Jobs and Social Security

Lindsay Hoyle Excerpts

Wednesday 28th November 2012 Commons Chamber

[Mr Duncan Smith]

I said that I was going to make a few points and then give way.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The right hon. Member for Tottenham (Mr Lammy)knows that he cannot keep standing. I am sure that the Secretary of State has made a note and is going to give way shortly.

[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.

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[Mr Byrne]

This is an important point for us to debate. I do not know whether the Secretary of State has seen the analysis that was published yesterday by Inclusion, but it is pretty clear on this question. The proportion of people flowing into sustained jobs from the flexible new deal was 5%, which is much higher than the figures for the Work programme. The flexible new deal was more expensive. Inclusion calculates that the cost per job outcome under the Work programme is £14,000. The flexible new deal was 9.5% more expensive, but the Secretary of State is failing to be level with the House about the fact that doing nothing costs his Department less, but it costs the country more, because the welfare bill goes up. A payment-by-results programme is cheaper if there are no results. That is the problem that we have to fix, and that is why the Chancellor is so cross.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Many Members wish to speak in the debate, so we must have shorter interventions and replies.

[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.

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[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I remind hon. Members that there is a 10-minute time limit on Back-Bench speeches.

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[Nigel Mills]

My hon. Friend reinforces the point that it is utterly unreasonable to say that the scheme is worse than doing nothing.

Providers who cover my constituency have told me that they had only a short time to prepare before they started work. They said they had not worked in the east midlands before, so had not only to find staff, but to build links and form relationships with employers to convince them to take people in more challenging situations. Expecting brilliant results at the start of the programme does not work.

The latest data show that 29% of first referrals from June 2011 have now had a job start, and that 37% of under-25s have had a job start. Those are not terrible results; they are encouraging. In Amber Valley, the results are better than average: 4.2% of those referred have met the target of spending six months in a job. I accept that that is less than the 5.5% target, but it is well ahead of the national average. Amber Valley is generally performing well. Total jobseeker’s allowance claimants are down 21% since the election, and JSA claimants under 25 are down 24%. Claimants per vacancy are down from 6.2 to 1.5. That is not a disastrous situation, but a sign that things are going in the right direction. I sincerely hope it continues—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I know a new Member will speak shortly, but could we just have a little quiet so we can hear Mr Mills?

[Nigel Mills]

Opposition Members clearly do not want to hear the truth of my argument.

The Select Committee on Work and Pensions report from last year, which was produced before I was a member of the Committee, gave the scheme a broad welcome, but one concern was the impact on smaller providers that are subcontractors to the main providers. I wholeheartedly endorse payment by results, but it can make things quite hard for organisations that are not large businesses with strong balance sheets, which can fund the gap. Given the delays in the system, some of the smaller providers have found their cash flow squeezed and are struggling to survive. All hon. Members value their innovative ideas and the extra local knowledge they can add to the scheme, so will the Government, after seeing the results, find a way of reviewing how small providers are funded and ensure they can survive the transition period and continue to provide their valuable work?

Overall, there are some concerns with how the Work programme has started. We would prefer the numbers to be a lot better, but there are encouraging signs. The programme can be a success and performance is going in the right direction. I hope that, in a year’s time, we are talking about the great successes of getting the most challenged people—those who have been out of work for a long time—back into jobs, which will improve their lives and the situation for the taxpayer.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Before I call the new hon. Member for Manchester Central (Lucy Powell), I remind Members that there will be no interventions because it is a maiden speech.

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[Paul Flynn (Newport West) (Lab)]

The results that we heard about yesterday cannot be compared with anything else that ever happened. It is probably true that if the Government did nothing at all, there would be a better outcome. Can we therefore conclude that the best we can expect from the Government for the next two and a half years of their miserable existence is a long period of inactivity?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We have a lot of speakers to get in, and we need shorter interventions. Otherwise, Members are going to be disappointed.

[Guto Bebb]

The hon. Member for Newport West (Paul Flynn) seldom sees the bright side of life. The truth is that I am not willing to see 31,000 job outcomes so far as immaterial. That is something that we should be proud of. To be perfectly frank, if that is failure, give us more.

The Opposition seem unwilling to accept that we should be concerned about value for money for the taxpayer. Obviously, I am not going to mention the comment made by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) about our financial position, but the Government should be aware of getting value for money for the taxpayer. The figures that I have here show that some of the previous employment support projects have not been particularly successful in that regard. The flexible new deal cost £7,500 per job created, and £770 million was spent. The employment zones cost £993 million, with an average spend of £7,800 per job. The new deal for young people—which was successful, it has to be said—cost £3,300 per job created. At the moment, the Work programme is coming in at about £2,000 per job created. I think that that is a sign of success. Even though it is still premature to look at the outcome figures, we should take a great deal of comfort from the fact that it is giving that level of value for money.

The proof of the pudding is in visiting the Work programme providers in our own constituencies and localities. I have visited the providers operating in the county of Conwy, and I was very encouraged by that visit. I found teams of dedicated members of staff, but an organisation that was taking a huge financial hit because of the performance-related concept that the Department for Work and Pensions insists that the Work programme providers deal with. Interestingly, however, none of the providers that I spoke to suggested that they had any intention of leaving the programme. That was because they could see that they were going to be successful as time moved on. Indeed, separate data published by the Employment Related Services Association, the trade association that speaks for the Work programme providers, show that job starts have increased in the months since yesterday’s figures were collated. That is reinforced by what I have been told in my constituency.

Nothing gives a feeling for the importance of the Work programme better than talking to the participants. They feel that they are finally being taken seriously. They are getting support in areas such as presenting themselves and putting together a CV. Even more impressively, they are getting support with transport to take them to job interviews and training opportunities.

On the visit that I made, I was also impressed by the flexibility of the Work programme to deal with the local issues affecting that particular part of the world. One of the key issues for the Work programme providers in rural north-west Wales is the need to be more flexible in supporting people into self-employment. The original contract that the provider signed included a comparatively low number of members of staff dealing with self-employment. However, it became apparent in no time at all that self-employment was going to be a key deliverer of outcomes in a constituency such as mine, and the contract was flexible enough to allow the provider to up the number of people being supported into self-employment.

A great example of partnership working in that context was the business support structure of the Labour Welsh Government giving its full support to the Work programme providers who were helping unemployed people who wanted to start their own businesses. So the flexibility is there, and the outcomes will potentially be there in due course. What I am seeing is work in progress and a programme that is aimed at ending our long-standing dependency culture. That needs to be targeted and dealt with.

When I visited these Work programme providers, the most impressive thing was that a number of the job outcomes highlighted on the whiteboards were job outcomes in local hotels and local restaurants. That is important in a constituency such as mine, which is heavily dependent on tourism, because previously over the past five or six years—and certainly from 2003-04 onwards—the jobs created in the leisure and hospitality sector in my constituency were being filled by hard-working individuals from eastern Europe. The wonderful thing about the Work programme is that we are seeing evidence that those jobs are now being filled by people living in my constituency and being willing to take the opportunity to work.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We are going to have to reduce the time limit to seven minutes, as I want to allow all Members to participate. It would be helpful if we had fewer interventions.

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[Sheila Gilmore]

I am sure my hon. Friend agrees that this is not an attempt to ensure that housing is distributed more evenly. It even applies to people with disabilities. Couples who have to sleep apart for medical reasons will be suddenly told that they have too big a house. It is a draconian measure.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. There is a danger that those who wish to make a speech later will not be able to do so. I am sure that the hon. Lady understands that if she does not have an opportunity to make a speech herself, it will be her own fault.

[Geraint Davies]

As has already been said, the tax affects those with particular problems such as disabilities. If one half of a couple is ill with flu and, because the couple are allowed only one bedroom, that person infects the other one, it will not help the other one to work. None of this has been thought through. The idea seems to be that such people live in council houses and receive benefit and that the Government will sort them out by cutting it, but what they are doing is preventing them from working and making their contribution.

The Government also say, “Let’s cut working tax credit.” Working tax credit was an ingenious device. If I were starting a small business—indeed, I have started and run small businesses—I might be able to give someone a job paying £12,000 a year because of the way in which the business worked, but that person might not be able to afford to work for less than £15,000 because of, for instance, child care costs. The Government stepped in and stumped up the difference. What did we end up with? A growing company and a job, instead of a company that was not growing and a person stuck at home. That is the economic logic of working tax credit, but it is being cut, so part-time workers are losing £3,750 a year if they do not work for 18 hours and go down to 16 hours, as there is not enough work to do. We need to evaluate keenly whether some of these nasty cuts deliver economic disincentives to working and are therefore counter-productive in getting the deficit down.

There are ways ahead, including targeted investment involving universities and various job programmes. Other Members have spoken of the effectiveness of the current scheme, but, as I mentioned earlier, the Prime Minister has confirmed the statistic in our motion, namely that only 19,000 people out of 800,000—2%—have gone into full-time work. That is in sharp contrast to what the Secretary of State said earlier, so someone must be wrong. We should refocus, by making sure that the changes do not disrupt job creation and that they are fair and put us back on track for a strong economy and a fair society.