New Deal for Young People

Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 26th January 2006.

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Photo of Dawn Butler Dawn Butler PPS (Rt Hon Jane Kennedy, Minister of State), Department of Health 10:30 am, 26th January 2006

What assessment he has made of the economic effects of the new deal for young people.

Photo of Des Browne Des Browne Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

Since 1998, the new deal has helped more than 630,000 young people to find jobs, contributing to a fall in long-term youth unemployment from 210,000 in May 1997 to 52,700, which compares with a high of 400,000 in the mid-1990s. Independent research has shown the new deal for young people's positive impact on the economy, with estimated benefits to the economy of up to £500 million a year.

Photo of Dawn Butler Dawn Butler PPS (Rt Hon Jane Kennedy, Minister of State), Department of Health

In my constituency, 3,699 young people have participated in the new deal, with 1,200 of them obtaining sustainable employment. Scrapping the new deal would have a detrimental effect on those young people, who are finally finding a means to work their way out of poverty. Will my right hon. Friend assure me that we have no intentions of scrapping the new deal?

Photo of Des Browne Des Browne Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

My hon. Friend can be assured that we have no intentions of scrapping the new deal. As my right hon. Friend the Chancellor explained in the pre-Budget report, we intend to build on the new deal going forward, to learn from its success in the past and to create better opportunities for those who will take advantage of it in future. Let us contrast that with the policy of the Conservative party, which would scrap the new deal, and by doing so effectively scrap and throw all those young people who have benefited from it—

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor

Of course there are individual success stories under the new deal, and they must be welcomed. My concern continues to be for the least well-off and most vulnerable in society. With one in 10 people struggling with dyslexia or some other learning disability, will the Government persist in inflicting their complex tax system on the most vulnerable in society?

Photo of Des Browne Des Browne Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

I welcome the hon. Gentleman's recognition of what he describes as the individual successes. In fact, the success of the new deal is the aggregate of all those individual successes. In all our constituencies, including his I am sure, it has taken significant numbers of young people from having no future to having significant opportunity to move themselves up the labour market and to improve their conditions. The challenge that we face in relation to the people whom he describes is that they have not had an opportunity to work in the past, rather than that they are faced with the complexity of income tax forms. My right hon. Friend the Secretary of State for Work and Pensions has set out our plans for the coming years to deal with the challenges that those people face, and to move them nearer to and into the labour market. I was delighted that those on the Conservative Front Bench supported those plans.

Photo of Wayne David Wayne David PPS (Rt Hon Adam Ingram, Minister of State), Ministry of Defence

Does the Chief Secretary agree that the new deal for lone parents has been particularly successful? Reforms are needed to the welfare system, however, to enable more lone parents to work.

Photo of Des Browne Des Browne Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

My hon. Friend is right. When we came into power, about 45 per cent. of lone parents were working, and that figure is now slightly beyond 55 per cent.—56 per cent., I think. There is still significantly more to do. That is why, in the pre-Budget report, my right hon. Friend the Chancellor announced additional support through the new deal for lone parents, which was augmented by the announcement this week by the Secretary of State for Work and Pensions. He is entirely correct to identify the challenge that we face, but we will only meet that challenge by redoubling our efforts through the new deal.

Photo of Paul Goodman Paul Goodman Shadow Minister (Childcare), Treasury

To be a success, however, the new deal could reasonably be expected to produce a consistent fall in the number of young people who are neither in employment nor full-time education. New data released since the previous Treasury questions show that number to be 1.2 million. If the new deal really is such a success, can the Chief Secretary explain why that number is now 180,000 higher than when the Chancellor launched the new deal, and at its highest since he took office?

Photo of Des Browne Des Browne Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

The hon. Gentleman articulates an argument for doing more on the new deal—more investment and, as I described it, redoubling our efforts—not for scrapping it. The fact is that the statistics that he quotes do not show the whole picture. That 1.2 million includes some people who are in part-time education or training. The situation is not nearly as bad as he describes it. I do not demur from the challenge—it is significant. We will only deal with this group of young people, however, if we are prepared to invest in them, not if we ignore them.

Photo of Barbara Keeley Barbara Keeley Labour, Worsley

Last Friday, a group of young people from high schools in my constituency came in to discuss their issues with me. The interesting thing is that worries about future employment did not rank among the concerns even of young people from a ward that is among the top 3 per cent. most deprived in the country. Does my right hon. Friend agree that we must redouble our efforts on the new deal, so that those young people can continue to feel that confidence?

Photo of Des Browne Des Browne Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

My hon. Friend describes one of the remarkable contrasts between the situation only a decade ago and the situation now for young people. Most young people in most of our communities now have the opportunity of a job, which they did not have before this Government came to power, but there are—it has already been highlighted in some of the supplementary questions—continuing challenges. Because of the state of the labour market, the bulk of the people coming into the new deal now are those who present the greatest challenge. We need to build on, to revise and to reform the new deal in order that it can address those issues more consistently.