National Insurance (Contributions) Bill

Brooks Newmark Excerpts

Tuesday 10th December 2013 Commons Chamber

[Mr Gauke]

Our motivation—and, I am sure, that of any sensible Government—is to do everything we can to address the issue of youth unemployment. That means trying a number of approaches and adopting a number of policies. It is difficult to quantify the number of jobs that will be created as a consequence of the measure, because many factors will come into play, but we believe that it will be helpful none the less. As I said, the director-general of the CBI also believes that it will make a real difference in tackling the scourge of youth unemployment.

[Mr Brooks Newmark (Braintree) (Con)]

It is probably worth considering the fact that a lot of businesses, particularly retail businesses, work on very small margins. Does my hon. Friend agree that the extra money that they will receive through not having to pay this jobs tax will probably encourage them to hire a young person rather than someone who is over 21?

--- Later in debate ---

[Shabana Mahmood]

It does not represent a flip-flop, as the hon. Gentleman well knows. It would not be a debate on this issue if he did not make the point that he has made on a number of occasions. I would have felt as though I had missed out on something if he had not made that intervention, so I am grateful to him. He will not be surprised if I repeat my previous answers to him in relation to national insurance. I was very proud to stand for election on the Labour party manifesto at the 2010 general election and proud that the Labour Government had got the recovery under way at the time of that election—a recovery that was choked off by this Government as soon as they came into power. [Interruption.] Government Members might not like to hear it, but I am afraid that that does not stop it being true.

Let me clarify my point about the employment allowance. From the moment it was announced in the Budget, our immediate critique was not that it should not be introduced —we supported its introduction from the beginning—but to say, as we have continued to say, “Bring it in as soon as possible—why wait?” If there were compelling reasons for the wait, it would be understandable, but I am afraid that I find nothing compelling in anything the Minister has ever said about the delay in bringing these proposals forward. All the issues relating to IT and systems and getting software up and running could be sorted out, with a bit of will.

I understand that software developers are still waiting on HMRC to give them the full guidelines on what software they will need to produce to make sure that take-up of the employment allowance goes ahead with relative ease. I hope that the Minister has had sight of the submission by Mr Holloway of the Learn Centre to the National Insurance Contributions Bill Committee, which was submitted after the Committee had disbanded but was still made available to all its members, because it contains concerns about the delay in getting proper clarification and explanation to software developers on what they need to do in relation to the employment allowance. Given that it is December and they have to get ready for the employment allowance to come online in April 2014, they will not have a huge amount of time to get everything in place and ready. If that is the position on the employment allowance, then why not add in the proposal on NICs for under-21s and deal with both issues at the same time?

Given that we are speaking from the Opposition Benches—unfortunately—our amendment does not propose that the measure should be introduced immediately in 2014; otherwise Government Members would no doubt have shouted at us about the cost of doing so and the spending commitment entailed. However, we have asked for a review that would look at the level of youth unemployment now and the impact that introducing the measure in April 2014 would have had on the level of youth unemployment as it stands today. That is because the Government should not escape scrutiny for the impact that this measure may have had compared with what it will have, I hope, when it comes into force in 2015. If it is found that the measure would have had a significant impact, as we believe it would, that is an important bit of information and the Government would be put under pressure to introduce it sooner than they intended.

This Government found money in the autumn statement for the married couples allowance. They have always said that the recognition of marriage in the tax system is symbolic. However, government is about choices and priorities, and if money can be found immediately to do something that is symbolic and sends a message, then surely it should be found for a practical Government measure that helps to prioritise our young people who need jobs today and not on a date far from now. The choices and priorities of this Government are wrong and they should think again. The emergency presented to this country by the current rate of youth unemployment cannot wait to be dealt with on some future date. The Government should reconsider the start date of this proposal. We therefore intend to press our amendment to a vote.

[Mr Brooks Newmark (Braintree) (Con)]

I am someone who looks at a glass of milk as being half full, not half empty, and I think that the Government have done much to help young people back into work. The hon. Member for Birmingham, Ladywood (Shabana Mahmood) may wish to mock the Youth Contract, but it has encouraged businesses to offer over 21,000 jobs to people at risk of long-term unemployment. Those 21,000 people appreciate the youth contract and want the job that it has enabled them to have.

We have over 1 million young people in apprenticeships, which are also getting young people back on to the jobs ladder. Indeed, the latest Office for National Statistics labour statistics indicate a significant rise—of about 50,000 in the past three months alone—in the number of young people in work. The number of young people seeking jobseeker’s allowance has fallen by 13,000—the 17th consecutive monthly fall. That is good news indeed. Many constituencies, of Members throughout the House, have benefited, as has Braintree, which has seen a fall in long-term unemployment, regular unemployment and youth unemployment.

On top of all that, I was absolutely delighted to hear the Chancellor supporting the Million Jobs campaign manifesto, which, I hasten to add, I helped to draft, by abolishing the jobs tax for under-21s. It is extremely important that if we are cutting taxes we do it to help those in society we really want to help. As a father of five children between the ages of 16 and 25, I am extremely sensitive to that age group. It is important that we get young people into work, and the new Government initiative does just that. It will enable even more young people to get a foothold on the employment ladder by providing a highly attractive incentive for businesses to hire a young person under 21. I thank Lottie Dexter, the director of the Million Jobs campaign, who has worked extremely hard not only in running it but ensuring that the draft manifesto that we put out only six weeks ago caught the Chancellor’s attention so much that he decided to support it in his autumn statement. I am delighted to support the new clause.

[Sheila Gilmore]

Our debate in Committee on the wider aspects of the Bill made it clear that employers may well use the allowance, which was originally the major part of the Bill, in a number of ways and that job creation would not necessarily be the only result. Some employers, for example, might choose to provide higher wages, while others might choose to provide more training for the upskilling of their work force.

The Minister did not touch on this, but I presume the same might be said for the current proposal, because it is not, as I understand it, tied to taking on a new employee; rather, it relates to anyone who employs a young person, which, obviously, simplifies the issue in many ways. It would be useful to consider and, indeed, encourage not just the take-up of new jobs—although that is very important—but the issue of upskilling.

As Members of all parties have said—Government Members often throw this at us—structural issues relating to youth unemployment have been around for some considerable time. Many things have been written about the causes, including whether there is a problem with a lack of entry-level jobs and whether people are skilled enough.

[Mr Newmark]

Would the hon. Lady at least like to join me in welcoming the fact that youth unemployment in her constituency over the past year has dropped by 19.8%?

[Sheila Gilmore]

I believe that relates to the claimant count, which is not always the same as youth unemployment, because some people in the 18-to-25 age group will have run out of contributory benefits and fallen off the claimant count. I still see an issue when I look around me, even in a city that, in comparison with the rest of Scotland, has always done better with regard to employment.

Of course, it is a good thing. [Hon. Members: “Hear, hear!”] No one is going to say that it is a bad thing. That would be ridiculous.

[Mr Newmark]

Just give the Government some credit.

[Sheila Gilmore]

I have two things to say to that. Is it a good thing that youth unemployment—or the claimant count at least—has fallen in my constituency? Yes, it is. Do I give the Government credit for that? Well, I am not sure whether it is down to the Government or not, so we should put that to one side.

We would not be debating the proposal, and it would not have been included in the autumn statement, if the Government did not believe that youth unemployment is still an issue and a problem. Many statements are being made about how wonderful it is that youth unemployment is coming down, but the Government clearly believe, like us, that there is still a problem. If there was no problem, I doubt the proposal would have been made.

Although many young people are not necessarily unemployed for long periods, there are groups of young people who find themselves unemployed for a year or even two years, which, as we know, is of huge consequence to people’s future life, health, well-being and income.

[Mr Newmark]

I am sorry to hear that the hon. Lady’s approach to what the Government are doing is one of, “Bah, humbug!” Given that it is Christmas, will she at least acknowledge, first, that the Government are doing a good job by bringing youth unemployment down in her constituency and throughout the country and, secondly, that this particular initiative of abolishing the jobs tax for under-21s is a good one? It is Christmas.

[Sheila Gilmore]

It is indeed Christmas and, given that many families up and down this country will be struggling through Christmas, I do not think the Government will receive much thanks. For example, a rising number of people are having to resort to food banks this Christmas and, indeed, throughout the year. We could trade these issues backwards and forwards.

The point I was making was about giving young people who are in employment the opportunity to be trained and to upskill because, while it is very important to get a first job, being able to progress is also extremely important. Will the Minister consider monitoring—in future or even when the proposal is implemented—what happens in practice? Perhaps the Government should tie the proposal to certain beneficial outcomes, such as making the provision available to employers who agree to use it either for the creation of a job or for the upskilling of an existing worker. It would be highly desirable not to encourage practices such as zero-hours contracts, which Members on both sides of the House said were bad when we debated them, so perhaps the allowance should be tied to employers who do not provide young people with zero-hours contracts.