Jobs and Growth

Stephen Timms Excerpts

Thursday 17th May 2012 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

One reason why there has been such a negative reaction to the Queen’s Speech, particularly from business, now that we are again in the midst of recession is the absence of measures to boost growth. There was a particularly exasperated reaction from the director general of the British Chambers of Commerce, which my right hon. Friend the Member for Morley and Outwood (Ed Balls) quoted at the beginning of the debate, straightforwardly accusing the Government of playing short-term politics instead of boosting the economy. A lot of people thought there would be a boost to the economy in this Queen’s Speech, but it simply was not there. The problem is that the Government’s policy has not delivered. We were told after the election that the policy being introduced would deliver a steady and sustained economic recovery with low inflation and falling unemployment. Unfortunately, that simply has not happened. The shadow Chancellor and the former Chancellor, my right hon. Friend the Member for Edinburgh South West (Mr Darling), warned that the policy put the recovery at risk. They have been proved right and Ministers have been proved wrong.

There are other reasons for the Government’s dramatic loss of popularity, one of which is a sort of policy incoherence across government, with different Departments going in contradictory directions. Let me give an example: people receive tax credits only if they work more than a certain number of hours. The previous Government set the threshold at 16 hours per week, but the Minister who is winding up the debate has announced that when universal credit is introduced in October next year there will be no hours thresholds. Support will be available only for people working very few hours, and the Secretary of State for Work and Pensions has perfectly fairly presented that as one of the virtues of his new system. However, the Chancellor, who opened the debate, has gone in the opposite direction. He has raised the threshold from 16 hours to 24 hours a week and more than 200,000 households have lost out. They cannot both be right, although one of them might be. The announcement from the Department for Work and Pensions goes in the opposite direction to the Treasury’s. No. 10 ought to have spotted that and sorted it out. People see that incoherence across government.

My right hon. Friend the Member for Barking (Margaret Hodge), who chairs the Public Accounts Committee, made some telling observations about the Work programme. We know remarkably little about what is happening in that programme because the Government have banned Work programme providers from publishing any data. When under pressure in January, the Minister with responsibility for employment promised guidance to allow them to publish, which they want to do. When he was pressed again he said that the guidance would appear by the end of April, but we are now in the middle of May and it still has not appeared, so providers in the Work programme have no way of comparing their performance with that of others. My right hon. Friend said that she could not find out what was happening in her constituency and every other MP is in the same boat. Jobcentre managers have no idea what is happening in the Work programme in their area, and the effectiveness of the Work programme is being weakened as a result.

This week, a very good charity working with homeless people, St Mungo’s, has resigned from the Work programme. It had three separate contracts with three Work programme prime providers, but in the 11 months since the Work programme started the charity has not had a single individual referred to it by any of those three prime providers.

[Mr Gordon Marsden (Blackpool South) (Lab)]

I am listening with great interest to my right hon. Friend, not least because I have heard similar things in my constituency, not just about the voluntary sector but about experienced private providers. Does he think it is time that the Government started doing a proper job for the third sector? They want to involve it in the big society, but they are cutting its legs off.

[Stephen Timms]

My hon. Friend is absolutely right. Step one would be to allow the data to be published. Instead of banning everybody from saying what is happening, the Government should let us have some numbers so that we can see what is going on. That would offer the chance for clarification.

[Michael Connarty]

I am grateful to my right hon. Friend for making those points about St Mungo’s. I took the trouble to visit the project in Hackney, and I was very impressed by what was being done for people with long-term dissociation from society to give them skills and jobs. It is a tragedy if the charity has decided that the Government have nothing to offer them. The project is wonderful and the Government, given all their rhetoric, should be supporting it wholeheartedly.

[Stephen Timms]

My hon. Friend is right. Not one person has been referred to St Mungo’s since the Work programme started. If the homeless are not being referred to St Mungo’s, we can be very confident that they are not being helped by anybody, and that is at the heart of what is going wrong. We certainly need guidance so that people can start telling us what is going on in the Work programme.

The hon. Member for Wolverhampton South West (Paul Uppal) is rightly concerned about the challenges of securing investment. I am disappointed that no communications Bill was announced in the Queen’s Speech. A year ago yesterday, the Department for Culture, Media and Sport announced the first stage of what it described as a

“comprehensive period of consultation that will inform a Parliamentary Bill.”

Unfortunately, no such Bill has been announced.

The Communications Act 2003, which I was responsible for, is excellent, but technology has moved on and the regulation needs updating. The problem is clearly highlighted by the failure on 4G mobile services. Capital Economics estimates that a go-ahead for 4G in the UK would trigger private sector investment of more than £5 billion and raise gross domestic product by the end of the decade by half a percentage point. It says:

“The UK is off the international pace. The technology has already been deployed commercially by more than 50 operators in over 30 countries.”

In the UK, we still do not know when the spectrum auction, and liberalisation of restrictions on existing spectrum, will go ahead. We cannot afford further delay. The destructive promotion, which we have unfortunately seen, of the narrow interests of individual operators must now give way to the speediest possible implementation, allowing investment to be made. One of the benefits will be viable access to superfast broadband for a significant part of the country where landline services will not be available in any reasonable time scale.

We shall need new legislation and I hope that Ofcom and the DCMS will press ahead to make sure that the changes that are needed—the auction and liberalisation of the existing spectrum—proceed without further delay. We have waited long enough already.

I welcome the inclusion in the legislative programme of the draft Groceries Code Adjudicator Bill, following the initiative of the previous Government.

[Jim Shannon (Strangford) (DUP)]

As the right hon. Gentleman is aware, small firms have suffered at the hands of the giant supermarkets for far too long. The Bill lacks the teeth to allow the ombudsman to fine large supermarkets. Does he agree that the ombudsman needs those enforcement powers?

[Stephen Timms]

The hon. Gentleman makes a telling point. The legislation will have to be scrutinised closely and we will need to make sure that it delivers on the purpose for which it is being introduced.

I have to express my regret at the lack of a Bill that would put into law the commitment to raise the international development budget to 0.7% of GDP. The Secretary of State for International Development has made that promise and I hope it will come forward.