Compulsory Jobs Guarantee

Lord Sharma Excerpts

Wednesday 11th February 2015 Commons Chamber

[Stephen Timms]

But long-term unemployment is higher in the hon. Gentleman’s constituency now than it was at the time of the last election. That is the legacy of the three years of almost no growth in the economy following the general election, which we now need to address. Let me say to him and to other Government Members that self-congratulation on what has happened in recent months is dangerously complacent about underlying problems in the labour market and utterly out of touch with the impact such problems have on people who are desperate to work and to earn their way out of the cost of living crisis they are facing. People are deeply concerned about the prospects for their children and the grandchildren. Those are the points we now need to address.

[Alok Sharma (Reading West) (Con)]

The right hon. Gentleman talks about self-congratulation, but that is not what Government Members are doing. We are recognising that policies have been put in place for businesses to create more than 2 million jobs. Why will he not congratulate the Government on their policies and businesses on creating those 2 million-plus jobs?

[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.

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[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.

[Alok Sharma]

The right hon. Gentleman is keen to talk about numbers, so let me give some from his own constituency. In May 2010, there were 410 jobseeker’s allowance claimants who had been unemployed for more than a year. In December 2014, the figure was 225. In May 2010, the six-month figure was 1,585, but in December 2014 it was 1,045. Will he not acknowledge that, even in his own constituency, this Government’s policies are making a difference and people are getting real jobs?

[Stephen Timms]

Those figures, in my constituency and in his, are far too high. A great deal more needs to be done to enable young people in particular, but long-term unemployed over-25s as well, to share in the benefit of the recovery that is, at last, under way.

[Stephen Timms]

My hon. Friend is right. I have spoken to many people, including those who went through the future jobs fund, who say exactly that: having the break of getting six months in a job, becoming familiar with the habits and routines of work, and putting that on their CV enabled them to thrive.

This policy is not just an immediate intervention to limit youth and long-term unemployment; it is an investment in the skills and employability of the British work force, underpinning our productivity, growth potential and fiscal sustainability into the future, but we have been clear that there will be no commitments in our manifesto that require more borrowing. Therefore, we have set out clear plans to fund the policy fairly and prudently.

In the first year, to provide for the large number of long-term claimants left by this Government’s policies, we would pay for the policy with a repeat of the successful bank bonus tax, which was levied in 2010. That could raise £2 billion. In future years, the costs would be covered by restricting pensions tax relief for the highest paid—those earning more than £150,000 a year—to 20%. The House of Commons Library has estimated that that could raise between £900 million and £1.3 billion a year. That is a fair and prudent way to fund jobs for young people and the long-term unemployed, and to fund the guarantee throughout the next Parliament.

[Alok Sharma]

rose—

[Stephen Timms]

I will not give way again.

Those measures have been opposed and rejected by Government Members, but we have seen where five years of their trickle-down philosophy has taken us—five years of protecting privileges for a few at the top while leaving the rest to fend for themselves.

Our plan is to put working people first, ensuring that those who can and should work are in work, that we make the most of their talents and that hard work is always rewarded. That is the way to secure a recovery from which everybody can benefit and to get social security spending under control and our public finances on a sustainable footing. That is the way to secure a future in which prosperity and social justice go hand in hand and ensure that the next generation can look forward to a brighter future. That is the plan our country needs. This Government will not deliver it. We can be thankful that the time is not far off when we can elect a Labour Government who will.

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[Stephen Pound]

Madam Deputy Speaker, there are matters of greater moment before us today. The point has been made.

In all seriousness, the comments of the Secretary of State at the end of his speech were very well made and measured. He drew our attention to the single most important fact: this debate is not about cold statistics, but about real experience, real people, real lives, real hopes, real dreams and, in some cases, the dashing of those real dreams. However, when he referred to the marvellous blizzard of feel-good statistics it was almost as if Dr Pangloss had ridden out of the pages of “Candide” and tethered his horse to the Treasury Bench to tell us that this is the best of all possible worlds and that everything is well. I, like most people, respect the Secretary of State, but this is not the best of all possible worlds.

May I pray in aid, as I seldom do, the Office for National Statistics? The labour market statistics from 21 January—not last year, not 2010, but 2015—show that youth unemployment stands at 764,000, which is an increase of 30,000 on the previous quarter, and that long-term unemployment for 18 to 25-year-olds stands at 188,000.

[Alok Sharma]

It was higher in May 2010.

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[Alok Sharma (Reading West) (Con)]

Back in 2011, I had discussions with Tesco about its plans to set up a major distribution centre in my constituency. They were very successful and a couple of years later we had a new distribution centre employing more than 1,000 people. As part of its commitment to helping the long-term unemployed, Tesco ring-fenced 85 of those new jobs for those who had been long-term unemployed; about 18 months ago I went to a graduation ceremony for those who had been on the scheme. They had not only gained new skills in the workplace but received training at a local college. The age range of those graduating was from the mid-20s to the mid-50s, and the event was one of the most emotional and uplifting that I have been to during my five years as an MP. The sheer sense of achievement and pride for those graduating was palpable, and it was not because somebody had just come along and handed them a job but because they had each worked hard, had achieved and had won a job on their own merits. There are many examples of employers across my constituency who have created jobs over the past five years.

A number of my colleagues have talked about apprenticeships. They have been a huge success in Reading West in the past five years. We have had thousands of new starts. All sorts and sizes of businesses, everyone from Cisco and Microsoft to Chiltern Training and Pertemps—a huge range of organisations—have been taking advantage of help from the Government to start apprenticeships,. We talk about real jobs—these organisations have been creating real opportunities for young people. The end result of all that job creation and help for young people is a massive 60% fall in unemployment in my constituency since May 2010. Overall, unemployment is now below 2%. The right hon. Member for East Ham (Stephen Timms) talked about youth unemployment. That has fallen from 7.8% in May 2010 to 1.7% today.

Those businesses did not need any kind of compulsory guarantee from Government; they got on and created jobs. The reason why businesses have invested, putting money into research and development and infrastructure, is that they have regained the one absolutely precious commodity that one needs to succeed in business: confidence. Businesses have confidence in the British economy and they have confidence in the future. Above all, they have confidence in a Government who have cut corporation tax, national insurance and red tape, and increased the investment allowance and extended small business rate relief. All these are policies designed to create jobs. It is not Governments who create jobs; it is companies in the private sector that create jobs.

The right hon. Member for East Ham, who is no longer in his place, was not able to say what percentage of jobs under the compulsory jobs guarantee would come from the private sector. I can tell him that, according to a BBC report in March 2014, the Labour party was talking about 80% of jobs coming from the private sector. In the past few weeks, it has been bashing businesses and demonising wealth creators. Labour has made it clear that it will put up taxes and have more red tape. That will end up driving businesses away from our shores. With all due respect, I have to say that I do not think the Leader of the Opposition, or indeed very many Labour Members, understand business. That is because they have never worked in business.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

There are a number of Labour Members who have worked in business, including me. What the hon. Gentleman said was ridiculous, and perhaps he will withdraw it.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I just say that interventions are going to take time from Members who are going to speak later? That is the only worry I have, but by all means continue.

[Alok Sharma]

I thank the hon. Lady for intervening. I am delighted she has some experience of business. The same is not so for the Leader of the Opposition, is it?

When it comes to businesses, I think the Leader of the Opposition has actually decided—this business bashing is not an accident—that bashing businesses will win votes. He thinks that bashing big businesses will somehow compel small businesses to move towards him. I have to say that that is utter fantasy. In my constituency, many people are employed by small businesses and they will not like what the Labour party has been saying. Small businesses want to grow into large businesses. They have ambition and aspiration, but that is not what we have been hearing from the Opposition.

The Government’s policies have created the real jobs, the real prospects and the real skills that young people and those who have been long-tem unemployed need. That is what has been happening in the past five years. I will not support the Opposition motion. It is unfunded, it is unclear and it has no support in the business community. Unless the shadow Minister can tell me otherwise, I do not think there are huge numbers of businesses crying out for the compulsory jobs guarantee.