(13 years ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
18:58 - The House divided: - Ayes: 234 / Noes: 290 - Question accordingly negatived.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I beg to move,
That this House believes that the Government’s policies of cutting spending and raising taxes too far and too fast have resulted in the UK economy flat-lining for 12 months, well before the recent Eurozone crisis; notes that unemployment has reached a 17-year high and youth unemployment has hit a record level of 991,000; further notes that slower growth and higher unemployment makes it harder to get the deficit down and that the Office for Budget Responsibility forecasts £46 billion more borrowing than the Government planned; further believes that with long-term youth unemployment up by 64 per cent. since January 2011 it was a mistake to abolish the Future Jobs Fund and urgent action is now required to stop a generation of young people being lost to worklessness; agrees with the IMF’s warning that ‘consolidating too quickly will hurt the recovery and worsen job prospects’ and that the Government should have ‘a heightened readiness to respond, particularly if it looks like the economy is headed for a prolonged period of weak growth and high unemployment’; and calls on the Government to adopt the Opposition’s five point plan for jobs which includes using funds raised from a tax on bank bonuses to guarantee a job for 100,000 young people and build 25,000 affordable homes, bringing forward long-term investment projects, temporarily reversing January’s VAT rise, a one-year cut in VAT to five per cent. on home improvements and a one-year national insurance tax break for every small firm which takes on extra workers.
I am glad to have the opportunity to open this Opposition day debate on youth unemployment, but sad not to see the Secretary of State in his place on the Treasury Bench. This is the second such debate we have had on youth unemployment, and it is the second such debate in which the Secretary of State has not been in the Chamber to present the Government’s argument. I am glad we have the opportunity to debate the motion today because next week we will see figures that could show youth unemployment has risen above 1 million, but I hope that it will come down. Today we have a chance to force the Government to come to the House to explain their complete failure to address the crisis now unfolding in almost every community in this country: the crisis of youth unemployment and the re-emergence of scars that we thought had gone from communities, never to return.
When we debated this issue in February, we heard some pretty complacent arguments from Treasury Front Benchers. Indeed, we had the spectacle of a Minister trying to blame the rise in youth unemployment unfolding on his watch on what happened five years ago. I hope we do not have that spectacle again this afternoon, because it is about time that the Government had the guts to take responsibility for their decisions.
In the past few weeks, the chorus of voices raising the alarm about youth unemployment has grown loud and wide. Yesterday, the Trades Union Congress confirmed that youth unemployment has now risen in 97% of communities. Last Friday, the Work Foundation urged Ministers to take urgent action to help the lost generation or risk a crisis in Britain’s communities. Last week, the CBI said:
“youth unemployment presents a specific and urgent challenge.”
Last month, the chief executive of the Prince’s Trust said that the number of unemployed young people is now twice the size of the population of Manchester and:
“If we fail to tackle youth unemployment now, we risk losing this talent forever which would be a tragedy.”
My constituency has the highest level of youth unemployment in the country, and throughout the summer residents have been telling me that we have got to do more to help our young people—people like Deborah Gillespie from Shard End who said:
“I’ve been looking since June for a job for my 16 year old. No jobs for him! He is a hard-worker. No-one will give him a chance.”
One of her neighbours has said:
“As I am an older person, I must say I do feel sorry for out-of-work youth. My own 24-year-old is out on the dole. They lose what little self-respect they once had.”
When I asked what young people needed, my constituents’ answer was pretty straightforward: work and to help them feel worthy. I know that what my constituents have been saying to me will have been echoed in constituencies around the country.
Robert Halfon (Harlow) (Con)
May I ask the right hon. Gentleman why youth unemployment increased by hundreds of thousands when the previous Government were in office?
Mr Byrne
The hon. Gentleman will know that I am familiar with his constituency because it is where I grew up. What his constituents want to know is what this Government are doing about the rise in long-term youth unemployment in his constituency. I hope that he will use the opportunity of this debate to press his Front Benchers to do more for some of the young people like the people I grew up with in his constituency.
Andrew Percy (Brigg and Goole) (Con)
I thank the Minister for giving way—[Interruption.] He is now a shadow Minister and will probably never be a Minister again—[Hon. Members: “ Oooh!”] Well, I talk to my electorate and that is what they are telling me. Although the right hon. Gentleman is right that we must do more about youth unemployment, the fact is that it was under his Government, from 2000 onwards, that the trend started to rise, and it was under his Government that the gap between the top 10 and bottom 10 performing schools, one of which I was teaching at for a number of years, increased. This is not something that can be laid at the door of any particular Government; it has been happening for a considerable time.
Madam Deputy Speaker (Dawn Primarolo)
Order. For goodness’ sake, I am losing my voice. Mr Browne, you will not stand at the Bar and shout across the Chamber. Thank you.
Henry Smith (Crawley) (Con)
One of the things this Government can do, and are doing, is to provide more apprenticeship places. Does the right hon. Gentleman welcome, as I do, the 70% rise in apprenticeship places in Crawley that has just been announced?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Will my right hon. Friend please ignore Government Members? They are in denial about what is happening to young people in this country. Young people are always the ones to suffer most in a recession. Does he agree that outside some parts of London and the south-east, we are in recession? We are in recession in Huddersfield and in his constituency, and we have to do something about it, but the Government are doing nothing.
Angie Bray (Ealing Central and Acton) (Con)
I recall writing a letter to my local newspaper in November 2009 berating the then Labour Government, whom the right hon. Gentleman served, for a 59% rise in the latest unemployment figures. Although he does not want to talk about history, does he accept that context is very important and that his own Government had a lot to answer for in relation to youth unemployment?
Mr Byrne
I might finish responding to the hon. Lady first.
The question that the hon. Lady has to answer for her constituents is why under Labour, even in recession, youth unemployment was coming down by 38%, and now, over the course of this year, long-term unemployment is up by 68%—on her Government’s watch. What is she going to say to those on the Treasury Bench about what further action they must take?
Mr Jones
The right hon. Gentleman tells us how well the previous, Labour Government did on youth unemployment, but that is not how the figures look to me. From 2004, youth unemployment was rising, and when the Labour Government left office it was higher than when they took office in 1997. How does he work that one out?
Mr Byrne
Let me just answer the hon. Gentleman’s question. He will know that the worst global recession since the 1920s was under way, yet despite that, before the election, youth unemployment was coming down. He must answer this question: how is it that this Government are doing so well, when since the beginning of this year long-term youth unemployment has risen by 68%? Hundreds of constituencies around the country have seen long-term youth unemployment double. If he has the right plan, can he explain exactly what is going so well?
Mr Graham Stuart (Beverley and Holderness) (Con)
As we know, the scar of unemployment on young people lasts through their lifetime; it has a tremendously negative impact. I do not think the right hon. Gentleman is getting the tone of this debate correct. In truth, in the years of economic boom on his watch, youth unemployment stayed resolutely high before peaking and rising following the crisis. We need to look at what we can do better to understand the youth employment market. He must at least acknowledge the steps that this Government are taking on training and apprenticeships. It may not be enough, but let us not use this as a party political football; let us try to be constructive.
Mr Byrne
I am grateful, at last, for a consensual note. [Laughter.] The hon. Gentleman’s hon. Friends might laugh, but the fact that long-term youth unemployment in his constituency is up by 48% this year is not a laughing matter. This debate is an opportunity for us to interrogate this Government on what they are doing to get youth unemployment down and how, ahead of the autumn statement, they should negotiate with the Chancellor for more resources to get our young people back to work.
John Healey (Wentworth and Dearne) (Lab)
Is my right hon. Friend aware that almost one in seven young people in Rotherham are looking for work and out of a job? It is one of the 10 worst-hit areas since this Government came to office. The question that people are asking is how much worse this waste of talent has to get before the Government are shaken out of their complacency, accept that what they are doing is not working and change course.
Mr Byrne
My right hon. Friend has experience of this matter at the sharp end. Long-term youth unemployment in his constituency is up by 78% this year. I know what a difference programmes such as the future jobs fund made in his constituency. That is why it is such a tragedy that before the evaluation was in, this Government chose to cancel the project. That is why this debate is so important.
The Opposition do not believe in half measures when it comes to getting young people into work. At the end of the recession, youth unemployment was down by 38%. A year and a half into the recovery, youth unemployment is up. This year, long-term youth unemployment is up by 64%. When we were confronted by the great increase in youth unemployment, we did not stand idle but did something about it. The future jobs fund worked because it helped to create 100,000 opportunities for young people all over the country. When we met to debate this matter in February, the jury was still out on the results. We now have the Department’s own evaluation and the judgment is categorical:
“for many participants their reported experiences had been to such a high standard, that they could not think of any improvements to the scheme.”
The Government cancelled it anyway.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
In my constituency, unemployment among 20 to 24 year olds is now at nearly a quarter. Members across the House should be alert to the cohort challenge, because a whole cohort of graduates is being hit hard. The unemployment rate for new graduates in the third quarter of 2010, according to the Office for National Statistics, was 20%. One in five recent graduates who are economically active and looking for work is unable to find it. That is almost double the rate from the start of the recession, which was 10.6%.
Mr Byrne
My hon. Friend makes an extremely important point, which echoes that made by the hon. Member for Beverley and Holderness (Mr Stuart). We know that if people are out of work when they are young, they are more likely to be low paid in the course of their career, more likely to suffer ill health and more likely to be unemployed again. That is why the Prince’s Trust and others are right to focus their attention on the crisis of youth unemployment that is unfolding in our country.
Jim Shannon (Strangford) (DUP)
Not only is there the spectre of unemployment and the prospect of no jobs, but many of the young people who are not in education, employment or training are under medical supervision. Is the right hon. Gentleman aware that almost 30% of the young people who are unemployed are facing depression and are suicidal? Does he feel that we have to address that issue along with unemployment?
Mr Byrne
The hon. Gentleman makes an extremely valuable point, which I hope he will develop in the course of the debate.
When this Government were first in office, at a time when the economy was fragile, when the recovery was in its first stages, when they were launching the biggest programme of Government cuts for many years, and when there was a risk of rising unemployment, as was made obvious by the Office for Budget Responsibility, they chose, at huge expense, to take out the key back-to-work programmes that we had in place, which were keeping unemployment down. That will stand as one of the worst judgments made by this Administration.
I know that the Government will in a moment protest that they are taking action. The Secretary of State, who is not here today, reeled off a list of programmes at Question Time last month, when he said that there are
“work clubs, work experience, apprenticeship offers, sector-based work academies, the innovation fund, European social fund support,”—
it is nice to see the Secretary of State supporting Europe on something—
“the skills offer, the access to apprenticeships programme, Work Together, the Work programme, Work Choice, mandatory work activity and Jobcentre Plus.”—[Official Report, 24 October 2011; Vol. 534, c. 4.]
It is not clear how Jobcentre Plus is an innovation of this Government, but none the less it earned a place in his list.
The only problem is that none of these programmes is making a blind bit of difference, so let us take some of the key measures one by one. I want to start with the flagship package of measures launched last May. So important was it, so pregnant with opportunity, so sure was it to make a difference, that the Deputy Prime Minister himself was allowed to put out the press release. Those measures came replete with a total budget of £60 million over three years—a grand total of £20 for every unemployed young person. Or we could look at it as 5p a day to help—
Mr Byrne
I shall give way in a moment, because I would like some questions answered.
That is 5p a day to help workless young people. In total, the scheme costs less than the Department spends on stationery—what an insult! Will the Minister tell us how many people the Government have got back into work? Just give us the number.
Chris Grayling
Will the right hon. Gentleman clarify that the measures announced in May were for 16 to 18-year-olds? He is misrepresenting the statistics. Will he also acknowledge to the House that his Government provided no support to 16 to 18-year-olds?
Lorely Burt (Solihull) (LD)
Will the right hon. Gentleman advise me on the future jobs fund, which he heralds as a great creator of opportunities? Owing to EU rules on wage subsidy claims, posts offered had to be newly created; they could not be normal vacancies. How many young people got real, permanent jobs out of the future jobs fund?
Mr Byrne
The hon. Lady need only look at the statistics, including those for her area. This year, long-term youth unemployment has risen by one third in Solihull. The future jobs fund was helping to bring youth unemployment down. To return to the point made by the hon. Member for Beverley and Holderness (Mr Stuart), we have to help young people stay close to the labour market because if we let them drift into long-term unemployment, they have a bigger chance of being unemployed in the future, of being low paid and of drifting into ill health. That is why the right decision for her constituents, as well as mine, is not to do nothing, but to act.
Richard Fuller (Bedford) (Con)
The right hon. Gentleman did not answer the question from my colleague, the hon. Member for Solihull (Lorely Burt). We are fooling ourselves, if we think that this problem is simply to do with this Government or the previous one. This is a long-term, growing problem of youth unemployment. [Interruption.] The hon. Member for Dudley North (Ian Austin) is looking for the statistics for my constituency. I can tell him: it is up 24%. As we look for solutions and as economies across Europe are being destroyed because of their excessive debt, my question is: what can we do that does not incur additional debt for the Government? Will he support our schools reforms? Will he support our efforts on apprenticeships? Will he support the reductions in taxation and regulation on small businesses indicated by the Government?
Mr Byrne
Long-term youth unemployment in the hon. Gentleman’s constituency is up this year by 133%. That is a serious increase. I am happy to share with him the figures produced for us yesterday by the House of Commons Library. Those statistics speak to one key point: we need action to get youth unemployment down, and we need it now.
Paul Maynard (Blackpool North and Cleveleys) (Con)
In my constituency, the figure is 36% year on year. I was delighted to read in The Times today the figures to which the right hon. Gentleman just referred on long-term youth unemployment. I made the point of getting the figures from the House of Commons Library, so that I could see what the figure was in my seat. Is he aware that in 235 constituencies, youth unemployment, by the measure that he requested, has fallen since May 2010, and that in a further 41 constituencies, it has remained static?
Mr Byrne
I can tell the hon. Gentleman the figures in his constituency. Long-term youth unemployment in his constituency has risen by 233%, and that is an extraordinary increase, but surely he will agree with the judgment of the TUC, the CBI and the Prince’s Trust that now is the time for urgent action to get young people back to work, including young people in his constituency.
Paul Maynard
As the right hon. Gentleman has again mentioned my constituency, I note that according to the Library the unemployment figures rose from 75 in May 2010 to 100 in September 2011. I represent a coastal community. Has he ever heard of seasonal unemployment?
Mr Byrne
The figures are seasonally adjusted, as the hon. Gentleman will know, but surely he is not saying to the House and to his constituents that he is seriously relaxed about the rise in long-term youth unemployment in his constituency. I simply do not believe that that is his position.
Mr David Winnick (Walsall North) (Lab)
The reality on the ground in my constituency is, I am sure, the same as that in many other parts of the west midlands and the black country. In my constituency, a store opened recently with 20 vacancies, and I wonder how many Government Members are able to tell us how many people applied for those 20 vacancies. I shall tell the House how many: 500. That is the reality: people desperate for work—and denied it by this Government.
Nick de Bois
If the right hon. Gentleman is as interested as I am in developing sustainable long-term jobs to deal with youth unemployment in particular, does he agree with and welcome rolling back the heavy hand of employment rules and legislation, including vexatious employment tribunals, and will he commit his Front Benchers to do that and even go further, so that it is easier to employ people?
Mr Byrne
Before I became a Member, I started a business. I know what it is like to start a business with two people around a kitchen table, to grow it, build it, take on new staff and do well, but dealing with regulation was the easy bit; selling and making a profit was the tough bit, and that is why we need urgent action to get growth back into the economy.
Andrew Percy
I thank the shadow Minister for giving way. He is being very generous and deserves credit for that, but is he honestly saying that, on this important issue, to which he is doing a great disservice, the upward trend in youth unemployment under his Government, the increased gap between the best and worst performing schools and the increased number of young people growing up in families where nobody has ever worked are totally and utterly unrelated to youth unemployment today? If he is, he is being completely and utterly incredible.
Mr Byrne
The hon. Gentleman’s constituents will want to know why he is living in the past, and what he is doing to take to his Front Benchers the argument about what more they are going to do in the autumn statement to get our young people back to work.
We have heard about the great success that is the flagship youth programme. Now let us turn to the Work programme.
Mr Byrne
In a moment. I shall just tell the House a little about the Work programme.
We have debated before the virtues of the Work programme, and I understand that young people can now be referred to it early. I shall put aside for one moment the Work and Pensions Committee’s conclusion that it is one third smaller than previous programmes, because the Minister has strong views about that, and I shall put aside also the Social Market Foundation’s analysis that the DWP offers providers of successful outcomes a maximum amount of money that is 25% less than the flexible new deal, because those facts are not the worst of it. The worst of it is that the Department itself expects three quarters of people to flow straight through the programme and straight back on to the dole, so I ask the House, how is that going to make a difference?
Mr MacShane
Do we not have to nail one lie—that there is some magic deregulation out there which solves the problem? European countries such as the Nordic countries, the Netherlands and Germany—the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) is aware of this—all have stronger regulation and active labour markets, so it is a huge lie to say that the poorer young workers are and the worse they are treated, the more jobs there will be.
Mr Byrne
I will give way in a moment, because I want to turn to apprenticeships, which the Minister has mentioned. Apprenticeships have sometimes been seen in this debate as the Department’s silver bullet, so let us be clear: ours was the party that rescued apprenticeships. We inherited 65,000 apprenticeships; the figure was over 260,000 when we left office. This year, 85% of new apprentices will not be young people, but people over 25. Leaked documents seen by The Guardian show that Ministers have been warned that apprenticeships are actually a re-badging of existing jobs. It turns out that about 11,000 of this year’s new places have gone to 16 to 18-year-olds. I should point out for the House that 205,000 of those aged 16 to 17 are now on the dole. If they all applied for one of those apprenticeships, they would have a 5% success rate. Getting into Oxford university is less competitive than that. Given those figures, an ally of the Chancellor of the Exchequer has said that the Chancellor thought that apprenticeships were
“a rare piece of good news, but it’s turning out to be a con”.
The unnamed ally is right: it is a con. We have a Work programme that is all programme and no work, a youth jobs scheme that costs less than the stationery budget and an apprenticeship scheme that is harder to get into than Oxford university. No wonder overall long-term youth unemployment is going through the roof. Let us hear an answer from the Minister.
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)
I am very happy to tell the right hon. Gentleman all about it, but I wonder whether he will acknowledge that today there are more apprentices under 25 than the total number of apprentices when his Government left office and that the two-year growth in apprenticeships for 16 to 24-year-olds over the last two years is bigger than at any time when his party was in office.
Mr Hayes
I am not sure that that is particularly relevant to the question that I asked, but I will ask the right hon. Gentleman another question. His Government commissioned the Leitch report—[Interruption.] It was probably the right hon. Member for Morley and Outwood (Ed Balls) who commissioned it—he was running the show in the Treasury then, or so he now pretends. What does the Leitch report say? It says that we need to upskill and reskill the work force and that apprentices are a critical way of doing that. Is the right hon. Gentleman now denying that? Has he changed his mind, or does he in fact think that we need to use apprenticeships for that purpose?
Mr Byrne
I want apprenticeships for young people, and it is this Government who are not delivering them. That is why, all over the country, we now see long-term youth unemployment rocketing up. Some 233 Members of this House now represent constituencies where long-term youth unemployment has risen by over 100% this year. Overall, long-term youth unemployment is up by 64% since the start of the year. All over Britain, scars that we thought were gone for ever are reappearing, and not just in Labour constituencies, but in places such as North Dorset, Aylesbury and Stevenage. Some 238 of us now speak for constituencies where, since the election, youth unemployment is up by 20%.
Mr Byrne
In a moment.
The bad news is that business is saying that it will get worse before it gets better. In October, BBC Radio 1 surveyed the business community. It found that two thirds of firms surveyed said that the situation would get worse for young workers before it got better. Half said that the Government should do more to train young workers. That is surely a sentiment that the hon. Lady will agree with.
Dr Coffey
I think everybody in this House shares the sentiment that it is a tragedy for any young person who wants to work not to be able to get a job, but we are trying on that. What I would like to understand from the right hon. Gentleman is this. Under the last Government, people who were unemployed for 12 months were moved on to a training programme. That meant that they moved out of the unemployment figures, but they went back if they were not successful in securing a job. This is an opportunity for a genuine debate about the future of our country, but I am afraid that some of the—how can I put it—casual use of certain statistics is not helping us to achieve that.
Mr Byrne
Is the hon. Lady seriously denying that a crisis in youth unemployment is unfolding now? [Interruption.] I am glad that she says from a sedentary position that she agrees that there is a crisis, because the question now is what we do about it. That is the answer we want from the Government.
Before I set out what the Opposition believe is the right next step, let us remind ourselves who is paying the bill for this failure. Since the Government came to office, the benefits bill alone is projected to rise by more than £12 billion, which is £500 for every house in this country. To pay that bill for the new workless, the Government are having to squeeze working people through cuts to child care and tax credits, and the acceleration of the rise in the state pension age. Good people who are doing the right thing and who are trying to get on and go up in life are being squeezed to pay the bill for people who have been put out of work by this Government.
Mr Sheerman
Does my right hon. Friend agree that we need a massive plan for young people in our country, because this problem will get worse? We need education and training leading to work in the community and the environment. We need something bold and imaginative. The fact is that Government Members know that it is cheaper to keep young people on the dole.
Mr Byrne
No. I could speak about this all afternoon, but I know that many hon. Members want to speak, so let me draw my remarks to a close by outlining what the Opposition believe should be done.
The Opposition believe that the starting point should be a new tax on bank bonuses. That is what this country is crying out for. There are only a few weeks left before the Chancellor’s autumn statement. The Secretary of State is not here but I hope he reads Hansard. Let me give him some advice about what he should negotiate for. He should be putting on the table the five-point plan that my right hon. Friend the shadow Chancellor has set out before the House.
Let us set out what that plan means for young people in this country. Many people in this country deserve a tax cut, but our country’s bankers are not among them. The scale of the imminent bank bonus round is already in the news. I see that there is a bonus pot of £500 million at Royal Bank of Scotland—shareholder: Her Majesty’s Government. Here is a sentiment with which most hon. Members can agree. Lord Oakeshott, the former Liberal Democrat Treasury spokesperson said:
“I don’t want my taxes going to pay for hundreds of RBS investment bankers taking home millions in bonuses as their profits tumble.”
Many hon. Members would agree with that. The Opposition advice is simple: let us have a fair and sensible tax on bankers’ bonuses. That could create a fund of £2 billion, which we believe could help to get 800,000 back to work, including 11,500 jobs here in London; 5,000 in the south-east, the region of the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling); and 8,500 in my home region, the west midlands. That is the kind of action that the Secretary of State should propose.
Mr Byrne
I will give way in a moment. Let me tell the Minister this: that policy would be popular. Over the summer, I asked my constituents whether the bankers ought to share their blessings a little more generously and whether they should do more to help get young people back to work—97% of them said yes. That policy would be popular, so why is the Minister not proposing it?
Chris Grayling
I wonder whether I could just clarify a point. The Leader of the Opposition has previously announced that the bank bonus tax money will be spent on additional infrastructure, reversing child benefit cuts and paying down debt, and, I believe, seven other commitments. Will the right hon. Gentleman confirm whether those policies have now been dropped?
Mr Byrne
If the Minister wants a full breakdown of the costs, I will be happy to provide it for him; and if he wants me to support him in his negotiations with the Chancellor, I will be right by his side.
With that policy should come an acceleration of investment in capital infrastructure, as the CBI calls for today; a temporary cut in VAT to help families up and down the country; a one-year cut in VAT on home improvements; and a tax break for small firms that take on extra workers, especially young people, as proposed by the Federation of Small Businesses.
The whole country knows that this Government are failing our young people. This year, our country has seen one of the fastest ever increases in long-term youth unemployment. When the TUC, the CBI, the Prince’s Trust and the Work Foundation are telling the Government to change course, surely it is time for them to act. Before the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts), was encumbered with the cares of office, he wrote a book about the baby boomers. In the introduction, he writes that
“the charge is that the boomers have been guilty of a monumental failure to protect the interests of future generations”.
The Secretary of State for Work and Pensions, who is not here today, is—believe me—a baby boomer. If he does not change course, and fast, he will stand before the House guilty as charged.
The Minister of State, Department for Work and Pensions (Chris Grayling)
I regard youth unemployment as one of the most difficult parts of the legacy left to us by the previous Labour Government. In 2010, at the time of the general election, 930,000 young people in this country were unemployed. When Labour left office, there were more young people not in education or employment than when it took office in 1997. Labour also left behind one of the most difficult sets of economic circumstances that any incoming Government have ever faced. Indeed, we do not need to use our own words to describe that; we remember clearly the words of the former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who left a note behind saying, “There’s no money left.”
Chris Grayling
Actually, youth unemployment—genuine youth unemployment—is not at the highest level on record. When we exclude from the figures full-time students looking for part-time jobs, the level of youth unemployment today is not the highest on record. However, I regard any level of youth unemployment as unacceptable, and something that we should work to try to solve.
Karl Turner (Kingston upon Hull East) (Lab)
In researching for this debate, I found an Office for National Statistics summary of labour market statistics. In one of the columns dealing with youth unemployment figures, under the heading “Last time higher”, I found, in bold writing, the word “Never”. That figure has never been higher.
Chris Grayling
When we exclude full-time students in colleges of higher and further education, the level of youth unemployment today is not the highest on record. I reiterate, however, that I regard any level of youth unemployment as unacceptable. It is a challenge and a priority for the Government. We have to remember that the problem goes back a decade. Youth unemployment started to rise in 2003-04, and it has been rising steadily since. Even in good years, the previous Government’s policies failed to deliver solutions. Eighteen months ago, we inherited a series of failed programmes that had failed to deliver real solutions for young people, and we are trying to turn that round.
Robert Halfon
Does my right hon. Friend agree that part of the problem has been the failure of our primary schools over the past decade? Under the last Government, 500,000 children left primary school unable to read or write. Is that not part of the reason that we have a skills problem today?
Chris Grayling
My hon. Friend has highlighted one of the many challenges that the previous Government left behind for us. There was a total failure to equip young people for the workplace and for a working life, a failure in our education system and many other failures, not least of which was the disastrous economic inheritance. When the Labour Government left office, they were borrowing £1 in every £4 that they spent. Our first priority remains sorting out the challenges in our public finances. Does anyone seriously believe that, if we were in the same position as some other European countries in failing to deal with our deficit, business would want to invest in this country rather than cutting jobs and moving elsewhere? It is my clear view that, had we not taken action to deal with the deficit, unemployment would be higher than it is now, rather than lower.
Chris Grayling
The right hon. Gentleman talked about international challenges, but let me remind him that, three months ago, youth unemployment was falling and was below its level at the time of the election. He should also remember that we are now in the middle of the biggest financial crisis in the eurozone in decades, perhaps in modern times, and that our labour market is not immune to that. However, we are now turning round the set of failed programmes that existed under the previous Government and putting in place measures that will make a difference to the long-term unemployed.
Mark Simmonds (Boston and Skegness) (Con)
Will my right hon. Friend confirm that containing, controlling and reducing the structural deficit is a prerequisite for economic growth and job creation?
Chris Grayling
It is my view that had we not taken those steps, interest rates would be higher, investment would be lower and unemployment would be higher than it is today. I know it is a point of difference between the two sides of the House, but Labour’s alternative strategy would simply involve Britain borrowing more money. I do not understand how it is possible to solve a crisis created by too much borrowing by borrowing even more.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I welcome the Minister’s acknowledgement that youth unemployment is to a large extent symptomatic of the fragility of the wider economy, but will he also acknowledge that the Government’s approach to the wider economy is not working and is actually exacerbating youth unemployment?
Chris Grayling
I do not accept that. I shall briefly set out some of the measures we are taking on the broader economic front that will make a difference to unemployment.
The regional growth fund is now delivering investment to parts of the economy where the private sector is too small, and where we want to see private sector growth, and the research and development and investment in infrastructure that creates jobs. The introduction of enterprise zones in parts of the country where the private sector is weak will encourage businesses to grow and develop. The cut in corporation tax will deliver the lowest headline rate in the developed world. Those are examples of measures that will help to make Britain a better place to do business.
Heidi Alexander (Lewisham East) (Lab)
The Minister talks about the regional growth fund and enterprise zones, but those words will mean little to young people in my constituency who have seen long-term youth unemployment rise by 192% over the past nine months. Can he tell me in plain English what he will do for those young people in Lewisham?
Chris Grayling
I can indeed, and I shall carefully go through the different measures we have taken to tackle the youth unemployment problem. It is also important to note that we are targeting investment and support on parts of the economy where we want private sector growth so that jobs can develop.
It is worth remembering that the previous Government fiddled the figures on youth unemployment; they claimed to have abolished it. When people moved on to the new deal, they had a period of work experience and were transferred to a training allowance, at which point they no longer showed up in the figures. By that mechanism people who remained out of work for long periods temporarily disappeared from the figures, so long-term youth unemployment was, according to the previous Government, “abolished.” That was absolute nonsense.
Mr Sheerman
I have known the right hon. Gentleman for a long time, and he is a reasonable man. People outside this place want a positive initiative, to which we can bind other parties. They want an adventurous and innovative scheme to give young people the chance to get off the dole and into training and work. That is what we are waiting to hear. If the Minister comes up with a scheme like that tonight, we shall support him.
Chris Grayling
I shall be delighted to talk about some of the specific measures we are taking, but before I do that, let me address the issue about the future jobs fund. It had two key flaws. The first was that it was entirely in the public and voluntary sectors; it did not take young people into the private sector, where there has been employment growth over the last 12 months. That was a fundamental flaw. The other one, in a world where, as the right hon. Member for Birmingham, Hodge Hill said, there was no money left, was that the FJF was by far the most expensive scheme; it was four times as expensive per job outcome as the new deal for young people, and massively more expensive than previous schemes. We have developed a better package of support; it will be more effective and more cost-effective. Through the various schemes that I am about to explain, I estimate that we shall provide support for about 350,000 young unemployed people over the next two years, to make sure that nobody is left without the help they need to try to get themselves into work.
Mr Iain McKenzie (Inverclyde) (Lab)
The Minister has referred to a number of issues about the future jobs fund. In Inverclyde, when I was council leader we were the second most effective constituency in using the fund, putting some 400 of our young people into employment, mostly in private sector jobs. In Inverclyde, we are putting our money where our mouth is; on our own backs, we are continuing the future jobs fund for a further year, with the target of putting 500 young people into jobs. The future jobs fund worked, and it is still working.
Chris Grayling
As the hon. Gentleman knows, this Administration believe in localism, and a local authority is free to do what it wants to support the unemployed. I welcome any local partnerships to deliver that. I would still say, however, that the reality is that the future jobs fund cost massively more than comparable schemes, and we believe that the package we put in place is more cost-effective and likely to deliver better success rates.
Chris Grayling
I shall give way once more to the shadow Minister, but then I am going to make some progress in explaining what we are doing.
Mr Byrne
If the right hon. Gentleman believes the future jobs fund was too expensive, is he by implication saying that he is prepared to see youth unemployment go up, because that is what has happened since the election, after which he abolished the programmes? Is he saying that youth unemployment is basically a price worth paying?
Chris Grayling
One reason this country is in its financial predicament is that the previous Government did not understand value for money. They believed in throwing money at a problem, not trying to do the most cost-effective thing. That is one reason for the right hon. Gentleman leaving that note behind, saying, “No money left”.
Neil Carmichael (Stroud) (Con)
One of the key things I believe is important is rebalancing the economy towards manufacturing and engineering, which focuses, of course, on the private sector to make sure that it provides jobs. I see evidence of that happening in my constituency. Does the Minister agree that that kind of initiative is critical to ensuring that we deal with youth unemployment?
Chris Grayling
I absolutely agree with my hon. Friend. One of the failures of the previous Government arises when we talk to engineering firms that want to recruit young engineers and cannot find them. I think that the previous Government 's skills strategy was fundamentally misplaced. That is why the work being done by the Minister for Further Education, Skills and Lifelong Learning, who is in his place beside me, is so important.
Robert Halfon
Talking about the future jobs fund, although it created 90,000 jobs, almost half of the people involved were back on the dole seven months later.
Chris Grayling
What the future jobs fund did not do for many young people was provide a clear pathway into long-term employment. As to apprenticeships—my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, too, will talk about them later—we believe that they are a better strategy.
There are three elements to the work we are doing for our young unemployed people. The first is helping those who have been unemployed for a shorter period of time to overcome that classic challenge—“If you haven’t got the experience, you can’t get a job, but you can’t get the experience unless you have got a job.” What we have done is launch our work experience scheme and its sister scheme alongside it—sector-based work academies. We launched those in the spring. Figures published this morning show that more than 50% of the young people who go through the work experience scheme are off benefits within a month of it finishing—at a cost that is a tiny fraction of the amounts spent on previous programmes.
Employers and Jobcentre Plus are working together around the country in a way that is hugely positive to deliver real opportunities for young people to get their first steps in the workplace—and it is making a real difference. I am confident that as we come forward and expand the sector-based work academies with a mix of training and work experience, we will see a similar result. That is a very good start for the scheme.
Richard Harrington (Watford) (Con)
Will my right hon. Friend inform me why the shadow Minister, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) should be laughing at such a scheme, when I have seen it working in my constituency? I would say that substantially more than 50% of people involved with it have got into real jobs.
Chris Grayling
My hon. Friend is right; I am baffled as well. This is working far better than we expected and provides a significant piece of evidence to show that if we can get a young person into the workplace quickly to get them their initial experience, it can make a real difference. I am proud of what that scheme has achieved, and I would like to pay tribute to members of the Jobcentre Plus team up and down the country who are working with employers to find those work experience opportunities.
I had occasion a couple of weeks ago to meet a group of young people who are actively looking to try to get work experience opportunities because they believe it is a real route for young people to get into employment. We are now working with that campaign to make sure we help all the young people involved to get work experience opportunities. We are, as I say, a Department providing work experience opportunities to a large number of young people, and I believe this is an important ingredient of the support we provide to those who have just entered the labour market, who are trying to get into work after a short period out of work, to make a difference for that group.
Mr Graham Stuart
Does my right hon. Friend agree that a generation of young people were betrayed by vocational qualifications that were inappropriate, as the Wolf report indicated earlier this year? It is ironic to see the shadow Chancellor of the Exchequer among the Front-Bench team, because when he came before the Select Committee, which used to be chaired by the hon. Member for Huddersfield (Mr Sheerman), he refused to listen when he was told again and again that the diploma was going to be a hugely expensive mistake. He refused to listen, spent millions of pounds of public money and let down young people with a diploma programme that was not fit for purpose.
Chris Grayling
My hon. Friend has made a good point. To be honest, I do not know why any of us listens to this lot. They were a disaster in Government, and the country is well rid of them. What we are trying to do now is repair the damage caused by 13 years of mismanagement.
Chris Grayling
I want to make a bit progress first.
Let me now deal with the second element of our strategy: how we will deal with long-term youth unemployment, a problem that has become much more acute now that we have stopped massaging the figures and hiding the real picture. I believe that the Work programme will make a real difference to those young people. It has been up and running for four months—
Chris Grayling
I think that the programme is doing good work. I have visited providers throughout the country—
Chris Grayling
I extend an invitation to Members on both sides of the House to visit their local Work programme providers. They can contact my office if necessary to arrange the introduction. I think that they will be impressed by the work that is being done.
Chris Grayling
We will publish details of what is happening in due course, but I can tell the House now that more people have been referred to the Work programme than we originally projected, that it is growing fast, and that a large number of providers are having a great deal of success in getting people into work.
Chris Grayling
I pay tribute to one of our providers, EOS in the west midlands, which has just achieved its 1,000th job placement. I congratulate all its staff on their success—
Mr Byrne
I should love to do so, and when I do I shall ask EOS for its performance statistics, because I understand that the Minister has banned their publication. If he is so confident about the performance of the Work programme, he should tell the House what it is delivering.
Chris Grayling
The right hon. Gentleman is, classically, trying to have it both ways. On one hand he tells me off about national statistics, and on the other he tells me off for not obeying the rules on national statistics. What does he want? These are national statistics, and they will be published in line with national statistics rules. He will just have to wait.
What I will say now is that so far I am encouraged by the progress that is being made. All of us—Members in all parts of the House—need the Work programme to work and to make a difference for the long-term unemployed, and I am confident that it will do that. For the first time we are giving the providers genuine professional freedom to do what works for our young people, and I believe that if we trust the professionals and do not tell them what to do, as the last Government did, we are much more likely to be successful.
Neil Carmichael
I thank my right hon. Friend for giving way a second time. This time I want to emphasise the importance of a proper interface between the education and business sectors, providing experienced, professional contact, so that people understand that they are receiving the kind of education that will lead them into jobs.
Chris Grayling
Absolutely. The Department for Education is working hard to remedy the failings of our schools system in partnership with my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, who is working with the FE sector to try to deliver a much better quality of vocational education. That, along with the partnership that now exists between my Department and the Department for Business, Innovation and Skills, will ensure that the unemployed are presented with a genuinely joined-up offer of an opportunity to obtain the skills that they need, and it represents a real step change from what we saw in the past.
The third element of the support—
Sheila Gilmore
I am obliged to the Minister for finally noticing me.
Is it not the Minister himself who is trying to have the question of the Work programme both ways? He does not want to publish figures on a national basis, but when he chooses, he will use figures plucked from we know not where to prove that the programme is working. Can he explain exactly how a work programme ever creates any jobs?
Chris Grayling
The point of the Work programme is very straightforward. We have a team of organisations throughout the country helping people to get into work. We pay them if they succeed. Fortunately, they seem to be making a good start. In due course, when I can do so, under national statistics rules, I will publish information for the benefit of the whole House. I want to expose to the whole market who is doing well and who is doing less well, so that there is competitive pressure on organisations to become the lead provider. I will publish those figures as soon as I can according to national statistics rules, and as soon as the programme has been going long enough for them to be reliable.
The third point—
Sarah Newton (Truro and Falmouth) (Con)
Will my right hon. Friend give way?
Chris Grayling
I will give way once more, and then I must make some progress and wind up my speech.
Sarah Newton
I am grateful to my right hon. Friend, who has been very generous in giving way. Does he agree that this is all about local partnerships? Organisations such as Cornwall Works will help the 105 young people in my constituency who have been unemployed for more than six months to get back to work. Those young people will benefit from the new apprenticeships created in my constituency in the last year—more than 660. Local partnerships enable such people to find real jobs with real employers.
Chris Grayling
Local partnerships are immensely important, and now the Work programme providers have complete freedom to forge partnerships that will make a genuine difference.
The third element of our strategy is apprenticeships. Over the past 12 months, we have launched 100,000 new apprenticeships. I believe that more apprenticeships are now available in this country than ever before. We have many apprenticeships that are targeted at young people. The previous Government’s track record on apprenticeships was, as usual, full of rhetoric but lacking in delivery. They repeatedly made promises for an overall number of apprenticeships, and they repeatedly failed to deliver what they promised. We are hitting targets for apprenticeships. That is the first time in a long time that that has happened, and I pay tribute to my hon. Friend the Minister for Further Education, Skills and Lifelong Learning for that.
Ian Austin (Dudley North) (Lab)
How many of these apprenticeships are reserved for 18 to 24-year-olds?
Chris Grayling
In the Budget, we announced an additional 40,000 apprenticeships targeted at the young unemployed, and the overall number of young people under the age of 24 on apprenticeships is greater than the total number of apprenticeships that were available under the previous Government. My hon. Friend will walk us through the details of that when he concludes the debate; this is very much his baby, and he should take credit for what he has achieved.
I might also mention the support we are providing for the short-term young unemployed through the work experience scheme, our sector-based work academies and the work being done through Jobcentre Plus. The Work programme is the biggest ever welfare-to-work programme of its kind in the country. We have the biggest payment-by-results scheme in the world, offering tailored, personalised support to help young people actually get into work right now. There is the opportunity to move through into an apprenticeship, which is an appropriate path into work for many young people. Never before has this scale of apprenticeships been provided in this country.
I believe these measures represent a coherent strategy to deal with a problem that was left behind by the previous Government, and that has been made more challenging by a difficult set of international circumstances. Unlike the previous Government with their failures, we are determined to tackle this problem, and to succeed.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Many Members wish to speak. The winding-up speeches will start at 6.40 pm, so there is not a lot of time. Although there is a four-minute limit on speeches, I ask Members to speak more briefly than that if they can do so. I also ask Members to show restraint in making interventions, so as to avoid doing others out of an opportunity to speak.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
We are having a debate about the economic situation and its impacts on young people. My constituency has felt the chill winds disproportionately, as has the constituency of my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne). My local authority, Sandwell, has the third highest rate of youth unemployment in the country. We also endured high youth unemployment under the previous Conservative Government. The Labour Government made substantial inroads, but the problem is now back with a vengeance.
On the general economic situation, some of the Government’s measures are aggravating the problems, which are a by-product of our poor economic performance. The higher education proposals, for instance, will disincentivise young people from low-income, low-aspiration backgrounds from entering higher education, and there is a great danger that young people from areas such as mine will look to take an alternative route, such as vocational training and apprenticeships. That is not in itself bad, and it may well be of great benefit to the economy, but the cohort of young people who previously would have gone into apprenticeships and training will find that they have nowhere to go. That is already being reflected in the increase in the number of NEETs in the country as a whole, and certainly in my area.
The Government trumpet the progress made on apprenticeships, and I welcome apprenticeships, as they are potentially of enormous benefit. However, the fact remains that the greatest increase in apprenticeships, as of this moment, is in the post-24 age group, and there is a suspicion that this is just a rebadging of the old Train to Gain scheme. In addition, the headline figures do not take into account the number of short apprenticeships—these are not the two or three-year courses that we commonly think of as apprenticeships which will enable people to go into work. My Committee will be undertaking an inquiry into this in the new year, and I hope to be able to drill down to find out exactly what the situation is.
Mr Hayes
I am sorry to have to intervene, because I know that time is short. Let me assure the hon. Gentleman that I take his work seriously in that regard and that we, like him, are determined to see apprenticeships of the right quality and to see bureaucracy cut so that more firms can be involved. He is right to say that apprenticeships matter, but the brand matters too and we are as committed to quality as he is.
Mr Bailey
I welcome the words of the Minister, whose commitment to this cause I would not doubt for a moment. I am sure that we will have an extremely enlightening inquiry in the new year.
I shall highlight two measures that would cost the Government very little but would help. First, they should continue the funding for the graduate internship scheme—these are funded internships for graduates in small businesses. This has proved to be of enormous benefit to small businesses and to the graduates, and the total cost to the Government would be about £8 million. Given that this is a win-win situation—it helps the small businesses and graduates, and the cost would be lower than that of keeping them unemployed—I would have thought it was an obvious thing to continue. Also it sends messages to young people thinking of going to university that there is career progression after graduation. In the context of the highest level of graduate unemployment since 1992, that is a very important thing for the Government to do.
Secondly, small businesses are crying out for a financial incentive to encourage them to employ young people. The Government have introduced national insurance breaks. The existing scheme has not been very successful, and there is £850 million allocated for it. It should be broadened to existing businesses or, as the CBI says, a possible cash payment should be established for companies that take on young people and give them meaningful employment. These are not the words of tax-and-spend merchants; they are coming from the Federation of Small Businesses and the CBI—the authentic voice of the business community. If the Government do that, without great cost, it could make an impact on youth unemployment.
Nigel Adams (Selby and Ainsty) (Con)
I speak as someone who knows what it is like to have been made redundant, and I have also seen my father lose his job in his 50s. I can tell hon. Members that there are not many things worse than when a breadwinner comes back home to his family to tell them that he is out of work and there is no income. I also recall that as a 17-year-old I was asked, somewhat prematurely, to leave school, and I found myself having to look for work. My first job was not the one that I would have ideally wanted, but it was work and it provided my first wage—£48 a week, as I recall it. Getting a start is crucial for young people and I always tell the youngsters I talk to that being in the workplace is much better than not being in work at all, because they have to get something on their CV.
It is easy to go for the headlines and talk down our economy, but I would like to take a moment to talk up this Government’s efforts to improve youth employment chances, not just through job creation, but through their support of the apprenticeship scheme programme. Just over two months ago, the Minister for Further Education, Skills and Lifelong Learning announced cuts to bureaucracy to encourage employers to take on a large number of apprentices, and this serves as a proven way to fill the skills gap in our economy. As someone who has owned and run businesses, and actually created employment before entering this House, I am all too aware of the damage caused by excessive red tape and bureaucracy. It is vital that we reduce regulation in order to encourage businesses to employ youngsters. I am pleased that the Government have set about tackling this via the red tape challenge.
Nigel Adams
I would love to but I need to crack on; we have only got four minutes each.
This Government also promised 50,000 extra apprenticeships in 2010-11, but the figure has been surpassed and we have seen a record year—an increase of over 50%. In fact, in my constituency 850 people are on apprenticeships, an increase of 67% in the last year. Only by proving to business and the private sector that it is worth their while investing in youngsters can we fulfil our long-term goal of reducing unemployment, and I am confident that, via apprenticeships, we are taking the right steps towards that aim.
Hon. Members can do more than their bit to help young people and others back into work. That is why I organised a jobs fair in my constituency, and I know that many of my colleagues have done something similar. More than 1,100 jobseekers came through the door—both unemployed, and employed but looking for new opportunities. It was evident to me at my jobs fair that vacancy statistics from Jobcentre Plus do not necessarily reflect the actual climate. Its figures for October 2011, published in the Library, would have people believe that at least three jobseekers apply for every vacancy advertised in my constituency—a deficit of employment. However, many of the work and training opportunities offered by the 52 different organisations that turned up to my jobs fair were not advertised in the Jobcentre Plus system, and never are. I am also pleased to say that the feedback from the jobs fair was very positive, and lots of people have received interviews and job opportunities and have started work. Indeed, I have visited some of the youngsters who have started work.
I am confident that the Government have a credible plan for getting this country’s finances back on track, reassuring businesses and reducing regulation. Labour should take note that—
Pat Glass (North West Durham) (Lab)
I had prepared something long and detailed, but I will keep my remarks brief because I want to let other Members speak.
When I made my maiden speech in May 2010, I spoke about unemployment, particularly youth unemployment, in my constituency; and when I checked my predecessor’s maiden speech, made in 1987, I discovered that she, too, spoke about unemployment in the north-east and North West Durham.
Pat Glass
I thank the hon. Gentleman for that. Anyone looking at those two speeches could be forgiven for thinking that this is a deeply entrenched problem that cannot be dealt with, but actually, that is not true. Between 1997 and 2010, North West Durham, like most of the post-industrial north, underwent an economic and social revolution, with the support of the previous Government, but it is amazing how quickly the clock has turned back to the 1980s. Under a previous Conservative Government, male unemployment in Consett, in my constituency, reached 100%. Can people now imagine what it is like to live in a place with 100% male unemployment?
Youth unemployment in my constituency has doubled in the last 12 months and now stands at 35%. Unemployment generally has increased by 20%, and it is a direct result of Government policies. The Prime Minister tells us that we need to rebalance the economy from the south to the north and from the public sector to the private sector, so that, as public sector jobs disappear, they are replaced by private sector jobs. We would all agree with that, but in my constituency, full-time relatively well-paid public sector jobs are disappearing at a rate of knots and are being replaced by very few part-time, poorly paid jobs.
If the Government are serious about delivering on unemployment in places such as the north-east, they need to be serious about a growth strategy. We do not need enterprise zones and short-term grants. We have had those before and they do not stay: as soon as the grants run out, the jobs disappear and everybody runs back to the south-east. We need instead proper infrastructure investment, so that private companies are attracted to the area and stay. That means investment in roads and rail, airports and broadband. Some 46% of my constituency is a broadband blackspot.
We need investment in skills. Nissan came to the north-east not because of the grants but because of the skills that were there when the shipyards and the steelworks closed down. We need investment in a growth strategy for the regions. But what have the Government done? They have cut public expenditure for infrastructure and jobs, and cut investment in skills. The abolition of the EMA has led directly to falls in participation rates at 16 to levels that we have not seen since the 1990s, and the tripling of tuition fees has led to a 12% reduction in university applications this year.
Young people are having a hard time from this Government and it is due not only to the abolition of the EMA and the rise in tuition fees, but to the cuts in home-to-school transport, home-to-college transport, careers services, youth services and local bus services. Young people are becoming more cynical now than they have ever been about politics and the role of the Government. I am pleading with the Government now to listen to the suffering out there and start putting in place a proper plan for growth and jobs for young people.
Paul Maynard (Blackpool North and Cleveleys) (Con)
It is a great pleasure to be called to speak in this important debate. I know the Opposition like to make their Wednesday afternoons political theatre, but there are many people on the Government Benches who are concerned about youth unemployment and have ideas about how the situation can be improved.
As the MP for Blackpool North and Cleveleys, I represent the fourth most deprived Conservative-held seat in the country. That is no badge of honour. It is with no sense of satisfaction that I report that year on year youth unemployment has risen 36% since September 2010. I take no pleasure from the fact that even on the figures that were fed to The Times by the Labour party, the number of long-term youth unemployed has risen from 75 individuals to 100 individuals since May 2010, but I point out to Labour Members, as they seem to have failed to understand earlier, that there are 276 constituencies where youth unemployment has fallen or remained static since May 2010, according to the same figures as they obtained from the House of Commons Library.
I am sure that everyone who speaks in the debate will say that apprenticeships matter, and they matter to me. I have taken on one apprentice, Nathan, in my constituency office, and he is excellent. Many on the Government Benches have done the same, but we in the House obviously cannot solve the problem alone. I am delighted that, thanks to what the Government have been doing, the number of apprenticeships in my constituency has risen from 300 to 940.
Meg Hillier
All hon. Members would agree that apprenticeships are a good thing and that we want more of them, but what would the hon. Gentleman say about the issue that I have picked up on on doorsteps throughout the country, which is that young people with A-levels, and sometimes with degrees, are going for apprenticeships that would normally have been available to young people with lower levels of qualifications, thereby pricing them, so to speak, out of the market? Does he share my concern about that and will he raise the issue with Ministers in his Government?
Paul Maynard
I am grateful to the hon. Lady for raising that issue. It brings together a number of points that Members are likely to make this evening. First, we should welcome the fact that better qualified individuals are now seeking apprenticeships. We should not say that apprenticeships are only for those who are not academically inclined. Secondly, the Labour party now disapproves of older people seeking to take on apprenticeships. It was a Labour Government who commissioned the Leitch review, which wanted to see more older people going into apprenticeships.
I represent a seaside town. I know the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) does not understand the economics of seaside towns, so I shall try to explain to him that one of our fundamental problems, as the hon. Member for Hartlepool (Mr Wright) pointed out in The Guardian interview that I saw in the debate pack, is that of generational worklessness and the potential for generational exodus, even—people not finding opportunities in seaside towns and having to leave.
For members of the third generation who do not have a job and cannot find a job, the inclination to go out and look for a job, and even seeing that part of their life involves going out to work, is lost. Part of the solution is getting the older generation into apprenticeships and into work as much as the younger generation. That is why, as my hon. Friend the Member for Brigg and Goole (Andrew Percy) tried to make clear, the problem did not start in May 2010. It did not start even in May 1997 or May 1979. There has been a gradual structural problem of worklessness, particularly in post-industrial societies. Tourism and hospitality are not like coal mining or the steel industry, but they have none the less gone through a period of decline in my constituency and we have seen employment and opportunities fall as a consequence, so there is a challenge.
The shadow Secretary of State mentioned the Prince’s Trust, which does a fantastic job in my constituency. Three times a year it takes a group of 12 young people from deprived backgrounds. I have been to one of the thank you parties at the end of a session and heard the powerful tales of how they got into the situations they found themselves in. Many brought their problems to Blackpool from outside the town. Many came from broken homes, broken families and disappointed backgrounds, yet they have struggled and managed to succeed.
What frustrates me about the debate is not so much the usual political to and fro, the misuse of statistics and Members trying to portray things as good or bad, but the Labour party’s failure to understand that this is not about who is to blame. It is about trying to understand why worklessness occurs in our society, why young people are unable to enter employment and what we need to do to get them there. The Government are making progress. I would of course like it to be faster, but we are putting the building blocks in place and I welcome that.
Derek Twigg (Halton) (Lab)
There could hardly be an issue of greater importance to my constituents in these challenging economic times than jobs and security for their families. Almost every day I hear about the consequences of unemployment and poverty in my constituency. It is not just about people losing their jobs; it is about people losing their homes or worrying about keeping their homes and the resulting stresses on family life.
Youth unemployment is a major concern in my constituency. Nationally it is at an 18-year high, at 991,000, with long-term youth unemployment up by almost two thirds this January and by a staggering four fifths in Halton. We are again seeing the familiar face of Conservative Governments: mass unemployment, people being thrown on the scrapheap and young people hit particularly hard. To put things in context, back in 1993, in the twilight of the miserable 18 years of Conservative rule, youth unemployment in Halton stood at a massive 22.7%, and it was almost 27% in the autumn of 1985. For most of the early 1990s the rate remained stubbornly above 20%, even as late as 1996, well after the last recession.
Under the Labour Government youth unemployment in Halton was mostly below 10%, which was not good enough, but it was still a lot less than it had been under the previous Conservative Government, and at times it fell as low as 4%. Of course, any youth unemployment is unacceptable, but comparing what the previous Tory Government and the current Tory Government have done shows the natural progression and where they are going. Their economic policy is failing and hurting. It is clearly not working because the Office for Budget Responsibility has forecast that the Government will borrow an extra £46 billion over the next year. As the Business Secretary said on 15 March:
“Cuts without economic growth will not deal with the deficit.”
The motion before us also refers to the International Monetary Fund’s concerns about the Government’s approach. A few weeks ago I met some young people in Runcorn who were on a training scheme to get jobs in the construction industry, which is massively difficult to get into. They were desperate to get work, but they want the confidence that there will be jobs for them. I regularly meet young people who want to work and get those skills. Only last Sunday I met members of the Halton Youth Parliament in Runcorn, who told me that one of their biggest problems is transport. When they are looking for a job or training or a college place, being able to get there is vital. The Government’s cuts to transport, particularly bus transport, have been very hard for my constituency.
There is of course concern about the banks, which should be doing more. I strongly support our proposal for a £2 billion bankers’ bonus tax, which would fund work for 100,000 jobs and allow every small firm taking on extra workers a one-year break from national insurance contributions. The banks should be doing more to help the unemployed, particularly young people. I have twice raised concerns about bank lending to small businesses with the Chancellor on the Floor of the House, and he is looking again at what more can be done. We shall see about that, but there must be a recognition that not enough is happening and that the policy is failing. He has to do more to help young people who are unemployed. It is important that we make it clear that we must have a growth strategy.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Will my hon. Friend give way?
Derek Twigg
I will not, because I have very little time remaining.
Finally, in my constituency we have done a great deal of work with the local authority and local businesses, with the help of the previous Government, to bring forward important projects, such as the Mersey multi-modal gateway, the new Mersey gateway bridge, the Daresbury science and innovation campus and a number of other important projects. Some of those are supported by the Government, but they were developed under the previous Government, which had a growth policy to encourage jobs in areas of high unemployment that need development and need to see—
Lorely Burt (Solihull) (LD)
I shall be very brief. There is not enough time to cover everything mentioned in the motion, so I will avoid the usual political knockabout in the first part of the motion, which is the Labour narrative about how we got into this economic situation. Those arguments are well rehearsed. What matters is not how we got here, but how we get out. I agree with some of the suggestions the Opposition have made. I have long campaigned for a 5% VAT rate on home renovation materials and have asked the industry to analyse the cost-effectiveness of that proposal.
Lorely Burt
I will not, if the hon. Gentleman will forgive me.
I agree that we could work up a programme to give national insurance relief to small companies taking on new workers, maybe even in the form of a rebate after the first complete year of employment. I have got lots of other ideas, which I hope colleagues in the Treasury will consider. Again, I agree with the Opposition: we need more incentives to stimulate private business to rev up the engine of growth.
It all boils down to growth, but it must be growth in the private sector, not growth led by creating jobs that do not exist, which is what one could argue the future jobs fund did. The Minister has outlined all the steps we are taking to create jobs and prosperity. The motion says only two things about youth unemployment: that long-term youth unemployment is up, and that we should not have scrapped the future jobs fund. Well, youth unemployment is up, but it grew under Labour by 40%—going from 664,000 unemployed 16 to 24-year-olds in May 1997 to 924,000 in May 2010. According to the latest statistics, that figure is 991,000. I hope that a Labour Member will intervene to explain to me how that equates to a 68% increase because, according to my mathematics, that seems more like 7%.
Meg Hillier
I thank the hon. Lady for giving way, especially given that time is short. Does she not agree that, out in the real world, people do not want the bickering. What they are concerned about, as we should be, is that an entire cohort—for example, graduates—is experiencing a higher rate of unemployment. We should be addressing the whole cohort issue, because we are condemning an entire group of young people to lower incomes and worse life chances as a result of Government policies.
Lorely Burt
I am sure we agree on the seriousness of the situation and all the different groups of young people who are affected. Unfortunately, the hon. Lady did not answer my question, but never mind.
Lorely Burt
I am sorry, but I will not give way.
Dealing with youth unemployment is incredibly hard, but the Opposition should not make political capital out of a relatively small increase in existing figures that are a legacy of their own figures.
Lorely Burt
I have only two minutes. I am very sorry.
The future jobs fund was well intentioned, but ineffective and expensive. It created new positions that were not, by definition, real jobs. It was so ineffective, in fact, that young people who were not on the programme fared better in getting real employment than those who were. It cost more than it saved, and failed to accomplish its targets. Now the Opposition are also calling for a bank levy to raise funds for a youth jobs fund. However, we have already introduced a bank levy, and it raises more each year than they managed to raise with their bankers’ bonus tax.
So what have we done for young unemployed people? We have concentrated on apprenticeships and getting people into real jobs. We have exceeded the targets in our apprenticeship scheme, with the provisional figures showing that the number of apprenticeships has grown by 58% across the UK and some areas showing growth of 198%. Perhaps the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) would like to welcome the 82% rise in apprenticeships in his constituency. The Work programme is designed to ensure that people can get out of a cycle of benefits and get back into work that pays. The jury is still out on the Work programme, but I am really hopeful that the work of specialist agencies, using their skills to find jobs for long-term unemployed individuals, will bear fruit.
I welcome the fact that Labour Members are bringing ideas to the table. As I said, I agree with some of them, but not all. We will listen and we will work with all colleagues in this House for a more prosperous future for all our constituents.
Mr Iain Wright (Hartlepool) (Lab)
Youth unemployment is the single biggest social and economic problem facing my constituency, and its effects will leave a scar on Hartlepool’s prospects for decades to come. My town has the dubious and unwanted distinction of having the worst youth unemployment in the country: 1,450 young people in Hartlepool—17.4%, or nearly one in five— do not have a job. We have not seen such levels of youth unemployment in my town since 1995. What is particularly worrying is that in my constituency unemployment is rising fastest among young people, and rising much faster than the regional or national average. Since this Government came to office 18 months ago, youth unemployment in Hartlepool has increased by some 60%, and it has been increasing fastest in the past six months.
Alex Cunningham (Stockton North) (Lab)
I am grateful to my fellow Teesside MP for giving way. Does he remember when Middlesbrough football fans used to chant, “There’s only one job on Teesside”, in celebration of Joseph-Désiré Job, who played for the club? That is no longer very funny, because young people might be under the impression that it is actually true as hundreds of them chase every single job opportunity on Teesside.
Mr Wright
As a proud Hartlepool United season ticket holder, I will never celebrate the achievements of Middlesbrough football club, but my hon. Friend is right to say that we have been here before.
When I was growing up in the 1980s, the spectre of unemployment haunted my constituency. The de-industrialisation of this country in the 1980s hit my region hard. In the recession of 1979 to 1981, an astonishing 20,000 jobs were lost in my constituency as shipyards, steelworks and heavy engineering firms closed their doors. In many respects, Hartlepool and the wider north-east is still, in 2011, adjusting to the huge economic shocks of the 1980s and 1990s. I suggest that the Government need to learn the lessons of history and acknowledge the problem that youth unemployment creates. They need to act decisively to ensure that the young people facing a bleak future are not abandoned permanently and that Hartlepool does not see once again, as we did in the 1980s, a lost and forgotten generation.
We all know that the longer a person is out of work, the harder it is for them to gain employment. Young people are hit particularly hard in this regard. They cannot get a job because they have not got experience, but they cannot get experience because they have not got a job. It does not have to be like this. The future jobs fund was a particular success in my constituency, helping more than 720 young people in Hartlepool to get a foot on the career ladder and providing them with tangible help and support into employment.
In contrast, we now have a Government stripping out demand in the economy and a Chancellor who is changing his growth forecasts more often than he changes his socks and neglecting the talent, potential and passion of the next generation. I urge the Government to change course—not to concentrate solely on deficit reduction to the exclusion of everything else, but to have a more sophisticated and holistic economic policy based on stimulating demand for our economy, providing a framework to make Britain the best place on the planet to do business and, crucially, providing good future prospects for our young people. Other nations are doing this. Germany now has a lower jobless rate in general and among young people than it did at the start of the financial crisis. It has achieved that through greater emphasis on infrastructure spending, ensuring that its economy will be more productive and efficient in future; and providing job subsidies, ensuring that its work force, particularly its young people, remain job-ready and equipped with the skills needed in the 21st century.
In my lifetime, in the 1980s, a Conservative Government abandoned a whole generation in my constituency. The rationale behind this was that such unemployment was a price worth paying. I implore the Government please not to make the same costly mistakes again.
Guto Bebb (Aberconwy) (Con)
My hon. Friend the Minister said that he believes strongly in localism, and so do I. However, having suffered under a Labour-led or Labour Administration in Cardiff for the past 12 years, it is sometimes difficult to keep supporting the idea of localism.
Since 2000, the level of Welsh GDP in comparison with the European average has fallen from 68.6% to 64.4%. At the same time, between 2000 and 2010, the proportion of young people aged 16 to 24 in Wales who are unemployed increased from 15.8% to 21.5%. The sad fact about this debate is that Opposition Members simply do not recognise that a failing economic performance is related to a failure to create jobs for young people.
Wales has had support from Europe on a regular basis because of the failure of the policies adopted by the Labour party in Wales. Such is the failure of the Labour Government in Wales to put together policies that make a difference that Wales is one of only eight regions out of 66 in Europe that have qualified for objective 1 funding to see its prosperity decline. To put that in context, over the past 10 years under Labour, Wales has gone backwards while even the Greeks have gone forward. That is the reality of living under Labour. I support localism, but in Wales we suffer for it.
We cannot divorce this debate from education, skills and training for young people. Recently, there was evidence from the largest inward investor in the south Wales valleys over the past five years that less than 20% of the young people who were referred for job interviews—not for high-level jobs, but for comparatively low-level jobs—had adequate skills in reading, writing and arithmetic, and, more importantly, adequate social skills. Is that a surprise when the Labour Government in Cardiff have deliberately decided to spend £600 per head less than England on educating young people? That is the reality of Labour.
We must take on board the need to create economic growth and prosperity. Jobs for young people will not appear in isolation. Opportunities for young people will come as a result of economic growth and success—something we desperately need. That is why it is crucial that we pay tribute to this Government for taking the issue seriously. The Work programme, which has been mocked by Opposition Members, will ensure that payments are made on the basis of performance. That is a move in the right direction. It means that people will have to be in position for 12, 18 or 24 months before payments are made. That is a sign of confidence in the ability of the programme to get people into private employment.
Guto Bebb
The shadow Secretary of State again makes the mistake of making a short-term point about unemployment in my constituency, without reference to the fact that the biggest employer in my constituency is the tourism industry, which is seasonal. As he wants to make an issue of youth unemployment in my constituency, it is worth pointing out that we have literally hundreds of people working in hotels, guesthouses and other tourism-related businesses there who are hard-working, successful and moving on. The sad fact is that a huge number of them are from eastern Europe. Those people have grasped their opportunity, but that opportunity has not been available to young people from my constituency because of the welfare state created by the Labour party, which is more interested in throwing money at a problem than solving it.
Guto Bebb
I will not take another intervention, because it would be unfair to my colleagues.
The Labour party has created a dependency culture, rather than a culture of can-do and change. As my hon. Friend the Member for Selby and Ainsty (Nigel Adams) made clear, young people should have the opportunity to take a job and to develop in that position. The Labour party’s policies have ensured that those jobs are not available. Many young people in my constituency have families and responsibilities, but because of the welfare system developed by the Labour party over 13 years, they are often better off not taking a job. The biggest change that the coalition Government are making is to ensure that when people take employment, they are better off. It is unacceptable that the Labour party believes that throwing money at people and allowing them to do nothing is more effective than changing the way we live and giving people the opportunity to make something of themselves in employment.
Ian Lavery (Wansbeck) (Lab)
May I say at the outset that I am disappointed that we have had only two hours to discuss youth unemployment and jobs, which is one of the most important issues in this country at the moment? I will use my four minutes to try to expose the myth that we are all in this together. Before the election, the now Prime Minister said that the north-east would be hit hardest and first, and that the public sector there was too big. What an absolute disgrace! It was an insult to everyone in the region, and what is more, only this week a report by the Institute for Public Policy Research North think-tank stated that 32,000 public sector jobs have been lost in the north-east so far this Parliament, yet 24,000 public sector jobs are being created in the south-east of England and 8,000 in London. Where is the fairness in all this? How are we in this together? It is not right. Why is the north-east continually hammered by this coalition Government?
Ian Lavery
Excuse me, but the hon. Gentleman has just come in. There are people who have been in here for ages.
In my constituency, 20.7% of young people are not in education, employment or training. It was once a thriving mining community, but we now have unemployment levels of 7.7%. Over the past five years, there has been a 67% increase in the number of jobseeker’s allowance applications, and over the past 12 months, a 19.8% increase. The number of applications from those aged 24 and under has increased by 34% in 12 months. It is an absolute disgrace.
The most horrendous statistic is that for every job vacancy in Wansbeck, there are 9.6 applicants. The jobs are not there for people. It is unacceptable, and we cannot continue to treat people like this. It has been said on numerous occasions, “Is this a price worth paying?” Do people believe that youth unemployment is a price worth paying? It is not. The lack of jobs and opportunities will see this country decline in the future. Young people should be seen as our future doctors, business men and women, nurses, firefighters, teachers, soldiers, sailors and council workers. We should treat them with a little decorum.
Mark Lazarowicz
My hon. Friend is right to point out what our young people should be able to expect from the future, but is not the reality that because of what is happening, there is so much despair and fear among young people—fear that they will never get a real job—that it is essential that we get action now to provide jobs, and that we do not just rely on promises and schemes? That is what will give them hope. Otherwise, they will find their fears and despair justified.
Ian Lavery
I agree wholeheartedly. The 9.6 people going for every job in my constituency are now being threatened and told that if they do not secure employment, their benefits will be withdrawn. That is hardly a carrot-and-stick approach; it is basically a baseball-bat-over-the-head approach. Instead of encouraging people into employment, we are seeing quite the opposite.
The Labour party has proposed a five-point plan for growth and jobs, and the Government parties would be well advised to scrutinise it. What the Minister said absolutely appalled me: he said that they should not listen to the Labour party. Well, let me give him a message. I am here to represent hundreds and thousands of people unable to attract employment. The employment that is available is low paid. On youth unemployment and jobs, the Government should be listening to everyone from across the parties. People are asking me, and are entitled to ask, whether this is a cynical, political attempt to attack the north-east region and them as individuals, because of a fundamental lack of support for the Government parties.
Katy Clark (North Ayrshire and Arran) (Lab)
The problems that my hon. Friend is describing do not just affect the north-east. Does he agree that Government Members seem to be in denial about the scale of the problem and the fact that it will get a lot worse if they do not change course?
Ian Lavery
That is exactly right, and the economy shows clearly that borrowing is up by £46 billion, that CPI inflation is up to 5.2% and that RPI inflation is up to 5.6%. We have the highest level of unemployment for 17 years, the highest level of unemployment among women since records began in 1988 and almost 1 million unemployed young people.
We have to change course. Whether it is plan B, plan C, plan D, plan A plus or whatever, I say to the Government, please listen to what people are saying on the ground. Instead of saying, “We are not prepared to listen,” please listen to these people, who are desperate out there—the people who have been marching the streets of London, the disabled and the women, who I have already mentioned. Listen to what they have to say, please change course and let us see what can be delivered for the people who are most in need in the UK.
Mark Simmonds (Boston and Skegness) (Con)
It is a pleasure to follow the hon. Member for Wansbeck (Ian Lavery), but the only point on which I agreed with him was when he said that this is a very serious issue, and that we need an extremely detailed and fundamental rethink of how we address unemployment.
Every single person who is unemployed, whether young, middle-aged or old, experiences a personal tragedy, and we need to do as much as we possibly can to address the situation, but the fundamental point is that we will not create jobs unless we have macro-economic stability.
To get macro-economic stability, we have to get the deficit under control, and the coalition Government must not change course. They must stick to the course that they have set, otherwise the economy will not grow, because controlling the structural deficit is a pre requisite of economic growth, not a substitute for it.
Of course there is growing unemployment, but youth unemployment grew by 40% between 1997 and 2010, so it is not a new problem or issue. Indeed, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who speaks for the Opposition on this matter, made surreptitious use of statistics, with some of those that he gave painting a wholly inaccurate picture. Interestingly his only solution to the problem was more tax and more spend, the formula that clearly did not work under 13 years of the Labour party in government.
Mr Graham Stuart
Is it not true that in Hull and other cities throughout the country, the previous Government ignored youth unemployment, which stayed steady even as the general economy boomed? The truth is that on too many estates the Labour party abandoned people, threw them on welfare and did not provide them with the employment or education that they needed to better themselves?
Mark Simmonds
My hon. Friend is absolutely right, and I think I am correct in saying that 97% of current youth unemployment was inherited by this Government from the Labour Administration.
I have three or four suggestions for what the Government might do in addition to the excellent job that they are already doing. The first suggestion is to provide a greater emphasis on lifelong learning through not just traditional learning theatres, but online learning in particular. Secondly, the costs to, and regulations on, businesses must be reduced. For example, businesses are being used for informal tax gathering, which is highly regressive and has a disproportionate impact on small and medium-sized enterprises, thereby inhibiting their ability to create jobs. There needs to be a close look at exempting businesses from a raft of regulations and bureaucracy which has a negative impact on their ability to create jobs. We must also find mechanisms—I hope the Chancellor is looking at this—to incentivise businesses to invest, to create wealth and, therefore, to create jobs for young people and for others.
Owing to the long-term nature of the problem, the education system clearly fails far too many young people. It is clear also from the rise in youth unemployment, which began long before the current economic crisis, that the education system did not meet employers’ needs, but the Minister for Further Education, Skills and Lifelong Learning, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes) is doing an excellent job of trying to make businesses and education link up and perform in that way.
The Government are absolutely right on their key policy areas, such as rolling out broadband to enable people to engage with technological businesses and innovation, and increasing the Work programme. It is absolutely right to involve independent sector providers to deliver personalised help. There is significant evidence in my constituency that the work providers and the Work programme are getting jobs for people whom the state structures had failed for up to 18 months beforehand. My hon. Friend is absolutely right to deliver improved apprenticeships. In my constituency they are up 67% this year, and in the east midlands the figure is 60%. They are significant achievements, and my hon. Friend should rightly be proud of them.
The introduction of university technical colleges is absolutely right, and I hope that there will be many more of them. Then there is the new enterprise allowance and the link between volunteering and work experience. My hon. Friend the Member for Brigg and Goole (Andrew Percy) was right that it is important for people to get something on their CVs. A link with the voluntary sector may enable that to happen. The Government are on exactly the right lines. They need to continue and they must not be deterred from controlling the structural deficit.
Rachel Reeves (Leeds West) (Lab)
It is right that we should have the chance to debate youth unemployment today, as our economy continues to flatline and unemployment is rising. It is just a shame that neither the Secretary of State for Work and Pensions nor a single member of the Treasury Front-Bench team has bothered to turn up. How complacent and out of touch this Government are.
The last time we debated the economy in this House was on the day when new figures showed that youth unemployment had reached a 17-year high, with 991,000 young people out of work. Next week we shall have an update on those numbers, but in the last few weeks the Government have done nothing to address the national youth unemployment crisis. It is almost two years since this country moved out of recession, yet the prospects for unemployment and youth unemployment are gloomier than ever. Labour has set out a five-point plan for jobs and growth, and called on the Government to introduce an alternative to their plans, which are hurting but not working. Businesses up and down the country are seeing demand hit. Young people out of work and facing trebled tuition fees are seeing the impact. Families struggling with high VAT and rising energy prices are feeling the impact. All are still waiting for a plan for jobs and growth from this Government. We are all waiting for some leadership from this out-of-touch Government on a jobs and growth plan internationally as well. Every day of waiting is a day wasted, with potential going untapped and opportunities squandered.
Richard Graham
I congratulate the hon. Lady on her appointment. Can she explain to me how it was that during the 13 years of Labour Government, 5,600 private sector jobs were destroyed in my constituency of Gloucester?
Rachel Reeves
What I do know is that in the hon. Gentleman’s constituency, as in mine, youth unemployment and long-term youth unemployment is going up on this Government’s watch.
There has rightly been concern from all parts of the House today about youth unemployment. My hon. Friend the Member for Hartlepool (Mr Wright), whose constituency has the highest youth unemployment in the country, rightly talked about the impact on his constituents. My hon. Friend the Member for North West Durham (Pat Glass) gave a passionate speech about youth unemployment and its effect in the north-east, as did my hon. Friend the Member for Wansbeck (Ian Lavery), who talked about people in his constituency being hammered by this Government’s policies. My hon. Friend the Member for West Bromwich West (Mr Bailey), in whose constituency long-term youth unemployment has risen by 106% in just nine months, was right to talk about the need for a national insurance holiday for small businesses. My hon. Friend the Member for Halton (Derek Twigg), in whose constituency long-term youth unemployment has gone up by 81% in nine months, raised the prospect of Royal Bank of Scotland bonuses of £500 million this year, with no tax on bank bonuses to fund youth jobs—a policy proposed by the Labour party.
Mr Winnick
We have heard many eloquent speeches about unemployment from our right hon. and hon. Friends, unlike those from Government Members. In the 10 constituencies in England with the highest jobless rate for 18 to 24-year-olds, eight are in the west midlands, and of those eight, six are in the black country. We should bear in mind the devastation that is occurring once again, as in the 1980s, in the west midlands and the black country.
Rachel Reeves
My hon. Friend is right to talk about the impact on his constituents. That is why we need a five-point plan for jobs and growth across the country, including the black country.
Unemployment is at a 17-year high and youth unemployment is almost 1 million. Despite the complacency on the Government Benches, the Government must do something to tackle the crisis. Long-term youth unemployment is at its highest for a generation, with 120,000 young people out of work for more than six months, up a staggering 64% since January. The number of young women who are long-term unemployed has risen to 37,500—the highest level in a generation. Whatever Government Members say, the number of young people in long-term unemployment was falling when the coalition Government were formed and it is increasing on their watch.
Paul Maynard
Will the hon. Lady tell me in how many constituencies, according to the figures she requested from the House of Commons Library, did long-term youth unemployment fall between May 2010 and September 2011? I, too, have the figures.
Rachel Reeves
The answer is in a very small minority of constituencies. In the hon. Gentleman’s constituency of Blackpool North and Cleveleys, long-term youth unemployment is up 233%, so enough of the complacency—he should be urging the Government into action rather than going along with their out-of-touch attitude.
Throughout the country, the number of young people looking for work has increased in 196 out of 202 local authorities since September last year—97% of local authorities have rising youth unemployment. Even in the Minister’s constituency of South Holland and the Deepings, 50 more young people have been looking for a job for more than six months, which is a 71% increase since January. I see the impact in my constituency of Leeds West day in, day out: 105 extra young people have been looking for work for more than six months, which is a 66% increase. Those numbers speak of a devastating impact on the lives of individuals and families, and they are the result of this out-of-touch Government’s complacency on youth unemployment.
Rising youth unemployment also shows that the Government’s plan A does not make economic sense. With unemployment at a 17-year high, inflation soaring and growth flatlining, the Government are set to borrow an extra £46 billion in this Parliament—and that is before the Office for Budget Responsibility comes up with its revised forecast on 29 November. We are all paying the price for the Government’s failure to get a grip on unemployment with higher Government borrowing and debt.
Robert Halfon
Will the hon. Lady answer the question that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) did not answer when I asked him? Why did youth unemployment rise by hundreds of thousands on her watch and under her Government despite all the taxpayers’ money that was spent on one scheme or another?
Rachel Reeves
With long-term youth unemployment up 140% in nine months, the hon. Gentleman should be asking questions of this Government rather than looking back to the past. The reality is that unemployment was falling when this Government came into power; now it is rising. That is the difference between a Labour Government and a Conservative-led Government.
The Government like to blame anyone but themselves—that seems to go for Government Back Benchers as well. First they blamed the snow, then they blamed the royal wedding, and now they blame the eurozone, but the truth is that the economy was flatlining and unemployment was rising before the eurozone crisis hit. They needed a plan for jobs and growth before the problems in the eurozone erupted, and they need to change course now more than ever. It is time they took responsibility for their actions.
In the wake of this national crisis of youth unemployment, what have the Government done? More than a year ago, their very first act was to abolish the future jobs fund, which was worse than doing nothing. The future jobs fund got 100,000 young people into work. Before the election, the Prime Minister said that that same future jobs fund was a good scheme. Why did he cancel it, and why did he cancel it before he had a replacement? The Work programme—the Government’s replacement—is no substitute for the future jobs fund. It has one third less funding and is making less of a difference to young people’s lives.
We need jobs and growth and young people need hope and opportunity. They deserve a plan that gets the economy moving and improves the prospects of those leaving school, college and university. That is why Labour has set out a five-point plan for jobs and growth. A £2 billion tax on bank bonuses will both support the construction industry and guarantee a job for 100,000 young people. What could be fairer than using some of the record bank bonuses to get young people back to work? Bringing forward long-term investment projects— which my hon. Friend the Member for North West Durham mentioned—utting VAT temporarily to give immediate help to our high streets and struggling families cutting VAT to 5% on home improvements, and a one-year national insurance holiday for every small firm taking on extra workers, will make a huge difference to small businesses and to the 991,000 young people who are out of work today. This is a five-point alternative that offers hope and unlocks opportunity. It is a five-point plan that would get young people back to work, get businesses hiring and get our economy growing. I urge hon. Members to support this action for the sake of the young people up and down this country who have been tossed on the scrap heap by this Government, just as they were in the 1980s and 1990s under Tory Governments of the past.
It is time to learn the lessons. We cannot afford the cost of spiralling unemployment, or of young people leaving school and college without the hope of getting a job. Call it what you will—plan A-plus, plan B or Labour’s five-point plan—but for the sake of 1 million young people waiting for action, I urge hon. Members to support the motion.
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)
How could we not be moved by what the hon. Member for Hartlepool (Mr Wright), my hon. Friends the Members for Blackpool North and Cleveleys (Paul Maynard) and for Aberconwy (Guto Bebb), and the hon. Members for North West Durham (Pat Glass) and for Wansbeck (Ian Lavery) said about the plight of young people in their constituencies? Let there be no dispute about this: there is no denial and there is no complacency. [Interruption.] Of course this matters to all hon. Members in this House, and it ill befits Opposition Members to suggest that they have a monopoly on care.
Mr Hayes
I will not give way.
Hearing Labour Members talk about generational joblessness reminded me of the plight that my father and my grandfather suffered in the ’30s when they were jobless. The story now, as we have heard from Members across the House, is no less tragic than it was then. That is why the Government are doing something about it.
All hon. Members who have spoken in the debate must be disappointed by the motion. Like worn-out conjuror’s paraphernalia, it is all smoke and mirrors. It resembles the economic policy that the last Government practised when the shadow Chancellor was their senior economic adviser, and we all know where that led. It led to the point at which the shadow Secretary of State, who introduced this debate, left his famous letter saying “There’s no money left”. We can see the shadow Chancellor’s footprints and fingerprints all over the motion.
Mr Byrne
I am genuinely grateful for the tone that the Minister is trying to strike, but does he understand the signal that it sends, in a debate on youth unemployment, when the Department for Work and Pensions Minister cannot be bothered to turn up for more than half the debate and the Secretary of State is nowhere to be seen?
Mr Hayes
The right hon. Gentleman obviously wants to make party political and partisan points. However, I was suggesting, perhaps unfashionably—perhaps this is not typical for the Opposition—that this matter goes beyond party divides, and that we should be united in our concern and in a call for action.
The shadow Chancellor is not without redeeming skills. I understand that, when he was at public school, he was good at playing the violin. So Balls fiddles while Byrne roams around talking down Britain’s chance to succeed.
Let me deal with the three principal points that have emerged from the debate—first, the future jobs fund. It was by far the most expensive part of the September guarantee package, at £6,500 for each individual, and 50% of the people who were under the influence of the fund found themselves unemployed eight months later. That is why we questioned its value—not because it did no good, but because it did not do enough good and was simply not cost-effective.
The second big issue that has been raised today is that of NEETS. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) and the hon. Member for Leeds West (Rachel Reeves) must know that the NEETS figures are part of a deep, long-term structural issue. Throughout the good years, the NEETs figures were at an unacceptable level. The right hon. Gentleman will see from the figures that in 2009, on Labour’s watch, the number of NEETs rose to 925,000. The truth is that youth unemployment involves long-term structural and systemic issues, and this debate was a chance for us to consider them seriously. Instead, what we have heard from the Opposition was little more than party political knockabout.
The third point to emerge from the debate relates to apprenticeships. Let us deal with them head on. I shall leave aside the fact that the right hon. Gentleman has rubbished all those in his constituency doing apprenticeships in their 20s—people like those at Jaguar Land Rover or at BT.
Mr Hayes
The right hon. Gentleman knows the answer: over two years, the growth in apprenticeships for people under the age of 19 has been 29% and for people aged between 19 and 24 it has been 64%. Labour could only dream of those figures, and would have died for them in government. The number of apprenticeships for young people is growing. There are new opportunities, and while Labour is deliberating, the Conservatives and Liberals are delivering. That is the difference.
Ed Balls (Morley and Outwood) (Lab/Co-op)
Does it not tell us everything we need to know that when there is a debate in the House on tax support to create jobs for young people, there is not one Treasury Minister on the Front Bench for the opening and closing speeches? Is that not a matter of great shame for the Government and an embarrassment for the Department for Work and Pensions?
Mr Hayes
I offer the shadow Chancellor this, and I do so fraternally: if just occasionally he would temper his belligerent bombast with a degree of humility about the advice he gave the previous Prime Minister and Chancellor, he might manage to stop his reputation flatlining.
The motion shows that the old conjuror has learned no new tricks. Once again, we have profligacy dressed up as prudence. It is public policy transvestism: from a distance, the promise of tax breaks may look alluring; only up close can we make out the underlying 5 o’clock shadow of debt and downturn. That is all the 5 o’clock shadow Cabinet can offer.
Some people think that many of the Opposition Front Benchers have been over-promoted, but I give them a second chance. I have a very small bet at very long odds that there is an outside chance that some of them may make a half-decent job of it.
This Government are acting on apprenticeships. We are acting on the Work programme. We are acting on work experience. We are working on getting people into jobs. That is the difference between this Government and the previous Government. We care too, but we act as well.
Ms Rosie Winterton (Doncaster Central) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.