Living Standards
Nick de Bois Excerpts(12 years, 6 months ago)
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Mr Byrne
I will indeed come on to that topic in a moment, but I first want to talk about the impact on children of yesterday’s Budget. We knew before yesterday’s Budget that all the gains made in reducing child poverty over the last decade were set to be wiped out by the decisions of just the last year. Once upon a time the Prime Minister told us he would not increase child poverty. That was the rhetoric, but today the Institute for Fiscal Studies has given us the reality. It has already said that almost one in four children will be in poverty by the end of the decade, thanks to this Government. That was before the attack on working families in yesterday’s Budget. A generation of children will not thank this Government because hundreds of thousands more of them are now destined to grow up poor.
Then we had yesterday’s Budget, reversing any improvement in child tax credit for the poorest, and robbing 5.5 million families of £110 per child. There will now be 13 cuts to children’s benefits beginning in March, which next year will take out £2.5 billion in benefits for children. That is almost eight times the level of benefit cuts this year. Almost £12 billion is coming out of children’s benefits over the course of this Parliament; that is £1.5 billion more than is coming off our nation’s bankers. I therefore have to ask this question: what kind of Government take more off children than they take off bankers?
Nick de Bois
Does the right hon. Gentleman not recall that in his Government’s 13 years in office between 1997 and 2010 they increased personal tax allowances by only £2,400, whereas in only 18 months we have increased people’s earnings by raising those allowances by £1,800, and we will go further by the end of this Parliament by raising the figure to £10,000? Is that not a major contribution to addressing lower pay?
Mr Byrne
No, because what comes with that is the biggest raid ever on the benefits of children and families. Let us consider the bill that will be paid by families under yesterday’s announcements. An average family on the minimum wage with two kids will lose £320 a year as a result of the changes made yesterday. They would only ever gain £120 a year through the increases in tax thresholds to which the hon. Gentleman referred. Overwhelmingly, poorer families and children in this country are now getting poorer as a result of his Government’s Budget.
No wonder Save the Children said yesterday:
“For many families the scrapped £110 increase in Child Tax Credit could mean the difference between putting food on the table for their children or having them go hungry.”
The Child Poverty Action Group said:
“Britain’s poorest families have been abandoned today and left to face the worst…the government has actively decided to let child poverty rise.”
Those on the Treasury Bench should be ashamed of themselves; they should be ashamed of what they have done to children in this country. Labour will be the party that stands up for a fair deal for working parents.
The scale of the cuts to children’s benefits is not the only story. There is more. Let us consider the cuts to working tax credits for working families. Working families are already in line for seven big cuts to their tax credits next year. That was going to lose them more than £1.7 billion, but that was not enough for the Chancellor, so yesterday they got an eighth cut to their working tax credits. They will now lose almost £2 billion next year. That is almost double the cuts they received last year.
Some 2 million families in our country now face a double hit, with the cuts to child tax credits and the freezing of the working tax credit. There is therefore a great deal of extra squeeze that will hit working families, but I want to flag up one cut in particular. It is the subject of a Westminster Hall debate secured by my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), and I want the Secretary of State to reflect on it further, as I think it will have consequences that he would not intend. One of the changes he will make next year is to increase the number of hours a working couple must work in order to get tax credits. At present, they can qualify for tax credits if they work 16 hours a week. From next April, they will need to work 24 hours a week. At present, however, companies are not handing out extra shifts. Many families that will be affected work in the retail sector. If anything, big retailers are cutting back on their employees’ hours, not increasing them. A family that is on the minimum wage for 16 hours a week might bring in just over £5,000. Working tax credits and child tax credit might increase their take-home pay to about £11,000. If they cannot get an extra shift, all of that working tax credit will be gone. Those families may well find themselves better off on jobseeker’s allowance.
We must not create a situation in which cuts to tax credits mean families are better off on benefits than in work. I am sure that is not the Secretary of State’s intention, and I urge him to look at this matter in more detail before those cuts bite in April next year.
Nick de Bois (Enfield North) (Con)
Given the constraints on time and the number of people who wish to speak, which shows how seriously Members on both sides of the House take this issue, I will try to limit my remarks.
The obvious route to improving living standards is to help as many people back into work as possible. Instead of focusing on the points that have been made about some of the very good schemes that have been introduced, I should like to start with structural issues to do with employment. There is no question but that the Government are introducing measures that will help to increase employment. For example, they are looking at rebalancing out-of-work incentives. We are trying to make work pay through the very welcome introduction of higher personal allowances, which will help people at the lower end of the scale. We are also, as the Secretary of State outlined, looking at the bigger picture of welfare reform.
However, we have to consider matters beyond that. As a former employer who started a business with one or two people and ended up with 100 people, I saw, and shared, the intense pleasure of recruiting someone into a new job or their first job. I also understood, and felt, the enormous pain, and sometimes shame, of people who underwent redundancy through no fault of their own. In the last two years of my working time before I came into Parliament, I was very worried by the level of the CVs that were being produced and the failure of candidates to articulate themselves with even basic English or a basic education. That was a clear sign that some people were being failed by their education. I am sure we all agree on the common goal to improve education and raise standards, but there is no question but that the structural changes that we are introducing will improve people’s chances and lead to a fundamental generational change for the future. If those changes fail, we may be back here in 10 years, still talking about the problem.
Mr Stewart Jackson (Peterborough) (Con)
Has my hon. Friend, like me, noted the lack of contrition from the Labour party in its failure to apologise for driving many people into welfare dependency through its policy of unrestricted immigration over the last 13 years?
Nick de Bois
I welcome my hon. Friend’s comments on the complex issues that he raised. We have to consider the consequences of both those issues, but I shall continue to examine the structural changes I was discussing.
The welcome sign for the future is that we have rightly shifted the emphasis from a purely academic route and are now pushing vocational routes, whether through apprenticeships or through further skills and training, giving people a choice from the age of 14 or 16 that will meet the skill needs of employers. Otherwise, we could be back here in 10 years discussing many of the same issues.
With the changes that are being introduced, we need to look at the tactical areas where we can help people get into Work that will meet the immediate challenges of improving both their life chances and their living standards. I have met Work programme providers and witnessed how they are determined to provide long-term jobs for those who are unemployed and going through the new system. These programmes are to be welcomed because they seek to provide a long-term, rather than a short-term, solution.
I am particularly impressed by the early results of the work experience programmes, working with the jobcentres, where people who had little chance of breaking the dependency culture and moving to independence are put into a work environment and employers are encouraged to take them on. As a result, over half of those who have been in such employment for three months are getting full-time work. I do not subscribe to the theory that so many people just wish to sit on benefits. The road to work is through breaking the cycle of dependency and putting people into an environment where they relish the challenge and want to work. That is the very life chance that they will be able to see, given the chance to improve their opportunities, shaped around the proposals of my right hon. Friend the Secretary of State.
Much has been said about the debt interest. It is shocking that this country pays about £46 billion a year to service debt in return for nothing. The worst thing is that that money is going to our competitors. The people who are lending us money are the people who will make it harder to help people in this country improve their life chances.
Youth Unemployment
Nick de Bois Excerpts(12 years, 6 months ago)
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Nick de Bois
If the right hon. Gentleman is as interested as I am in developing sustainable long-term jobs to deal with youth unemployment in particular, does he agree with and welcome rolling back the heavy hand of employment rules and legislation, including vexatious employment tribunals, and will he commit his Front Benchers to do that and even go further, so that it is easier to employ people?
Mr Byrne
Before I became a Member, I started a business. I know what it is like to start a business with two people around a kitchen table, to grow it, build it, take on new staff and do well, but dealing with regulation was the easy bit; selling and making a profit was the tough bit, and that is why we need urgent action to get growth back into the economy.
Mr Byrne
I will give way in a moment, because I want to turn to apprenticeships, which the Minister has mentioned. Apprenticeships have sometimes been seen in this debate as the Department’s silver bullet, so let us be clear: ours was the party that rescued apprenticeships. We inherited 65,000 apprenticeships; the figure was over 260,000 when we left office. This year, 85% of new apprentices will not be young people, but people over 25. Leaked documents seen by The Guardian show that Ministers have been warned that apprenticeships are actually a re-badging of existing jobs. It turns out that about 11,000 of this year’s new places have gone to 16 to 18-year-olds. I should point out for the House that 205,000 of those aged 16 to 17 are now on the dole. If they all applied for one of those apprenticeships, they would have a 5% success rate. Getting into Oxford university is less competitive than that. Given those figures, an ally of the Chancellor of the Exchequer has said that the Chancellor thought that apprenticeships were
“a rare piece of good news, but it’s turning out to be a con”.
The unnamed ally is right: it is a con. We have a Work programme that is all programme and no work, a youth jobs scheme that costs less than the stationery budget and an apprenticeship scheme that is harder to get into than Oxford university. No wonder overall long-term youth unemployment is going through the roof. Let us hear an answer from the Minister.
Oral Answers to Questions
Nick de Bois Excerpts(13 years, 2 months ago)
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Damian Hinds (East Hampshire) (Con)
7. What assessment he has made of the potential effects on incentives to work of implementation of the provisions of the Welfare Reform Bill.
Nick de Bois (Enfield North) (Con)
8. What assessment he has made of the potential effects on incentives to work of implementation of the provisions of the Welfare Reform Bill.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The Welfare Reform Bill introduces a fundamental reform of the benefit system and should ensure that work always pays. The universal credit will improve earnings incentives for some 700,000 people and could reduce the number of workless households by about 300,000.
Mr Duncan Smith
One of the complexities that most people face is the fact that two Departments administer what are, in essence, benefits: the working tax credit and the Department’s own benefits system. One of the problems that occurs is that people in difficulty often find it difficult and stressful to figure out who they are supposed to notify of the changes taking place in their lives, their working hours and so on, and they have to go to two Departments to deal with two sets of figures. That will all be sorted out as we bring those together under one benefit. First, these people will not have to notify so many people, and secondly, universal credit will pick up a great deal of that through the real-time system.
Nick de Bois
Does the Secretary of State agree that in addition to the incentives in the Welfare Reform Bill, community initiatives such as the Enfield jobs club, which we launched this morning, play a vital role in securing employment, as does the support of a national charity such as GB Job Clubs?
Mr Duncan Smith
May I take this opportunity to congratulate my hon. Friend on his job club, whose launch I attended? This is a good example of an area where Members of Parliament can help enormously, because by working with their local jobcentres to set up these job clubs, which we now discover work incredibly well with those who are out of work, people can be given real enthusiasm and hope for the future.
Youth Unemployment
Nick de Bois Excerpts(13 years, 3 months ago)
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Mr Byrne
My right hon. Friend is right to raise that question, which underlines the dilemma so many young people now confront. With this morning’s numbers now on the public record, it is clear that young people face a summer of anxiety. If they do not make the grades to get into college—and we know the number of college places is now more limited—they will face a labour market that is tougher than ever. That is a worry for them and their families, and for older residents in this country who, having worked hard all their life, are now concerned about who will pay for the future.
Nick de Bois (Enfield North) (Con)
Does the right hon. Gentleman not understand that there is one significant distinction in respect of the figures he is discussing, in that there was massive over-reliance on putting people into the public sector through many of these programmes as a result of the legacy of economic failure that we have inherited? Therefore, there is naturally now some shrinkage in the public sector. That is the big difference. We have to create real jobs in the private sector for the long term.
Nick de Bois
I am grateful to the right hon. Gentleman for his invitation. A job is very important to the individual, no one doubts that; but we are talking about dealing with youth employment by creating work in a real sector that will last. That is the difference. We will only deal with the problem when the private sector has the opportunity to deliver long-term sustainable jobs—however well intentioned the programmes to which the right hon. Gentleman referred.
Mr Byrne
The hon. Gentleman exposes the dilemma that now perplexes the Government’s entire back-to-work programme. Figures issued this morning reveal that private sector employment is dead flat, yet public sector employment is falling fast. What has become clear from those figures is that because the Government have put the recovery in the slow lane, the private sector is not creating jobs fast enough to absorb the scale of redundancies that are being announced.
Nick de Bois (Enfield North) (Con)
It is a pleasure to follow the hon. Member for Wansbeck (Ian Lavery). I hope that he will understand if I return to some of his more outrageous comments a little later. First, let me say how pleased I am that we are debating youth unemployment: it is a major issue, and it is clear that Members on both sides of the House understand the need to discuss it.
Before I came to the House, I derived real pleasure from being able to offer someone a job in our company. I also understood the absolute nightmare of having to make someone unemployed in difficult times. I hope that Members on both sides of the House have approached the debate with the shared goal of alleviating what are very difficult circumstances. I also feel, however, that the debate should be put into context. It takes place against a background of economic failure, a legacy of banks that were not supporting business, a massive decline in manufacturing, and an essentially unbalanced economy.
Governments can take a wide range of measures to ease the problem of youth unemployment, but in my view nothing is more important than enabling the economy to grow at a sustainable level so that business can expand, create those much-needed jobs and, indeed, flourish. That is why difficult measures are being taken: vital measures to deal with deficit control, and positive fiscal measures to support investment. We are seeing changes in employment law, export support for small and medium-sized enterprises, and a review of many of the welfare schemes and benefits out there to encourage people to move from a life of dependence to one of independence.
I am therefore somewhat disappointed by the fact that the debate is focusing almost entirely on the future jobs fund. It was, I am sure, a project born of good intentions, and I admit that there are good stories about it from various parts of the country. The fact is, however—this brings me back to the hon. Gentleman’s speech—that we were creating a large number of temporary jobs, predominantly in the public sector, which did not offer a sustainable solution to the problem of youth unemployment. I hope, indeed I know, that I speak for Government Members when I say that any suggestion that we were disparaging public sector workers is utterly unacceptable. The hon. Gentleman shakes his head, but he has had his say, his say was wrong, and the House should not accept it.
What is wrong, and what we do challenge, is the temporary nature of many of those jobs. We intend to deliver permanent, sustainable jobs, and I believe that most of them will have to be in the private sector. If Members are not willing to take my word for it, as I am sure some are not, let me tell them what the Confederation of British Industry said to the Work and Pensions Committee.
“We are concerned the programme for the most part failed to deliver a long-term strategy to tackle youth unemployment. While there are undoubtedly some successes within the programme, the CBI argued there needs to be better business involvement and a greater focus on long-term job sustainability with future programmes. The Work Programme is the way to deliver this.”
I am surprised that the Opposition have not raised some of the other measures that we have had to consider to help employers take people on. It is beyond question that employers who feel restricted by the heavy hand of all the employment legislation that has grown up over the last decade will think twice not just about employing people, but about retaining them. They may feel that someone who has worked for the company for nearly a year—just before the employment legislation protection kicks in—needs more training or help because he is not quite up to the job. At that point they will seriously consider whether it would be better to lose that employee immediately, before the rules kick in and cause difficulties in future, than to invest more time in him. That is a trade-off governed by excessively burdensome regulation. Such a restriction is not acceptable, and I am pleased that the Government are loosening it to provide flexibility for both employers and employees. [Interruption.] If the hon. Member for Preston (Mark Hendrick) wishes to intervene, all that he need do is ask, rather than chuntering from a sedentary position. I should be more than happy to take his intervention; otherwise I shall press on.
There is, I believe, evidence that we will produce more long-term sustainable jobs through apprenticeships. What evidence is there for this? I witnessed the hunger of those who wish to work and the appetite for recruitment in the private sector when I held a jobs fair in my constituency. It was put together without any cost to the state, and we managed to engage with local businesses and those who were looking for work, either immediately or in the near future. We brought in the voluntary sector too, so that those who wished to keep their CVs active and engaged could do so. We brought more than 40 companies together after a two-month period. Hundreds of visitors turned up and companies such as Johnson Matthey offered apprenticeships. That company is running a programme of apprenticeships which is not supported by the state but which will offer sustainable, long-term jobs to some of those who successfully get through. We had people willing to go to work in the voluntary sector, such is their appetite to keep their CVs active. I admire them and their hunger. Above all, we should note that at this jobs fair the jobs fundamentally came from the private sector in the local economy, thus keeping local jobs for local people. That is the future, which is why I believe that the combination of our enterprise economies, our welfare reforms and our support for apprenticeships will lift us out of this situation and help tackle youth unemployment.
Oral Answers to Questions
Nick de Bois Excerpts(13 years, 4 months ago)
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Mr Duncan Smith
Of course if one defines tax evasion as doing something utterly illegal, it is quite wrong and we should bear down hard on it. That is the reality for everybody—if they do something that is beyond the law, that is wrong and we should bear down on them no matter how wealthy they are. That should be a rule for everybody, not just for the poor.
Nick de Bois (Enfield North) (Con)
The Secretary of State may be aware that in my constituency, we have enlisted the support of companies and the voluntary sector to host a jobs fair on 21 January, to create local jobs for local people. That could not have been done without the support of the jobcentre agencies. Will he encourage other jobcentre agencies, as a matter of policy, to support the idea?
Mr Duncan Smith
I congratulate my neighbour on his role in that idea, which reflects the fact that as the Minister of State, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), has made clear, Jobcentre Plus has worked really well in various constituencies to try to get work clubs going. In fact, the level of work club start-ups so far has been beyond what we expected at this point. Jobcentre Plus and my hon. Friend need to be congratulated, and I look forward to coming to see him in his constituency this Friday.
Housing Benefit
Nick de Bois Excerpts(13 years, 6 months ago)
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Nick de Bois (Enfield North) (Con)
As an outer-London MP with the 13th highest proportion of LHA claimants, I very much welcome the opportunity to contribute to this debate, in preparation for which I met representatives from Shelter and other interested parties. I had looked forward to this debate, but I must say that as the afternoon has grown longer and I have grown a little wearier, I have been disappointed that, apart from some notable contributions, we seem to have heard a lot of cant, hyperbole and soundbites from many Opposition Members, which has done little to improve the quality of the debate.
I have sat here for so long that I started looking for some fresh ideas, and at one point the hon. Member for Sheffield South East (Mr Betts) said that there was no strategy. Well, strategy there is, and strategy is the point that has been missed by Opposition Members, because it is a mistake to look at housing reform in isolation. That is a mistake that we have seen all afternoon. To do so is to miss the point of what the Government are trying to do. This Government’s strategy is to try to lift people out of poverty, taking them from dependency to independence—something that the Opposition have neither embraced nor understood, but even at this late hour I hope that they might just reflect on it. They are missing the point of what the Government are doing, but by understanding my constituency they will see what we can do for our constituents.
Enfield North has 7% unemployment, higher than average youth unemployment, and pockets of poverty, mainly in the eastern area. Those are issues that I want to conquer, and that requires reform. Doing nothing is not an option, but constructive suggestions have been notably lacking from the Opposition. Of course the decisions are difficult—[Interruption.] I welcomed the conversion of the hon. Member for Dudley North (Ian Austin) to the cap for London, which was seriously missing from everything that the Opposition had said previously. Of course the changes are difficult, but that does not mean that they are wrong. They will drive out poverty by the most reliable means of helping people and contributing to getting them back into paid employment.
The Secretary of State is sensitive to many of the demands. He was quick to point out the discretionary funds that are available and to which due acknowledgment has not been given today. Is it right to have a system—
Nick de Bois
I will not give way until I have made some progress. I am sure the hon. Lady will understand that I have been here for many hours, and I am not sure whether there is anything new coming from the Opposition Benches.
Is it right to sustain a scheme that works against employment? No. What do I say to the employer who came to my surgery only last week and told me that people are queuing up for jobs, but they want to work for only a limited number of hours for fear of losing their house? How absurd is that? Whatever the Labour party’s good intentions when it was in government, its reforms produced a grotesque situation. What do I say to the people who come to my office and want to work, but are caught in the poverty trap—[Interruption.] I am sorry that hon. Members do not want to listen, but week after week in my constituency I see the evidence of a failed policy on my doorstep, and it is absolutely right to represent my constituents’ interests not only where there has been failure, but where there is an opportunity for success. That is what this Government are trying to do, and rightly so.
What will the changes mean? We are talking about the LHA, not social housing. Rents are high. There has been a 25% increase over seven years in the LHA sector compared with 15% in the private sector. It was interesting when an Opposition Member—forgive me, I cannot remember his constituency—said that the 40% share of the LHA market that the Government are driving is not influencing rents. It is utter nonsense to think that such a massive contribution can have no impact on the level of rents. Opposition Members may deceive themselves if they wish, but I assure them that in the real world that is definitely the case.
Nick de Bois
I will not give way at the moment. I want to finish my speech, but if there is time I will happily take a further intervention later.
A four-bedroom house will allow almost £20,000 of LHA, which is equivalent to a substantial amount of gross income. We talk about fairness, but it must work both ways. Hon. Members should come with me down the Hertford road in my constituency to meet those who are working hard to pay their rent and trying to look after their family on a low income. They should try to understand the frustration of living next door to people who may be living in a bigger house, subsidised by the state. We must bear that in mind when making judgments. We are all in this together, and we must reform and change.
The Labour Government believed that the answer to defeating poverty was to use targets and money—some £20 billion of our money in housing benefit. They rationalised that that was how to fix the problem, but it failed. It did not help; it hindered. Instead of releasing those in poverty and suffering inequality, it imprisoned many in a spiral of unwelcome state dependency. The time has come to change. Our proposals are part of a holistic, joined-up programme.
Caroline Flint
My understanding is that nearly 7,000 people will lose out as a result of the cuts in Enfield. What does the hon. Gentleman have to say to them?
Nick de Bois
The hon. Lady should change the end of the telescope she is looking down. She should look at what she can do to encourage employment and encourage people back to work, and start to take people out of real poverty. That is the contribution that she could make, and I hope that I can welcome her to such a conversion later this evening.
Our proposals are part of a holistic, joined-up programme to reform the Labour party’s policy of surrender to dependency to a future of independence free from poverty. I understand that hon. Members do not want to hear that, but they have heard and perhaps they will learn.
Jobs and the Unemployed
Nick de Bois Excerpts(13 years, 10 months ago)
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Chris Evans (Islwyn) (Lab/Co-op)
Thank you, Mr Deputy Speaker, for calling me to speak in this debate, which is important not only for the country but for my constituency. When we face difficult economic times, the primary task of Government is to protect existing jobs and to provide all possible assistance to get people who are out of work back into employment. If not tackled, unemployment can have long-term effects on society. It destroys communities, ruins lives and tears the very heart and fabric of society.
I was brought up in the south Wales valleys and I well remember my first day at secondary school in 1987. I remember a teacher saying to me, “I’ve one tip for you, boy.” I said, “What’s that?” He said, “Have no ambition, because nobody from round here ever amounts to anything. If you’re lucky, you’ll have a job in a factory—if there are any factories left when you leave school—but most probably you’ll be signing on.” For me, that summed up the attitude of the Tory Government in the 1980s, and I have not come to this place to see that happen ever again.
I must tell the House that it has been only in the past few years that our communities in the valleys have begun to recover, with the confidence that new jobs bring. Without the right Government support to encourage job creation, we risk repeating the mistakes of the past. To ensure we develop the right environment for new jobs to be created, it is vital that we maintain growth.
The Government have been keen to express sympathy for those facing unemployment. For Ministers, describing unemployment as a “tragedy” and mentioning helping the “forgotten millions” of unemployed workers into jobs might come easy, but it is action that counts. In contrast to those sentiments, the Government’s main labour market policy so far has been to cut support for unemployed people. The Government claim that the measures they are taking are necessary—after all, their tough words about getting people off benefits and into work will be meaningless if there are no jobs to get people into.
To create real jobs we need real investment across the country. Getting unemployment down requires two things: businesses must offer more jobs and the unemployed must have the necessary skills to enable them to take the new jobs as they become available. That means that the Government must invest in people and create the environment in which the private sector can invest to create jobs. If we cut too quickly, we will leave no room for the Government to work with the private sector and make job creation possible. We need a real partnership between Government and the private sector. That requires the Government to spend money to create jobs. The question is how we can minimise job losses and prevent another lost generation in constituencies such as mine.
The Government believe that if they cut public sector employment and slash departmental spending, the private sector will ride to the rescue and fill the void. They seem to have forgotten, however, that many private sector jobs are dependent on Government contracts. If departmental spending is slashed, those contracts are vulnerable, as are the jobs that depend on them. If we do not think seriously about the scale of cuts, there is a real risk that they will remove vital support for private sector industry and, crucially, for private sector jobs. Equally, however, it is vital that as companies develop, their employees’ sets of skills develop, too.
That is where Train to Gain has been so important. Across the country, 1.3 million people go to work every day without the skills that they need to do their jobs well. That affects productivity and limits how successful those employees can be. Often, though, employers are unwilling or unable to provide the extra training needed for their staff to realise their potential. It is only when the Government offer assistance that training opportunities can be realised and employees can fulfil their potential. It is therefore critical to our economic future that we invest in training and upskilling our people. In the US, 80% of people in work have been back in a training situation since leaving school. In Germany and Japan, the figure is 56%, but it is only 30% here. That is the measure of how far we still have to travel to improve training and opportunities for our people.
Train to Gain benefits both employers, by increasing the abilities of their workers, and employees, by giving them the skills they need to succeed. That in turn is good for the whole country and for our economic future. The Welsh Assembly Government—the only Labour-led Administration in the UK—have introduced ProAct, a progressive scheme that offers funding for employee training and a wage subsidy while the training is being undertaken. Companies are eligible for ProAct money only when they are on short-time working and when, without ProAct funding, the company would have to consider redundancies. ProAct not only keeps people employed when they might otherwise be made redundant but gives employees a wider skills base, meaning that companies can use quiet periods to upskill their staff. That is precisely the sort of thing that should be happening across the United Kingdom. It has a positive impact for employers, employees and the wider economy.
In addition, to help employers to keep people in work, the Government also need to help those who are currently out of work. It is particularly important that we get young people who have never been employed into their first jobs. That is why the young person’s guarantee and the future jobs fund were so crucial, yet that flagship policy has been scrapped.
The Government claim that their new Work programme will meet the needs of unemployed workers. However, there are several flaws to that argument. Nearly 2.5 million people are unemployed now, and the impact of the cuts is that less support will be available to them and any other people who lose their jobs over the next year. In addition, the Work programme is essentially replacing the flexible new deal initiative. The experience provided by the future jobs fund and the guarantees was in addition to new deal measures. So far, no details are available on the funding for the Work programme. It seems likely that, even when it is introduced, overall investment in tackling unemployment may fall.
At the end of March 2011, the future jobs funds will have funded more than 100,000 jobs, the majority of which will have gone to 18 to 24-year-olds who have been out of work for six months. Given that the Secretary of State for Work and Pensions has said that he wants to get young people off benefits and into work, it absolutely beggars belief that one of the first acts was to cut a scheme that does exactly that.
I should like to take this opportunity to point out to the Secretary of State that, if people are to be asked to travel to find work, it is vital that transport links are good enough to support them in doing so. In south Wales, there is no train link between Newport and Islwyn. Although there are plans to establish such a link by opening the Gaer junction, there is still no timetable for doing so. I ask the Government to ensure that that project goes ahead, so that the people of Islwyn and Blaenau Gwent can commute to work in Newport and the surrounding areas.
We should be striving for growth, but the Budget will mean lower growth and more unemployment. The Government are making the wrong decisions in all those areas, and it shows me that they believe, as they believed in the 1980s, that unemployment is a price worth paying to cut the deficit. [Hon. Members: “Oh!”] Yes, they think that unemployment is a price worth paying.
Alison McGovern
I should like to make some progress. I do not want to prevent others from speaking in the debate.
I fear that that withdrawal of Government input, especially in areas where the employment picture, though recovering, is historically fragile, will result in more people on the dole, which will make it even more difficult for us to reduce the deficit.
Nadhim Zahawi
It is not sustainable to follow the path of the previous Government and bloat the public sector. Business needs confidence to invest. Our first Budget last month has laid the groundwork for these aims. We will drop the headline rate of corporation tax by 1% each year for the next four years, lowering it to 24%. We have ended the disastrous jobs tax that the last Government tried to introduce for employers, a key policy in ensuring that our businesses once again begin to hire people.
The measures in this Budget are intended to give businesses the confidence to invest for the long term, and to reduce the burden of tax and regulation. One area where we need to, and can, do more, is in funding for business. If we expect business to take up the slack of the reduction in the size of government, we must send it a clear message on funding. There is a disconnect between what the banks are telling us regarding the amount they are lending and what businesses are experiencing and telling us about the access they have to funding. I hope that in my new role as a member of the Business, Innovation and Skills Committee we can spend some of our time inquiring as to how we can alter that dynamic.
Nick de Bois
Will my hon. Friend add to that the outrageous attack on many SMEs, with banks inflating margins for captive customers with nowhere else to go? Does he welcome the opportunity for competition in that marketplace?
Nadhim Zahawi
My hon. Friend is right, and that is one of the areas I am passionate about.