Living Standards
Debate between Stephen Williams and David Miliband(12 years, 12 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
David Miliband
The hon. Lady is right, in that the zero stock held by the Bank of England in 2007-08 meant that quantitative easing had not yet started. When it did start, the stock went up. However, as she will know, since the general election there have been three further rounds of quantitative easing, including the most recent injection of £75 billion. That does much to explain why, although yields have fallen, international market ownership of the stock has not changed. I hope that she will engage with the issue that I am raising in all seriousness, because it is a serious problem for the Government’s argument.
In respect of the future, I want to concentrate on an aspect of the debate that relates directly to the Secretary of State’s responsibilities: youth unemployment. Let me repeat something that I said on television last week, half of which the Prime Minister and the Chancellor have enjoyed quoting. The current Government did not invent the problem of youth unemployment, but my goodness, they have made it worse. That is the charge against them. As the Secretary of State will know, it is a fact that structural unemployment among 16 to 25-year-olds stubbornly refused to fall below 10% even in the good years, when the economy was cantering along, and it is true that unemployment rose in 2005-06.
David Miliband
No, let me make this point.
It is also true, however, that between the start of the Labour Government and the financial crisis, long-term unemployment fell by 78%. It fell again, by 38%, between January and December 2010, before the Government’s first Budget decisions were implemented. In January, 150 people aged 16 to 25 in my constituency were claiming jobseeker’s allowance for more than six months. Today the figure is 420, and the figure in the north-east has doubled to nearly 9,000. Youth unemployment across Britain is now at record levels. Severe long-term youth unemployment—the number of people who have been out of work for at least 12 months—stands at 260,000, up by over 100,000 in 18 months, and the number of NEETs, those not in employment, education or training, has risen to 1.2 million. The Secretary of State agrees with me that those figures are a disgrace for any Government or any country. The question is what we do about it. I hope that the Government will take the following points into consideration as they think about the roll-out of their work contract.
First, the Work programme is fine in good times, in a growing economy, but it is not enough to give people job interview preparation when not enough jobs are being created in the economy as a whole. Secondly, the wage subsidy that is being introduced is designed to help 53,000 of the 260,000 long-term youth unemployed. When in 1995 the then Chancellor of the Exchequer introduced a similar scheme, however, it helped 2,300 people. The Secretary of State needs to look at those figures and understand why. Thirdly, the growth in apprenticeships is welcome, but it has got to be for the under-25s. Finally, young people who need help with transport costs, disabled young people and young people with carers need extra help. He knows it as well as I do. It is bad enough to be young and stuck on the dole. It is double the agony to be promised a job and then find that you will not get it.
Let me finish with this thought. The Chancellor’s
“latest economic commentary shows just how out of his depth he is when it comes to important economic issues. Slashing spending now could push the economy back into recession and inflict further structural damage on the UK”.
Those are not my words, but those of the current Business Secretary in February 2010. How right he was. It is time for a change of course, and it is time for a change of course now.
Stephen Williams
I have taken two interventions.
There was pressure from certain quarters not to make that increase, but the coalition has done the right thing and stuck by its promises to the poorest people in society.
On children, which the motion also covers, tax credits for children are being increased—given all the rhetoric, one would swear they were being cut—by the rate of inflation, 5.2%. In the long term, we want to transform the life chances of the poorest children in society, through the pupil premium and extra child care for two-year-olds announced in the autumn statement.
For young people, the Government are putting millions of pounds behind increasing apprenticeship places. The right hon. Member for South Shields (David Miliband) did not want to take my intervention on youth unemployment—
Stephen Williams
He can shake his head and then he can deny that youth unemployment was 650,000 in 1997, and after one of the longest booms in Britain’s peacetime history the Labour Government left behind 930,000 young unemployed for this Government to deal with.
For pensioners, the autumn statement confirmed that the basic state pension will be increased by £5.30, the biggest cash increase in the history of the state pension. That increase comes about because of the triple lock that the coalition Government have put in place. Let us remember another policy choice that could have been made. In 2000, when the previous Government were in office and when earnings rose by 4.4%, the CPI was 1.2% and inflation was 1.1%, which measure did the previous Labour Government choose? They chose the lowest, producing a 75p pension rise. That was at a time when the budget was in surplus and we were in the middle of a boom. In these difficult times, the Government have done the right thing by pensioners as well. No wonder that pensioners were left out of the motion that has been tabled today.
The motion mentions a squeeze, but the biggest squeeze that could be inflicted on citizens in our country—the 29 million people in work—would be on their mortgage payments, their debt interest payments, and the loans of the businesses that employ them, if the international markets were to lose confidence in this country.
The motion says that the government are “out of touch”. There is some cheek, some chutzpah, at the heart of a motion worded in that way by a party formerly led by Tony Blair, alongside whom the architect of new Labour, Peter Mandelson, said that he was “intensely relaxed” about people becoming filthy rich. If the shadow Secretary of State wants to see who is out of touch, I suggest that he and his colleagues look in the mirror, because it is they who are out of touch with reality.