Employment

Baroness Gould of Potternewton Excerpts

Thursday 27th October 2011 Lords Chamber

[Baroness Gould of Potternewton]

My Lords, I also thank my noble friend Lady Prosser for initiating this very timely debate, which is about changing the world of employment. I thought a lot about this and about the ideal that I would really like. At the end of the day, I decided that I could not talk about the ideal without talking about the present. It is a very sad, negative story about employment at present. On 12 October, at the Prime Minister’s Question Time, he accepted responsibility for everything that happens in the economy. That must include responsibility for the highest level of unemployment in 17 years, with over 2.5 million people without jobs and 1,200 extra people each and every single day becoming unemployed. One in five young people is out of work, with over 800 extra young people each day. Youth unemployment is near the 1 million mark, the highest number since corporate records began in 1992.

One of the first acts of the coalition was to scrap Labour’s Future Jobs Fund, which helped young people into work; and to introduce the work programme, which gives no guarantee of jobs for the future. The abolition of the Future Jobs Fund was all the more surprising because on 10 March 2010, just before the general election, the current Prime Minister referred to it as a “good scheme”. Why abolish it? A further advantage of the scheme was that it enabled partnerships with apprenticeship programmes, providing additional work placements for apprentices, and could have created up to 200,000 full-time paid jobs for young people up and down the country.

The noble Baroness, Lady Brinton, referred to the reluctance of some employers to train young people at work. I am a great believer in training on the job. We really must encourage more activity by employers to do that. Not satisfied with abandoning the fund, the Government have cancelled a number of schemes to help young people get on in life—starting with the very young and the abandonment of child trust funds, the ill thought-through plans to scrap the education maintenance allowance and the tripling of tuition fees.

Putting young people on the dole is not just a waste of talent but a waste of money. It does not make economic sense—not only in the short term but in the long term. There is strong evidence that if a young person cannot establish themselves in work early in their careers, they will find it much more difficult to do so later on. The lost generation of the 1980s—a whole generation of young people—grew up in Britain with little or no hope of a job. We must not let that happen to this generation of young people.

There are now more women unemployed than at any time since 1988. Redundancies in the public sector are dominated by women. To make it worse, the Government's welfare reforms actually penalise families in work by cutting support for childcare for parents who want to work; and by the end of this Parliament, it is estimated that the Government will have slashed the support for families with children by nearly £7 billion.

There is a pattern. All this has not happened by accident, but by design—and I say that with the greatest respect to Members opposite. It is a political choice, not a necessity. For instance, the Government have now accepted that women are being the hardest hit, whether it is because of the cuts in services, benefits or unemployment. I do not believe for one moment that the Government were previously unaware of the consequences for women and their families when those actions were taken. What is happening today takes me back to the 1980s, when women again bore a disproportionate share of the increased rate of unemployment. Women were then, as now, vulnerable to the actions of a Conservative Government. Also at that time, unemployment topped 3 million twice and less than one-fifth of 16 year-olds had a job. We cannot go back.

One accepts that like in every other country it was necessary to reduce the deficit, but for me there is something illogical in the Government’s philosophy. I am not an economist but I try to use my common sense: rather than generating jobs and making work pay, if you have more people on the dole who are not in work paying taxes but claiming benefits instead, it means that the Government have to borrow more, costing Britain an extra £500 million from the Treasury for every 100,000 people out of work. That surely cannot be sense. We were told by the Government not to worry about the loss of public sector jobs because the private sector would make up the shortfall. Those were fine words that have proved completely false. The Treasury is now forecasting that 700,000 jobs will be lost in the private sector.

The consequences of the Health and Social Care Bill will further exacerbate the problem. The reforms raise all the questions about workforce planning, education and training. Staff in the NHS are already in the midst of a pay freeze and their pensions are threatened with the triple whammy of paying more, working longer and receiving less in retirement. On top of this, despite revising down the figures used in their latest impact assessment, the Government still anticipate nearly 13,000 redundancies as a result of their planned reorganisation. This represents a personal tragedy for those affected and a colossal waste of talent, skills and resources at a time when the NHS can ill afford it. Even with the revised figures, the Government still predict redundancy costs alone running to £810 million.

The Government have failed to acknowledge the need to retain national workforce structures for terms and conditions, pay and bargaining—in breach of staff rights set out in the NHS constitution, which the Government said they would honour. The Bill will allow new commissioning groups greater leeway to break away from the Agenda for Change pay system. Not only does this rob health staff of certainty about their pay and conditions, but the potential for local pay negotiations also creates a massive extra administrative burden for local negotiators. Undermining the Agenda for Change may lead to an increase in equal pay litigation for the NHS—something which the existing system was designed to avoid.

The “any qualified provider” policy will make it extremely difficult to plan staffing and training placement, as providers will not have any guarantees of the volume of work they can expect. How is it to be ensured that there will be sufficient workforce to meet the needs, as the needs are not yet known?

The reforms, as if not a large enough upheaval for NHS staff on their own, are taking place alongside the expected efficiency savings of £20 billion over the next four years, which is already having an increasingly negative effect on services and staff. For example, the RCN’s Frontline First campaign has found that over 40,000 posts have been earmarked for removal from the NHS by employers looking to save money. This causes the RCN serious concerns that the dual reform of efficiency savings within the NHS is adversely affecting the quality of care and the safety of patients. Somehow the Government fail to understand the consequences of reducing the number of front-line staff. The right way to get a better health service is to get the best out of people. This requires a well trained, supported and rewarded workforce.

There are those who believe that the rising employment of older workers leads to the creation of youth unemployment—a position completely refuted by the TUC, which points out that they tend to do the jobs that the young unemployed might not expect to do. The main reason for the job crisis among young people is that not enough jobs have been created. Many older people choose to work, but many do so out of necessity. Low wages and poor pension provision—particularly in the private sector—coupled with rising inflation have made work a necessity, and we should all respect that, instead of trying to use it as an excuse for youth unemployment.

A statement from the Department for Business, Innovation and Skills says that a successful UK economy will depend on the skills and contribution of the older people in the workforce, but it relies on much more than that. It relies on a faster growing economy and on the Government actually looking again at their plans. We heard in Question Time the Government’s determination to stick to their three-point plan; but without change—without a real plan for growth—we are going to see unemployment continue to rise and the welfare bill continue to go up.