16:28 - The House divided: - Ayes: 215 / Noes: 301 - Question accordingly negatived.
Stephen Timms
We were left with a legacy of a very large number of people who have been out of work for a long time. It is welcome that at long last the economy is growing and jobs are being created; the long-delayed recovery is now, finally, in place. The question is: are those who have been left out of employment by the events of the past few years going to get the opportunities that these new jobs will create? Addressing that is exactly the purpose of this afternoon’s debate and of the proposal I am commending to the House.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
If the right hon. Gentleman wants to be completely fair, will he take the chance now to apologise for the fact that under the last Government long-term unemployment doubled and youth long-term unemployment rose by a half? Should Labour not be saying, “We are really sorry, we got something very badly wrong”?
Stephen Timms
I can assure my hon. Friend that these will be jobs for at least 25 hours a week and paid at least at the level of the national minimum wage.
The persistent unemployment that we still see today could be contributing to a continued cost of living crisis tomorrow, weakening the productivity and the growth potential of our economy as well as undermining efforts to keep social spending under control and to bring down the deficit. We must take urgent and effective action now to tackle the problem.
What action have we seen from the Government? One of their very first acts on entering office was to abolish the future jobs fund, breaking, incidentally, the promise that the current Home Secretary made during the election campaign. Eventually, the DWP published an evaluation of the future jobs fund and, to the surprise of nobody on the Opposition Benches, it was glowing. It found a net benefit to society—net of all the Exchequer costs—of £7,750 for every single young person who took part. It reckoned that, within three years, half the cost of that intervention came back to the Exchequer because participants stopped claiming benefits and started paying tax and national insurance. It was an exceptionally cost-effective policy.
By late 2012, when the evaluation was published, it was too late. The future jobs fund had gone. In the time since its abolition, unemployment had risen to more than 2.5 million and youth unemployment had risen to more than 1 million.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
As the right hon. Gentleman is referring to the research, may I just read out what it says? It says that
“even under the most optimistic combination of assumptions…the FJF programme is still estimated to result in a net cost to the Exchequer…there might never be an estimated net benefit to the Exchequer.”
That is what the analysis said.
Stephen Timms
If the right hon. Gentleman looks at the previous paragraph, he will see that the evaluation said that half the cost of an intervention came back to the Exchequer within a three-year period and that the wholly inadequate replacement for it was the Work programme, which sends more people straight back to the jobcentre after two years than it places in sustained work. It also performs shockingly badly not just in Edinburgh, as we were hearing earlier on, but for those in need of support, such as older workers and people with health problems for whom it has so far recorded failure rates of 87% and 93% respectively. The Work programme has been a failure and we must replace it with something that works better.
On youth unemployment, the Deputy Prime Minister saw what was going on and had an attack of conscience. He announced the Youth Contract, which the Government promised would lead to 160,000 work subsidies for young jobseekers. It started in April 2012 and it was an utter flop. It was not promoted. That was undoubtedly because DWP Ministers, with the possible exception of the Minister for Pensions, did not have their heart in it. Employers knew nothing about it. Those who did hear of it were confused by it and had nothing to do with it. The Government’s own advisers on poverty and social mobility said that it was not working, so last summer it was unceremoniously shut down early, after it had achieved fewer than 10% of the promised placements that were budgeted for. Ever since then, unemployment among young people has been going up.
The latest proposal from the Government is time-limiting support for young people without giving them the opportunity to train, after which they will simply be required to do community service. That is not an employment policy, but a policy for punishing the victims of the negligence and ineffectiveness of this Government.
Stephen Timms
We will be delivering a guarantee, exactly as we did with the future jobs fund. Anyone can look back at the record of the future jobs fund, where a guarantee was delivered. It will be again.
I shall say a little more about how the guarantee would work. Participants would be required, if their employer did not plan to keep them on when the subsidy ended, to pursue intensive job search for a permanent opportunity at the end of the six months. Any jobseeker who refused to take up a job offered under the guarantee would, in the normal way and in line with the long-standing conditions for benefit claims, lose their benefits. That is always the case.
The Minister for Pensions (Steve Webb)
The right hon. Gentleman is very careful with his figures, so he will know the answer to this question. He points to the future jobs fund as evidence of how his new scheme would work, and he says he hopes those new jobs would be in the private sector. What percentage of future jobs fund jobs were in the private sector? What is the figure?
Stephen Timms
Very few. There is the good example of Jaguar Land Rover taking on a group of young people under the future jobs fund, and my understanding is that every single one of those young people was kept on in their job when the wage subsidy ended. The future jobs fund was largely about the charity and public sectors; the guarantee is largely about the private sector, exactly as Jobs Growth Wales has been.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I say to colleagues that I will give way, but I am conscious also that, owing to all the pressures earlier on, Back Benchers will want to get their speeches in.
It is always a pleasure to follow the right hon. Member for East Ham (Stephen Timms), who took a good shot at making a good fist of a bad job. By my calculation, it is over a year since the Opposition initiated a debate on jobs. I wonder why. So much for their being the party of work, which is what they used to say.
The Opposition have repeatedly avoided talking about the labour market, although my colleagues have been dying to intervene. When the Opposition have spoken about the labour market, there has been nothing but talking the economy down and negativity. They have made gloomy forecasts—I recall the Leader of the Opposition talking about
“the disappearance of...a million jobs”.
Then there was the misguided prophecy of
“a long ‘lost decade’...of...high unemployment”.
The Opposition have opposed welfare reform, and most importantly work experience, at every turn. The hon. Member for Ealing North (Stephen Pound) is right: work experience is what young people want, so why have the Opposition opposed our work experience programme, which has been unbelievably successful?
Meanwhile, it is this Government who have delivered 2.2 million more private sector workers, 2 million apprenticeships starts, work experience and training for over a quarter of a million young people, 60,000 businesses through the new enterprise allowance, and the Work programme, helping 600,000 people to get a job—a sustained job that follows. With the election approaching, the Opposition desperately want to sound as though they have anything positive to say about any kind of jobs programme, now that this Government have turned the situation around. Whereas this Government have a record of success, the more one examines the Opposition’s flagship jobs guarantee, the clearer it becomes that that is little more than a no-jobs guarantee, and certainly a guarantee of no jobs in the private sector.
Let me go through the jobs guarantee, as it is the subject of the debate today. We first heard about it in 2011, when it was said to be for young people who had been unemployed for a year. It offered a guaranteed job for 12 months. In 2013, that seemed to morph into a compulsory jobs guarantee for those who had been unemployed for two years, so the objective had already slipped a bit. It guaranteed a job for only six months—half the time previously advertised by the original statement. Yet there remained complete confusion in the Opposition ranks about how long this programme was meant to last. When pressed, the shadow Chancellor said:
“We would have a guarantee of one year for young people, two years for adults. Anybody who is out of work would be guaranteed a job.”
That is not quite what I heard from the Opposition today. How long will it last—one year, two years, six months? What exactly have they costed?
I can understand why the title of this debate was changed. One could almost hear what was going on behind closed doors between the shadow Chancellor and my opposite number, the hon. Member for Leeds West (Rachel Reeves), when they were hoping to announce all the details about how long the jobs guarantee would last. One could almost hear the shadow Chancellor saying, because it was in the speech from the right hon. Member for East Ham, “You’re not announcing anything that allows anybody to cost this properly, because that way they will tell us that this does not work.” Even the motion carefully leaves those questions unanswered. Why would not the Opposition put in their motion all the details of this apparently wonderful plan? The answer is that no such wonderful plan exists. They allude to certain other plans out there, but they do not tell us what they mean.
What we heard today sounded rather familiar, so I looked it up. Back when Labour was last in government, there was a programme called StepUp. It was piloted by the previous Government, of which the right hon. Gentleman was a member, in 20 areas between 2002 and 2004. I shall not go over the names of the programme, but it was supposed to give paid employment to those failed by the new deal and out of work for two years. StepUp was never rolled out nationally by the previous Government because the evaluation from 2006 exposed its failings: for those nearest the labour market and those under 25, StepUp actually had a negative impact on work prospects, at a massive cost of £10,000 per place.
The right hon. Gentleman referred to the programme in Wales. The hon. Member for Leeds West has been even more explicit that the Opposition’s jobs programme is a rehash of Jobs Growth Wales. She said:
“I went to see a scheme very similar to this in Wales last week and...that’s what we would aim to do across the UK”.
But that is not what was described from the Opposition Front Bench today. A closer look at what has been announced about Jobs Growth Wales reveals that in many senses it is an exercise in cherry-picking. The hardest to help are not eligible; no one on the Work programme, Work Choice or any similar programme is allowed to go for the new programme; and places are given to only one in three of those who have applied, so a place is far from being guaranteed for all. In any case, although Jobs Growth Wales has trumpeted a success rate of 80% of participants in work, an apprenticeship or learning after six months, already 90% of all—not some—young people in Wales move off jobseeker’s allowance within nine months. That has nothing to do with the programme and all to do with what is happening to them through the jobcentres and through the Work programme.
Robert Halfon
My right hon. Friend will be aware that general unemployment in Harlow has gone down by 50% since 2010, youth unemployment has gone down by 56% since 2010 and 83% of the jobs created are permanent positions, yet the Labour councillor Emma Toal said last week at a council budget meeting in Harlow that she feels sick to the stomach when I quote the fall in unemployment and the jobs created. Is that not shocking? Is that not a shame? Does that not show that we are the workers’ party and Labour is the party of dependency?
Mr Duncan Smith
Yes, it is appalling that the councillor is unhappy about the idea that more people are getting work in my hon. Friend’s constituency. The reason why she takes that attitude, I think, is that Labour wants only to be elected. The Opposition do not care about anyone else. They would rather tell bad news to get elected than have a success that they could trumpet. Perhaps that is the real point.
Ninety per cent. of all young people in Wales move off JSA within nine months, so at £6,000 a place, the alleged success that is being trumpeted is nothing like the value for money that the right hon. Member for East Ham mentioned earlier.
Gordon Birtwistle (Burnley) (LD)
In Burnley in 2009 we were classed as a basket case—a town that was going nowhere, or going down. That was at the time that the future jobs fund was happening. Last year we were cited as the most enterprising town in the UK. We have doubled the number of apprenticeships to 4,300 and the number of young people out of work has gone down by 47%. Surely that is the right way to go, not to force people into work that they do not want to do.
Mr Duncan Smith
May I say to my hon. Friend—I repeat, my hon. Friend—what an excellent job he has done in championing his constituency? He is right—it is about getting private sector businesses to create real jobs for young people and older workers to go into.
I want to deal in some detail with the jobs guarantee versus the future jobs fund. A Labour press release that I saw in 2014 extolled the Opposition’s pet project as
“building on the success of the Future Jobs Fund”.
The right hon. Member for East Ham carried on the Labour line. I hope that was noted back at headquarters. He is clearly to be trusted through the election, and I give him a lot of support for that.
As for the claimed success of the future jobs fund, the DWP analysis that I quoted earlier is important. It was commissioned under Labour and was subjected to extensive peer review by the National Institute of Economic and Social Research, which, as I said earlier, found that not only was the fund estimated to result in a net cost to the Exchequer but that, as I pointed out, the future jobs fund was not estimated to benefit the Exchequer at any stage, and the Exchequer would not be able to get back the money that it had spent on the programme.
By contrast, as the hon. Member for Ealing North said, young people want work experience. I remember that early on, when I first went into jobcentres, I was accosted by young people who said that the problem for them was that at job interviews they were asked whether they had job experience, and when they said they had none, they were told that they could not be given a job without work experience, but their response was that they could not get work experience without a job.
Under the previous Government, people were allowed only two weeks’ work experience before they were expected back at the jobcentre. What we did instead was to allow them up to two months’ work experience in a business, and an extra month if they were offered a job or an apprenticeship. So, by contrast, work experience under this Government—this is the interesting point—has achieved the same success rate at least as the future jobs fund achieved, but at a twentieth of the cost—£325 per place as opposed to £6,500 per place. Another difference is that the vast majority of positions under the work experience programme are in the private sector, whereas I can think of hardly any private sector companies that offered jobs under the future jobs fund. It is a success versus a costly failure.
Stephen Timms
As the right hon. Gentleman knows—he has the evaluation in front of him—there was a net benefit to society of £7,500, net of all Exchequer costs, for each person who took part. Is he surprised that youth unemployment has been going up over the past three months, at a time when overall unemployment is coming down, or was that what he expected?
Mr Duncan Smith
Youth unemployment is now lower than it was under the previous Government, and it has been falling consistently. I will wait for the figures for the next few quarters, and when they show that youth unemployment has continued to fall, I expect the right hon. Gentleman to write me a note saying, “Sorry about that; that’s another thing we got wrong.”
Mr Duncan Smith
I will give way in a moment, but I just want to spend a little more time on the future jobs fund, because it is such a rich seam. I continue to ask the right hon. Member for East Ham to give us the list of private sector companies that are signed up to his new scheme, but he has not come up with it. The interesting point is that councils from Merthyr Tydfil to Norfolk and from Tyneside to Wakefield have all complained about how difficult it is to get businesses to deliver the future jobs fund. None of them could find anyone to deliver it. In Barnsley only 7% of the jobs found were in the private sector, and in Birmingham the figure was only 2%.
I was a little intrigued by that, because I know that the right hon. Gentleman is an intelligent man—I have huge respect for him and thought that he was a very competent Minister—and it was unlike him, given how accurate he normally is, to come to the Dispatch Box and, when pressed on how many private sector jobs would come from the scheme, answer, “It is most likely to be in the private sector.” That is it. That is the calculation that the Opposition have made for this incredible programme. He believes that it is “most likely” that those jobs will be in the private sector, yet not a single private sector employer is interested in it.
It is small wonder that the shadow Leader of the House also failed to name a single business that had signed up to the jobs guarantee. When pressed about the vast number of jobs there would be in the private sector, the shadow Chancellor, in a forerunner to his problem with “Bill Somebody”, said:
“But if not, you can do it through the voluntary sector. If not, you have to have a final backstop: a public work scheme.”
That is what they have. He let the cat out of the bag. The reality is that high streets and businesses have now made their views clear about Labour’s “destructive anti-business mood”. The Institute of Directors has stated that
“wage subsidies for employers are not the source of sustainable jobs”.
That is what this ridiculous programme would mean.
Stephen Pound
I was initially reluctant to interrupt the right hon. Gentleman while the compliments were flowing from the Treasury Bench, but normal service has now been resumed. The major difference between the scheme that he is promulgating and that which we are proposing—I reiterate this for the avoidance of any doubt—is that while the Government are proposing work experience, we are talking about real jobs. The advantage of work experience cannot be denied, but the aim of our proposal is proper, permanent jobs. If they turn out not to be permanent jobs that people start with it, so be it, but the difference is between permanence and work experience.
Mr Duncan Smith
The hon. Gentleman, for whom I have a huge amount of time, is right about work experience, and he must not let anyone on his side push him off that, but what he has just said is slightly wrong. He said that we are promulgating work experience and the Opposition are talking about a jobs guarantee, but we are not promulgating it; a quarter of a million young people have already gone on our work experience programme, and over 50% of them have gone into work. He is quite right that not all of them went into the businesses they did the work experience with, but many of them have gone into other jobs almost immediately. What is really exciting is that although many businesses said, “We’ll do the work experience, but we can’t guarantee a job,” a significant number of them, once they had seen the young person for a few weeks, came back and said, “I tell you what: we’re going to create a job around this individual, because we think they’re going to help our company.” That is what work experience has done. I simply say to Opposition Members that they should embrace that, not oppose it, because their Front Benchers have opposed work experience, and that is a big problem.
Pamela Nash (Airdrie and Shotts) (Lab)
In my experience the Opposition do support work experience, and there are many examples of that. Does the Secretary of State realise that there are already local examples of programmes similar to that which we are today proposing nationally? For example, my local authority, North Lanarkshire council, is about to announce that 5,000 people have got into work as a result of a similar project. Permanent private sector jobs have been created as a result of a six-month wage subsidy.
Mr Duncan Smith
But because of what we are doing with local authorities, working through the local enterprise partnerships, and with all the local provision that we have been pushing down, if they want to create additional programmes, Jobcentre Plus will support them through that. We have to be slightly careful, when starting to calculate figures, about one group coming on the back of others, because we will not know how many of those went to work as a result of Jobcentre Plus and how many as a result of the programme. If local authorities, rightly, want to help, we are all in favour of supporting them with extra help.
Mr Duncan Smith
I will make a little progress before giving way again.
The issue still remains for the Opposition which I thought this debate was about. I thought they would have a fantastic motion that answered all these questions, but they do not. These are the biggest questions: which businesses have signed up to the jobs guarantee, and how many jobs have they guaranteed to provide? In the absence of any answers, I will quote the OECD’s view of these kinds of make-work schemes. For the past 20 years it has demonstrated that such schemes are expensive and counter-productive. Its jobs strategy states that having
“large deadweight losses, displacement and substitution effect… direct job creation in the public sector has been of little success in helping unemployed people get permanent jobs in a more open labour market”.
That is probably the final word on the structure of Labour’s jobs guarantee.
Let us look at how the Opposition propose to fund their jobs guarantee, which I had thought would be dealt with clearly today. The right hon. Member for East Ham said something about it, but they seem to have gone back to their original position. Her Majesty’s Treasury has estimated that for 2015-16 the jobs guarantee would cost £1.54 billion for the over-25s and a further £540 million for the under-25s, so over £2 billion in total for only one year. To pay for it, the Opposition have proposed two measures.
First, they would restrict pensions tax relief for earnings over £150,000. Let us deal with that first. They originally committed that funding for the purpose of increasing working and child tax credits, so they seem to have done a little dodge. I have no idea whether they still plan to use it for that, but I am sure we will find out. Apparently it will now pay for the jobs guarantee. Never mind the fact that it would take—this is a real estimate from those who know—until 2018-19 to implement, leaving three years with no funding to cover the annual cost of £1.5 billion. They cannot just wave a magic wand and say, “The money’s there”; they also have to position the money at the right time. The right hon. Gentleman was forced by the shadow Chancellor to say that there would be no borrowing. Well, that looks to me like a chunk of borrowing.
That is even if the proposal raises any money at all, because the CBI has called it “simply unworkable”, the National Association of Pension Funds has warned that it is a “disaster in the making”, and the Institute for Fiscal Studies has said that it
“would be expensive to administer… unfair and would inappropriately distort behaviour.”
The Opposition would create a problem in the pensions industry and damage people’s savings, and all to fund a programme that simply would not work.
The second source of funding is repeating the one-off bankers bonus tax. I have to tell the right hon. Gentleman that no matter how many ways he cuts this, Labour has spent this money 11 times over. That is the 11 that I can find; I am sure my hon. Friends will find a lot more. There were proposals on reversing the VAT increase, at £12.75 billion; reversing tax credit savings, at £5.8 billion; more housing, at £1.2 billion; reversing the child benefit savings, at £3.1 billion; more capital spending, at £5.8 billion; and more child care, at £800 million. It is almost like one of those game shows—“Come on down, there’s another box to be opened and we’ll spend that money as well.” These sources go on and on and on; it is quite fascinating. Yet it has been said time and again that this is a one-off tax. When in office, Labour’s last Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said of the idea of repeating this tax that it is
“a one-off thing…because the very people you are after…will find all sorts of imaginative ways of avoiding it in the future.”
He had no time at all for the idea of a repetition of Labour’s bankers bonus tax. So there we have it: the cobbled-together nonsense of Labour’s jobs guarantee, destined to fail and wholly and utterly unfunded.
Jim Sheridan
On additional funding for the unemployed—I say this as someone who was unemployed for three years, so I know it is not a nice place to be—would this Government consider channelling any retrospective payments from people who have been found guilty of avoiding tax into fighting youth unemployment?
Mr Duncan Smith
Let me say to the hon. Gentleman that in my time before politics I was made redundant, and I know what it is like not to know where the next pay cheque is coming from. I agree with him: it is a terrible place to be, and no one, if we can avoid it, should be there. That is why we have said that, through the long-term economic plan, we have to make sure that the economy is stable and on a good, long trajectory, and that we get our debts and our deficits down. As regards chasing people who are avoiding tax, this Government, as my right hon. Friend the Prime Minister said today at the Dispatch Box, have done more to close tax loopholes than any other Government previously.
Mr Duncan Smith
Hypothecated funding is a matter for the Chancellor, as the hon. Gentleman knows, but I will certainly pass his views on. Many of us in this House loathe the idea of some people being able to hide their money away. We think that hard-working taxpayers deserve a fair deal, and the unemployed do too. I am seeing the Chancellor later today, and I promise the hon. Gentleman that I will pass his comments on to him.
As regards Labour’s proposed programme, with the best will in the world, I say to the right hon. Member for East Ham that he could have done better on the back of a fag packet, having had weeks, months and years to figure it out. I suspect Labour Members had to come up with something for this debate and are therefore doing this now. This slot was probably destined for a debate on the health service, but because they have made such a Horlicks of that, they have decided to throw in this business instead.
Let me deal with the success of the employment programme and talk about what we in this Government have done. Universal Jobmatch has transformed how almost 7 million people look for work, with over 4 million average daily searches. Work experience is one of this Government’s great successes for young people, with half of participants off benefits at a twentieth of the cost of the future jobs fund. The Work programme is helping more people than any programme before. Over 1 million have spent time off benefit, and almost 640,000 have got a job, 368,000 of whom have found lasting work, with a third of them staying in a job for 18 months or longer. It is now the most successful back-to-work programme of all those that have been put forward. Performance is exceeding all our original expectations and is better than under any previous Labour programme.
Let us look at how much better the Work programme is than some of the programmes Labour had. More than twice as many people moved into work in the first two years under the Work programme as under the flexible new deal. Nearly three times as many people have been in a six-month job as under the flexible new deal. For recent and new employment and support allowance claimants, Work programme job outcomes are exceeding expectations and rising all the time, compared with Labour’s Pathways to Work programme—never rolled out fully—which had no statistically significant impact on employment outcomes and was assessed by the National Audit Office as poor value for money. The truth is that we are now doing more for people who have difficulties getting into work than the previous Government ever did.
Does the hon. Member for Edinburgh East (Sheila Gilmore) still want to intervene, as she has been trying to catch my eye? No, she is on her computer. I hope she was writing up a glowing review of my speech; I look forward to reading it on Twitter in due course. I give way to her.
Sheila Gilmore
The Secretary of State always says of the work experience programme that about half of young people who take part in it go into work. His own Department’s evaluation—I do not know whether there has been a more recent one than 2012, but I have not seen it—suggested that following the work experience programme there was a difference between a participant group and a non-participant group, but it was only a small one. Does he not agree that nearly half of those who did not participate in work experience also went into work?
Mr Duncan Smith
It is always a pleasure to listen to the hon. Lady. She has tortuously wound her way around all these figures, but I come back to the simple point that the work experience programme, at a twentieth of the cost of the future jobs fund, ensures that over 50% of those who enter it will go into work. By the way, I did not invent the work experience programme—it was invented for me by somebody on the floor of the job centre because young people were saying, “Can’t we have more time for work experience than the last Government allowed us to have?” I do not know if she has seen the really interesting figure that the claimant count in her constituency is down by nearly 50%. That is a very good story. I know she will want to write that up as well, as an excellent statistic.
The record jobs figures under this Government stand as a testament to our success, with more people in work than ever before, up by 1.75 million, and more people in private sector jobs than ever before, up by nearly 2.2 million. Since 2010, two thirds of the rise in employment has gone to UK nationals—the Opposition never achieved this—thereby reversing the damaging trend of Labour’s last five years in office, when the majority of jobs went to foreign nationals. What is more, we now have more women in work than ever before, more lone parents in work than ever before, and more older workers than ever before—and employment for young people and disabled people is up on the year as well.
Let me now deal with the suggestion that these people are moving into part-time, low-quality work. That is not true. The Opposition constantly harp on about a figure that has no basis in fact, so let me give the facts. Full-time employment is up by over 1.3 million since 2010—over 80% of the rise in employment in the past year alone. Permanent employees are up by 1 million since 2010—nearly 80% of all people in work. Three quarters of those in employment since 2010 have come from managerial, professional or associate professional jobs. The Opposition constantly put about the nonsense that there are nothing but zero-hour, no-value, low-skilled jobs, but that is simply not true.
Adam Afriyie (Windsor) (Con)
It seems to me that with the DWP reforms we have brought through and with the changes to the tax system and regulation, we have created the greatest job creation engine this country has ever seen. Does my right hon. Friend agree that this motion is completely redundant, just as the Labour party’s measures in the previous Government created so many redundancies?
Mr Duncan Smith
I do agree. I also remind my hon. Friend that my hon. Friend the Member for Nuneaton (Mr Jones) said that under the previous Government youth unemployment did not, as the right hon. Member for East Ham claimed, rise only because of the great global recession that somehow crept up on the previous Government, but was rising steadily from 2004 all the way through.
Mr Marcus Jones
Opposition Members often say that all the jobs being created are zero-hours contracts, as in the election literature they put through people’s doors. Can my right hon. Friend say what the prevalence is of zero-hours contracts in the workplace?
Mr Duncan Smith
I can tell my hon. Friend exactly—it is 2% of people and 4% of total contracts. Moreover, this Government are moving to get rid of the exclusivity that we think is an abuse in zero-hours contracts—something that Labour never did anything about when in office. The truth about zero-hours contracts, limited as they are, is that they give some people, such as many of those with caring responsibilities, the flexibility of picking work when they need it. We are closing down on the abuses, and they are reducing. By the way, the previous Government never did anything about that. I am reminded—I should have remembered—that the previous Government said they were perfectly at ease and happy with people getting filthy rich, so the point is that we should not expect too much from Labour Members.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I hope that my right hon. Friend is making progress with the Leader of the Opposition in convincing Doncaster council not to use so many zero-hours contracts, because it is profligate in doing so.
Mr Duncan Smith
With the Labour party, it is always a case of “Look at what I say, not what I do”, because we invariably find that Labour party members out in the country are doing something fundamentally different. Let me finish my speech, because I am conscious of the time, Mr Deputy Speaker.
The Labour Government presided over a great recession—the great Labour recession—which cost the British economy £112 billion, and cost 750,000 people their jobs. We should never forget that their recklessness with the economy cost ordinary families up and down the country very dear in terms of lost jobs, lost money and lost hope. On their watch, youth unemployment increased by nearly half, long-term unemployment almost doubled in just two years, 5 million people were on out-of-work benefits and no one worked at all in one in five households. When we entered government, one in five households had nobody in work: that was the previous Government’s record.
I believe that this Government have got Britain back to work, with unemployment down, youth unemployment down, long-term unemployment down and the lowest rate of workless households on record. We have a proven track record on delivery: departmental baseline spending is down £2 billion; reforms are set to save £50 billion overall next year; and there has been a real-terms fall in welfare spending for the first time in 16 years. Over this Parliament, welfare spending has grown at the slowest rate since the creation of the welfare state.
Above all, our real success is not about figures—in hundreds of thousands, millions or even billions—but about the fact that each and every job created means a life transformed. Each job gives a young person a real sense of self-worth, gives an adult new hope, and gives a parent a sense of security for themselves and their children. That is what the Government stand for, and what we have delivered—hope and security for families up and down the country.
The Minister for Employment (Esther McVey)
With only three months to go until the general election, I was intrigued to hear what the Opposition would put forward today to help people into work. What was this compulsory jobs guarantee? What we have learnt today is that there is no real commitment and no real understanding of what would happen. As my hon. Friend the Member for Reading West (Alok Sharma) said, it is unfunded, un-thought-through and unworkable.
Many questions remain about the jobs guarantee. Which businesses have signed up to it? How many jobs would it provide? What would happen if someone refused to do it? What would happen to apprenticeships if people did it? How would it be funded? None of those questions has been answered adequately. What we do know is that it is important to distinguish between proposals that have not been thought through, prepared or funded and what this Government have done.
Members spoke today about what has happened in their constituencies—and those are facts. In Aberdeen South the claimant count is down 56% since 2010, and in Stroud it is down 56% since 2010. I congratulate my hon. Friend the Member for Stroud (Neil Carmichael) on setting up the festival of manufacturing and engineering in his constituency. When it comes to building infrastructure and helping business, we know that we have put forward £12 billion for the growth fund. We are putting £15 billion into roads and infrastructure. We have the northern powerhouse, bringing together science, manufacturing and infrastructure and absolutely turbo-charging our northern cities.
In Ealing North the claimant count is down 38%, and in Nuneaton it is down 46%—the same is true for every Member who has spoken today. We are seeing employment going up and unemployment going down. We need this clear distinction: should people go forward with a party that does not know what it is doing or what the outcome would be, or should they go forward with a Government who have a tried and tested record—1.75 million more people in work and the biggest fall in youth unemployment since records began?
Esther McVey
I will not take any interventions, as the shadow Minister did not do so, but I will get through this in plenty of time for Members to speak—[Interruption.] Okay, I will take two interventions later.
What does the OECD have to say about Labour’s compulsory jobs guarantee? It says that there would be “displacement and substitution effects” and that it would not get anyone into permanent jobs. What did the Institute of Directors say? Like my hon. Friend the Member for Enfield North (Nick de Bois), it said:
“Wage subsidies for employers are not the source of sustainable jobs. Government must focus on creating the conditions for growth, as only businesses know when consumer demand will allow them to create more positions.”
That is exactly what we are doing, with business tax support, welfare changes, infrastructure and true fiscal discipline. I work with businesses pretty much every day, and we know that over the next 10 years, as a result of what this Government are doing, there will be 12 million new jobs created, fundamentally in science, engineering and IT. We have to ensure that our young people can take up those jobs, and that is what we are doing, with increased support for training and increased support for schools, for example through the pupil premium. We will help those who have been left on the unemployment list for so long and tackling the long-term youth problems and family problems through support for troubled families. We are systematically tackling unemployment and working with people to ensure that they are in work.
It is really important that we draw a clear distinction between what is working under this Government and what never worked under the Labour Government. My hon. Friend the Member for Selby and Ainsty (Nigel Adams) said that when Labour leaves office, it always does so with higher unemployment than when it came into office, and that is absolutely true. So why would anybody choose to move forward with this jobs guarantee without knowing where these guaranteed jobs are coming from?
Interestingly, even the European Commission, which likes to foist initiatives on people, has said that
“the draft Country Specific Recommendations published 2 June call for commitment to the UK’s Youth Contract to be maintained.”
In other words, it would not pursue Labour’s proposal on guaranteed jobs, and what we did was correct. We supported people and put money in place to create work experience, sector-based work academies, and incentives.
Kate Green
I am grateful to the Minister for giving way; this must be one of the two interventions that she is going to accept. Given that she is speaking of the European Commission’s comments on the youth jobs contract with such approval, why did her Government decide to scrap it, and how can it have been such a failure in delivering the outcomes it was promising?
Esther McVey
No, it is still going ahead. As I said, we have had the biggest falls in youth unemployment since records began. The Commission agreed that we are creating the right conditions, with more jobs being created in the UK than in the rest of Europe put together. That is why we have been having meetings with it to explain what we are doing rather than what the Opposition would do. The key point is that of course people would stay with those who have ensured that 1.75 million more people are employed.
I want to read out some of the predictions that Labour Members have made. They said that 1 million more people would be unemployed if we followed what we are doing. [Hon. Members: “Wrong!”] As all my Back Benchers are saying, that was wrong. In fact, nearly double that number of jobs were created. Labour Members said that what this Government were doing would lead to out-of-control inflation. [Hon. Members: “Wrong!”] That did not happen—we have brought it down. They said that there would be a double-dip recession. [Hon. Members: “Wrong!”] That never happened. No—the only recession was under Labour, and it was the longest and deepest since the war. They said that it was a fantasy that the private sector could create more jobs than were lost in the public sector. [Hon. Members: “Wrong!”] That was never the case; in fact, the private sector created over 2 million more jobs.
So why would anybody trust the Opposition with the economy, with jobs, and with the future of this country? The answer is that they certainly would not. That is why we are firmly saying today, three months before the general election, that their idea of how to create jobs is unfunded, ill thought through and unworkable, and we cannot find a business yet that wants to follow it. We reject the motion.
Question put.
Mr Speaker
I have now to announce the result of the deferred Division on the draft Smoke-Free (Private Vehicles) Regulations 2015. The Ayes were 342 and the Noes were 74, so the Question was agreed to.
[The Division list is published at the end of today’s debate]