amendment of the law

Sheila Gilmore Excerpts

Tuesday 25th March 2014 Commons Chamber

[Mr Speaker]

For the avoidance of doubt, I should just say that I was happy to see the Secretary of State looking happy.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Secretary of State will be aware that, for very many people, the average level of savings is in the hundreds, not the thousands. Do the Government regret abolishing the savings gateway as one of the first measures they took on coming into government?

[Mr Duncan Smith]

When the hon. Lady got up to make an intervention, I wondered whether she would take the opportunity to say how much she welcomes the fact that unemployment has fallen by 20% in her constituency—a very good thing. I know she does not want to say that, but I say it for her.

I have to say to that no, we do not regret that. What we have undertaken since we came into power is going to hugely incentivise and improve pension savings and the savings marketplace. The extra vehicles announced in the Budget will rapidly improve that and I believe, all in all, that we will have a much better savings position than we inherited, so I think I have answered that question.

I need to make the point about employment and unemployment. Let me get this right: when we came into power, we inherited a situation where unemployment rose by nearly half a million. At its peak, some 5 million were on out-of-work benefits—1 million for a decade or more—and in one in five households, no one worked. The number of households where no member had ever worked doubled under Labour, from 184,000 in 1997 on an upward trend to 351,000 by 2010. I do not recall Labour Members mentioning those figures, and they avoided them when they were in power.

Correspondingly, since we came to power, unemployment is down 168,000 since the election. The claimant count has fallen by almost a quarter over the last year, which is the fastest annual fall since 1997. Workless households have fallen to the lowest rate since records began, down 450,000—two percentage points—since the end of 2010.

At the same time, we now have record employment: more people in work than ever before, more women in work than ever before and more people in work in the private sector than ever before—up over 1.7 million since the election. Ninety per cent. of the increase over the last year has come from British workers, unlike before, and more than three quarters of the increase since the election is from full-time work, up over 1 million compared with part-time work, which is up only 300,000.

Here is the point: we hear a lot from Labour Members about what they would do if they were in government, but youth unemployment increased under the previous Government by nearly half from 1997 to 2010—up almost 300,000. Now, on what the shadow Work and Pensions Secretary called

“the failure of this government to get young people into work”,

youth unemployment is down 81,000 on the year and is lower than what we inherited. The International Labour Organisation long-term youth unemployment is also down 37,000 on the year. The number of young people out of work and not in full-time education is down 63,000 and the long-term youth claimant count is down 23,900 on the year, having fallen for the last 15 consecutive months.

I remind the Opposition, who are chuntering away from a sedentary position, that under them long-term unemployment nearly doubled in two years, from 400,000 in 2008 to 800,000 in 2010. While they were seeing that rise, they gerrymandered the figures on the claimant count: 80,000 were put on to training allowances so that they came off the measurement of whether they were long term unemployed. Even though they were back out of work or back out of training, they went back as though they had just started their claims.

The trend slowed and is now falling. ILO long-term unemployment is down 38,000 this quarter and is down 59,000 on the year. The number on the claimant count for 12 months, ungerrymandered, is down 74,000 on the year—a fall of 17%. That is down, I believe, to so many of the reforms and changes that we have made, improving the labour market and improving the process of getting people back to work. The latest labour market statistics are remarkable and nothing demonstrates more clearly the Government’s success in getting Britain working.

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[Mr Duncan Smith]

I pay tribute to my neighbour and hon. Friend for his phenomenal work on the jobs fairs, on all the creation he has done and on the work he has done with local unemployed people. He is absolutely right: the new enterprise allowance has been a phenomenal success. Thousands of people have started their own businesses under it. It is one of the big success stories of this Government. It is going to grow and we are going to ensure that many more people, particularly young people who are more and more keen to start their own businesses, get the kind of support they want.

[Sheila Gilmore]

Does the Secretary of State not have any concern that even now there are 2.3 million people unemployed, and as his own statement made clear, the total has gone done by only some 160,000 since the election? The figure was 2.4 million before the election and now it is 2.3 million. What has gone wrong with getting those people into jobs?

[Mr Duncan Smith]

Of course I want to see more people back in work, particularly young people, but the hon. Lady must remember that we inherited from the previous Government an economy that had hit the buffers, with young people cascading out of work in the two years running up to the election. Youth unemployment rose over their whole period in office, which suggests to me that their policies were hurting young people long before the recession. What we are doing is aimed at getting more people back into work. We have been successful in improving the situation, as the figures now are better than those we inherited—more people are in work, including more young people—but of course there is more to do, and it is this coalition Government who are doing it.

We are also introducing our other programmes, including the Work programme and universal credit, with the pathfinders moving into the north-west and eventually rolling out by 2016. We know that 90% of claims for jobseeker’s allowance and other benefits are already being made online, which is a huge change—only about 10% or 12% were made online before—that is improving speed and accuracy. Some 78% of claimants are confident about their ability to budget with monthly payments, as a result of the programmes we have run. Two thirds think that the universal credit process offers a much better work incentive than jobseeker’s allowance. Even in its early stages, universal credit is having a significant impact on people’s work prospects: claimants are likely to spend twice as long looking for work; two thirds agree that it is easier to understand their obligations; and 86%—rising to 90%—are confident of gaining a job within three months, which is a much higher rate than for jobseeker’s allowance.

These are dynamic changes that we are making, improving the path back to work, the incentives and the choices that people make. We are improving their work prospects and helping them into meaningful, long-term jobs. However, I gather from the Chief Secretary that the Treasury received a submission from the Opposition in the run-up to the Budget for an alternative to our programmes, which they call a jobs guarantee. I thought that we should look at that, just to examine whether it was worth embracing. I think it only fair that we tell the House whether or not it would work. Having looked at the proposal in a completely ambivalent manner, I have to say that it is confusing. The first submission said that it was a six-month programme for young people. The second submission said that it was a year-long programme. The third submission said that it was a two-year programme for the long-term unemployed. I gather that there is now some suggestion that it might be a six-month programme for everybody.

Apparently the jobs guarantee is now a flagship policy for the Opposition, but I understood that it would be funded for only one year. Now we hear that the same funding they announced for one year is meant to last all the way through a full Parliament. We asked the Treasury to do some formal costings for that, which I hope have been made available to the Opposition. They said that their scheme would cost only £1.9 billion in its first year and £0.9 billion thereafter, but the Treasury’s formal costings—[Interruption.] I know that Opposition Members do not want to listen, because the last thing they want to hear is how they would pay for it The Treasury, which is full of decent people doing a hard day’s work, has shown that there is a massive gap of £2.6 billion per year between what the Opposition say their jobs guarantee will cost and what we calculate it will cost.

Not only have the Opposition underestimated the costs by £0.6 billion in the programme’s first year, and £1.7 billion in future years, but they have no robust means of funding it. They say that they will fund it with a bankers’ bonus tax that will raise £2.3 billion, which is questionable, but I understand that they have spent that 10 times over. Let me list a few of the things they have committed to spend it on: reversing the VAT increase, which would cost £13.5 billion; more capital spending, which would cost £5.8 billion; reversing child benefit savings, which would cost £3.1 billion; reversing tax credit savings, which would cost £5.8 billion; and more housing, which would cost £1.2 billion. They have made £30 billion of spending commitments, apparently to be paid for by a tax that would save them £2.3 billion.