Compulsory Jobs Guarantee

Sheila Gilmore Excerpts

Wednesday 11th February 2015 Commons Chamber

[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.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mr Duncan Smith]

I will make a little progress before giving way again.

The issue still remains for the Opposition which I thought this debate was about. I thought they would have a fantastic motion that answered all these questions, but they do not. These are the biggest questions: which businesses have signed up to the jobs guarantee, and how many jobs have they guaranteed to provide? In the absence of any answers, I will quote the OECD’s view of these kinds of make-work schemes. For the past 20 years it has demonstrated that such schemes are expensive and counter-productive. Its jobs strategy states that having

“large deadweight losses, displacement and substitution effect… direct job creation in the public sector has been of little success in helping unemployed people get permanent jobs in a more open labour market”.

That is probably the final word on the structure of Labour’s jobs guarantee.

Let us look at how the Opposition propose to fund their jobs guarantee, which I had thought would be dealt with clearly today. The right hon. Member for East Ham said something about it, but they seem to have gone back to their original position. Her Majesty’s Treasury has estimated that for 2015-16 the jobs guarantee would cost £1.54 billion for the over-25s and a further £540 million for the under-25s, so over £2 billion in total for only one year. To pay for it, the Opposition have proposed two measures.

First, they would restrict pensions tax relief for earnings over £150,000. Let us deal with that first. They originally committed that funding for the purpose of increasing working and child tax credits, so they seem to have done a little dodge. I have no idea whether they still plan to use it for that, but I am sure we will find out. Apparently it will now pay for the jobs guarantee. Never mind the fact that it would take—this is a real estimate from those who know—until 2018-19 to implement, leaving three years with no funding to cover the annual cost of £1.5 billion. They cannot just wave a magic wand and say, “The money’s there”; they also have to position the money at the right time. The right hon. Gentleman was forced by the shadow Chancellor to say that there would be no borrowing. Well, that looks to me like a chunk of borrowing.

That is even if the proposal raises any money at all, because the CBI has called it “simply unworkable”, the National Association of Pension Funds has warned that it is a “disaster in the making”, and the Institute for Fiscal Studies has said that it

“would be expensive to administer… unfair and would inappropriately distort behaviour.”

The Opposition would create a problem in the pensions industry and damage people’s savings, and all to fund a programme that simply would not work.

The second source of funding is repeating the one-off bankers bonus tax. I have to tell the right hon. Gentleman that no matter how many ways he cuts this, Labour has spent this money 11 times over. That is the 11 that I can find; I am sure my hon. Friends will find a lot more. There were proposals on reversing the VAT increase, at £12.75 billion; reversing tax credit savings, at £5.8 billion; more housing, at £1.2 billion; reversing the child benefit savings, at £3.1 billion; more capital spending, at £5.8 billion; and more child care, at £800 million. It is almost like one of those game shows—“Come on down, there’s another box to be opened and we’ll spend that money as well.” These sources go on and on and on; it is quite fascinating. Yet it has been said time and again that this is a one-off tax. When in office, Labour’s last Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said of the idea of repeating this tax that it is

“a one-off thing…because the very people you are after…will find all sorts of imaginative ways of avoiding it in the future.”

He had no time at all for the idea of a repetition of Labour’s bankers bonus tax. So there we have it: the cobbled-together nonsense of Labour’s jobs guarantee, destined to fail and wholly and utterly unfunded.

--- Later in debate ---

[Sheila Gilmore]

The Secretary of State always says of the work experience programme that about half of young people who take part in it go into work. His own Department’s evaluation—I do not know whether there has been a more recent one than 2012, but I have not seen it—suggested that following the work experience programme there was a difference between a participant group and a non-participant group, but it was only a small one. Does he not agree that nearly half of those who did not participate in work experience also went into work?

[Mr Duncan Smith]

It is always a pleasure to listen to the hon. Lady. She has tortuously wound her way around all these figures, but I come back to the simple point that the work experience programme, at a twentieth of the cost of the future jobs fund, ensures that over 50% of those who enter it will go into work. By the way, I did not invent the work experience programme—it was invented for me by somebody on the floor of the job centre because young people were saying, “Can’t we have more time for work experience than the last Government allowed us to have?” I do not know if she has seen the really interesting figure that the claimant count in her constituency is down by nearly 50%. That is a very good story. I know she will want to write that up as well, as an excellent statistic.

The record jobs figures under this Government stand as a testament to our success, with more people in work than ever before, up by 1.75 million, and more people in private sector jobs than ever before, up by nearly 2.2 million. Since 2010, two thirds of the rise in employment has gone to UK nationals—the Opposition never achieved this—thereby reversing the damaging trend of Labour’s last five years in office, when the majority of jobs went to foreign nationals. What is more, we now have more women in work than ever before, more lone parents in work than ever before, and more older workers than ever before—and employment for young people and disabled people is up on the year as well.

Let me now deal with the suggestion that these people are moving into part-time, low-quality work. That is not true. The Opposition constantly harp on about a figure that has no basis in fact, so let me give the facts. Full-time employment is up by over 1.3 million since 2010—over 80% of the rise in employment in the past year alone. Permanent employees are up by 1 million since 2010—nearly 80% of all people in work. Three quarters of those in employment since 2010 have come from managerial, professional or associate professional jobs. The Opposition constantly put about the nonsense that there are nothing but zero-hour, no-value, low-skilled jobs, but that is simply not true.

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[Nigel Adams (Selby and Ainsty) (Con)]

I thank the Opposition for giving the House the opportunity to discuss jobs and their compulsory jobs guarantee scheme. [Interruption.] I am told that that is very generous, and it is. I am a little surprised that the Opposition have been unable to rustle up more than half a dozen Members, aside from their Front Benchers, to debate their own motion. [Interruption.] I apologise, one additional Member has walked into the Chamber.

The aspiration for any political party should be full unemployment, and no Government should rest until that is achieved. It is always correct to say that more can be done on jobs; frankly, more needs to be done following the downturn that did so much damage to our country’s economy. This Government have made great strides in restoring economic credibility with plans that are working and will continue to work if we stick to them.

It is worth reminding the House about the record of the previous Government. We are all aware that long-term unemployment almost doubled between 2008 and 2010, from 381,000 to 788,000. We also know that under Labour unemployment rose by almost 500,000, female unemployment rose by almost a third and youth unemployment almost doubled. The number of households in which nobody worked or had ever worked also almost doubled, and more than 2.5 million people spent at least five years on out-of-work benefits. In my constituency, the number of people out of work in May 2010 was higher than in May 1997. According to the Office for National Statistics, every period of Labour Government since 1945 has concluded with unemployment higher than when it began. That is not a record that I would be proud of.

[Sheila Gilmore]

Will the hon. Gentleman concede that the figure that he gave was not correct? In fact, unemployment was not higher in 2010, even after the recession, than when the Labour Government came to office.

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

In all the debates on this issue, sweeping statements are made about how Labour Governments have higher unemployment at the end of their term than, it is implied, Tory Governments do. The Tory Government of 1979 to 1997 inherited an unemployment rate of 5.2% and left an unemployment rate of 7.4%, and in 13 out of 18 years unemployment was over 10%. We really should not take lessons from a party that produced those kinds of results during one of its longest periods in government in recent years.

I was slightly wrong when I intervened on the hon. Member for Selby and Ainsty (Nigel Adams). Unemployment rose slightly between 1997 and 2010, in the midst of a world economic recession—it was 0.4% higher in 2010 than it was in 1997, and that is after a major recession. Between 1945 and 1951 unemployment fell, so I hope we will hear slightly less of that generalisation.

One of the other generalisations made by the Secretary of State was meant to frighten people outside this place with the notion that Labour creates a situation in which nobody works. He said that under Labour 20% of households had never worked. That is one in five of all households. If someone heard that, they would think it shocking and dreadful, but what he did not say was that 48% of those—nearly half—were students who had never worked because they were students, 14% were carers, 18% were sick or disabled and only 10% were unemployed.

The number of workless households has fallen slightly under this Government, but it has gone back to where it was in 2008. After the recession, there has finally been a slight fall in the number of households not in work, but, again, many are not in work because of caring responsibilities, because they have children or because they have taken early retirement. We must be realistic about the figures.

Conservative Members always throw figures at us to show how unemployment has fallen in our constituencies, but they always use the claimant count. The gap between the claimant count and the unemployment rate has been very high under this Government and that is something that we must consider. What is happening to those people who are unemployed but not receiving any benefit? Who are they, what is happening to them and how are they living? Are they getting any of the help that we are so often told about and that they are supposed to be given? I know that many of those people are living on much reduced incomes and many are not getting benefits, either because they have lost them in some way or because they have a partner in what might be only part-time work.

[Sir Oliver Heald]

Listening to the hon. Lady is reminding me of Nicola Sturgeon’s speech. She is arguing for more borrowing, more spending and more tax, so is the hon. Lady buying into the SNP agenda?

[Sheila Gilmore]

We say that there is a different way to tackle the budget deficit. We said that we would do it differently in 2010. Of course, the Conservatives went to the electorate and said that they knew the answer and would eliminate the deficit in five years. They set about trying to do that and have manifestly failed. We said that we wanted to stimulate the economy rather than depress it as they did month after month in their first three years when growth fell. Despite all the measures in the so-called emergency Budget, the Conservative party has not achieved what it said it would.

We always have an argument about work experience, and the counterpoint to anything we propose is that the work experience scheme is, to use the words of the Secretary of State, unbelievably successful. As he constantly says, half the people who go through the work experience scheme get a job. What he did not say is that nearly half those who did not go through work experience in a matched cohort, according to the DWP’s own research, did not get a job. Being in the work experience programme did have an effect, but it was not the type of effect the Government suggest.

After 21 weeks, 50% of those who had been through work experience were back on benefits, but those who did not go through the scheme did not do much worse. There is no point in exaggerating these schemes. A real and proper job, which involves real training and will get people into permanent employment, is worth much more than a short-term work experience scheme, which is not to say that there should not be work experience. We are proposing that particularly for young people because they need it.