Intergenerational Fairness

Justin Tomlinson Excerpts

1st reading: House of Commons
Tuesday 28th February 2017 Commons Chamber

[Justin Tomlinson (North Swindon) (Con)]

It is a real pleasure to follow the widely respected and thoughtful comments of the right hon. Member for Birkenhead (Frank Field). Sometimes they are difficult for the Government and sometimes they are difficult for the Opposition, but we should always take heed of his comments and listen to them very carefully.

This debate nearly passed me by until I saw a quote in the report stating:

“An economy that is skewed towards baby boomers and against millennials”.

That panicked me. We all have our own calling into politics. I went to a school that was bottom of the league tables in Kidderminster and my father died at an early age. Many of my friends did not fulfil their potential. I was always driven by the thought that, given the right opportunity, everybody can be successful if equipped with the right skills, sometimes the right luck, the right support and the right direction. All too many people—very, very good friends of mine—did not take that path and have missed out. That is bad for them, bad for the economy and bad for society.

I looked at that quote and I worried, because to me it was one versus the other, rather than the core principle that we have a duty to do our very best by everybody. I know a lot of people will focus their comments on the triple lock—whether it is right, whether we are doing too much for pensioners and whether we should be doing it in a different way. I would just gently say, because I wish to focus my comments on the younger generation, that we all welcomed the triple lock. There had been a long time when perhaps we had underserved those who had worked hard all their lives. I just urge caution. Once people get to pension age, they have limited opportunities through which to change their circumstances. They have either fulfilled their potential or there is not really much more opportunity to do so. They have reached the finish line that the right hon. Member for Birkenhead talked about. We have to respect the fact that their incomes are predominantly fixed, and we have to do our best by them.

[Jeremy Quin (Horsham) (Con)]

There is a lot in the report that I would recommend to my hon. Friend, but does he share my slight concern that we must not allow our long-term thoughts on pensions to be coloured by a particular cohort of pensioners retiring right now? In 10 or 15 years’ time, defined benefit schemes will have gone and people may be in a much worse position than those retiring this year or in the next few years.

[Justin Tomlinson]

I am very grateful for the fact that we have a fantastic Pensions Minister who will be responding to the debate and who will no doubt comment in detail on that point.

The broader point, as I turn to the opportunities for younger people, is that we all collectively—the Government and the Opposition—have a responsibility to recognise that we have a habit of spending more money than we get in as tax revenue. Since the second world war, I think there have been only six years where the Government of the day have spent less money than they have collected. What that really means in plain English is that we, as the generations from most of those years, wish to have more than we can afford and we would like our children, or maybe our children’s children, to pay for it. This applies to all Governments, except in those six years where, for whatever reason, the Government of the day were able to collect in more tax revenue than they spent. We have a moral duty and responsibility to future generations not always to take that easy decision.

I was doing a radio interview yesterday on a relatively contentious issue involving possible additional Government spending, and another MP said, “Well, if I was the Minister, I’d have taken the hit.” The key point was that it was not they who would have taken the hit; it was everybody. Given that we already spend more money than we collect, what they were saying was, “I’d pass that one on to the next generation as well.” We all know that. We would all like to balance the books immediately, but we also all have a long list of personal priorities we would like to spend money on—our inboxes are full of helpful requests from residents for where we could spend more money. Many of those are very important—a balance always needs to be struck—but I gently remind the House not to lose sight of the fact that if we wish to give the best opportunities to future generations, we must not saddle them with too much of our own overspending.

I am inherently a very positive person—I believe that if we equip people and give them the opportunity, they will seize it with both hands and make a huge success of it—so I am greatly encouraged that our Government have delivered 1.8 million more good or outstanding school places. As someone who went to a school at the bottom of the league tables, I understand the importance of equipping people with the right skills. In my constituency and across Swindon, we have had a difficult Ofsted report recently. We have fantastic teachers, headteachers and governors all trying their best in Swindon and we have secured extra funding for our schools, but we are not quite there yet.

We all—the Government, MPs, the council, the schools collectively, the parents—have to look at what more can be done. I am encouraged that the schools Minister recently visited two of my local schools, Nova and Swindon Academy, both of which are transforming the opportunities for their children, having come from what not so long ago were very poor ratings. Frankly, they were failing the children who were relying on them to equip them for the future, but both have transformed their ratings through strong leadership, and I am delighted that yesterday Ofsted confirmed that Nova had moved to “good” in all categories. I pay tribute to Mr Barton, the headteacher, and all his staff who have worked incredibly hard to achieve that. Schools are the fundamental building block for equipping young people in life.

I am also a huge fan of the National Citizen Service, a new initiative giving young adults real, tangible life skills, and every summer, without fail, I visit every stage of the three to four-week programme. It takes a random collection of young people—the activities cost about £1,500—and sends them away for a week to learn teambuilding skills. They then come back, form teams and choose a charity. They learn about that charity, organise entrepreneurial and fundraising activities, volunteer for the charity to see it at first hand, learn presentation skills, haggling, engaging and so on, and at the end, they graduate as NCS students. There is an incredible transformation in all those young adults, who arrive well educated by their schools but perhaps not quite ready for the workplace. I ran my own business for 10 years and employed a lot of young people and I am encouraged to see the huge difference in those young adults. They take the time in their summer holiday, when it is tempting to do other less-constructive things, to go and engage. In doing so, they give themselves the best opportunity when entering the workplace.

University numbers continue to increase, but the Government have rightly put a huge emphasis on apprenticeships. For generations, Governments and Opposition parties got into an arms race on students going to university. Every general election, we would hear, “We sent 25%.”, “Well, we’d send 30%.”, “We’d do a third.”, “We’d do 45%.”, “We’ll break 50%.”. Everybody has a talent. David Beckham is not renowned for being academically gifted, but he has a gift that has earned him more money in a week than the majority of people in society will ever earn, and that was because somebody recognised his skill and allowed him to develop it.

We all have a talent. Every time I failed to make it on to a sports team, I wondered whether I did—perhaps that is why I am here—but everyone has a talent, and apprenticeships rightly recognise that. Workplace learning provides people with real, tangible skills and a fantastic opportunity to secure a long-term career with good career prospects. That is also vital for our growing economy, particularly where we have skills gaps.

In the last Parliament, we had a commitment to 2 million apprentices, which we have met, and in this Parliament we have rightly identified an even more ambitious target. It will be tough to get there, but it is right to have such challenging targets. I have spent, as I am sure have all hon. Members, a lot of time meeting the young apprentices who are doing things that I have absolutely no idea about—advanced engineering, all sorts of complex things with computers. They are on the first rung on the ladder towards their brilliant careers. They will all go on to huge success.

Across the economy, this Government have now delivered record employment—2.7 million more people are in work than when we came to office in 2010. That is not just in London or the south-east, as has sometimes been seen in previous strong economic performances; it is in every single region of the country. In my town of Swindon, 8,400 more people are in work, which is greater than the number who currently go on a weekly basis to see Swindon Town bravely fighting the relegation battle. Thankfully, with the victory at the weekend, we have got a bit closer to achieving the objective.

There are now 865,000 fewer workless households, and youth unemployment is at its lowest since 2005. In Swindon—I know that people are keen to know how well we are doing—youth unemployment is down by 69.2% since 2010, which is a fantastic achievement. The Government have rightly introduced the national living wage so that we are looking at a wage of about £9-plus by 2020. That will help 6 million of the lowest earners to have a pay rise and to share in the proceeds of the strong economic growth that we have delivered. The increases in the personal tax threshold have taken the 3.2 million lowest earners out of paying any income tax at all, and we are continuing to raise that threshold to £12,500, after which it will be index linked, making sure that the lowest earners will never return to the point of having to pay income tax again.

[Mr Jackson]

My hon. Friend is making an excellent speech, based on his expertise as a former Minister. We share something in common, in that our towns and cities of Swindon and Peterborough are, unfortunately, the two largest conurbations in the UK without a university that was created from the beginning. Does he agree that, in that respect, it is important to build on apprenticeships, with university technical colleges, for instance, so that young people who are not of an academic bent can be persuaded to pursue a technical and vocational education, which is so important for our future economy?

[Justin Tomlinson]

I thank my hon. Friend for that powerful intervention. He is a real champion for his constituency. On his point about universities, my Swindon constituency benefits from having a huge influx of graduates, so we benefit from the network of local universities within striking distance of Swindon, which is why our area has seen such strong economic growth.

My hon. Friend is absolutely right to highlight the importance of university technical colleges. My constituency had one of the first UTCs—a £10 million facility in Swindon. It has had its teething problems, but the principle is fantastic, because it is identifying the people who would ultimately be doing advanced engineering and technical work, giving them a real focus on that. They are working with local businesses, which can help to shape the curriculum to fill the skills gaps that can be identified in the local economy. This means that young people will have the best chance of having a career at the end of their education.

The challenge with university technical colleges is how to attract the best and most able students for that type of education at the age of 14. Not unsurprisingly, schools, which are all judged by league tables, are not always brilliantly keen to encourage their most able students to transfer, because it will have a detrimental effect on their place in the league tables. I would urge the schools Minister to consider having a dual score in the league tables, whereby the student remains attributed to the original school, but the results can be shared with the UTC. That would get around the disincentive facing schools if they lose some of their best students. It will give them the opportunity to say, “Look, they are doing great; but they can do even greater with that type of specialist education”. Undoubtedly, apprenticeships and UTCs are making a huge difference.

Not everybody has the opportunity to walk straight into work. As a society, we therefore have a duty to make sure that our jobcentre network is at its most able to support people. I was not the Minister responsible for jobcentres during my time in the Department for Work and Pensions but we had a lot of joint meetings and I got very excited about the need to refresh our jobcentre network. I had been on a number of visits and I was fundamentally depressed when I saw the 1960s and 1970s concrete structures and the security guards who are, understandably, needed. Let me imagine, though, that I am going to a jobcentre. I am almost certainly nervous, and I am then greeted by a security guard in bleak surroundings. There is no celebration of the successes, and no highlighting of those who have faced the same challenges that I fear but know that I must overcome.

I also visited a Shaw Trust community hub that helped a number of people who were a long way away from entering the workplace. There were bright colours and great furniture. This security guard had a different uniform to show that he was a welcomer: as soon as people arrived they were made to feel special, were congratulated on taking this step, and were made aware that he was there to be their anchor throughout the process. It was a real hub of activity. I could see nervous people coming into the building, but as soon as they met the guard they were at their ease, keen to engage in the process and fulfil their potential.

I am delighted that the Government have rolled out this system. When I visited the Swindon jobcentre a few weeks ago, I was not sure what to expect. I was greeted by senior members of staff, who told me excitedly that although the jobcentre had a budget of only about £3,000, they had painted the walls, changed the furniture around, changed the way the entrance worked, and provided work stations so that people could use computers to look for jobs independently after receiving support from the staff. Those staff members were excited because those improvements had transformed their morale and engagement among those with whom they sought to work.

The staff were then keen to talk to me about the difference that universal credit was making by simplifying what had been an incredibly complex benefits system. Under the old system, involving about 167 benefits, it was necessary to be a nuclear physicist to work out what people were or were not entitled to. All too often, through our casework, we would discover that, because of the complexity of that system, our constituents were missing out on support to which they should have been entitled.

Everyone supports the idea of a simplified single benefit that enshrines the principle that the more people work, the better off they will always be, and removes the ridiculous 16-hour cliff edge that prevented people from progressing from part-time to full-time work, to the frustration both of employers and of those whose circumstances were changing and who wished to build up their hours. Crucially, real-time technology now allows people with fluctuating health conditions to have a minimum income. As the condition goes up or down, the system automatically kicks in, so that people no longer constantly have to reapply and experience complicated bureaucracy when they want to focus on dealing with their health challenges and with remaining, or progressing, in work.

Often it is the simplest things that make the biggest difference. Another exciting development is that, for the first time, there are named work coaches. When people arrive at the jobcentre, they do not just need direct help with their search for work; there are a number of other challenges that they may need to navigate, such as securing childcare or additional training. The named coach will help them through that process, giving them significantly more time to concentrate on looking for the work that they would like. The coach will stay with people when they start work, which will also make a huge difference.

Many of us, looking back on our careers, will realise that we were probably driven mostly by our parents encouraging us to make progress—encouraging us not to be complacent; encouraging us to push ourselves—but that is not a given in life. When I was at school, it was a given that many people had no interest in going to work. That was a shame, because they were brilliant people, and with the right encouragement they could have made huge successes of themselves.

Often, people—especially those who have been out of work for a long time—will enter work, but on the lowest wage. Sometimes they will then stagnate, and will not have the confidence to kick on to higher levels. Let us suppose, for example, that I have been out of work for a long period, and have secured work in a supermarket. I am determined to make it a success, so I turn up every day, work my hours diligently, and stay there. Now, however, the named work coach would contact me and ask, “How is it going?” I would say, “For the last three months I have turned up every day and worked as hard as I possibly can.” The named work coach might say, “Have you thought about asking to become the supervisor?” The reply would be, “I’m too shy to do that.” The named coach would say, “No problem,” and then ask the supervisors and managers in the store, “Is he ready to take that step up?” Therefore, the coaches help people to progress in the workplace.

It is great that we have 2.7 million more people in work and that we have introduced the national living wage, which has helped the 6 million lowest earners to get a pay rise, but the next challenge, as we move close to full structural employment, is to ensure that there is support for in-work progression, so that everyone can not just get a job but fulfil their potential. By working hard, they can then progress through those organisations.

[Richard Graham (Gloucester) (Con)]

I want to come back to the subject of the debate, intergenerational fairness. My hon. Friend has made some points about working issues. Does he agree that for those who have retired or are working but are due a pension a key issue is not only intergenerational fairness but fairness between people who own and run companies and who have responsibilities to people in pension schemes? The news today is a good example of how this place can help to secure the best outcomes for those who are promised pensions in a not very rich retirement world.

[Justin Tomlinson]

I thank my hon. Friend for his intervention. I am always at a loss to understand why he is not a Minister. He is one of our most able MPs. In the debates that I have attended, time and again, he is so thoughtful. I had a brilliant time visiting his constituency as a Minister to see the great work that he had done to help to promote apprentices, before it became fashionable and all of us started to campaign for more apprenticeships. He is always ahead of the curve. Rightly, his intervention highlights that we have to look at people of all ages and at the opportunities. I was an employer myself, so I understand the responsibilities to staff in respect of pensions and other benefits and career progression. As ever, he makes a powerful point.

[Mr Jackson]

Before my hon. Friend finishes his speech, on a positive note, does he agree that it is important that we have done everything we can to remove the badge of shame in the way we treat disabled people who want to work, and that the Disability Confident scheme, with which he was very much involved at the Department for Work and Pensions, is going from strength to strength, so that more disabled people, who should not be put in the shadows but allowed to fulfil their potential are able to do so in the employment market?

[Justin Tomlinson]

I thank my hon. Friend for his intervention. I know that he personally supported the Disability Confident campaign. I am coming to that, if he can hold on for a few more seconds.

Another thing that the staff at the jobcentre highlighted was the great initiative of the school advisers from the jobcentre going into schools, starting to identify those who would need help at an earlier stage and working with them to prepare them for their final day in education and to have a smooth transition. Staff are very excited about the early stages of that initiative. I am delighted that the small employment offer, a pilot that I introduced, is making a difference in getting more businesses to engage directly with the jobcentres, which are now a hub of activity, creating more potential vacancies for those who are still looking for work.

As a former disability Minister, it would be remiss of me not to talk about the additional opportunities that have been created for disabled people. On all the visits I ever did, the most passion I saw from people was when I played my favourite game, which was to ask anyone I ever met, “You are the Minister—what would you do?” I was always looking for good ideas. Without a shadow of a doubt, the most passionate, enthusiastic and engaged cohort of people I talked to were young disabled people who wanted to have exactly the same chances and opportunities as their friends. These were highly talented, often highly educated, brilliant young people, but not all employers had the confidence to consider offering them an opportunity. Nearly always, the employer just needed to make a relatively small change and they would benefit. As an employer, by accident—I am not looking for a halo—I employed people with a disability and it made a huge difference. Therefore, I welcome the fact that over the past three years 600,000 more disabled people have gone into work and that the Government are committed to delivering the disability apprenticeships. Those are real opportunities, predominantly for that younger generation.

I welcome this report, but I urge everyone to remember: it is not them versus us. We have a duty to do our best by people of all ages. I very much hope the Government continue their good work in this area.

[Several hon. Members rose—]