Unemployment in the UK

Opposition Day — [18th Allotted Day] – in the House of Commons at 6:41 pm on 7th October 2008.

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Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means 6:41 pm, 7th October 2008

I have to inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister. I must also announce to the House that I am placing a 12-minute limit on Back-Bench speeches in this debate.

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions 7:18 pm, 7th October 2008

I beg to move,

That this House
notes with concern the recent increases in unemployment, and the widespread forecasts that the total may rise in the months ahead;
further notes that the UK already has almost five million people in receipt of out of work benefits;
and calls on the Government to implement measures to help British business secure existing jobs and to improve the back to work support available to those who do become unemployed.

Before I begin my remarks, may I welcome the members of the rather extensively new Department for Work and Pensions team to their positions? There has been a big change in the departmental ranks, but we on the Conservative Benches look forward to debating with all of them in the weeks and months ahead.

Much of the media attention over the past couple of weeks has rightly been on the crisis in the financial markets, which was the subject of the earlier debate this afternoon. In the second debate today I want to turn the attention of the House to an issue that is becoming an increasingly big concern for people around the country: unemployment. None of us wants to see the unemployment rate rise. We all hope that the gloomier forecasts about unemployment prove to be over-pessimistic, but the truth is that things are getting worse, and not only in the financial services sector. Yesterday, we had 600 jobs lost at the automotive firm LSUK in Sheffield. One thousand people per day are currently joining the dole queue. Unemployment is up by more than 40 per cent. in some areas. Employment is falling; vacancies are down by 60,000, and youth unemployment stands at more than 1.25 million.

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Photo of Chris Ruane Chris Ruane PPS (Rt Hon Caroline Flint, Minister of State), Department for Communities and Local Government

The hon. Gentleman mentioned employment levels, so may I inform him that in 1997 the employment level in my constituency was 23,000 and in 2007 it was 29,000? Does he know the employment levels for his constituency over that period?

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

The hon. Gentleman will find that the headline figures on employment levels that the Government and Ministers have been bandying around in recent weeks do not tell the whole story, and I shall return to his remarks shortly.

People up and down the country are worried about their jobs and businesses, and they are worried about the future. The worry is that this Government have been complacent about unemployment. Again and again, as the economic storm clouds gathered, Ministers have sheltered behind optimistic claims about their record on employment as a justification for their belief that Britain is somehow better placed to deal with the economic challenges that we face. They have claimed that Britain had "record employment" and that long-term unemployment has been "virtually eradicated". Only four weeks ago, the then Minister for Employment and Welfare Reform said:

"And we have grasped the opportunity to lift the rate of employment to a historically high level, with more people in work in Britain today than ever before in our history, and to reduce unemployment to levels not seen since the 1970s."

That remark does not entirely reflect the reality behind the scenes in the small print.

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Photo of Philip Davies Philip Davies Conservative, Shipley

My hon. Friend rightly said that people are concerned for their jobs, and nowhere is that more the case than in west Yorkshire. It faces the combined effects of what has happened to HBOS and Bradford & Bingley, which are based in my constituency. Does he agree that although the Government have been keen to safeguard Northern Rock jobs in Newcastle and jobs in Scotland—through the deal that they cobbled together with Lloyds TSB and HBOS—it is just as important to safeguard jobs in west Yorkshire? Does he also agree that everything should be done to try to help that local economy, which will be devastated by the combined effects of what is taking place?

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

My hon. Friend makes an important point, and he speaks out clearly in defence of the interests of the people of west Yorkshire. We should be concerned about employment in both Bradford and Halifax, given what has happened in the past few weeks.

After 10 years in power, Ministers need to spend a bit more time in the real world, because as always with this Government, when one reads the small print, one sees that there is a much more sober tale to tell. Ministers tell us that they have created 3 million more jobs, but they do not tell us that about 80 per cent. of them have gone to migrant workers. If one uses the International Labour Organisation measure of unemployment, which, in opposition, the Prime Minister used to prefer, one is told that the jobless total has fallen by only 300,000 over 10 years of continuous economic growth. Almost 5 million people in Britain are claiming out-of-work benefits. The rate of economic inactivity—one in five—is pretty much unchanged from 1997. Some 5 million people in Britain do not have any formal qualification, and the employment rate for those lower-skilled workers has fallen under Labour. Britain's employment growth last year was among the lowest in Europe; it was higher only than in Hungary and Portugal.

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Photo of Brian H Donohoe Brian H Donohoe Labour, Central Ayrshire

Does the hon. Gentleman really think that this debate is of value to the British people? Talking down the economy instead of talking it up is the poison that is bringing about the uncertainty in our constituencies. My constituency contains companies that are taking on apprentices for the first time in a generation and companies that are expanding by the day. I do not need to hear drivel being talked; the economy does not need to be talked down.

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

It is only understandable that Labour Members will not like being told the truth about the Government's record on employment, but if we are to address the problem of rising unemployment, we should at least start by recognising the scale of the challenge.

The reality should not be buried in the small print. A perfect example is the Government's claim that long-term unemployment has been "virtually eradicated". In fact, they have made it statistically impossible to be long-term unemployed. Young people who claim jobseeker's allowance for six months and over-25s who claim for more than 18 months are automatically referred to the new deal, and if they fail to find a job initially on the new deal, they are referred to a period of mandatory training. At that point, claimants are moved off JSA and on to a training allowance, and are removed from the Government's official claimant count. At any one time, about 40,000 people are hidden from the Government's official claimant count in that way. About one in three people leaving the new deal return straight to benefits, at which point they rejoin the claimant count, their previous claim is wiped clean and they appear to have only just become unemployed. Under the Government's current system, it is possible for people to be have been unemployed for more than two years, but for them to appear to have been on benefits for only two days.

Some of the other hidden statistics are equally worrying. According to official figures, 700,000 people who would like to work full-time are working part-time because they cannot find full-time work. Employment among British-born, British nationals is falling fast; 250,000 fewer UK nationals are in employment than two years ago. Until now, this Government have got away with their failure to address the underlying weakness in our labour market, but it is about time that they stopped denying that there is an unemployment problem in this country and started listening to those who are already struggling.

We know that the consequences of those employment failures are not just limited to adults; child poverty is up for the second year in a row. The UK has a higher proportion of its children living in workless households than any other EU country. Almost 1.3 million young people aged 16 to 24 are not in work or full-time education—that is a 19 per cent. increase on the 1997 figure.

How should we begin to tackle the problem? First, we must do everything possible to help those who are unfortunate enough to lose their jobs. An important first step would be to accelerate the process of welfare reform—to turn some of the things on which the Secretary of State and I have agreed into reality now, rather than in two years' time or more. People think that talking about welfare reform at a time of rising unemployment is a contradiction in terms; how can one introduce big new changes to the welfare-to-work process when the number of jobs is falling? That is not the right view to take, because we know about the experience from the other side of the Atlantic. When I went to New York in January to look at welfare schemes, I asked people about coping during the recession of the early 2000s. I was told that the introduction of innovative employment programmes, which helped to match people and their skills with the opportunities that were available, helped to make a difference to the rise in the claimant count. The rise in the number of unemployed was less pronounced than it had been in previous recessions.

We understand that times have changed and that Britain is facing a tougher economic climate. If anything, that makes the case stronger for a fairer, more active welfare system. With the publication of our green paper on welfare reform in January, and the Secretary of State's subsequent decision to adopt both David Freud's proposals and ours, there should be cross-party consensus on what needs to be done—so why the wait? The Government will have our backing if they accelerate the reform process, and now is not the time to be timid.

People who lose their jobs will need individualised support to reflect their needs. They will need tailored employment programmes that offer, among other things: job search facilities; specialised training to increase suitability for work; personalised career and recruitment advice; interview training with employers; and CV-writing techniques. The reforms that we have all discussed would lead to the creation of a world-leading back-to-work system, through centres all around the country delivering the necessary support.

We have some of those skills in Britain already, but as the Government's amendment so clearly reveals, the programmes that are in place barely scratch the surface of the challenge we face. That is why we need to accept the accounting changes that allow the use of benefit savings to help pay for the programmes that get people back into work—the so-called DEL-AME, or departmental expenditure limits-annually managed expenditure, switch. It is no good piloting that change sometime after 2010, because it is needed now. Without it, we cannot build the scale of programmes needed to meet the nature of the challenge we face. The biggest problem with the Government's Green Paper in the summer was that everything seemed to be timetabled for years down the track. I offer the Secretary of State our support in changing that and getting on with things now.

We need to do more to protect the jobs that we have. In the last recession, I worked for a small company in Winchester. Out of the blue, our biggest customer went bankrupt and we did not even have enough money to pay the salary bill at the end of the month. It would have been easy for the bank to pull the plug, but we were lucky and it did not. With a real team effort, the business pulled through, but many others in that position are not so lucky. Loans can be called in and businesses can collapse almost overnight. We need to take steps to protect good businesses that suffer a sudden problem of that kind.

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Photo of David Wright David Wright PPS (Rt Hon Jane Kennedy, Financial Secretary), HM Treasury

The hon. Gentleman will know that local authorities provide a lot of employment. Can he predict what would happen to local authority jobs if there was a freeze on council tax?

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Probably be of less impact than, oh, I don't know... doing what David Wright and his cronies did and stabbing Tony...

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

I am sorry that the hon. Gentleman does not appear to believe that, given the financial and cost-of-living pressures on pensioners, freezing the council tax is a good idea. We happen to think that it is, and I would be delighted to argue the case with him on the doorsteps of pensioners in my constituency and elsewhere.

We need to take steps to protect small businesses that face a sudden problem, especially in the current climate of difficult times and in the months ahead. At the moment, our insolvency rules do not do enough to stop those firms going under. That needs to be changed as a matter of urgency. The United States has a special system for companies in that position, called chapter 11. The system allows companies in difficulties enough time and protection to sort things out. A similar system should be introduced in the UK. It would allow company directors the time to formulate a plan to rescue or restructure the company. It would not save lame ducks, but it would give good companies a breathing space when their financing was put under pressure by world events or a sudden, unexpected and unwanted hiccup, such as a supplier failing to supply or a customer going bankrupt.

The current insolvency system often means that the only option is to close down the business, destroying livelihoods and creating significant job losses. If we were to adopt the proposed reforms that we have set out, introducing a chapter 11-style system, it would create a breathing space that allowed company directors to formulate a plan to rescue or restructure a company.

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Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

My hon. Friend is making an important point, and I hope that it will not be lost in party political jibes from the Labour Benches. At the moment, many companies that are well run have severe credit problems because of the banking crisis, in which the banks are not lending to each other, let alone to companies. In these circumstances, well-run companies may be short of credit and in a situation in which they and their creditors do not have time to come to some arrangement, as they would in normal conditions. We are in a crisis, and we require crisis thinking on a collaborative basis, so I welcome my hon. Friend's contribution.

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

My hon. Friend makes his point well. In the next few weeks, we must all be careful not to use rhetoric against the financial services sector and the banks that ends up being counter-productive. The reality is that our banks play a crucial role in the fabric of our economy. The disappearance of credit facilities affects individuals and small businesses and could, as my hon. Friend rightly says, force otherwise good businesses into receivership. We wish the Government well in their efforts to ensure stability for our banking system. We also need protection in place for businesses that run into unexpected difficulties that, given time, they might be able to trade through.

If the Government accept the principle behind our proposals, there are three elements to our plan. The first is to introduce an automatic stay of enforcement. That would prevent banks or other creditors from intervening immediately to enforce repayment of debt while the management stays in place and attempts to negotiate a restructuring. The second is to give a priority status for any financier willing to provide ongoing funding for the company post petition. Unlike in the UK, firms in chapter 11 in the US are able to raise finance even after they have petitioned for bankruptcy. Lenders will lend them money in exchange for "super-priority" over other unsecured creditors. In fact, there is a whole market for such rescue funding in the US. Introducing such a market in the UK could help to protect businesses and jobs.

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Photo of Stewart Hosie Stewart Hosie Shadow Chief Whip (Commons), Shadow Spokesperson (Treasury)

If companies had a stay of execution and the chance to seek private finance, would the hon. Gentleman envisage reversing the Government's recent changes to the capital gains tax regime to make that an attractive proposition? If not, what changes would need to be made to capital gains tax?

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

The experience in the US suggests that such tax changes might not be necessary. We are not in a position now to write the next Budget, but the opportunity to lend to a business that has the potential to recover and is otherwise fundamentally sound, in exchange for super-priority status, would be attractive to investors in any case.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

I am sure that the hon. Gentleman does his homework, because he is quite bright. Does he not realise that most large US companies that go into chapter 11 dump their pension liabilities on the US equivalent of the Pension Protection Fund, and their employees suffer horrendously? That is how those companies get afloat again. For example, every major US airline has done that. What it means is that somebody somewhere suffers and pays for those companies to stay in business. It is not a no-risk proposition.

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

Right now the priority in this country should be to protect jobs. We are not talking about an exact replication of the US system, but about taking the best from it and applying it here. If a business is in difficulties, it may be better for change to be negotiated within the business, instead of seeing the kind of failure that faces Alitalia, with tens of thousands of jobs at risk in Italy because the unions and the management could not agree on a rescue package.

The point about the chapter 11 system is that it allows time for discussions on securing the future of the business. The hon. Gentleman may not appreciate the problem; at the moment, the banks can come in, literally overnight, and close a business down. The jobs go and the business is completely lost. We are arguing for a stay of execution, so that otherwise decent businesses that are experiencing hiccups have a chance to survive, especially at a time like this. Under the current regime, the danger is that that will not happen.

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Photo of Ian Davidson Ian Davidson Labour, Glasgow South West

Is the hon. Gentleman aware that none of this would be necessary under the plans recently announced by the Scottish Executive, who have told us that all the money needed for every public and private scheme will be borrowed from the Government of Qatar? Does he believe that that is likely to happen?

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

It sounds a tad implausible, but I am sure that it will lead to lively debate in Scotland. Sadly, I fear that businesses in Scotland will not be immune to the present problems. The changes for which we are arguing tonight would also apply to businesses in Scotland, Wales, Northern Ireland—indeed, across the UK.

The third element of reform that is needed is to prevent unscrupulous creditors from vetoing desirable restructurings. Once a company had proposed a restructuring plan, it would be required to submit it to the court, along with any supporting evidence. Any creditor group that disputed the plan would also be able to submit evidence, but once the court and a majority of creditors had approved the plan, it would bind all of them.

Taken together, these reforms may provide the right framework to allow good companies to continue to trade during an economic downturn. I sincerely hope that the Government will adopt these proposals now. British business cannot afford to wait to the next election for a set of reforms like this. We face tough challenges today and I hope that the Government will accept the reforms in a good spirit and implement them as soon as possible.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

The hon. Gentleman's party has had a Damascene conversion on unemployment, and I welcome that. I also welcome his position that more regulation is appropriate, rather than a free-for-all. I shall try to tempt him a little further. Would he care to distance his party from hedge fund managers, spiv short-sellers and arbitrageurs, some of whom have been funding his party?

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

I am very surprised that any Labour MP would want to draw attention to that issue today given the fact that only last week the Prime Minister appointed the senior director of a City fund that has been involved in short trading to his Government to serve as City Minister. I am baffled by why any Labour MP would want to try to turn the mirror on the Opposition—Labour should be answering those questions, not anyone who sits on this side.

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Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

I apologise to my hon. Friend for intervening twice. The simple fact is that anyone who was selling short in the city was borrowing stock in order to do so. Guess who was lending the stock? It was the pension funds and other so-called Labour-approved reputable trading bodies. I think we need a little less sanctimonious crap from Members opposite.

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

My hon. Friend makes his point succinctly. There will come a time when all the events that have taken place in the financial markets in the past few weeks will of course need to be addressed, but right now our duty as a House of Commons and as a nation is to seek stability in our economy and to take the steps that we need to take to protect jobs, to protect businesses and to ensure that we can look after those who are unfortunate enough to lose their jobs. The other big step that the Government need to take to protect business and jobs is on tax. It cannot help employment prospects in this country if some of our biggest firms are transferring their headquarters and domiciles to other countries so that they can take advantage of favourable tax regimes in places such as Ireland. That cannot help the employment prospects of people in this country either. That is why we continue to argue that we need to cut the main rate of corporation tax from 28p to 25p and to reverse the Government's planned increase in the small companies rate from 20p to 22p. The costs of such a reform can be met by dramatically reducing the complex structure of allowances that the Government have introduced for business. We need a simpler and more attractive tax regime in this country that makes it attractive to do business here, that protects jobs and that attracts employers to this country in the future.

I sincerely hope that unemployment does not rise as far and as fast as some are predicting.

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

The hon. Gentleman's point about corporation tax, which has been mentioned and which particularly affects companies in Northern Ireland because of the land boundary, has been resisted strongly by the Treasury. Does he agree that the experience of the Irish Republic, where a lot of inward investment has attracted a high percentage of EU inward investment as a result of the low corporation tax rate, proves his point? Corporation tax is an important incentive for firms, and we cannot understand why the Treasury has resisted the idea.

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

The hon. Gentleman makes an extremely fair point. We feel strongly about that issue, and that is why we have argued for the reforms and why it remains our aspiration, when economic circumstances permit and when we are able to share the proceeds of growth, to bring down the tax burden on business and on individuals in this country so that we do not lose major corporations to other countries. We cannot afford to do that.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

Does not the hon. Gentleman find it ironic, as I do, that all those tax incentives are in the Republic of Ireland, yet the Republic of Ireland was the first European country to go into recession? That is very problematic for the future. Does not he agree that what we really need is stability so that we do not have a sharp downturn, as we have seen in the Republic of Ireland?

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

We clearly need to achieve economic stability in this country and in other parts of the world. There is no doubt about that. Economic stability is the only environment in which to do business and it is a tragedy that we have gone from a boom to a bust in this country despite being told by the Prime Minister that there would be no more boom and no more bust—that somehow we had got over that, as he had changed the laws of economics. However, it was not like that, and our businesses are paying the price today.

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Photo of Paul Rowen Paul Rowen Shadow Minister, Work & Pensions, Whip

I have listened to the hon. Gentleman's proposals with some interest. Will he tell the House what he envisages will be the cost of his welfare reform proposals and the other changes, such as the chapter 11 changes? What does he envisage will be the net saving in the number of jobs that he expects his proposals to save?

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

There are two key elements to my argument today, and the chapter 11 proposals would have no cost impact. On the subject of bringing forward the welfare reforms, since the Secretary of State has assured us regularly over the past few weeks that his proposals carry no extra cost, I assume that bringing them forward earlier would indeed carry no extra cost. It is merely a question of getting on with the job faster.

I sincerely hope that unemployment does not rise as far or as fast as some are predicting, but we need to be ready if it does. It will not help tackle the problem if the Government continue to bury their head in the sand about the true scale of worklessness in the UK. We need measures to protect small business and to help it grow. We need better support for those who do lose their jobs so that we can get them back into work as quickly as possible.

We have heard boast after boast about the Government's record on employment in the past few months—boasts that do not pass muster under scrutiny. So, we have had enough of the complacency and enough of the empty rhetoric about a record on employment that just does not reflect the reality. Let us see some real action before things can get any worse.

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions 7:45 pm, 7th October 2008

I beg to move, To leave out from 'House' to end and to add instead thereof:

"notes the global economic challenges that are facing the UK;
congratulates the Government on policies such as Local Employment Partnerships which have helped nearly 40,000 people find work, Pathways to Work which has supported more than 94,000 people off Incapacity Benefit and into work, and the New Deal which has helped 1.97 million people into jobs;
welcomes the policies of this Government which seek to reform the welfare state to give people active support to get back into work as quickly as possible;
and supports rapid action to ensure that where redundancies occur people are given the personalised support they need to return to work, to intensify the activity of the welfare state to ensure no-one is written off and to maintain a strong and flexible labour market.".

I was rather sad to hear the partisan tone adopted by Chris Grayling. This is an important issue for our constituents and I think that it would be better if we debated it in the spirit in which I thought that the hon. Gentleman's leader said that he would approach this economic challenge. That spirit was that we should try to work together to address these issues. I shall try to address the points that the hon. Gentleman made and some of his rather eccentric use of facts. I shall then turn to his proposals and try to explain that all his main points are already Government policy. We are glad that he already agrees with what we are doing on employment and on the insolvency regime.

It is right that we should debate the subject tonight, and I am glad that the hon. Gentleman called the debate. Over the last two days, we have rightly discussed in this Chamber the financial situation and the global economy. All parties agree that there is no way that Britain could not be affected by the international situation. We could not stop the world, even if we wanted to get off. We need to maintain our open economy and to do everything we can to protect people through the current financial and economic situation and to prepare them for the upturn that will come thereafter. That is exactly what the Government are doing.

Our constituents tell us that they know about the drama on Wall street and Threadneedle street, but they want to know what the ripple effect will be on their high streets. The hon. Gentleman said that we should be living in the real world, but that is what we do. Last week, I spent two days in the high street in Kentish Town at the Jobcentre Plus, talking to advisers and to people who have just started to claim. The interesting thing was that there was a steady flow, as there always is, of people signing off benefits, because they have found work, and a flow of people coming in. People asked two questions: first, what is happening in the economy, and secondly, what are the Government doing? I want to talk about both those things and will try to address the points that the hon. Gentleman made.

Let us start with the facts. The latest analysis of the labour market makes it clear that unemployment is rising. The number of people claiming jobseeker's allowance has been going up since the beginning of the year. In the last month, it went up by just over 32,000. Inflows on to jobseeker's allowance are now at 250,000 people compared with 200,000 earlier in the year. The steady flow of people in and out that I mentioned seeing in Kentish Town is reflected in the wider economy. At the same time as 250,000 people were flowing on to the allowance, 216,000 people flowed off in August. That is because we have a strong, flexible labour market that is one of the best in the G7.

The hon. Gentleman tried to make some points about that, but he could not detract from the fact that we have the second highest employment rate in the G7. He cannot detract from the fact that there are 600,000 vacancies in the economy or that 500,000 people start a new job every month. Every time someone loses their job it is a worry, and it is a tragedy if they cannot find the next one. We should all be focusing on exactly what we can do to ensure that people find their next job as fast as they can as well as protecting existing jobs.

Let me correct some of the things that the hon. Gentleman mentioned. He said, for example, that it is not true that employment has been at a record level this year—he quoted an example of that being said earlier this year. Over the past 11 years, the employment rate has been at 74.3 per cent., compared with 71.4 per cent. under the Conservative Government. There has been a significant rise in the employment rate in this country. It is the highest employment level that has ever been achieved in this country. We are coming from a high level and it is therefore wrong for him to say that the economy has not had a successful labour market over the past few years. It is wrong for him to say that 80 per cent. of those jobs have gone to migrants. That figure is simply wrong. The figure is 50 per cent. and 800,000 more UK-born people are in work than there were in 1997. It is wrong of him to say that the inactivity rate is at 20 per cent. That includes students, whose numbers have risen very significantly over the last 11 years, and I thought that that was something that those on the Conservative Front Bench supported. If the number of students is taken out, the inactivity rate has fallen significantly.

It is wrong to say that long-term unemployment has not fallen as, even under the ILO measure that the hon. Gentleman quoted, it has gone from 800,000 to 354,000. It has fallen by more than half, so the figures that he tried to quote were, I am afraid, wrong. In his motion, he states that 5 million people are inactive, but that figure includes carers, people who have been recently bereaved, and parents with children under five. Even he does not want to see them in work. Will he confirm that that 5 million figure includes all those people? Is he saying that all carers should go back into work, or that the 5 million figure is a completely inappropriate way of describing the inactivity rate?

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T

Employment may be high, but are all these employed people doing jobs that are useful to us, or that we really want done?
How many jobs exist only by Government edict - either new, and not always necessary, public sector jobs or those jobs that exist in the private sector solely to service the plethora of regulations we now have? And how many are employed to spy on and collect transgression taxes from us?
Are they doing jobs that are fulfilling and well rewarded? Or are they so bored senseless that they can't wait to clock off for a night's binge drinking?
Employment is not just about quantity. It's also about quality, both for the employee and for the rest of society. On that measure, we are falling short.

Submitted by Tom Knott

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

The Secretary of State's point about carers is right, but will he confirm that he is now proposing to move them on to jobseeker's allowance rather than income support?

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

Yes. That is exactly what we are proposing. We want to simplify the benefits system, which is something that Front-Bench Members of all parties agree with. I hope that he will say in future that he does not recognise that 5 million figure, which is a totally inappropriate way of describing inactivity. If he wants to continue using it, he will have to make it clear to carers that he is expecting them to look for work.

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

We are not going to change the conditionality regime for carers. Is the hon. Gentleman saying that he wants carers to look for work? If not, he should he say that he will no longer use the 5 million figure because it is deeply—

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

No, it is not true. I think that "eccentric" is the most parliamentary way that I can put it.

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

So can I take it that the Secretary of State does not believe that there are many people among those carers who would like to work if we provided the right care and support for their families, and the right job opportunities for them? Does he not agree that, if we develop a world-leading back-to-work system—and I trust that we will—it should be open and available to carers, to help them find the opportunities to do more than simply be full-time carers?

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

Basically, Mr. Deputy Speaker, I think that that shows that the hon. Gentleman agrees that the 5 million figure is not the right one for him to use. I hope that he will not use it in future.

I want to make it clear to the House that we have not been sitting on our hands. We have not been complacent. For the last six months, my Department has been preparing for a wide range of economic scenarios. I want to take the hon. Member for Epsom and Ewell through what we are planning to do. There are three lessons in particular that I want to share with him.

The first lesson is that we should maintain the active approach to getting people back to work. We have looked at the lessons of our labour market history, and the worst possible thing that we could do at this moment is to relax the activity and obligations required in our back-to-work system. How do we know that? We know it because it is exactly what the Conservative Government did in the 1980s, when they took all conditionality off unemployment benefits. That meant that unemployment rose further than it need have done, to 3 million.

We will not repeat that mistake, and we will maintain the conditionality in the system. Why will we do that? We will do it because conditionality means giving people support and requiring them to take it up. If it is more difficult for people to find work, it would be extraordinary at this stage to start relaxing that conditionality or to provide people with less support.

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Photo of Tobias Ellwood Tobias Ellwood Shadow Minister (Culture, Media and Sport)

May I take the Secretary of State back to his statement that only 50 per cent. rather than 80 per cent. of jobs went to UK people, and that that was where the Government were focusing their efforts? Does he think that 50 per cent. is still acceptable?

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

Are the Opposition saying that they do not want any migrants to come to this country? Is that the policy of those on the Opposition Front Bench? We think that having a positive approach to migration's contribution to our economy is important. We think that migration has to be managed, and we are bringing in the points-based system because we think that it will help us to do that. We think that it is right that migrants should contribute to our economy. If Opposition Front-Bench Members do not believe that, they should say so. I was merely pointing out that the figure used by the hon. Member for Epsom and Ewell was wrong.

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Photo of Ian Davidson Ian Davidson Labour, Glasgow South West

I want to make a point about conditionality. Does my right hon. Friend agree that simply asking people to turn up and participate in training is not sufficient and that, in some circumstances, we need something like the old community programme? People should be given the opportunity to go into meaningful work to get them into the habit of attendance. Something like that would be immensely constructive, especially at a time of declining economic circumstances. Will he introduce it tomorrow?

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

I cannot quite promise to do it tomorrow, but my hon. Friend will be glad to know that the flexible new deal will do exactly what he describes. It will require people to do mandatory work in return for their benefits. As he knows, we said in our welfare reform Green Paper that we would expect people gradually over two years to be looking to work for their benefits. I am sure that he will support us in that approach as well.

My hon. Friend is absolutely right to say that we need an active approach to getting people back to work, The hon. Member for Epsom and Ewell quoted at length from his recent document "Labour isn't working...again", in which he said that he wanted a network of back-to-work centres around the country that would make sure that there was an

"immediate assessment of every individual's skills and barriers to work".

Well, we do that now in jobcentres. The hon. Gentleman also says that he wants

"individualised support to reflect individual needs", with job search facilities, CV writing and interview training. We do that already. He says he wants to harness

"the innovation of the private and voluntary providers", but we do that already. We do not need to reinvent a network of back-to-work centres around the country. Those centres are called Jobcentre Plus, and they are in all our communities. If the hon. Gentleman wants to visit the one in his area, it is at 50, East street, Epsom, Surrey. I suggest that he goes and finds out what is really happening, rather than presenting our policy as his own.

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

I have given way to the hon. Gentleman enough already. [Hon. Members: "Oh!"] Very well, I give way.

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Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

Does the right hon. Gentleman really believe that Jobcentre Plus offers the scale of back-to-work support that is needed, and that it replicates what is done in the back-to-work centres in north America? If he does believe that and that is the extent of his aspiration, it is profoundly depressing.

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

Jobcentre Plus is better than what is offered in America. I visited back-to-work centres in New York, and people queue for hours. Often, they are sent back at the end of the day. They get no advice on getting back to work, and there is a total separation between claiming benefits and back-to-work services. From that Dispatch Box, the hon. Gentleman has just insulted the people who work for Jobcentre Plus in this country. That insult will be noted around my Department, and he should retract it.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

The Secretary of State is right to praise the role played for many years by Jobcentre Plus and the jobcentres in getting people back to work and tailoring support to their needs. However, even at a time when the economy is so precarious, there is a proposal to close some jobcentres in my constituency and in four other areas in Wales. Will he take that proposal on board? Will he meet me, or instruct the area managers to withhold or suspend the proposed closures at this important juncture? People need the extra support that the centres give, especially in areas of historically high unemployment

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

I should of course be very happy to meet my hon. Friend, but the closures have been proposed because my Department has met some very significant targets, with claimant count in those areas falling from 130,000 to 100,000 and there is another 12,000 headcount reduction. We have looked at a range of economic scenarios to see how the system would react to different levels of claimant count. We are confident that the system is robust, not least because an increasing amount of work is being done by telephone and over the internet. It is right that we do what needs to be done face to face in jobcentres, but the rest can be done by telephone and over the internet. However, I can reassure my hon. Friend that we have already decided to keep on some of the extra people whom we will recruit for the introduction of the employment and support allowance. They will be kept on to help deal with the very problem that he has identified, but I shall of course be happy to talk to him about the specific point that he raises.

The hon. Member for Epsom and Ewell, rather than demeaning the work of Jobcentre Plus, should recognise the world-class work that it does. It has been recognised by the National Audit Office very recently, and he should accept that 60 per cent. of people go back to work within three months, that 80 per cent. go back within six months, and that 90 per cent. do so within a year. That is a very good record, but we want to go further. We want to strengthen the regime further, so we are making sure that people sign on for skills when they sign on for work. We will modernise our new deals and bring them into a single, flexible new deal, so that they can respond to personal needs. As I said earlier, there will be a period of 12 months' intensive support with four weeks of mandatory activity, and we will fast-track people with greater needs on to the new deal. They will include people who have not been in education, employment or training when they turn 18, or those who are ex-offenders.

The regime is world class. We have been planning for these economic contingencies, and we have been strengthening the system. The first lesson of the past 20 years in this country is that the activity of the system should not be relaxed. We need an active system, rather than the passive one that existed under the previous Conservative Government.

The second thing that we will not do is to repeat the mistake of the previous Government of massaging the figures to pretend that the numbers are not changing. We will not shift people on to incapacity benefit and consign them to a life trapped on benefits without any kind of support, as a way of keeping the headline figures below what they really are. I can give the hon. Member for Epsom and Ewell that commitment, and I hope that he will match it. We will not manipulate the figures in the way that he did. We will not move people on to inactive benefits when they should be on active benefits. In fact, we shall be doing exactly the opposite; we will make sure that people are moved on to active benefits precisely because that is the right thing for them and their families.

The hon. Gentleman may want to listen to the third lesson of the changes, as for once I am about to agree with him. He is absolutely right: we should not take our foot off the pedal of welfare reform. When people may be finding it more difficult to look for work, they should get more help rather than less. He said that we should be accelerating reforms and bringing them in right now. If I may say so, that is a tiny bit churlish given that yesterday we said that we would be bringing in radical reforms to lone parent support, and given that we are abolishing incapacity benefit and bringing in the employment and support allowance this autumn.

A programme of reform is already going on. It is significant and radical and the hon. Gentleman has praised it a number of times over the past few months. We welcome and accept his support, but he should recognise the changes that are going on. We are increasing the support we give lone parents but we are also asking them to do more in return. From this April, every lone parent who goes back into work has a £40 in-work credit every week—£60 in London. They have more help in and out of work; there is a discretionary fund that can pay for a new uniform or for child care costs.

We have radically improved support for lone parents and in return we think it is right to ask them to look for work at a slightly earlier stage. At present, in Sweden, they have to look for work immediately when their parental leave finishes. In Denmark, the age is one, but in the UK it is 16. Clearly, the balance is not right in this country so we shall be reducing the age from 16 to 12, to 10 and then to seven. That is the right approach: giving people more support, but also expecting more of them in return.

We are doing exactly the same thing with incapacity benefit. Under the Conservative Government, incapacity benefit tripled. Lone parent numbers tripled. The numbers went up from 700,000 to 2.6 million. There was no support for people at all. They were given no help with their health or to get back into work. We introduced pathways to work. We know that the process works and that it gets more people back into work and now we are making it available to everyone across the country. We are replacing IB with the ESA. We will re-test everybody on incapacity benefit to see whether they are on the right benefit and we will expect the vast majority of people on ESA to take up pathways to work and the support we offer. Again, there will be better support, which we know works, and we will be asking and requiring people to take up that support because we know it will change their lives. It will get more people back to health and back into work.

It is wrong to say that we are not introducing radical welfare reform right now; we are doing exactly that. To pick up the point the hon. Member for Epsom and Ewell made about the AME-DEL transfers—the Ant and Dec of welfare reform policy—we are moving ahead with them as fast as David Freud recommended. The fact that the hon. Gentleman thinks that should be done now shows his complete lack of understanding of how we contract with the private sector. David Freud, whom the hon. Gentleman often quotes, says that we are proceeding at exactly the right rate and that the strategy will be a revolution in the delivery of welfare. I would rather take advice from David Freud than from the hon. Gentleman.

At the end of the hon. Gentleman's remarks he spoke about the insolvency regime. I am sure the House listened with interest to what he said, but I am afraid I have to tell him that the reforms introduced in the Enterprise Act 2002 have modernised our system, and have meant that it is recognised across the world as one of the very best insolvency regimes. The hon. Gentleman mentioned three things. On automatic sale enforcement, administration already provides for a moratorium for all companies while restructuring is agreed. On priority funding, again administration already provides for priority status over other creditors. The same is true for his proposal on restricting creditor rights to veto restructuring. We have already modernised the regime and we are bringing in further changes next year, yet he tries to pretend that there is a solution to something that the Government have already achieved.

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Photo of Peter Bone Peter Bone Conservative, Wellingborough

I am listening with interest to the Secretary of State on this point. I am quite sure that chapter 11 or its equivalent is not in place in the UK at present. Is he really saying that the Government's Act is the same as chapter 11?

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Photo of James Purnell James Purnell Secretary of State, Department for Work and Pensions

It is similar. We have a different approach because we have a different legal system but the hon. Gentleman is welcome to read the Enterprise Act 2002 and raise it with Ministers.

In conclusion, the thing we should be doing in the House is protecting people in the short term and helping them for the long term. Instead of scoring partisan points and trying to make rather eccentric use of the figures, the hon. Member for Epsom and Ewell should be focusing on what is right for people. We are continuing to help people, as we have done, and in addition we are making sure that people have proper protection for their mortgages—again improving something his Government left undone. We are making sure that the rapid reaction force is available to people around the country. Most of all we are learning those three lessons: not to fiddle the figures, not to consign people to inactive benefits and, still less, not to slacken the pace on welfare reform. I hope that that is the approach he will be taking.

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Photo of Jennifer Willott Jennifer Willott Shadow Secretary of State for Work and Pensions, Shadow Minister (Justice) 8:05 pm, 7th October 2008

I join Chris Grayling in welcoming the new faces on the Treasury Bench. I also welcome the debate; it is good to be talking about such important issues so soon. When I was looking for an update on the latest figures, I found an estimate produced by the British Chambers of Commerce today that unemployment figures will rise by 350,000 by next year, which shows how important the issue is and how crucial it is that we do something as soon as possible to try to stem the problem.

The recent rises in unemployment have been widespread across the economy in general, but in the main they can be attributed to people who have been unemployed for less than six months, men, those aged between 25 and 49 and those in the north and the midlands. Specific groups need support and help at this time.

In a long-term crisis, we can use indicators to measure the severity of the situation. Looking at those indicators today, some of them are particularly worrying for the future. One of them is the increasing length of time that somebody is unemployed. As it becomes harder to find work, people are unemployed for longer. As we are at the beginning of the crisis, that is not happening yet. However, the number of vacancies relative to the number of filled jobs has been falling recently, especially in certain sectors such as construction, finance and business and other services. That is a worrying indication for the future.

Another indicator relates to average earnings. When times are very tough, earnings grow more slowly as employees' bargaining power is eroded as the job market changes. It is too early to see clear trends, but the latest figures—for June—show that average earnings growth, including bonuses, fell from 4 per cent. at the beginning of the year to 3.4 per cent., which, despite large rises in inflation over the same period, suggests that the bargaining power of employees is beginning to become more limited. That is a worrying sign for the long term.

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Photo of Ian Davidson Ian Davidson Labour, Glasgow South West

May I seek clarification as to whether the Liberal party agrees that in these circumstances we need a substantial increase in the national minimum wage? What is the figure that the Liberal party would like to see it raised to?

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Photo of Jennifer Willott Jennifer Willott Shadow Secretary of State for Work and Pensions, Shadow Minister (Justice)

That could be a foolhardy move at this point in time. When a number of businesses are struggling, it could tip some of them over the edge.

Another issue that I want to raise is the level of economic inactivity. When there is a long-term crisis in the economy, the long-term unemployed eventually stop searching for work and leave the job market altogether. Fortunately, we have not yet reached that point.

There are worrying signs, but this evening the Government are clearly taking pleasure in the fact that we are not experiencing anything that looks as severe as the situation at the beginning of the last recession in 1992-93, when the Tories were in power. However, I want to flag up a couple of concerns about the Government's record. The Government have wasted a great opportunity. In 1997, when they came in, there were extraordinarily favourable conditions for introducing radical welfare reform. There was sustained growth, and the Government put a huge amount of money into welfare reform, but the reforms have been patchy at best. There are persistently high incapacity benefit claimant counts and persistent levels of poverty.

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Photo of Paul Rowen Paul Rowen Shadow Minister, Work & Pensions, Whip

I am sure that my hon. Friend is aware that there is a part of my constituency where three quarters of people are on one form of benefits or another; I know that the Secretary of State is aware of that, because he visited my constituency earlier this year. Does my hon. Friend agree that that illustrates the fact that the Government have patently failed to do anything to get those people back to work?

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Photo of Jennifer Willott Jennifer Willott Shadow Secretary of State for Work and Pensions, Shadow Minister (Justice)

I share my hon. Friend's concerns. There are areas in the Welsh valleys, very close to my constituency, where there are very high levels of worklessness, which is extremely damaging to entire communities. Despite huge efforts, the Government have not managed sufficiently to reduce persistent poverty levels in the UK. That is one of their failings.

I want to flag up the issue of rising youth unemployment. Gordon Brown [Interruption.] Sorry; the Prime Minister said in 1995, when he was shadow Chancellor, that no young person should spend years without a job, and he pledged that no young person would do so under Labour. However, the new deal for young people has not been as successful as the Government hoped. Youth unemployment is higher than in 1997, and it is rising. It is up 172,000 on its lowest point, which was reached back in 2001. Worklessness among the 18-to-24 age group is worsening for every single category, including those who have been unemployed for up to six months, those unemployed for between six and 12 months, those unemployed for more than 12 months and those unemployed for more than 24 months. It is very worrying for the future that so many young people are unemployed. The figures are significantly worse than they were when the new deal for young people was first rolled out. Worryingly, we are talking about an underlying trend; the recent economic turmoil cannot be blamed for the situation, as the figures were similar last year. That trend needs to be tackled.

The new deal for lone parents, which the Secretary of State mentioned, has been more of a success, although the picture is mixed. Fewer parents with children over the age of 12 have volunteered to participate than was hoped, but it seems to have been reasonably successful; of those who participated whose youngest child was over the age of 12, about half left immediately to go into employment. I am somewhat confused about why the Government are moving lone parents from a programme that appears to be reasonably successful to a sanctions regime under jobseeker's allowance, given that research from the Department for Work and Pensions itself found that lone parents did not respond to sanctions by going into work. They often did not realise why they had been sanctioned, as they were not certain about how much benefit they should have been on in the first place. That is unsurprising, given the rate of error in the benefits and tax credits systems.

My main concern about the changes that the Government propose, and the impact on unemployment, relates to the economic climate, which we are all discussing. Introducing conditionality for claimants will mean that if they do not get work, they will face sanctions or have to go into workfare. That seems to be a wrong target, particularly with respect to those furthest from the job market—those who are disabled, who have been out of work for a long time, who have very low skills levels, who are lone parents or who have additional caring responsibilities. The job market is becoming increasingly challenging for those who are out of work, and employers are increasingly calling the shots. They can afford to be choosy, and those who are furthest from the job market are most likely really to struggle to get into work. It seems wrong to make them face sanctions. We should not punish those who cannot get into work. Instead, the Government should do more to work with employers, and to tackle the barriers faced by lone parents, those with disabilities and others. They should consider demand as well as supply.

I take issue with some of the points made by the hon. Member for Epsom and Ewell. Under Conservative Governments in the 1980s, there were more than 3 million people unemployed, a figure that we have not even come close to hitting in recent years. As was highlighted by the Secretary of State, when the figures were looking particularly bad for the previous Conservative Government, rather than tackling the issues, they moved people on to incapacity benefit to get them away from the unemployment figures. That created huge numbers of problems that the current Government are still trying to tackle. It created a hard core of people who have not worked for years, who are out of touch with the job market, and who do not have relevant job skills. It makes it even more difficult for people who are suffering from horrendous physical and mental health problems to enter the job market. The cost to the health service and the economy, and the cost in terms of family breakdown among those who are struggling, has far-reaching consequences for British society, so it is a little rich for Conservative Members to preach to the Government about the problems created by unemployment.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

Does the hon. Lady agree that it is also a little rich for Conservative Front Benchers to criticise the Government for allegedly fiddling the unemployment figures, when, according to my recollection, the previous Conservative Government changed the measure 18 times? This Government have changed it once to bring it into line with international standards and, after that one change, kept it in line with international standards.

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Photo of Jennifer Willott Jennifer Willott Shadow Secretary of State for Work and Pensions, Shadow Minister (Justice)

Governments are known for changing figures to best suit themselves. No Government are immune from that criticism. As the hon. Member for Epsom and Ewell has said, this year, there is almost no point concerning welfare reform on which the Conservative party has disagreed with the Government. It agrees with the Government on the coercive approach that I have mentioned, and about which I have concerns. That approach is particularly worrying at a time of economic downturn. In fact, the Conservatives have been even harsher than the Government on those who face the greatest barriers to work. They have a three-strikes-and-out policy for those who refuse "reasonable" job offers.

The motion mentions helping businesses to

"secure existing jobs and to improve the back to work support available to those who do become unemployed."

My main concern with the motion is that it does not relate to those people who are already out of work. I am concerned that the motion does nothing to support the millions of people who are currently trying to find work, and who are particularly far from the job market. These are worrying times, and unemployment is rising—nobody disputes that. We do not know how long that will continue, or how bad things will get. I agree with the motion on the point that we need to improve back-to-work support. We need to look much more closely at support that is tailored to individuals. We need to look at what works and replicate it. That would be better than getting rid of programmes such as the new deal for lone parents, which seems to have had some success, and replacing them with much more coercive programmes.

I agree with everybody in the House on the need to make more imaginative use of voluntary and private-sector organisations when trying to support people back into work. A lot of things could be done to improve the situation, but we need to be realistic about the jobs market. I have concerns about the introduction of too much conditionality and about sanctions, given the current economic climate.

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Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

The hon. Lady talks about conditionality and coercion, but the point is actually the effort that is made. It is not about whether a person succeeds, but about whether they are prepared to put the effort in, and nothing else.

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Photo of Jennifer Willott Jennifer Willott Shadow Secretary of State for Work and Pensions, Shadow Minister (Justice)

I agree with the hon. Gentleman that we need to encourage people to put more effort into the process. The issue that I was raising was the Conservative party's three-strikes-and-out policy for those who do not accept a "reasonable" job. Who is to decide what a reasonable job is for a particular individual? That takes us into very murky waters.

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Photo of Paul Rowen Paul Rowen Shadow Minister, Work & Pensions, Whip

I am grateful to my hon. Friend for giving way a second time. Does she not agree that, rather than dealing with the conditionality element all the time, we should accept that many people, particularly the long-term unemployed, need support in gaining skills to get themselves into jobs? For the sake of employers who wish to employ those people, use must be made of benefits to support training while people are in work. If the Government had adopted a scheme with much more flexibility—I know that they are now talking about that—we might have got some of the long-term unemployed people who want to work back into work a lot sooner.

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Photo of Jennifer Willott Jennifer Willott Shadow Secretary of State for Work and Pensions, Shadow Minister (Justice)

It is certainly true that the problems that many people faced in trying to find jobs in the past few years arose from skills gaps. In the buoyant job market over the past few years, it is people who did not have the skills who were unable to find work. One of the worrying trends now is that the problem is more likely to be not skills gaps, but the fact that jobs will not be available, however skilled people are. That suggests that there should be a change in emphasis over the next few years.

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Photo of Jennifer Willott Jennifer Willott Shadow Secretary of State for Work and Pensions, Shadow Minister (Justice)

I would rather finish. When we are considering unemployment and how to support people back into work, it is clearly important for the Government to take into account the current economic climate and to make sure that, as was highlighted by the Secretary of State, they do not make the same mistakes as the previous Conservative Government and make the situation worse. They must not penalise those who are struggling to get work and are doing their best, but who are simply unable to find work because of the economic circumstances.

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Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. Before I call the next speaker, may I inform the House that a 12-minute limit has been placed on Back-Bench speeches? That applies from now on, but the House will see that many Members are seeking to catch my eye, so if hon. Members can take less than their allotted span, that would be extremely helpful not just to me, but to colleagues.

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Photo of Gerald Kaufman Gerald Kaufman Labour, Manchester, Gorton 8:21 pm, 7th October 2008

I marvel that the Conservative party can even stage a debate on unemployment, and I marvel that Chris Grayling felt it possible to talk about the need to protect jobs. The Conservative party, when it was last in office, destroyed indigenous manufacturing industry in Britain: it destroyed the steel industry; it destroyed the motor car industry; it destroyed the shipbuilding industry; and it destroyed the extractive industries. The Conservatives left a wasteland that the present Government had to clear up and then build on.

In my constituency, we had—I went to see Margaret Thatcher about it when it was in danger, to no avail—an electronics factory that manufactured multi-layer boards. That went under, and it is now a blood transfusion centre. That is one of the legacies of the Conservative party in the Gorton constituency of Manchester. It created a wasteland in which the Gorton constituency was No. 1 in Great Britain for long-term unemployment and No. 1 in England for youth unemployment. We are still above the national average, but the situation in my constituency has been transformed since the Labour Government came to office.

How has the situation been transformed? One of the first things that the Government did when they came to office was to sign up to the social chapter, which the Conservative party said would be ruinous to the country. When we introduced the new deal, the Tory party voted against it in the House. We financed the start of the new deal by the windfall tax, and both the Tory party and the Liberal Democrats voted against the windfall tax when my right hon. Friend the Prime Minister introduced it.

Jenny Willott has said that it would be dangerous to increase the national minimum wage at this point. In fact, the national minimum wage is being increased at this point. When our Government, when they first came to office, decided to introduce the national minimum wage, the Conservative party, with its spokesman, Mr. Howard, said that introducing a minimum wage would increase unemployment. In fact, the national minimum wage, rising regularly and periodically as a result of the Government's decisions, has not only reduced unemployment, but given workers a self-respect that they did not have before.

I had a constituent who, during the period of Conservative Government, came to tell me that his employer—he was a security guard—had increased his working hours from 64 hours to 72 hours alternating, reduced his hourly wage and, what is more, would not pay him overtime. I wrote to the Secretary of State for Employment in the Conservative Government asking her what my constituent could do in those fraught circumstances. She very kindly wrote back to me and said that it was open to him to resign his job. He would, of course, have lost any redundancy benefits, if he had done so. That would not be possible now. Under the social chapter, that man could not be forced to work those hours, and his pay would be protected against the most rapacious employer under the national minimum wage. The present Government have not simply reduced unemployment and increased employment availability to the highest level that this country has ever known, but made it impossible for workers to be treated like serfs, as they were under the Conservative Government.

The projects continue. Even over the past month, two new projects have opened in my constituency, both as a result of Government policies. We have the new east Manchester construction centre, in which people, who include not only young people but men and women, are being trained in construction skills such as kitchen and bathroom fitting, plastering, carpentry and joining, and general construction operations. The centre is funded largely by the Government through the Northwest Development Agency, the new deal for communities and the learning and skills council.

The head of Manchester college, which is involved in the project, made a speech at the opening, which I attended, in which he said that before 1997 the only money that his college was given for job creation projects was £1 million to demolish a building. Now it has been given £50 million for employment projects. Those employment projects are not simply reducing unemployment in the Gorton constituency, but giving people skills, so that they can get better jobs and not be ground down and obliged to take the only job available.

A couple of weeks ago, I attended a graduation ceremony in Gorton monastery, about which I spoke the other day, of people about to be employed in the huge new Tesco that is to open in Gorton later this month. They had an eight-week training period—130 people deliberately and specifically chosen by Tesco in co-operation with Jobcentre Plus, the learning and skills council and Sure Start. I do not know how the Tory party has the nerve to talk about child poverty when it opposed and jeered at Sure Start, which is one of the greatest of a series of projects in my constituency. The Tesco project is exactly what we want in this country today—private enterprise joining with Government and public agencies, including the excellent Manchester city council, in order to provide people with jobs.

When I attended an address at the graduation ceremony for Tesco, I was moved by the way in which people reacted to the opportunities that they have been given. A middle-aged woman said that she had her self-respect back again. That kind of thing is happening only because we have a Labour Government who are carrying out policies based on not some kind of blanket funding, but a one-to-one project. That is the merit of Jobcentre Plus, the new deal and the kind of projects that I have been talking about.

Those are not the only projects that are proceeding. The Minister of State, Ministry of Justice, my right hon. Friend Mr. Hanson, came to Gorton a few months ago to deal with bringing offenders back into paid employment, which is again a Government project joining with private agencies. That is the kind of thing that the Government are doing.

I am proud of this Labour Government. I am well aware that a great deal more needs to be done. In my constituency, we are part of east Manchester regeneration, which would not be possible without the Labour Government and Manchester city council. My right hon. Friend the Prime Minister came to my constituency a couple of weeks ago and opened a £47 million high school that is better than anything in Europe. That was only possible because of Labour Government policies, and, of course, it provided a huge amount of employment for local workers.

The Government have a record that will stand up against anything that I have experienced in my years in the House of Commons. Yes, there is a lot more to be done, and yes, of course, there is huge concern about how the current global crisis will affect employment. I was interested to listen to the hon. Member for Epsom and Ewell offering a solution to the global crisis—it was a bit different from the solution offered by the shadow Chancellor yesterday, but no doubt when the Leader of the Opposition speaks tomorrow he will offer yet a third solution to the global crisis.

What we have in this country today is far from perfection, but it is very, very much better than anything that my constituents have experienced since I was a Minister and did such good things for them. I do not criticise the hon. Member for Epsom and Ewell—he has a job to do and he did it quite nicely—but it is just that it was totally incredible.

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Photo of Roger Gale Roger Gale Conservative, North Thanet 8:32 pm, 7th October 2008

Sir Gerald Kaufman began his speech by marvelling, so let me marvel just a little at his selective memory. In 1982, following the death of Jocelyn Cadbury, I fought the Birmingham, Northfield by-election. There was a 0.02 per cent. swing against the Conservative party, the smallest swing ever recorded, and I lost the seat by 289 votes. We were accused of cutting jobs at the Austin factory in Longbridge. Employment had gone down, I think I am right in saying, from 15,000 to 9,000, and we were told that we had cut those jobs. The choice was not between 15,000 and 9,000, but between 9,000 and none. Under this Government, the automotive industry in Britain has been decimated.

I happened to take a train through the Northfield site only last week and 98 per cent. of it has been razed to the ground. That is what the Government have done to manufacturing industry, so let us not lay the blame just on the previous Conservative Government. The fact is that the game has changed and the game is changing now.

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Photo of Roger Gale Roger Gale Conservative, North Thanet

I do not have time.

On "BBC News" tonight it was said that retail and manufacturing had fallen and the chambers of commerce said clearly that jobs and business were suffering badly in the real economy. I welcome the Under-Secretary of State for Work and Pensions, Jonathan Shaw, to the Dispatch Box. It is good to see a Kentish Member on the Treasury Bench. In a couple of years he will be on the Opposition Benches, or not here at all. As the Fisheries Minister he was courteous to our fishermen, and I am grateful to him for that. I know that in his present role he will be courteous to the unemployed, and I fear that before long there will be more unemployed than there are fish around the Kentish coastline.

As the Minister knows, Thanet has suffered historically from the highest levels of unemployment and social deprivation in the south-east—among the highest levels in the country. The reasons are not hard to find. Thanet has suffered from an enormous amount of immigration. During the 1980s, the immigration came from around the United Kingdom in what was known as the "dole on sea" syndrome: the unemployed came to the seaside to live on the dole in hotels and guest houses, and Thanet took more than its fair share. That contributed to its unemployed base. The Conservative Government of the time got to grips with that issue, but in 1997 the wave of immigration and asylum seekers began, and that pushed up the figures again. In common with Dover, also on the south coast, Thanet took more than its fair share.

Throughout the 25-year period, Thanet has also been the dumping ground for cared-for children from London boroughs and, shamefully, from some of the home counties as well. Those young people have grown up. Very many of them have been damaged and found it extremely hard to find employment of any kind, so we are used to unemployment in Thanet. However, the county council and Thanet district council have made a Herculean effort to attract inward investment, to promote skills training and to enhance employment opportunities in general and in Thanet in particular.

Thanet college is seeking to relocate to provide training in the skills that the sorts of businesses that we want to attract will require. Thanet council has promoted Thanet Earth, probably the most impressive glasshouse horticultural development in the whole of Europe. It is absolutely vast and its hydroponic techniques are staggering. It is highly environmentally sensitive and represents tomorrow's agriculture. It will employ huge numbers of people, and we want those people to be locally employed. However, the other thing that has impacted on us has been the importation of labour—particularly from the new Europe, but also from aspirant countries on the fringe of Europe.

Yes, agriculture does need imported labour; on that we take issue with current Government policy because, as the Minister knows, agriculture in Kent relies heavily on casual student labour for the picking of fruit. Historically, the hop pickers from east London did the job, but now students come from all over Europe to pick our top fruit and soft fruit—and we need them. However, we also need jobs for local people. The recovery in east Kent has been extremely fragile and what we are seeing now, in the current economic climate, is the shattering of that recovery. It is no good those on the Government Benches saying that we Conservatives are talking the economy down—the economy is down. We are in recession. If the Government choose to be in denial, so be it, but we know that out there in the real economy businesses are closing, shops are closing and people are losing jobs.

You, Mr. Deputy Speaker, wanted me to be brief, and I will be. I want to make two specific pleas to the Minister and two observations to my hon. Friend Alan Duncan on the Conservative Front Bench. I understand that there is a proposal to close the jobcentre in Whitstable, which is represented by my hon. Friend Mr. Brazier. I am concerned about that because the unemployed people involved—there are 220 at the moment, and the figure is rising daily—would have to come to the Herne Bay jobcentre in my constituency for the assistance that they need. On my estimate, were the closure to happen, there would be 500 extra journeys a month, which I do not consider to be environmentally friendly. It would also impact on staff and the services available to my constituents who use the Herne Bay centre.

I mention the issue not because I believe that the area jobcentre manager is not doing her job well; I am sure that she is—she is trying to maximise her resources. I mention it because I do not believe that now, as we go into a recession with unemployment rising daily, is the moment when this or any other Government should close jobcentres. Those centres will be needed more and more for the foreseeable future. I understand from other colleagues that similar proposals are being made around the country. I mention this now because I believe that the Minister needs to address it immediately in his new role. The game has changed; the economy has changed. Plans that were being laid nine months ago are no longer relevant. We have to look at the situation again.

Another issue that I wish to raise has a direct impact not on today's employment but on tomorrow's employment and the circumstances that we hope to face when, as we will, we come out of this recession—empty property rates. My political colleague who represents the Conservative interest in South Thanet, Mrs. Laura Sandys, has blazed a trail in east Kent on this issue, working with the chambers of commerce. I freely concede that she was ahead of me, but she has been ahead of many Members on both sides of the House, in recognising the damage that is being done by Government legislation that imposes full business rates on empty properties after six months. House building has virtually come to a grinding halt, with all the jobs that have gone with that. The same applies to the building of industrial properties. The right hon. Member for Manchester, Gorton talked about investment in new industrial premises and said that under a previous Government money was offered to pull those premises down. Premises are being pulled down as I speak so that the owners of those empty properties do not have to pay business rates. If we continue down this road, when we come out of recession we will not have the properties or premises that we need. That must be changed, and Ministers have the power to act under existing legislation at the stroke of a pen. This legislation was designed, or dreamed up, for circumstances that existed three years ago but do not exist today. We must change it today, because tomorrow will be too late—it is already too late for buildings in the Medway towns that have already been demolished.

My final point concerns the impact that the current economic climate is having on the elderly. When we think about unemployment, we tend to think of young people; indeed, there are far too many unemployed young people. However, today I took a call from an elderly, dignified lady whose husband is too frightened to retire, although he is well over retirement age. After a long and successful working life, that man, fearing for his savings, his bank balance, his pension funds and his modest investments, is stacking tins in a supermarket at night to ensure that his wife does not go hungry. That is the reality of the economic situation that our constituents face.

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Photo of Nigel Griffiths Nigel Griffiths Labour, Edinburgh South 8:42 pm, 7th October 2008

The Conservatives are not brave about many things, but they are certainly brave in tabling today's motion on unemployment in the United Kingdom. They are surely the experts on unemployment, for they gave unemployment to every region, every community and every sector. In Edinburgh, South, their political heartlessness combined with their economic incompetence to leave a legacy of more than 2,000 people on the dole in 1997. That is the golden legacy that they hark back to. Now, in the seat of Edinburgh, South, within large boundaries, unemployment stands at 667—it has fallen by more than two thirds. That means that 1,372 fewer people are now worried about applying for jobs, seeking employment and where they will get the money that they need for themselves and their children.

In the past year alone, unemployment has fallen by 8.3 per cent. and more than 333,000 people have entered work. That has given the UK an all-time record employment figure of 29.5 million. Of course, none of this happened by chance—it happened by choice when the Government chose to levy £5 billion as a windfall tax on the excessive profits of the utilities to fund the new deal. Instead of 3 million languishing on the dole, unemployment recently fell to its lowest level since 1975. Our choice was to bring long-term unemployment to its lowest for 30 years. The Tory choice would have been no windfall tax, no new deal and not even a minimum wage to stop exploitative employers. But then, as the shadow Chancellor made clear on 17 September,

"making...money out of the misery of others...is a function of capitalist markets."

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Photo of Nigel Griffiths Nigel Griffiths Labour, Edinburgh South

He certainly did say that.

Those are their values, not ours. It was their choice, not ours. It was their 3 million on the dole. Our choice was to help to create 3 million more jobs than there were in 1997, putting more people in work than at any time in our history. It was this Government's choice to give the UK one of the highest employment rates of any advanced manufacturing country—it is higher today than that of France, Italy, Germany, Japan or even the United States of America. So far this year, every weekday, 10,000 new vacancies have been posted. With 600,000 vacancies, 90 per cent. of those losing their jobs and seeking another one find work within a year, while 80 per cent. find one within six months.

This motion was tabled by the party that regrets rien and labels as unemployed parents with very young children, the most severely disabled people, carers of disabled children and frail elderly people and the bereaved. Doubtless, the Opposition think that they should pick up their spirits and get on their bikes. Those are the very people—the disabled and others—that the Opposition pretended to care about in their welfare reform proposals of 27 May, when Chris Grayling claimed that they would be exempt. But now, just four months later, here in the House, the Opposition have counted them in, as we knew they always would.

The task of Government is to tap into the talents of every citizen. That is what the record number of university and college places is about, and it is why we have more than tripled the numbers of apprenticeships. Let us remember that other Tory legacy: 75,000 apprenticeships in 1996-97. Now there are 255,000, with 70,000 alone in manufacturing. But it does not stop there. This Government are committed to ensuring that every 17 and 18-year-old has an apprenticeship, a college education or skilled schooling to allow them to maximise their potential. And it does not stop at that either. We are committed to the £1 billion Train to Gain programme, which will allow businesses to invest in the training and retraining of their work force to meet the skills challenges all businesses face.

There must be no return to the mass unemployment, despair and poverty that ravaged many communities in the 1980s and 1990s. For this country to ride out these economic storms, and for us to prosper in the decades to come, we must tap into the talents of every person in every part of this country. As a nation, we cannot afford to neglect the talents of anyone, regardless of race, creed, ability or disability. That is the path we must choose.

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Photo of Douglas Carswell Douglas Carswell Conservative, Harwich 8:48 pm, 7th October 2008

I will be as brief as I can. I am very concerned about unemployment, especially in Harwich and Clacton in my constituency. In August, male unemployment stood at about 6 per cent. and it is rising. Even before the full impact of the debt-fuelled recession is felt, unemployment in my constituency is high. I am concerned about unemployment and its grim consequences for my constituents.

Like many seaside towns, Clacton, Walton-on-the-Naze and Harwich have all suffered economically in recent years, and we have yet to see much of a vision on how to regenerate such resorts. Unemployment nationally is rising by something like 1,000 a day, and many of those folks are my constituents. Indeed, unemployment in Clacton could be increased by 50 in the next few weeks, by the Government's decision to close the Revenue and Customs office. The raw data on unemployment hide other facts that should concern us. Almost one in five people of working age are classed as economically inactive. Despite all the Government's boastful claims, the rate of economic activity today is virtually unchanged from what it was a decade ago.

I am concerned that many of those who are not formally regarded as unemployed are being let down. They are not being helped back into work and, with a looming debt-created recession, they will find it even harder. I am especially concerned about long-term youth unemployment in Clacton. Far too many young folk in Clacton are not in employment, education or training and, to be frank, the new deal does not really do much for them. Rather than recognising the problem, the Government are, I fear, just cooking the statistics. Young people claiming jobseeker's allowance for six months, for example, are automatically referred on to the new deal. If they fail to get a job on the new deal, they can be moved off jobseeker's allowance, on to the so-called training allowance. They disappear from the official statistics, but believe me, they do not go away—they are there in Clacton. I want to know what the Government will do to help.

I am concerned about how rising unemployment will affect those on incapacity benefit. Some 2.6 million people are claiming incapacity benefit, which is three times more than the number on jobseeker's allowance. I fear that incapacity benefit could end up being used as a way of trying to force unemployed people off jobseeker's allowance—indeed, some say that that is already the case—which could make it much tougher for those who genuinely need incapacity benefit to receive it. If incapacity benefit becomes a substitute system of jobseeker's allowance, that will not help anyone.

Finally, some eight out of 10 jobs created have gone to immigrant workers. I have always strongly disapproved of the phrase "British jobs for British workers". It is a phrase that the Prime Minister used, which was extremely ill judged. The phrase had some unsavoury tones of economic nationalism and, as a free-market liberal, I found it offensive. The phrase is one that I would have expected to hear in the 1930s, not in Britain today. However, the new jobs created have disproportionately tended to go to people who were not born in the UK. I suspect that that is a fairly damning verdict on the Government's education policy. They have simply failed to ensure that we have an education system that delivers the level of skills needed.

The Government have had a decade of extraordinary growth. The sun has shone. However, they have failed to reform welfare to help people into work. They have failed to listen even to voices on their side, such as that of Mr. Field, and to implement some of the proposals that he has made over the years. The Government have failed to produce an education system capable of providing people with the necessary skills to take the jobs that are available. With the Government having failed while the sun was shining, to coin a phrase, we now face a serious problem of unemployment, as the economy goes from boom into bust.

The tone of Labour Members in this debate has all too often been one of indignant outrage that the Conservative party should dare even to talk about unemployment. Their indignant outrage is matched only by their references to the past—to history. That shows that after a decade of being in government, Labour Members are out of touch. The rising tide of unemployment that we now face has increased and will increase on their watch.

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Photo of Jim Devine Jim Devine Labour, Livingston 8:53 pm, 7th October 2008

I once had the great privilege of working for a very clever psychiatrist, who told me never to listen to what anybody says, but always to watch behaviour. I want to deal with the behaviour of the Conservatives when they were in power.

Like other hon. Members, I congratulate the Conservatives on having the audacity to call a debate on unemployment, particularly this week, which has seen the anniversary, on 5 October, of the Jarrow march, when 200 men walked from Jarrow for 22 days. They collected 12,000 signatures to a petition, which was unprecedented, to campaign about unemployment. The anniversary was this week.

I want to talk about my personal experiences of unemployment from when the Conservative party was in power. I am a 55-year-old—I know that I look a lot younger—and I had friends who left school in the late '60s and early '70s. I had not one friend who left school who did not have a job. People left at 15 and went into labouring. Others left at 16 and went into apprenticeships. People such as myself left at 17 or 18 and went into further education. I remember this as a rite of passage. We left school and were part of society. We felt that we had status and standing, and we received a pay packet or a loan. There was something very special about it. It was our contribution to society, and it was about saying that we had a role in society.

In fairness to the Conservatives, every Government, Tory or Labour, since the late '20s and early '30s have been committed to full employment. As Harold Wilson once said, the Labour party is a campaign against poverty, or it is nothing. Tory MPs from Macmillan through to Ted Heath were committed to full employment, but that changed under the premiership of Margaret Thatcher. It is naive for the Conservatives to pretend that they have changed, because many of them are still part of the No Turning Back group. They still believe in the basic Thatcherite philosophies that we had to suffer in the working class communities in the late '70s and early '80s. We had a Thatcherite Government who were prepared to indulge in a financial experiment that had an impact on individuals, their families and their communities.

Unemployment in parts of my constituency rose to 26 per cent. all the way through that time. I have seen the lump in operation—it was something that my granddad had told me about. For those who do not know, when the Tories were in power, men—there could be up to 25 of them—had to assemble at a pre-determined place and a builder would come along and pick five of them. He would take them away to a building site for a day, without any training, health and safety or access to a trade union. At the end of the 12-hour day, he would put £10 in their hands. This is what happened. Those unemployed men then had to go through exactly the same process the following day. It was demeaning and humiliating, and it was meant to be.

The film "The Full Monty" brilliantly characterised what was happening in working class communities at the time. The leading character, played by Robert Carlyle, was a man who had to steal lead so that he could take his child to the football on a Saturday. Then there was the manager who left his house every single day at the same time, dressed for work and carrying his briefcase, because he was too ashamed to tell his wife that he had been made redundant. A third character was a man who could not perform in the bedroom because the Tories were not allowing him to perform in the workplace. His dignity and his status had been taken away from him. The fourth senior character in the film was a man who tried to kill himself, because that was the logic of Thatcher's view that "there is no alternative". He took that logic to its natural conclusion. If that was what life was like on the dole, with no status, no standing and no ability to provide for his family, he did not want anything to do with it.

I worked as part of a primary care psychiatric team in my constituency. I watched patients coming to the health centre and being prescribed anti-depressants and Valium. If they had been prescribed a job, they would not have had to go anywhere near that health centre.

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Photo of Peter Bone Peter Bone Conservative, Wellingborough

I am very interested in the hon. Gentleman's powerful speech, but I would like to bring us back to the 21st century. Is he not at all concerned that unemployment in his constituency has gone up by 8 per cent. over the past year?

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Photo of Jim Devine Jim Devine Labour, Livingston

I will deal with the current unemployment levels in my constituency at the end of my contribution.

Working as part of the primary care psychiatric team, I used to make appointments at 9 o'clock in the morning for such individuals. The reason was that the appointment was the only thing that they had to get up for—the only thing to get dressed and washed for, and to get out of their beds for. There was an appalling impact on the community in which I was born and brought up. We saw the destruction of individuals and their families and the break-up of marriages. That was the reality in such communities, and in the community that I represent.

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Photo of David Anderson David Anderson PPS (Bill Rammell, Minister of State), Department for Innovation, Universities and Skills

Does my hon. Friend agree that the real difference between then and now—it is right to look back—is that what happened in his constituency, as in mine, was the direct result of Government policy, whereas what is happening today is outside the Government's control?

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T

Take care on this issue, Dave. While I sympathise with the sentiments of what you say, we must remember that Gordon Brown told us that he had brought an end to boom and bust....

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Photo of Jim Devine Jim Devine Labour, Livingston

I was about to come to that point.

We should remember this financial experiment and its consequences. We were told that mass unemployment was an accident of central policy. But mass unemployment was the central part of the strategy of that policy. We know that because we can remember Tory Ministers saying at the time, "High unemployment is a price worth paying," and, "If it isn't hurting, it isn't working." In my constituency, it certainly hurt. I find the Conservative party's crocodile tears about the unemployed hard to take. I believe in what my psychiatrist told me: "Never listen to what somebody tells you. Watch behaviour." When the Conservatives were in power, their behaviour destroyed my community and many others like it.

On the question asked by Mr. Bone, I am delighted to tell the House that unemployment in my constituency today is at 2.4 per cent. That is down from 20 per cent., and 26 per cent. in parts. It is no accident that unemployment is down to that level. It is the result of the Labour Government's calculated strategy, to which reference has been made. I am a socialist, passionate about the Labour Government, and very proud of them. The aim and objective to create full employment, as we said 11 years ago, has been achieved. Yes, we have difficulties, which, in the main, are outwith our control. But we should ensure that the Conservatives never get their hands on the levers of power again, because we remember exactly what they did.

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Photo of Stephen Crabb Stephen Crabb Conservative, Preseli Pembrokeshire 9:02 pm, 7th October 2008

It is a pleasure to follow Mr. Devine, whose contribution was impassioned and at times entertaining. I must take issue, however, with his claim that those on the Government Benches have a monopoly of concern and interest in unemployment. We would take that claim more seriously were any of them willing to engage with the current circumstances.

I congratulate those on my Front Bench on securing this debate at a time when the international economy and financial system is undergoing a trauma that none of us has seen before in our lifetimes. As someone described it to me last night, the pieces have been thrown up in the air, and we do not know whether they will fall down in the same place—they will probably not—and how they will fall down. We do know, however, that real economic pain is starting to be felt.

I think that the hon. Member for Livingston—forgive me if it was not him—called out "Rubbish" when my hon. Friend Mr. Gale talked about some of the economic difficulties being felt in his constituency. However, that is the reality. If we talk to any of the major recruitment agencies—perhaps some Government Members will have the opportunity to do so in the next 18 months—they will tell us that there is a freezing-up of recruitment in certain important sectors in our economy. This is not just a banking and financial crisis. The real economy is starting to slow down, and a real economic chill is starting to set in.

I want to focus on an issue that has been mentioned in passing by several hon. Members—youth unemployment, in which I take a close interest. Ministers have claimed repeatedly at different times in recent years that long-term youth unemployment has been virtually eradicated or wiped out. Unfortunately, the statistics simply do not back that up. Those who do not believe the statistics should go down to any town centre in the middle of a working day. In most constituencies, they will see large numbers of young people doing nothing with their lives.

My hon. Friend Mr. Carswell hit the nail on the head when he said that although we had experienced 10 years of good times—or relatively good times—involving sustained economic growth, the operation of a flexible labour market and the falling of the headline unemployment rate, during those good times there had been no success in tackling the hard core of youth unemployment. In fact, it has become worse. That represents a major stain on the reputation of the Government who were elected in 1997. I seem to remember from their election campaign that one of their five key pledges was to bring down youth unemployment, but what has actually happened is that youth unemployment has increased.

In 1997, the Prime Minister—with, no doubt, his famous moral compass buzzing—described youth unemployment as a "human tragedy", as "sickening" and as "an economic disaster". Those are the terms on which we should hold the Government to account. At the time, the Prime Minister asked

"How did a society like ours get itself into a position where we are wasting young people's talents like this?"

We can ask exactly the same question here in 2008. The Prime Minister said at the time that

"staying at home is not an option", and that it would not be an option. Well, it is, actually, for too many young people; for 1.2 million young people, staying home or hanging out on the streets is an option.

That is the scandal of youth unemployment that is on the Government's charge sheet. At a time of sustained economic growth with, as near as dammit, full employment in many parts of the country, when the cohort of 16 to 24-year-olds is shrinking slightly as a proportion of the overall population, why should there be a 70,000 increase in the number of people of that age who are not in education, employment or training? My constituency is in Wales, and in Wales the position is even worse. Nearly 20 per cent. of 19 to 24-year-olds are doing nothing constructive with their lives. Research commissioned by the Prince's Trust suggests that youth unemployment is costing the country £3.6 billion a year.

What has let the Government off the hook over the past 10 years is the fact that we have benefited from a large influx of migrant workers. I for one do not consider it a negative development that people have come into our country with skills, drive and entrepreneurial initiative—it is a good thing that they have come into this country—but it has let the Government off the hook. They have not seriously had to tackle the long-term problem of youth unemployment.. The fact that 1.2 million young people are not in work has not caused severe economic problems, because the gaps in the labour market have been filled by migrant workers.

Reference was made earlier to the role of Jobcentre Plus offices. I for one have spent significant amounts of time with my two local offices. I have huge admiration for the staff, who are trying to do an excellent job, but they are very clear about what they can and cannot do—about what they are cut out to do and what they are not cut out to do. During my discussions with them, they have made clear that they are simply not in a position to address the multiple and complex needs of many newly unemployed young people who do not have the basic life skills and basic literacy to perform even very basic jobs in the modern labour market.

During the summer recess, I spent some time with my local Prince's Trust organisation. It has a fantastic training centre at Pembroke Dock. Although it is in the neighbouring constituency of Carmarthen, West and South Pembrokeshire, a significant part of the client base comes from my constituency. I participated in CV-writing workshops, and in all sorts of other activities. That is an example of a third sector organisation that is trying hard to rescue a lost generation of young people and give them back some self-esteem and direction in their lives, or at least to return them to the lowest rungs of the ladder, which will hopefully lead to sustained employment in due course.

I make the following appeal to the Government. At a time when businesses are starting to suffer, we should also remember that the charitable sector is starting to suffer as a direct result of the economic downturn, and there are organisations such as the Prince's Trust and Fairbridge that provide strategic work in this area. A recent survey—it was published today, I think—by the Association of Chief Executives of Voluntary Organisations pointed out that there has been a 72 per cent. increase in demand for charities' services, that 88 per cent. of chief executives of charities expect their income to fall as individual and corporate donations decrease, and that 30 per cent. of charities say they have been forced to make redundancies. I know the Government recognise the role the voluntary or third sector plays in working in conjunction with the private and public sectors to tackle long-term—and in particular youth—unemployment, and I appeal to them to recognise the particular pressures it might be facing at this time.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn 9:10 pm, 7th October 2008

It is a privilege to follow Mr. Crabb because I do not accept that there is the doom and gloom he talks about in Wales, but I do remember recent history when there was real doom and gloom in my constituency. For the record, benefit claims have dropped by, I think, about 70 per cent. in the hon. Gentleman's constituency. That is a success in the last 10 years that he failed to mention.

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Photo of Stephen Crabb Stephen Crabb Conservative, Preseli Pembrokeshire

No one is questioning the headline unemployment figures; there is no point in trying to score points on that. The point I was trying to make is that, underlying those headline figures, are deeply entrenched problems around long-term and, in particular youth, unemployment. That the hon. Gentleman responds by simply referring to the headline figures shows that he has not been listening and that he understands nothing about the problem we are discussing.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

With respect, before being elected to the House, I was a manager in a centre for the unemployed in Anglesey, and I dealt very much at the front line with youth employment—and with many issues such as lone parents. The centre I managed offered advice, training and support for the unwaged, so I think I do have a bit of experience in this field, and I wish to develop an argument that will defend what I have to say.

The centre was established in an area of very high unemployment in the 1980s, or re-established I should say, because the centre for the unemployed was originally established in the 1930s, and the sad fact is that unemployment in the 1980s under the Conservative Government mirrored that of the inter-war years of the 1930s, when we had mass male unemployment. In the 1980s, we had male unemployment in my constituency—I hope the hon. Member for Preseli Pembrokeshire is listening now—of 25 per cent. A quarter of the male population was unemployed.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

I will not give way at present, as the hon. Gentleman has just come in and we are nearing the end of our debate.

The Conservative legacy in my constituency was threefold: mass redundancies, mass unemployment and mass depopulation. My constituency of Ynys Môn or Anglesey was the only county in England and Wales that in two successive censuses—those of the '80s and '90s—saw a decline in its population. That decline was caused by high unemployment, when young people and their families had to leave the area to find employment elsewhere. That is the legacy of the Tory years of the '80s and '90s.

So let me give the answer to the question about what the Conservatives did for Anglesey or Ynys Môn: they gave us two decades of mass unemployment, decline and stagnation, and two recessions—deep recessions that bit very hard and hurt the people I was helping out in my previous job. My hon. Friend Mr. Devine mentioned the famous, or infamous, comment by Lord Lamont—and we know who was advising him at the time—that unemployment was a price worth paying. My constituents, young and old, actually paid that price over the two decades of the '80s and '90s.

The story of the last 10 years is rather different. Unemployment—both headline and real—is down considerably. Employment levels are up by some 7 per cent. One of the highest increases in Wales is in my constituency, where we have seen a 29 per cent. increase in employment levels. That is the real story of Wales today under this Labour Government, compared with Wales in the '80s and '90s under the Conservative Government.

That did not happen by chance. The new deal for the unemployed was a policy, paid for, as has been said, by a windfall tax on the utilities. I am rather fond of windfall taxes, and I have tried to encourage the Chancellor of the Exchequer to go down that road again to help to tackle some of the root causes of hard-core unemployment that the hon. Member for Preseli Pembrokeshire discussed. This Government invested in helping the unemployed back to work through that scheme and others. Labour Members rightly believed that unemployment was not a price worth paying—it was a problem worth sorting. During the past 10 years, we have done our best to sort that problem out.

Labour also introduced the minimum wage, and, again, that did not happen by accident. The policy was opposed by the Opposition. I hear today that Jenny Willott, who speaks from the Front Bench, is not happy that we are raising the level of the minimum wage; I am not sure whether that is Liberal policy. I recall that when the minimum wage was introduced in my constituency, the wages of hundreds of families doubled from £1.80 an hour to £3.60 an hour, giving dignity to families young and old.

By August, unemployment in my constituency had fallen to 4.2 per cent.; it had reduced by 53 per cent. Too many people remain unemployed, but Ynys Môn is not now top of the Welsh league of unemployment; it is halfway down that table, and the levels are well below those of the 1980s. There are black spots of unemployment in my constituency, which is why I intervened on the Secretary of State about the proposal by the Department for Work and Pensions to close a job centre in one of those black spots. It is located in a rural area where it is difficult for people to get to other job centres, as they will be required to do. I understand the back-up provided by the internet and various other things at the contact centre, but that contact centre will be moved. I am glad that he has agreed to meet me, because it is the wrong time to close job centres when unemployment is undisputedly rising. I hope that the closure of the centre at Amlwch in my constituency will not go ahead and that people will be able to get the face-to-face contact that they deserve.

This economic downturn has been caused by a number of factors: the world credit crunch; the global financial crisis, which we have debated today, and high fuel prices and energy costs. They are having an impact on businesses in my constituency and across Wales and the United Kingdom. A cut in jobs is inevitable, but I believe that the UK is better placed than it was in the 1980s and 1990s, when two deep recessions had an impact on constituents across the UK.

The largest employers in my constituency include an aluminium smelter works and Stena Line at the port of Holyhead, both of which face major challenges from the high increases in fuel prices, as do other companies. All energy intensive users across the UK, from paper mills to brick and cement works and aluminium smelters, face similar problems. I declare an interest, because I chair the all-party group on the aluminium industry. Electricity prices are too high in the UK, they make British manufacturing less competitive and they could lead to big job losses. According to The Times yesterday, the price of electricity in the UK is four times higher than in France.

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Photo of David Davies David Davies Conservative, Monmouth

One of the reasons for that is the cost of the renewables obligation commitments, which is being put back on to the customer. The rate of unemployment looks so low because many people are on sickness benefits, and the reason why so many people have extra jobs is because they came here from abroad.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

The hon. Gentleman has just come into the Chamber and has not listened to both sides of the debate or even to the debate about the financial situation. One of the reasons why electricity costs four times more in the UK than in France, and costs more than in Germany, is the lack of capacity. That lack is exacerbated by the fact that we have not built enough nuclear power stations over the past 20 years. Some 80 per cent. of France's electricity comes from secure sources of electricity—nuclear power—and France is able to keep its price low.

Rather than gibber about various issues that have arisen in the debate, I have raised a specific point that I would like the Government to address. I am pleased with their record and what they have said on new nuclear build. Indeed, I have campaigned for new nuclear build in my constituency, but I have been very disappointed by the Conservative party. It is dithering on nuclear power stations, trying to use the policy as a last resort, when we all know that it takes a decade for them to go through the planning system and be built. I am prepared to take an intervention from a Tory Front Bencher on that point—[ Interruption.] Well, I would "Get with it" if I knew what the Conservative policy was. As I say, I will take an intervention from Alan Duncan—[ Interruption.] He says that I am out of date, but I am not sure what has changed since their conference last week.

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Photo of David Taylor David Taylor Labour, North West Leicestershire

David T.C. Davies echoed a remark by Mr. Carswell, and they both displayed a breathtaking chutzpah in suggesting that unemployment figures are being massaged by the decanting of claimants on to incapacity benefit. The Thatcher Government created invalidity benefit and saw a huge surge in the number of claimants. The number has floated up slightly over the last 11 years, but the huge growth occurred much earlier.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn

I am grateful to my hon. Friend who has been in and out of the debate, unlike David T.C. Davies who has just come in. That point has been addressed by many Labour Members, because the Thatcher Government not only massaged the figures, but they did so 18 times to mask unemployment levels. They put people on to long-term sickness benefit, contributing to long-term unemployment in many areas.

The other big employer in my constituency is transport, including the port of Holyhead, and fuel prices are having an impact not only on road hauliers, but on the ferry companies that use a lot of fuel to get people and goods across the Irish sea. I hope that the Government will take that on board. I welcome the fact that the Chancellor decided against the duty increase this autumn, because that will help the road hauliers, but more has to be done to help intensive fuel users such as fast ferry companies. They transport people and goods to help the economy to keep moving at full speed.

I have raised challenging issues for my constituency and they need to be addressed. The Government are not running away from their obligations, but it is right for Labour Members to remind people of recent history. Mr. Carswell is not in his place at the moment, but I know that the Conservatives would like to forget recent history and their record on employment and unemployment. We need to secure existing jobs and provide opportunities and hope for the long-term unemployed. That is why it is worth investing in skills for our young people and in re-skilling older people.

We must help those who are still on long-term unemployment or sickness benefit to get back to work. I have said on many occasions that I want to see a carrot-and-stick approach to that, but I want the carrot to be bigger than the stick. We should help and encourage the long-term unemployed back to work.

The Government were right in 1997 to tackle mass unemployment and to put that at the top of their agenda. They were right to introduce the new deal, which has been a success in my constituency and many others in Wales, including Preseli Pembrokeshire, which has seen one of the largest falls in unemployment of the past 10 years under this Labour Government. They are also right to invest in people and communities. Getting people off unemployment benefit is a price worth paying. The immediate prospect of global and financial turmoil will be challenging, but we must remain focused on the need to modify and reform the welfare state by giving support and hope to our people, instead of returning to the bad old days of mass unemployment in the 1980s, which still scar my constituency and many others across the UK. We must move forward, not back to those days.

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Photo of Peter Bone Peter Bone Conservative, Wellingborough 9:24 pm, 7th October 2008

It is a great pleasure to follow Albert Owen. Although I did not agree with everything he said, I certainly agreed with him on the subject of the closure of jobcentres. It seems to be a strange time to be closing jobcentres when it looks as though there will unfortunately be a lot more unemployment. I noted that unemployment in Ynys Môn increased by 7.8 per cent. last year, so the trend is going up. I also want to refer Members to my entry in the Register of Members' Interests.

I thought that the debate was generally most interesting and that it tried to be constructive where possible. The most important issue to come out of the debate was the fact that the shadow Secretary of State pledged the Conservative party to a chapter 11 proposal, but I do not think that the Secretary of State understood the situation. Chapter 11 gives companies the time to reconstruct, to go to court, to get the whole thing on a level playing field, to get their business in order and to continue to trade. That does not happen in this country when companies go into administration. As my hon. Friend Chris Grayling said, the banks come along and close the company down, and there is no method to save that company. That, of course, leads to increased unemployment.

I thought that those on the Government Front Bench were very complacent about the situation. We clearly have a boom-and-bust situation. I know that the Prime Minister kept saying that that would never happen, but if we are not careful, we will have the worst bust for more than 100 years. Unless a Government recognise a problem, they will never put it right. Now I have said that, I hope that I can be more constructive in my comments.

I have heard time and again how the wicked Tories left the country in a terrible mess last century, in 1997, how everything was evil and how it was terrible for people, so I thought that I had better look up the unemployment figures for Wellingborough in August 1997. Unemployment then was at 1,678. That must have been terrible, because we have heard time and again that it was the pits and that the whole world was going down at that time. Unfortunately, unemployment in Wellingborough today is at 1,710, an increase since 1997. Instead of there being a wonderful economic miracle up until now, the economy in Wellingborough has gone backwards. If it has gone backwards when there have been good times, what on earth will happen during the bad times that are just around the corner?

Let me make a point on a serious note, which I hope will worry the whole House. We have in Wellingborough a good multicultural society. We have people from all races in the town and we have had for a long time. I run a "Listening to Wellingborough and Rushden" survey, which tracks people's concerns. Until a few months ago, immigration never appeared in that survey as a problem. It is now coming out as the first or second issue. I could not understand how that could have changed, but it is actually to do with unemployment. If we look behind the headline subject of immigration as the No. 1 issue, unemployment is the problem.

Let me give an example. A new supermarket opened in the town and needed to take people on. Let us imagine that we were the manager of that store. A Polish worker might come along, smartly dressed, and say, "I used to work in a store in Poland. Please give me as much overtime as possible. I don't mind working nights; please give me as much work as possible." On the other hand, someone from the jobcentre might first ask, "How much holiday will I have?" and say, "I can't possibly work weekends." It would not be unreasonable as store manager to give the job to the Polish worker. The problem is that the person from the jobcentre, who is British, would get offended. It takes only a few evil people from the British National party to come along and exploit that situation.

We never had any problem with the BNP until a few months ago. A BNP candidate stood in a safe Conservative ward, which we won quite securely. However, the Labour party, the traditional party that came second, was pushed into third place. So we have gone from being a town that did not have a problem to being one that does. I am sure that that problem is being repeated across the country. I do not know the solution, but it is a real problem. Unemployment is going up, while migrant workers are coming in, and the BNP says that they are stealing British jobs. That is not true, but that is what the BNP makes out, and the worse the recession and unemployment become, the greater is the danger that those evil extremists will come into our society. I hope that we can work together to address that problem.

A particular additional problem in Wellingborough is that we are part of a growth area. The existence of lots of new houses and new migrant workers means that people can see the change that is taking place, and I have to tell the Minister and other colleagues that we must look at the problem. We must not be scared to address it, as we must find some solution to it.

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Photo of Ian Davidson Ian Davidson Labour, Glasgow South West 9:31 pm, 7th October 2008

In the first 10 years of this Labour Government, unemployment in my constituency came down by 50 per cent., youth unemployment came down by 80 per cent. and long-term unemployment came down by 90 per cent. Those are statistics of which the Government and I can be proud, and they represent one of the best things that this Government have done.

However, we have to recognise that the economy is on the turn. Male unemployment in my constituency has gone up to 10 per cent. We clearly face a problem with the hard-core unemployed, and I very much regret that we missed an excellent opportunity when the economy was booming to move many of those people into employment. We should have allowed the market to pull them into jobs, but instead we acquiesced in a policy of unlimited immigration.

The colleague who has just spoken, Mr. Bone, was undoubtedly right to say that many of the jobs that the market would have filled with people who were otherwise difficult to employ have been filled instead by eastern European migrants. As he said, an employer might have to choose between a person from eastern Europe who is highly skilled, motivated and educated and someone who has not worked for 10 years, who has a problem with drink or drugs or who has difficulties with attendance. Who will that employer select? The answer is a no-brainer. In my constituency, vacancies were not made available to people who would have benefited very much—given the right supervision and support—from those opportunities.

None the less, we have to recognise that what the Government are proposing is absolutely necessary. In the main, the proposals are excellent but, for constituencies such as mine, they are not sufficient. There are three areas in which I think that the Government must take some action.

The first relates to what I said in an earlier intervention on the Secretary of State, when I spoke about the old community programme. The private sector and the normal routes to employment are not going to cope with the hard-to-place individuals to whom I have referred. If we are going to get them into the habit of work and attendance, so that they experience the pride that comes from making a contribution, we will have to create an agency similar to the old community programme. Perhaps it could be called the new community programme, but we need something that will allow the voluntary sector or local government to offer such people employment opportunities. In the present competitive environment, it would be unfair to expect the private sector to carry people who undoubtedly will be less productive than other workers in the same circumstances. Something needs to be done in that regard. Although much is already being done, it is not sufficient.

The second issue that we need to address is how the benefits system interacts with getting people into work. People are not always convinced that they will be better off in employment. I believe in incentives in those circumstances. It is not clear to me or to people in my constituency that they are genuinely always better off in work. The complexity of the benefits system cannot be explained to people who have some difficulty with literacy or numeracy; indeed, it cannot be explained to many people who have no difficulty with literacy or numeracy. It is unclear whether people will be better off.

There is a loss of benefits for many people who get employment. They lose council tax and rent benefits, and they lose in a number of other ways. That interaction means either that people are being invited to go into employment for almost nothing or that, as shown by the evidence given to me by local citizens advice and information centres, they are actually worse off. In those circumstances, it is entirely comprehensible and rational on economic grounds that people do not seek employment. That is why we need to decomplexify, if such a word exists—

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Photo of Ian Davidson Ian Davidson Labour, Glasgow South West

That is a much better way of putting it. I thank my colleague for that intervention.

We need to simplify the benefits system, but we must provide greater incentives. If people believe that incentives of a financial nature are necessary for the masters of the universe, they must also be necessary for those at the bottom of the economic pile. We have to recognise that the national minimum wage at its current level does not provide sufficient incentive in all circumstances, when taking into account all the benefits that people will lose. We need to address that question, and I am very disappointed that the new Liberal party policy seems to be opposed to any increase in the national minimum wage.

As I understand it, the Liberals have now swung to the right. The first clear evidence that they are deserting the traditional caring aspect they embraced under previous leaders may be that they are distancing themselves from any prospect of an increase in the national minimum wage. I deplore that, and I am sure that the vast majority of my colleagues do, too, although I do not want to make too much of a meal of it. I simply draw to the attention of the House the fact that the Liberals are opposed to increasing the national minimum wage.

My final point is about Scotland. Many Members will be aware that the Scottish Executive have promised that money from Qatar will flow like water, that Qatar will provide an alternative to PFI and PPP and that Qatar will provide funds for public finances and for the private sector. Many Members will have noticed that the nationalists have disappeared from the Chamber. They did everything but intervene when I raised the point earlier.

Many Members will be aware that in the past the nationalists said that Scotland's oil would be the answer to the nation's problems. Now it appears that Qatar's oil will be the answer to Scotland's problems. Again, I do not particularly want to make a meal of that fact—I just draw it to people's attention. I am sure that the Qataris will be very unhappy that their name has been used to intervene in domestic British politics in this way.

I have been invited by madam gamekeeper not to go beyond 9.40 pm, so I draw my remarks to a close. When we discuss employment, people in my constituency remember that we cannot trust the Tories. We could not trust them in the past, and we cannot trust them now. I do not accept that they are serious about trying to combat the evils of worklessness.

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Photo of Alan Duncan Alan Duncan Shadow Secretary of State 9:38 pm, 7th October 2008

Our debate this evening takes place against the backdrop of increasingly serious economic difficulty. Over the past few weeks, we have seen great turmoil in financial markets, and Members on both sides of the House share concern that it risks turning into turmoil in labour markets. Unemployment is a scourge. We have to work together across the House to confront enormous economic difficulties, which none of us can wholly understand, to try to do our best to ensure that they do not turn into the unemployment and human misery that the debate is all about.

I am afraid that by the end of tonight's proceedings, we will all have painted a rather depressing picture of what might be coming down the track at us. When it comes to the problems that we want to confront, the starting point is not really one of which the Government can be proud. It is not a proud boast that after 10 or more years of economic prosperity, unemployment stands at "only" 1.7 million. Let us compare that with the situation in many of the years that speakers have mentioned tonight; it is triple what was seen as an absolutely unacceptable level of unemployment in the 1970s. The starting point is not a happy one, which means that what will follow may be extremely serious.

The climate for future employment is not healthy, and one reason why is that after the 10 years to which I have referred, our economy and fiscal position should be in a much better position to cope. We should now have lower taxation. Instead of Government borrowing, we should have a surplus. We should have higher savings and a massive pensions pot. Sadly, we have none of those things, and in my view, unemployment is relatively high. We have higher taxes, more regulation and the worst budget deficit in the developed world. We have squandered a decade of growth, and that will make the pain far greater when we have to face what is around the corner.

We have had a lively debate. Sir Gerald Kaufman began the Back-Bench speeches and spoke in his inimitable style. I thought that he showed insufficient appreciation of the ferocity of the business cycle—a ferocity that his constituents will yet have to withstand. My hon. Friend Mr. Gale spoke about jobcentre closures. He also mentioned empty property rates, which I shall come on to in a minute. I thought that Nigel Griffiths was unduly vitriolic, and looked only to the past. Our concern tonight is about the future.

My hon. Friend Mr. Carswell was especially convincing on the Prime Minister's view on immigrant workers, but the victor ludorum tonight is Mr. Devine, who is temporarily out of the Chamber—it is certainly a brave man who becomes his psychiatrist. The mistake that he made, when levelling accusations against us, was insufficiently to appreciate the fact that so many of the problems of the '80s—high tax, inflation, underinvestment, restrictive practices and loss of competitiveness—were caused by what had gone before. I am not sure whether the Secretary of State was even born then, but he can always turn to the history books.

My hon. Friend Mr. Crabb proved that Labour's monopoly of concern is not safe in its hands. Albert Owen—I am sorry that I missed a bit of his speech—was, once again, looking back. My hon. Friend Mr. Bone showed a rather more accurate grasp of history. Mr. Davidson, once he had decomplexified everything, showed a much greater sense of realism, which he injected into our debate.

I am the Conservative spokesman for the Department for business. It is vital that the UK has a strong business sector, and that Whitehall speaks up strongly for business, if we are to counter the scourge of unemployment. I fear that the Department for Business, Enterprise and Regulatory Reform, whose Ministers I face across the Chamber, has not done as well as it could have done over the past 10 years. There have been 38 Ministers and seven Secretaries of State, and the Minister with responsibility for small firms has changed on average once every 18 months. The construction portfolio alone has changed six times since 2001. We are talking about the Department that needs to oversee all the economic activity that ultimately gives us all our wealth, which all other Departments then spend.

Unfortunately, I will not even be able to face my opposite number across the Floor of the House. For these few days, until he is duly ennobled, I can accurately call him Mr. Mandelson. It is a great pity that I will not face anyone of Cabinet rank across the Dispatch Box. When we had a Cabinet Minister in the Lords, be it Lord Carrington or Lord Young, there was always a Member of this House of Cabinet rank whose voice in Cabinet from the Commons would always be there, but we do not have that under the future Lord Mandelson.

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Photo of Alan Duncan Alan Duncan Shadow Secretary of State

Very briefly, if the hon. Gentleman is extremely quick.

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Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

I will be brief. I assure the hon. Gentleman that the Minister of State, Department for Business, Enterprise and Regulatory Reform, Mr. McFadden, is a fine parliamentarian who will do a fine job speaking for the Government.

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Photo of Alan Duncan Alan Duncan Shadow Secretary of State

Yes, but he is not in the Cabinet, as I have said.

I fear that the prospects for employment are grim. We have seen institutional mayhem, and the concern is that even within a matter of weeks businesses, small, medium and large, will have their credit lines withdrawn and their overdrafts cancelled, that they will not be able to pay their bills, and that people who are paying them will take longer and longer to pay what they owe. The picture that we can therefore foresee of a credit squeeze going right to the high street, to households and into corporate Britain is potentially apocalyptic. If the bank problems that we face today are not addressed in short order, the mayhem in the business community will hit people in a way in which no one has been hit for nearly a century.

We must address the matter carefully. The problem is that almost everything that the Government have done in the corporate sector over the past decade will make things worse. It is so easy to tax and put burdens on business as the economy is rising, but when the inevitable downturn comes, those burdens are like an albatross around its neck. The danger, therefore, is that those burdens on business will convert immediately into unemployment.

People can pay £20,000 in stamp duty on housing when the market is going up. When the market is going down, that renders it immediately stagnant, driving out of work estate agents and people who do up houses, and the whole collateral of many small businesses is diminished. We have seen tax for businesses rise. Corporation tax, particularly for small businesses, was raised at just the time when it needed to go down. There has been messing around with capital gains tax. We have seen a challenge to income shifting, which is exactly the underpinning focus for families and couples who run a business.

We have seen fuel duty interrupt the clear economics of business. We have seen regulation increasing. We have seen employment tribunals making it too intimidating for an employer to take on their first employee. We have seen business rates that are particularly punishing for small businesses and high street shops. The ports sector—some Members present may have one of the 56 ports in this country in their constituencies—is about to face national domestic rate demands backdated in an immoral way to April 2005.

Perhaps most immoral of all, taxing something that generates no revenue does enormous damage. Removing the tax relief for empty property rates is bringing to a grinding halt any kind of activity for preparing business premises or developing wrecked premises for future use. It is taking money from people who have not got it to the point where they have to take the roof off or demolish what they have just built.

If the Secretary of State and the Minister do not want to take my word for it, perhaps they will study early-day motion 2045 tabled by Mrs. Riordan, assisted by Dr. Kumar. In an e-mail to all Members, the hon. Lady states:

"In these difficult times, I know that we should not make things worse for employers."

She lists all the damage that the tax is doing—early demolitions, shelved regeneration projects, loss of inward and overseas investment, bankruptcies and hence, unemployment and the loss of pensions. Perhaps the Minister can tell me whether he agrees with his own Back Benchers that the tax is but one of the measures that is making the future rise in unemployment higher than it would otherwise be, which is adding to the recession that the British Chambers of Commerce says is already upon us.

We need financial stability. We need our proposed reduction in corporation tax. We need a higher threshold for stamp duty as advocated by the shadow Chancellor. We need a reduction in regulation. We need the effective implementation of the small business support fund promised at the EU meeting last week, and, yes, we need the reform of insolvency law, so that those who are on the edge of bankruptcy can be protected from their creditors.

The lesson of this is that nothing has been set aside for a rainy day. Labour Governments always run out of money, and once this crisis is behind us the best prospects for an economic recovery will come only from a change of Government.

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Photo of Tony McNulty Tony McNulty Minister of State, Department for Work and Pensions

The jokes might be fun, but they are made at the expense of the Opposition, because at this time of all times in this place, with all that is going on in the broader country, all we have heard from the man who purports to speak for the Opposition on business is that there should be less borrowing, less taxation and less regulation. Conservative Members should run away and turn their televisions on. At this moment of all moments, borrowing and taxation equal public expenditure, the very public expenditure that we shall use here and elsewhere to lessen the impact of any slowdown. Given his contribution, the Opposition spokesman cannot be taken seriously.

Yesterday, a senior member of the Tory Front Bench said:

"Families are deeply worried about their savings, their homes and their jobs, and it is up to us to try to work together to get the country through this current crisis. I do not think that the British public would thank us if they saw happening here in this House of Commons what everyone saw happening in the American Congress. That is why we offer to look constructively at any proposals brought forward by the British Government."—[ Hansard, 6 October 2008; Vol. 480, c. 23.]

I fully endorse that. We have had nothing in that spirit from either Chris Grayling or Alan Duncan. They could have been consensual. They claim to be consensual on the issue of unemployment and welfare reform. [Interruption.] With the greatest respect, I thought that I might speak to the motion and our amendment rather than take a back-of-a-cigarette-packet approach. They could have recognised that intervention is essential, as my right hon. Friend the Secretary of State for Work and Pensions said. They could have said that a lot has been done to great effect over the past 10 years in assisting those currently and previously unemployed. They could have headlined that they will keep up the pressure on us to ensure that the pace of welfare reform is greater not lesser. They did none of that. Instead, we heard a complete dismissal from the hon. Gentleman of all that Jobcentre Plus has done for so many of our communities throughout this country over the years; work that means that whatever the severity of any forthcoming slowdown we are better placed than we have ever been to help and assist those who are unemployed for however long. For it to be so glibly dismissed by the hon. Gentlemen defies belief.

I do not claim a monopoly of concern about unemployment and I accept that there is no such monopoly among Labour Members, but it would be hard to credit Opposition spokesmen with that from their speeches, which is a shame. Among other things they could have apologised for, as so many of my right hon. and hon. Friends have so eloquently put it, was the scandalous waste of human talent in the 1980s and 1990s when the Conservatives were in charge, when there was no intervention of any substance to assist the unemployed and no conditionality, and when there was precisely the fiddling of figures that is the charge falsely laid against us at this stage. They could have apologised for putting so many of our people and communities on the proverbial scrapheap, causing heartbreak and destruction.

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Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

What would my hon. Friend say to the former miner whom I met only last Thursday? That former miner may have seen this debate in a crystal ball. He was put out of work in the '80s when the north Staffordshire coal mines were not only completely closed, but filled in with concrete day after day. What would my hon. Friend say to him? He is still embittered about it now.

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Photo of Tony McNulty Tony McNulty Minister of State, Department for Work and Pensions

I would say to him that there is a package available to him now that was not there in the '80s.

The hon. Member for Epsom and Ewell could have gone further, been honest and explained how less public expenditure, in terms of the magnitude that the Conservatives are referring to, and the whole notion of a shrinking state helps any of the unemployed people in this country. We got a sub-prime cabaret from the Little and Large of the Tory Front Bench. That is a real shame, because we are discussing a serious matter.

The Conservatives are playing the same game of smoke and mirrors with this issue as they are playing across the piece on policy, to hide the wasteland and absence of any Conservative policy. They propose either what we are already doing or what we already propose to do and claim that as their own as though it were radical. I want the hon. Member for Epsom and Ewell to help me, the Government and the country with the welfare reform agenda, as he promises to. I want him to make clear exactly where he stands on every aspect of our Green Paper, subsequent White Paper and Bill. If he is serious about a consensus and in thinking that we need substantive welfare reform, which has been outlined by my right hon. Friend the Secretary of State, we will work with him. However, given his contribution, I fear that we will be waiting a long time. Whatever the rhetoric—heightened, sub-prime or otherwise—in this place, it is simply not good enough to condemn the progress made by initiatives such as Jobcentre Plus and the other significant progress on getting people back into work.

Are there problems and difficulties? Yes, there are, as my right hon. Friend the Secretary of State said in no uncertain terms. Do we have a monopoly on caring? No, of course we do not. However, we collectively have the experience of the '80s and '90s and it is important that there should be a serious and substantive debate on this matter.

It is no accident that there was a Celtic tinge to the contributions from my hon. Friends. My hon. Friends the Members for Edinburgh, South (Nigel Griffiths), for Livingston (Mr. Devine) and for Ynys Môn (Albert Owen) all spoke, as did my hon. Friend Mr. Davidson, who made a point about decomplexification. They were not wallowing in the past, as was suggested by the Conservatives. They recognised that we cannot go back to the '80s and '90s and that we cannot have the non-intervention, "not our fault, guv" approach that the Conservative Government took in those decades. It is time that there was some consensus in this House. Whatever the depth of the current downturn, and however much harder it makes it to find work, it is not a reason for despair, as has been suggested by some Conservative Members—not least because of what we have already put in place.

My right hon. Friend said clearly that we should treat the current downturn as a spur across the Dispatch Box to ensure that we get even more help to those who need it to overcome challenges—not by fiddling figures or consigning people to inactive benefits and still less by slackening the pace of welfare reform, but by ensuring that we have high expectations, effective support and real obligations not for the minority, but for everyone. We know and understand the lessons of history and we want to get to a stage at which this time, whatever the level of unemployment, nobody in this country will be written off or left behind. As is clearly stated in the Government amendment, we will build on the progress that we have already made to make sure that we do not return to the shameful history and experience of unemployment, perpetrated by the Conservative party in this country.

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Question put, That the original words stand part of the Question:—

The House divided: Ayes 205, Noes 300.

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Division number 269 Opposition Day — [18th Allotted Day] — Unemployment in the UK

Aye: 204 MPs

No: 299 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Abstained: 1 MP

Abstaineds: A-Z by last name

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Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—

The House divided: Ayes 293, Noes 203.

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Division number 270 Opposition Day — [18th Allotted Day] — Unemployment in the UK

Aye: 293 MPs

No: 203 MPs

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Tellers

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Question accordingly agreed to.

Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House notes the global economic challenges that are facing the UK; congratulates the Government on policies such as Local Employment Partnerships which have helped nearly 40,000 people find work, Pathways to Work which has supported more than 94,000 people off Incapacity Benefit and into work, and the New Deal which has helped 1.97 million people into jobs; welcomes the policies of this Government which seek to reform the welfare state to give people active support to get back into work as quickly as possible; and supports rapid action to ensure that where redundancies occur people are given the personalised support they need to return to work, to intensify the activity of the welfare state to ensure no-one is written off and to maintain a strong and flexible labour market.

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