Jobs and the Unemployed

Anne Begg Excerpts

Wednesday 7th July 2010 Commons Chamber

[Yvette Cooper]

I can tell the hon. Gentleman what happened after 1997. In fact, there was a reduction of 350,000 in the number of people claiming inactive benefits, as a result of the extra support that was put in. That was in strong contrast to the early ’90s recession when we saw an increase of more than 450,000 in the number of people on incapacity benefits. In this recession, we have had a reduction of more than 70,000 in the number of people claiming those long-term sickness benefits, despite the difficulties in the world economy.

[Miss Anne Begg (Aberdeen South) (Lab)]

One reason why young people find it so difficult to get into work is that they do not have experience, and the future jobs fund and the youth guarantee were very good for young people because they gave them that experience and made them much more employable. Has my right hon. Friend done any analysis of the effect on these young people of the scrapping of both those schemes?

[Yvette Cooper]

My hon. Friend is right. She obviously brings great experience to the field, having been a member of the Select Committee on Work and Pensions for many years. She is now its Chair, and I look forward to hearing more of her views on this in the House. We have been talking to many young people about the impact of cutting the future jobs fund. Yesterday afternoon, I met 10 young people who have just started work thanks to the future jobs fund. They are all working for charities and social enterprises, have jobs in fundraising, in office work, in organising charity events and in repairs and maintenance, and some had fantastic jobs in creative design. Several are graduates who had struggled to find work because of the recession. Many had tried unpaid internships and voluntary work—anything to get a foot in the door. It was only the future jobs fund that had made the real difference to them. One of them said to me, “It’s a life saver.” Another said, “It’s given me confidence. It’s a proper job. It’s a huge boost to put this on my CV.” A young woman I spoke to in my constituency who was training to be a car mechanic, thanks to the future jobs fund, told me, “I tried and tried to get something, and this is just like the light at the end of the tunnel. In fact, it’s the only opportunity I’ve been given. I don’t understand why they want to cut it.”

--- Later in debate ---

[Yvette Cooper]

In fact, the additional support we put in through things such as the future jobs funds and support for the economy helped Scotland. Indeed, Scotland benefited from thousands of future jobs fund jobs, which were funded by the Government, in addition to the money that went directly to the devolved Administrations. Every part of the Government had to make efficiency savings, and unfortunately the Scottish Administration consistently set themselves efficiency targets considerably lower than those set and met in Whitehall Departments across government. It was fair to expect the Scottish Administration to pay their fair share and to contribute to those efficiency savings.

We believed, however, that it was right to keep supporting jobs in Scotland through things such as the future jobs fund, which is why the Association of Chief Executives of Voluntary Organisations said, in response to the cuts in the future jobs fund:

“We know of many third sector organisations in Yorkshire who were ready to place people into jobs and were mid-way through bidding for FJF money to make that possible when the funding was cut. Among the placements that were to be created were jobs to support women in the community through a Women’s Refuge. Now those women won’t get the extra support and Yorkshire won’t get the extra jobs.”

Real jobs in Yorkshire gone—because of the Secretary of State’s plan!

[Miss Begg]

It is third sector providers who often help to get people facing particular barriers into work. It is hard enough for young people to get into work anyway, but if they have barriers such as drug dependency or homelessness, it is particularly difficult. The future jobs fund was being used by organisations such as Aberdeen Foyer in my constituency to get those marginalised youngsters into work and to break that cycle of poverty, which the hon. Member for North East Hertfordshire (Mr Heald), who sits with me on the Work and Pensions Committee, talked about earlier.

[Yvette Cooper]

My hon. Friend is right, which is why all young people, no matter what the difficulties they face, should have a guarantee of a job, training or support to get into work. She might also be interested to know that significant numbers of the people going into the future jobs fund were disabled, so it was providing additional support for people who might have found it more difficult to get their first job elsewhere in the economy and to get that start and get into work.

The former Chief Secretary to the Treasury, the right hon. Member for Yeovil (Mr Laws), told the House that DWP officials had advised that the future jobs fund was not effective and not working. That is not what young people and voluntary sector providers are telling us. For example, the Scottish Council for Voluntary Organisations said:

“It is obviously very disappointing that the Future Jobs Fund is not continuing as it was a highly successful initiative which was popular with employers and employees”.

Angie Wilcox, whom I met, from the Manor residents association in Hartlepool, said that

“in one area alone, manor residents have recruited 118 young people, of which the first 17 finished their six months last month, all 17 secured sustained employment...This is a vital programme that must stay”.

So what advice did DWP officials really give to the Treasury? The Employment Minister, the right hon. Member for Epsom and Ewell (Chris Grayling), has so far refused to publish any advice or evidence that it is not effective. That is because, in the end, he does not have any. He has commissioned a detailed evaluation of the future jobs fund for 2011, so there is no evidence to show that the fund is not working and plenty of testimony from young people and employers across the country that it is transforming people’s lives. The Government did not talk to a single voluntary sector provider before they axed the fund, and they did not talk to a single young person on the fund before they made their decisions—actually, the Prime Minister did. He talked to young people at a social enterprise in Liverpool, and told them he would keep the fund. He said that

“it is a good scheme, and good schemes we will keep.”

Was he setting out to deceive those young people, or does he just not care about the broken promises from the election?

The Employment Minister has, I understand, been back to that same corner of Liverpool to see the same social enterprise. He has told us in previous responses that he has not received any representations about the decision to cut the future jobs fund. Yet someone who was at the meeting said that

“when Chris Grayling visited Everton on the 26 May we raised with him the very negative impact cutting the Future Jobs Fund will have and 2 local people said the difference having a future jobs fund position was already having on their lives, their self esteem and their long term job prospects...We asked him specifically about whether his replacement scheme was going to give at least the minimum wage. He couldn’t guarantee that at all...The FJF has already made a big difference to us in Everton... Young people on the FJF have got their heads back up and are going for it.”

So what other excuses have the Government given us for cutting the future jobs fund and the support for the unemployed? The Secretary of State claimed on 8 June that the cost of the programme was “running out of control”. That is rubbish—it is a fixed-cost programme. It costs just over £6,000 per job and is paid when the job is delivered. Furthermore, the taxpayer saves six months of benefits too. It is a fixed cost, so it cannot escalate out of control.

The difference between us is that we want 90,000 people in jobs. The Government would rather have them on the dole than pay for the extra support that those young people and long-term unemployed need. So, from next year, they are cutting the rest of the guarantee. In total, they are cutting £1.2 billion from support for the unemployed—and they tell us it is all right because there is going to be a Work programme. But where is it? The soonest the Secretary of State will be able to deliver it is next summer, but what about the people in the meantime who need support and help? What about the young people leaving school, college or university this summer who need help? What about the people who have been unemployed for six months and who need support now? Yet now is the time when he is cutting future jobs fund opportunities in favour of a Work programme that cannot be in place for at least another 12 months.

--- Later in debate ---

[Yvette Cooper]

My hon. Friend is right. I know that his constituency was hit very badly in the 1980s as a result of the decisions that previous Conservative Governments took, and that that is why he feels so strongly that we should not take those decisions again. We have to do everything possible to help people back into work.

The Guardian has even reported that Ministers want jobcentres to give out charities’ food vouchers, so now they are turning the clock back not just to the 1980s but to the 1930s. It is looking less like welfare to work and more like welfare to the workhouse.

[Miss Begg]

Before my right hon. Friend moves off the subject of housing benefit, I wish to mention that Aberdeen is one of the areas where there are jobs—unemployment in my constituency is 2.6%, which is higher than we would like but relatively low. The problem is that rents are high. A constituent who came to see me on Friday is finding things very difficult, because in the private rented sector she is already subsidising her rent despite being on full housing benefit. It is therefore impossible for people to move into Aberdeen to get a house and a job without falling foul of the Catch-22 situation that my right hon. Friend describes.

[Yvette Cooper]

My hon. Friend is right, and that is why it is difficult to reform housing benefit without considering the consequences for the labour market. The two things should be examined together, not in isolation in a way that can have destructive consequences.

--- Later in debate ---

[Chris Grayling]

That is not my concern. My concern is to ensure that, if the OBR forecasts are correct and we see employment growth amounting to 1.5 million more jobs in the next few years, we do not make the same mistake in government as the hon. Gentleman’s party did and fail to get people off benefits and into work to take those jobs. I do not want to see a steady and unchanging level of millions and millions of people on out-of-work benefits over the course of a decade while jobs are created around them, effectively operating outside our mainstream society. That must change. I want opportunity for those people. I want to see them back in employment. I am sure the hon. Gentleman shares that goal, but what we aim to do is make it happen this time around.

[Miss Begg]

I am sure the Minister is well aware that the increase in the number of people claiming incapacity benefit is a result of mental health problems. He may also know that, in response to most surveys, 60% of employers say that they would not employ someone who has had a mental health problem. How will the Government solve that conundrum?

[Chris Grayling]

The hon. Lady has made an important point, which I am sure her Committee will want to address. In fact, I was going to refer to the work capability assessment. These are important issues, and we clearly face a big challenge. There are 2.2 million people on old-style incapacity benefit, and we must do all we can to help as many of them as possible to return to work. Of course, not all of those people will be able to work and many will need to continue to receive unconditional support throughout their lives; but every organisation I have ever worked with, come across or talked to that works with people with disabilities and long-term sickness problems would like to see more of them back at work. We all believe that work will help those people, and I am determined that this part of the Work programme will make a huge difference to them.