Unemployment in the UK

Part of Opposition Day — [18th Allotted Day] – in the House of Commons at 7:45 pm on 7th October 2008.

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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 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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