Jobs and Work

John Hemming Excerpts

Wednesday 11th June 2014 Commons Chamber

[Mr Umunna]

I will just make a bit more progress.

Part of that involves ensuring the right environment across the country in all regions for our businesses to grow, and part of it involves a sector-led approach, looking at where we have a competitive edge and comparative advantage relative to our international competitors. I am very supportive of the sectoral approach. It was of course the Labour Government who led the way in that by setting up the Automotive Council.

When it comes to creating the right environment, ensuring that people have the skills our businesses need is crucial. Increasing the quantity and quality of apprenticeships is a must. We have a record to be proud of. In government, we rescued apprenticeships from the scrap heap. We more than quadrupled starts—[Interruption.] Government Members do not want to hear it, but let me give them the facts. We more than quadrupled apprenticeship starts, from a woeful 65,000 under the Major Government to 280,000 in our final year in office.

[John Hemming (Birmingham, Yardley) (LD)]

Is it still the Opposition’s policy to get rid of the intermediate apprenticeship?

[Mr Umunna]

No, it is not, and I should say that the Deputy Prime Minister’s intervention on this subject while standing in for the Prime Minister at PMQs was deeply embarrassing, given that he was attacking an independent report that was produced by a group of experts for us which said exactly the same as his own Secretary of State’s report for his Department on the same subject.

[Mr Umunna]

I am very grateful to my hon. Friend for drawing attention to his excellent Bill, which I and many of my hon. Friends were here to support, but which was disappointingly ignored by the Government.

What is happening to apprenticeships now? This issue, frequently raised here by my hon. Friend the Member for Blackpool South (Mr Marsden) and my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), is worrying.

[John Hemming]

Will the hon. Gentleman give way?

[Mr Umunna]

No, I want to make some more progress—[Interruption.] I have been quite generous in giving way.

Countless other colleagues have talked about opportunities for young people. My hon. Friend the Member for Rotherham (Sarah Champion) has drawn attention to the lack of apprenticeship opportunities for people in her constituency. Under-19 apprenticeship starts have fallen by 17,000 over the last academic year, and there are now 2,000 fewer under-19s starting apprenticeships than in 2009-10, and less than 2% of apprenticeship starts last year were at level 4 or above. Where was the Bill in this Queen’s Speech to require all large companies taking on large Government contracts to provide apprenticeships, as we called for? It was not there. Where was the requirement for all apprenticeships to last at least two years and to be at level 3 or above to ensure we maintain their quality? It was not there. We need to see more done on that.

It is important to help those who want to get into work through jobs and training, but it is also important to help those who want to create their own jobs, and they will not be able to do that without the finance. We are told that the small business Bill will make it easier for small businesses to access finance. I really hope so, because in the last year, net lending to small and medium-sized businesses fell by £3.2 billion. Scheme after scheme after scheme—from Project Merlin to funding for lending—has simply failed to resolve these problems. In the last quarter, net lending to businesses by funding for lending participants actually fell by £700 million—an issue on which I know my hon. Friends the Members for Rochdale (Simon Danczuk) and for Feltham and Heston (Seema Malhotra) have been campaigning.

--- Later in debate ---

[John Hemming (Birmingham, Yardley) (LD)]

One always wonders whether the Opposition have actually learned anything while in opposition, and listening to the shadow Secretary of State gave some indication of whether they have or not. I have had some useful conversations recently with Lord Turnbull, who, as Cabinet Secretary, was the senior civil servant and, I would argue, has some understanding of how national fiscal policy operates. He kindly pointed out table 4.1 of the “Public Expenditure Statistical Analyses” to me, which shows that when Labour was in office, while there was an upswing, public expenditure increased as a proportion of GDP. If anyone is interested, I have put the figures on my web log, linked to a Google Docs analysis that demonstrates how Labour started over- spending.

Much though people on the continent, such as the President of France, may have taken the view that one can spend one’s way out of bankruptcy, after a period in office I think President Hollande concluded that actually one cannot spend one’s way out of bankruptcy—that the additional GDP from the spending does not give an adequate tax take.

That leaves us in a situation where we cannot change things rapidly. A very big deficit cannot be reduced to zero overnight, because of the economic disruption that that causes. The shadow Secretary of State complains that we have borrowed a lot of money, but we have done so because there was a big deficit. Every year, one borrows the amount of the deficit, which adds to the debt, and one cannot change that rapidly, either by putting up taxes or by cutting spending to bring the accounts back into balance, because the disruption from that causes additional problems. The fact that he complains about something that is obviously there on a simple, basic mathematical point shows that Labour has learned nothing.

The hon. Gentleman’s refusals to clarify for me Labour’s plan to get rid of the intermediate apprenticeship is also symptomatic of a substantial problem. Scrutinising the Deregulation Bill, Opposition Members happily stood up and said, “Let’s get rid of the intermediate apprenticeship,” of which there are about half a million in this country; they did not think about the consequences for the people affected. Earlier, the hon. Gentleman gave a one-word answer on that subject and would not clarify, so one has to assume that the Opposition’s detailed policy remains the same: they do not want intermediate apprenticeships. Well, I do want intermediate apprenticeships; they are a good route into work.

There we have two basic examples in which it appears that the Opposition have learned nothing. In government, we are making progress and dealing with matters that require a long-term plan—we cannot do it based on a short-term plan—but there are issues to be worried about.

I worry about the statistical basis of poverty analysis. I see individual cases of people who are really struggling. I see people who have been wrongly sanctioned and, happily, at times I have been able to resolve the sanctions. There are problems with the system—it can have a knock-on effect on housing, which it should not have. I know that the Government are trying, through the universal credit system, to introduce a more supportive system, which is more about encouraging compliance than punishing people, but we are still operating the older system, which is causing problems.

Everyone who is on tax credits and at the bottom end of the market is included, but we have to remember that people who are not officially in poverty in other countries migrate here to enter our work and tax credits system. Should they be lumped in with the people who are having to attend food banks because they were wrongfully sanctioned? I do not think they should. When the statistics conflate those different circumstances—people who are coming to this country to participate on that basis and people who are really suffering—they make a mistake. We need to work as a Government to reduce the suffering that comes from, say, wrongful sanctions and to help people who are having great difficulty making ends meet, but we should not conflate the different circumstances. If we get the statistical analysis wrong, it is meaningless.