18:59 - The House divided: - Ayes: 243 / Noes: 331 - Question accordingly negatived.
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.
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.
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?
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.
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.
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.
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.
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
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.
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.
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.
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
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.
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.
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.