Compulsory Jobs Guarantee

Kate Green Excerpts

Wednesday 11th February 2015 Commons Chamber

[Kate Green (Stretford and Urmston) (Lab)]

This has been a good debate and I thank all hon. and right hon. Members for their contributions.

Our motion is about how we tackle long-term unemployment, particularly long-term youth unemployment. While I welcome the belated increases in the numbers in work that hon. Members have talked about in relation to their constituencies—in passing, I point out that that rise in employment has been accompanied by record in-work poverty—today’s debate is about the fact that our long-term unemployment rate, particularly our long-term youth unemployment rate, remains far too high.

As my right hon. Friend the Member for East Ham (Stephen Timms) pointed out in opening the debate, long-term youth unemployment, at 750,000, is not only rising but worsening relative to the population as a whole. Research by the House of Commons Library has shown that in 2010 youth unemployment stood at 2.5 times all unemployment. Now, on the latest figures we have, that proportion has increased to 2.9 times, so young people’s position is not improving; it is getting worse. As many hon. Members have noted, we should all be concerned about the scarring effect that occurs over lifetimes for individuals and communities if young people do not get the best start at the beginning of their working lives.

[Andrew Bridgen]

Does the hon. Lady agree that not having a role model and being brought up in a workless household are also sources of long-term youth unemployment? Does she welcome the fact that there are 400,000 fewer workless households under this Government?

[Kate Green]

Very few households choose to be workless. Indeed, very few—[Interruption.] I understand that the hon. Gentleman was not saying that. It is an issue not just of role models, but of opportunities. It is welcome that more people are in paid employment, but today’s debate is about that vulnerable minority who are scarred by long-term unemployment.

[Mr Jim Cunningham (Coventry South) (Lab)]

One thing we should remember is that the Labour Government helped one-parent families through Sure Start, whose schemes allowed trapped housewives on council estates to get back into work if they wanted it.

[Kate Green]

I am extremely proud of the fact that, under Labour, lone parent employment rose from 44% in 1997 to nearly 60% by the time we left office.

An interesting debate opened up this afternoon about the proper role of Government in relation to long-term unemployment. One argument was expressed very well in a thoughtful speech by the hon. Member for Enfield North (Nick de Bois), who suggested that the role of Government was only to create the conditions for business to thrive and to make employment available. That is the real philosophical divide between Opposition and Government Members. We believe that it is the role of Government proactively to intervene as a backstop to tackle entrenched long-term unemployment. We believe that programmes that have attempted to do that—for example, the future jobs fund and Jobs Growth Wales—prove that such programmes, in those terms, are effective.

Those programmes were much criticised today by the Secretary of State, but they have been cost-effective and have created real jobs with real pay for those who participated. That, fundamentally, is what young people want.

Our compulsory jobs guarantee will be a quality offer for long-term unemployed people. It will be paid at least at the national minimum wage. It will guarantee work for at least six months. We expect, drawing on our experience of other programmes, that many of those jobs will turn into permanent jobs. It will consist also of support, to ensure that training and the opportunity to develop one’s career are embedded as part of the programme. Contrast those conditions with work experience which, of course, is important, but which fulfils a different function. I do not think it is appropriate to expect anyone, even our young people, to work for three months without proper pay, because at that point they must be doing a proper job.

My hon. Friend the Member for Ealing North (Stephen Pound), who is not in his place, made an important point about our compulsory jobs guarantee—the fact that it is founded on the concept of mutual obligation. For those who are out of work, we will make sure that after a period of one year for the under-25s or two years for the over-25s it will be our role to take the responsibility to guarantee them employment, and in return that individual will be expected to take up the opportunity that is offered.

The hon. Member for Banff and Buchan (Dr Whiteford), who made a very useful speech in many respects, seemed to think that the sort of conditionality that we propose in our compulsory jobs guarantee programme was not appropriate. I am entirely with her in the appropriate and careful use of sanctions—which I do not think we are seeing under the present Government—but I do not see what the problem is with having conditions for support which our compulsory jobs guarantee will offer, and it is right that they should be contained in the programme.

There was an important and interesting debate about engaging the private sector in our programme. As my right hon. Friend the Member for East Ham pointed out in opening the debate, we have seen successful engagement of the private sector, particularly of the small and medium-sized enterprise sector, in Jobs Growth Wales. One criticism that many Government Members levelled at the future jobs fund was that it had not engaged with private sector employers. I readily accept that the programme was brought in as an emergency in response to a significant employment and financial crisis, and at that time the most straightforward way to do so was through the medium of the voluntary and the public sectors. But there is no reason at all why that could not have evolved to encompass private sector employers, and indeed those private sector employers who did participate, such as Jaguar, as my right hon. Friend mentioned, found it a very positive programme, as did those who went through it.

We heard some useful contributions from, for example, my hon. Friend the Member for Scunthorpe (Nic Dakin) and the hon. Member for Stroud (Neil Carmichael), about the importance of accompanying jobs programmes with investment in education, skills and vocational training. As the hon. Member for Stroud said, it is right that certain industry sectors struggle to recruit suitably qualified and appropriately skilled workers. That is why I so deplore some of the reforms that we have seen to the education system under this Government, which so erode the value of vocational education and training. Although Government Members like to tell us often about the growth in apprenticeships under this Government, young people aged 16 to 19 have not seen a growth in opportunities to take up apprenticeships. What is more, those apprenticeships too often take young people to only a level 2 qualification, and we know that many employers consider a level 2 qualification insufficient for someone to make a meaningful start in the kind of jobs that the hon. Gentleman rightly talks of.

Finally, let me address the concerns that were raised by a number of Government Members about whether our programme is fully funded and costed. May I take the opportunity to assure them that it is? It will be funded by the bankers’ bonus tax—[Interruption.] Not again, as the Minister says. This will be the only purpose to which an incoming Labour Government will put the funds raised by this one-off repeat of the bonus tax. When the Minister for Disabled People is sitting on the Opposition Benches after 7 May, I invite him to hold us to that commitment, because this is one that I confidently give on behalf of my party.

We also think it is right to impose further restrictions on pensions tax relief for the very highest earners. I can see no objection to those with the broadest shoulders bearing more of the burden of funding so that some of our young people have the chance of employment, and that is what we will do.

Many people lost out after the global economic crash and in the three years after the general election, when the economy hardly grew under this Government. Even now, as Ministers point to improving levels of employment, long-term and youth unemployment remain a scourge on our economy. Labour’s compulsory jobs guarantee is the key policy to change that, and the sooner we have a Labour Government ready to introduce it, the better.

--- Later in debate ---

[Esther McVey]

I will not take any interventions, as the shadow Minister did not do so, but I will get through this in plenty of time for Members to speak—[Interruption.] Okay, I will take two interventions later.

What does the OECD have to say about Labour’s compulsory jobs guarantee? It says that there would be “displacement and substitution effects” and that it would not get anyone into permanent jobs. What did the Institute of Directors say? Like my hon. Friend the Member for Enfield North (Nick de Bois), it said:

“Wage subsidies for employers are not the source of sustainable jobs. Government must focus on creating the conditions for growth, as only businesses know when consumer demand will allow them to create more positions.”

That is exactly what we are doing, with business tax support, welfare changes, infrastructure and true fiscal discipline. I work with businesses pretty much every day, and we know that over the next 10 years, as a result of what this Government are doing, there will be 12 million new jobs created, fundamentally in science, engineering and IT. We have to ensure that our young people can take up those jobs, and that is what we are doing, with increased support for training and increased support for schools, for example through the pupil premium. We will help those who have been left on the unemployment list for so long and tackling the long-term youth problems and family problems through support for troubled families. We are systematically tackling unemployment and working with people to ensure that they are in work.

It is really important that we draw a clear distinction between what is working under this Government and what never worked under the Labour Government. My hon. Friend the Member for Selby and Ainsty (Nigel Adams) said that when Labour leaves office, it always does so with higher unemployment than when it came into office, and that is absolutely true. So why would anybody choose to move forward with this jobs guarantee without knowing where these guaranteed jobs are coming from?

Interestingly, even the European Commission, which likes to foist initiatives on people, has said that

“the draft Country Specific Recommendations published 2 June call for commitment to the UK’s Youth Contract to be maintained.”

In other words, it would not pursue Labour’s proposal on guaranteed jobs, and what we did was correct. We supported people and put money in place to create work experience, sector-based work academies, and incentives.

[Kate Green]

I am grateful to the Minister for giving way; this must be one of the two interventions that she is going to accept. Given that she is speaking of the European Commission’s comments on the youth jobs contract with such approval, why did her Government decide to scrap it, and how can it have been such a failure in delivering the outcomes it was promising?

[Esther McVey]

No, it is still going ahead. As I said, we have had the biggest falls in youth unemployment since records began. The Commission agreed that we are creating the right conditions, with more jobs being created in the UK than in the rest of Europe put together. That is why we have been having meetings with it to explain what we are doing rather than what the Opposition would do. The key point is that of course people would stay with those who have ensured that 1.75 million more people are employed.

I want to read out some of the predictions that Labour Members have made. They said that 1 million more people would be unemployed if we followed what we are doing. [Hon. Members: “Wrong!”] As all my Back Benchers are saying, that was wrong. In fact, nearly double that number of jobs were created. Labour Members said that what this Government were doing would lead to out-of-control inflation. [Hon. Members: “Wrong!”] That did not happen—we have brought it down. They said that there would be a double-dip recession. [Hon. Members: “Wrong!”] That never happened. No—the only recession was under Labour, and it was the longest and deepest since the war. They said that it was a fantasy that the private sector could create more jobs than were lost in the public sector. [Hon. Members: “Wrong!”] That was never the case; in fact, the private sector created over 2 million more jobs.

So why would anybody trust the Opposition with the economy, with jobs, and with the future of this country? The answer is that they certainly would not. That is why we are firmly saying today, three months before the general election, that their idea of how to create jobs is unfunded, ill thought through and unworkable, and we cannot find a business yet that wants to follow it. We reject the motion.

Question put.