Amendment of the Law

Stephen Timms Excerpts

Thursday 20th March 2014 Commons Chamber

[Vince Cable]

The hon. Gentleman’s analysis is spot on. Of course that is what has happened. We have managed to avoid mass unemployment, but the average productivity level has fallen. If we are to grow, and if living standards are to grow—that seems to be the focus of the debate—productivity must rise, which prompts the question of how we do it. We are currently doing it in an environment that is severely constrained. We must remember—and I think that the shadow Chancellor often forgets this—that one of the massive legacies of the crisis was the structural deficit. A deficit of that kind does not go away when growth increases; it is there, it is structural, and it will have to be dealt with. The structural deficit, defined as we defined it when we formed the coalition, has fallen from about 5.4% of GDP to 2.7%. We are nearly halfway, but we have to continue the job, and the next Government will have to continue the job. In that context, we must proceed with an agenda of raising productivity and growth.

[Stephen Timms (East Ham) (Lab)]

Does the Secretary of State acknowledge that a particularly serious problem is long-term unemployment among both young and older people, which, according to the figures released yesterday, has increased? Does not more need to be done to tackle that problem?

[Vince Cable]

It does, but the figures produced over the last year suggest that long-term unemployment is falling, along with unemployment in general.

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[Stephen Timms (East Ham) (Lab)]

At the start of his speech yesterday the Chancellor drew attention, naturally enough, to the fall in unemployment announced yesterday morning. That is unequivocally good news, but it has been a very long time coming. We were told after the general election that the new Government’s policies would lead to steady growth and falling unemployment. In fact, for three years there was hardly any growth, unemployment remained high, and only now are we finally starting to see unemployment coming down.

That three-year delay has meant that the promise to eliminate the deficit within this Parliament will not be delivered either, and an important part of the legacy of that three-year failure will be in the labour market. Because the economy did not grow for three years, a large number of people are now long-term unemployed, and those long-term unemployed will not be the ones who move into the new jobs finally now being created. The long-term unemployed face much higher barriers to getting into work than others.

A striking detail in the labour market statistics yesterday, which I mentioned in my intervention on the Secretary of State, is that the number of people out of work long term—more than two years—went up. In his response a moment ago, the Secretary of State said that overall, long-term unemployment is coming down. In fact, it went up yesterday to exactly the same figure as a year ago, namely 450,000. That is the central challenge for labour market policy in the next few years: how do we bring people who have been out of work for a long time, and who have the biggest barriers to contend with, into productive employment?

[Lyn Brown (West Ham) (Lab)]

We have noticed the thirst for work in the job fairs that we hold collectively in our constituencies. Does my right hon. Friend agree that the Government are simply not meeting that thirst for work?

[Stephen Timms]

My hon. Friend is absolutely right. There is huge enthusiasm for getting back into work in our area and across the country. It is absolutely clear that the answer to long-term unemployment is not the Work programme. The Chancellor rightly identified in his spending review statement last summer that it falls into the category of “underperforming programmes” in the Department for Work and Pensions. Figures today show that the Work programme’s performance has got worse.

I want to talk about the compulsory jobs guarantee, which my right hon. Friend the Member for Morley and Outwood (Ed Balls) has referred to and which he and the leader of our party set out at the beginning of last week. The proposition is for every young person who has been out of work for more than a year, and every older unemployed person who has been out of work for more than two years, to be guaranteed the offer of a choice of jobs. In some cases, a training place will be one of those offers. The jobs will consist of at least 25 hours a week for at least six months, and will pay at least the national minimum wage. The way in which we will deliver the guarantee, as in the future jobs fund before the election, is that the Government will pay the wages.

A fortnight ago, the shadow Secretary of State for Work and Pensions and I visited a software company in Cardiff, which employs 150 people. The company is growing fast and things are going well. It recruited 12 young people under the jobs growth Wales programme, which works on the basis that I have described. The Secretary of State commented in the House a few weeks ago on the fact that labour market performance was better in Wales compared with the rest of the UK. He is right, and jobs growth Wales is an important part of the reason for that. The company that my hon. Friend and I visited told us that it would never have been able to take the risk of taking on those 12 young people had it not been for the support of jobs growth Wales. That is why the Federation of Small Businesses in Wales is a champion of the programme. The subsidy for those 12 young people is long since finished, and they have been in their jobs for a year or so. Of the 12 young people who were taken on, 11 are now in permanent jobs with that company. The twelfth was not kept on by that company but has a job in a different company not far away. That is the kind of success that we can deliver with the approach that we are describing. We want to see the job guarantee delivering right across the country.

What a contrast that is to the wage subsidies under the Government’s youth contract, which has been a complete damp squib. We are about 60% of the way through the three-year programme, and only 7% of the budget has been taken up. More than 900,000 young people—nearly 20% of young people—are still out of work. We must do a great deal better than that.

On Wednesday evening, at the invitation of Colin Crooks, the social entrepreneur in residence at the London borough of Lambeth, I attended a reception at Brixton East for a couple of dozen start-up enterprises in Lambeth that were being mentored, with support provided by the Department for Business, Innovation and Skills, by Tree Shepherd, the organisation that Colin leads. It was a great evening with a tremendous buzz as imaginative and creative people presented their products, food, crafts and fashion. There are now opportunities for people to take the risk of starting up new enterprises. The Government must get behind them and support them particularly at the key moment when they take on their first employee. That is one of the key things that our guarantee will do, and I urge the Secretary of State to support it.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 11th March 2014 Commons Chamber

[Danny Alexander]

It will please my hon. Friend to know that I can confirm that, yes: we will stick to the plan that is getting the recovery going. There is, of course, a vast amount still to do to get our economy back on the right track and to ensure we get more people into work. Nothing would threaten that more than abandoning the economic plan that has got us this far.

[Stephen Timms (East Ham) (Lab)]

Will the Chief Secretary confirm that the number of people on jobseeker’s allowance for more than two years has quadrupled since the Government came into office? Will he accept that we have a serious long-term unemployment problem that requires Government action, beyond what is happening at the moment, to tackle it?

[Danny Alexander]

The most recent set of figures for the quarter show that long-term unemployment has come down, including in the right hon. Gentleman’s constituency. I note, too, that the shadow housing Minister’s flagship programme to build more houses has been cut away by the shadow Chancellor, or is that yet another way they plan to spend their mythical bonus tax?

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 25th June 2013 Commons Chamber

[The Economic Secretary to the Treasury (Sajid Javid)]

I can tell the hon. Gentleman that the answer is none. He is passionate about the issue, which he has raised before. I can also confirm that the Treasury implements the policy of the Government—to make sure that all reservists who request a 10-day special leave on a paid basis get it.

[Stephen Timms (East Ham) (Lab)]

On infrastructure investment, there is widespread disquiet—including in the National Audit Office, it seems—about the management of the Government’s broadband investment programme. Does the Chancellor agree that it is essential to harness competition effectively in delivering infrastructure investment?

[Danny Alexander]

Our programme of investment in rural broadband is being delivered in every part of the United Kingdom, and it is on track for delivery. We continue to look at the capability of Government Departments to deliver infrastructure projects effectively. My noble Friend the Commercial Secretary to the Treasury has been undertaking a review of these matters and will set out the conclusions shortly.

Infrastructure (Financial Assistance) Bill

Stephen Timms Excerpts

Monday 15th October 2012 Commons Chamber

[Chris Leslie]

At near enough to 7 o’clock, I am glad that we finally turn our attention to the Infrastructure (Financial Assistance) Bill. Anybody following these proceedings might be astonished that we have been allowed just over two hours for the Committee stage. In our view it is unsatisfactory to leave the rules governing £50 billion of public expenditure to such scant and inadequate scrutiny. Although we do not necessarily disagree with the broad principles behind the Bill, that does not mean that we should fall short in our duty as parliamentarians to analyse, consider and improve the details of the legislation. Ministers cannot point to the House of Lords as the place where the Bill can be improved and amended if we run out of time for consideration in Committee. I think the last time the Lords sat in Committee on a money Bill was in 1995, when it considered the European Communities (Finance) Bill. This two-hour period is therefore the only opportunity we will get to scrutinise the particulars of the legislation; hence the amendments that are before us.

I want to talk to amendments 11 and 9 in this first group. Amendment 11 would make it clear that the substantive powers in the Bill, which give Ministers the ability to grant financial assistance to any persons, should be used for infrastructure in the United Kingdom, for essentially this reason: we believe that we should focus all our efforts on the domestic infrastructure needs of our country. That is why we think the Bill, if it can bring benefits, needs to focus very much on the benefits of infrastructure and bringing forward capital schemes here at home. Hon. Members will be aware that the UK has been falling behind quite considerably in the past couple of years in terms of infrastructure and capital investment schemes. Only today in the Financial Times we read about the Construction Products Association warning that

“infrastructure is in free-fall,”

and that it expects spending to fall by 13% in 2012 compared with the last calendar year, despite the hollow words of the Chancellor of the Exchequer. Noble Francis, economics director at the CPA, said:

“We are getting to the stage where the government just can’t make more announcements with nothing happening. At some stage they are going to have to launch some capital investment that sees work happening on the ground. This can be done quickly, easily and cheaply speeding up work on the repair and maintenance of roads, schools, hospitals and housing.”

The article points out that road construction, to take one example of infrastructure investment,

“is suffering in particular, with the CPA projecting a decline of 40 per cent this year and 5 per cent next year.”

[Stephen Timms (East Ham) (Lab)]

I am listening to my hon. Friend’s speech with a lot of interest. I wonder whether he saw the recent CBI survey and the comments by its director general, John Cridland, who described it as

“a wake-up call that businesses in Britain are looking for action”—

on infrastructure—

“and we haven’t seen any yet.”

[Chris Leslie]

Alarm bells are ringing from a number of eminent institutions across the country, and they are not those that one might necessarily feel were natural allies of Her Majesty’s loyal Opposition. Nevertheless, they are saying exactly the same thing as us: when will the Treasury wake up and realise that the Government’s strategy on infrastructure—this laissez-faire approach—is singularly failing? Rather than driving new schemes forward, with their Bill and the rest of their strategy, the Government seem to be waiting for others to come forward with various schemes; they seem to be saying, “Please will you dream up some ideas?” They are hoping that something will turn up, but that is an approach characterised by drift rather than leadership when it comes to capital investment.

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[Stephen Timms]

My hon. Friend has talked about organisations that are not necessarily natural supporters of Her Majesty’s loyal Opposition. Has he seen the recent comments from the Country Land and Business Association, which described the superfast broadband situation as “lamentable”—precisely the same word that he has just used? The association stated:

“It is becoming clear that the Government’s strategy will not meet the target date of 2015…There is no clear mechanism to put in place the universal service commitment.”

Is not this another example of the economy crying out for investment that is simply not being delivered?

[Chris Leslie]

My right hon. Friend makes an important point that emphasises the argument that we are making. This is not simply a question of the levels of capital investment; it is also a question of competence. It is also about the relentless need to focus on delivery, and on the detail behind the delivery. I just do not see the Treasury, as currently comprised, being capable of getting to grips with the granularity of some of the obstacles that face capital schemes. It is no wonder that we are falling further and further behind. The Treasury seems to see an obstacle and be deterred by it, rather than trying to tackle it and move past it.

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[Chris Leslie]

A pattern is emerging, but I shall not use the word “omnishambles”, which is probably past its best. There is great concern about these schemes. Thameslink, for example, is a project that is slipping considerably. The contracts for rolling stock were due to be awarded by early 2012; then it was by the summer, and now the Department says that the contract with the preferred bidder will be signed in the autumn. The Transport Select Committee is on top of that issue. It is writing to Secretaries of State asking why there is a delay with the rolling stock procurement, and I am sure that the Minister will be able to reply to that question when he responds to the debate. However, many other significant questions about delay need to be answered.

We need to know about the ongoing programme of work on the north Doncaster chord, a rail link that is greatly needed in that part of Yorkshire. The national infrastructure plan of 2011 promised that a business case would be provided by April 2012, but the proposed development is still awaiting a decision from the Secretary of State, which must be delivered before production can continue and construction can start.

The preferred bidder for the extension of the Northern line to Battersea was announced in June. A Treasury source then told the Evening Standard:

“The entire weight of the Government is being thrown behind the extension of the Northern Line”,

but nearly a year after the Chancellor’s autumn statement, the extension is still subject to the existence of funds. Despite backing from the

“entire weight of the Government”,

Transport for London can only say:

“Subject to funding being in place and permission from the Secretary of State for Transport, the new stations could be open by 2019.”

The construction of the Green Port Hull was due to begin this year, but Siemens now says that it will not sign a contract for the wind turbine factory until 2013. As for carbon capture and storage, the Department for Energy and Climate Change was supposedly

“developing a streamlined selection process”,

and £1 billion of capital was supposedly available to support the project, but construction is not due to begin until 2014.

Planning permission was granted in March for biomass electricity generation at Royal Portbury dock, but E.ON is currently taking time to

“review the prospects for the project in light of the UK Government’s current banding review”.

Again, a Government decision is awaited.

I am sure that I do not need to mention the issue of the 4G mobile spectrum auction and roll-out. Many Members may be checking their not necessarily 4G-compatible handsets as I speak. However, I will say that a very messy approach was taken to the auction of that particular regulatory arrangement, and that anyone who may be thinking of buying an iPhone 5 should be careful, because it will not necessarily be compatible with many possible providers. This is an example of our falling many years behind the United States, Germany, Sweden and parts of Asia. Unlike this country, they already have 4G services which are giving businesses opportunities to benefit customers.

We need only compare the much-vaunted promises of the 2011 national infrastructure plan with the actuality of the infrastructure pipeline that was announced in April. Although 182 new projects had been added, 63 had disappeared without explanation. Of the 357 projects announced in November that were updated in April, nearly two thirds were still in pre-procurement stages, and just 38 had proceeded to procurement or construction. Of the 229 that were still at the pre-procurement stage, three quarters were still at the same stage as had been reported in November 2011, and 36 had moved backwards.

Members may recall the regional growth fund, the supposed successor of the regional development agencies and, supposedly, the Government’s flagship alternative for regional economic development. Although the winners were announced in, I believe, April 2011, fewer than half the final offer agreements in rounds 1 and 2 of the fund have been put in place. Only £60 million of the £1.4 billion fund to spur growth has been released to businesses, and, according to a report by the Public Accounts Committee, the £364 million spent by the fund so far has been held up in intermediaries such as banks and local authorities.

[Stephen Timms]

My hon. Friend is making a powerful case, and I hope that we shall hear a response to it shortly. Has he seen the assessment by the British Chambers of Commerce which—before the election, I believe—identified 13 critical infrastructure projects, and said that although three were going ahead, there had been little or no progress on eight of them? That is a lamentable situation. Businesses across the country are desperate for those projects to go ahead.

[Chris Leslie]

It is very difficult to find an explanation for this Keystone Cops approach to infrastructure schemes, other than that the Government are incapable of getting to grips with the detail. I welcome the Minister to his position—he may be a new broom who will sweep everything clean, deal with the issues firmly and move many of these infrastructure projects forward—but I want to hear about his strategy for improving infrastructure on these shores, in the United Kingdom.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 11th September 2012 Commons Chamber

[The Economic Secretary to the Treasury (Sajid Javid)]

My hon. Friend is passionate about this issue, and she will be pleased to hear that the Government are removing unnecessary obstacles to investment in nuclear power plants and that new power stations will come forward. For example, the Government are undertaking electricity market and planning reforms and introducing an energy Bill. As it happens, I am meeting representatives of EDF later this afternoon, and I would be happy to share her concerns with the company.

[Stephen Timms (East Ham) (Lab)]

T5. Why is Britain in a double-dip recession when France and Germany are not?

[Mr George Osborne]

In case the right hon. Gentleman had not noticed, the eurozone is in recession. He talks about France and Germany, but the International Monetary Fund—[Hon. Members: “Answer!”] I am about to give him the answer. The IMF’s latest forecasts for growth next year show the UK growing at almost twice the speed of France, and the same with Germany. If the question is, “Why isn’t the British economy more like Germany’s?”, I will give him the answer. It is because we did not invest in skills over the past decade. We did not build our export links with China and India and the growing parts of the economy. We put all our bets on the City of London when the right hon. Member for Morley and Outwood (Ed Balls) was the City Minister and it all went spectacularly wrong. We are now clearing up the mess.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 26th June 2012 Commons Chamber

[Mr Osborne]

The funding for lending scheme, which the Governor and I announced at the Mansion House, is explicitly designed to address the high bank funding costs and it is tied to lending into the UK economy, so that is precisely what this new scheme is designed to do.

[Stephen Timms (East Ham) (Lab)]

3. What recent estimate he has made of the level of economic growth in 2012.

[The Chief Secretary to the Treasury (Danny Alexander)]

The Office for Budget Responsibility is responsible for producing independent economic and fiscal forecasts. In its March economic and fiscal outlook, the OBR forecasted economic growth of 0.8% in 2012, but more recent independent forecasts have been lower, reflecting the fact that the euro-area crisis remains the biggest risk to the UK recovery.

[Stephen Timms]

A worryingly large jump in Government borrowing has been reported today. Why is it that of all the G20 countries, only Britain and Italy are in recession?

[Danny Alexander]

The right hon. Gentleman refers to borrowing, but his Front-Bench team wants us to borrow tens of billions of pounds more, which is not the right response. If he studies the figures carefully, he will see that departmental spending is rising much less than was forecast, but, of course, the automatic stabilisers in the economy are operating. That is precisely the flexibility in our plan, which is tough on the structural deficit but supportive of the economy.

Unemployment (North-east)

Stephen Timms Excerpts

Wednesday 20th June 2012 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

I, too, congratulate my hon. Friend the Member for Hartlepool (Mr Wright) on securing this important debate. I also congratulate the hon. Member for Preseli Pembrokeshire (Stephen Crabb) on being hauled in to answer it. Having heard the speeches that my hon. Friends and, indeed, Lib Dem Members have made, I can well understand why the Minister responsible for employment has chosen to leave the country rather than answer the debate.

There has been some effort today to derive optimism from the unemployment figures, but the fact is that according to the figures published today, the claimant count nationally and the number of people who are long-term unemployed have gone up. My hon. Friend the Member for Sedgefield (Phil Wilson) rightly made those particularly important points. The number of people working part-time who want to work full-time is at a record level—it has never been as high as the number announced today. Youth unemployment remains above 1 million, and, as we were reminded, unemployment in the north-east has risen.

There are not many grounds for optimism in today’s figures, except that they are slightly less bad than the figures we have seen in the past few months. I am afraid the picture will not change until the Government’s economic policies change and they think again about the strategy that they have been pursuing, which has choked off demand, crushed confidence and sent us into a double-dip recession. My hon. Friend the Member for Hartlepool set out Labour’s alternative plan, and there is growing recognition—not in the Government yet, but certainly elsewhere—that we need to change course if we are to change the bleak picture of unemployment that we have heard about this afternoon.

In 1999, the unemployment rate in the north-east had risen to more than 10%, but successful initiatives reduced it to 6% in January 2008, before the global financial crisis hit. After the election, we were told by the Government that their policies would renew private sector confidence and that aggressively tackling the deficit would cause a surge in confidence, investments and new jobs. Instead, since the election confidence has collapsed and the number of unemployed in the north-east has risen by almost a quarter to 145,000. The unemployment rate is now 11.3%, including an increase of 0.5% in the past three months alone.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

I apologise for not being here for the beginning of the debate, but I was in the meeting with the Dalai Lama, which was an excellent experience.

According to National Audit Office figures, the number of young people in my constituency who have been unemployed for over a year has gone up by 950% since last year. The hon. Member for Preseli Pembrokeshire (Stephen Crabb) looks confused, but the number has gone up from 20 to 210 in a year. Does my right hon. Friend not agree that that shows how damaging the double-dip recession created in Downing street is and why we need action from Ministers to create jobs and growth in the north-east?

[Stephen Timms]

Yes, I agree completely. It is long-term youth unemployment that will have the most damaging long-term effects on the economy. We know from the last time we had a lost generation how damaging it is for the life chances of the individuals affected, and now we see it happening again. We need a change of policy and a change of course to avoid the frightening figures on the rate of growth of long-term youth unemployment to which my hon. Friend draws attention.

I imagine that the hon. Member for Preseli Pembrokeshire will tell us about the Work programme and present it to us as the panacea for the problems. It struck me that the Work programme did not get a mention in either of the speeches from coalition Back Benchers, the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) and the hon. Member for Redcar (Ian Swales). I suspect that that reflects the reality of the Work programme’s impact.

The hon. Member for Preseli Pembrokeshire will not be able to tell us a great deal about the Work programme, because it is a secret. Members who have been to see the Work programme prime providers in the north-east, Avanta and Ingeus, will have found out from them that they are not allowed to provide any data at all on how they are getting on—no data or numbers about their performance. The Minister responsible for employment, who we understand has left the country, imposed a contractual ban on the publication of any data on the Work programme. He said in January, under pressure in the Chamber, that he would lift the ban and would in future allow prime providers to publish some data about their own performance, as of course they all used to do—under the flexible new deal, they published the numbers on how they were doing, because they wanted to compare how they and others were getting on.

Since then, however, the Minister of State has got cold feet, so the ban remains in place. One is bound to ask: what exactly are Ministers trying to hide? Why do they not want anybody to know what is going on in the Work programme? One consequence is that Jobcentre Plus managers do not know what is going on. If one speaks to one’s Jobcentre Plus district manager, one finds that they do not have a clue what is happening in the Work programme. Nobody has told them how many people have got jobs through it. We understand that Ministers want to avoid potentially embarrassing questions being put to them, but the consequence of the ban has been a destruction of the trust on which such initiatives depend, and a reduction in performance.

We have managed to glean very limited data from the providers’ trade association, the Employment Related Services Association, and it is no surprise that the numbers suggest that the Work programme is performing no better than the flexible new deal that went before it. That is after the Government spent more than £60 million buying out all the flexible new deal contracts to introduce it. They had not tried their programme out anywhere; they just launched into it in June last year, with no piloting or testing at all. We have seen a very disappointing performance, which we will eventually get some figures on, but we should have heard about it long before now.

Youth unemployment has been an important feature of the debate. The Government’s answer to the problem has been the youth contract, but that is smaller than the future jobs fund, to which my hon. Friend the Member for Hartlepool referred, and is dependent on take-up. Given the effect on regions that suffer particularly high unemployment, I again ask the Government to reconsider their decision to put all the funding into a national pot, available on a first-come, first-served basis to those Work programme providers that ask for it. If a Work programme prime provider in an area with relatively low unemployment sees a way of getting a subsidy to push a young person who might have found a job in that area anyway into a subsidised role, it can do so, but that will be done at the expense of young people in areas such as the north-east, for whom the case for support is much stronger. Work programme providers agree. It would make much more sense to ring-fence the available youth contract funding, to ensure that it is used where it is needed, rather than squandered elsewhere.

As we have heard, we need a more active industrial strategy. That is key to reducing the problem of unemployment in the north-east. I very much agree with the tributes paid to One North East, which co-ordinated such an industrial strategy before the election. We see the benefits of it now in the announcements, which hon. Members have mentioned, on the car industry, the progress with electric vehicles and so on. That is all being lost. The RDA was scrapped in favour of the fragmented, piecemeal local enterprise partnership.

It was pleasing to hear the hon. Member for Redcar say something positive about the regional growth fund—a rare event indeed. The NAO pointed out that so far under the regional growth fund, the cost per job is more than it was with the RDAs. The whole point of the changes was supposed to be to save money; it is not working. The regional growth fund is proving to be very expensive. It is ironic that the Government accused the RDAs of being too centralised and bureaucratic, but have replaced them with one fragmented and divided scheme that does not have enough clout and another run from Whitehall, and not run very well at that.

We heard about the proposed move to regional pay bargaining, and will discuss it in on the Floor of the House this afternoon. It will certainly threaten the economy of the north-east. There have been hints of a U-turn here, and the people of the north-east would very much welcome that, if it were to be the outcome.

We need a change of course on economic policy. My hon. Friend the Member for Hartlepool set out a compelling five-point plan. We need the problems in the Work programme sorted out—frankly, we need some daylight in the Work programme. It has been secretive so far and has had a blanket thrown over it. My fear is that we will not get those changes from the Government; we need a different Government to make the changes required.

Changes to the Budget

Stephen Timms Excerpts

Monday 11th June 2012 Commons Chamber

[Mr Gauke]

I am grateful to my hon. Friend for his characteristically helpful intervention.

[Stephen Timms (East Ham) (Lab)]

The Minister is now telling us that the Government do not need the money that would have been raised by the measures that he has scrapped, so why were they announced in the first place?

[Mr Gauke]

Let us put this into context. In the last year of the forecast period, the Budget measures that we announced in March would have resulted in an additional £1.14 billion for the Exchequer. As a consequence of these changes, that figure will now be £1 billion. These are relatively small items, but we have listened to the specific cases that have been made on the three elements. We had already made it clear that we wanted to consult carefully with charities and philanthropists on one of them. We have listened to the arguments and we have made changes. In the overall scope of the public finances, however, they will not make a significant difference.

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.

Youth Unemployment and Bank Bonuses

Stephen Timms Excerpts

Monday 23rd January 2012 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

We have had a very good debate. In June last year, the Prime Minister told the House that cutting the deficit faster would revive private sector confidence. That was the basis of the strategy with which we were presented for private sector investment and jobs to surge. Tragically, that has not happened. The business confidence monitor from the Institute of Chartered Accountants says:

“UK Business confidence has collapsed”.

It says:

“Confidence has declined across all sectors and all regions.”

Nobody now claims that the coalition strategy is working to boost confidence. Confidence has evaporated, and the strategy has clearly not worked.

We are debating the consequences tonight: unemployment rocketing; youth unemployment of over 1 million, and becoming worse—the highest that it has ever been. My hon. Friend the Member for Wigan (Lisa Nandy) drew attention to the growing sense of hopelessness and the long-term damage to our economy. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) pointed to the growth of long-term unemployment among young people as particularly damaging.

As a result of that failure, the Government have to spend a great deal more on benefits. It is worth comparing the latest forecast from the end of last year showing how much they intend to spend on benefits in the year after next with the forecast a year earlier. Projected benefit spending in the year after next has gone up by £5.4 billion. The overall estimate of borrowing has gone up by £158 billion—a figure at which the Chief Secretary to the Treasury balked at admitting. The Government are determined to press ahead with their version of the benefit cap, which the Department for Communities and Local Government says will add 20,000 to annual homelessness figures, with massive Exchequer costs. The ill-judged attack by the Secretary of State for Work and Pensions on the bishops at the weekend has led to yet another defeat for him in the other place.

All along, we have been told that the solution to all these problems was the Work programme. Let me begin by welcoming the U-turn by the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling). I welcome his change of heart, because until now he has refused to allow Work programme providers to publish any data on their performance. Today, he has announced that he is going to change his policy.

[Chris Grayling]

rose—

[Stephen Timms]

Perhaps the Minister will tell us when the guidance to which he referred will be published.

[Chris Grayling]

I am a little puzzled. I could be wrong, but I thought I heard the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) say that the Labour party supported the benefit cap, but the right hon. Member for East Ham (Stephen Timms) has just said that they do not. Would he tell us which is right?

[Stephen Timms]

We do support the benefit cap. The version that the Minister is pressing through is, as the House of Lords has rightly pointed out, going to cause huge costs for the Exchequer. I hope that even now the Secretary of State will think again before returning to the House with the measure next week.

The Work programme was rushed, and badly prepared. As we pointed out at the time, there should have been a plan for transition to the new programme. There was no plan. We can glimpse how the Work programme has been going by looking at the number of people coming off benefit each month. The number plummeted last May, when the flexible new deal stopped, and it stayed low as the Work programme got going. I invite the Minister to compare the months after May with the same period the previous year, because he will see that poor Work programme performance resulted in 86,000 people not getting into work who should have done. That is probably a permanent unemployment rise. The damage will be with us for years.

The Government told us that the Work programme would enlist an army of voluntary organisations to give specialist help to jobseekers. To begin with, we were told that 508 voluntary sector organisations would be involved. By August, that number had fallen to 423. Next week the Government will count once again. Last week, apparently, at a crunch meeting, voluntary sector organisations told the Minister that they were being used as “bid candy” to win contracts. Some of them still have not had a single referral since the Work programme began last summer.

The “Open Public Services White Paper” promised, as I quoted to the Minister earlier:

“Providers of public services from all sectors will need to publish information on performance and user satisfaction.”

I welcome the Minister’s U-turn on performance. What about user satisfaction? Let me tell him about the satisfaction of one user, the father of a constituent of mine, who came to me to complain about his daughter’s experience on the Work programme. She received a letter referring her to mandatory work activity. It was completely incomprehensible; I will send the Minister a copy. She lives in my constituency in east London. The letter appeared to require her to report on an unspecified date to an address with a postcode in Sheffield, and the telephone number was given as 000. It was a shambles. It is no wonder the Work programme is not delivering and youth unemployment is rocketing.

[Esther McVey]

When I read the title of today’s Opposition day debate, which mentioned youth unemployment and bank bonuses, I thought it was a list of Labour’s worst failings—youth unemployment up by 40% and a banks bonus culture developed under Labour and signed, sealed and delivered with a knighthood under Labour—so will not the right hon. Gentleman concede that where Labour messed up, the coalition is cleaning up?

[Stephen Timms]

We had some discussion in the debate about the future jobs fund. The Minister has awarded a contract for the evaluation of the Work programme. I welcome the fact that he has done that. He should read the evaluation of the future jobs fund carried out by the same organisation that he has commissioned to evaluate the Work programme. It points out just how effective the future jobs fund was and the crucial value for young people of

“a real job with a real wage”.

We need a new approach. We should repeat the tax on bankers’ bonuses to bring in £2 billion, funding 100,000 real jobs for young people. We need, once again, a temporary cut in VAT to rebuild momentum in the economy, as the VAT cut did before the general election. A further VAT cut on home improvements would give the construction industry, which is in a desperate state, the chance that it needs. We should bring forward investment in schools, roads and transport, and we should listen to the Federation of Small Businesses and give small firms hiring new staff a break from paying national insurance—five points that would give us, at last, a chance.