New Clause 13
Welfare Reform Bill
4:45 pm
Tony McNulty (Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions; Harrow East, Labour)
I appreciate the spirit of the new clause. If I were being churlish, I could rip virtually every provision apart, because it is wanting in many ways, but given the spirit in which it was tabled, I will not do so.
There are strong arguments for wage subsidy—indeed, we have had it in the new deal for the past 10 years. However, I am troubled by the fact that the new clause would kick in only after 18 months of longer term unemployment. The hon. Gentleman will know that, in our last series of announcements, we announced the introduction of a package, from April, that will include a £2,500 mixture of employer subsidy and training for companies that take on someone who has been unemployed for six months. Why the delay? It is precisely because of some of the problems with the new clause, such as resisting duplication and dead-weight costs. That is a horrible phrase, but we want to resist those costs. We also want to avoid the perverse notion, which is problematic in any subsidy system, that people can sack a worker to take on someone else.
The issue involves all sorts of details and complexities, but the notion that we should not deal with it at all is wrong. We can and do, as I have said, have a more focused use of Train to Gain—through the new deal, the new package that we are introducing in April, and our work with colleagues in the Department for Innovation, Universities and Skills—to achieve some of what the hon. Gentleman has suggested, such as keeping people in work, including in skilled jobs, and having additional training facilities. In motor car plants, for example, where the work force are on short time, Train to Gain has gone in to see what it can do to help with skills and training, and to preserve the skills base. The hon. Gentleman is right to raise this issue, because we do not want to come out of this recession having to look for the very skills base that were so dissipated in the past two recessions, and finding that those people simply were not around, leaving us having to skill people up again. That would not be appropriate.
I agree with the thrust and sentiment of what the hon. Gentleman said, but we have to be clear that subsidies are short term—the new clause is very open-ended—and, secondly, that they are precisely focused on the longer term unemployed, potentially through particular skills bases.
I will be candid and say that there is still a huge debate across Government about whether we should introduce blanket wage subsidy schemes in areas such as the motor trade. We think that there is a great deal of job substitution, duplication and other things going on in some of the European models—in Germany’s and France’s, in particular. If we were to go down that road, we would work much more around retention schemes that focus on training and skills interventions to skill up the work force while they are still in place.
I appreciate that Wisconsin is in the US—that is a perfectly fair point—but, although I am au fait and happy with the notion that we should not take job subsidies off the table as an element in our arsenal to equip us for responding to the downturn, for all the reasons that the hon. Gentleman suggested, including holding on to the skills base, I believe, on balance, that the new clause should be resisted, albeit for reasons that I have resisted giving because of the spirit in which the hon. Gentleman opened the debate. However, I do not doubt that we will regularly return to this issue if the downturn endures.
If the hon. Gentleman has not done so already, I commend him to look in detail at the golden hellos and all the other bits in the package that we are introducing in April for the six-months unemployed. They will help and, I hope, obviate the need for a subsequent package for those at 18 months, as is suggested in the new clause, which I ask the hon. Gentleman to withdraw.