Compulsory Jobs Guarantee

Pamela Nash Excerpts

Wednesday 11th February 2015 Commons Chamber

[Mr Duncan Smith]

The hon. Gentleman, for whom I have a huge amount of time, is right about work experience, and he must not let anyone on his side push him off that, but what he has just said is slightly wrong. He said that we are promulgating work experience and the Opposition are talking about a jobs guarantee, but we are not promulgating it; a quarter of a million young people have already gone on our work experience programme, and over 50% of them have gone into work. He is quite right that not all of them went into the businesses they did the work experience with, but many of them have gone into other jobs almost immediately. What is really exciting is that although many businesses said, “We’ll do the work experience, but we can’t guarantee a job,” a significant number of them, once they had seen the young person for a few weeks, came back and said, “I tell you what: we’re going to create a job around this individual, because we think they’re going to help our company.” That is what work experience has done. I simply say to Opposition Members that they should embrace that, not oppose it, because their Front Benchers have opposed work experience, and that is a big problem.

[Pamela Nash (Airdrie and Shotts) (Lab)]

In my experience the Opposition do support work experience, and there are many examples of that. Does the Secretary of State realise that there are already local examples of programmes similar to that which we are today proposing nationally? For example, my local authority, North Lanarkshire council, is about to announce that 5,000 people have got into work as a result of a similar project. Permanent private sector jobs have been created as a result of a six-month wage subsidy.

[Mr Duncan Smith]

But because of what we are doing with local authorities, working through the local enterprise partnerships, and with all the local provision that we have been pushing down, if they want to create additional programmes, Jobcentre Plus will support them through that. We have to be slightly careful, when starting to calculate figures, about one group coming on the back of others, because we will not know how many of those went to work as a result of Jobcentre Plus and how many as a result of the programme. If local authorities, rightly, want to help, we are all in favour of supporting them with extra help.

--- Later in debate ---

[Pamela Nash (Airdrie and Shotts) (Lab)]

Thank you for calling me to speak in this important debate, Mr Deputy Speaker. I have to start by saying that I am particularly proud to be a member of the Labour party and the labour movement, as we debate this policy. I feel it reflects the heart of our movement and where our priorities lie in creating new opportunities for young unemployed and long-term unemployed people to give them the dignity of paid work and skills development, while simultaneously supporting job creation and business growth, making for a stronger, more vibrant economy with permanent long-term jobs. I have no doubt that, should we have a Labour Government in May, this policy will make an incredible impact in my constituency of Airdrie and Shotts, complementing the existing work going on at local government level and in the voluntary sector. Indeed, it will help thousands of people back into work across the country.

We know that youth and long-term unemployment has a detrimental effect on people’s self-worth, their mental and physical health and their circumstances. However, that impact is not confined to individuals; it is also felt by their families, by the people around them, and by their communities. The youth dole queue, which is currently the length of Hadrian’s Wall, shows us the impact that this is having, and can have, on society as a whole, and it is the responsibility of whichever Government are in power to tackle it.

In the short time that is available to me, I must confront the Secretary of State’s claim, in his opening speech, that the Labour party is opposed to work experience. I find that offensive, because it is categorically wrong. Our opposition is to the Government’s exploitation of the unemployed through poor-quality, mandatory, unpaid work experience. I would be less likely to be in the House today had I not had the opportunity to benefit from high-quality work experience when I was young. That led me to launch the Our Community project, in conjunction with the trade union Community and the local jobcentre. The project matches young unemployed people with voluntary, high-quality work experience provided by local employers. Work experience is extremely valuable, and we must do all that we can to nurture the culture that produces it.

[Mr Iain McKenzie (Inverclyde) (Lab)]

My hon. Friend has referred to the importance of keeping young people in employment, and to the project that matches them with local employers. Constant contact with employers makes it possible to find out what new skills and career directions can benefit those who are placed with them. Is that not one reason for the success of the project?

[Pamela Nash]

Absolutely—and I think that the jobs guarantee will extend or complement the ability to do that, rather than take it away. However, it will also have a positive impact as a whole. It will create new jobs. As we heard from my right hon. Friend the Member for East Ham (Stephen Timms), employers will have to prove that the jobs would not otherwise be there. It will also be mandatory for them to include a training element that will provide over six months of guaranteed paid work, with all the benefits that that brings.

As I said earlier in an intervention, the system is already working. We have seen several examples of that. My local authority, North Lanarkshire council, is doing fantastic work in getting people back to work, and creating new jobs—in the voluntary and public sectors, but mainly in the private sector—through its project “North Lanarkshire’s Working”. A key part of the project is the provision of a 50% wage subsidy for employers who give unemployed people new jobs for six months. It is aimed primarily at young people, although 15% of the funds are earmarked for older people, and it has returned nearly 5,000 people to employment and training. I hope that a version of it will be rolled out throughout the country, so that others can benefit from it. The project has also put considerable effort into encouraging the creation of jobs for those who find it most difficult to obtain work, including those who live with disabilities and young people who are leaving the care system.

Earlier, both SNP and Tory Members heckled my right hon. Friend the Member for East Ham, saying that after the six months was over, people would end up back in the dole queue. Our experience in North Lanarkshire shows that that is not the case among the vast majority of participants. The wage subsidy allows businesses to expand at reduced risk, because it allows them to take people on for six months and then create permanent jobs for them. Even when that has not been possible, the skills, confidence and routine that people have gained from six months of paid employment have left them with much brighter prospects.

The jobs guarantee that my party has proposed today, and in the last few months, is the culmination of other successful policies that we have seen in the past, and see currently in other parts of the United Kingdom. I think that it will be a game changer, creating jobs and tackling both youth and long-term unemployment, and I look forward to its implementation by a Labour Government in May.

--- Later in debate ---

[The Minister for Employment (Esther McVey)]

With only three months to go until the general election, I was intrigued to hear what the Opposition would put forward today to help people into work. What was this compulsory jobs guarantee? What we have learnt today is that there is no real commitment and no real understanding of what would happen. As my hon. Friend the Member for Reading West (Alok Sharma) said, it is unfunded, un-thought-through and unworkable.

Many questions remain about the jobs guarantee. Which businesses have signed up to it? How many jobs would it provide? What would happen if someone refused to do it? What would happen to apprenticeships if people did it? How would it be funded? None of those questions has been answered adequately. What we do know is that it is important to distinguish between proposals that have not been thought through, prepared or funded and what this Government have done.

Members spoke today about what has happened in their constituencies—and those are facts. In Aberdeen South the claimant count is down 56% since 2010, and in Stroud it is down 56% since 2010. I congratulate my hon. Friend the Member for Stroud (Neil Carmichael) on setting up the festival of manufacturing and engineering in his constituency. When it comes to building infrastructure and helping business, we know that we have put forward £12 billion for the growth fund. We are putting £15 billion into roads and infrastructure. We have the northern powerhouse, bringing together science, manufacturing and infrastructure and absolutely turbo-charging our northern cities.

In Ealing North the claimant count is down 38%, and in Nuneaton it is down 46%—the same is true for every Member who has spoken today. We are seeing employment going up and unemployment going down. We need this clear distinction: should people go forward with a party that does not know what it is doing or what the outcome would be, or should they go forward with a Government who have a tried and tested record—1.75 million more people in work and the biggest fall in youth unemployment since records began?

[Pamela Nash]

Will the Minister give way?

[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.