Jobs and Growth

Debate between Baroness Hodge of Barking and Stephen Lloyd

Thursday 17th May 2012 Commons Chamber

[Margaret Hodge (Barking) (Lab)]

Today’s debate on jobs and growth is of huge importance not only to the constituents of Redcar but to those in Barking and Dagenham in my constituency. All too often, particularly in this Chamber, people believe that London’s streets are paved with gold, and that there is little poverty or joblessness in the capital. All too often, again in this Chamber, people believe that the challenges facing Londoners are concentrated in the inner boroughs. Sadly, and with a strong sense of anger and frustration, I must tell the House that the reality for families in Barking and Dagenham demonstrates that those beliefs are not only misguided but just plain wrong.

Any set of statistics will demonstrate a high level of joblessness in my constituency and, under this Government’s legislative programme, there is little hope for the future. A datablog published by The Guardian shows that Barking and Dagenham is ranked eighth out of 326 local authorities for long-term unemployment, and 11th for child poverty. If we look at the latest unemployment figures, we see that the unemployment rate in my constituency, across all people of working age, is almost double the national average, and that the number of people on jobseeker’s allowance for 12 months or more has doubled in the past year.

Growth and jobs are vital for my constituents, yet they have become the victims of the Government’s stubbornly blinkered and highly ideological approach to the economy. This involves putting tax cuts for the rich before job creation for the poor, putting deficit reduction before poverty reduction and putting the interests of the few before the well-being of the many. Without active Government intervention, my constituents will find it harder than most to find the jobs that they need to pull themselves out of poverty. Almost 60% of 19-year-olds do not have a level 3 qualification, nearly half the people of working age who are out of work have no qualifications at all, and one in four of my constituents work in the public sector. Faced with cuts in public sector jobs, cuts in training and employment opportunities, a failed growth strategy, little business investment and miserable levels of bank lending, the future for them is bleak.

As Chair of the Public Accounts Committee, I also know that when the Government talk about private sector job creation, the reality is something else. Many of the new private sector jobs are simply public sector jobs that have been transferred to the private sector as a result of the Government’s privatisation programme. We have only to look at the Audit Commission, at the privatisation of the Work programme and of prisons, and at private contractors providing health care to NHS patients to see that many of the so-called new private sector jobs are jobs funded by the public purse. That is scarcely a surge in private sector growth.

The Government claim that they are running the biggest-ever welfare-to-work programme with the Work programme. Let us inject a bit of reality into that claim. I shall look at the Work programme both as a constituency MP and as Chair of the Public Accounts Committee. I have always been an optimist, but I have grave concerns about whether this will be an effective value-for-money programme. Ministers claim that it is value for money because it is paid by results, but surely the programme’s purpose is to get people into work, not to cut the welfare-to-work budget. If we end up spending less, we will do so by achieving less. A detailed look at the programme shows that one in four of those referred will get a job anyway, with public money being spent both on the attachment fee and on the placement. Unemployment is much higher, so referrals are greater and more money is going to private providers, but with fewer people placed in a job.

[Stephen Lloyd (Eastbourne) (LD)]

The right hon. Lady talks about value for money, but does she not agree that the prime providers of the Work programme will be paid only if, first, they get people into jobs and, secondly, they sustain those people in jobs for two years, which will provide the bulk of the money. That sounds like good value to me. Does she disagree?

[Margaret Hodge]

I have two points on that. First, it is not good value if people do not get into work, which is the whole purpose of the programme, and, secondly, one in four of those who get into work would have done so anyway without any intervention at all. Given the black box nature of the programme, we will not know whether people have actually been given support. All the indications I have seen suggest that that is highly unlikely. We are beginning to get evidence to show that the more difficult cases are being parked, simply because all the money is focused on those most likely to get into work.