Jobs and Social Security

Kate Green Excerpts

Wednesday 28th November 2012 Commons Chamber

[Mr Duncan Smith]

I just want to pick up on one point and then I will happily give way to the right hon. Gentleman.

The same scant regard for general facts is apparent throughout the motion. The Opposition claim that long-term unemployment is now soaring, yet long-term unemployment nearly doubled in the two years before Labour left office, going from 396,000 to 783,000 in 2010. By the way, just so that the record is absolutely straight, the right hon. Member for Birmingham, Hodge Hill says that Labour had got spending down, but welfare spending rose by 60% under the previous Government.

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

rose—

[Mr Duncan Smith]

I will give way in a moment, but I said that I was going to make these points.

Labour’s policies then went on to try to hide the true scale of the problem, by automatically moving people off jobseeker’s allowance into training allowances or short-term jobs, thus breaking their claim just before they reached the 12-month point. The Opposition claim today that long-term unemployment is up by more than 200,000 since the Work programme began, but in actual fact, comparing like for like, which means counting all those who were previously hidden on training allowances and other support, the total number on jobseeker’s allowance is about the same as it was at the start of the Work programme, so that point is complete nonsense.

--- Later in debate ---

[Mr Duncan Smith]

Guided by you, Mr Deputy Speaker, I shall simply tell the right hon. Member for Birmingham, Hodge Hill that he is wrong. I do not agree with his figures, and anyway, he served in government while the bill for welfare rose by 60% in real terms over the lifetime of that Government. Enough said: we took on a massive problem, and we have to deal with it.

[Kate Green]

rose—

[Mr Duncan Smith]

I shall make some progress, but I promise to give way to the hon. Lady.

Let us deal with the final point made by the right hon. Gentleman in the motion: that somehow all this could be solved if only we did not cut, change or reform anything and implemented a bank bonus tax to fund a real jobs guarantee. Such a one-off tax would be worth £3.5 million. However, we have introduced an annual bank levy, which raises much more money over the period. The Opposition did not introduce such a levy when they were in power.

Let us look at the bank bonus tax that they propose. I love the fact that that tax is wheeled out whenever they are in a corner. It has already been used to cover the spending of £13.5 billion that they committed to make when reversing the VAT increase. It has been used for more capital spending—£5.8 billion—and again to reverse tax credit savings of £5.5 billion. It was used to build 25,000 extra homes—£1.2 billion. It was used again to reverse child benefit savings of £1.7 billion, and more and more.

It is a joke to keep wheeling out that ridiculous programme as an excuse for what the Opposition should be doing, which, as my right hon. Friend the Member for Wokingham (Mr Redwood) said earlier, is telling us what they would do instead, where they would make the necessary savings and how they would reform welfare. That is the main issue.

[Kate Green]

The debate has moved on, but I wanted to say that the rise in social security spending under the Labour Administration was not all in relation to out-of-work benefits. A large proportion related to better payments for children and working tax credit, which subsidised low pay.

[Mr Duncan Smith]

I agree. The only way to look at these things is to consider the overall state of welfare spending. That is exactly how I look at it. As for the point about tax credit, much of it had nothing to do with going back to work, but it supported families for other reasons. The Opposition cannot separate what suits them from the other bits. We have a welfare budget, and they must own up to the fact that it rose by 60%.

Let me deal with what the Work programme really is. It supports 800,000 people—more than any previous programme—and data published yesterday show that it is successfully moving claimants off welfare rolls into jobs, so generating savings in the process. More than half those referred to the programme in June 2011 have since come off benefits, and about a third have spent the past three months off benefit, and a fifth have spent six months off benefit. Independent statistics published on Monday show that 207,000 people, as I have said, have been in work—a fifth of everyone on the programme. What is more, job entries are rising month on month. The figures that we published yesterday showed that in the past two months there was a 40% increase in attachments lasting six months.

We have rejected the old tendency that the right hon. Member for Birmingham, Hodge Hill keeps coming back to—chucking money at programmes in the hope that people will say we are doing something because we are spending money. With the FND, Labour paid out 40% of the fee up front just for signing up someone. Firms never had to do much at all. Under the flexible new deal, the average up-front attachment fee was more than £1,500. More than £500 million was paid out in total, without any assurance of success at all.

--- Later in debate ---

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

As others have said, the Work programme builds on a direction of travel that those on both sides of the House have been pursuing for a number of years. As my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) said, the difficulty is not particularly with the concept; it is that there simply is not enough investment in the programme to produce the outcomes we need. The problem is that a lot of over-simplification of the issues that long-term workless people face means that we are failing to address some of the real drivers of worklessness and are allowing ourselves to be carried away by some incorrect and pervasive myths.

The first myth, which I am sorry to say has been repeated again this afternoon, is about a culture of worklessness and three generations of households where nobody has ever worked. These households do not exist; researchers have gone out looking for them and they are not there. The hon. Member for Witham (Priti Patel) looks doubtful, but what is there are households that have experienced, over the generations, sporadic and insecure employment. As Joseph Rowntree Foundation research carried out in 2010 by Teesside university has shown, there is no evidence whatever of a pervasive culture of worklessness among these households. Actually, the opposite is the case; many of the people now accessing the Work programme are and have always been desperate to work, and they have a history of employment, although it has not been sustainable employment. It is really important that we address the true underlying causes of worklessness.

Secondly, we recognise that skills are important in enabling people to access employment and to progress at work, but it is important to recognise that when that low-income group of workless people move into work, skills are not particularly well correlated with a long-term improvement in their incomes and do not predict particularly strong labour market success for that group. A lot of difficulties remain in respect of how skills strategies do not improve people’s labour market prospects. Some of the initiatives being taken forward by the Government are going to miss the mark. Too many apprenticeships are being offered at level 2, and we need to increase access to apprenticeships at higher levels. We are seeing a reduction in employer levels of training—they are down to low levels not seen since 1996. Poor-quality jobs also inhibit the demand for skills. Even if we upskill our work force, the skills investment will be wasted if the skilled jobs are not there for them to do. So one thing we have to invest in is the leadership and entrepreneurial skills of those who start up businesses and create jobs.

It is also important to understand that different groups in the workplace and in the labour market experience different barriers and obstructions to progressing at work. The Work programme has proved uneven in how some groups have done better and some have fared worse; interestingly, women and lone parents are shown to be doing quite badly in these early Work programme figures. That contrasts with a very strong record of success on lone parent employment under the new deal for lone parents offered by the previous Government. It is also deeply concerning that we still have an alarmingly high rate of unemployment among young black men—twice the rate among young white people—yet the Government are determined that the Work programme will be, in the words of Ministers, “colour-blind”. No specific measures will be taken to address the particular characteristics that affect that hard-hit group.

Equally, it is of concern—the hon. Member for Aberconwy (Guto Bebb), who is no longer in his place, referred to this—that many of the new private sector jobs that are being created are part-time jobs. Some people prefer part-time work, but a large proportion are unable to access the full-time work that they want.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

rose—

[Kate Green]

The Minister clearly has a figure that he wants to offer me and I will be interested to hear it. I have heard reports just this week that in one workplace, employers are refusing to extend hours of work and are holding people to part-time contracts because they know that they do not have the resources to pay more.

[Mr Hoban]

As the hon. Lady is so keen on evidence-based policy making, let me point out that the last unemployment figures demonstrated that 80% of the people working part time wanted part-time work, as it helps them get back into the labour market after years of caring for people and being off sick.

[Kate Green]

That might be the case, but the Minister must also recognise that 40% of the new private sector jobs that have been created have been part time. He needs to be confident that that part-time work will lift families out of poverty, because far too often the evidence suggests that it will not. It certainly will not do so under the newly structured universal credit, as the rewards for working will be for one full-time breadwinner earner, reducing the opportunities for a second member of the same household to undertake the part-time work that the Minister is suggesting is a stepping stone into more work. There will be very little incentive for people to take the part-time work that improves their labour market prospects and it is to be regretted that he is not grappling with that point.

We still have a real issue with pay in the labour market and gender segregation in the workplace. The apprenticeship figures over the past few months show that women are still going down the traditional routes of care, business administration and retail, where pay is lower, and that men are more likely to go into information and communications technology, construction or engineering, where pay is typically higher. We have heard very little today about how apprenticeship strategies will be developed to widen access at a higher level and to ensure much more diverse participation in industry sectors that offer the best prospects of work and pay.

Finally, we have all been guilty of focusing too much on what we might call the supply side of the worklessness problem, as if the difficulty was that individuals needed help to be got into work. We have not considered the demand side nearly sufficiently. The problem is not a lack of willingness to work, related to what the individual seeks to achieve; the problem is that the jobs are not available. They are not available at the rates of pay that enable people to support their families, in places that people can travel to and at the hours that match up with domestic and caring responsibilities. Also, frankly, they are often not permanent, which means that people repeatedly fall in and out of low-paid and insecure work. That is the labour market failure we ought to be tackling and that I am afraid the Work programme is so far failing to address.

--- Later in debate ---

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

This useful debate has exposed comprehensively the emptiness of the Opposition’s policies on welfare reform and their deeply patronising attitude to part-time work and apprenticeships. I shall come back to those points.

My hon. Friend the Member for Amber Valley (Nigel Mills) was right to point out the scale of the ambition of the programme. It meets a wide range of needs and provides tailored, personal support to some of the hardest-to-help and hardest-to-reach people to get back into work. It supports people who have been on incapacity benefit for 10 or 15 years. They had been condemned to a life on benefit, but the programme gives them the opportunity to get back into work.

My hon. Friend the Member for Aberconwy (Guto Bebb) was right to highlight the importance of self-employment as a route back into the labour market. We see many examples of people who are able to juggle self-employment with caring responsibilities and people who return to the labour market after ill health through self-employment. That is why we have extended eligibility for the new enterprise allowance. We have seen good examples—for instance, in Humberside—of people using the enterprise allowance to get back into work and creating businesses for themselves and their community.

My hon. Friend the Member for Witham (Priti Patel) will be pleased to know that 80% of the increase in employment in the past year was for UK nationals. That demonstrates progress compared with the empty slogans of the previous Government. My hon. Friend the Member for North West Leicestershire (Andrew Bridgen) was right to hold Labour Members to account for their record in government, the legacy that they left this country and the appalling economic mess that this Government must clear up.

The hon. Member for Huddersfield (Mr Sheerman) spoke of the deep-seated structural challenges that we face. He is right: we are in a global race, and we need to respond to threats from overseas. The model that we have set out to broaden the economic base and move away from Labour’s debt-fuelled model of consumption provides sure foundations for us to win that global race.

The hon. Member for Manchester Central (Lucy Powell) gave an accomplished speech. I particularly liked the bit when she said she was delighted that the baton had passed from red to blue, but perhaps she was talking about football. As the son of a former miner, I know just how much family pride there is in achievements such as hers and mine.

The hon. Members for Swansea West (Geraint Davies) and for Stretford and Urmston (Kate Green) were dismissive of people who have part-time jobs. For so many people, taking part-time work is the right thing to do. It gets them back into employment.

[Kate Green]

Will the Minister give way?

[Mr Hoban]

I will not give way; the hon. Lady had her chance earlier.

The last labour market survey showed that 80% of people in part-time work wanted part-time work—it is right for them to do so. It is the right route back into employment for many people.

The right hon. Member for Tottenham (Mr Lammy)—