Autumn Statement

David Miliband Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

My hon. Friend makes a good point: many of the problems in our economy are borne of the credit constraints and the elevated bank funding costs, which I talked about when I mentioned the OBR’s assessment of the economic forecast. There are several responses. The funding for lending scheme has brought bank funding costs down. That scheme, according to the OBR’s assessment, has had an impact, and it is an important part of our macro response. I agree with him that we must do much more to encourage competition in our banking system. We have some new entrants, but we can go further, and we need a much more competitive banking system that is able to serve the public better.

[David Miliband (South Shields) (Lab)]

This time last year, the Chancellor told me not to worry about youth unemployment on the grounds that his Youth Contract would take care of it. Now we know that 450,000 young people have been unemployed for more than six months and that 179,000 have gone on to the Work programme but only 5,920 have got a job as a result. That is 3% of those going on the Work programme and less than 2% of the long-term youth unemployed. Will he now agree, without point scoring, to look at the level of the wage subsidy to incentivise take-up, at the structure of the Work programme, so that voluntary organisations are not squeezed out, and at the role of a part-time job guarantee to give hope to these young people?

[Mr Osborne]

The right hon. Gentleman often has interesting and intelligent things to say about welfare to work programmes, and I am happy to consider the points he makes. I read some of his work earlier this year—it was quite a good job application for being shadow Chancellor.

Jobs and Growth

David Miliband Excerpts

Thursday 17th May 2012 Commons Chamber

[David Miliband (South Shields) (Lab)]

I want to make two points in this debate. The first is about youth unemployment. I will present some figures showing the rising cost of the Government’s economic failure. The second is that the neglect in respect of youth unemployment is mirrored by a misguided response to the storms in the eurozone.

I do not think that we need to debate whether youth unemployment is a big problem; it is a massive problem. As the Chancellor and others have said in previous debates, long-term youth unemployment is the greatest danger to not only our economic future, but our social future. Today, according to the Government’s own figures, 260,000 young people have been unemployed for more than a year, which means long-term unemployment. Another 200,000 have been unemployed for more than six months. The interesting, depressing and worrying thing is that the situation is getting worse. As recently as 2008, 6,000 18 to 24-year-olds had been claiming jobseeker’s allowance for a year. By April last year that figure had tripled. Over the past year—just 12 months—it has tripled again, to 55,000. In my constituency, this time last year there were 15 18 to 24-year-olds who had been claiming jobseeker’s allowance for over a year, but now the number is 250, which is a 1,500% increase. The total figure for youth unemployment is 1.3 million or 1.4 million, which comes from the labour force survey, but these are JSA claimants, because that is a claimant count figure.

As for the costs, in February this year I chaired the Association of Chief Executives of Voluntary Organisations commission on youth unemployment. We costed the levels of youth unemployment on the basis of the figures for the first quarter of 2011, which showed a net present value cost of some £28 billion. I asked the university of Bristol to rerun the figures for the last quarter of 2011, which it has done, and the calculation now stands at £30 billion. In the space of 2011, the net present value cost has gone up by £2 billion. That seems to me to be 2 billion reasons for a greater degree of urgency and effectiveness in Government policy.

The Minister responsible for employment says that we should be pleased with stability, but stability in this policy field means that the problem is festering and getting worse. The deputy leader of the Lib Dems, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), said we should celebrate the “huge success” of Government policy. The wage subsidy that was introduced in April is at best unproven. The majority of jobs under the apprenticeship drive are the result of jobs for the over-25s being rebadged, not new apprenticeships for the under-25s. The expertise in the voluntary sector is being squeezed out by the Work programme. Some 20% of voluntary sector providers have stopped providing under the Work programme. There is a gaping hole in Government policy on transport costs for people to get to interviews, never mind getting to work.

I make no apology for repeating this very basic fact: the Work programme, which is the Government’s flagship programme, helps one in 10 of the youth unemployed. Its success rate is 20%, according to the Government’s own figures. That means that one in 50 of the young unemployed are getting a job as a result of Government interventions. I say to the Chancellor—I am grateful that he has stayed for the debate—that there are three steps that he could take now. First, he could require all public contracts over £1 million to offer apprenticeships to young people. In his autumn statement last year he announced infrastructure expenditure, which is a good thing, but where are the apprenticeships to go with it? Secondly, he could bring forward from 2014 money to raise the size of the wage subsidy or the number of young people helped. In 1995, when his predecessor, the right hon. and learned Member for Rushcliffe (Mr Clarke), tried a wage subsidy, it helped only 6,000 young people. He will have to boost the effort to get take-up. Thirdly, he should bite the bullet and recognise that every study anywhere in the world has shown that for the long-term unemployed only a part-time job guarantee can ensure that one year’s unemployment does not become three, four or five years’ unemployment.

[Mr Spencer]

The right hon. Gentleman is making a compelling case, and I know that he has worked very hard on this matter in the past, but surely he recognises that the best way to solve this is to increase the number of apprenticeships, which the Government are doing, and that his Government encouraged young people to try to aspire to university and many of them, when they did not meet that aspiration, found that deflating.

[David Miliband]

I am grateful to the hon. Gentleman, who makes a perfectly intelligent point. It seems to me to be a good thing to raise university participation levels up to international standards, which is between 45% and 50%, but it is crucial for those who do not go to university that we have high-quality options for them. High-quality apprenticeships are an important part of that.

[Dr Phillip Lee (Bracknell) (Con)]

Will the right hon. Gentleman clarify what he means by international standards?

[David Miliband]

The leading countries of the world for higher education are, first, the United States, which has a 55% participation rate, and, secondly, France, which most people would recognise as having an outstanding higher education system. It has 48% participation. Korea, one of the new countries growing up in the world, has 80% participation in higher education. By the way, Scotland already has over 50% participation in higher education, so I do not believe that somehow English or UK young people are unable to benefit from higher education in the way that people in other countries can.

The Robbins report of 1963 said that higher education should be open to anyone with the ability to benefit, and that seems to me to be the right test. For the 50% who do not go on to higher education, we of course need high-quality apprenticeships, but I say to the hon. Member for Sherwood (Mr Spencer) that he should work with us to raise the quality of apprenticeships, because too many apprenticeships are at too low a level and are not leading to the kinds of life chances that we want to see.

It is true that our levels of youth unemployment are not the levels of Spain and Greece—thank God for that —but in 600 wards in this country one in three young people are not in education, employment or training. It is not the 50% or 55% of the Greeks or the Spanish, but one in three. I do not believe that Europe should be the benchmark for levels of youth unemployment.

I also say to the Chancellor that Europe cannot be the alibi for the collapse of our economy at home over the past 18 months. If we look at the growth measures since his first spending review in the autumn of 2010, we will see that we are actually doing worse than comparator countries, and I do not just mean Germany. In the 18 months since the 2010 spending review, we have had worse growth than France, Poland, Sweden, Austria and Slovakia. I will compute the Spanish figures announced today, but until those figures were announced we even had lower growth than Spain. Our growth was worse than the EU 27 average, the eurozone average and the G7 average.

The Chancellor’s claim about the problem that the eurozone mess is causing for our economy is actually undermining his own promise to rotate our economy from domestic demand to external demand. The question is: what should we do about that? He says that the lesson is to stay the course. I say that when the external environment changes, we should change course. The storm in Europe is not a reason for us to stick to plan A; it is a reason to shift to plan B. There is a warning in the travails of the eurozone, but not the one that the Government claim there is. Debts are rising today in Spain, Portugal, Italy and Ireland because fiscal policy is exacerbating the downturn in the economic cycle. The Prime Minister said in his speech today that we are “on track”, but Conservative austerity is not working at home and collective austerity is not working in Europe.

I believe that our absolute requirement in the light of the real and serious risks we face is to pitch policy—fiscal policy, monetary policy, industrial policy and banking policy—against the tide of the economic cycle. We need to argue for that abroad and at home. We heard a shift today from the Chancellor about what should happen abroad. We should be embracing President Hollande, not snubbing him. We should be anti-austerity and pro-reform. That is the right position for Europe and the right position for Britain, because there are no islands in the modern economy. It is not ideology; it is maths. And judging by the Gracious Address, it is time for the Government to go back to the classroom.

--- Later in debate ---

[Mr Duncan Smith]

Labour gerrymandered the figures, and that was a long suicide note about what they tried to do to change those figures. The hon. Lady can try as much as she likes but the truth is that the previous Government set in place every single mechanism to ensure that they did not count young unemployed people.

[David Miliband]

The figures that the right hon. Gentleman’s Department have put out show that in the past year—under his Government—long-term jobseeker’s allowance claimant figures have gone up threefold to 55,000. How does he explain that?

[Mr Duncan Smith]

As I said to the right hon. Gentleman—his point was about youth unemployment—the reality is that the figures I have given today are correct. His Government created a major crisis by putting us into a great big slump. That is what they did. Whatever else he wants to say in an attempt to defend the Labour Government, we are having to dig them out of a hole and we are the ones producing better youth programmes such as the youth contract. Those unemployment figures are very simple. When you add all the details together, you find that unemployment among young people was higher when we took office than it is now.

I want to move on to what other hon. Members said. The hon. Member for Leeds East (Mr Mudie) said that he wanted to see the right hon. Member for South Shields on the Front Bench. I wonder what role he would see the right hon. Gentleman in if he got him there. I congratulate my hon. Friend the Member for Bournemouth East (Mr Ellwood) on his speech. He reminded us that we had some great news the other day because Boris won again in London. That is very good news for all of us. [Interruption.] I wonder what Opposition Members are saying. The reality is that their candidate, Ken Livingstone, failed, and I note that a lot of them did not even bother to turn up to support him.

The hon. Member for Redcar (Ian Swales) attacked Labour very effectively. I should like to pick up a point made by the right hon. Member for Barking (Margaret Hodge), the Chairman of the Public Accounts Committee, who said that the welfare-to-work programme is unlikely to be good value for money. I differ from her on that. The big difference with the welfare-to-work programme is that we will not pay the providers unless they get someone into work. Under the future jobs fund and everything else that was going on under the previous Government they threw money at providers ahead of any kind of outcome, caring only to tick the boxes to say that they had done something rather than that they had done something reasonable.

A large number of people spoke in the debate, including my hon. Friend the Member for Warwick and Leamington (Chris White), the right hon. Member for East Ham (Stephen Timms) and my hon. Friends the Members for Bedford (Richard Fuller) and for North East Cambridgeshire (Stephen Barclay). The hon. Member for Liverpool, Walton (Steve Rotheram) made an interesting speech. I notice that he wants to put his name forward to be manager of Liverpool. I wish him the best of luck in that endeavour. As a Tottenham supporter, I am looking forward to him running Liverpool next season.

The Opposition approached this debate believing that they had the right to criticise our Government for what they call our failures, yet not once have they ever apologised for putting the economy in the worst possible state—the biggest bust. They try to compare themselves to other countries. It is worth noticing that the US economy is set to fall faster—

Amendment of the Law

David Miliband Excerpts

Monday 26th March 2012 Commons Chamber

[Mr Vaizey]

My hon. Friend makes a very good point. Because we believe in devolution and localism, the implementation of the plans is down to the Welsh and Scottish Governments. It is therefore up to them to roll them out as quickly as possible. I am sure the hon. Member for Wrexham (Ian Lucas) will send an e-mail from his iPad to the leader of the Welsh Assembly Government to tell him to pull his finger out.

Ten million premises will be covered by BT by the end of the year in one of the largest engineering projects the country has ever seen. Those areas will get speeds of up to 80 megabits a second.

Mobile broadband is becoming increasingly important, with more people purchasing smartphones. Last year, the Chancellor announced an additional £150 million to help with mobile broadband coverage. By 2015, that will extend mobile coverage to 60,000 rural homes that have no mobile connection whatever, including, perhaps, villages in the constituency of the right hon. Member for Stirling (Mrs McGuire), as well as along at least 10 key roads. We will also continue to look at how we can improve coverage on our railways.

At the end of this year, we will auction spectrum that will allow mobile companies significantly to increase their capacity, as well as offer faster speeds to their customers, and we continue to make progress on our plans to release some 500 MHz of the public sector spectrum.

World-leading digital infrastructure is the cornerstone of economic growth in the 21st century. Some estimates show that a 10% increase in broadband penetration can deliver a boost of up to 1.4% of gross domestic product. By the end of this Parliament, at least 90% of the country will have superfast broadband; our great cities will have ultrafast broadband; and 60,000 rural homes and businesses will have mobile coverage for the first time.

As the House knows, the UK has some of the most successful creative industries in the world. I know the whole House will wish to congratulate One Direction on topping the US charts with their debut album—a feat not matched by either the Rolling Stones or the Beatles. Adele’s “21” is the best-selling digital album of all time, and for the first time in 25 years, UK acts were at Nos. 1, 2 and 3 in the US charts. We have the second- biggest music exporting industry in the world, and our UK animation industry has a huge impact worldwide. In 2010, Peppa Pig’s UK licensing and merchandising sales were £200 million alone.

Last year saw the most UK film production activity ever—it grew by 7% to £1.16 billion. UK television formats dominate television schedules all across the globe, accounting for two in every five global programmes, and of course “Downton Abbey” has continued UK success at the Globes. Exports of UK television content are the second highest in the world, worth more than £1.3 billion per year, having grown by more than 20% a year for about the last decade. [Interruption.] The right hon. Member for South Shields (David Miliband) looks astounded by this success. I urge him to get out more and see what some of our successful creative industries are doing.

[David Miliband (South Shields) (Lab)]

I was actually wondering how many more pages of this drivel we had to sit through. The hon. Gentleman said that infrastructure is the seedcorn and the basis of future prosperity. How, then, does he explain the fact that 45% of the infrastructure investment that the Chancellor announced in the autumn statement will not happen until 2014-15?

[Mr Vaizey]

I have just spent two or three minutes talking about the success of the UK music, animation, film and television industries, and the right hon. Gentleman, who was meant to be the Labour leader, describes that as utter drivel. Let the message go out to the UK creative industries that one of the most senior members of the Labour party regards their success as drivel. And I make no apology for continuing to list some of those successes.

BBC Worldwide increased international sales by almost 10% last year. We are the European hub for the video games industry, with 35% of video games software sold in Europe being developed by UK studios, and almost half of the world’s top 100 development studios based in the UK, generating sales of almost £2 billion a year. The visual effects hub in Soho is home to four of the largest visual effects companies in the world. We have one of the most innovative and successful advertising industries in the world, and it is growing despite the recession. We have one of the most successful and creative fashion capitals anywhere in the world, with Burberry, a UK company, increasing its sales by a quarter. And, of course, our largest creative industry, the UK publishing sector, has a turnover of almost £20 billion.

We want to build on this success. We do not regard it as drivel. We regard it as vital to our economic success. That is why we will introduce a tax credit for our video games and animation industries and our high-end television production sector. We are confident that this will bring increased investment and growth in these sectors too.

--- Later in debate ---

[David Miliband (South Shields) (Lab)]

The Minister did not manage to mention in his speech the export potential of football, but I am happy to refer the House to my declared interest as the vice-chairman of Sunderland football club.

Since last Wednesday, the consensus has formed that the Budget spin was cack-handed. I want to make the case that the substance was dangerously complacent about growth and youth unemployment. Growth in our economy has tanked since the Chancellor’s Budget at this time last year. The hon. Member for Bury St Edmunds (Mr Ruffley) said that we had had a nascent recovery, but the truth is that we have had a non-existent recovery. We have had stagnation. British business is sitting on £750 billion-worth of cash, but it is not investing. It is not refusing to invest because of the planning laws or tax rates or because of public sector pay rates; it is not investing because there is no demand in the economy for the goods and services it wants to produce. No wonder the OBR has slashed its forecast not just for growth but for business investment from nearly 8% to less than 1%.

I have never believed the argument that without the austerity programme Britain was about to become Greece; neither do I believe the Chancellor’s argument from last Wednesday that it is essential to keep austerity to keep international investors buying British gilts. Why? Some 89% of conventional gilts issued by the Debt Management Office in the past year have been bought by the Bank of England, not by international investors. Even within the fiscal straitjacket that the Chancellor has set, he could have done more. He found £1 billion to support business. We all want to support business. His corporation tax cut will add to the corporate cash pile, but it will not change the arithmetic of demand. Meanwhile, far from increasing investment in capital allowances that would do so, he is cutting them by £1.7 billion. Instead of focusing on regional policy, the Treasury has abolished its regional policy unit. Instead of the strength of higher education being exploited, higher education visas are being cut. Instead of tackling the finance gap for small and medium-sized enterprises, a British investment bank was nowhere to be seen in this Budget. No wonder the OBR concluded, after studying each and every one of the Chancellor’s plans that had been announced since the autumn statement, that the plans will do nothing for growth this year and that it will have to reduce its forecast for growth next year.

We have learned, since the Chancellor’s new definition of simplification last Wednesday, that the price is to be paid by the old. There has been a lot of commentary on that, but there has been far less commentary on the price to be paid by the young. By the Government’s own admission there is a crisis of youth unemployment, with more than a million under-25s out of work, with 1.4 million not in education, employment or training, with 250,000 young people having been unemployed for at least a year and with 200,000 more having been unemployed for more than six months. The net present value cost of all that has been independently calculated at £28 billion. In my constituency, there has been a 250% rise in long-term youth unemployment, with 590 young people having been looking for work for more than six months.

This Government did not invent the problem, but they have made it worse. The Budget was their chance to make a difference, but while the Chancellor insulted the elderly he ignored the young—he spent longer talking about taxing hot snacks. Ministers say, “Look at what we have already announced,” but the flagship Work programme covers only one in 10 of the young unemployed. By the Government’s own admission, the Work programme itself, according to the voluntary sector group that comes together to discuss these things, will help only one in five of those on the programme. So, in total, the Government’s programme will help only one in 50 of the young unemployed get into work.

The Government’s wage subsidy programme, which starts in April, is designed to help 50,000 young people but that number could be doubled by bringing forward the spending for 2014 when the Government say that unemployment will be falling. What about the apprenticeship programme? We all support apprenticeships. Some 75% of the increase in apprenticeships is going to the over-25s. The administration of the £120 million plan for 16 and 17-year-olds is putting at risk precisely the voluntary organisations that the big society was meant to help.

The Deputy Prime Minister has said that he cannot think of a better use of money than creating jobs, hope and optimism for young people. The Prime Minister and the Chancellor say we are all in it together, but the truth is that they got lost in the endless tactical dance about how to dress up the cut in the top rate of tax and in the endless leaking about who would claim credit for raising the personal allowance. They have completely flunked the issue of how to get our economy back on its feet. The loveless coalition will say anything but will do nothing. That is the true story of the Budget and that is the tragedy for the country.

Youth Unemployment and Bank Bonuses

David Miliband Excerpts

Monday 23rd January 2012 Commons Chamber

[David Miliband (South Shields) (Lab)]

rose—

[Danny Alexander]

Hold on. I will give way to the former Foreign Secretary, but let me make just a little progress.

We are already providing more apprenticeship places than any previous Government, with an increase of 400,000 in the last year and a commitment to 1.2 million over the entire spending review period. That is at least 250,000 more than the previous Government’s commitment, although the shadow Chief Secretary seems to oppose that increase. As announced in the autumn statement, we are also launching a new £1 billion youth contract to help get young people into work, so that they can learn a trade and get equipped for their future career. Starting this spring, the youth contract will support up to 500,000 young people into education and employment opportunities. The youth contract wage subsidy is targeted at employers in the private sector, creating sustainable private sector jobs for the long term.

[Danny Alexander]

I fear that the hon. Gentleman was planning his question so carefully that he did not listen to my remarks about apprenticeships or the youth contract, which is a vast improvement on the wasteful future jobs fund, which offered subsidies almost three times as high as the youth contract and funded too many temporary jobs in the public sector. In fact, almost 50% of participants in that scheme were claiming benefits again within eight months of starting a future jobs fund job.

[David Miliband]

The right hon. Gentleman quoted the figure of 40% for the rise in youth unemployment under the previous Government. It is correct that youth unemployment started rising in 2004, but the allegation against the current Government is that they have made the situation much worse. In my constituency of South Shields there was a 210% increase in long-term youth unemployment in 2011 alone. That is what he has to answer for. It is not that he invented the problem, but his policies are making it worse.

[Danny Alexander]

The Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) will address the statistical changes that the previous Government made. However, the right hon. Gentleman was in government during a boom, yet his Government presided over an increase in youth unemployment. We are facing serious economic challenges in this country, caused in large part by the actions of the previous Government, and we have to take steps to resolve those problems.

The youth contract offers young people the prospect of long-term private sector employment. It is a scheme that has the full backing of the private sector. As John Cridland, director general of the CBI, has said, it strikes at the “scourge of youth unemployment”.

Autumn Statement

David Miliband Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

I agree with my hon. Friend that that is a very important part of making sure that customers get the best possible deal. It was the part of the Vickers report that got the least coverage because of the interest in things like ring-fencing. We are determined to introduce changes that allow people to switch their current accounts very easily, and we hope to have them in place before the end of the Parliament.

[David Miliband (South Shields) (Lab)]

The Chancellor has recognised that 260,000 young people have been unemployed for more than 12 months—that is over 100,000 more than 18 months ago. He has rejected the argument for a job guarantee and instead embraced wage subsidies, which he says will help about 53,000 young people. For the sake of those young people, will he look at the similar scheme announced by his right hon. and learned Friend the current Secretary of State for Justice, in 1995? That scheme promised 130,000 jobs, but only 2,300 applications came forward. Will the Chancellor look at that experience to make sure that we do not have a repetition of the very low take-up of wage subsidy schemes?

[Mr Osborne]

We have worked with the business groups and businesses to make sure that the youth contract is going to be effective. I respect the fact that the right hon. Gentleman told us some days ago that the problem of youth unemployment was not invented by this Government. I respect his honesty in saying that. This is a problem that all western countries are facing at the moment. Frankly, in Britain youth unemployment has been going up for the past seven years. A subsidised job in the private sector is part of the answer. The work experience places are already working well, and we are adding to those. Of course, there is some conditionality in all this, so we are introducing, for example, weekly signing on after five months.

Oral Answers to Questions

David Miliband Excerpts

Tuesday 1st November 2011 Commons Chamber

[Mr Osborne]

Actually, you just have. You made him your general election strategist. However, I will not comment on the tax affairs of individuals, although I suspect that many will over the coming years.

[David Miliband (South Shields) (Lab)]

The Chancellor will remember, in his first Budget, fixing a target for debt

“to place our fiscal credibility beyond doubt”. —[Official Report, 22 June 2010; Vol. 512, c. 167.]

That target was for debt to be reduced by the end of the Parliament, but, according to figures from the Office for Budget Responsibility, it depends on economic growth of 2.8%. How far below 2.8% must growth fall for the Chancellor’s fiscal mandate and his fiscal credibility to be shot to pieces?

Global Economy

David Miliband Excerpts

Thursday 11th August 2011 Commons Chamber

[Mr Osborne]

I completely agree with what the Chair of the Treasury Committee says about the credibility of the deficit reduction plan and how disastrous it would be in the current environment to weaken that plan. We would—within hours, I think—find ourselves sucked into the global debt whirlpool from which other countries are struggling to get out. I also agree with him that we need to do more to improve the supply side of our economy. That is hard work for Governments, and it means taking on difficult vested interests. We have seen the argument in the last few days about planning controls, where we are trying to make it easier to have economic development, and there are plenty of groups that pop up and oppose that. That is an example of some of the battles that we will have to have and win. I can confirm that we will be producing the second phase of our plan for growth at the time of the autumn forecast.

[David Miliband (South Shields) (Lab)]

I would be grateful if the Chancellor confirmed private sector estimates that I have seen that a 0.4% downgrade of the growth forecasts for the next four years means that it will be impossible for him to hit his fiscal target of turning the debt-to-GDP ratio down by the end of this Parliament.

[Mr Osborne]

The most recent independent analysis of the British economy was done by the IMF this month. It made an assessment using lower growth forecasts, and came to the conclusion that we will hit both our fiscal mandate and our target for reducing debt, which the IMF made clear in its article IV assessment. I cannot help but note that if the right hon. Gentleman had given the leader’s speech that he had written, the Labour party would be in a much more credible place than it is today.