Compulsory Jobs Guarantee

Andrew Bridgen Excerpts

Wednesday 11th February 2015 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I beg to move,

That this House calls on the Government to put a strict limit on the amount of time that people can be left on jobseeker’s allowance without being offered, and required to take up, paid work, by introducing a compulsory jobs guarantee that would ensure that anyone under 25 who has been receiving jobseeker’s allowance for a year, and anyone over 25 who has been receiving jobseeker’s allowance for two years, would be offered a paid job, with training, that they must take up or face losing benefits; and further calls on the Government to ensure this compulsory jobs guarantee be fully funded by a one-off repeat of the tax on bankers’ bonuses and restricting pension tax relief on incomes over £150,000.

This is a debate about the kind of recovery our country needs to see, about who is being left behind, about the kind of future we are building for the next generation and about whether this Government are using more than just warm words when they talk about full employment, as the Prime Minister has done recently.

Our challenge to Ministers today is to put a strict time limit on the period for which someone can be left on jobseeker’s allowance before they are offered, and required to take, proper paid work. The compulsory jobs guarantee, funded by a tax on bankers’ bonuses and restrictions to pensions tax relief on incomes over £150,000 a year, would mean a new start and new hope for the more than 29,000 young people who have been out of work for over a year, and for the 130,000 over-25s who have been out of work for more than two years.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the right hon. Gentleman clarify whether this will be the 10th or the 11th time his party has spent the bankers’ bonus tax?

[Stephen Timms]

We had a bankers’ bonus tax in the past, but this will be the sole purpose for the new bankers’ bonus tax to be introduced after the next election. We will all be committed to the guarantee that I am setting out for the House this afternoon.

Those people I have described are the ones this Government have left behind. They are the people whom Labour Members are not going to forget, not only because we owe them a fair chance to escape long-term unemployment but because we cannot afford, as a country, to leave them on benefits for years on end. Nor can we afford the consequences of the low wages that they are likely to earn if they do find work after such a long period of unemployment.

--- Later in debate ---

[Stephen Timms]

I will in a moment, but I wish to make a little more progress first.

There are serious causes for concern in the labour market and much more needs to be done to build a recovery that works for everyone. Long-term unemployment remains much too high. The long period—three years—after the general election when there was almost no growth in the economy has left too many people locked out of employment and now left behind even as overall employment is rising. The number of people claiming jobseeker’s allowance for more than two years is 224% of what it was in May 2010, and young people remain at high risk of unemployment. Strikingly, the relative position of young people has become steadily worse since 2010 The most recent figures show that the youth unemployment rate is almost three times the overall rate—it is 2.9 times that rate—and for the past three months, while overall unemployment has been falling, youth unemployment has been going up. The total is now back above three quarters of a million, and we just have to hope that that is not the new trend. Action needs to be taken now to make sure that it is not and that young people are able to share in the benefits of the recovery.

[Andrew Bridgen]

Would the right hon. Gentleman like to comment on the words of James Sproule, the chief economist of the Institute of Directors? He said that

“Labour’s job scheme does not bear much scrutiny as a solution. No government can pull a lever in Whitehall and expect youth unemployment to disappear.”

Is not the truth that only the private sector can create sustainable jobs but that it needs a business-friendly Government to do so?

[Stephen Timms]

Jobs are being created. The question is: who is going to get them? At the moment, the evidence clearly shows that young people disproportionately are not. We know that the future jobs fund worked—I will discuss that in a moment—and we are going to be repeating that approach with this jobs guarantee.

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[Stephen Timms]

I have just mentioned the FSB. My hon. Friend will know how active it has been in demanding change of the kind he describes and makes a telling case for. I agree: more should be done to support small business in that way, and in other ways. We need to reform how the banks deal with their small-business customers too.

[Andrew Bridgen]

The right hon. Gentleman is being generous in giving way. He has expounded a great deal on his belief in Jobs Growth Wales. His party’s socialist policies have been implemented in Wales, but figures from the Welsh Government show that only one in three of the young people who have applied for Jobs Growth Wales got a job, so it is nowhere near guaranteeing a job for all young people.

[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.

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[Andrew Bridgen (North West Leicestershire) (Con)]

I oppose the Opposition’s motion, but I wholeheartedly thank them for giving me an all too brief opportunity to talk about the huge success of the economy in my constituency under the current Government, and about the impact of their long-term economic plan on job creation there.

Unemployment in my constituency is 1.5%, which means that there are 716 jobseekers. That is too many, and we have much more work to do. But the good news is that only last week, East Midlands airport in my constituency announced that it was creating 1,250 jobs across the airport this year. Depending on the traffic on the M1, I hope to go up there this evening to join the Chancellor of the Exchequer in congratulating the airport on its sterling work and economic growth. Since 2010, we have had nearly 800 fewer jobseeker’s allowance claimants, a drop of almost 60%. Even more pleasingly, our youth unemployment claimant count has fallen by 310 since 2010, a reduction of almost 70%.

In North West Leicestershire, we have one of the highest-growing economies outside London and the south-east. That is because we have business-friendly government at all levels—a Conservative-led coalition Government, a Conservative county council and a Conservative district council—delivering the long-term economic plan right to the doorsteps of my constituency. In North West Leicestershire, Labour’s proposal for a compulsory jobs guarantee would be a solution—an expensive, discredited one—looking for a problem.

Last week I visited a multinational company, Schneider Electric, in Ashby-de-la-Zouch. It trains 15 to 20 people a year to become highly skilled engineers, and it is a very impressive set-up. It is not looking for Government intervention; it is looking for a Government who will provide the right mood music, set the right agenda and create an environment in which businesses can feel confident to invest, create jobs and wealth and pay the taxes that will support the essential public services that we all need.

I struggle to understand how business can have any confidence in a party led by an individual who ducked out of addressing the British Chambers of Commerce conference just the other day. Just as we cannot have a strong NHS without a strong economy, we cannot have strong wealth creation without a Government who support enterprise and business. That is something that Labour would not do, given its relentless attacks on business and wealth creation. After all, how can we take seriously a party that wishes to emulate François Hollande’s failed and discredited economic model? I remind the House that the Leader of the Opposition has stated that he wants to do in the UK what President Hollande is doing in France. He should clearly be more careful what he wishes for, because the socialist policies in France have resulted in a youth unemployment rate of 25.4%.

This Government have got to the root of the problem when it comes to unemployment. The Opposition want to do what all Labour Governments do—they want to chuck taxpayers’ money at the issue in the hope that some of it sticks. Their compulsory jobs guarantee scheme seems to be modelled on the discredited future jobs fund, a scheme that was five times more expensive than some other employment programmes and created only short-term placements, costing around £6,500 per job.

It should come as no surprise to those in this Chamber or to the people of our country who will go to the polls in a few months to elect a new Parliament that no Labour Government have ever left office with unemployment lower than when they took office. The Labour party claims to love the poor, and indeed it must, because every time it gets into government it always creates more of them.

[Several hon. Members]

rose—

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

If there is one group of people in this country whom the Government have let down it is our young people. Young adults in this country have been pushed to the fringes by this Government, who have chosen to focus their energies on pockets of society they believe are more important. But nobody is more important than our young people. No one knows that more than our older people. Grannies and granddads are heartbroken that their grandchildren are unable to start making their own way in the world, and are having to rely on mums and dads who are dealing with pressure on top of pressure. Our older people have seen it all before, and this Government should have spent the past five years helping them and helping our young people. Instead, they have sat back and watched poverty creep across the UK, so that it is now a normal part of far too many working people’s lives.

[Andrew Bridgen]

rose—

[Gemma Doyle]

I will not give way.

The Government have sat back as almost 1 million people have turned to food banks for help. Their mismanagement of the economy means that prices have risen faster than wages for 52 out of their 53 months in office. Under this Government, unemployment reached more than 2.5 million, which is its highest level for 17 years, and youth unemployment peaked at more than 1 million.

Ministers may rejoice at the figures in their briefings, but let me tell them that things do not feel like they are getting better for my constituents. Some 6% of young people in my constituency are claiming jobseeker’s allowance, which is twice the UK average. Although that figure represents about 500 people, in every month of this Parliament the number of unemployed young people in my constituency has been closer to 1,000. Sometimes the figure is above 1,000, but mostly it is close to it. Those young people, who are struggling to find work, have been let down month after month after month by this Government. Tory Ministers would rather give millionaires a tax cut than help our young people. Young people think that life under the Tories is not fair, and they are absolutely right.

A Labour Government would introduce a compulsory jobs guarantee to get more young people into work. Those young people would receive in-work experience, on-the-job training, and wages; perhaps most importantly, they would have the dignity and confidence they need and deserve.

Government Members are wrong in saying that our scheme is not costed. We have set it out very clearly. It would be paid for through our tax on bankers’ bonuses and by restricting pensions tax relief for those who earn more than £150,000 to the same rate as that for basic taxpayers, which is fair enough. This scheme is necessary. Our young people deserve a better future. We cannot have another five years of this Government.

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[Kate Green (Stretford and Urmston) (Lab)]

This has been a good debate and I thank all hon. and right hon. Members for their contributions.

Our motion is about how we tackle long-term unemployment, particularly long-term youth unemployment. While I welcome the belated increases in the numbers in work that hon. Members have talked about in relation to their constituencies—in passing, I point out that that rise in employment has been accompanied by record in-work poverty—today’s debate is about the fact that our long-term unemployment rate, particularly our long-term youth unemployment rate, remains far too high.

As my right hon. Friend the Member for East Ham (Stephen Timms) pointed out in opening the debate, long-term youth unemployment, at 750,000, is not only rising but worsening relative to the population as a whole. Research by the House of Commons Library has shown that in 2010 youth unemployment stood at 2.5 times all unemployment. Now, on the latest figures we have, that proportion has increased to 2.9 times, so young people’s position is not improving; it is getting worse. As many hon. Members have noted, we should all be concerned about the scarring effect that occurs over lifetimes for individuals and communities if young people do not get the best start at the beginning of their working lives.

[Andrew Bridgen]

Does the hon. Lady agree that not having a role model and being brought up in a workless household are also sources of long-term youth unemployment? Does she welcome the fact that there are 400,000 fewer workless households under this Government?

[Kate Green]

Very few households choose to be workless. Indeed, very few—[Interruption.] I understand that the hon. Gentleman was not saying that. It is an issue not just of role models, but of opportunities. It is welcome that more people are in paid employment, but today’s debate is about that vulnerable minority who are scarred by long-term unemployment.