I beg to move,
That this House
believes that the Government’s policies of cutting spending and raising taxes too far and too fast have resulted in the UK economy flat-lining for 12 months, well before the recent eurozone crisis;
notes that unemployment has reached a 17-year high and over-50s unemployment has risen sharply;
further notes that slower growth and higher unemployment makes it harder to get the deficit down and that the Office for Budget Responsibility forecasts a further rise in unemployment to 8.7 per cent., a rise in the benefits bill of £29 billion, and an increase in projected borrowing of £158 billion;
agrees with the IMF’s warning that ‘consolidating too quickly will hurt the recovery and worsen job prospects’ and that the Government should ‘have a heightened readiness to respond, particularly if it looks like the economy is headed for a prolonged period of weak growth and high unemployment’;
and, in light of the Office for Budget Responsibility forecasts published on
It is a shame that the Secretary of State for Work and Pensions has chosen not to be present for the third Opposition day debate on unemployment and living standards. We rely, I hope, on the Minister for unemployment to relay back the nature of today’s debate and discussion.
The House meets to debate the motion after more grim news on jobs this morning. Grim news on jobs this month has followed grim news on the Budget last month. Once again we have seen this morning how the Chancellor’s decision to clobber the recovery is clobbering families all over our country. Once again we have heard of families losing their jobs because of this Government’s decision to cut too far and too fast, and once again we see the consequences of this Government’s decision to stand easy while millions of people in our country are now standing idle.
Not even the Minister for unemployment could spin his way through the statistics published this morning—unemployment up by 128,000, employment down, vacancies down and the public sector now losing jobs 13 times faster than the private sector is creating them. We do not have to look very far for the root cause of this unalloyed misery for families 11 days before Christmas. The Chancellor laid it out for us just a fortnight ago. Last year he was boasting about delivering cuts that were £40 billion greater than the cuts planned by Labour. Last year he was boasting about how Britain had suddenly become a safe haven. Last year he was so pleased with himself that he said this country was out of the danger zone. How hollow those words ring today.
The autumn statement laid bare the catastrophic failure of the Chancellor’s policy—growth flat-lining for a year, borrowing up £37 billion higher than the plan drawn up by my right hon. Friend Mr Darling, welfare up by £29 billion, and debt up an extraordinary £158 billion higher than forecast, which is £6,500 more for every house in this country. Borrowing, welfare bills and national debt are all higher, but growth is nowhere to be seen.
The right hon. Gentleman appears to be criticising the Government for borrowing more money. How much more money would he have borrowed, had he been in government?
If the hon. Gentleman had been listening carefully, he would have heard me answer that question. The plan that my right hon. Friend the Member for Edinburgh South West and I set out entailed borrowing that was £37 billion lower than that outlined by the Chancellor in his autumn statement a couple of weeks ago. That is of grave concern to the number of people who are now out of work, especially young people in the hon. Gentleman’s constituency, where long-term youth unemployment has gone up by 128% this year, which must surely concern him.
I will in a moment.
Amid these difficulties, people in this country expect the Minister for work to do something about it, and I think that I speak for many Members of the House when I say that most right-thinking people in this country believe that the Government should be doing more to get people back to work.
During Work and Pensions questions a month ago I pressed the Secretary of State to tell us what exactly he is doing to get Britain back to work. A vast constellation of initiatives was set out, including work clubs, work experience, apprenticeship offers, sector-based work academies, the innovation fund, the European social fund, the skills offer, the access to apprenticeships programme, Work Together, the Work programme, Work Choice and mandatory work activity. Listening to that list, I became slightly puzzled. With such sweat being worked up at the Department for unemployment, surely we could expect the country’s unemployed to be positively flowing back into jobs. Members can imagine my surprise when I saw the Office for Budget Responsibility’s forecast that, amid that blizzard of initiatives, unemployment is forecast to go up. How can that be?
We asked the Secretary of State to tell us just how many jobs have been created by this glorious expenditure of energy at his Department. This is what we were told in a written answer in Hansard . On Work Choice, no statistics will be available until spring 2012. On mandatory work activity, no statistics will be available until February 2012. On work clubs,
“the data requested are… not available.”
On work experience, a link was provided to a website that says nothing about jobs actually created. On apprenticeship offers, we were told:
“Information on the number of people placed in work through apprenticeship offers… is not available.”
On sector-based work academies, we were told that
“there is no national requirement for districts to record and report job outcomes achieved.”
On the skills offer, “information… is not available.” On Work Together,
“the data requested are not available.”
On the innovation fund,
“no young people have been placed into work at this point.”—[Hansard, 21 November 2011; Vol. 536, c. 122W.]
Here we are, with unemployment going through the roof and the OBR telling us that unemployment is forecast to rise again next year, but despite the multiplicity of schemes laid out by the Secretary of State, who cannot be bothered even to come along to the debate, he cannot tell us how many people are going into work as a result of the spending his Department has in place, with the exception of one programme. The one initiative—it is buried in his answer in Hansard—run by his Department that he can claim is actually creating jobs is the programme financed by the European Union. He said:
No doubt that is why he is urging his right hon. Friend the Prime Minister to get the hell out of the EU.
Are not leadership, boldness and imagination missing from that catalogue? With 1 million young people unemployed, surely we need something that captures the imagination—for instance, by using young unemployed graduates to train other people in the community and in the environment. We need imagination now.
My hon. Friend is absolutely right, and he has been a long-standing champion of the need to get young people into work and, crucially, equip them with the skills to succeed in the workplace, but I am afraid that we have a deficit of that from the Government. It is an embarrassment for the Minister that he is unable to tell the House how many people his schemes are getting into work. The Secretary of State appears to have so much confidence in the schemes that he cannot be bothered to turn up this afternoon. However, I want to make a more substantive point about the Minister’s flagship scheme.
I will in a moment, but first I want to make one point about the Work programme.
The Work programme is a new scheme that builds on the flexible new deal. We have said that if it works and delivers value for money we will keep it in place, but the Minister must accept that worries about the programme are growing. [ Interruption. ] I am delighted that the Secretary of State has been able to join us to hear this important point. The Minister for unemployment has repeatedly told the House that he cannot produce statistics on how well the Work programme is doing, and I completely understand his caution. I think that he is the only Minister who has been formally warned by the chairman of the UK Statistics Authority, who last year said that the Minister’s use of figures was
“likely to damage public trust in official statistics”.
No doubt he has repented for that sin and is seeking redemption, and I understand that he apologised and is certain not to repeat the offence. If the Work programme was working, surely the Department’s statistics would show that more and more people were flowing off benefits and into work. That is a simple test we can apply, but the problem is that the figures do not show that.
On that basis, how does my right hon. Friend, as a fellow Birmingham MP, react to the fact that in the past year, between November 2011 and November 2011, the number of young people in Birmingham claiming jobseeker’s allowance increased by 19%, which is the worst figure for all core cities in the country?
That is an extremely serious problem for Birmingham, and my hon. Friend is absolutely right to draw the House’s attention to it, but there is a more widespread problem if the rate of people flowing off benefits into work is not rising. Research by the House of Commons Library for my office, which we are publishing this afternoon, shows that fewer people are flowing from benefits into work than at any point since 1998. That fall coincides with the Government’s decision last year to cancel the flexible new deal and the future jobs fund. Since January, when the future jobs fund ended, the percentage of people flowing off benefits and into work has fallen by a fifth. Between May and August last year, when the new scheme was being worked up, 86,000 fewer people came off benefits and into work than the year before. Surely Government Members would accept that that is simply not good enough.
Does the right hon. Gentleman not accept that the future jobs fund was not about providing long-term jobs, but about short-term work placements of six months in the public sector? What is the point of that? If he wants to talk about solid outcomes for the future, he should not be talking about the future jobs fund, because within weeks the people involved were out of work again.
Let me say as diplomatically as I can to the hon. Gentleman that since the future jobs fund closed long-term youth unemployment in his constituency has gone up by 43%. He must accept that the future jobs fund was helping to keep young people in work. We know, as Ministers accept, that keeping young people close to the labour market, close to jobs and close to the habits of work is a good thing.
We all agree that keeping young people close to the labour market is important, and the advantage of what the Government are proposing is that it is in the private sector, where the jobs will come, where those opportunities are being given. Does the right hon. Gentleman not accept that in all the years when Labour was in government the number of people not in education, employment or training stood at a very high level and barely moved, despite all the growth?
Let me repeat that when Labour was elected in 1997, youth unemployment was about 14%. It came down to about 12% before the recession and then, yes, of course it went up during the recession, as all unemployment did. But rather than sit there doing nothing, as this Government have over the past year and a half, we chose to act. That is why youth unemployment was coming down before the election and why, since this Government were elected, it has gone up to record highs and has done so again this morning. That is surely not a record of which the hon. Gentleman can be proud.
If the right hon. Gentleman wishes young people to be near the labour market, does he regret presiding over the lowest number of social housing units ever developed under a prosperous Government? That means that young people cannot have social housing at an affordable level and are therefore unable to access jobs in areas where there are high house values.
We do wish that more houses had been built over the past year, and that is precisely why we have said that a sensible tax on bankers’ bonuses could create the funds to build 20,000 new homes. Why does the hon. Lady oppose that policy?
Will my right hon. Friend confirm that 65,000 jobs have been lost in the construction sector alone, and that that is because of the slump in building across the board?
That is absolutely right. The construction sector has taken an absolute hammering since this Government took office, not least because of their foolhardy decision to get rid of infrastructure projects and building projects such as Building Schools for the Future that would have equipped many of our young people with the facilities needed to deliver a world-class education in the years to come.
Will the shadow Minister be extremely careful about the information that he lays before the House? Last month, in our previous debate on this subject, I told him that Department for Work and Pensions statisticians had made a comparison between youth unemployment lasting for more than six months as of now and two years ago, and that on a like-for-like measure there has been virtually no change. He keeps insisting that there has been a substantial increase, but the civil service statisticians say that that is not correct. Will he please stop making that assertion to this House?
I know that, like me, hon. Members will have read last year’s letter to the right hon. Gentleman from Sir Michael Scholar. The letter was very assertive about the way the right hon. Gentleman had used statistics before. I am happy to lay the letter before the House for those who have not seen it. I am also happy to show the Minister figures produced by the House of Commons Library, which show that since January long-term youth unemployment has risen by over 90%. That is a badge of shame for this Government, and the Minister should be doing more to get our young people back to work.
Does my right hon. Friend share my view that the Government seem to be stuck in an ideological Tardis in their view of the public-private divide in the economy? A case in point is what they have done to the solar panel industry. We have seen massive job losses in the private sector because of a loss of private and public sector contracts. It is amazing that the Government cannot seem to get hold of this concept.
My hon. Friend is absolutely right. We were promised that this was going to be the greenest Government ever, but a wide group of green and conservation organisations now say that the Government are comprehensively failing to meet that commitment. We all know that one of the key growth sectors for the future has to be low-carbon industries. The Government should therefore be doing more to get people into work in these sectors, not least by providing some regulatory certainty about the future.
Let me finish my point about the collapse in the rate of people flowing off benefits and into work. There is a very basic test. The Minister’s plan is not working unless it is getting more people off benefits and into work, unless the unemployment bill is coming down, and unless it is really making a difference—and right now, he is failing on every single count.
Does my right hon. Friend agree that the 227 additional people who have joined the dole queue in Liverpool, Walton may be seen by the Conservatives as just collateral damage from their failed economic policy, but for each of those individuals, although they are a statistic to the Government, theirs is a personal tragedy? Does he agree that they are still the same old Tories who believe that unemployment is a price worth paying?
Many will draw exactly that conclusion, not least because when they see a Secretary of State who is unable to come to this House and set out how many jobs his various initiatives are creating, they must conclude that he simply cannot be bothered to find out.
I want to spell out how two particular groups are being pretty badly hit by this Government’s policies. The human cost of the Government’s failure to get people back to work, to which my hon. Friend Steve Rotheram alluded, will be on everybody’s minds this afternoon. When families get together this Christmas, there will be plenty of anxious talk about the year ahead. This House has debated many times before the dangers of creating a lost generation, and today that news got even worse. Youth unemployment is up by 54,000. As my right hon. Friend the Leader of the Opposition said earlier today, long-term youth unemployment is up this year by 93%. Two hundred and seventy of us now represent constituencies where long-term youth unemployment has risen by over 100%. That is simply not good enough.
As someone who spent three years unemployed due to the activities of the Economic League, I well understand the indignity that unemployment brings. One of the things that kept me sane during that period was the ability to go along to the jobcentre and speak to people who could help me to get back into work. This Government are now closing the jobcentres.
The Minister says that this is nonsense. I am afraid that he will be giving the House the illusion that he is not taking the figures that we saw this morning seriously enough. He went on the media this morning and said that today’s figures, which show youth unemployment rising to the highest level this country has ever seen, represented a stabilisation in the labour market. When youth unemployment is going up, overall unemployment is going up, and women’s unemployment is going up, that is not stabilisation—it is a tragedy for the people those figures represent, and he should be doing more to get them back into work.
Does my right hon. Friend agree that it was a massive strategic error for the Government to announce over a year ago that they were going to get rid of half a million public sector jobs? Public servants spent less because they thought they were going to lose their jobs. Together with two years of a 1% pay freeze, which will reduce real incomes by 17%, and the attempt to dress up a 3% change in income tax as a pension contribution, that has massively deflated the amount of consumption in the economy and given rise to flat-lining growth.
My hon. Friend makes an extremely good point. The recovery has been clobbered, and as a result the welfare bill is now going through the roof. That is a bill that the rest of us are going to have to pay.
We now have, since we last met, a youth contract on the table. That is a recognition that it was a mistake to get rid of the future jobs fund and to leave instead, for two years, no active programme for getting young people back into work. That was a grave error. The shame is that this contract was paid for by a botched deal between the Deputy Prime Minister and the Chancellor; I do not think that the Secretary of State was even in the room. He should remember that if you are not in the room, it is quite hard to influence the decision. What emerged from the quartet, as I think it is quaintly called, was a shabby settlement that took money off hard-pressed parents with children to pay for this Government’s failure to get young people back to work. In the past, the Secretary of State has talked a lot about the marriage penalty, and there are sympathisers with his argument on both sides of the House. However, he too must now recognise that he is presiding over the biggest parents’ penalty that we have ever seen introduced into the benefits system, with twice the amount of money being taken off children and families than will be taken off the bankers over the course of this Parliament. Surely Government Members cannot be proud of that.
I want to ask a couple of questions about the youth contract to which I hope the Minister will be able to respond. First, will he admit that 53,000 work subsidies this coming year is far too few for the task that we have in hand? That equates to only one opportunity for every 20 young people now unemployed. Secondly, in 2009—this is perhaps of interest to Oliver Heald—Labour introduced a form of work subsidy, but the take-up was not great and the Conservative party attacked it remorselessly. What has accounted for the sudden change of heart over work subsidies? Thirdly, and perhaps most importantly given the Minister’s concern about statistics, when will we find out how many people the youth contract is getting back into work? Will it be Work programme providers who operate the schemes? If so, why do so many of them appear to be completely in the dark about the scheme and its introduction? If the contract proves not to work in short order, will the Government consider reintroducing Labour’s future jobs fund, which was such a success?
I share my right hon. Friend’s concern about the fact that we still have no details regarding the youth contract. I asked the Minister last week how much of the programme would be spent in Scotland and he could provide me with no information whatever. No one in Scotland, including Work programme providers, private employers and those in the public sector, has any idea what they have to plan with or to work with. That is simply hopeless when so many people are out of work.
That was indeed a very disappointing answer to my hon. Friend, particularly considering today’s rise in unemployment in Scotland.
I want to highlight one other group of workers who have been particularly badly hit. The over-50s are now losing jobs at a faster pace. The number of people in that group in Britain who have been unemployed for more than a year has risen by about 25% this year. Such workers often fear that they will not get back into work again and that they will be thrown on to some kind of silver scrap heap. The picture of the country that emerged this morning is terrible: long-term unemployment among the over-50s is up by 21% and in seven regions—Wales, the north-east, the east midlands, London, the north-west, the south-west and the west midlands—it is even higher. More than 50 Members of this House now represent constituencies where the rise in long-term unemployment among the over-50s is more than 50%. That is surely unacceptable and it surely demands a response from the Government.
Will my right hon. Friend bear it in mind that that situation is very much like what happened in the 1980s? People in their late 40s, let alone those in their 50s, were made redundant when there were two major recessions. Many of them were never to work again. That is the humiliation that was heaped on our fellow citizens. Although the Government and Tory Members do not seem to be much concerned—only five Tory MPs are present, leaving aside the Parliamentary Private Secretary—the tragedy is that there is now a repeat of what occurred at that time.
My hon. Friend is right to remind us of what happened in the 1980s. Of course, that was the decade when the number of those left to languish on incapacity benefit went through the roof.
Our motion calls on the Government to change course. We call on the Government to learn from today’s figures, to remember our young people, and to listen to the worries of the over-50s. We want them to change course and give us a real plan for getting people back to work and for creating growth. We think that there is another way and that the Government need to listen, and fast.
This is perhaps the last debate that I will lead for the Opposition this year. I want to conclude by looking ahead to an important anniversary next year—the 70th anniversary of the Beveridge report. I think that it is appropriate to mark the achievement of that very different kind of alliance; an alliance that genuinely acted in the national interest. The report was commissioned by a Labour Minister, written by a Liberal and welcomed by a nation. The Beveridge report provided the foundation for the welfare state created by the Attlee Administration. It was a welfare state that freed people from fear and it was created on the proceeds of full employment. I believe that the goal of full employment should once again be our aim. I hope that next year we can celebrate the achievement of that progressive alliance by rededicating ourselves to the idea that politics can make a difference, that politics can author the policies that get this country back to work once again, and that politics once again can offer this country freedom from fear.
I commend the motion to the House.
I rise to take part in episode two of the debate that we began a month ago.
Let me start by saying, once again, that this Government regard unemployment among people of all ages as bad, although youth unemployment is a particular concern. All unemployment is bad and it will remain a priority for this Government to deal with the issue, to help those who are unemployed back into work, and to create an environment in which businesses are able to grow, develop and create jobs. We will do everything that we can to tackle this genuine blight, which causes concern for Members on both sides of this House. It is a problem that we must tackle.
I must also say, however, that I have seldom in this House heard such a load of complete nonsense as I have just heard from the shadow Secretary of State. He used statistics that bear no relation to the truth and he made an argument based on achievements of the previous Government that bear no relation to reality. We need to remember that it was the Labour Government who brought us youth unemployment of nearly 1 million, unemployment of 2.5 million, a deep recession, the biggest peacetime financial deficit in our history, and a Chief Secretary to the Treasury who was best known not for his taste in cappuccino or the memos that he sent to his staff, but for the note that he left behind, saying that “there’s no money left”.
Had we followed the economic strategy of the right hon. Gentleman when he was at the Treasury and of his former boss, the former Prime Minister, not only would we be in the same kind of financial predicament today that some of our European partners are in, but we would have unemployment that is much higher today than it is.
The report issued by the Office for Budget Responsibility at the time of the autumn statement made it clear that the boom was greater and the recession sharper and deeper than had previously been thought. It also stated that the recovery in 2009 was stronger than had previously been thought, and that it was brought to an abrupt halt in the second half of 2010. Perhaps the Minister would like to reflect on what happened in 2010 to change things.
What the hon. Lady has missed is that the OBR said at the time of the autumn statement that the structural deficit—not the cyclical deficit—that we inherited from the previous Government was much worse than it had previously believed. That means that the economic legacy that we inherited was much worse than we had previously believed. It is therefore a much bigger task to overcome that and to get the economy growing again, to get jobs being created again and to get Britain moving.
I know that the Minister cares about this issue and that we are going to have point scoring. However, a million young people and their many millions of parents and friends are waiting for something to happen. Point scoring will not help them. The shadow Secretary of State finished by remembering the 70th anniversary of the Beveridge report. He was offering an olive branch. In that spirit, why can the Government not say, “Let’s all get around a table and find something together that helps the young unemployed people in this country.”?
The hon. Gentleman will learn, if he listens to my speech, that we are already doing things. We have delivered a package of support that will make a significant difference to the lives of the unemployed.
We keep hearing about a mythical two-year gap in provision. I remind the Opposition that the programmes that we inherited from them finished only three months ago. Today’s unemployment figures cover part of the period when the previous Government’s programmes were continuing.
Let me take up the points that Mr Byrne made about this morning’s unemployment figures. He questioned why I had said this morning that the labour market had showed some signs of stabilisation. Let me explain why. It is because over the past month, employment has risen by 38,000 and unemployment has risen by 16,000, a number that is considerably exceeded by the change in activity levels. The youth unemployment figure, excluding full-time students, has remained static, and the jobseeker’s allowance claimant count has risen by 3,000, whereas the total number of people who have moved off incapacity benefit and income support as a result of our welfare reforms is 10,000. Those are one month’s figures and certainly do not reflect a long-term change, but they are at least a sign of some stabilisation in the labour market. I think he would and should welcome that.
I want to return to the Minister’s point about the previous programmes having only just come to a conclusion. He surely accepts that they were running down. If someone started on a future jobs fund programme at the very end of its life, that individual would inevitably be in work for a further six months. However, that does not mean that there was not a substantial gap between the announcement of the closure of some programmes and the Government finally getting around to opening up a new programme, the youth contract, which we understand will not actually come into effect until next April.
That is simply not correct. We managed a transition strategy that kept existing programmes going until the first part of this autumn, precisely to ensure that there was not a gap in provision between what we inherited and what we were putting in place.
Does my right hon. Friend share my consternation that Opposition Front Benchers are saying that they would reintroduce the future jobs fund, given that it was an entirely public sector operation providing work placements but no permanent jobs for the future? Surely it is much better to go with the private sector option, as the Government are talking about. That is a way of providing jobs for the future.
I absolutely agree, and that is central to what we are trying to achieve. The measures that we are putting in place, which I will set out for the House in a moment, are designed to ensure that we help young people, indeed people of all ages, to move into roles in the private sector, where there is a long-term, sustained opportunity for them to build careers.
The hon. Gentleman will know that in order for a private sector organisation to participate in the future jobs fund, it had to set up a special purpose vehicle to work around European Union state aid rules. The result was that virtually all placements under the future jobs fund were in the public and community sector. In putting in place additional programmes, providing apprenticeships and providing a subsidy through the youth contract, we are focusing support on roles in the private sector.
I will focus not on the over-50s, because I would have to declare an interest, but on 18 to 24-year-olds. In Birmingham, 15,600 of them are claiming jobseeker’s allowance. If the Minister is so focused on private sector job creation, will he give me one example of how he is encouraging the private sector in Birmingham to get jobs for that lost generation, rather than providing a programme of aid?
I will set out in a moment how our work experience scheme, for example, is succeeding in helping young people to move into work in the private sector.
Youth unemployment started rising in 2004 and peaked at nearly 1 million in 2009. Will my right hon. Friend set out the facts about that in an honest and straightforward manner? The problems did not start in 2010.
My hon. Friend makes an important point. From listening to the Opposition, one would believe that the problem had simply emerged in the past few months. One would not believe that unemployment among young people was almost 1 million when Labour left office. Indeed, the total number of young people not in education or employment passed 1 million during the last recession, but we do not hear about that from Labour.
The Minister can try to evade the truth as much as he likes, but he cannot duck the basic fact that youth unemployment was about 14% when Labour took office. Before the recession it came down to 12%. It did go up during the recession, but it was coming down before the election. Since the election, it has gone through the roof to a record high. He simply cannot duck that truth. Why does he not get on and do something about it?
I will explain what we are planning to do, but we should remember that youth unemployment was at almost 950,000 when Labour left office, which was higher than when it took office. We are not going take lessons from Labour and its record on youth unemployment.
I wish to set out the approach that we have put in place to try to support the unemployed.
No, I am going to make some progress now.
The first priority has to be to help get business moving and growing again. That involves having a stable financial environment in which businesses are confident that this country is not going to find itself in the economic predicament that some other nations are facing. We therefore remain determined to address the deficit challenge, bring our public finances under control and send a message to the world that Britain understands the challenges that we face and is trying to do something about them. That is why we saw such a good response in the bond markets this morning to this country’s attempts to sell its bonds, and why other countries are facing difficulties. I believe that if we had not taken those measures, businesses would not be investing in this country or considering employing people here. I believe that unemployment would be higher than it is today.
We also have to take measures that, within the confines of the financial constraints upon us, do everything possible to encourage and support business. That is why my right hon. Friend the Chancellor set out in his autumn statement two weeks ago a variety of measures designed to do just that. They include investment in infrastructure; an expansion of the regional growth fund; increased capital allowances in enterprise zones; and measures to underpin bank lending to small businesses, so that they can access the finance that they need to grow. Those are essential parts of ensuring that in exceptionally difficult times, businesses at least have the best foundations that we can possibly give them to enable them to grow.
We all appreciate that summary of the autumn statement, but will the Minister remind the House to what level unemployment is projected to rise next year?
The right hon. Gentleman and other Members can read the OBR forecasts, which state that at the end of a difficult economic period unemployment will start to fall again. I remind him that we are dealing with international circumstances that the Governor of the Bank of England described as being among the most difficult in modern times, if not the most difficult.
Of course, alongside the measures that we need to take to support and encourage business growth, we need high-quality support for the unemployed to ensure that we can get them back into work as quickly as possible.
The Minister has been on his feet for what feels quite a long time, and he has attacked the public sector and talked about how he will support the private sector but not once mentioned the third sector. That shows the Government’s real attitude to that sector’s role in supporting people into employment, which was what made the future jobs fund work.
If the hon. Lady will allow me, I will finish explaining what we are doing. Last night, we published figures showing that 20% of referrals taking place through the Work programme are being handled by the voluntary sector, so it is playing an extremely important part in our work. It is also helping us to deliver a number of other programmes, and it is an integral part of supporting both the short and long-term unemployed.
There are a number of elements to the package that we have put in place. The first is support for the shorter-term unemployed, with a particular focus on the young, through our work experience programme and sector-based work academies. The right hon. Member for Birmingham, Hodge Hill, would know, had he read the figures that we published, that the first statistics, for the period up until August, showed that more than 50% of the young people going through our work experience programme moved off benefits quickly afterwards. Indeed, we know that many of those young people are staying in employment with the employers who gave them their work experience place. The scheme is a great success, and we are doubling its size as part of the youth contract.
I should like to put it on record that I am very grateful to all the employers up and down the country, large and small, that are offering young people work experience and helping to break the vicious circle whereby people cannot get a job unless they have experience, but they cannot get experience unless they have a job. The scheme is cost-effective, costing one twentieth of what was spent on the future jobs fund for a broadly similar outcome. It is a great initiative, and I pay tribute to all the Jobcentre Plus staff who are working on it.
I am grateful to the Minister, who is characteristically generous in giving way. I assume that he refers to the statistics that were published on the Department’s website about work experience, which showed that between January and August 2011, 16,360 claimants started a “get Britain working” work experience placement. That is in the written answer that he gave me. Of those 16,000, how many have got jobs?
We know that just over 50% of those people were off benefits within a total of 12 weeks from day one of their placement. It is an eight-week placement, so the answer is, in effect, within a month of the end of the work experience period. That is the first set of figures. The right hon. Gentleman said, “No more figures till February”, and he is right. He cannot berate me for misuse of national statistics—he and I can argue about that offline sometime—and at the same time demand that I misuse them to give him more evidence now. We will publish the figures for the programme at the appropriate moment, but I am confident that they will continue to show the real difference that it is making to young people.
Does the Minister agree that the best thing is the Government’s bringing everything together to ensure not just that private sector businesses grow to employ people, but that we put good, solid training, work experience and apprenticeships in place so that people can not only get into work but have sustainable long-term employment, unlike through some of the fad projects of the past?
I agree. The second part of the support that we are providing to young people—and, indeed, to older workers, for whom apprenticeships are also available—is a substantial increase in the number of apprenticeships. More than 100,000 new apprenticeships have been announced since the general election—the total across the Parliament will take apprenticeship provision far beyond where it has been previously. We believe that an apprenticeship that combines training and a real job for many young people is a better vehicle for delivering a long-term career option for them than simply putting them into a temporary six-month work experience placement at significant cost to the taxpayer, as we experienced with the future jobs fund. I accept that we do not agree on that: Labour Members believe that their approach was better. However, we believe that sustained employment in the private sector with an apprenticeship for a substantial proportion of young people is the best option. I am delighted that my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, who is responsible for that, has put in so much effort and won so many extra resources for apprenticeships.
I make the same point to the hon. Lady that I made to the shadow Minister: I wish they would stop producing figures that are not statistically valid. The previous Government had something called the training allowance. Somebody who had been out of work for 12 months and entered the new deal programmes went for a short time on to a training allowance. That meant that their JSA claim was moved back to day one. As a result, the previous Government claimed to have abolished youth unemployment. We have stopped doing that—we do not hide the unemployed. We accept the scale of the problem and try to tackle it properly. The civil service statisticians in the Department for Work and Pensions carried out a like-for-like comparison, which shows that there is virtually no difference in youth unemployment for more than six months between today and two years ago. Opposition figures are therefore simply not accurate.
The third element of the support is through the Work programme, which began at the start of July. It has been going for five months and is the most ambitious welfare-to-work programme that the country has seen. The first signs from providers are encouraging. We will not have official statistics till next year, but there are many examples of people who have been out of work for a long time getting into work. It is a payment-by-results scheme, so providers have every incentive to use the right approach to working with people in a personalised way to deliver the right support to them individually and to match them to the right job; otherwise they will not stay there. Given that the full payment is not made until a conventional jobseeker has been in work for 18 months, there is a real incentive to ensure that it is about not just placing someone in a short-term job but building a long-term career for them.
The Minister wants accurate figures, so let me tell him that 130 people in my constituency in highly skilled engineering jobs are losing their jobs today because of cuts in public sector spending. It is a private sector business. Does the Minister not understand that cuts in the public sector impact on the private sector? Here in my hand is the proof to show that.
I regret every single redundancy in any sector in any part of this country. It is a terrible blow for the people concerned. I do not know about the case, but if the hon. Gentleman wants to talk to me afterwards, I will ensure that Jobcentre Plus support from a rapid response team is available to his constituents. I regret any such situation. However, we are having to get to grips with the challenges of the public sector because of the mess we were left. If we did not do that, unemployment would be higher, not lower. I stress that we will do everything we can to help the hon. Gentleman’s constituents and those elsewhere who are in a similar position. Any unemployment is too high, and we will do all we can to help tackle it.
Let me briefly consider the youth contract because questions have been asked about it. It was announced shortly after our debate a month ago and I think that it will enhance the programmes that we are already delivering. It builds on the programmes that are already in place and will involve doubling the work experience programme so that we should be able to guarantee every single young person who has been out of work for three months a work experience place. Through the Work programme, it provides a subsidy to employers to take on a young person who has been unemployed for a longer time. The CBI proposed it to us, but it is more generous than the programme that the CBI requested. The shadow Minister made the point about the previous Government’s scheme in 2009, but the difference is that we are delivering something to a template that leading business groups requested. They say that it will make a real difference to the likelihood of an employer taking on a young person. I hope and believe that will make a genuine difference.
One of they key factors throughout the United Kingdom that perhaps the Minister has not mentioned yet is small and medium businesses. In Northern Ireland, 90% of those in employment are employed through small and medium businesses. What help does the Minister intend to give small and medium businesses to create jobs and thereby address youth unemployment?
I agree that small and medium-sized enterprises are crucial. I hope that the subsidy that is paid to employers through the youth contract will be attractive to large and small employers. We are clear that the role that small businesses play is important. Opposition Members raised issues about unemployment among the older generation and I believe that our new enterprise allowance, which is proving successful in the areas where it has been operating so far and is now available throughout the country, will provide a real route for people who want to build their own SME in future.
Mr Deputy Speaker, do not listen to what you hear from the Opposition about the Government doing nothing about unemployment. We have a comprehensive range of support, which I believe can make a real difference to the unemployed. We face huge economic challenges and some of the most difficult economic circumstances that any Government have faced. However, unemployment is and will remain a priority for the Government. We will do everything that we can to tackle it.
Order. I remind hon. Members that I am imposing a six-minute limit due to the number who wish to speak.
It is a pleasure to follow the Minister. The statistics I will use are from the Office for National Statistics, but my experience is as a manager of a centre for unemployed people before I came into the House. I saw at first hand the failure of economic policy. That is what unemployment is: a failure of an economic system. It is not “a price worth paying” as a previous Chancellor of the Exchequer said.
In the 1990s, I ran a centre that helped young people to get back to work. We gave them life experiences and choices. Whether in the public sector, the private sector or the voluntary sector, those experiences were valuable tools and gave skills to young people. It is a shame that Government Members rubbish schemes involving the voluntary and public sectors, because people need help to get those necessary skills; they do not need Government Members to attack the public sector.
Does the hon. Gentleman not accept that it is something of a deception to put a young person in a job for six months with the idea that it will lead to something at a time when the public sector is being cut? Surely it is better to give that young person a private sector job opportunity or work experience that has some prospect of leading somewhere.
I will tell the hon. Gentleman what a deception is: it is the Government saying that they will introduce a scheme next April when youth unemployment is going through the roof this month and last month.
Why is it a deception if the Government set out a well thought through policy that they are ready to deliver in three or four months’ time? That is not a deception but a well organised policy. It is ludicrous to trade such cheap remarks about people’s jobs and futures.
I shall tell the hon. Gentleman my background in a moment—I certainly know what unemployment is like and have worked with unemployed people—but month on month, people are losing their jobs. Saying that there is hope in future of a scheme—he says it is well thought out, but nobody has seen it implemented—is a disgrace when the Government are doing away with schemes that were working and helping people. I met people who went on those schemes. They had the opportunity in a major global recession to gain work experience and skills. That is what the Government should be doing; they should not be talking about some generous scheme of the future that we do not know about.
The Government’s record is one of increasing unemployment, which compares with the Government of the 1980s and 1990s. The centre for the unemployed where I worked was established in the 1930s, and was re-established in the 1980s because of mass unemployment and mass depopulation. People left my area to look for jobs in the 1980s and ’90s as they did in the 1930s. The county of Anglesey, which I represent, was the only county in Wales that had a declining population in two consecutive censuses, because people went looking for work. Yes, they got on their bikes, but it harmed our community. Unemployment is not a statistic to bandy around in the Chamber; it involves real lives and real people. It affects individuals, families and communities. I have seen communities scarred by mass unemployment, which is why I am passionate about standing up here today to say that this Government’s policies are not working. We need to work together to find policies that work. When the Government scrap policies that have been successful in my community, I will stand up and say so—that is the reality of the situation not only in my constituency but in many parts of the country.
In 1992, unemployment in my constituency stood at 3,912—nearly 4,000. By October 2002 it was down to 1,516, and by October 2007 it was down to 1,093, because schemes that targeted the hardcore unemployed to help them back to work were introduced.
I remember that there was no plan to help in the 1980s. In 1992, the Chancellor of the Exchequer said that unemployment was “a price worth paying”—it was an economic tool. The Minister shakes his head, but those were the Chancellor’s words, and he cannot contradict that because they are on the record. The Chancellor said that there were shoots of growth, but people were losing their jobs and livelihoods, and communities were being destroyed.
The buzzwords of the ’80s and ’90s were “downsizing” and “redundancy”. We needed a scheme, and when the Labour Government came to power in 1997, we introduced the new deal for the unemployed. A levy from the excess profits of utility companies was used and targeted to help young people. Between 1999 and 2004, it was hugely successful. I think it should have continued, but after 2004 the scheme was targeted at other sections of society that needed help. With hindsight, perhaps we should have continued to concentrate on young people.
Youth unemployment has gone up in the past 12 months, whatever statistics we use. Young people are losing their jobs or are not able to enter the employment market. My daughter’s peers, who are in their 20s, have taken extra university courses because they cannot get jobs. They are coming out highly qualified and cannot get jobs. That is the reality of the situation today. It is incumbent on us all, whichever party we represent, to get the number down. Although bandying statistics does not help, we must, none the less, use the records of different Governments to paint a picture. The record of this Government is to do away with schemes that were successful and to say, “We’ll replace them with something in the future.” The reality is that unemployment is going up.
I am afraid that I do not have much time; I have already taken two interventions.
In the 1980s and 1990s, there was a period of stagnation in my constituency. The gross value added, or the gross domestic product, was among the worst in the United Kingdom. The historical scar is there and people are finding it difficult. Between 1997 and 2007, the number of jobs increased by some 7,000 and many skills were brought back to the area through various schemes. There was a partnership between Government, the public sector, the private sector and the voluntary sector, all working together to help people. That is the way forward.
I accept that unemployment went up in 2007, but it started to come down in 2010, which is important. When this Government took office, growth was increasing and unemployment was coming down. The trend has now been reversed and we are back to what it was like in the 1980s, and once again we are facing mass unemployment. Some 2.64 million people are unemployed, which is a disgrace for any Government. This Government should apologise for the fact that their policies are not working.
The Welsh Assembly Government are introducing additional projects to help the unemployed. Austerity alone will not create jobs; it is getting people skilled up and giving them the necessary experience, growing the economy, and bringing down unemployment that will put increase the GDP and the GVA of every part of the United Kingdom. Wales has been hammered by unemployment. We need to move forward. Today is a bad day for unemployment and a bad day for this Government’s record.
Mr Byrne and many of his colleagues have basically said that the Government should change course. I listened to them with great interest but did not hear any of them say what their course should be. I heard plenty of criticisms of the Government, but there has been no mention by the right hon. Gentleman of a coherent economic policy.
I am grateful to the hon. Gentleman for giving way. We have set out a clear five-point plan for getting people back into work. The starting point is a sensible and fair tax on bankers’ bonuses. Does he think that his constituents, like mine, would support that?
I have heard about this tax on bankers’ bonuses, which has already been spent in myriad different ways. In any case, the Government have already introduced taxes on banks, which are bringing in far more money. I point out to the right hon. Gentleman—I am sure he knows this, given what his last job was—that the financial services industry in this country is contributing about 10% of all the money that we have, or somewhere in the region of £50 billion. At this moment in time, we cannot do anything too much that will damage that.
Let me explain to the House what I think the Opposition party’s economic policy was. Up until October and the Chancellor’s statement, the economic policy of Labour Members was to borrow even more money than we are being forced to borrow at the moment. Since October, everything has changed and suddenly their policy is to borrow less money. Amazingly enough, they are not only going to borrow less money, but spend more money. The Opposition are going to borrow less money but somehow there will be no cuts in Government expenditure and no freezes on pensions and everyone will have a job. It is a totally incoherent economic policy, but completely consistent with what we have come to expect from Labour.
The hon. Gentleman says that we did not outline our plans. If he reads the motion, he will find them there, and he should be speaking to the motion. He said two things that were incorrect. He said that we would be spending more than the Government. In the autumn statement, this Government said that they would spend more than Labour. One tool of employment is taxation. Does he agree that reducing VAT temporarily during the previous recession helped employment and consumers? Would he support something of that nature now?
The hon. Gentleman ought to know that I will always support any kind of tax cut if it is affordable and I welcome his conversion to that idea. I recall him talking about what happened when Labour got in, but he forgot one or two important facts. He forgot to tell us that when Labour got in in 1997, the national debt was some £350 billion. By 2007, before the economic crash, the national debt had risen to £650 billion. Yes, the Labour Government had been paying off the national debt for two years but when the election started to loom, all of a sudden off went the spending taps and they were spending at a rate of £30 billion or so on average more than they were earning. That meant that by 2007 they already had a problem, yet they let the spending rip and we ended up with a national debt of £1 trillion and a deficit of £160 billion. Their response was to say up until October that we should borrow even more money—now, they suggest we borrow even less.
What the hon. Ladies and Gentlemen on the Opposition Benches do not understand is that it is very easy to create a little employment in the short-term by borrowing money that one does not actually have, but the problem is that that will always lead to greater unemployment in the longer term because at some point—they do not realise this—that money must be paid back. In the meantime, the interest on it, which is about £30 billion a year at the moment, has to be paid. The only way that money can be paid back is by raising taxes, which destroys jobs, or cutting public spending. That is a basic economic fact that Labour Governments throughout history have failed to comprehend.
Of course, there are more things that this Government can do. We have taken the brave decision as a coalition to get rid of the deficit as quickly as we can. It might take until 2017—[ Interruption. ] Yes, I accept it is not going to be an easy task, given what we have inherited. It will take a number of years, but we will stay the course and do it, and we will do more, besides.
We must consider immigration. It cannot possibly be right that 250,000 people are coming into this country at a time of recession if we have to find them all jobs, too. My wife is one of them and my sister-in-law, who is from Asia, is another. I am not in any way against those who come here; I welcome the fact that people have come here and are making a contribution, but we must consider whether that is sustainable in the long term.
We must also consider the attitude of some British people—that has to be said. Neither of my sister-in-laws had problems coming over here from Asia and eastern Europe and getting jobs, but there is unfortunately a small minority of younger British people who would prefer to stay on the dole than go out and get a job. It is a harsh fact but it needs saying and it is something that this Government will actively tackle.
We need to look at the attitudes and training of those who come out of our schools, ensuring that they can add up and have basic English and social skills, as it is often people’s attitude that gets them a job. We must consider what our universities are teaching people, because it is no good if everybody comes out with a degree in media studies. There will always be some jobs for some people in the media, but not for all those who want them.
I have spoken to a number of people working in companies that are contributing a lot to this country—gas and oil companies and so on—and they say that they have had to go abroad to find people because there are not enough with the necessary practical skills in this country. By that I mean people who do not mind getting their hands a bit dirty. I spent four or five years getting my hands a bit dirty, as did many people on the Opposition Benches. I have no problem with that whatsoever. Unfortunately, some young people in this country at the moment do.
I am grateful to the hon. Gentleman for giving way, but may I urge him to focus on the issue of joblessness rather than worklessness? I think that was an offensive remark, although I am sure that he made it unintentionally. We have Office for National Statistics data giving the numbers of vacancies and the numbers of people who are unemployed, particularly young people. In neighbouring constituencies, such as Hartlepool, which is just to the south of me—
I take the hon. Gentleman’s point. I am focusing on the fact that there are jobs out there for some people and that there are some people who will not take jobs. I accept that there are not enough jobs and we would all like to see more.
One thing the Government can do—I think they are considering this—is look at the red tape imposed on small businesses. When I ran a small family business, I was reticent to take people on because if we took on a contract to move goods from A to B that lasted for nine or 12 months and took on some extra drivers to do that, we were stuck if we suddenly lost the contract because we found it very difficult to get rid of people. We ought to look at lifting the red tape so that companies can take a risk by taking somebody on. If that does not work out, sadly, they might have to let them go but a lot of companies would hang on to people if they could. It is not the public sector out there—things are a lot harsher. Kate Green is laughing, but I wonder whether she has ever tried to run a small business. We are also, I am glad to say, looking at the green taxes that have been levied on the big industries, because there is absolutely no point in hitting big manufacturing companies with carbon and environmental taxes if they are simply going to relocate to the other side of the world and make their goods over there, taking jobs with them and probably creating even more carbon as they ship back whatever it was they were making.
I have only 45 seconds left, but I must mention the right hon. Member for Birmingham, Hodge Hill, who was going to give way to me, but failed to do so, when he mentioned Clement Attlee. We all supported the grandiose schemes of—not Clement Attlee, sorry, Bevin, who was supported by Winston Churchill at the time, the Conservative leader—[Hon. Members: “Beveridge!”] Beveridge, sorry. Not Bevin, no, I accept that.
The right hon. Gentleman will know, however, that Beveridge’s plans were built on the back of a war loan from the United States, which had to be paid off for decades afterwards; that Callaghan’s Government ended in failure; that Wilson had to devalue the pound; and that his own, previous, Government were responsible for the biggest boom and bust in financial history—
May I give David T. C. Davies a little history of how the economy is affected from time to time in the United Kingdom, as it has been for centuries and will carry on being, because unforeseen things come along and rock economies, as we experienced in 2008-09 under the previous Labour Government? That should not cloud the issues before us in the motion that my Front Benchers have tabled and I support, because the figure of 2.638 million unemployed people in this country represents a massive amount of human suffering, costs the economy and will go on doing so for generations if it is not tackled. The hon. Gentleman asked whether people are leaving school with the right language, literature and other skills to go into the workplace, but, having been a Member for 28 years, I have listened to such debates, and at certain points we decided to tackle the major issues that needed to be tackled in order to ease the problems that mass unemployment has caused.
Today’s rise in unemployment is our biggest since July 1994. The regional breakdown for Yorkshire and Humberside shows that employment—not unemployment—has fallen by 70,000 over the last quarter; that unemployment has increased by 9,000 on the previous quarter; that it stands at 253,000; and that the number of people claiming jobseeker’s allowance has increased by 500 on the previous month. That tells me and most people that there is something seriously wrong with the path that the Government are taking to turn the economy around, and that a large amount of money will have to be paid from the public purse to keep the figures as they are.
Youth unemployment went up by 54,000 in the three months to October and now stands at more than 1 million, the highest level since comparable records began in 1992. I brought the matter up at Prime Minister’s Question Time today, noting that more than 22% of 16 to 24-year-olds who could be economically active are unemployed, an increase of 1.2% on the previous quarter. That has major implications for the British economy and, certainly, for young people.
Long-term youth unemployment has gone up to 141,200, the highest level since July 1997, and by 68,000 alone since January, a rise of 93%.
Government Members are obsessed with immigration, when there is youth unemployment and young people are leaving school without the skills to fill the jobs that are going to come up. In future we will have to bring more people to this country to fill those jobs for which we do not have the skills.
Order. Lots of Members are doing this: when they make an intervention or speak they have to face the Chair, not turn their back to it. So, if everybody could remember that, it would be very handy.
Long-term youth unemployment has increased. In Yorkshire and Humberside, it increased from 7,160 in January 2011 to 13,895 in November 2011. That is an increase of 94% in long-term youth unemployment. In my constituency it has increased by
68.8%, while in the two neighbouring constituencies in the Rotherham borough it has increased by 125% and 80% respectively. We are talking about the life chances of young people in our constituencies being taken away from them. I have not seen such increases in youth unemployment since the 1980s, when my constituency and neighbouring constituencies suffered from the Government’s run-down of the coal industry, which not only put thousands of people on the dole, but struck off the life chances of people in education trying to get into work, as one of the major employers for young men in my constituency was systematically closed down. The consequences of that have run on not just for a few years, but for generations.
I do not doubt either the right hon. Gentleman’s sincerity or the fact that he believes the figures that he has been given, but let me tell him that they are simply misleading. What used to happen is that after a young person on jobseeker’s allowance had gone on a scheme, the clock would start ticking as though it were day one, which meant that they had disappeared from the long-term youth unemployment figures. The right hon. Gentleman is comparing figures that exclude those young people with those that include them, so the rise that he describes has not happened in the way that he believes.
The idea that we should come here and dance around about whether all the figures are accurate, when there are 2.6 million unemployed people in this country, is not sensible. [ Interruption. ] I do not know: I am not a Minister, and I do not study the briefs that the Minister studies. What I do, and what I have done for over 28 years, is represent a constituency that is largely poor, with far too much deprivation in all sorts of areas, whether in terms of ill health, high unemployment or anything else. I saw that change in my lifetime, over a decade, which affected the lifestyles of many people in my constituency. I see from today’s statistics and what has been happening over the past 12 months that things are returning to how they were decades ago. It is wrong and it is unfair, and I am not going to come to this place and listen to a debate about “the national economy” this or “the national economy” that. We need to look at the crucial issues of how to help the young generation.
My right hon. Friend is making a characteristically powerful speech. The truth is that the House of Commons Library is clear: in January 2011, long-term youth unemployment in his constituency was 160, but it is now 270, a rise of more than 68%. Under anybody’s definition that rise is unacceptable, and the Government should be doing more to bring it down.
I agree entirely with my right hon. Friend.
If anybody wants to know the consequences of youth unemployment—not just now, but in the future—they could do worse than look at the article headed “Future costs of youth unemployment” on the BBC business news website, which refers to an academic paper by
Paul Gregg and Lindsey Macmillan that sets out in great detail what happens to people who suffer from youth unemployment. It affects them for the rest of their lives, not only in terms of their jobs, but in terms of their incomes and everything else. It is not acceptable for us to sit in this House today and watch youth unemployment increasing to its current levels, which will disadvantage generations of people and their children, as well as the taxpayer, who will have to pay for it. I will not rehearse how much it will cost, but there will be a cost to the taxpayer—the cost to the individuals concerned will probably be far higher—that we should guard against.
I want to finish on this point. The Government’s ideology was about coming in and saying, “We get rid of the public sector”—I have seen the damage of that—“and we bring in the private sector.” However, for every 13 jobs lost in the public sector in the last quarter, only one has been created in the private sector. It is not good enough. The plan is not working. It is about time this Government tried to protect everybody in this nation.
Of course it is right that we are debating this important issue today. Everybody knows that unemployment is a serious problem across the country. We seem, however, to have had the same Opposition day debate over and over again. The same people have been in the Chamber repeatedly over the last few months, and every debate follows the same pattern. Labour never accepts responsibility for the economic mess in which we find ourselves and no new ideas on how to tackle the problem are offered; the same old failed ideas are repeated in every debate.
No, I will not. There will be plenty of opportunities for others to speak later. I hope that by not giving way, as many Back Benchers as possible will have the opportunity to contribute.
The Government are trying to rebalance the economy left to us by Labour. Labour relied on the public sector for far too long to make up for declining growth elsewhere, and it did not support the private sector in the good times. Some areas have stratospheric levels of public sector employment. In Merthyr Tydfil, for example, more than 40% of people—more than four in 10—are employed in the public sector. That is clearly not sustainable across the country as a whole. We must work to increase employment in other sectors—the private sector has already been mentioned and other Members have mentioned the voluntary or third sector—to reduce our reliance on the public sector and ensure that we have a much better balanced economy that is better able to absorb shocks from the global economy and future recessions.
There is some evidence that we are starting to see progress. I would take issue with the figures of Mr Barron. My understanding is that public sector employment fell last year by 276,000, but that employment in the private sector increased by 262,000—a difference of only 14,000 jobs. Almost all the jobs lost in the public sector have been replaced by an increase in jobs in the private sector.
I am not going to give way.
There are problems in the eurozone, problems with bank lending and so forth, which have a serious impact on job creation in the private sector, but we can say that we are starting to see some progress, and the Government are trying to encourage even more progress. The Minister of State, Department for Work and Pensions, Chris Grayling, who is responsible for employment, announced in the autumn statement measures to stimulate growth. Rather than try to borrow their way out of a debt crisis, the Government are being more pragmatic and sensible. I welcome some innovative ideas for raising money—working with pension funds, for example, to unlock £20 billion of investment. That is better than the Government simply borrowing more and more money, which has been shown not to work.
I share the concerns of some Labour and Government Members about the level of youth unemployment. I know that this is a concern across the House. Under Labour, youth unemployment rose nearly 75% between 2001 and 2010, so it was a serious problem before this Government came to power. There has been an increase, however, in the number of young people who are unemployed, and I know that Ministers, too, are deeply concerned about that. I am glad that the Government are investing in trying to tackle it. We need to recognise that it is going to be tough for young people in the near future, and we need to do more to make them as employable as possible so that when jobs are created and become available, they can take them up.
We know from past experience, and from the experience of unemployed people today, that people who are seeking work and spending all their time going to the job centre and applying for jobs can find the experience hugely demoralising, and it can lead to depression and mental health problems. For decades, that has been a problem for people facing unemployment. We need to make it easier for younger and older people facing unemployment to volunteer in order to build their skills, to learn what they enjoy doing, to get useful information for their CVs, to get good references and to help keep them closer to the job market.
Jobcentre Plus and the Work programme providers could work with the local voluntary sector and others in many areas to identify more opportunities for those on jobseeker’s allowance to volunteer. There are already many opportunities across the third sector, which we have heard about in various debates on this theme. There are other ways in which unemployed people of whatever age can volunteer and build up their skills. For example, it is possible to become a magistrate at 21. That is a good way in which people can gain experience in an area about which they would not necessarily know anything otherwise, while also learning skills that they can transfer to employment. Charity shops are always looking for volunteers, who will have the opportunity to gain retail experience that they too can transfer to employment. The retail sector in my constituency still has a significant number of vacancies, and it is one of the sectors that are most willing to take on those who are furthest from the jobs market.
There are plenty of ways in which we can help people to develop the habit of working by getting up at the same time each day, finding out what they enjoy, learning people skills, and acquiring new skills that they can take into work when jobs are created. Some may be inspired to set up their own businesses—older people who have experience and skills that they can take into entrepreneurship, and young people who are brimming with ideas.
I accept that the unemployment figures are an individual tragedy for all the people affected, and I am sure that we all feel the same, but relying on the ability to borrow more money will not help us to find a way out of this situation. We need to see investment, and to see the Government putting their money where their mouth is.
The dire news presented by the latest unemployment figures should cause members of the Government to hang their heads in shame, but there are not many present to do that today. The Government have promised much, but instead of delivering on their promises, they have proceeded to devastate the lives of ordinary hard-working people—people such as nurses, engineers, chemical process workers, local authority employees, shop assistants and even members of our armed forces, some of whom return from action on behalf of our country to learn that their jobs are either gone or under threat.
We were promised a private sector jobs revolution, but, as the Prime Minister had to admit today when challenged by my right hon. Friend the Leader of the Opposition, he has failed to deliver on that promise. His failure is proving expensive, not just for the millions who are unemployed, but for our country. Instead of investing billions in infrastructure, house building, new hospitals and other job creation schemes, the Tory Government are throwing that money away on escalating unemployment benefit bills which, sadly, are likely to increase even more in the future.
Is not one of the problems the fact that the Government seem to view the public and private sectors as two separate entities, although one cannot survive while the other is being cut to death?
I agree. My hon. Friend provided an illustration of that earlier when he mentioned the job losses that have been announced in a company in his constituency. For some time the Tories said that we did not have a plan for jobs. They may have systematically dismantled our investment programmes for job creation, but it is not too late for them to adopt our five-point plan for jobs and growth.
Like others who have spoken, I shall concentrate on the subject of young people. The acceleration in the number of young unemployed people will help this Tory-led Government to go down in history as the Government who could not care less about our country’s most important asset.
It has been suggested that businesses should be given an incentive to employ people aged between 16 and 24, in the form of a £1,500 tax relief which would cover national insurance contributions for a year. Does the hon. Gentleman believe that such initiatives are capable of providing employment for unemployed people?
I welcome all schemes that will encourage employers to take on workers and, in particular, increase the number of young people in employment.
In 1997, my Stockton borough inherited from the Tories an unemployment rate of 14.9% among young people, while the national rate was 8.1%. Hard work by the Labour Government more than halved the Stockton rate to 6.7%, but since then the Tories and their Liberal Democrat allies have allowed it to soar almost to its previous level. It is now 12.9%, which, although it may not seem a huge number, represents 2,300 young lives.
In my constituency, I see countless young people wandering the streets of Billingham, Norton and Stockton, and I worry about their future. I see them peering into shop windows, knowing that all they can do is look. They certainly cannot buy, as they see no positive prospects. They know that there is no longer any support that would enable them to go to college, and that even if they had qualifications, possibly even degrees, their prospects would be extremely low in an economy that is stagnant at home and across the country.
Will my hon. Friend endorse the work done by Glasgow city council? It has launched a scheme aimed specifically at young graduates, and is using some of its pension fund to give them an opportunity to gain employment.
I have always been a great admirer of Glasgow City council and I am certainly not going to disagree with my hon. Friend there, but it saddens me that for so many young people, the first taste of adult life will not be starting their first job and getting on the career ladder, but waiting in the dole queue and competing for the tiny number of vacancies available, while being lectured by the Tory-led Government that there are jobs out there for them if only they look hard enough. However, in my constituency there are 10 people fighting for every job vacancy. There are 2,335 jobseeker’s allowance claimants aged between 18 and 24—an increase of 18% on the previous year.
Earlier this year, the employment Minister singled out the north-east as his “top priority” in safeguarding and protecting jobs. However, the money received from the regional growth fund—believed to be the cure for all our economic woes—is but a fraction of what has been invested in recent years through the regional development agency. I am grateful for the money we did get in my constituency from the regional growth fund, and I was pleased to visit one of its recipients, Darchem Engineering, last week. It is a fine example of the great British manufacturer we need to encourage, and the Government cash will help to attract new investment to the north-east. However, while that one example is a positive one, the amount of cash available through the fund is extremely limited in my area, and many other companies with strong plans for growing their businesses and increasing the number of jobs found that the Government cash chest was slammed shut in their faces.
In my constituency alone, 166 young people aged between 18 and 24 took up employment and after 26 weeks, 162 of them—98%—were sustained in employment as a result of using part of Stockton’s allocation of the working neighbourhoods fund, thanks to our future jobs fund. Add to that the fact that those successful young people undertook 628 pieces of individual training and achieved 80 NVQs at levels 2 and 3, and we can celebrate an excellent achievement.
Labour also introduced the education maintenance allowance, which subsidised poorer students through the sixth form, helping 650,000 16 to 19-year-olds from low-income families and tackling the long-standing problem of a high teenage drop-out rate from education, particularly among poorer students. However, both these effective programmes were recklessly cut by the Tory-led Government, who dismissed them as bureaucratic and wasteful despite their strong success in helping young people to reach their potential.
The £180 million bursary scheme the Tories replaced the EMA with has instead succeeded in giving 70p extra a week to 12,000 of the poorest students—while at the same time taking away £30 from many of their classmates whose finances are only marginally better. It is simply insulting that the Secretary of State for Education believes that this is concentrating resources
“on removing the barriers to learning faced by the poorest”.—[Hansard, 28 March 2011; Vol. 526, c. 52.]
I strongly urge the Government to reassess their priorities, given that they are currently bent on making access to education far more difficult and are cutting everything in sight—the very things that were helping young people. Such a blatant disregard for the future of young people really is shameful. We should be under no illusions about the damaging effect that unemployment among young people can have. Failing to harness the energy of the younger generations is eating away at the foundations of all our futures.
Work largely defines us and as a society, and we cannot afford to ignore the talent and potential of so many young people. Those one in five young people who cannot find work therefore often cannot leave home. They remain financially dependent on their parents and are trapped in a confidence-sapping cycle of application after application, rejection after rejection.
The current jobless figures are a wake-up call for the future for young people. Youth unemployment scars people for life, particularly if it is prolonged, and at today’s levels it will be costing the country millions of pounds a week. We must not let the scourge of unemployment leave a permanent mark on the hundreds of thousands of young people living through it today. We need to give those young people, and everyone else window-gazing in towns and cities across the country this Christmas, real hope for the future. They see very little of it now.
Listening to Alex Cunningham, one would have thought, “Oh, the Labour Government did a marvellous job. Then along came this coalition and they mucked it up.” One would never have thought it was the Labour Government who beggared this country, who borrowed and borrowed and borrowed again, who gave us the worst deficit in the G20, who doubled national debt, who sold our gold at a record low price—£23 billion down the drain—who took £5 billion a year out of our pension funds, and who gave back our EU rebate of £7 billion a year and got nothing in return. Then, there was the moment of salvation—the last general election. A moderate coalition Government came in and started to make the sort of decisions that needed to be made in the national interest—the sort of decisions Labour ducked. Now, though, we are told, “The consequences of those difficult decisions—they’re all your fault.” They certainly are not.
If we look at the Labour years, we see that, as always happens with Labour, unemployment went up—to 2.5 million by the time they left office. We see that youth unemployment rose by 270,000 under the Labour Government. Theirs was not a successful Government, but a Government who led Britain to the brink of bankruptcy. It is our Government—the coalition Government—who are rescuing this country. Of course it is not easy. It is right to say that every redundancy is a personal tragedy—of course it is. We must try to do all we can as a country to help people back into work, but my goodness, this Government cannot be blamed for the situation from which they are trying to rescue the country.
That Labour Government were also the Government who tried to hide from the realities. Take the vast number of people claiming incapacity benefit: it is this Government who are testing and ensuring that those who receive incapacity benefit are genuinely entitled to it, and that it is not being used to mask unemployment in areas where there is a particular labour market problem. Take Labour’s measures on long-term youth unemployment, where a training scheme was introduced after 12 months and the clock was started again, to mask what was happening in this country. Although 2.5 million extra jobs—half of them were part-time, of course—were created in the Labour years, they did not seriously affect unemployment, which was reduced by about 300,000. That is because the Labour Government were not really tackling the underlying problem of the 5 million people of working age who were not engaged in the labour market.
Given that is now clear that the benefits bill will rise by £29 billion—higher than the Government predicted—does the hon. Gentleman think that the plan is working?
I think that this Government are making a serious, determined and honest effort to help people in very difficult times. The hon. Lady talks as though there is no eurozone crisis and the world is not experiencing the problems it is experiencing, but those problems are out there. This is a difficult time politically and economically, yet this Government are trying to help people.
The hon. Lady should talk to young people in Spain, where youth unemployment is very high—as much as 30%, I am told. The same is true in Italy. The fact is that youth unemployment is a European problem that must be tackled in the eurozone and right across the continent.
The Government are concentrating on a Work programme that, after 12 months, gives people individualised help to look at what skills and assistance they need to get them back into work, and that, for the first time, gives the disabled a chance of getting the help they need. That is a good thing. That programme and the youth contract, with its job subsidies and extra incentive payments, are not signs of an uncaring Government.
Everything the hon. Gentleman describes counts for nothing if there are no jobs for those people to get. That is the problem that we face today: there are simply not enough jobs in the economy for everyone who is out of work to get into work.
The hon. Lady makes the very important point that we need growth in our economy, and that to achieve that we need a range of measures to stimulate growth. I agree, and that is what the Government announced in the autumn statement. She should not, however, treat the whole country as though it were the same. We have much lower unemployment in my constituency—indeed, it has fallen this month—and there is no doubt that jobs can be found, but that is not true everywhere. The picture is different in different parts of the country, but if one looks at the overall picture one can say, month on month, that we have more people in the work force than we had last month. We have seen an improvement in some parts of the country, such as the part I represent, so the picture is not hopeless. The Government have a difficult task and are tackling it seriously, but sometimes we should look a little more widely at the labour market and the trends within it. We are asking people to work to an older age and to take on jobs that they might not previously have done because they were on incapacity benefit or were otherwise out of the labour market. So, we are asking more people to try to find work against a background in which that is not easy, but I believe—certainly the research shows this—that it is possible for us to see our GDP rise and our people go into work. What the Government are doing is along the right lines.
Sir John Rose said in a speech about a year ago that in Britain we train people to be hairdressers when we need engineers and IT specialists. One of the good things about the Government’s apprenticeships and skills programme is that it is targeted on areas in which we have found it difficult to create skills and on areas that are hard to fill, so there is a better match between skills and vacancies. The number of vacancies runs at between 400,000 and 500,000 each month, about 40% of which are in areas with skills shortages or areas that are hard to fill. If we can better match the skills to the vacancies, that could help. Overall, I think the Government are on the right lines.
Today’s employment statistics make extremely sobering reading. They spell out more clearly than any of our speeches today just how much our economy is struggling and how the recovery is faltering. We know from the Office for Budget Responsibility that the UK economy is already contracting in the final quarter of this year and we can predict with some confidence that there will be more turbulent times in 2012.
Has the hon. Lady seen the latest statistics showing that Scotland had the second-worst unemployment in the UK in the last quarter? Does she think that her Government in Holyrood have any responsibility for those figures?
I am certainly happy to look at that because the sharp increase in unemployment in Scotland is very concerning. However, over the past year as a whole, unemployment in Scotland has fallen and employment has risen. That compares very favourably with the record of her Administration. For most of the past few years, employment in Scotland has outperformed employment in the rest of the UK. That record contrasts sharply with the situation when Labour and the Liberal Democrats were in coalition in Scotland.
We have to look at the big picture and remember that when the Government set us down the path of austerity a year and a half ago, many of us warned that taking the feet out from under the public sector was not the way to boost employment and growth in the private sector. We said that the cuts went too far too quickly and it gives me no pleasure whatever to be proved right on that front. It is now abundantly clear that the medicine is not working and is not achieving the results we want. I accept that the Government have not been in control of some of the external circumstances, but nevertheless those risks were always apparent. The Government need to acknowledge that their plan is not working and that it is time for a change of direction.
What has been disappointing this afternoon is the very ideological and doctrinaire approach taken by Members on the Government Benches to their prescriptions. It would be helpful if we acknowledged the interdependence of the public and the private sectors. The bottom line is that the UK as a whole is losing public sector jobs faster than the private sector can create them. We all know that borrowing is still very difficult for small and medium-sized enterprises, which is a major source of potential growth. We know that business confidence is low, but in that circumstance it makes no sense at all to punish the public sector when the private sector just cannot keep up.
Paradoxically, that is the opposite of what has been happening in Scotland. One of the interesting things—
Not at the moment, thank you.
It has been evident in Scotland over the past year that the growth of private sector employment has outweighed falls in public sector employment. We now have the highest share of private sector employment that we have had since the advent of devolution. [Interruption.] Although unemployment has fallen across the piece in the past year, it shows that the Scottish Government’s decision to boost investment in the public sector and in infrastructure as far as possible has been a way of offsetting the problems of investment that have been apparent in other parts of the UK—[Interruption.] If Mr McCann wants to make an intervention, I am happy to accept it. If not, perhaps he could stop heckling.
If we are serious about tackling unemployment, we need to accept that the cuts introduced by the Government are biting very hard indeed across the whole UK, and that the announcements in the Chancellor’s autumn statement do not go far enough. Crucially, they will not address the immediate challenges of high levels of unemployment and a high benefits bill. I am not sure how we will pay for that in the current circumstances.
I will not at the moment, thanks. Time is pressing.
In Scotland we are experiencing 32% real-terms cuts to the capital budgets and even after the announcements in the autumn statement, the Scottish capital budget will still be cut by £3 billion over the spending period. More importantly, 70% of the new consequentials announced in the autumn statement will not be available until the year after next. Waiting until 2013 will not deal with the problem that we need to tackle now. What we need is investment in infrastructure.
Much has already been said today about youth unemployment. For those of us who came of age in the 1980s there is a horrible sense of déjà vu. I was one of those who had to put up with the 1980s and see the problems at first hand. When I hear young people in my constituency bemoaning to me the prospects that they are now facing, I have great empathy. It was exactly the same in the 1980s, when we were all told that unemployment was a price worth paying, and a whole generation was relegated to the scrapheap. We are still living with the legacy of that and dealing with the social consequences of it. It was not just about economics. It was about our society and the prospects of a whole generation.
Across the UK we have seen diverse approaches to tackling youth unemployment. It is far too high everywhere, but, as we have heard today, there has been a range of approaches in the devolved Administrations. In Scotland there have been 25,000 apprenticeships, a significantly higher number than before. It even exceeds what the UK Government are doing. University and college places have been maintained. Efforts have been made to ensure that apprenticeships that fall through because companies have gone under as a result of the recession are continuing and those young people are getting back into work. The Opportunities for All initiative is making sure that every young person aged 16 to 19 will get a work or training opportunity.
I hope Ministers will take the opportunity to sit down with Finance Ministers across the devolved Administrations and look specifically at how we can tackle youth unemployment. There are different approaches and there are good ideas coming from different parts of the UK. It is such an urgent problem and such a challenge with such serious long-term consequences that I hope the Minister will take action. We were told in the 1980s that unemployment was a price worth paying. It was not a price worth paying. It is never a price worth paying. It must be the Government’s top priority.
Order. There are still 12 hon. Members remaining to speak. The debate must end by 5.36 pm. I am therefore reducing the time limit from now to four minutes for all subsequent speakers. That will just about get everybody in, unless there are lots of interventions.
I shall take no interventions, given the need for brevity. I share the concerns of my hon. Friend Oliver Heald that Labour Members seem to have collective amnesia about exactly how much they frittered away during the prosperous times for this nation and that they now claim that only they know how to fix it.
I am amazed that that flexible old chestnut, the bankers’ bonus, has been wheeled out yet again as a way of solving all the ills. This is from a party that did not tackle bankers’ bonuses in the good times, when there were plenty to tackle, and seems to have found them now as a cash cow that can be used many times—this is the sixth or seventh time the Opposition have proposed using that source of finance. They did not tackle bonuses then, yet they did abolish the 10% tax rate, which they seem to have forgotten about. Many women and low-paid workers were on that tax rate. Indeed, when I was knocking on doors during the 2010 election, many people told me that after that rate was removed it was hardly worth them working. There are still people caught in that trap, which the Opposition have collectively forgotten about.
The Labour party has also collectively forgotten that companies have been disadvantaged by the regulations it put in place. For example, Bombardier could not competitively tender because of the regulations that Labour put in print, which resulted in job losses. Unfortunately, it also presided over the lowest number of social house starts for decades. I read with interest that it now proposes building 25,000 affordable homes—again using the bankers’ bonuses—but with no new funding of the sort that my right hon. Friend the Minister for Housing and Local Government has rolled out. At least this Government are making new funding available, rather than relying on the ever-flexible bankers’ bonus.
No, I shall not give way.
I am also amazed that the Labour party, while talking about wanting to attack bankers’ bonuses, was so lacking in its support for what our Prime Minister had to do last week, which was to defend London against being raided by the European Union. They do not seem to want to do that either. I can tell Opposition Members that many bankers and wealth generators in the City would otherwise have upped sticks and gone, and there would be no bonuses for them to use in this flexible way.
Labour Members are asking us today to believe their statistics—this from a party that spectacularly underestimated the number of people who would come to the UK through its failed immigration policy at only 5,000. If they looked back at the figures, they would see that they completely underestimated the number of people who chose to come to Britain to work, so I have little faith in the statistics they regularly wheel out. They left us with the highest number of workless households in Europe and only now are coming up with ideas on how to fix that. It bears no credibility. They propose spending bankers’ bonuses multiple times and have few other ideas on how to fix the failed and broken economy that we inherited. They left this Government the note stating that they had spent all the money, but they had in fact mortgaged it. They mortgaged the future of many young people in this country.
I have only a few seconds remaining. If the Government were not taking these tough choices, more and more young people would be looking forward to a fruitless future without hope of social housing or affordable housing, because, unlike this Government, the Opposition had no appetite when in government to tackle the problems, and now they carp from the sidelines and apparently come up with solutions to fix the problems they created.
I am disappointed by the previous speech, because it repeated the yah-boo exchanges on what is, frankly, a generalised crisis that has touched us all. The notion that it is all the fault of either the previous Government, or of everything that has happened since May 2010, is simply not valid. In 2008, I wrote in The Daily Telegraph a letter to my right hon. Friend Mr Brown stating that we should cut spending and taxes, and he ignored me, but the year before Mr Osborne, then the shadow Chancellor, wrote in The Times that the model Britain should emulate was that of Ireland. I think that I was right, and I hope that Government Members think that the Chancellor was completely and utterly wrong.
In Rotherham we received news today that 597 more people are unemployed than there were this time last year, which is an increase of about 15%. This is profoundly serious, with families now facing a miserable Christmas.
I do not blame all those problems on this Government—it is absurd to do so. Around the world, we are facing a generalised crisis of the market economics—or, if one prefers, capitalist—model. There is Government debt but, as the remarkable graph put up on last night’s “Newsnight” by Miss Vicky Pryce, the distinguished economist, showed, there is far greater private debt. Everybody is going through the detoxification problem of getting out of debt, and we do not know how to handle it. Niall Ferguson—a distinguished conservative, right-wing historian—writes in Newsweek:
“In normal times it would be legitimate to worry about the consequences of money printing and outsize debts. But history”— he is writing about how people handled the 1929 Wall street crash and the 1931 Credit-Anstalt crash; there was not one general crash but two—
“tells us these are anything but normal times.”
When Monsieur Hollande, the French Socialist candidate whom I wish to see elected President of France, says that we should be looking at spending more money and at job creation measures, he is shouted down, but I think he is right. Frankly, the Conservatives ought to be in their own little Euro-heaven. We have conservative Governments and conservative presidents of the Commission, the Council and the Parliament proposing fiscal austerity, balanced budgets, making the poor pay, and protecting bankers and the rich. I thought that that was classic liberal—in the Manchester sense of the word—Conservative policy. I do not know why the Conservatives are at odds with Europe, because Europe is doing exactly what they are trying to do with the policy that is having such disastrous consequences in this country.
We look to the BRICs—Brazil, Russia, India and China—but growth in them is slowing down. Today’s figures from the IMF show that Russia, South Africa and Brazil have 3% or 4% growth and China and India have below 10% growth. There is a generalised crisis of world market economics. The United States is in disarray. The United Kingdom is part of the problem as well. We are not the solution to the European crisis—we are intimately part of it. There is no growth, no demand, increasing unemployment and increasing debt.
I am not going to say that this is all the fault of decisions taken since May 2010. I wish we had a Chancellor of the Exchequer of the maturity of Nigel Lawson, Geoffrey Howe or Denis Healey; it is rather disappointing that we have a PPE graduate from Oxford who has just done a little bit of political research in his life. We are going to have to work these problems through internationally.
“No man is an island, entire of itself”,
as John Donne said; every man is a piece of the continent. We will have to find global and European solutions to this crisis or, believe me, we will all be sunk.
I agree with Mr MacShane that the world did not start in May 2010. There are 30 million people in the work force, and when they were educated, what they were educated in, and how they have skilled themselves throughout their lives makes a very big difference to their employment prospects today. Therefore, whoever the Government are, they are, to some extent, presiding over the legacy of previous Governments.
We all know that, as a country, there are some things we have done well and some things we have done badly. Being out of work is a tragedy for anybody, but over the past 10 or 20 years, this country has not done too badly in keeping unemployment levels below that of many countries in Europe. In Spain, for example, unemployment is at horrific levels. Where we have got it wrong is in having, for understandable reasons, a welfare system that has sometimes become a disincentive for people to take jobs. In the Government’s reform of the welfare system—I hope that it turns out on time and to plan—they are trying to take away the cliff edge from those who are out of work and perhaps not well skilled enough to get a high-paid job so that they can take a job because it is worth their while to do so. That is a very important part of the future of our nation. Over the past 18 months, we have still had people with skills coming in from abroad and taking jobs. Under the last Labour Government, about 2 million jobs were taken by people coming in from abroad. That meant that we have not been able to motivate our own people to take those jobs. Welfare reform must be part of that.
We must look at our education system and put a lot more effort into technical education. Since Beveridge and the Education Act 1944, this country has not done as well as many of those on the continent, particularly the Germans, in technical education, which was never properly developed. When I look at Germany, I am impressed by how well respected people are who have a good technical education and by how workers are trained to provide a highly skilled work force. The success of the German economy has a lot to do with that.
What the Government are doing about training and in trying to recreate the apprenticeships that fell into disrepair is very valuable. When I go around companies in Poole, including many successful companies, the managing directors are often not degree candidates, but people who started on the shop floor with an apprenticeship in engineering and have skilled themselves up throughout their lives. Unless we get back to having good technical education, I fear we will not produce a generation of decent managers and keep the standard of living that we want.
Welfare, training and education therefore need to be part of the picture. However, we need to have a stable economic environment for people to invest. We inherited a big deficit and it will take some years to sort things out. Things do not happen in a straight line. There will be good years and bad years, and good Budgets and bad Budgets. Clearly, this is one of the years when things are going a bit slower, and I suspect that over the next four or five years, there will be years when things go a bit better. I hope that, over that time, we can create enough jobs to take up the slack of the public sector and that we can provide people in this country with a decent living, but it is going to be hard.
Nobody in this Government underestimates the task. We have a coalition of two parties that agree that we need to sort the country out and to provide more opportunities. It is a moderate coalition of sensible people and I think that it will succeed in the end, but it may take all five years before people make a sensible judgment about whether we have succeeded.
I want to tell the House the story of Chris, a young man in my constituency. I know his story only because a friend of mine gave him a lift home last night.
Chris works at Currys in Bury. Because his boss would not let him leave five minutes early, he had a 40-minute wait for the bus. Usually, when he gets into Bolton he has to catch two more buses. The whole trip takes him two and a half hours each way. If it had not been for my friend last night, it would have taken him nearly three and a half hours to get home. It is not as though it is a great job. He has a contract for six hours, which he believes is so that his employer can get rid of him easier. However, as he says, any job is better than none. It is no wonder that Chris is desperate to keep his job. With more than six people fighting for every vacancy in Bolton West, he knows that he is lucky to have anything.
People in my constituency are scared: scared that they will lose their jobs, scared that they cannot afford to pay their bills and scared that they cannot see anything getting any better. The Prime Minister is proud to state that interest rates are at an historic low, but he forgets to tell everyone that he inherited low interest rates. The much more important measure of the health of our economy is growth. What do we have? We have no growth, borrowing up, ever-rising unemployment and cuts to the public services that we all rely on.
The figures today show that the Government’s policies, like so many people in Britain, are just not working. The economy is flatlining and ordinary people are paying the price. It is back to normal business for the Tories—the rich play and the poor pay. The Government want to blame everyone but themselves—it is our fault, it is the snow, it is the royal wedding, it is the euro. It is time that they took responsibility for their actions and time they accepted that their plans are ruining Britain and ruining the lives of people in my constituency.
It is not just young people who are suffering; long-term unemployment among the over-50s is up by 20%. Just at the time when people should be able to relax and enjoy their lives, and when they should be able to plan for retirement, they are thrown on to the scrap heap.
I have told the House before about the 10 years in the ’80s and ’90s when I worked with unemployed young people. That was the last time the Tories thought that unemployment was a price worth paying. I have told the stories of the young people who took their own lives; the young people who turned to drugs and alcohol; the young people who developed long-term mental health problems; and the young people who spent many years unemployed. It is the truth that when the economy eventually recovered, employers preferred to take on the 16-year-olds who were fresh out of school than the 26-year-olds who had spent most of the previous 10 years out of work with nothing to do and nothing to get up for. Those stories of 15 years ago are starting to repeat themselves. If the Government continue to follow their failed policies, we will have another generation with no jobs, no hope and no future.
The Government also ignore the health costs of unemployment. Unemployed people are twice as likely to have a psychological illness than those who are employed. Many studies in the ’80s and ’90s proved the links between serious diseases of major organs and unemployment. It is true that unemployment makes people ill.
The Government talk about making it easier to hire people, but in truth they mean making it easier to fire people. There are people in my constituency who are not only worried about their employers’ economic future but doubly worried that their terms and conditions could be changed on a whim and that they could be fired despite doing nothing wrong. How can they buy a house or make another major purchase that would get the economy working when they are fearful for their future?
I do not believe that Ministers get it. They do not understand the reality of people worrying about losing their job, or their fear of not being able to feed or clothe their children. It is not too late to change tack and, for the sake of our constituents, the Government should do so.
In my constituency, 997 people are unemployed, which represents 2.3% of those who are economically active. I recognise that that is a modest number compared with many constituencies, but it is an absolute tragedy for every single one of those individuals, particularly the 85 who have been unemployed for more than 12 months.
I agree with much of what Julie Hilling said about the tragedy of unemployment. It means a loss of self-esteem, poor mental health, losing the pattern and discipline of work and losing hope. Listening to the debate this afternoon, I have found it very difficult to take the charge that all Government Members believe that unemployment is a price worth paying. I do not, but I do believe that it is a very sad economic reality.
The question is how the Government should respond. Should they act as though they have all the solutions and can essentially buy a load of jobs to relieve the misery overnight? Would that be a sustainable solution for the affected individuals in six, nine or 12 months’ time? I do not think so.
Looking back to before the general election, I am certain that elements of the future jobs fund were worth while. However, when the Government are constructing a national scheme for getting people into work, there comes a point when they have to consider whether such a programme is the most cost-effective way of delivering sustainable skills and jobs that will lead people to full-time employment for many years.
I will not, because I want to give colleagues an opportunity to speak.
I believe that two significant matters need to be examined: supply-side reform and macro-economic stability. Many Members have already spoken about the excellent apprenticeship schemes, the work experience programme and the reforms under the new youth contract, but we need to recognise that if small businesses, such as the many micro-businesses in my constituency, are to be confident enough to take on new people, they need to feel that the Government are on their side. They need to know that the Government understand that they do not need so much regulation. They do not need the 14 new regulations a day that they had under the last Government. They want to know that we will exempt micro-businesses from new business regulation and EU accounting rules. Such issues influence whether a small business man takes the leap and takes somebody on in these difficult times.
We also need macro-economic stability. Low interest rates are important, because they condition investment decisions and how people feel about their finances. They cannot spend money that they do not have in a way that is expensive and does not have a secure outcome. The Government will not have all the answers, but they are on the right trajectory to relieve the misery, and I wish them well.
There has been some dispute about whether the coalition Government are the greenest Administration, but they are definitely good at recycling. In particular, the Prime Minister has recycled figures about private sector jobs in the past year and a half. Today, he said that the Leader of the Opposition was recycling jokes, yet he recycles the figure of half a million private sector jobs. Initially, it was half a million in the Government’s first six months; then, it was half a million in the year since they came to power, and now it is half a million since the election. The problem is that it is exactly the same half a million jobs. Half were created in the first quarter of the financial year that started in 2010. What caused that—the actions of the Government? I think not. It was the stimulus provided by the previous Government, whom the coalition Government are so fond of rubbishing. They do that consistently. After that burst of jobs, almost nothing has happened. The promise that if we squeezed the public sector, the private sector would rise up, take the strain and create jobs is not being fulfilled. Until we and our constituents see signs of that, we will simply not believe the Government.
As well as job figures, the Government are recycling ideas. Part of their approach since the election has been to suggest that unemployment is somehow a problem of individuals—of their not being willing, skilled enough or having the financial incentive to work because the benefits system is so generous. I was fascinated to come across a quotation from Sir John Anderson, who was head of the then Prime Minister’s Secretariat in 1930. At a time when people were worried about unemployment, he said:
“Unemployment statistics give an exaggerated view of the magnitude of the problem”.
“a large number of people really abused the Unemployment Insurance Scheme”.
I do not think that many would say that unemployment in the 1930s was caused by people abusing an extremely low amount of benefit. It shows that nothing changes. The Conservative party has always said that at times of high employment. Increasingly, its coalition partners are also saying it. It was said in the 1930s and it was not true then; it is said now and it is still untrue.
That is not to say that training is not important, but it is not new, either. In Edinburgh, the city council considered employment in the first decade of this century. We had historically low unemployment at that stage, but a residual number of people were out of work, some for a long time. We considered training schemes and specialised job academies. For example, we had a health care academy and a social care academy, and we know that taking action is not always easy. The trouble with the Government is that they think they are at ground zero with many things. They imply that we did nothing and that they have sprung into life to make things better.
Yes, we need to train people properly, but training is not a job. The Work programme does not of itself create jobs. We must be absolutely clear about that.
This debate is about unemployment and what can be done about it. However, the consideration of what unemployment means has been lost in some of our discussion. On Thursday, when travelling, we were delayed for an hour because someone had fallen in front of train in Alexandra Palace. I do not know whether it was a suicide attempt. At the weekend, we had the news in Leeds that a father had murdered his family and killed himself. Suicide is increasing and there must be a link with the economic situation. I hope that all hon. Members would deem that the personal disaster that it is.
I find it deeply offensive that Opposition Members mocked this afternoon every time Government Members said that we were trying to do something for the unemployed in this country. They are laughing at the unemployed. Do you know why you are laughing at the unemployed? Because the left has always used the unemployed as a political tool. If you keep people down, you try to use them as a tool. And what did you do in 13 years of government? You borrowed huge amounts of—
Order. I understand the hon. Gentleman feels very strongly about this, but he is addressing me, the Chair. He will not use the word “you”; he will please refer to “hon. Members”.
I apologise, Madam Deputy Speaker, but for 13 years, the Labour party bought jobs and did not lay a foundation for moving forward. It was left to this coalition Government—two of the major parties of this country coming together—to try to put in place the proper foundations.
The smiles of glee cannot be wiped off the faces of Opposition Front Benchers when there is bad economic news. That is reprehensible. Jobs cannot be bought by borrowing; economic stability that will last must be put in place. The difference between Government Members and Opposition Members is that we try to govern for the future of this country. Whether or not we are in power, we mean to ensure that we do what is right for this country. All the Labour party did was try to hang on to power, which is why we today face one of the biggest economic crises and the fastest growing level of unemployment in decades.
It is no good Opposition Members harking back to the ’80s and ’90s. We should not forget the very different circumstances, especially of the 1980s. The fact is that this Government have been dealt a terrible economic hand. I make the point again: it is not a Tory Government, as was said earlier, but a coalition Government of the two main parties of this country, which came together to sort this mess out. We have been mocked this afternoon. I have listened carefully and although Julie Hilling made a good speech, the most impassioned was by Mr Barron—he was the one who meant what he said. Other than that, unemployment has been used as a political football.
If the hon. Gentleman is advocating a particular course, he might give his opinion on this question: would he pay his 15-year mortgage off in five years if it meant sending his children to school hungry and without shoes?
My response to that rather strange analogy is that if we were to follow the route taken by the Labour party, interest rates in this country would rise, hard-working families up and down the country would be paying another £1,000 a month on their mortgages and their children would go to school hungry, because of the folly of Labour’s policies.
We have only to look at events around Europe. A 40% cut in public sector wages was proposed in Greece, but Ireland cut public sector wages by 15% to get on top of things, and yet all the Opposition say is that we should spend more money and buy jobs. That does not lay the foundations to move this country forward.
My hon. Friend is making a powerful point. As a fellow Yorkshire MP, does he agree that if we are to tackle unemployment in the north, we must tackle the north-south divide, which sadly widened under the previous Administration?
I could not agree more with my hon. Friend. We could list example after example of when infrastructure spending was removed from the north of England and brought down to marginal seats in the south in what can only be described as an attempt to hang on to power, not operating in the best interests of this country.
A bit of humility from Opposition Members would not go amiss in this debate. Very few Opposition Members have this afternoon spoken about trying to tackle the problem. I go back to where I started: when someone becomes unemployed, it is a massive tragedy for that family. Where will they find the money to pay the bills? Where will they find the money for Christmas? It is no wonder that there is a rise in suicide rates. Opposition Members should not dare say that Government Members believe that that is a price worth paying. We do not. We believe that we need to put in place the strong foundations for an economy that will work in the long run, and that will work for generations beyond the one that has been terribly let down by the previous Labour Government.
I rise to support the motion in the name of my hon. and right hon. Friends on the Front Bench. We are aware of the national figures, so in the limited time that I have I will concentrate on the picture as it affects Easington and the north-east region.
As Opposition Members are aware, the north-east has suffered more than perhaps any other region. Unemployment currently stands at 11.7%. In both the public and private sectors, unemployment is rising unabated as a direct consequence of the Government’s policies.
As we already know, the public sector is losing jobs more than 13 times faster than the private sector can create them. We were promised a private sector-led recovery. We were told that the public sector jobs that have been lost in the north-east—we have lost more than 32,000 so far—would be replaced by a growing private sector. That clearly has not happened over the past 12 months.
The latest job figures show that the north-east has lost a larger proportion of jobs than anywhere else in the country. We have 6,000 fewer jobs in the construction sector compared with the same period last year. Clearly, Government policy has had a direct impact on the private sector. Cutting infrastructure projects and the Building Schools for the Future programme has hit construction jobs. The figures produced by the northern TUC show that the public sector is losing 2,000 jobs a month.
As my hon. Friend Alex Cunningham mentioned, the Conservative Government of the 1980s and early 1990s bear a heavy responsibility for the worklessness that exists in areas such as mine. When the traditional industries were still operating—in my case it was coal mining—the numbers of people who were employed were high and the numbers on benefit were relatively low. It was not until the pits closed that we saw significant increases in unemployment and incapacity claims. As hon. Members have already said, there is a human cost to unemployment. After closing the pits in Easington and in the north-east, the Conservatives left villages, towns and entire communities without work.
Does my hon. Friend agree that the unemployment statistics in Easington are very similar to those in Wansbeck? In my constituency, there is in excess of 30 people applying for each job vacancy and that is intolerable. The Prime Minister has kept one of his promises: before the election, he said that the north-east would be hit the first and hit the hardest.
Indeed. I share my hon. Friend’s concerns, and that has certainly been the case. We are facing a worsening of the north-south divide. It is also the case that the north-east has faced some of the worst increases in unemployment across the UK. John Glen said that there were 1,000 people out of work in his constituency. There is more than three times that number in my constituency. The number of 18 to 24-year-olds out of work in Easington has increased by 65%. For the over-50s, the figure is up 58%, which is just as concerning. The situation for those out of work in the north-east is much bleaker than in many other regions.
Unemployment and worklessness are not evenly spread across the country. Indeed, they are concentrated in particular pockets, largely the older industrial areas of the north-east, Merseyside, Scotland and Wales, and that makes unemployment far harder to deal with. I should like to commend the excellent work carried out by Professor Steve Fothergill and his colleagues at Sheffield Hallam university in identifying some possible solutions. I know that time is short, so I will bring my speech to a close.
There are real concerns about the Government’s intentions in relation to workfare. If jobs exist, why are they not being offered as real jobs with real wages? We need a plan from the Government for jobs and growth. Our Front-Bench team has a five-point plan to kick-start the economy, but the Government could go further. There are some helpful suggestions from the Institute for Public Policy Research for supporting employment, and I raised them with the Minister of State, Department for Work and Pensions, Steve Webb, in a recent Adjournment debate. I would point out, however, that the Government’s promises on jobs and growth are as hollow as a chocolate Father Christmas.
I want to begin by answering some of the accusations made by Alec Shelbrooke. I do not think that it is a price worth paying to see the failure of this Government just so that we can get any kind of political advantage. He should have withdrawn his remarks—Members were not laughing, we were saying that the Government’s plan is not working.
Jobs and employment are the biggest issue in my constituency and the latest figures now show that just under 2,000 people are claiming jobseeker’s allowance and chasing 191 vacancies in East Lothian. That means that if every Member sitting on the Government Benches went for a job, only one would stand a chance of getting one.
I also want to address the comments made by Jenny Willott. She spoke about the voluntary sector and her contribution contained a lot of sense and value. I concede that Government Members care about unemployment. I have no doubt that when the Secretary of State for Work and Pensions went to Glasgow East and saw what poverty and deprivation did that he was genuinely moved, but I think there is a real gap when it comes to introducing policies and systems that help and support people in getting out of poverty and long-term unemployment. The Government talk about the voluntary sector playing a role when they are cutting the public sector, but the voluntary sector, which played such an important role in the future jobs fund, is now less able to respond to people’s needs.
Mrs Main made the most unhelpful remark in the entire debate when she said that the Prime Minister went to Europe to stand up for London. I remind her—even the Prime Minister knew this—that there are financial services sector jobs across the United Kingdom, not only in London.
What I had really hoped for was a little humility. We have been preached to about humility, but the hon. Lady completely failed to recognise that there are financial services sector jobs in other parts of the country. My constituency is heavily dependent on the financial services sector in Edinburgh, and we will see what happens. The signs since this Government came into office have not been good.
The Government offer us the Work programme. I have been to visit the providers in my constituency. A woman opened up a spreadsheet and said she was not sure whether she was meant to show me it. It was, in effect, a profit and loss account showing at each quarter how many people the providers need to help into work to get a return on the payments from the Government. The most depressing thing was seeing the percentage they expected not to find their way in to work at the end of the two years.
My fear is that providers will not invest the resources in supporting that percentage, whom we could probably all identify when they walk in the door, when they are the very people who need more help and support to take them back into work. This is where the Government do not get it.
I remember during the 1997 general election knocking on a door and meeting a woman who was still in her pyjamas in the early afternoon and trying to convince her that she could get out, vote Labour and make a difference. She did not even have a reason to get dressed. When Government Members hear of a case like that, they think in terms of a drain on resources, and resentment and a grudging feeling come over them. They do not think about how to support someone like that and what it might mean for someone to have reached that low point in their life when they do not think that they have any contribution to make to society.
I am also particularly concerned about the increase of 55% in the number of young people in my constituency who have faced no prospect of finding work since this Government came into power. The future jobs fund gave them hope. Government Members keep yelling that it did not lead to real jobs, but the hon. Member for Cardiff Central, to give her credit again for bringing some reason into the debate, talked about the elements of the fund. She described eloquently how it helped young people to break the habit of not getting up in the morning, to gain self-esteem and to feel not only supported but understood.
We take no joy in the Government’s failure to address the needs of people who are seeking work, or to create the jobs that could lift them out of poverty. It is not a price worth paying for the political advantage that we are benefiting from.
The latest unemployment figures are absolutely shocking: 133,000 in Wales alone; and, in some areas such as the Rhondda, 20 people are chasing every single job vacancy. As we look around our constituencies, we see people losing their jobs because of the Government’s savage cuts to public services, and because private firms that thrived on public procurement are seeing their order books empty. We see people losing jobs in the private sector because consumer confidence is low and demand is down, and we just need to look at our high streets and town centres to see shops closing, including those of big household names and local businesses.
If any programme to get people back into work, such as the Work programme, is going to be successful, and if people are going to have a chance of getting a job, the Government need to get their act together and get a growth strategy—now, before it is too late; now, before any more firms go bust; now, before any more shops on our high streets close; and now, before any more families suffer the scourge of unemployment.
But we see nothing from the Government that will stimulate consumer confidence or demand. On the contrary, we have seen this shameless coalition Government hike VAT up to 20%, despite the fact that just before the election, in April 2010, the Conservatives and the Lib Dems vigorously denied any intention of increasing it. Now, they are ignoring Labour’s calls to cut it.
The Federation of Small Businesses has described the Government’s abysmal attempts at a growth strategy as
“too timid and out of touch with the reality of the UK’s sluggish economy.”
Indeed, back in July the British Chambers of Commerce said that the Government’s deficit reduction plan was
“already dampening demand and adding significantly to the pressures facing businesses and individuals.”
It called on the Government to strengthen their efforts to stimulate growth. Did the Government listen then? No. Are they listening now? No.
We have not seen the long-term strategies or the certainty that firms need in order to invest. Let us take the feed-in tariff fiasco. In my constituency alone, we are losing many jobs, because a new policy has been introduced in only six weeks, just like that, meaning that nobody has the confidence to put up the £10,000 to install solar panels on their roof. What other scheme do the Government have in mind whereby people put up £10,000 up-front to help to secure jobs in their local economy? I do not think they have one other idea.
In Wales we can show Members a better way—the one mentioned in the motion before us is being put into practice by the Welsh Government. The Labour Government in Wales are creating 4,000 jobs a year for young people in the private sector through the Jobs Growth Wales programme; helping to create jobs in the construction sector by continuing to build schools and houses; and helping businesses by making £55 million available in grants and loans to them. The problem, however, is that the Welsh Government are having to do this against the background of UK Treasury policies, which are making it very difficult for any business to flourish. We have a Chancellor who is determined to suck money out of our local economies, making it extremely difficult for local businesses to keep going.
We all know that people on the lowest and most modest incomes spend their money most rapidly in the local community, because they have to for their day-to-day needs, so let us look at a few examples of how the Government are squeezing hard-pressed families and sucking money out of our local economies. First, there is the VAT hike, which I have mentioned.
Secondly, there is the winter fuel allowance. Most pensioners, certainly in Wales and in many unemployment hot-spots across the UK, are not millionaires but need that £100, so they are transferring money that they would have spent in the local economy and putting it by to pay for their fuel. That money is leaving the local economy, with the economy in Wales alone losing some £31 million.
Thirdly, we have real cuts dressed up as freezes, such as those on public sector pay and on child benefit, and they are translating into money that people do not have to spend in the local economy. Fourthly, the 3% hike in pension contributions is taking £2.8 billion out of the economy; and fifthly, tax credits are being taken away from people who work less than 24 hours a week. But people just cannot, unfortunately, get those hours, and they are from some of the very poorest households. They are trying to work and to keep the family together, yet they are going to have even less money to spend and less money to stimulate the economy, so there are going to be even more job losses. The Government must do something now to put that right and get growth going.
The last Labour Prime Minister will be remembered in the economic history books as the man who in 2008, alongside President Obama, averted a depression of a 1930s quantum by invoking a fiscal stimulus. The current Prime Minister may well be remembered as the Prime Minister who prematurely used his veto to stop Europe putting together a plan to promote economic stability and growth, and avert a crisis in the euro and a national sovereign debt crisis across Europe. We all know that we did not want the financial transaction tax, but that could have been vetoed at a later date.
We have a deficit, as we all know, two thirds of which was the responsibility of the international financial markets and the banks. The remaining third was due to the excess investment over earnings of the Labour Government. There should be no apology for that, because that investment was in lower VAT, the car scrappage scheme and so on, which stimulated growth on the back of what could have been the worst depression since the ’30s, and reduced the deficit forecasts by some £22 billion. With the change of Government there was a change of focus, from growth to cuts. Growth has now stopped. The immediate judgment of the new Chancellor was to announce 500,000 job cuts and, for instance, 7% cuts in local government for four years. That meant that everyone in local government thought they were bound to lose their jobs and therefore stopped spending. The reduction in consumption and spending has meant a depression in growth. Now the deficit forecasts are not going down, but going up. They went up to £46 billion, and now they are £158 billion.
As for business and inward investment, the Chinese are coming to Cardiff tomorrow. They are concerned about a country whose growth is flatlining, which has strikes and riots provoked by the Government parties’ policies, where crime is rising for the first time and waiting lists are going up—again, through cuts—and where the educational standards of those going to university are beginning to fall off. In other words, this dualist idea—that if we get rid of the public sector, the private sector will be all right—is completely fallacious. The Labour party has a five-point plan. For example, the VAT change would stimulate £46 million in the local economy in Swansea, helping to create new jobs, while lower national insurance rates would also be helpful in stimulating building businesses.
I should mention that the interest rates that we now enjoy are thanks to the Labour Government making the Bank of England independent. We remember the last time the Tories were in, when interest rates hovered between 10% and 15%, so I will take no lessons from the Conservatives about how the austerity plans and unemployment are the reason for low interest rates. In fact, since the summer, interbank borrowing rates—that is, wholesale rates—have increased by 1%, so small businesses are suffering.
Finally, there is a glimmer of hope for the future in Swansea and Wales, thanks to the standard and quality of research and development in both our universities, which are working with UK Trade & Investment to network into international markets. However, with an enterprise zone in Bristol, parked on the gateway to Wales, we are not helped, frankly, by the continuation of rising tolls on the Severn bridge, especially when we see them being cut on the Humber. That is basically leading to disinvestment in many investment projects, whether in St Athan or the Severn barrage. There is hope, but we need a refocus on growth, instead of an endless focus on cuts. Anyone who runs a business that is making a loss needs to focus on revenue, not just cutting everything. The Government need to think again and remember the success of the previous Labour Government.
Let me make a few brief points. There is a lot of emotion and pain about rising unemployment, for the many reasons that were eloquently expressed by many Members from across the Chamber, including, as Alec Shelbrooke said, my hon. Friend Julie Hilling and my right hon. Friend Mr Barron. We make those emotional points strongly not because we want to re-fight the class wars of the 1980s and 1990s, but because we want to ensure that we learn to understand the impact of letting unemployment rise unchecked without properly and effectively intervening. I therefore hope that Government Members will not misinterpret me when I say that one of the things that we should learn about—in addition to what happens when whole generations are lost, along with the insult and disrespect that they feel—is what that leads to, in terms of alienation and the kind of behaviours it can drive. When we look at the lessons from the interim report of the official inquiry into the riots, I hope that we will take note of the rising sense of alienation among our young people and ensure that our employment policies specifically address it.
I want to ask a couple of questions about the Work programme. It cannot resolve the shortage of jobs, but it can prepare people to be better able to take the opportunities if and when they are made available. It is a matter of great regret to many Labour Members that there is so little transparency about how the Work programme is performing.
I hope that the introduction of the wage subsidy, which it seems might be related in some way to the operation of the Work programme, will not mean a double payment to Work programme providers or a double cost to the economy. I hope the Minister can reassure us on that. I hope, too, that he will say something about whether providers continue to see Work programme contracts as viable. Providers in my region are certainly expressing the concern to me that the lack of jobs means that it will not be possible for them to carry on without coming back to have further discussions with the Government about the payment structure and rewards built into the contracts. We need to know just how Ministers see the economic and financial viability of the Work programme in these very different economic circumstances from those in which the contracts were designed and let.
The Minister should acknowledge that the payment structure in the Work programme does not reward people only for getting someone a job and keeping them there for two years. There should be interim payments all the way through. When we look at the way in which people are moving into employment, I am particularly concerned that we do not move them just to short-term, stop-go, sporadic episodes of employment, whereby Work programme providers pick up some of the payment and redesign their model to make it sufficiently economically viable for them to keep the contract manageable, but do not deliver the sort of long-term sustainable jobs that I think we all want.
Finally, let me support the comments of my hon. Friend Nia Griffith. The Government have tools at their disposal not to make the situation worse. I ask them to look urgently at two aspects of tax credits. The first is about the operation of the rule that, as my hon. Friend said, requires couples to work a minimum of 24 hours. We know that employers are not able to offer more hours in the current economic climate, and that rule is going to drive people out of the workplace. I also ask Ministers to look once again at the operation of the child care element of working tax credit. Aviva has shown us that about 32,000 women are leaving the workplace because they cannot make work pay. That is a false economy, and I hope Ministers will—
We have had an interesting and worthwhile debate.
In June last year, the Prime Minister told the House that cutting the deficit faster would revive private sector confidence. That was the basis for the whole plan: private sector investment and jobs would surge, and new private sector jobs would outweigh public sector job cuts. We now know that that plan has not worked. My hon. Friend Nia Griffith and Dr Whiteford were right to underline that the key assumption that confidence would surge has proved to be wrong. The new “Business Confidence Monitor” from the Institute of Chartered Accountants says:
“UK business confidence has collapsed…Confidence has declined across all sectors and all regions.”
My right hon. Friend Mr MacShane was right to underline the seriousness of the crisis we face.
Nobody claims that the coalition strategy has worked to boost confidence. We will take different views about the reasons why it has not worked, but the fact that it has not worked is beyond dispute. Public sector job cuts now far exceed new private sector jobs—by 67,000 to 5,000 in the last quarter. My hon. Friend Sheila Gilmore was right to draw attention to the fact that Conservative Members like to look further back, closer to the election, when there were still beneficial effects from the previous policies. Today, however, private sector job creation has completely stalled.
The Office for Budget Responsibility tells us that more than 700,000 public sector jobs will go; already, for the first time, more than a million young people are out of work. My hon. Friends the Members for Ynys Môn (Albert Owen), for Stockton North (Alex Cunningham) and for Easington (Grahame M. Morris) pointed out what that means in communities around the country.
May I ask the right hon. Gentleman, who is a decent man, to go and look at the original quotation? If he does so, he will find that I said that the actual figure for youth unemployment was 730,000. The 1 million figure is not a true reflection of the position, because it includes a large number of full-time students looking for part-time jobs. I do not count those as being unemployed.
Last month the Government finally recognised that they had to do something and announced the youth contract, but they have not made up their minds about the details. There appears to be some haggling with the Chancellor about how it will work, and it is clear that the Government’s providers have no idea how they are supposed to be delivering it from next April. A year after the Deputy Prime Minister said—so he tells us—that something needed to be done, there has still been no action.
Although we do not know the details, we can say one thing for sure: it was folly to scrap the future jobs programme and allow youth unemployment to rocket. As was recognised by my right hon. Friend Mr Barron, my hon. Friends the Members for Bolton West (Julie Hilling) and for Stretford and Urmston (Kate Green), and, indeed, John Glen, a generation of young people will bear the scars of that folly throughout their working lives because Ministers were asleep at the wheel. All along, we were assured that the solution would be in the Work programme—that it would solve all the problems—but the truth is that the programme was rushed and inadequately planned. As we pointed out at the time, there needed to be a plan for transition from the previous programmes to the new one, but there was no such plan.
So how has the Work programme fared? As my hon. Friend the Member for Stretford and Urmston pointed out, Ministers have gone to extraordinary lengths to block the publication of data about what it is achieving. I am told that officials have threatened Work programme providers that if they publish any figures, they will lose their contracts. I well understand the concern of the provider in the constituency of my hon. Friend Fiona O'Donnell who said, “I should not show you this, because if I do I may lose the contract.”
Absurdly, the Minister of State claims that the purpose of the ban was to meet the requirements of the United Kingdom Statistics Authority. As we have been reminded, he has some form with the authority. However, its chairman wrote to me last week:
“The Statistics Authority has not been consulted on whether it would be appropriate for Work Programme providers to publish their own performance data.”
It was the Minister's decision to hush things up, not that of the United Kingdom Statistics Authority. As I told the Minister yesterday in Committee, the same organisations published their performance data in the flexible new deal, under the same United Kingdom Statistics Authority rules. They actually want to tell people what is going on and what is happening. The Minister must lift the ban.
“it is only by publishing data on how public services do their jobs that we can wrest power out of the hands of highly paid officials and give it back to the people.”
How true that is, but in this case the Minister is resolute: they shall not know.
As it happens, it is possible to glimpse how the programme has been going by looking at the number of people coming off benefit each month. It is no surprise that the number plummeted in May, when the flexible new deal ended. The fact that it continued to be low as the Work programme got going should also have been no surprise, because that always happens. If we compare the months after May with the same period last year, we see that poor Work programme performance resulted in an estimated 86,000 people who should have obtained work not obtaining it. That is probably a permanent unemployment rise. The damage will be with us for years.
Incidentally, to deliver that worse performance, the Government had to pay out millions. I have heard that they had to pay tens of millions in penalty charges for early termination of flexible new deal contracts. I wonder whether the Minister can tell us how many millions of pounds the Government had to pay to prevent those 86,000 people from obtaining jobs.
The Government told us that the Work programme would enlist an army of voluntary organisations to give specialist help. To begin with, we were told that 508 voluntary sector organisations would be involved. By August, the number had fallen to 423. I met a group of them last month—superb organisations such as St Mungo’s, with a great track record in helping homeless people into work. They had agreements with three different prime providers in London. How many people had been referred to them for help under the Work programme in the six months since it started? None—not a single person. Dyslexia Action has Work programme agreements in six different areas. How many referrals has it received in the six months since June? I checked with it yesterday. None; not a single person; nobody at all. These are good organisations. They tooled up and acted in good faith on what the Minister said. He led them up the garden path; he has not delivered. The Merlin standards that he said would safeguard them have proved completely worthless.
Others who have had referrals told us that relationships in the Work programme are terrible. Prime providers are not talking to sub-contractors; jobcentres are not talking to prime providers; and as was rightly said earlier, there are persistent rumours of serious financial problems ahead in the new year. Can the Minister who is winding up tell us what contingency plan he has for the eventuality of a Work programme provider failure? The Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell has indicated that he is relaxed about that eventuality. What will the Department do if it occurs?
It is clear that we need a new approach. We have spoken about the alternative five-point plan, which my hon. Friend Geraint Davies was right to underline. That, at last, would give us a chance, and it is a chance we desperately need.
It is important in the few minutes remaining to put on the record some of the facts about the current situation, because there is a danger that the tenor of what we have heard from the Labour party might talk down the British economy and lead to an unnecessary depressing of confidence at a time when we need realism, not talking down the hard-working people in our economy.
Let me give an example. One would hardly believe from today’s debate that since the general election, the number of people in work in this country has risen by a quarter of a million. In fact, the number of people in private sector jobs has risen by more than half a million.
In a second. So when it is said that the private sector is not expanding, that is simply not right. People say that there are no jobs, but there are half a million additional private sector jobs. The hon. Lady made the point that that is looking over the whole period, so I will take her at her word. Let us look at the last month. In it, the number of people in work has risen by 38,000. Of course, we can all choose different time periods—Labour Members used the last quarter, for example—but my point is that selective use of statistics, such as that made by Mr Byrne, creates a highly misleading impression and talks down the British economy in a way that is in nobody’s interests.
The Minister is characteristically generous in giving way. Surely he cannot celebrate the fact that employment over the last quarter has fallen by some 63,000, and that 13 times more jobs are being lost in the public sector than jobs are being created in the private sector. He cannot tell the House today that everything is going well, surely.
Of course, I did not say that everything is going well, but the right hon. Gentleman cannot deny that in the last month, an extra 38,000 jobs, net, have been created. We can choose different time periods. As my right hon. Friend the Minister of State said, the claimant count rose by 3,000 in the last month, but that is more than offset by the fact that people who were previously on incapacity benefit have been reassessed on to JSA, and lone parents have been required to look for work and moved on to JSA. In fact, without those policy changes, JSA numbers would have fallen in the last month. That is why my right hon. Friend was absolutely right to talk about signs of stabilisation in the job market.
As a number of Members on both sides of the House said—my hon. Friend John Glen, Mr Barron and others—every single person on the unemployment roll is a person too many, but if we overstate the doom and gloom, we talk down confidence in the economy, which is to the detriment of all our constituents.
Let me respond to the claim made by the right hon. Member for Rother Valley and others that long-term youth unemployment is up—and I quote—“93%”. Labour
Front Benchers have clearly supplied all their Back Benchers with figures for their constituencies. The only problem is that all of them are wrong. Labour Members might be interested to learn that what used to happen is that under measures such as the new deal, people had to move off JSA after a certain period and were paid something else—a training allowance—or they got a temporary job; then, when they went back on to JSA, as so many did, the clock started again. Hey presto—a long-term unemployed person had been converted into a short-term unemployed person. They had not got a job; they had just been taken out of the figures. We have stopped doing that. As a result, if all the factors are taken into account—the people who were excluded from the statistics because they were on training allowances or in temporary jobs—the number of long-term claimants aged 18 to 24 is about the same now as it was in 2010.
To hear Labour Members, one would think that the numbers had doubled. The right hon. Gentleman was very angry about that, and had they doubled he would be right to be so, but they have not doubled—in fact, they are roughly the same.
Mr MacShane said that it was “absurd” to blame all the problems on this Government. That was gracious of him, although I take great offence at his attack on Oxford PPE graduates, but to hear Labour Members today, one would have thought there would have been no public sector job losses at all had they stayed in power. They were planning tens of billions of pounds of cuts. How many public sector jobs would have gone had they gone ahead with their tens of billions of pounds of cuts? They have no idea—no idea at all.
Several hon. Members mentioned interest rates. We were told that we inherited low interest rates, and the Bank of England base rate was indeed low. The question was what decisions did we, as a new Government, have to make to get the fiscal position under control. Because we took the difficult decisions early—pretty much every one of which has been opposed, item by item, in the course of this debate—the interest rates at which the British Government are borrowing have stayed low while other countries’ debt rates have soared. As a result, in this Parliament we have saved £22 billion in debt interest—money we can spend on services and on helping the unemployed which would not have been available had we listened to Labour.
Early in the debate, my hon. Friend David T. C. Davies, said that we need to tackle red tape. He is right, and we have the red tape challenge, which has already resulted in substantial deregulation in, for example, retail and hospitality, with much more to come. I am grateful to him for making that point.
My hon. Friend Jenny Willott highlighted the fact that pension funds will now be asked to invest more in the long-term infrastructure of this country—and rightly so. It is shocking that, for so many years, the money in our pension funds was not invested in our long-term infrastructure. This coalition Government are taking action to tackle that.
Alex Cunningham referred to the regional growth fund money in his constituency, and I am grateful to him for acknowledging the good that it can do. He asked about incentives to take on the long-term unemployed and the young unemployed. The youth contract is being introduced so that when people take on 18 to 24-year-olds from the Work programme—so they are long-term unemployed—they will get an incentive worth £2,275. That is more than a year’s free national insurance, so it is a valuable incentive. Unlike point five of this fantastic five-point plan we have heard about, which would reward small firms that take on anybody—including someone they were going to take on anyway and who would have got a job—our incentive is targeted on the long-term unemployed. That is the crucial point. Only one person in this debate has mentioned cost-effectiveness—my hon. Friend Stephen Timms said that it was a scandal, or something, to have finished up the future jobs fund, but he should know that that fund was costing more than £6,500 per place, whereas our work experience programme costs a twentieth of that and delivers the same sort of outcomes. Cost-effectiveness simply is not on the Labour party’s radar.
In the few seconds available to me I shall not have chance to go through all hon. Members’ contributions. My hon. Friend Oliver Heald flagged up the record national debt that we were left and my hon. Friend Mrs Main talked about the collective amnesia of Labour Members and asked why they did not tackle bankers’ bonuses. Just before the election, they introduced a temporary bankers’ bonus tax—