,000 new apprenticeships and 10,000 new university places for young people, thus stimulating growth, delivering jobs and creating a fairer society for all.

Schools Funding

Wednesday 7th July 2010 Commons Chamber

19:14

[The Secretary of State for Education (Michael Gove)]

With permission, Mr Speaker, I should like to apologise to you and to the whole House for the way information accompanying my oral statement on Monday was provided to all Members.

During my statement a list of schools affected by our plans to review capital funding was placed in the House of Commons Library. I wish to apologise to you and to the whole House for not placing that list on the Table of the House and in the Vote Office at the beginning of my statement, as you reminded me page 441 of “Erskine May” quite properly requires. I further wish to apologise for the inaccurate information on the list I was supplied with and which I gave to the House. [Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the Secretary of State. The statement will be heard in silence. That is the way things are done in these circumstances.

[Michael Gove]

A number of schools were miscategorised, and for that I apologise. In particular, there were schools that were listed as proceeding when, in fact, their rebuild will not now go ahead. That confusion caused Members of this House and members of the public understandable distress and concern, and I wish to take full personal responsibility for that regrettable error.

I also wish to apologise to you, Mr Speaker, and to the House for any confusion over the manner of my apology today and any related media speculation. In responding to press queries earlier, my Department confirmed that I was writing to those affected by these mistakes, and it was my intention then to come to the House with as accurate a picture as possible of the exact errors and to apologise for them. I have placed a revised list of schools in the Vote Office and am writing to all Members affected. I would be grateful if any Members who are concerned that schools may have been wrongly categorised were to contact me personally, so that I can ensure, with them, that the information we have been supplied with is as accurate as possible. Once again, Mr Speaker, I am grateful to you and to the whole House for granting me the opportunity to make this statement and, once again, to apologise unreservedly.

[Vernon Coaker (Gedling) (Lab)]

May I thank the Secretary of State for finally coming to this House to make an apology for the serious errors made in his statement on Monday about the cuts to the school building programme? It is right that he apologising to this House, but he should also apologise to all the pupils, parents and teachers expecting new buildings, who have now had them cruelly snatched away.

The chaos and confusion around this announcement is frankly astonishing. First, during the statement on Monday the Secretary of State had a list of the more than 700 school building projects that he was axing, but no list was available to any other hon. Members during the debate. Does the Secretary of State agree that this must not happen again and that, in any other statement he makes, timely and accurate information will be made available to all hon. Members?

We then find out that this list of school projects to be cut by the Government was inaccurate and that schools who thought they were safe have, in fact, lost out. A second list was published on Monday night, followed by a third list yesterday afternoon, and we now believe a fourth list may be coming. A total of 25 schools had wrong information: nine schools previously listed as going ahead have now been told they will be cancelled; seven schools previously listed as unaffected have now been told they are “under discussion”; and five schools which are under review or have been axed were not even on the list at all. These are schools in Sandwell, Northamptonshire, Bexley, Doncaster, Greenwich, Peterborough and Staffordshire. Can the Secretary of State explain how this possibly could have happened?

It is good that the Secretary of State has finally been dragged kicking and screaming to this House to apologise, but the real apology should be directly to the more than 700 communities up and down this country expecting new schools, who now will not get them. The real apology should be to the teachers, pupils, parents and governors from every area who have had the prospect of new buildings and new facilities cruelly snatched away. Will the Secretary of State now apologise to the country for shattering the dreams and hopes of so many pupils and schools across the country?

[Michael Gove]

I thank the shadow Minister for his questions, and I understand the passion with which he speaks; it is entirely understandable in the circumstances. May I also apologise—quite rightly—to those in the borough of Sandwell and all those other boroughs that were most affected by the inaccurate way in which I made my announcement? I entirely agree with him that it is parents and teachers in those schools, who believed that they were spared and found out 24 hours later that their schools were to be closed, who were the most badly affected. It is their feelings that I am most affected by. He is absolutely right to invite me to apologise, and I am more than happy to underline how sorry I feel towards the parents and teachers involved.

The hon. Gentleman asks me to ensure that this will not happen again. It will always be my aim to ensure that timely and accurate information is provided to the House, and I apologise once again for the inaccuracies in the information given. He mentions that two lists were supplied; they were, indeed. One listing was by local authority and one listing was by parliamentary constituency. We have sought to ensure that the list that is now supplied is as complete as possible and as accurate as possible, and I repeat again that I am apologising to all Members who may have been misled, inadvertently, by the information that was supplied on Monday. For those Members who wish to contact me personally, I hope to be able to talk to all of them and reassure them about the future of the building projects in each constituency affected

[Tony Baldry (Banbury) (Con)]

Does my right hon. Friend find the synthetic anger somewhat sickening? Banbury—[Interruption.]

[Mr Speaker]

Order. I know that passions are running very high on this matter—[Interruption.] Order. I certainly understand why, but the hon. Gentleman must be heard, and he will be.

[Tony Baldry]

Banbury school in my constituency is one of those where my right hon. Friend has had to cut the funding, and, actually, I think that all my constituents understand that, given how the Opposition left the cupboard absolutely bare, it really does not lie in their mouths to complain that we have had to take the action that we have. I have no hesitation or problem in going to the teachers and parents of pupils at Banbury school and explaining the realities of life as they are.

[Michael Gove]

I am very grateful to my hon. Friend. On Monday I explained to the House why I had to take the regrettable decision that we took. Today is a day for me to apologise for the inaccuracy that accompanied my statement. I am grateful for the generosity of his support, but the important thing that I would like the whole House to appreciate is that I am apologising today, and the only person who should apologise today is me.

[Mr Tom Watson (West Bromwich East) (Lab)]

Mr Speaker, I can assure you that there is nothing synthetic about the anger felt in Sandwell. The pupils in Sandwell have seen what the new politics is: they have seen the attempt to sneak out a half-spun, half-apology on the BBC, and they have seen the Secretary of State come here humiliated for the second time this week to apologise to them. He can embarrass himself, he can disgrace his party, but what is intolerable is that he has cynically raised the hopes of hundreds and thousands of families. You’re a miserable pipsqueak of a man, Gove. You have—

[Mr Speaker]

Order. Before we go any further, I must ask the hon. Gentleman to withdraw the term that I think he used. I think I heard the term, “pipsqueak”. The hon. Gentleman must withdraw that term. It is not appropriate—[Interruption.] Order. I know what I am doing. Members should leave this matter to me.

[Mr Watson]

Out of deference to you, Mr Speaker, I withdraw it.

[Mr Speaker]

I am grateful to the hon. Gentleman.

[Michael Gove]

I am grateful to the hon. Gentleman for his question; it gives me the opportunity once again to apologise to his constituents and to other parents and teachers in Sandwell for the confusion that was caused by the mistake that I made on Monday. I understand the passion that he brings to the issue, and I understand how hard he fights for his constituents. I shall be very happy to go to West Bromwich and apologise to those who have been misled by the mistake that has been made. I am more than happy to do so. As I said earlier, the mistake was mine and mine alone, and I am happy to acknowledge it.

[Bob Russell (Colchester) (LD)]

I am grateful to the Secretary of State for his statement here this evening, because one school that has been wrongly classified is the St Helena school in my constituency, which by some happy coincidence is the one that I used to go to. However, will the Secretary of State have words with Conservative-controlled Essex county council, which, notwithstanding his statement, still proposes to shut two secondary schools in my constituency? They were going to be shut if Building Schools for the Future money had been forthcoming. There is no money, but the council is still going to shut them—despite the fact that 96% of my constituents do not want them shut.

[Michael Gove]

I know exactly what my hon. Friend means; I am very well aware of the situation in Colchester; and I know that the situation to which he alludes is one that now, as a result of the decision that was taken on Monday, we can freely and, I hope, constructively discuss.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Is the Secretary of State aware that his statement today will have done nothing to assuage the anger in Coventry at his continued ignoring of the situation in Coventry? I understand that not a single one of its schools, even on the revised list, is to be given the go-ahead. That is a degree of neglect and irresponsibility on his part which, frankly, we did not expect of him.

[Michael Gove]

I am grateful to the hon. Gentleman for his question. Once again, I expressed my regret on Monday, and I underline it again today, that we are not in a position to go ahead with 50% of the projects under the Building Schools for the Future programme. My reason for coming to the House today was to apologise for the 25 or so schools that were wrongly categorised in the 1,400 or so about which we made an announcement. However, I do understand the particular sense of regret that many—he and his parliamentary neighbours—will feel across Coventry and I am sorry that the decision that I announced to the House on Monday was forced on us because of the regrettable financial legacy that we inherited.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I thank the Secretary of State for the clarity that he has provided today on a very thorny issue. Rather than focusing on the synthetic anger of Labour Members, I welcome his offer to apologise to the schools affected, but ask him to ensure that he writes not only to the local education authority but to the individual headmasters. I have spent today on the phone having to deal with disappointed parents and headmasters who are uncertain of what the situation is. I welcome his apologies; can he please ensure that they are transmitted to the headmasters in my area and the other areas affected?

[Michael Gove]

My hon. Friend makes a very good point; I shall certainly seek to do so.

[Fiona Mactaggart (Slough) (Lab)]

I understand that the Secretary of State has apologised for errors in the list, but why did the list not come to the House in the first place? Was it because he did not think that other Members of this House should see it, or was there some other reason?

[Michael Gove]

I thank the hon. Lady for her question. No, absolutely not. I wanted to make sure that Members had as much information as possible. In the course of my statement, I outlined the criteria by which I had been guided and the fact that we were going to terminate those projects which had not reached financial close, with the exception of some projects which were at the so-called close of dialogue stage. The fact that the list was placed in the Library, and not on the Table of the House and in the Vote Office, is something that I deeply regret and for which I should like to apologise once more. The hon. Lady’s question provides me with an opportunity to say, once again, that I am sorry, to her and to other colleagues.

[Nick Boles (Grantham and Stamford) (Con)]

The whole House welcomes the Secretary of State’s gracious apology. However, is not the real deceit the more heinous because it was intentional—the one perpetrated by Labour Members who ran around the country during the election campaign promising school rebuilding programmes that they knew the money was not there to supply? That is a disgrace.

[Mr Speaker]

Order. Let me say very gently that, in so far as one can hear everything that was said, the hon. Gentleman has made his point, and made it very clearly, but the Secretary of State is not responsible for the policies or for the behaviour of other parties. He might, however, wish very briefly to reply.

[Michael Gove]

I am sure that the whole House will have heard what my hon. Friend says.

[Barry Gardiner (Brent North) (Lab)]

Does the Secretary of State understand not only the anger but the confusion of the young students from Copland school and Alperton school, who, at the very moment when he was at the Dispatch Box making his original statement, were receiving an award from the organisers of Building Schools for the Future for their contribution to the design of the new schools that they then heard him announce were not going ahead?

Does the Secretary of State also understand that the manner of his dealing with questions on the statement—

[Mr Speaker]

Order. I have cut the hon. Gentleman off at one and a half questions, but I think we have the gravamen of what he wanted to convey.

[Michael Gove]

As the hon. Gentleman might know, I have visited Copland school and know that its facilities are less than adequate, so I appreciate the frustration that the staff, pupils and parents of that school will feel. I underlined on Monday the regrettable fact that the economic circumstances that we inherited meant that we could not go ahead as we might have wished with the school rebuilding programme. I also stressed that the manner in which Building Schools for the Future had been organised did not seem to me to guarantee the best value for money. We are reviewing how capital is allocated in order to ensure that we get value for money so that those schools across the country that do need rebuilding and renovation will receive that money in a more timely and efficient manner in future.

[Stephen Lloyd (Eastbourne) (LD)]

To my ears, the Secretary of State’s apology is sincere. One school affected is the Eastbourne technology college, which is under consideration. So that I can reassure the head and the staff, can my right hon. Friend give me some indication of exactly the time line for the decision on whether the building will go ahead?

[Michael Gove]

We hope to make the decision in respect of the school to which my hon. Friend refers before the House rises for the summer, but I will obviously seek to talk to him after this statement in order to clarify exactly the position that his school is in.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Just before there is a growing enthusiasm for participation in the statement—people are standing up who were not standing up before—perhaps I can just emphasise to the House that the statement is about the manner in which matters were handled, and indeed to an extent about the inaccuracy of lists. We are not having a re-run of Monday’s statement, when the Secretary of State, if memory serves me, was available for one hour and 20 minutes. We are not going through all of that again.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Questions should therefore relate to matters in the statement tonight.

[Stephen Pound (Ealing North) (Lab)]

I thank the Secretary of State for his dignified statement, and I have a deal of sympathy for him, but may I ask for a little more than sympathy for the people of Cardinal Wiseman high school in my constituency, who have been told that their case for a rebuild under BSF is under further discussion as a sample school? Can he give the House some indication of when he will make a decision on that, because they desperately need to know the facts?

[Michael Gove]

Ealing is one of those local authorities in that stage prior to financial close called close of dialogue. As the hon. Gentleman quite rightly points out, several schools in each of those local authority areas are called sample schools. Those schools are thought to be in the most urgent need. For that reason, we wish to do everything possible to try to ensure that they will receive funding as quickly as possible. As I mentioned in response to my hon. Friend the Member for Eastbourne (Stephen Lloyd), I hope to be able to provide clarity by the time the House rises for the summer recess.

[Chris Skidmore (Kingswood) (Con)]

I should like to thank the Secretary of State for his apology. I am sure that not one person in the Chamber has not made a mistake at some stage. I also imagine that few in the Chamber would be able to apologise to the House with such dignity and humility, and I thank him for that. However, will he explain the reason for the list that was released, and the reasons for the cuts that we are seeing? The fact is that there simply was no money—it was promised and never delivered. Will he explain why the list was released in the first place?

[Michael Gove]

rose—

[Mr Speaker]

Order. The right hon. Gentleman should sometimes beware the entreaties of his friends, and I know he will be conscious of that. I have just made the point that we cannot rehearse all the arguments behind the announcement. I will leave it to the judgment of the Secretary of State briefly to respond.

[Michael Gove]

My hon. Friend refers to the list. The list was furnished to me by those involved in the Building Schools for the Future project, but it was my responsibility to check it before it came to the House. I was anxious to do so in as rigorous a way as possible. The fact that the list contained inaccuracies when it came to the House is my responsibility alone. It was for that that I wished to apologise, and I underline that apology thanks to my hon. Friend’s question.

[Joan Walley (Stoke-on-Trent North) (Lab)]

Surely the Secretary of State owes the House an explanation as to why he brought wrong information to it. We do not seem to have had such an explanation. Just for the record, given that the list is now elsewhere and not available to hon. Members in the Chamber listening to the statement, could he reassure us about and explain the decision that has been made on the Staffordshire schools?

[Michael Gove]

I would like to make two points in response to the hon. Lady’s question. I sought as quickly as I could to bring to the House a statement explaining the future of Building Schools for the Future. That is why I made the statement on Monday. There had been a great deal of speculation about the future of the project, and to allow it to proceed would have meant that whichever schools were built, unnecessary additional administrative costs would have been incurred. That is why I sought the fullest possible information, and sought to bring it to the House in a statement at the earliest possible stage. I know that the hon. Lady is a Member of Parliament for Stoke-on-Trent. One announcement that I was able to make on Monday was that Stoke-on-Trent, as a local authority that has reached financial close, will see all the schools under Building Schools for the Future rebuilt or refurbished.

[Claire Perry (Devizes) (Con)]

Will the Secretary of State confirm that the other piece of important factual information he presented on Monday, the expansion of the Teach First programme, is in fact accurate, and that the numbers were presented—[Interruption.]

[Mr Speaker]

Order. I am sorry; I respect the hon. Lady’s enthusiasm, but the short answer is that the Secretary of State cannot go into that, because it is way beyond the terms of the statement today. If I know the hon. Lady, she will save it up for another day, and we look forward to hearing it on a subsequent occasion.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

My hon. Friend the Member for Stoke-on-Trent North (Joan Walley) has gone to the heart of the situation, and the Secretary of State has markedly failed to answer her searching question. When the Secretary of State delivered his statement to the House, he presented the image of a man who had spent 24/7 examining the Building Schools for the Future programme and had at his fingertips absolutely every issue relating to it, yet we learn today that he did not have that knowledge. He should apologise to the House for his failure as a Secretary of State, and for failing markedly to be on top of his brief.

[Michael Gove]

I hear what the hon. Lady says, and I remember also her passionate intervention on Monday. I take note exactly of what she said, and I can only underline again that I apologise for the fact that the information I presented to the House was inaccurate.

[Clive Efford (Eltham) (Lab)]

It is extraordinary how this list was produced and put before the House. Let us recall what happened on Monday: the Secretary of State was cuddling the list as if it contained secret information, and he slipped bits out only as they were forced from him in response to questions from Opposition Members. Therefore some of us on the Opposition Benches suspect that the Secretary of State knew that the list was not complete and that there were errors in it when he was delivering it in the House—[Interruption.]

[Mr Speaker]

Order. I must ask the hon. Gentleman to resume his seat. I would not want to misunderstand the hon. Gentleman, but I am gaining an impression that he is suggesting that—[Interruption.] Order. I am gaining an impression that he is suggesting that the Secretary of State was engaged in a knowing deception. [Interruption.] I really do not believe that to be so, and to my knowledge there is certainly no evidence for that, and I cannot have a Member accusing any other Member of knowing deception—of deliberately misleading people—unless that can be substantiated.

[Clive Efford]

rose—

[Mr Speaker]

I think it would be better if the hon. Gentleman left it there, but I will allow him a sentence to try to clarify his position.

[Clive Efford]

I did say that some of us suspect that that is the case, Mr Speaker, and if you ask me to withdraw that, I will obviously do so, but I think there is something that needs to be investigated further in the way that the Secretary of State treated the House. [Interruption.]

[Mr Speaker]

Order. What I would say to the hon. Gentleman is that I have given a ruling and I think it is a fair one. I asked the hon. Gentleman to clarify his position, but it has not moved me, if I may say so. However, he is a very experienced parliamentarian—he and I came into the House together—and if he wants to table questions or write letters or both, and to engage in all sorts of other activities that satisfy him in relation to this subject, I do not think he will require any encouragement from me to do so.

[Michael Gove]

In the spirit of the hon. Gentleman’s question, I mentioned in response to a previous question that two lists were furnished on Monday afternoon. One list was supplied to Members, which listed schools by constituency, and another, which listed schools by local authority, went on my Department’s website. The aim was to be as candid as possible with all the people raising queries about the number and location of affected schools. I had sought to satisfy myself that the list I had was as accurate as possible, and I had ensured that the people who supplied me with it knew the importance of providing accurate information to the House. The fact that inaccurate information was supplied to the House is, however, my fault, and my fault alone. The fact that the information did not reach the hon. Member in the most accurate and timely way possible is my fault, and my fault alone, and I apologise unreservedly.

[Mr Andy Slaughter (Hammersmith) (Lab)]

We must take the apology for what it is, but the Secretary of State must now deal with the consequence of that, which is that he failed to give an opportunity to Back Benchers to question him on the implications of, in the case of my constituents, losing 20 school-building programmes. My constituents go to 20 of these schools. The Secretary of State will remember that he referred to Phoenix school as an excellent school. Its head teacher, Sir William Atkinson, told the Evening Standard, “It is devastating news”. He has lost £25 million. He has buildings with concrete crumbling, iron pipework that has been fractured, lots of leaks and flat roofs that are leaking. Will the Secretary of State therefore give parliamentary time, or meet me and Sir William and the other heads, to discuss what we do now?

[Michael Gove]

I am always very happy to talk to the hon. Gentleman and, indeed, to schools in Hammersmith and Fulham.

[Derek Twigg (Halton) (Lab)]

I am sure that the Secretary of State will understand the massive anger in my constituency over what has happened, particularly as the permanent secretary to the Department for Education has now clarified the fact that the money for this programme was there. Is the Secretary of State aware of the following type of error, which happened in my constituency? A school that was proposed for closure was told in the literature given out by his Department that that had been stopped. If that is another error he was not aware of, how many more might still be out there, and what is he going to do about that?

[Michael Gove]

I am grateful to the hon. Gentleman for making that point. In my statement, I made it clear that I would be grateful if hon. Members would ensure that any information they had that pointed to inaccuracies was put to me, and I am very happy to discuss that. Following the questions and points of order that have been raised by Opposition Members, my Department has insisted on looking at all the information that has been placed in the public domain in order to check it for accuracy. That is why I have come to the House today to make this statement. I believe that about 25 schools were miscategorised. I think that the shadow Minister, the hon. Member for Gedling (Vernon Coaker), indicated in the question that he asked that that was around the figure that he had identified as well. With other schools that were listed, there were clerical errors—for example, the date of opening was not accurately recorded—and for that I apologise.

[Ian Mearns (Gateshead) (Lab)]

I am not really sure about this, Mr Speaker, but is the Secretary of State saying that the list that was put in the Vote Office this afternoon is not accurate? I understand from my hon. Friend the Member for North West Durham (Pat Glass) that a school that is listed as in her constituency actually is not in it.

[Michael Gove]

It is my belief that the list we have placed in the Vote Office is accurate. I know that there was particular confusion regarding schools in Durham in the first list that was issued on Monday, but we have sought to clarify that and I believe that it is now correct.

[Mr Speaker]

I am grateful to the Secretary of State and to all hon. and right hon. Members for their co-operation.

Business without Debate

Wednesday 7th July 2010 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Employment Agencies, Etc.

That the draft Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010, which were laid before this House on 23 March 2010, in the previous Parliament, be approved.—(Mr Goodwill.)

Question agreed to.

Business of the House

Motion made,

That, notwithstanding the practice of the House as to the intervals between stages of Bills brought in upon Ways and Means Resolutions, more than one stage of the Finance Bill may be taken at any sitting of the House.—( Mr Goodwill.)

[Hon. Members]

Object.

[Mr Speaker]

Mr Mark Williams will now present a public petition. [Interruption.] Just before Mr Williams gives the detail of his petition, I appeal to hon. and right hon. Members who are leaving the Chamber to do so quickly and quietly, because we want to hear what he has to say.

petition

Wednesday 7th July 2010 Commons Chamber

19:42

[Mr Mark Williams (Ceredigion) (LD)]

I have a petition on behalf of Mrs Elizabeth Morley and other constituents from Ceredigion on the subject of the Israeli blockade of Gaza.

The petition states:

The Petition of the people of Ceredigion,

Declares that the Petitioners believe that the Government should take all actions within its power to end the blockade of Gaza.

The Petitioners therefore request that the House of Commons urges the Government to condemn the blockade on Gaza and Israel’s attack on peace activists in international waters; and urges the Government to demand of Israel the release of all activists detained and to urge all international institutions, including the UN, the EU and human rights agencies and organisations to work towards ending Israeli impunity.

And your Petitioners, as in duty bound, will ever pray.

[P000842]

British Waterways

Wednesday 7th July 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Goodwill.)

19:43

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Thank you for allowing this Adjournment debate, Mr Speaker, on the future of British Waterways. May I also thank the waterways Minister for his presence here tonight?

This topic might seem a rather limited one, of interest only to narrowboat enthusiasts, barge owners, dog walkers and lock-keepers, but it is of profound importance not only for canal-side communities in villages, market towns and cities across the country, but for the intellectual validity of this Government. For what we have before us tonight is a test case for the big society in action. That, in case you missed it, Mr Deputy Speaker, is the Conservatives’ big idea: a commitment to society, not the state, and to people power, not market dogma. My message to the Minister is very simple: we are here to help him. As he begins his grand battle with the Treasury on the future of British Waterways, I want him to know that he has my support against the plunderers and privatisers who work alongside him.

We are an inland nation as much as an island nation; a country shaped as much by our great rivers and historic canals as by our by encircling seas. Take, for instance, my own wonderful constituency of Stoke-on-Trent Central. In Simeon Shaw’s 1829 classic, “History of the Staffordshire Potteries”, he writes of how

“in the vale below Burslem, July 26, l766, the first clod was cut of the Trent and Mersey Canal, by the late Josiah Wedgwood, Esq., then recently appointed Potter to the Queen Consort of George III.”

Wedgwood’s interest in canals was driven by profit rather than pleasure. He had already petitioned this place in 1763 for a new system of turnpike roads to allow for the easy carriage of the raw materials needed for his Etruria pottery works as well as the safe delivery of his finished ceramics, but still the road network let him down. So in 1765 he personally subscribed £1,000 for a new canal to connect the Trent with the Mersey and to allow his firm to export both nationally and internationally. The great engineer James Brindley was commissioned for the task and soon his entire network of canals criss-crossed the country, with Staffordshire as their box junction.

To allow for the transport of limestone and coal into Stoke-on-Trent, a new canal was added—the Caldon canal—that stretched from Etruria up into the surrounding moorlands. All that underpinned the boom days of the Potteries. “Pro patria populoque fluit”—it flows for country and people—was the Trent and Mersey’s motto, and the money certainly flowed for Wedgwood.

No wonder the great Adam Smith felt moved to praise canals for

“diminishing the expence of carriage”,

and putting

“the remote parts of the country more nearly upon a level with those in the neighbourhood of the town”.

As a vehicle for the investment of new provincial capital flows and for easing the transport of goods, canals were an essential feature of the first industrial revolution, but by the 1840s, the canal boom had given way to railway mania. Indeed, the consequence of rapid urbanisation and industrialisation meant that the canals and waterways of Britain were soon in danger of becoming open-air sewerage systems.

In 1847, the Scottish novelist Hugh Miller described the Irwell in Salford as

“a flood of liquid manure, in which all life dies, whether animal or vegetable, and which resembles nothing in nature, except perhaps the stream thrown out in eruption by some mud-volcano.”

My old friend Friedrich Engels was equally disparaging about the state of Manchester’s Irk,

“a narrow, coal-black, foul-smelling stream...out of whose depth bubbles of miasmatic gases constantly rise and give forth a stench that is unbearable.”

Railways took over from the canals, canal companies went into liquidation or were run down by railway owners, and local authorities declined to pay for canal upkeep.

[Roger Williams (Brecon and Radnorshire) (LD)]

I understand the hon. Gentleman’s general point about railways taking over from canals, but does he accept that because the Glanusk estate refused to have the dreaded railway across their land, the Mon and Brec canal persisted for a lot longer than most canals?

[Tristram Hunt]

I take the hon. Gentleman’s point. I bow to his superior knowledge on the specificities of that point and I agree with it. However, there was a broad concern about the control railways had over canals in the late 19th century, which led to their being run down and to a collapse in infrastructure. Tonnage levels fell, canal miles collapsed and locks crumbled.

Eventually, the tide turned. The first stirrings of preservation can perhaps best be traced back to L. T. C. Rolt’s masterpiece, “Narrow Boat”, which described a journey taken in 1939 and expressed a terrible fear that

“if the canals are left to the mercies of economists and scientific planners, before many years are past the last of them will become a weedy, stagnant ditch, and the bright boats will rot at the wharves, to live only in old men’s”—

and we should add women’s—

“memories”.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

My hon. Friend speaks eloquently about the history of canals. Does he not agree that the Olympic legacy in east London involves a future for our waterways and that the future of British Waterways, among other bodies, is therefore very important in ensuring that the renaissance of canals continues into the next century?

[Tristram Hunt]

I absolutely agree with my hon. Friend, and I do so as I shunt towards the future and get away from the past. Having seen the Prescott sluice along the Lea valley, I know the wonders of the valley.

Unfortunately, in the mid-19th century, the Government failed to rise to the task of looking after the future of the waterways. A cash-strapped British Transport Commission could not provide the investment needed to open up the waterways and still focused on freight traffic, rather than on the leisure potential of the waterways. Only with Barbara Castle’s great Transport Act 1968 was British Waterways given a specific mandate to focus on exploiting the enjoyment potential of our rivers and canals. Since then, of course, the transformation has been dramatic. All hon. Members will have witnessed in our constituencies the transformation in water quality and amenities brought about by the new British Waterways strategy. In Stoke-on-Trent, the Caldon canal has been rescued from closure and now provides a stunning route from the urban gothic of the Potteries to the stark beauty of the Staffordshire moorlands. Indeed, we even have our very own Hanley regatta based on the canal.

By the early 2000s, some 200 miles of new and restored waterways were added to the 2,000 mile network—a faster expansion than at the height of the industrial revolution. Moreover, we now have an unprecedented 34,900 licensed boats on the network and some 11 million people visit its waters and banks every year. According to Her Majesty’s Treasury, out of the £330 million total value of inland waterways managed and owned by British Waterways, the amenity and recreational use amounts to £230 million and the use for freight £700,000—but that £700,000 is not to be sniffed at, and it was with great pleasure that we learned that Tesco has begun to move much of its wine stock by canal.

Yet a revived canal network has also proved a highly effective vehicle for some £10 billion-worth of urban regeneration. Whereas once we in this country sought to deny our industrial inland heritage, with buildings jutting up to the canal edge, offering no space for waterside walks or civic space, canals are championed today as placemakers and urban signifiers.

[Claire Perry (Devizes) (Con)]

I am grateful to the hon. Gentleman for bringing such a fascinating topic to the Floor of the House. I am delighted to listen to the eloquent things that he says about the value that canals bring to our localities. In my case, the Kennet and Avon is the longest in-water canal in the country—if I may make that proud boast—but I submit that its restoration had much to do with the volunteer activity of the Kennet and Avon Canal Trust, plus a hefty dose of lottery money, delivered not coincidentally under the last Conservative Government. Of course, British Waterways had a part to play in that, but it is much more a reflection of the local love, enthusiasm and energy that the volunteers in my constituency feel for such an important asset.

[Tristram Hunt]

I am in full agreement with the hon. Lady. The wonder of canals is the civil society, the volunteering and the ethos around them. I was a trustee of the Heritage Lottery Fund in a previous life and followed with interest the Kennet and Avon’s progress. We have seen in all sorts of communities along the Kennet and Avon the regeneration aspects brought by canals.

[Sir Peter Soulsby (Leicester South) (Lab)]

I congratulate my hon. Friend on bringing this important issue before the House. Does he agree that British Waterways has had most success in promoting regeneration when it has brought its own property, land and buildings to the table with partners and has led those partnerships, and that, if it were to lose control of that property and land and those buildings, it would be very much enfeebled in its ability to promote regeneration?

[Tristram Hunt]

I am in full agreement with my hon. Friend, who brings me to the dark spectre of Her Majesty’s Treasury, which is where we fear that forces are at work that want to access that property in not the most progressive manner. The capacity of British Waterways to use volunteering, to bring in all sorts of other funders and to have that property asset inspires regeneration.

[Alun Michael (Cardiff South and Penarth) (Lab/Co-op)]

I am grateful to my hon. Friend for the way in which he is introducing the debate. As a former waterways Minister, may I tell him that what is striking is the nature of the cross-party consensus in respect not only of canals as a vital part of our heritage, which he has illustrated so well, but of their importance to tourism, regeneration and the environment? Will he invite the Minister to embrace the proposal made in the last Parliament to create a national trust for canals, to secure their long-term future and viability, using the assets to which he refers for the benefit of the long-term future of the canal network and therefore balancing the strengths of the system with the resources to deal with the repair and maintenance requirements, without which the canals will not be much of a heritage for long?

[Tristram Hunt]

I am in full agreement. First, I would like to say what the Minister should not do, which is listen to the Adam Smith Institute, which is keen to privatise British Waterways, and in the process hopes to realise £400 million—a rather low price, I think, for the centuries of heritage as well as the property assets.

There is no doubt, however, that a change in governance is needed. Currently, the nation is underspending by around £30 million a year on its waterways, and, in the words of the British Waterways chairman,

“without the required spend on canal maintenance and repairs the overall physical state of Britain’s waterways will once again go into decline.”

As my right hon. Friend makes clear, the Labour party fought the last general election on precisely that message of reform.

In December 2009, the then Government published details of its asset portfolio and promised

“to consider alternative models for the British Waterways business as a whole, such as mutual or third sector structures.”

That is what my right hon. Friend has described as the National Trust model, whereby British Waterways’ property endowment will be placed in a charity-locked mechanism to fund future maintenance. But this means more than just establishing an effective financial footing. It also means mutualising the governance system by extending democratic control to waterway licence holders, employees, volunteers, partner organisations such as local charities and the lottery, as well as members of the general public. That third sector model will give energy, activism and public buy-in to the sector. We in the Labour movement call it the co-operative principle.

So it was with great delight that I read in the coalition agreement that the Government

“will support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services.”

I was equally impressed by the Minister’s statement on 21 June where he highlighted the role of civil society in creating what the Government call the big society, and his commitment to look at a third sector model for the future of the waterways.

[Meg Hillier]

Does my hon. Friend, like me, tremble at the thought of the alternative to the model that he proposes—that this asset will be sold off and thereby, once and for all, be out of public control and away from where it should be, which is in the hearts of the public?

[Tristram Hunt]

I am in full agreement. We do not know what would happen were British Waterways to be privatised, in terms of fees, uses and common access, and that sense of heritage, of a past coming down to us. The worry is that the Minister has decided to take no decisions until after the forthcoming comprehensive spending review. My worry is that by the time we reach the CSR, his colleagues in the Treasury might have decided that flogging off the property portfolio was too good an opportunity to miss. We might find ourselves in the awful position of watching the Chancellor stand at the Dispatch Box and sell our national heritage down the proverbial Kent and Avon, in the classic Treasury manner of knowing the price of everything and the value of nothing.

[Chris Heaton-Harris (Daventry) (Con)]

In my constituency, I have a huge swathe of the Grand Union canal, with fantastic marinas such as Braunston and a huge interest of the populace, who spend much of their leisure time around the canals. Given the hon. Gentleman’s analogy that the dark spectre of the Treasury is lurking all around, will he remember that in the dark days of the last Labour Government, when European fines were levied on the Government, money was moved away from the British Waterways budget into other areas to cope with that funding black hole? I would like to think that there is definitely cross-party agreement on the idea of mutualisation in the future.

[Tristram Hunt]

The hon. Gentleman confirms the point that the traditional model of funding is really no longer credible, not least under this Government’s rather aggressive approach to the public finances.

I agree with the hon. Gentleman that we are in some form of agreement, and that is why we have come together this evening to support the Minister in his lonely pilgrim’s progress against the big beasts of Whitehall. He might call it the big society, we might call it the co-operative spirit, but what we must seek to establish is a modern national trust for British Waterways, and a financially secure, democratic and sustainable future for the inland waterways that made our wealth and now help to shape our national identity.

20:00

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I congratulate the hon. Member for Stoke-on-Trent Central (Tristram Hunt) on securing this debate. After such a tense afternoon in the Chamber, it is nice to be able to find a subject on which there is a large degree of agreement across the House. He is well known for having a keen interest in the heritage and history of this country, and I also know that he combines this passion with representing with pride the constituency that has more miles of canals than any other in England. I take similar pride in the canal—the Kennet and Avon canal in west Berkshire—that runs in part through the constituency I have the honour of representing. I am old enough to remember when it was in large parts just a ditch. It was restored with the hard work, love and what the Americans call emotional capital of local people, with the backing of British Waterways and lottery money, as my hon. Friend the Member for Devizes (Claire Perry) pointed out. That has created an asset of unique value.

The hon. Gentleman talked about the added value of the canals. We must not be concerned purely with quality of life and recreational value; they are of course a financial asset because of what they provide through tourism and the local economy, particularly in rural areas such as mine. The hon. Member for Hackney South and Shoreditch (Meg Hillier) attends debates on these matters assiduously. She feels passionately about the Regent’s canal, just as so many of us feel passionately about our local canals. I have learned from the canal in her part of London the ability of canals to unlock regeneration, and to be a focal point for the local community in a way we cannot just ignore.

[Jeremy Lefroy (Stafford) (Con)]

I am sure that the Minister agrees that the 23 canal reservoirs up and down the country are also of enormous value to this country. Many of them provide excellent wildlife reserves and, hence, recreation, and are assets for our tourist industry.

[Richard Benyon]

My hon. Friend touches on a very important point. Sir John Lawton is about to report on work commissioned by the last Government that this Government firmly supports. It examines the coherence between different natural sites around the country, and looks into corridors of biodiversity that can flow and allow species to increase in population in different parts of the country. Canals are a vital link in our natural environment, and I am keen during my tenure in this post—however long it lasts—to bang that drum as hard as I can.

I do not care whether our modern canals structure is based on the writings and teachings of Friedrich Engels and is considered part of the co-operative movement, or whether it can be considered the inheritance of Edmund Burke and his little platoons. What matters is that canals are properly managed and have a sustainable long-term future.

I shall do my best to deal with many of the points raised by the hon. Member for Stoke-on-Trent Central and others. However, I would caution him on his view of the Treasury. In my experience, it consists of cuddly souls, warm-hearted and full of understanding on these matters. I do not share his deep pessimism.

[Alun Michael]

rose—

[Richard Benyon]

I am glad to give way to the chairman of the all-party group on waterways.

[Alun Michael]

The Minister has an almost unique experience of the Treasury. However, I encourage him to make the case that a model that engages the public and makes them feel a part of the ownership and running of the canals might make sense financially to the Treasury, too.

[Richard Benyon]

I am delighted that the right hon. Gentleman is in the Chamber for the debate, as he is a notable chairman of the all-party group through which I hope we can continue these debates. I hope that what I am about to say will satisfy his concerns, if I have the time.

I am well aware of the concerns of Members from all parties about the future of British Waterways. I made a statement to the House on 21 June in which I explained our intention to move British Waterways to the civil society, subject to the outcome of the spending review. I again had the opportunity to set out the Government’s position to the hon. Member for Stoke-on-Trent Central and others during oral questions two weeks ago, and I welcome this further opportunity.

I fully understand the important role that volunteering and the civil society have played over many years. Volunteering on the waterways has a long tradition, and many enthusiasts give freely and generously of their time to help re-create and restore our waterways. Without that, many historic canals would no longer be in operation and the network that we have today would be much poorer for it. I firmly believe that civil society has a valuable role to play in delivering public services, and as I recently announced, we will therefore continue to look in detail at such a model for British Waterways. As the hon. Gentleman pointed out, that is a good example of the big society we are trying to create.

I assure hon. Members that that would not be a privatisation of British Waterways. I hope the hon. Gentleman and others will get the message across to some of their colleagues on the Opposition Benches that that is not what we are about. We want a mutualised product for the waterways, dependent on three clear objectives. First, it must have a clear purpose and robust governance arrangements that protect waterways assets and the public benefits that they bring, both now and in the future. Secondly, it must ensure that all users, local communities and other stakeholders can hold the new body to account. Thirdly, it must ensure that the waterways are placed on a more sustainable footing for the longer term while reducing the ongoing cost to the taxpayer.

[Roger Williams]

I am very encouraged by the positive way in which the Minister is responding to the debate. I can see how such a model can deliver sustainable maintenance of the waterways, but on the Monmouthshire and Brecon canal, for example, we had a breach that cost £1 million to repair. How would such a model deal with those emergency situations?

[Richard Benyon]

I was shown a photograph of that breach by the chairman of British Waterways at my meeting with him last week. It is expensive to maintain the waterways, and I hope that what I am about to say will show that we can provide the means to ensure that whatever organisation emerges has access to funding—probably never enough, but at least enough to deal with major problems such as that.

[Sir Peter Soulsby]

I very much welcome what the Minister is saying about the future of British Waterways, but does he accept that if it is to have the sustainable future that he talks about, it is vital that it takes with it its assets and its current property, and that they are not ripped out by his friends in the Treasury before the transfer takes place?

[Richard Benyon]

I am conscious that this will not work unless that happens. The scale of that asset transfer is probably above my pay grade, but I am absolutely conscious that it has to be done in a way that enables the organisation to operate just as any other organisation of the type I am about to describe could. That is absolutely vital and a given.

As part of that work, we are considering including the Environment Agency’s navigations. I have an open mind on that and want to understand the pros and cons, but my initial view is that it, too, might be suitable for a civil society rather than a Government body to run. That would help to ensure that we had a coherent vision for the main inland waterways of England and Wales.

I know from meetings I have already had with waterways stakeholders that they have concerns, which they have expressed passionately, about two questions: what will happen to British Waterways’ property assets—the point just made by the hon. Member for Leicester South (Sir Peter Soulsby)—and can they influence decisions on the governance model of any new body? It is clear that British Waterways would need to retain its property assets for a viable civil society model. On the second issue, much work has yet to be done on the appropriate governance structure. One model is for a national charitable trust. I recently received a letter that was co-signed by a number of representative waterways bodies, including the Inland Waterways Association and the Angling Trust. The letter welcomed such a model, subject to decisions on governance arrangements and the level of ongoing Government support.

I know that there is some nervousness about the prospect of change and what it might mean for those with particular interests in the waterways.

[Meg Hillier]

I do not wish to detain the Minister, but having been a Minister seeking advice on setting up social enterprise mutuals and the like, I would caution him to be alert to any advice that he might receive from within the civil service about setting up a mutual. I would also ask him where else he might be seeking advice from, because it is important that any model be properly drawn up.

[Richard Benyon]

I am grateful to the hon. Lady, who is absolutely right. It is vital that we are extremely careful to ensure that we receive the best advice and get the correct model. I can assure her that officials in my Department are working hard on the issue and are committed to it, although we shall have a difficult time ahead with the comprehensive spending review, which I shall talk about in a moment.

We would have to have a completely new board or council that would shape its own future. It would not be British Waterways by another name, but a new structure, in different hands altogether. We do not aim to impose a particular model for a new civil society body, so we will work up different options in partnership with stakeholders, through workshops, forums and other engagement mechanisms. It is vital to understand the views of all interested parties if we are to reach a successful conclusion to our work on an alternative model for the future management of our waterways. As part of that engagement, I am considering a suggestion recently made to me to include representatives from waterways user groups on the current British Waterways board. We need to be ready for the big change in culture involved in the possible move to civil society.

As the House will be aware, very tough decisions need to be made in the coming months that will affect public expenditure for the next four years. That will inevitably affect the resources available for inland waterways spend in British Waterways and the Environment Agency.

Finally, let me make it clear that I believe strongly that the inland waterways are a vibrant resource that can provide a wide range of benefits and opportunities for individuals and communities across the country. Although we may find ourselves in extremely challenging times for public investment, in the longer term, the potential of our waterways can and will be realised if we all embrace the possibilities at all levels. I believe that moving British Waterways out of Government control to civil society has the potential to make a significant and innovative contribution to the long-term sustainability and resilience of the waterways, by providing additional income and greater engagement of all users, volunteers and local communities in waterways management. We will therefore be exploring all possibilities—

20:13

House adjourned without Question put (Standing Order No. 9(7)).