Unemployment

Debate between Steve Webb and Denis MacShane

Wednesday 14th December 2011 Commons Chamber

[Steve Webb]

Of course, I did not say that everything is going well, but the right hon. Gentleman cannot deny that in the last month, an extra 38,000 jobs, net, have been created. We can choose different time periods. As my right hon. Friend the Minister of State said, the claimant count rose by 3,000 in the last month, but that is more than offset by the fact that people who were previously on incapacity benefit have been reassessed on to JSA, and lone parents have been required to look for work and moved on to JSA. In fact, without those policy changes, JSA numbers would have fallen in the last month. That is why my right hon. Friend was absolutely right to talk about signs of stabilisation in the job market.

As a number of Members on both sides of the House said—my hon. Friend the Member for Salisbury (John Glen), the right hon. Member for Rother Valley (Mr Barron) and others—every single person on the unemployment roll is a person too many, but if we overstate the doom and gloom, we talk down confidence in the economy, which is to the detriment of all our constituents.

Let me respond to the claim made by the right hon. Member for Rother Valley and others that long-term youth unemployment is up—and I quote—“93%”. Labour Front Benchers have clearly supplied all their Back Benchers with figures for their constituencies. The only problem is that all of them are wrong. Labour Members might be interested to learn that what used to happen is that under measures such as the new deal, people had to move off JSA after a certain period and were paid something else—a training allowance—or they got a temporary job; then, when they went back on to JSA, as so many did, the clock started again. Hey presto—a long-term unemployed person had been converted into a short-term unemployed person. They had not got a job; they had just been taken out of the figures. We have stopped doing that. As a result, if all the factors are taken into account—the people who were excluded from the statistics because they were on training allowances or in temporary jobs—the number of long-term claimants aged 18 to 24 is about the same now as it was in 2010.

To hear Labour Members, one would think that the numbers had doubled. The right hon. Gentleman was very angry about that, and had they doubled he would be right to be so, but they have not doubled—in fact, they are roughly the same.

[Mr MacShane]

Yet.

[Steve Webb]

The right hon. Member for Rotherham (Mr MacShane) said that it was “absurd” to blame all the problems on this Government. That was gracious of him, although I take great offence at his attack on Oxford PPE graduates, but to hear Labour Members today, one would have thought there would have been no public sector job losses at all had they stayed in power. They were planning tens of billions of pounds of cuts. How many public sector jobs would have gone had they gone ahead with their tens of billions of pounds of cuts? They have no idea—no idea at all.

Several hon. Members mentioned interest rates. We were told that we inherited low interest rates, and the Bank of England base rate was indeed low. The question was what decisions did we, as a new Government, have to make to get the fiscal position under control. Because we took the difficult decisions early—pretty much every one of which has been opposed, item by item, in the course of this debate—the interest rates at which the British Government are borrowing have stayed low while other countries’ debt rates have soared. As a result, in this Parliament we have saved £22 billion in debt interest—money we can spend on services and on helping the unemployed which would not have been available had we listened to Labour.

Early in the debate, my hon. Friend the Member for Monmouth (David T. C. Davies) said that we need to tackle red tape. He is right, and we have the red tape challenge, which has already resulted in substantial deregulation in, for example, retail and hospitality, with much more to come. I am grateful to him for making that point.

My hon. Friend the Member for Cardiff Central (Jenny Willott) highlighted the fact that pension funds will now be asked to invest more in the long-term infrastructure of this country—and rightly so. It is shocking that, for so many years, the money in our pension funds was not invested in our long-term infrastructure. This coalition Government are taking action to tackle that.

The hon. Member for Stockton North (Alex Cunningham) referred to the regional growth fund money in his constituency, and I am grateful to him for acknowledging the good that it can do. He asked about incentives to take on the long-term unemployed and the young unemployed. The youth contract is being introduced so that when people take on 18 to 24-year-olds from the Work programme—so they are long-term unemployed—they will get an incentive worth £2,275. That is more than a year’s free national insurance, so it is a valuable incentive. Unlike point five of this fantastic five-point plan we have heard about, which would reward small firms that take on anybody—including someone they were going to take on anyway and who would have got a job—our incentive is targeted on the long-term unemployed. That is the crucial point. Only one person in this debate has mentioned cost-effectiveness—my hon. Friend the Member for Salisbury. The right hon. Member for East Ham (Stephen Timms) said that it was a scandal, or something, to have finished up the future jobs fund, but he should know that that fund was costing more than £6,500 per place, whereas our work experience programme costs a twentieth of that and delivers the same sort of outcomes. Cost-effectiveness simply is not on the Labour party’s radar.

In the few seconds available to me I shall not have the chance to go through all hon. Members’ contributions. My hon. Friend the Member for North East Hertfordshire (Oliver Heald) flagged up the record national debt that we were left and my hon. Friend the Member for St Albans (Mrs Main) talked about the collective amnesia of Labour Members and asked why they did not tackle bankers’ bonuses. Just before the election, they introduced a temporary bankers’ bonus tax—