Jobs and the Unemployed

Debate between Oliver Heald and Tom Blenkinsop

Wednesday 7th July 2010 Commons Chamber

[Mr Oliver Heald (North East Hertfordshire) (Con)]

The House appreciated the passion with which the hon. Member for Wakefield (Mary Creagh) put her case, but if she were being frank she would accept that, in the 1960s, 1970s and, again, in the 1980s, this country faced some difficult economic problems. If she looks back at the history of interventions in the job market, she will see that since 1979 we have tried various options. Indeed, there has been some success in putting people back into work by using employment-market interventions, but I am sure that in her heart of hearts she will accept that we have let many people, particularly during the past 13 years, fall by the wayside.

The people who were getting jobs through Labour’s employment schemes had skills or were in the age bracket of 25 to 49 years old. Many other people became part of that workless group whereby 3 million homes had no adult of working age in work at all. Those people were not seen on programmes, and very few of them were seen at all, so we need to consider a programme that really challenges that situation and looks to provide the help that people need in all aspects of work. Too many schemes have been based on just one benefit: if people were on one particular benefit, there was a scheme for them; and if people were from one age group, there was a scheme for them. However, we need something that captures all the issues and removes all the barriers to employment, so that everybody gets a fair deal from the Government.

There are some encouraging signs in the labour market. The Chartered Institute for Personnel and Development’s latest quarterly survey shows for the first time in six quarters a plus 5 figure for the employment intentions of employers: they do intend to employ people. The figures for the south-east are particularly good, showing a strong intention to employ. Equally, Reed in Partnership, an excellent contracting company, has shown that the number of advertised vacancies is up by 5%, so there are some encouraging signs. However, the real question is whether the increase in private sector employment will be enough to deal with the undoubted fall in public sector employment and the likely redundancies there. That is the challenge for the next few years—to ensure that private sector employment increases sufficiently.

At The Times CEO summit last week, Sir John Rose, chief executive of Rolls-Royce, one of our best companies, was reported to have said that we as a country were very self-satisfied about the services boom in the Labour years, but that during that time manufacturing capability and competitiveness were on the slide. He noted that in higher education we are educating 7,000 people a year in media studies, at a time when China is educating technicians and people who will have skills in the nuclear industry. He rightly said that during that period we did not concentrate enough on investment in technical education at the secondary and tertiary levels, and that we need to address that issue if we are to have a future of success in the private sector.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

On Reed in Partnership’s job index, the hon. Gentleman mentioned the figure for growth, on which the organisation comments in its press release, but that growth is predominantly in financial services, accountancy and insurance. The index also states that, compared with February, the figure for this month in charity and voluntary work is minus 30 index points; in construction and property, it is minus 7; in engineering, it is minus 8; in health and medicine, it is minus 19; in scientific, it is minus 6; in social care, it is minus 8; and in training, it is minus 15. In the north-east—my area—the salary index has also fallen, so fewer jobs are being advertised for less money.

[Mr Heald]

I think the hon. Gentleman is wrong, because the headline figure shows an increase of 5% over the past six months, but he is right about the differences between sectors and regions. He makes an important point, which we should not ignore, and I shall return to it later in my remarks. However, Sir John Rose’s point was also well made. On the question of what needs to happen in this country, the role of apprenticeships should not be ignored, and 50,000 more apprenticeships are welcome, particularly given the good quality of education that they provide in technical areas.

In the latest CIPD survey, there is a lot of criticism of the abilities and work-readiness of our graduates, and there is a lot to be said for schemes such as internships, which get people ready for work so that they can do a good job as soon as they enter employment. I represent North East Hertfordshire, and a good thing about Hertfordshire is that we, as a county, have a series of institutions that are business-facing but educational. Our colleges are business-facing, and our university is well known as business-facing, which means that the county asks businesses what skills they need and our university provides the skilled workers. In terms of the employment service in Hertfordshire, if a graduate who is placed with a Hertfordshire company needs an extra skill, our university will teach them it, and our colleges all feed into that. It is no coincidence that we have the lowest number of NEETs in the country.

[Mr Heald]

The hon. Lady makes an extremely good point, which is that we are not good enough as a country at preparing people for work. If we look at why we have so many workless families, and why employers are dissatisfied, it goes right back to the beginning—to school. The fact is that 40,000 young people leave school every year in this country who cannot read, write and add up properly. It is not good enough that we do not have the technical people we need in business coming through. This is a failure of the whole system that needs to be addressed. [Interruption.] The hon. Lady chunters, but Sir John Rose is probably one of the most eminent chief executive officers in the country, he is running a company that is a great success story, and he is right to highlight the need to do better on technical education and skills.

Over the years, we have had a range of employment programmes that have not succeeded as well as we would have hoped. A few years ago, the Work and Pensions Committee looked into what contractors can achieve. We did a major report on how the Department for Work and Pensions commissions employment programmes and the role of prime contractors. We were encouraged by the international examples. We looked at what had happened in Australia and visited the Netherlands to look at what was being done there. That seemed to show that contractors were able to provide programmes more cheaply, but also to get better results. Professor Finn, who was advising the Committee, found that Australia was achieving, through “contractorisation”, an improvement of about 10% in job readiness and people’s ability to find placements. In the Netherlands, we were told very strongly that the people who ran these contractor companies were able to specialise provided that they were given enough flexibility in respect of the barriers to employment that there have been and still are.

Looking at the picture overall, I have reached the view that as soon as a person is not working, and we are aware of that, they must be interviewed to find out what the barriers to employment are that they face and start to tackle them. If somebody has basic skills problems, we need to get on to that at an early stage and tackle it—and equally, if somebody needs child care or has a problem with addiction. These are all areas where action is required. In relation to the work capability assessment for incapacity benefit, a lot of people have not been seen for many years, and the on-flow that has been examined so far seems to suggest that many of them are capable of doing some kinds of work, but not necessarily all kinds. Those people need considerable help.

If we are to help people who have the classic problems suffered by those on incapacity benefit—musculoskeletal problems such as back injuries, and mental health problems such as stress, and worse—it is very important to get in with an early intervention. More can be done by employers, the NHS and the system as a whole—including, perhaps, the companies that provide insurance for people who are unable to work—in getting together to see whether they can do more to get this help in quickly. It is not acceptable that somebody of working age who has a back injury and needs physiotherapy has to wait 10 weeks for an appointment whereas if they were seen quickly they could get back to work. I ask the Minister whether it is possible to have liaison and discussion with the NHS, employers and insurance companies to try to do better in getting involved more quickly and stopping some of these conditions becoming chronic in the first place. With back problems, that means physiotherapy; with mental health problems, it may mean talking therapies as well as the drug treatments for depression of the sort that are available these days.

Yesterday, I talked to people at the National Ankylosing Spondylitis Society, who said that all too often they have to wait a long time for the treatment they need to deal with their condition. For people of working age, we need to prioritise their health and have something amounting to a national occupational health approach so that we do not end up with a lot of people who become chronically ill. It is well known that someone who has been out of work with a disability for two years is very unlikely to work again.

I welcome the Work programme. The criticisms that have been made of it are a little unfair, if I may say so. The fact is that the economy has been put into a terrible situation by the previous Government. The future jobs fund is a scheme that has only just started, and it is not as though it is not being replaced by something that is probably better—namely, more apprenticeships. It is a bit disingenuous to describe it as a jobs fund, as though these are permanent jobs, when they are really job placements for six months.

[Tom Blenkinsop]

Speaking of disingenuous elements, the Government’s amendment refers to

“policies to stimulate private sector employment by reversing the damaging increase planned for employer national insurance contributions”,

which implies that that was a jobs tax. Is it not really the case, particularly for the north-east, as I have been advised by the North East chamber of commerce and the Federation of Small Businesses in the north-east, that the real jobs tax is the VAT increase that the Government have proposed?

[Mr Heald]

If the hon. Gentleman thinks about when we got 2.5 million extra jobs in our economy in a three-year period, he will recall that it was under the Conservatives in the 1980s. That was done by allowing businesses to have lower taxes and to be less regulated—by really giving them a boost. We need to do something similar to help business and to get off its back. We also need to provide the technical training that Sir John Rose talks about, together with a scheme that helps the workless—the people who have been left behind in the plethora of employment schemes that we have had for the past 30 years.

[Tom Blenkinsop]

What about 1979?

[Mr Heald]

If the hon. Gentleman looks back at the mess that this country was in when the Conservatives came into office in 1979 after the Labour years, he will see that it was not an easy period to be in government. He must accept, surely, that if we can improve on what has gone before, that is the best thing to do. We need to listen to somebody who is a thoughtful CEO saying that we need better technical training; to look at the idea of apprenticeships as good-quality training, which we all agree about really; to try to have internships so that our graduates are job-ready; and, on top of that, to have a Work programme that does not leave anyone behind, that is streamlined, and that involves contractors sooner rather than later. Surely that is the wisdom of our time.

[Tom Blenkinsop]

Interestingly, the majority of men and women on site in the steel and chemical industries in my area are in either their late teens or early 20s, or in their late 40s or early 50s, which suggests an 18-year period when apprentices were not taken on.

[Mr Heald]

The hon. Gentleman is right that in periods of our history, both sides of industry have not distinguished themselves in supporting apprenticeships adequately. I do not know whether he agrees with that, but now is the time to do the right thing, and to support apprenticeships and technical education. We need a scheme that works on the Work programme side, and hopefully this country can come roaring back from the mess it was left in by the Labour Government.