Jobs and Social Security

Opposition Day — [11th Allotted Day] – in the House of Commons at 4:19 pm on 28th November 2012.

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Votes in this debate

  • Division number 106
    A majority of MPs voted against introducing a bank bonus tax to fund jobs for young people and against an impact assessment of disability benefit changes.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions 4:19 pm, 28th November 2012

I beg to move,

That this House
notes that only just over two in every hundred people referred to the Work Programme in its first year have gone into work;
further notes that it has delivered a worse outcome than no programme at all;
recognises that long term unemployment is soaring and that the welfare bill is projected to be £20 billion higher than planned;
notes with concern that the Government is cutting £14 billion from tax credits and is taking £6.7 billion from disability benefits to pay for this cost of failures;
and calls on the Government to implement a bank bonus tax to fund a Real Jobs Guarantee for young people and commission a cumulative impact assessment of disability benefit changes.

Our debate takes place in the shadow of the Chancellor’s winter statement next week. It is clear that a winter of misery lies ahead. The Chancellor has already had to revise up the cost of welfare spending for this Parliament by an eye-watering £20 billion, and now, after yesterday’s brutal exposure of the Work programme, we know a great deal more about who is to blame.

We already knew that the Chancellor had done his level best to throttle the recovery. He has cut so far and so fast that we have now been landed with the longest double-dip recession since the war; and our economy is so fragile that the Governor of the Bank of England has warned that we might lapse into another recession this year; but what we did not know until yesterday was just how badly let down the Chancellor, the Cabinet and our constituents have been by the complete inability of the Department for Work and Pensions to get our country back to work. No wonder the Chancellor is tearing strips off the Secretary of State for Work and Pensions in Cabinet.

All over Britain, businesses and families are busting a gut to do anything and everything to find work. Some 60% of jobs created since the election have either been part-time or self-employed, and, amidst all that strain and effort, we might have expected a little more support and a little more of a helping hand from the DWP. Yesterday, however, we discovered that it has done worse than nothing. Ministers swept into office promising the biggest-ever scheme to help people back to work, but yesterday we heard, not the hype, but the reality. It has been trying to hide these figures for more than a year, and yesterday we found out why: the Work programme has proved precisely as useful as doing absolutely nothing—in fact, worse than nothing.

When the DWP went out to market to ask contractors to come forward and help with the task, it said, in its documents, that it could expect about 5% of people on long-term benefits to make it into work under their own steam each year. That is why it set itself a target of outperforming doing nothing by 10%—not a high bar—but somehow it managed to set a target as low as possible and miss it. It is right, therefore, that the House highlights, not just this failure, but the soaring cost of failure, which our constituents will now have to help pay down.

Photo of John Redwood John Redwood Conservative, Wokingham

Will the right hon. Gentleman give us some positive ideas on what improvements could be made? I am sure that all people of good will in the House want more people to get back to work and will recognise that this large welfare spending needs to be used in a way that encourages them.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

The right hon. Gentleman will be as concerned as I am about this question, because only 2.6% of people in his constituency on the Work programme got a sustainable job outcome. I will come directly to that very question, but I want to dwell first on the cost of failure.

Since the Work programme has been in place, the number of people out of work full-time for more than a year has risen by an extraordinary 210,000. This spiralling cost of long-term unemployment is now costing us, in the jobseeker’s allowance bill alone, £750 million. That is an enormous cost of failure. It is the cost, in fact, of 18,000 nurses, 16,000 teachers and 14,000 police officers.

Photo of Bill Esterson Bill Esterson Labour, Sefton Central

My right hon. Friend talks about the cost of the failure of this programme. Will he also mention the impact on our constituents? The message from mine is clear: when they go on Work programme activities, they are not given the sort of training or opportunities they are promised, by and large, and so there is little prospect, even from the start, of their getting a job, even if the jobs are there at the end. Does he agree that that is a common experience across the country?

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

I know this is of great concern to my hon. Friend. There are more than six people chasing every job in his constituency. What his constituents need is a back-to-work programme that actually works, pulling out all the stops to get people into jobs, but I am afraid the story he has told from his constituency has become all too common across the country.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I am sure the right hon. Gentleman wants to get the record straight. Will he now tell the House that in the last two years of his complacent Government, long-term unemployment rose by some 400,000?

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

I would be happy to trade arguments about our record with the Secretary of State, because while Labour was in office, the amount of money that we spent on out-of-work benefits fell by £7.5 billion. That is why his noble Friend Lord Freud described Labour’s record in getting people back to work as remarkable. It is a shame that he could not arrive at the same judgment about this Government’s programme, which is now in place.

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield

I am sure that my constituents want a reflective debate today, not the sort of intervention they have just heard from the Secretary of State. As I remember, Lord Freud—or Mr Freud or Dr Freud, before he was ennobled—did a thorough piece of work for the former Prime Minister, Tony Blair. What went wrong? Was his analysis wrong or was the way the Conservative Government interpreted it wrong? Was Freud wrong and his analysis abused, or was he right and something has gone wrong with the Government?

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

The Work programme has got only just over 2% of the people in my hon. Friend’s constituency in the programme into sustainable jobs. It is becoming clear that there is simply not enough fuel in the tank.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

In a moment.

The Government spent something like £63 million closing down the flexible new deal—a programme that was actually getting more people into sustainable jobs than the Work programme and was costing only something like 9.5% more per job outcome. The Government have, in effect, shut down a system that was working, spent an awful long time getting something back up and then overseen a programme that has dramatically failed to hit the target set for it in the first years. It is a catalogue of failure.

Photo of Jessica Morden Jessica Morden Labour, Newport East

Does my right hon. Friend agree that yesterday’s figures for young long-term unemployed people were especially tragic? Would he be interested to know that Jobs Growth Wales, which was introduced by the Labour Government in the Welsh Assembly in April, has proved to be seven times as effective in getting young people back into work and was based precisely on the future jobs fund?

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

My hon. Friend is absolutely right. The Work programme has been an abject failure in her constituency. Only 1.4% of people in her constituency who went into the programme were attached to any kind of sustainable job outcome. We know from Department for Work and Pensions research last week that the future jobs fund was a roaring success, delivering more than £7,500 of wider benefit to society. It was such a tragedy that the Government closed it down. Thank heavens that Labour is in power up and down the country, including in Wales, where we are building on the lessons of the future jobs fund, making it better and stronger, and now making a difference for young people across her constituency and beyond in Wales.

Photo of Nick de Bois Nick de Bois Conservative, Enfield North

Before we get too engrossed in bandying statistics around, is it not worth remembering that a job outcome is measured over a six-month period? The Work programme has been in place for a year; therefore, the early statistics will inevitably not reflect its success accurately. Indeed, we could actually discount almost half the 800,000, simply because getting a six-month job outcome is almost impossible.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

I am afraid that prompts the question why the DWP set the target in the first place. Indeed, yesterday on the television news that I watched, the Secretary of State made great play of the fact that the Work programme was only in its first year. However, the fact that the targets were set by the DWP was somehow missing from what he said yesterday. Indeed, they were targets for the first year. The challenge only gets greater in the second year. If the hon. Gentleman looks at the tender documents that the DWP put out, he will see that in the second year the Work programme has to get 27.5% of those on jobseeker’s allowance into sustainable job outcomes. That is about 10 times what the Government have managed to deliver in the first year. So I am afraid the argument that the Work programme is just warming up simply will not do.

Photo of Nick de Bois Nick de Bois Conservative, Enfield North

I think that the right hon. Gentleman would accept, on reflection, that in achieving the goal of helping people to secure full-time employment, it is inevitable in these difficult times that some of them will need to take jobs that might not last six months in order to help them to get back into the Work programme cycle. The inevitable consequence of that is that we will do far better in the next year. So be it: let us celebrate that.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

There is an element of me that feels sorry for the Secretary of State. He is operating in an economy whose recovery has been throttled by the Chancellor, while another Cabinet colleague, the Secretary of State for Communities and Local Government, is implementing the biggest cuts to those local councils where there are the fewest jobs. So yes, the Secretary of State for Work and Pensions faces a difficult challenge, but it was his Department that set out the bald statistic—[ Interruption. ] I am sorry that Nick de Bois cannot hear me because of the chatter from those on his Front Bench. It was the Secretary of State’s Department that said that if the Government did nothing, 5% of people on long-term benefits could flow into work. The Work programme has delivered less than that, and the benchmarks will get stiffer next year.

Photo of William Bain William Bain Shadow Minister (Scotland)

My right hon. Friend has seen a successful job creation plan for the long-term unemployed in my city of Glasgow, run by the Labour administration on Glasgow city council. There are 1,320 long-term unemployed people in my constituency, but under the Work programme only 2.5% of them have found a lasting job. Does not that illustrate the difference between a Labour administration who know how to help to create jobs, and a Conservative-led coalition that is making an absolute hash of it?

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

My hon. Friend is absolutely right. Glasgow city council has lessons to teach all of us about what it takes to get young people back into work. Despite all the difficult decisions that the council has had to take, it has made it a priority to get young people back into work. The way in which it has built on the future jobs fund is a real lesson for everybody.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire

The right hon. Gentleman talks about the Labour Government’s record of getting people into work. Can he explain why the number of households in which no one had ever worked doubled to 350,000 during the 13 years of his Government?

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

The hon. Gentleman should check his facts. The number of people on out-of-work benefits came down by 1 million under Labour, and the out-of-work benefit bill came down by £7.5 billion. That is in sharp contrast to this Government, who have put up welfare spending by £20 billion more than they projected. To pay down that bill, they are now having to cut tax credits from constituents such as those of the hon. Gentleman.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire

The right hon. Gentleman did not answer the question. I asked why the number of households in which no one had ever worked doubled to 350,000 under the last Labour Government.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

I am afraid the hon. Gentleman has to check his facts. The truth is that Labour delivered 1 million fewer people on out-of-work benefits and a £7.5 billion reduction in the out-of-work benefits bill. That is why his noble Friend Lord Freud described our record of getting people back to work as remarkable.

If this Government had built on those lessons rather than ignoring them, they would not be presiding over the sorry state of affairs that was announced yesterday, when the Secretary of State and the Minister for unemployment—the Minister of State, Department for Work and Pensions, Mr Hoban—were forced to come out and tell us that the only virtue they could find in yesterday’s figures was that the Work programme was cheaper than the flexible new deal. The truth is that a payment-by-results system will always be cheaper if there are no results. It is the lack of results that is now costing this country a fortune. That is what is driving up the welfare bill by £20 billion more than was projected at the beginning of this Parliament.

We have to ask who is going to pick up the tab. We know that it will not be Britain’s richest citizens. They have been handed a tax cut of some £3 billion. They will not be asked to pay for this failure. Instead, it will be Britain’s strivers and battlers—those whom the Prime Minister promised to defend. Well, some defence! This Government are now taking £14 billion off tax credits over the course of this Parliament. I think I am right in saying that tax credits are the only benefit that is currently frozen.

The tragedy is that the cuts are so unfocused and so unwise that Britain’s part-time workers will now be better off on benefits than they will be in work. How on earth can that be right? A couple with two children and some child care costs on £40,000 a year are set to lose £1,900—5% of their income—in benefits over the course of this Parliament, while 8,000 millionaires will gain an average of £100,000 a year from the Government’s tax rate cut in April. If that is the Prime Minister’s defence of Britain’s battlers and strivers, I would hate to see what happens when he starts attacking them.

Photo of Gavin Shuker Gavin Shuker Shadow Minister (Environment, Food and Rural Affairs)

Is not the reality even worse than my right hon. Friend paints it? [Interruption.] He says that he has not finished yet! Many of the battlers and strivers are young people, and in my constituency, long-term youth unemployment is up by 1,150%. The other options available to them are going on to university or staying in education, yet tuition fees have trebled and the education maintenance allowance has been taken away.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

My hon. Friend is absolutely right: there is a bleak future for many young people in his constituency. The Work programme has delivered something like 1.3% of people into sustainable jobs, so it is one of the worst figures in the country. When young people in my hon. Friend’s constituency face tuition fees that have trebled, the cancellation of EMA and the shutdown of the future jobs programme, he is right to call in this place for a very different course of action.

Even more worrying for the future, the signs are that when universal credit is introduced, it will not get better for Britain’s strivers and battlers; it will actually get worse. We know that new rules for universal credit will mean taking in-work benefits away from anyone who has managed to squirrel away £16,000, and we know that it locks in cuts to tax credits. Now, in this morning’s

The Sun

, we read that a couple working full time—over a million of them will be in the system—will lose something like £1,200 a year. That is, of course, if it ever happens.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

Perhaps the hon. Gentleman will tell us what he thinks of that.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire

I thank the right hon. Gentleman for giving way again. I would like to tackle him on the last Government’s record on what he claims was getting people into work. If that were the case, will he explain why the working age welfare budget increased by 40% in real terms during the 13 years of the last Labour Government?

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

Let me give the hon. Gentleman some statistics. If he looked at the amount spent on benefits in 1996-97, he would find that it came to about £51 billion, excluding pensions. By the time we reach 2009-10, that had fallen to £44 billion, so I am afraid that no matter how he looks at it, the truth is that the amount spent on out-of-work benefits over the course of Labour’s period in office fell by £7.5 billion. The hon. Gentleman is a member of a party that has presided over an increase in the projected welfare spend by £20 billion, and there are something like 8,000 families in his constituency that are now seeing their tax credits either frozen or cut to pay for that cost of failure. I wonder how he is going to explain that to his constituents as we get closer to the next election.

It is not simply people in work who are paying the bill. We now know that about 6 million families are working, yet are still in poverty. There is another group of our constituents that we must worry about, too—those constituents who are disabled yet are set to lose something like £6.7 billion of help over the course of this Parliament to help pay for the failure to get Britain back to work. These benefits are being taken away, without any cumulative assessment of their combined impact, and these cuts total more than the Government are taking away from banks. That, I am afraid, is a sorry indictment of this Government’s values.

Photo of Geraint Davies Geraint Davies Parliamentary Assembly of the Council of Europe (Substitute Member)

My right hon. Friend will know that growth is at a standstill because of the collapse in consumer demand. Given that poor people spend all their money while rich people can afford to save or hide it away, does he accept that focusing the cuts on the poorest—cutting disablement benefits, the working families tax credit and the like—is completely counter-productive for job growth as it deflates the whole economy?

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

My hon. Friend is right. The Work programme has delivered only about 1% of his constituents into sustainable work. What we will publish this afternoon is an analysis showing that the per capita cuts in councils across the country are biggest where jobs are fewest. Where there is something like £200 a head in cuts, it means two or three times the national average of people chasing every single job. It is not surprising that the Work programme, flawed as it is, is finding it hard work because the Chancellor has throttled the economy and the Secretary of State for Communities and Local Government is cutting back where jobs are fewest.

Photo of Joan Walley Joan Walley Chair, Environmental Audit Committee

Does my right hon. Friend agree that the Government should be redoubling their efforts to invest in the areas that need investment most—the areas that have been hit hardest by the welfare reform cuts? The Prime Minister implied that Stoke-on-Trent would have a local enterprise zone, but that never happened. We need to benefit from the regional growth fund, and we need a Government emphasis on what needs to happen.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

My hon. Friend has been a consistent champion of Stoke, and has consistently drawn attention to the need for greater economic development there. The Work programme is not helping, the cuts in council funds are not helping, and the Chancellor’s wider economic strategy is not helping. My hon. Friend is right: we must redouble our efforts, particularly in those poorer parts of the country, to get people back into work. There is very little sign that that is happening at present.

Once upon a time we were promised a welfare revolution, and I think that we are right to ask this afternoon what on earth has happened to it. Universal credit is descending into universal chaos, punishing the strivers and battlers whom it was supposed to help. A climate of fear is being created for disabled people, and the Work programme quite simply is not working. The Chancellor knows that it is going wrong, and No. 10 knows that it is going wrong. Only the Secretary of State thinks that it is all okay. There he was yesterday, running from studio to studio, saying to anyone and everyone who would listen that it was all fine—that it would be all right on the night—although, quite obviously, it is all wrong. I am now sure that the Secretary of State is competing for Channel 4’s Comical Ali award for those who ignore all the evidence around them. It is not delusions of grandeur from which he suffers; it is delusions of adequacy, and the tragedy is that there is an alternative.

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Health)

Does my right hon. Friend agree that, although it would be bad enough if just one of the elements that he has mentioned affected any of his constituents, many of our constituents will be clobbered by a combination of them all? They will be hit by the bedroom tax, they will be hit by the changes in tax credits, they will be hit by the housing benefit changes, and they will be hit by the localisation of council tax relief.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

My hon. Friend is exactly right. Many of our communities throughout Britain are being hit from all sides, and the Government simply do not seem to understand the combined impact of what is happening. We can only hope that next week’s autumn statement will contain a proper plan to get us back to growth and to get our country back to work.

Photo of Andrew Slaughter Andrew Slaughter Shadow Minister (Justice)

No group is being hit harder than the homeless, or the most recently homeless. I do not know whether my right hon. Friend has had a chance to read “The Programme’s Not Working”, a report published yesterday by Homeless Link, St Mungo’s and Crisis about the experience of homeless people on the Work programme. It states that

58% of them were not even asked whether homelessness contributed to their difficulty in obtaining a job, and that the same number said they were not treated with dignity or respect. People who are losing their benefits are also being victimised by this dreadful scheme.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

I am grateful to my hon. Friend for bringing that report to the House’s attention. I have not seen it, but yesterday’s announcement made clear that for the groups who need extra help, the Work programme is failing particularly badly. I was extremely disappointed to learn, for example, that those receiving employment and support allowance were getting the toughest deal. Fewer than 1% of them were being helped into sustainable jobs. That is not a record of which any Member in the House can be proud.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Education), Shadow PC Spokesperson (International Development), Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Health), Shadow Spokesperson (Cabinet Office)

I am grateful to the right hon. Gentleman for giving way. He is being very generous. To complete the picture, does he agree that the poorest areas often contain the largest public sectors? Would it not be a tragedy if regional pay in the public sector were introduced in those areas, including my own, and would not regional benefits compound the difficulty?

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

The hon. Gentleman is right. That is just one more element of the wider picture that we are presenting this afternoon. At a time when there is a huge combined impact on communities throughout the country, we do not have a plan to get Britain back to work. What we have is a welfare bill that is rising, and when it comes to paying that down, it is Britain’s working people—those in receipt of tax credits—who are bearing the brunt. The Government are taking £14 billion out of tax credits over the course of the present Parliament.

We are arguing for a different approach, and we hope that we will see it next week. We believe that that different approach starts with getting our young people back into work. They currently constitute some 40% of those who are out of work. That is one of the highest levels in any western country, and it is a badge of shame. Now, all over the country Labour councils are leading the charge to get young people back into jobs. In Leeds, Sheffield, Liverpool, Wales, Cardiff, Glasgow and Birmingham, it is now Labour councils that are rolling up their sleeves and leading the drive to get young people into jobs. We should help them, so let us put in place a bank bonus tax to create a fund that would help us get young people back into work.

This Saturday is the 70th anniversary of the Beveridge report. That report offered the blueprint for post-war social security. The truth is that 70 years later, working people in this country need new things from the welfare state. They need retraining when they lose their job. They need child care. They need better social care. They need help when they are disabled. Millions today pay in and get nothing back. They are short-changed Britain, when what we want is something-for-something Britain.

Those of us who want to modernise the system know we need to remember the most important lesson Beveridge taught us: social security is built on full employment. So let us get on with getting Britain back to work, and we should start with the young people, whom we will ask to pay for all of our futures—our young people who are hungry for work, yet are being let down by this shambolic Government.

I commend the motion to the House.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions 4:46 pm, 28th November 2012

The Labour motion is one of the stupidest motions I have ever had to deal with. It says very little and nothing at all about what the Opposition would do if they were in office. It also lays yet more spending commitments on an Opposition whose programme is littered with huge cost increases.

I will take no lectures from Mr Byrne. I remind everyone again that he is the man who thought it was a joke to write a letter to the incoming Government saying there was no money left. [Interruption.] Opposition Members moan, but the reality is that the last Government bust this country, and we are having to pick up the mess. Furthermore, the right hon. Gentleman was hugely responsible for that mess, yet we have just got a lecture from him on the economy and on unemployment. The reality, however, is that unemployment is now lower than it was when he left office. We have higher employment. We have more women in work than ever before. We also have 1 million new private sector jobs. The reality is that he and his party left us with an utter mess, and we are having to take tough decisions to get ourselves out of it.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I will take some interventions from the right hon. Gentleman after I have dealt with a few of the points that he made.

The right hon. Gentleman’s motion says that just

“two in every hundred people referred to the Work Programme in its first year have gone into work”.

That is complete nonsense. The Opposition have added, and then divided, the numbers in a very partial way, to come up with the worst possible figure, which is precisely what they wanted. They have added up all the total attachments, but taken into account only a small proportion of those for whom six-month job placements were found.

Several hon. Members:

rose —

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

As I have said, I will take some interventions after I have made a few rebuttal points.

If the Opposition had worked the figures out correctly, they would have noticed what my hon. Friend Nick de Bois has pointed out: some 315,000 of the 837,000 people who were attached were not in a position to have a six-month outcome because they had not been on the programme for six months. The Opposition do not want to incorporate that fact into their figures, however. Those people will come through into the next set of figures that we produce.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I will give way to the right hon. Gentleman after I have made this point. In fact, the total number in sustained job outcomes falls well within the target area that we were trying to achieve during the first year’s figures. If people want to gerrymander the figures, they should make sure that they gerrymander them all.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

May I draw the Secretary of State’s attention back to the invitation to tender, which presumably he signed off? Under the heading of “Key Performance Measure”, which is in bold type and is the thing that we are interested in and debating, it says:

“Performance will be measured by comparing job outcomes…in the previous 12 months to referrals in the same period.”

The target for performance in the previous 12 months was 5%, and the Work programme statistics delivered yesterday showed that that target had been missed comprehensively.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

Yet again, the right hon. Gentleman has defeated the first point that he made. In other words, the figures that he has produced in the motion are wrong and he has just proved it. [Interruption.] If he wants to listen, he might learn something. No wonder he ended up as the man who told us there was no money left—with his kind of arithmetic, I am surprised that there was anything left at all. The reality is that in a year—if we want six-month referrals—a number of people will not have been in the programme for six months. So 315,000 people—[Interruption.] I am simply saying to him that the reality exists. This programme is on track; it is the best programme; and it will be putting some of the most difficult people back into work. Let me just deal with another point, which is the one about unemployment.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I said that I was going to make a few points and then give way.

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chairman of Ways and Means

Order. The right hon. Member for Tottenham knows that he cannot keep standing. I am sure that the Secretary of State has made a note and is going to give way shortly.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I just want to pick up on one point and then I will happily give way to the right hon. Gentleman.

The same scant regard for general facts is apparent throughout the motion. The Opposition claim that long-term unemployment is now soaring, yet long-term unemployment nearly doubled in the two years before Labour left office, going from 396,000 to 783,000 in 2010. By the way, just so that the record is absolutely straight, the right hon. Member for Birmingham, Hodge Hill says that Labour had got spending down, but welfare spending rose by 60% under the previous Government.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I will give way in a moment, but I said that I was going to make these points.

Labour’s policies then went on to try to hide the true scale of the problem, by automatically moving people off jobseeker’s allowance into training allowances or short-term jobs, thus breaking their claim just before they reached the 12-month point. The Opposition claim today that long-term unemployment is up by more than 200,000 since the Work programme began, but in actual fact, comparing like for like, which means counting all those who were previously hidden on training allowances and other support, the total number on jobseeker’s allowance is about the same as it was at the start of the Work programme, so that point is complete nonsense.

Photo of David Lammy David Lammy Labour, Tottenham

Can the Secretary of State confirm that, on his figures, he is talking about 4.5%, which is still below the dead-weight of 5%—in other words, the situation if he did nothing—and his target of 5.5%? Is it 4.5% on his figures? If I am wrong, what is it?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

No, the figures we stand by are those we published yesterday. The point that I was making today to the right hon. Member for Birmingham, Hodge Hill—[Interruption.] No, actually the figure would be more than 5%, but I am not claiming that. What I am saying is that we stand by the figures that we published yesterday, and I believe we are on track. The point I was making, legitimately, is that the right hon. Gentleman spent his time deducting some numbers from one bit and adding them into another to create some bogus figure that two in every 100 people were found sustainable jobs. That is complete nonsense.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I will give way to the right hon. Member for Birmingham, Hodge Hill in a moment, but some of his colleagues behind him want to intervene.

Photo of Geraint Davies Geraint Davies Parliamentary Assembly of the Council of Europe (Substitute Member)

Today, at that Dispatch Box, the Prime Minister said that 19,000 people out of 800,000 had gone into full-time work. I make that 2.3%, so the Secretary of State is saying that the Prime Minister is talking complete rubbish.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I stand by the figures that we published yesterday—3.5% is exactly correct. The reality is that what I have said today is what we said yesterday. The point that I want to make is that the thing that has gone missing in all this is that, without the Work programme, some 207,000 people who had been long-term unemployed would not be in work today—they are. Now, we work with those 207,000 people, many of whom have serious problems and difficulties, to make them longer-term employed, which is the key. The Work programme is all about resolving that.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

I am grateful to the Secretary of State, who is being characteristically generous in giving way. Broadly speaking, about 800,000 people were referred to the Work programme in the 14 months to which he extended the reporting period to flatter the figures, and 5% of 800,000 is 40,000. According to his figures, only just over 30,000 got into sustained jobs, so 10,000 more people would have got into jobs if the Government had done nothing. That cannot be a record of which he is proud; surely, he can admit that to the House.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

That is simply not true. I do not want to spend any longer on this, but the point that I made earlier about the right hon. Gentleman’s figures was that, when he concocted the figure of 200,000, he stripped out of his achievement figures the numbers for those who had been on employment and support allowance and so on and divided the total that was left, but those figures were in the other total. The Opposition have made a mistake and need to reckon that their adding up is wrong. The truth is that we have a programme that is helping people who are long-term unemployed.

Photo of Margot James Margot James Conservative, Stourbridge

I visited EOS, our local provider in the black country, which gave me data to show far in excess of 5% getting back into work. Those data were more recent than the statistics that are being publicised, and I am very encouraged by what the Work programme is doing for people in the black country. Before 2009, the number of people on JSA in my constituency rose by 205%, which was a scandal. That figure is much reduced now.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

The truth is that the previous Government did next to nothing for the seriously long-term unemployed, and as I have said, we saw the figure rise by nearly 400,000. I want to come to that point in a second, but let me first deal with another comment made by the right hon. Member for Birmingham, Hodge Hill during his speech. He said that Labour’s unemployment scheme was a roaring success. I noticed that in Prime Minister’s questions today—I do not know whether I have got this wrong—the Opposition quoted a report that they said had been done by the DWP.

Let us deal with that point now: both the future jobs fund and the flexible new deal were rushed through just before the election. After all the years for which Labour had been in government, it suddenly discovered an urgent need to start to spend money on some programmes. Let us deal with them one at a time, and with the future jobs fund first. The Leader of the Opposition quoted a DWP report earlier and said that that scheme had a net benefit to society of £7,750. What he did not say—I suspect that he needs to speak to the right hon. Member for Birmingham, Hodge Hill next time he gives him something to say at Prime Minister’s questions—was that the report goes on to state that

“these estimates exclude the cost of administering the programme and the cost of hiring and training participants.”

I wonder why he did not quote that.

Using any one of the more conservative estimates, as used in the report in table 5.3 on page 62, puts the benefits at £4,650, less than the £6,500 that it cost to place people in those jobs. So the right hon. Member for Birmingham, Hodge Hill and the Leader of the Opposition unwittingly misled the House and the future jobs fund lost money, rather than rescuing the situation. The report goes on to state that

“it is notable that under all of the scenarios considered in this analysis, the programme is estimated to result in a net cost to the Exchequer” and

“depending on the rate of decay there might never be an estimated net benefit to the Exchequer.”

What the Opposition are saying is fundamentally wrong: their scheme cost money and did not as a net benefit get anything back to constituents.

Photo of Bill Esterson Bill Esterson Labour, Sefton Central

The Secretary of State is talking about a completely different world that is divorced from the reality for my constituents. My constituents who were on the future jobs fund had real jobs at the end because the programme worked. They are now missing a programme that works, because the Work programme is designed wrong and because the jobs are not being created. He needs to talk to his friend the Chancellor and get the jobs created, as well as getting the Work programme right. Is that not the reality of what is needed?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

Of course it was a different world—it was a world in which the previous Government thought that every problem could be solved by chucking shed-loads of taxpayers’ money at it without caring what the outcomes were. That is exactly the point I am making. We have had to clear that mess up.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I will give way, but I ought to deal with the other programme first, as the right hon. Gentleman might want to ask some questions about that, too. The other programme that the Opposition cited was the flexible new deal. If that was such a brilliant programme, surely it would have been rolled out nationally; it never was. When Labour left office, it was only just up to running across half of the UK.

Over an equivalent period and claimant cohort, the Work programme has got more people into work for six months or more—19,000—compared with 15,000 under FND, and it delivers better value for money. The £14,000 per outcome figure thrown around by Labour ignores the start-up costs of the Work programme, which covers five to seven years. An independent cost comparison by the Employment Related Services Association shows a figure of £2,000 per job under the Work programme, compared with £7,500 under FND which, just like other programmes, ultimately cost money and did not succeed in helping to get people into work.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

This is an important point for us to debate. I do not know whether the Secretary of State has seen the analysis that was published yesterday by Inclusion, but it is pretty clear on this question. The proportion of people flowing into sustained jobs from the flexible new deal was 5%, which is much higher than the figures for the Work programme. The flexible new deal was more expensive. Inclusion calculates that the cost per job outcome under the Work programme is £14,000. The flexible new deal was 9.5% more expensive, but the Secretary of State is failing to be level with the House about the fact that doing nothing costs his Department less, but it costs the country more, because the welfare bill goes up. A payment-by-results programme is cheaper if there are no results. That is the problem that we have to fix, and that is why the Chancellor is so cross.

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chairman of Ways and Means

Order. Many Members wish to speak in the debate, so we must have shorter interventions and replies.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

Guided by you, Mr Deputy Speaker, I shall simply tell the right hon. Member for Birmingham, Hodge Hill that he is wrong. I do not agree with his figures, and anyway, he served in government while the bill for welfare rose by 60% in real terms over the lifetime of that Government. Enough said: we took on a massive problem, and we have to deal with it.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I shall make some progress, but I promise to give way to the hon. Lady.

Let us deal with the final point made by the right hon. Gentleman in the motion: that somehow all this could be solved if only we did not cut, change or reform anything and implemented a bank bonus tax to fund a real jobs guarantee. Such a one-off tax would be worth £3.5 million. However, we have introduced an annual bank levy, which raises much more money over the period. The Opposition did not introduce such a levy when they were in power.

Let us look at the bank bonus tax that they propose. I love the fact that that tax is wheeled out whenever they are in a corner. It has already been used to cover the spending of £13.5 billion that they committed to make when reversing the VAT increase. It has been used for more capital spending—£5.8 billion—and again to reverse tax credit savings of £5.5 billion. It was used to build 25,000 extra homes—£1.2 billion. It was used again to reverse child benefit savings of £1.7 billion, and more and more.

It is a joke to keep wheeling out that ridiculous programme as an excuse for what the Opposition should be doing, which, as my right hon. Friend Mr Redwood said earlier, is telling us what they would do instead, where they would make the necessary savings and how they would reform welfare. That is the main issue.

Photo of Kate Green Kate Green Shadow Minister (Equalities)

The debate has moved on, but I wanted to say that the rise in social security spending under the Labour Administration was not all in relation to out-of-work benefits. A large proportion related to better payments for children and working tax credit, which subsidised low pay.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I agree. The only way to look at these things is to consider the overall state of welfare spending. That is exactly how I look at it. As for the point about tax credit, much of it had nothing to do with going back to work, but it supported families for other reasons. The Opposition cannot separate what suits them from the other bits. We have a welfare budget, and they must own up to the fact that it rose by 60%.

Let me deal with what the Work programme really is. It supports 800,000 people—more than any previous programme—and data published yesterday show that it is successfully moving claimants off welfare rolls into jobs, so generating savings in the process. More than half those referred to the programme in June 2011 have since come off benefits, and about a third have spent the past three months off benefit, and a fifth have spent six months off benefit. Independent statistics published on Monday show that 207,000 people, as I have said, have been in work—a fifth of everyone on the programme. What is more, job entries are rising month on month. The figures that we published yesterday showed that in the past two months there was a 40% increase in attachments lasting six months.

We have rejected the old tendency that the right hon. Member for Birmingham, Hodge Hill keeps coming back to—chucking money at programmes in the hope that people will say we are doing something because we are spending money. With the FND, Labour paid out 40% of the fee up front just for signing up someone. Firms never had to do much at all. Under the flexible new deal, the average up-front attachment fee was more than £1,500. More than £500 million was paid out in total, without any assurance of success at all.

Photo of William Bain William Bain Shadow Minister (Scotland)

In my constituency, just 70 people have been placed through the Work programme into sustainable employment, but the Employment Related Services Association says that providers of the Work programme have received £436 million in public money already, as at September 2012. Can the Secretary of State update the House with the most recent figures? Does he really believe that constitutes value for money?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

The figures have been published. This is about start-up costs and the money that is paid for every job. If the hon. Gentleman wants to do the mathematics, he will find that it adds up quite well.

Under the Work programme, companies are paid only if they keep people in work for six months for the most part, and for some 13 weeks. Under Labour’s programme, 40% of the total budget or about £500 million, as I said earlier, was paid just to sign up people. That is the difference. We save the taxpayer the money, and we will produce a programme that gets people into work. It transfers the risk. In future, we should be able to shift market share from those who do not succeed to those who succeed.

Many of the same companies are used as were used under the previous Government, but the difference is that they are now being examined to show how successful their programmes are. Whereas under the previous Government they could simply sign up people, now they have to get them into work and sustain them in work, or they do not get paid.

Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak

If I accept the Secretary of State’s proposition and that of the Minister of State, Mr Hoban in his letter yesterday that it is a bit early to judge the programme, when is it reasonable to judge it? Can we expect to see a substantial improvement in the figures next year? If we do not, will the Secretary of State admit then that he has failed?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I happen to believe that the people who will admit that they failed are the Opposition. I hope that within a few months they will be eating their words over all this. Over many years, while the hon. Gentleman’s party was in government, we saw welfare bills soaring. By the time that Labour left office, there were 5 million on out-of-work benefits, one in every five households had no one working, 2 million children or so were living in those workless households with no chance that they would ever see anyone go back to work, and youth unemployment was up by 40%. Unemployment was at 7.9% and inactivity at 23.5%.

What a contrast with the situation now. In recent months, there have been more women and more people overall in work than ever before, up 734,000 since the election. There are 1 million more jobs in the private sector. We have seen four consecutive quarters of rising jobs growth and three consecutive quarters of falling unemployment. Not one word about that from the Opposition; not one congratulation to those who have found jobs. Excluding students, youth unemployment is down 65,000 on the latest quarter and 15,000 since May 2010. There are now 190,000 fewer people claiming the main out-of-work benefit and the inactivity rate is close to the lowest in a generation.

Thirteen months after coming into office, this Government introduced the biggest payment-by-results programme that the UK has ever seen. It is succeeding. It will succeed. We have heard nothing from the Opposition today. It is a pathetic motion from a pathetic Front Bench team and I will oppose it tonight.

Several hon. Members:

rose —

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chairman of Ways and Means

Order. I remind hon. Members that there is a 10-minute time limit on Back-Bench speeches.

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield 5:09 pm, 28th November 2012

It is a pleasure to take part in this debate, although I must say that there were moments when I wondered whether some of the Members who have spoken had somewhat lost the plot. So few people seem to be interested in our parliamentary democracy these days, and sometimes I think that is because of how we shout across these Benches, which puts many people off. The truth of the matter is that all the mature industrial democracies are facing some deep-seated structural challenges. The previous Government struggled with those structural difficulties, as will this Government. If anyone expects the coalition Government’s policies, many aspects of which I am critical of, to solve the problems that the Labour Administration failed to solve, I think that they are being rather naive.

What do we all want for our economy and our democracy at the moment? I want us to have full democratic citizens, something we do not often talk about. I get sick of Governments, even my own, talking out taking people out of tax. I want everyone in our country to pay tax. I want a broad tax base and the people who pay tax to feel that they are real citizens and participants. They do not want to be non-taxpayers. They also want good pay that is fair and better than the lowest legal pay, the basic minimum wage. We want full citizens, good taxpayers, fair pay and, of course, high skills.

One of the real challenges our country faces, as exemplified by the Ofsted inspector’s annual review published yesterday, is that a significant percentage of people do not get a good deal out of education and skills. We have improved immensely. The previous Government expanded higher education, and much of our school education has been improved under the previous Government and this Government. However, the fact of the matter is that roughly 25% of kids—perhaps even 30%—in many constituencies across this country are not getting the opportunity to acquire the kinds of skills that would make them full, taxpaying, participatory citizens.

Indeed, evidence given to the Skills Commission, which I co-chair along with Dame Ruth Silver, by the chief executive of Hackney college—the Secretary of State does not seem to be interested in this, but he should listen—which takes in the whole of silicon roundabout, shows that around 30,000 jobs have been created there, but unemployment in the area has not fallen by so much as 0.5%. That gets to the heart of what the McKinsey report states, which is that there is a real problem across modern industrial democracies: those people whom we cannot skill-up, whatever age they are, and who cannot get jobs.

Photo of Ann McKechin Ann McKechin Labour, Glasgow North

My hon. Friend makes some good points about skills and training. Does he share my concern that the Department for Work and Pensions is still to reach agreement with the Scottish Government about who is responsible for the cost of training those who have entered the Work programme in Scotland and that, as a result, applicants in Scotland are actually less likely to get training under the Work programme than those south of the border?

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield

My hon. Friend will forgive me for knowing less about the situation in Scotland than I do about the situation in Yorkshire and England, but I am sure that she is right. There are many local differences, as I am finding in my area.

That is why I asked for the Freudian analysis earlier. Lord Freud, before he became a Member of the upper House, was asked by Tony Blair to evaluate which programmes worldwide had actually worked and addressed the structural problem of how to get people into work so that they can be full citizens. He looked right across the piece to identify which programmes had been successful. By requesting the Freudian analysis, I was asking whether it was good information. It was the whole basis of the policy that influenced our Labour Government’s policy and also that of the Conservative party. Freud is very important to these discussions, however he has been interpreted, and we should not forgot that he was trying to look at that central problem we all face.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

Given that the hon. Gentleman has asked about my noble friend, who is an excellent addition to our team—whichever party he represented previously he is a very good man and is doing very well—I may say that the Australian system, which is the basis of the Work programme, has shown some of the best results, which occur once companies are geared up and focused on getting people back into long-term, sustained employment. The system is working very well and says that it is on track.

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield

I thank the Secretary of State for that intervention, and I accept what he says. He knows that what I am getting at in this short contribution is that we play this game of blaming each other all the time, but the problem is international and global and we will have to sometimes forget party differences and work together on it. I want to make a couple of suggestions as to how we might do that.

Let us face it: all Governments throughout Europe, the United States and beyond have a long history of failure. Modern industrial democracies have this problem of skilling the work force. Indeed, I have never heard such castigation of our country’s further education system as that in yesterday’s annual report by the chief inspector of Ofsted, who said how poorly further education was performing in our country. All the evidence shows that further education is where young people get skills for the good life. It is where they get high skills to get good jobs to be the full citizens that I am after.

I have never heard of the chief inspector picking on one town in particular. I do not know what he has against Hastings, but he said that early years and primary schools are a failure for the children of Hastings and that they also fail when they go on to secondary school and further education. I was astonished. Thank God he was not talking about Huddersfield. It comes down to the fact that a significant percentage of people in our country have inadequate training and skills, and we need to work across parties to do something about that.

I want to share some of my experiences. One of my last reports when I chaired the Children, Schools and Families Committee looked at the problem of those not in education, employment or training. We found that intelligent programmes on the ground which represented a positive response from local authorities that understood their local communities, and which also had good local skills training and good employers, could make a significant difference to the number of people gaining skills and getting into work. There are good exemplars in this country, but some towns are more fortunate than others in retaining their manufacturing and employment base.

Photo of Jane Ellison Jane Ellison Conservative, Battersea

I rise merely to express agreement with the thrust of the hon. Gentleman’s argument on skills, and in particular to say that London is the classic case that supports it, because it has created hundreds of thousands of jobs over the past decade or so, yet large numbers of our young people have been left behind. That points to a much more deep-seated problem.

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield

That is why I spoke of our experience in the United Kingdom, which has good exemplars of significant improvement, but the best example that I found in Europe was in the Netherlands, which has a much tougher welfare policy than us. It is difficult for someone to get any welfare payment there until they are about 27. If they are not in work, they have to be in education or training, and if they are not in education or training, they do not get a welfare payment. We in this country seem to have accepted over a long period that significant numbers of young people, many of them with low skills, can be left in a shadow land—a marginal existence—on housing benefit and a little benefit for subsistence, and that they can live in this half world as half citizens for a very long time.

During one of my shadow ministerial jobs a long time ago—it was so long ago that I was a deputy to Roy Hattersley—I became something of an expert on crime and criminality. It is fascinating that if young people do not get into crime before they are 25, they do not at all; unless they bump off their partner for the usual reason later on, they do not get into criminality. The sensible policy on deterring young people from crime is to spend money on doing so early on. We can apply the same analysis of our society to unemployment. What we hate most is intergenerational worklessness, where three generations of a family have never known anyone work.

Photo of Barry Sheerman Barry Sheerman Labour, Huddersfield

No, I am sorry.

Intergenerational worklessness is a dreadful scourge. We all see it on some of the estates that we represent, and we hate it, so what are we going to do about it?

We have to say, on an all-party basis, that nobody under the age of 25 should be unemployed. We should not let them down in that way. Every young person under the age of 25 should be in work, in training, or participating in a programme; I do not care if we call it the new deal, the new new deal or the Work programme. They should be in a routine of getting up in the morning, going to work and doing something creative, whether it is in the community or helping in hospitals. We have got to the stage where we are moving very quickly towards the participation age rising to 17 or 18. Neither the former Government nor this Government have seriously tackled what young people with a lower level of skills are going to do in the extra year. That is a challenge for those on both sides of the House. I once said that to my right hon. Friend Mr Brown, but he got very cross with me for pointing it out, and asked what I wanted for these young people. I said that I wanted for them what rich people have—a personal trainer and a life coach—and he thought I was mad, but never mind.

I want to abolish unemployment for those under 25 and to get people out of that routine. I want to get rid of intergenerational worklessness, with a fundamental change in how we allow people to live that half life. My plea is that across the parties we should agree on a programme that gives all our young people the opportunity to live a full, democratic life.

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley 5:22 pm, 28th November 2012

It is a pleasure to follow Mr Sheerman. I think that I agree with most of what he said. I certainly agree that on this issue we need cross-party consensus and not political point-scoring. It is a pity that his Front Benchers did not take note of that in drafting their motion and chose to play politics instead of dealing with the substance.

Whatever our concerns about the performance of the Work programme to date, it beggars belief to suggest that people would have been better off left to their own devices, with none of the support that it has been providing, and that more of them would have found work in the difficult economic climate we have seen over the past 18 months. That is a grave insult to the providers and their employees who have been working hard trying to help people to have been unemployed for a long time. We have to give the programme somewhat more time than its first year before we draw any real conclusions about its success. We can see from the data published by the trade association that its performance is improving, and that is consistent with what I have seen on the ground in my constituency.

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

The problem I have with quoting the additional figures that have emerged from the trade association is that for the past year and a half we have been lectured on the fact that we could not have any interim information about how the Work programme is going because the data had to be properly evaluated and reliable. Yet because the published data do not suit the Government, we are suddenly having all these unverified data thrown at us to tell us that things are not really how we think they are. Why was all this kept secret?

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

I am not sure that I am the best person to answer that question. However, when we have a programme that is running for seven years, with people being put on to it for two years, we cannot draw many conclusions from the data in the first few months of its operation. A decent period will have to elapse before we get some reliable data that will have some meaning and can be used to look at trends. I see why we have official data to the end of July this year, but data since then would have more relevance if we also had data from the first three months of the programme.

No Member of this House seriously disputes the need to provide those with most barriers in their way with the additional support that they need to get back to work. Many such people have been out of work for a long time and will need help with serious issues in order to build up confidence and have any chance of getting back to work. To be fair, the scheme of the previous Government towards the end of their time in office was not radically different from that introduced by the current Government. This Government have accelerated the change, introduced a more consistent programme over the whole country and brought the strands of different schemes into one programme, but the direction of travel is not entirely different. In fact, many providers involved with the previous scheme are also involved in the current one. It is not sensible to say that the Work programme is doing the wrong thing and is a terrible idea, and that its support is completely wrong. Where does that leave us? Surely it is not the Opposition’s policy to have no support at all for the long-term unemployed.

Photo of Liam Byrne Liam Byrne Shadow Secretary of State for Work and Pensions

The hon. Gentleman is generous in giving way. Our point is that there is not enough fuel in the tank. I am sure he is as worried as I am that on current performance, the Work programme may not hit its second-year target to get 27.5% of those on the programme into a long-term job. The Opposition motion says that we should start putting more fuel in the tank by providing extra resources for young people.

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

One problem of the Work programme is that the year we are looking at contained the second part of the double-dip recession. We all accept that it is hard for anyone to find work in a recession, let alone those who have been out of work for a long time and have the most barriers to overcome. We hope that as the economy gathers strength in the coming year, that will give the Work programme even more chance of success in meeting its second-year targets.

Photo of Margot James Margot James Conservative, Stourbridge

My hon. Friend draws attention to some of the similarities between the Work programme and what went before. Does he agree that one key difference is the remuneration paid to Work programme providers? They get a £300 attachment fee when someone is referred to them, but do not receive further remuneration until a candidate has been in work for six months. That provides a huge incentive—along with the fact that some applicants will have their benefits docked if they do not co-operate—and makes the Work programme a greater success than what preceded it.

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

I am grateful to my hon. Friend. The motion suggests that people would have been better off without the Work programme and with no extra support, but the support it provides is valuable and not entirely different from that provided by providers in previous programmes. Payment by results, which I will come to, provides a far greater incentive to providers to get people back into work and, most importantly, not just to start a job but to find a sustainable position where they can remain for a long time. That is a key part of the programme.

The Work programme also fixed the problem of providers going for low-hanging fruit and getting back into work those who could do so most easily, while not placing quite the right focus on those who were more challenging. Remuneration for the Work programme means there are far more incentives to focus on the harder parts of the cohort.

Like my hon. Friend Margot James I have visited providers in my constituency—A4e and Ingeus—and I have seen their work and how they go about it. Importantly, somebody does not come through the door on the first day and start applying for jobs on the second; there is a long period of working out a person’s needs, what support they have, the training they need, and building their confidence, before they start applying for jobs. One does not expect providers to get people into work in the early months of their referral, which is why there is a problem with the statistics. We are looking at numbers of people who have been in work for six months of a programme that has existed for 13 months during a double-dip recession. The providers might not have even tried to get some of those people into work at the start of the programme—it is not a fair measure. Providers in my constituency are doing great work and the support they provide is valuable. I commend them on that, rather than saying that their work is worthless or worse than nothing.

No one would pretend that yesterday’s results were anything other than disappointing and concerning. We all wish that progress was quicker, and the whole House wants to get people back into work to improve the quality of their lives and for the sake of the taxpayer. However, the Work programme is a seven-year programme that gives individuals a two-year programme, and it is unfair to judge it on the basis of its first-year performance. We should look in a year’s time when the first cohort has spent two years in the programme. Let us look at the outcomes after the full two years, and see how many people are in work at that point.

Photo of Ben Gummer Ben Gummer Conservative, Ipswich

My hon. Friend is entirely right that the figures are disappointing. I am sure that he, like me, has had successful cases in his surgery. Two people who came to my surgery went through training schemes under the previous Administration—one of them had been unemployed for eight years—but found a job through the Work programme, so it is having an effect in individual cases. It is certainly making an impact in my constituency, as I am sure it is doing in his.

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

My hon. Friend reinforces the point that it is utterly unreasonable to say that the scheme is worse than doing nothing.

Providers who cover my constituency have told me that they had only a short time to prepare before they started work. They said they had not worked in the east midlands before, so had not only to find staff, but to build links and form relationships with employers to convince them to take people in more challenging situations. Expecting brilliant results at the start of the programme does not work.

The latest data show that 29% of first referrals from June 2011 have now had a job start, and that 37% of under-25s have had a job start. Those are not terrible results; they are encouraging. In Amber Valley, the results are better than average: 4.2% of those referred have met the target of spending six months in a job. I accept that that is less than the 5.5% target, but it is well ahead of the national average. Amber Valley is generally performing well. Total jobseeker’s allowance claimants are down 21% since the election, and JSA claimants under 25 are down 24%. Claimants per vacancy are down from 6.2 to 1.5. That is not a disastrous situation, but a sign that things are going in the right direction. I sincerely hope it continues—[ Interruption. ]

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chairman of Ways and Means

Order. I know a new Member will speak shortly, but could we just have a little quiet so we can hear Mr Mills?

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

Opposition Members clearly do not want to hear the truth of my argument.

The Select Committee on Work and Pensions report from last year, which was produced before I was a member of the Committee, gave the scheme a broad welcome, but one concern was the impact on smaller providers that are subcontractors to the main providers. I wholeheartedly endorse payment by results, but it can make things quite hard for organisations that are not large businesses with strong balance sheets, which can fund the gap. Given the delays in system, some of the smaller providers have found their cash flow squeezed and are struggling to survive. All hon. Members value their innovative ideas and the extra local knowledge they can add to the scheme, so will the Government, after seeing the results, find a way of reviewing how small providers are funded and ensure they can survive the transition period and continue to provide their valuable work?

Overall, there are some concerns with how the Work programme has started. We would prefer the numbers to be a lot better, but there are encouraging signs. The programme can be a success and performance is going in the right direction. I hope that, in a year’s time, we are talking about the great successes of getting the most challenged people—those who have been out of work for a long time—back into jobs, which will improve their lives and the situation for the taxpayer.

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chairman of Ways and Means

Order. Before I call Lucy Powell, I remind Members that there will be no interventions because it is a maiden speech.

Photo of Lucy Powell Lucy Powell Labour, Manchester Central 5:33 pm, 28th November 2012

Thank you very much indeed, Mr Deputy Speaker, for the opportunity to speak in this important debate. It is a huge privilege, if a little daunting, to be making my maiden speech in the House today as the new Member for my home city of Manchester.

I should first like to pay tribute to Tony Lloyd, not just because it is the custom, but because he is a brilliant man and a very dear friend of mine. Tony was first elected to this House in 1983 as the hon. Member for Stretford, taking over as the Member for Manchester Central in 1997 following boundary changes. Through his 29 years’ service as an MP, he always remained absolutely rooted in his constituency and home city, providing a first-class service to his constituents and making a real impact on the quality of their lives by ensuring they got the support, services and investment they so badly needed.

Tony married that local commitment with a distinguished and long parliamentary career, particularly in the field of foreign affairs. He was also extremely popular among his colleagues, becoming the chair of the parliamentary Labour party for six years. It is a tricky position to hold at the best of times, but Tony managed to achieve it under three different party leaders.

Like me, Tony is a proud Mancunian, but I have to say that there was one area on which we disagreed. Thankfully, the passing of the baton from Tony also marks a new era in Manchester: the passing of the Championship from the red side to the blue, and long may City’s reign continue. I know Tony will be sorely missed in this place, but I am sure that the whole House will join me in wishing him well in his important new position.

In preparing for this speech, I also looked back at the maiden speech of Tony’s predecessor, Bob Litherland. Bob was another proud Mancunian and he was also elected in a by-election, just after the 1979 general election. In his maiden speech, like me he felt compelled to speak early on in a debate on the effects of the Tory Government’s Budget, as it had been a big issue in his campaign. He said:

“The people of Manchester Central will be hit hardest, because they are the people who need the facilities and who cannot afford any more cuts to their standard of living.”—[Hansard, 24 October 1979; Vol. 972, c. 471-4.]

His words would have been just as relevant in today’s debate.

As with by-elections today, turnout was relatively low in Bob’s election. However, the turnout in my election, Mr Deputy Speaker, I am sorry to say, was very low indeed. There were a number of difficult and complicated factors at play, but still, we in this House should not be satisfied with falling voter engagement and growing apathy. The previously lowest turnout in a by-election was in the Leeds Central by-election of 1999, a record that my right hon. Friend Hilary Benn was quick to relinquish when he phoned to congratulate me the next day.

As the granddaughter of Irish immigrants on one side and a mining family on the other, my family are hugely proud of my achievements here today. I was born on the day of the second general election of 1974. My dad would not take my mum to the hospital until after our local polling station in Moss Side had opened, where he duly declared that my mum was in labour and voting Labour. Some thought this marked my future destiny, but my beliefs and conviction were actually shaped by the fact that it would be nearly 23 years before Labour would next win a general election.

Growing up in Manchester in the ’80s, I was surrounded by social injustice and lost opportunity. At school, we shared old and poor resources, leaving many pupils behind. Our city was dying, and to succeed people needed to get out of there, and fast. Members of our families died prematurely, or suffered unnecessarily. Too many of my school friends lived in cramped and poor homes.

The Manchester of today is a very different place indeed. An urban renaissance, begun by my hon. Friend Graham Stringer when he was the leader of the council and then realised by Sir Richard Leese, was accelerated by the investment and measures brought in by the previous Labour Government. Manchester Central now boasts one of the best hospitals in the country, the Manchester Royal infirmary; all our secondary schools are new or rebuilt, raising attainment significantly; we have a network of Sure Start centres, which we are keeping open; housing stock has been transformed with major redevelopments in Beswick, Ardwick, Ancoats and the city centre; areas formerly associated with gangland culture, such as Moss Side and Hulme, are unrecognisable and fast becoming highly desirable places to live; and, perhaps most importantly in the context of this debate, we have a city that is growing, attracting new businesses and residents, where public and private work together to generate jobs and growth.

Nowhere epitomises that partnership more than the Sharp project in Newton Heath. In the shell of an old factory now sits a buzzing and successful digital media hub, housing tens of digital start-ups. Sharp has recently announced a major expansion into West Gorton, creating 400 new jobs, as well as a new apprenticeship scheme for local young people. Cities around the world are trying to emulate this success. The private sector alone has not, and could not, ever spontaneously create such an environment. It was local political leadership, working in partnership with the private sector, that has delivered jobs and growth.

It is this vision and partnership that ensures Manchester pulls above its weight in other areas too. Manchester’s audacious bid for the Olympics, followed by a successful bid for the Commonwealth games in 2002, has left a lasting legacy for my constituency, and indeed for the rest of the country. The national cycling centre, a world-class aquatic centre, sports city and, now, the only indoor competition BMX track in the world are all in Manchester Central. They are all used by local young people and they all contributed to Britain’s recent success in the Olympics.

For all that transformation and recent achievement as a city, however, challenges remain and, I fear, might get worse over the coming years. A child born in Manchester Central is still likely to live five years less than the UK average; 50% of children in Manchester Central live in poverty; long-term youth unemployment is high and rising; too many families are in underemployment with not enough hours to make ends meet; wages are stagnant and bills getting higher; access to quality, affordable child care is getting harder; the vulnerable and disabled are seeing their services and support cut; and places such as Collyhurst, Clayton, Newton Heath and Openshaw are still in desperate need of regeneration.

In summary, Manchester Central has the third-highest level of child poverty in the country; the fourth-lowest life expectancy; and the 10th-highest level of unemployment in the UK. And yet Manchester received the fifth-worst local government settlement last year, resulting in £170 million of cuts over two years, compared with no cuts in other much more affluent authorities. It is this sort of unfairness that makes my constituents really angry. But, for all these depressing statistics, Manchester Central is a fantastic constituency with many diverse communities, all of which are united in their pride for the city and themselves. They do not want handouts or sympathy—just a fair shot and a fair playing field. Manchester has great culture, sport and history, too, and I am sure the whole House will agree that Manchester Central has the best conference venue in the country.

So, next time my hon. Friends are in Manchester, I recommend they venture out of the secure area to explore what Manchester has to offer: cafes and bars in the northern quarter, Chinatown, the gay village perhaps, museums, galleries, shops, music and much, much more. I am incredibly proud to be the Labour and Co-operative Member of Parliament for Manchester Central, the modern-day home of the co-operative movement, and I am proud to be Labour’s first-ever woman MP for my home city. I will do my very best to stand up for Manchester and all of its communities in the House and beyond. Thank you very much.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy 5:42 pm, 28th November 2012

It is a great pleasure to follow the maiden speech from Lucy Powell. I agree with much of what she said about Manchester—I can certainly attest to the fact that the city has been renewed dramatically—but it is fair to say that my son would not support the same football team as she does, although the fact that he supports a team in Manchester, rather than Liverpool, would probably go down well with the Manchester electorate.

It is a great pleasure to contribute to this debate. This issue constantly comes back for debate and is rightly being scrutinised, because the Government’s investment in the Work programme is probably among the most important things the coalition is doing. It is right that the Opposition scrutinise how the Work programme operates, but this debate is premature and the motion is not based on any reality that I recognise. I certainly want to challenge some of the assumptions—lazy assumptions, I would argue—behind the debate.

As the Secretary of State made clear, the Labour Front-Bench spokesman provided no context for the debate. I reiterate that, despite the difficult economic circumstances that the coalition is dealing with, we have seen sustained employment growth. We have the highest number of people employed in this country ever, yet we get no recognition of that from the Opposition. I almost think they begrudge employment creation in the private sector under the coalition. Nothing typifies Labour’s behaviour better than the way it constantly dismisses some of the jobs being created by the private sector. As I have said before, if I ever hear another Labour Member talk about jobs that are nothing more shelf-stacking, I will finally blow my top.

Photo of Nick de Bois Nick de Bois Conservative, Enfield North

Is it not also worth highlighting the fact that Jobcentre Plus has a successful record of getting those who have been employed for less than one year into work? Not only is that an achievement that we should celebrate, but it has the effect of leaving a tough challenge for those in the Work programme who are finding it hardest to get placed.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

That is an important point. I have visited Jobcentre Plus in my constituency to pay tribute to the work it is doing. Jobcentre Plus has been successful in getting people back into employment quickly, which means that the Work programme providers are not dealing with the low-hanging fruit, but with difficult-to-place individuals who need support and guidance over a longer period than Labour is willing to admit. It is also important to say that a job is not just a job, but an opportunity to change one’s lifestyle, gain respect in one’s family and community, and show that one can make a contribution.

Photo of Jane Ellison Jane Ellison Conservative, Battersea

The rather dismissive attitude towards jobs in retail that my hon. Friend has described drives me to distraction as well, particularly as I am co-chairman of the all-party retail group. Retail is an industry in which a great many people have started at the bottom and, from that chance on the shop floor, have risen to the very top through their application and talents. There can be no more meritocratic industry, so he is quite right to castigate the Opposition for being so dismissive.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

Indeed. My experience of going around Tesco’s partnership stores, for example, has been quite inspiring. I found somebody who had been unemployed for eight years and was given an opportunity to work in the bakery section; 18 months later she was the manager, and famously said, “They’ll be carrying me out of here in a box, because I’ve been given an opportunity.” That is the reality of what creating a job and helping people into a job is all about.

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

The points the hon. Gentleman makes about the importance of employment are clearly correct. The reason I have any criticism of jobs in the retail sector, for example, is not because they are not important jobs, but because people are increasingly being offered short-hours jobs, on zero-hours contracts and with little security, which simply does not work for those trying to organise child care. That is the problem.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

I disagree on the whole. Quite often the current restriction means that when people go over a certain number of hours, they are penalised. That will be dealt with when we introduce universal credit. What I have found is that there is a feeling out there that people are still being penalised for wanting to work more. Universal credit will certainly deal with that, which is an important change that is required.

We have heard a lot in this debate—from the Opposition Front-Bench spokesman and some Opposition Back Benchers too—about youth unemployment. Obviously it is absolutely problematic if too many young people are not working, but between 2004 and 2010, youth unemployment in my constituency of Aberconwy increased by 192%. If I recall it correctly, I think the Labour party was in government at that point.

Photo of Rehman Chishti Rehman Chishti Conservative, Gillingham and Rainham

Does my hon. Friend agree that a number of councils out there are working in partnership with Jobcentre Plus? They include Medway council, which reduced youth unemployment from 1,600 to 1,200 between April and October. That clearly shows that where there is the will, the Government’s policies, with local councils working in partnership with Jobcentre Plus, are reducing youth unemployment.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

Indeed, and that example should be replicated in other parts of the country, where partnership working can make a difference.

Despite a 192% increase in youth unemployment in my constituency of Aberconwy during the last six years of the Labour Government, we have seen a 21% reduction in youth unemployment since this coalition came into play. Twenty-one per cent is not enough—the fact that I still have young people not working in my constituency is unacceptable—but we should recognise the success in getting young people back into employment. Every young person who is not claiming unemployment benefit or lying around doing nothing is a success story as far as I am concerned. When Labour Members talk about youth unemployment, it is important that they consider their performance in government.

However, I suspect that this debate is more about the Work programme than about the general context. I have talked about the general context, but it is important to bear in mind that the Work programme is the Department’s flagship programme, and a lot rests on its success. My concern is that this debate is premature, because it is difficult to look at a long-term programme—which is looking at paying people based on their performance over the long term, not the short term—and say after a year that it is failing. Even going on the figures that came out yesterday, it looks as though the programme is doing exactly as it was supposed to be doing. They show that 56% of Work programme starters in June 2011 are no longer on benefit, that 30% of them have been off benefit for 15 weeks and that 19% have been off benefit for 26 weeks.

Photo of Paul Flynn Paul Flynn Labour, Newport West

The results that we heard about yesterday cannot be compared with anything else that ever happened. It is probably true that if the Government did nothing at all, there would be a better outcome. Can we therefore conclude that the best we can expect from the Government for the next two and a half years of their miserable existence is a long period of inactivity?

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chairman of Ways and Means

Order. We have a lot of speakers to get in, and we need shorter interventions. Otherwise, Members are going to be disappointed.

Photo of Guto Bebb Guto Bebb Conservative, Aberconwy

Paul Flynn seldom sees the bright side of life. The truth is that I am not willing to see 31,000 job outcomes so far as immaterial. That is something that we should be proud of. To be perfectly frank, if that is failure, give us more.

The Opposition seem unwilling to accept that we should be concerned about value for money for the taxpayer. Obviously, I am not going to mention the comment made by Mr Byrne about our financial position, but the Government should be aware of getting value for money for the taxpayer. The figures that I have here show that some of the previous employment support projects have not been particularly successful in that regard. The flexible new deal cost £7,500 per job created, and £770 million was spent. The employment zones cost £993 million, with an average spend of £7,800 per job. The new deal for young people—which was successful, it has to be said—cost £3,300 per job created. At the moment, the Work programme is coming in at about £2,000 per job created. I think that that is a sign of success. Even though it is still premature to look at the outcome figures, we should take a great deal of comfort from the fact that it is giving that level of value for money.

The proof of the pudding is in visiting the Work programme providers in our own constituencies and localities. I have visited the providers operating in the county of Conwy, and I was very encouraged by that visit. I found teams of dedicated members of staff, but an organisation that was taking a huge financial hit because of the performance-related concept that the Department for Work and Pensions insists that the Work programme providers deal with. Interestingly, however, none of the providers that I spoke to suggested that they had any intention of leaving the programme. That was because they could see that they were going to be successful as time moved on. Indeed, separate data published by the Employment Related Services Association, the trade association that speaks for the Work programme providers, show that job starts have increased in the months since yesterday’s figures were collated. That is reinforced by what I have been told in my constituency.

Nothing gives a feeling for the importance of the Work programme better than talking to the participants. They feel that they are finally being taken seriously. They are getting support in areas such as presenting themselves and putting together a CV. Even more impressively, they are getting support with transport to take them to job interviews and training opportunities.

On the visit that I made, I was also impressed by the flexibility of the Work programme to deal with the local issues affecting that particular part of the world. One of the key issues for the Work programme providers in rural north-west Wales is the need to be more flexible in supporting people into self-employment. The original contract that the provider signed included a comparatively low number of members of staff dealing with self-employment. However, it became apparent in no time at all that self-employment was going to be a key deliverer of outcomes in a constituency such as mine, and the contract was flexible enough to allow the provider to up the number of people being supported into self-employment.

A great example of partnership working in that context was the business support structure of the Labour Welsh Government giving its full support to the Work programme providers who were helping unemployed people who wanted to start their own businesses. So the flexibility is there, and the outcomes will potentially be there in due course. What I am seeing is work in progress and a programme that is aimed at ending our long-standing dependency culture. That needs to be targeted and dealt with.

When I visited these Work programme providers, the most impressive thing was that a number of the job outcomes highlighted on the whiteboards were job outcomes in local hotels and local restaurants. That is important in a constituency such as mine, which is heavily dependent on tourism, because previously over the past five or six years—and certainly from 2003-04 onwards—the jobs created in the leisure and hospitality sector in my constituency were being filled by hard-working individuals from eastern Europe. The wonderful thing about the Work programme is that we are seeing evidence that those jobs are now being filled by people living in my constituency and being willing to take the opportunity to work.

Several hon. Members:

rose —

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chairman of Ways and Means

We are going to have to reduce the time limit to seven minutes, as I want to allow all Members to participate. It would be helpful if we had fewer interventions.

Photo of Geraint Davies Geraint Davies Parliamentary Assembly of the Council of Europe (Substitute Member) 5:55 pm, 28th November 2012

It is a pleasure to follow Guto Bebb and more especially to follow the newly elected Member, my hon. Friend Lucy Powell, who made a magnificent speech, in sharp contrast to the ragbag of rubbish that we heard from the Secretary of State, who again painted the false picture that all the problems were inherited from the Labour party and that everything is hunky-dory now.

The reality is, of course, that under the previous Labour Administration we had sustained growth to 2008, after which there was a financial tsunami, yet we kept growth going through the fiscal stimulus. Two thirds of the deficit in 2010 was due to the banking community and only a third was due to pump priming, which kept us on the move.

What did we see then? The Conservatives arrived, deflating consumer demand by immediately announcing half a million job cuts—and we have seen virtually zero growth since. Growth is the prerequisite to getting the deficit down. It cannot be done simply by cutting and cutting, particularly by targeting the most savage cuts at the poorest, which is precisely the strategy of the Tories and their Liberal accomplices.

We have heard of figures purporting to show more people going into work, but when they are analysed, they show that the number of people in part-time work is going up. There is a transition from full-time to part-time work. The people with the least are getting less—again, deflating consumer demand—and people with less spend more of their income. In the time available, I want to answer the question how the measures for the restructuring of the welfare state impact on the effectiveness of the generation of jobs, growth and getting the deficit down, and how they impact on fairness, by hitting those who are least able to afford it.

Some of the most profound changes affect housing benefit. Particularly despicable, of course, is the reduction of housing benefit for people under 25, 45% of whom are with children. The question is whether this reduction in housing benefit, sometimes thrusting people into homelessness, helps or hinders them from getting a job, so that they can care for their family and provide tax for the Exchequer—or, rather, does it throw them into a situation from which they cannot get work again because they are, frankly, out on the street?

A couple in Wales were highlighted recently. The man had worked since he was 15 for nearly 10 years continuously, but he now faces six months of unemployment. His partner is now redundant, so under the new legislation, they face homelessness. What chance will they have to secure employment and what sort of springboard for life chances will their child have? Very little, I would suggest.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Human Rights)

Is the hon. Gentleman experiencing in his constituency, as I am in mine, a greater demand from constituents for applications for housing benefit at a time when there is less money to go round? Does that not highlight the issue for the Government? They must provide more money for benefits and for housing benefit in particular.

Photo of Geraint Davies Geraint Davies Parliamentary Assembly of the Council of Europe (Substitute Member)

We are seeing the perverse irony that the welfare bill is going up and up, with more people going into dependency, because the environment for job creation is not there. Meanwhile, the Government’s one-string solution is simply to give people less and less, when the focus should be on how to create new jobs, so that we can help people to get and sustain a job.

Another example—other than the targeting of under-25s who tend to have children and the escalation of child poverty into intergenerational poverty—is the empty bedroom tax. This is another horrendous idea whereby poor people—they are poor by definition as they are on housing benefit—who have an empty bedroom will lose about £7.50 a week, or £15 if they have two empty bedrooms. For example, a couple with two children, one of whom wants to go to university or get a job, will clearly have an incentive to say, “Don’t go to university,” or “Don’t leave home to get a job”—“Don’t ‘get on your bike’”, as Lord Tebbit would have it—“because, if you do, we shall end up being taxed £7.50 a week.”

A man who came to my surgery a couple of weeks ago told me that he was receiving disability living allowance, that he had a second bedroom—he used it for painting, as it happens—and that he did not have a job. Indeed, he was not a person who could have got a job. After he had paid his utility bills and all the rest, his disposable income was £20 a week. He will now lose £7.50 as a result of the bedroom tax, and next April the Government will cut the council tax rebate by 20%, which amounts to about £5 a week. His disposable income will then be down to £8 a week, which will have to cover his food, clothing and leisure.

This despicable and, in my view, socially criminal activity generates very little money from those who can least afford it, and one of the by-products will be mass homelessness. I have been a leader of a local authority, and I know that local authorities usually build family-size housing. Someone living in a two-bedroom flat or a three-bedroom house that ceases to be full when the children leave home will lose housing benefit and will then be evicted if he or she goes into arrears. Where do such people go when a local authority has not built enough one-bedroom accommodation because it is supposed to cater for families?

What if a child wants to come back from university, or to visit the family? What if there is a split in the family and the child needs to move from one place to another? The bedroom tax will cause massive disruption to communities in areas like mine throughout the country and disfigure the opportunities for us to create new jobs and get back on a sound track towards economic recovery.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire

Will the hon. Gentleman not concede that better utilisation of the social housing stock and an increase in its capacity will give us an opportunity to reduce homelessness?

Photo of Geraint Davies Geraint Davies Parliamentary Assembly of the Council of Europe (Substitute Member)

I have been the housing chair for London and for Croydon. I know that it is possible to devise strategies involving incentives to encourage people to move to smaller homes—and, of course, as people die over time, housing is recycled in any case—but the suggestion that a group of people in social housing should be evicted once their children have grown up and that, because suitable housing does not exist in their own communities, they should be moved around is not only despicable but completely counter-productive. It is economically insane as well as socially immoral.

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

I am sure my hon. Friend agrees that this is not an attempt to ensure that housing is distributed more evenly. It even applies to people with disabilities. Couples who have to sleep apart for medical reasons will be suddenly told that they have too big a house. It is a draconian measure.

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chairman of Ways and Means

Order. There is a danger that those who wish to make a speech later will not be able to do so. I am sure that the hon. Lady understands that if she does not have an opportunity to make a speech herself, it will be her own fault.

Photo of Geraint Davies Geraint Davies Parliamentary Assembly of the Council of Europe (Substitute Member)

As has already been said, the tax affects those with particular problems such as disabilities. If one half of a couple is ill with flu and, because the couple are allowed only one bedroom, that person infects the other one, it will not help the other one to work. None of this has been thought through. The idea seems to be that such people live in council houses and receive benefit and that the Government will sort them out by cutting it, but what they are doing is preventing them from working and making their contribution.

The Government also say, “Let’s cut working tax credit.” Working tax credit was an ingenious device. If I were starting a small business—indeed, I have started and run small businesses—I might be able to give someone a job paying £12,000 a year because of the way in which the business worked, but that person might not be able to afford to work for less than £15,000 because of, for instance, child care costs. The Government stepped in and stumped up the difference. What did we end up with? A growing company and a job, instead of a company that was not growing and a person stuck at home. That is the economic logic of working tax credit, but it is being cut, so part-time workers are losing

£3,750 a year if they do not work for 18 hours and go down to 16 hours, as there is not enough work to do. We need to evaluate keenly whether some of these nasty cuts deliver economic disincentives to working and are therefore counter-productive in getting the deficit down.

There are ways ahead, including targeted investment involving universities and various job programmes. Other Members have spoken of the effectiveness of the current scheme, but, as I mentioned earlier, the Prime Minister has confirmed the statistic in our motion, namely that only 19,000 people out of 800,000—2%—have gone into full-time work. That is in sharp contrast to what the Secretary of State said earlier, so someone must be wrong. We should refocus, by making sure that the changes do not disrupt job creation and that they are fair and put us back on track for a strong economy and a fair society.

Photo of Priti Patel Priti Patel Conservative, Witham 6:05 pm, 28th November 2012

I welcome this debate, as it gives us an opportunity to highlight the positive steps that the Government have taken to get people off benefits and back into work. It is extraordinary that the Opposition should want to hold this debate given that many of the problems that the Government face in tackling unemployment are due to the Labour party’s failings when it was last in power. Labour left a legacy of more than 3 million workless families, with youth unemployment of about 1 million—the figure rose by about 40% from 2004—and that was when the economy was growing. Millions of people had never worked as Labour confined people to the scrapheap and kept people on disability and incapacity benefits even though they were capable of working. Labour also imposed heavy tax and regulatory burdens on businesses, which stopped them employing people and creating jobs.

I am sure that we all remember the following remarkable statement by the previous Prime Minister, Mr Brown. Once upon a time, he spoke about British jobs for British workers, but his policies—especially on open-door immigration in respect of eastern Europe and accession states—effectively left a generation of young people struggling to compete with their international competitors in our domestic labour market. That policy denied hundreds of thousands—if not millions—of British people jobs.

Labour also left that generation of young people struggling to compete with their international competitors because our school standards fell. In 2000, England was ranked 8th in the world for maths, 7th for literacy and 4th for science. By the time Labour left office, we had dropped down the international league tables to 24th for maths, 17th for reading and 14th for science. Education is very important for young people’s job prospects and this country’s ability to attract inward foreign investment and compete for jobs internationally, and Labour’s neglect of education has left Britain far behind in the global race for jobs, investment and growth. The current Government are trying to turn that around.

I applaud the Secretary of State for his commitment to changing the culture in this country. Ministers are putting an end to the “something for nothing” culture that blights our economy and saps our hunger to compete in the global race. It also undermines many of our communities and does so much to damage aspiration—the concept of social mobility and moving onwards and upwards in life. Over time, reforms to education and welfare will improve the prospects for young people who are currently trapped in challenging situations.

My constituency has some areas of substantial deprivation and poverty, yet youth unemployment has fallen by 6.6% in the last year—and it would be nice to hear a few positive words of congratulation from Opposition Members on such achievements. We should do whatever we can to support our young people to get into employment and to enhance their skills, and we should create opportunities for them not only in the labour market, but through apprenticeships and other innovative schemes with small businesses.

Many young people in my constituency are securing apprenticeship places, and the Government should be congratulated on doubling the number of adult apprenticeships to about 650,000 this year, from a figure of 300,000 inherited from the previous Government. If we include apprenticeships for 16 to 18-year-olds, there will be close to 900,000 apprentices in this country this year. Apprenticeships help people to learn new skills, to get a foothold in the labour market and to increase their confidence by having work experience.

Unemployment is, of course, still too high. No one likes the fact that it is high, but we should remember that the Government are also reducing the number of economically inactive people, by helping to get those who were left on the scrapheap by Labour into meaningful employment. Even in these challenging economic times, Britain is expanding its work force and businesses in my constituency are eager to grow and create more jobs, and they are doing so.

About 83% of jobs in my constituency are based in small and medium-sized enterprises—a figure considerably higher than the national average. Those firms are local wealth creators, and they will do their utmost to support local jobs. Many of them are opening their doors to young people, again giving them the opportunity to get off benefits, get work experience and increase their skills. That is why it is so important that the Government continue to focus on getting rid of business regulation, so that small businesses have a greater opportunity to invest and grow.

Unlike the Labour party, which tried to force small businesses to pay for the deficit by increasing all sorts of taxes and regulatory burdens on them, this Government understand small businesses and know exactly what needs to be done to cut red tape costs, which are still about £17 billion a year. That is equivalent to the cost of Crossrail or almost two Olympic games; it is 11 times the apprenticeships budget.

I urge the Government to continue with all the positive work that they are doing. I know that Ministers value the private sector and the role that it plays in supporting employment and will do more in the months ahead to support the sector. I welcome the steps that the Government are taking to create jobs and enable our young people and unemployed to move onwards, off benefits and back into work. The employment prospects of my constituents are far greater and higher now than they would have been under a Labour Government.

Several hon. Members:

rose —

Photo of Dawn Primarolo Dawn Primarolo Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. To ensure that all Members can participate in this debate, I am reducing the time limit, with immediate effect, to six minutes.

Photo of Kate Green Kate Green Shadow Minister (Equalities) 6:11 pm, 28th November 2012

As others have said, the Work programme builds on a direction of travel that those on both sides of the House have been pursuing for a number of years. As my right hon. Friend Mr Byrne said, the difficulty is not particularly with the concept; it is that there simply is not enough investment in the programme to produce the outcomes we need. The problem is that a lot of over-simplification of the issues that long-term workless people face means that we are failing to address some of the real drivers of worklessness and are allowing ourselves to be carried away by some incorrect and pervasive myths.

The first myth, which I am sorry to say has been repeated again this afternoon, is about a culture of worklessness and three generations of households where nobody has ever worked. These households do not exist; researchers have gone out looking for them and they are not there. Priti Patel looks doubtful, but what is there are households that have experienced, over the generations, sporadic and insecure employment. As Joseph Rowntree Foundation research carried out in 2010 by Teesside university has shown, there is no evidence whatever of a pervasive culture of worklessness among these households. Actually, the opposite is the case; many of the people now accessing the Work programme are and have always been desperate to work, and they have a history of employment, although it has not been sustainable employment. It is really important that we address the true underlying causes of worklessness.

Secondly, we recognise that skills are important in enabling people to access employment and to progress at work, but it is important to recognise that when that low-income group of workless people move into work, skills are not particularly well correlated with a long-term improvement in their incomes and do not predict particularly strong labour market success for that group. A lot of difficulties remain in respect of how skills strategies do not improve people’s labour market prospects. Some of the initiatives being taken forward by the Government are going to miss the mark. Too many apprenticeships are being offered at level 2, and we need to increase access to apprenticeships at higher levels. We are seeing a reduction in employer levels of training—they are down to low levels not seen since 1996. Poor-quality jobs also inhibit the demand for skills. Even if we upskill our work force, the skills investment will be wasted if the skilled jobs are not there for them to do. So one thing we have to invest in is the leadership and entrepreneurial skills of those who start up businesses and create jobs.

It is also important to understand that different groups in the workplace and in the labour market experience different barriers and obstructions to progressing at work. The Work programme has proved uneven in how some groups have done better and some have fared worse; interestingly, women and lone parents are shown to be doing quite badly in these early Work programme figures. That contrasts with a very strong record of success on lone parent employment under the new deal for lone parents offered by the previous Government. It is also deeply concerning that we still have an alarmingly high rate of unemployment among young black men—twice the rate among young white people—yet the Government are determined that the Work programme will be, in the words of Ministers, “colour-blind”. No specific measures will be taken to address the particular characteristics that affect that hard-hit group.

Equally, it is of concern—Guto Bebb, who is no longer in his place, referred to this—that many of the new private sector jobs that are being created are part-time jobs. Some people prefer part-time work, but a large proportion will are unable to access the full-time work that they want.

Photo of Kate Green Kate Green Shadow Minister (Equalities)

The Minister clearly has a figure that he wants to offer me and I will be interested to hear it. I have heard reports just this week that in one workplace, employers are refusing to extend hours of work and are holding people to part-time contracts because they know that they do not have the resources to pay more.

Photo of Mark Hoban Mark Hoban The Minister of State, Department for Work and Pensions

As the hon. Lady is so keen on evidence-based policy making, let me point out that the last unemployment figures demonstrated that 80% of the people working part time wanted part-time work, as it helps them get back into the labour market after years of caring for people and being off sick.

Photo of Kate Green Kate Green Shadow Minister (Equalities)

That might be the case, but the Minister must also recognise that 40% of the new private sector jobs that have been created have been part time. He needs to be confident that that part-time work will lift families out of poverty, because far too often the evidence suggests that it will not. It certainly will not do so under the newly structured universal credit, as the rewards for working will be for one full-time breadwinner earner, reducing the opportunities for a second member of the same household to undertake the part-time work that the Minister is suggesting is a stepping stone into more work. There will be very little incentive for people to take the part-time work that improves their labour market prospects and it is to be regretted that he is not grappling with that point.

We still have a real issue with pay in the labour market and gender segregation in the workplace. The apprenticeship figures over the past few months show that women are still going down the traditional routes of care, business administration and retail, where pay is lower, and that men are more likely to go into information and communications technology, construction or engineering, where pay is typically higher. We have heard very little today about how apprenticeship strategies will be developed to widen access at a higher level and to ensure much more diverse participation in industry sectors that offer the best prospects of work and pay.

Finally, we have all been guilty of focusing too much on what we might call the supply side of the worklessness problem, as if the difficulty was that individuals needed help to be got into work. We have not considered the demand side nearly sufficiently. The problem is not a lack of willingness to work, related to what the individual seeks to achieve; the problem is that the jobs are not available. They are not available at the rates of pay that enable people to support their families, in places that people can travel to and at the hours that match up with domestic and caring responsibilities. Also, frankly, they are often not permanent, which means that people repeatedly fall in and out of low-paid and insecure work. That is the labour market failure we ought to be tackling and that I am afraid the Work programme is so far failing to address.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire 6:18 pm, 28th November 2012

I share the Secretary of State’s incredulity that the Opposition would choose to debate these issues on an Opposition day, since they have no credibility at all. They snipe from the political sidelines despite the fact that the Government have created more than 1 million private sector jobs in just three years—twice as many as the previous Labour Government produced in 13 years.

The Opposition seem also to have forgotten the terrible legacy that they left, and they should once again be reminded of a few of the facts. For instance, in their 13 years in government in arguably favourable economic conditions—the boom before the inevitable bust—the number of households in which no one has ever been in work doubled to 350,000. That legacy will take many years to rectify, as children in those households will have no working role model and will probably come to believe that not working is the norm and that it is normal to subsist on benefits. As a Member of Parliament, there is nothing more depressing than visiting a school and asking a young child what they want to do when they finish school, only to be told, “I’m going to sit at home and watch television with my dad.” I never want to hear that again; it makes me want to weep.

Almost 2 million children are growing up in homes where nobody works. The UK has one of the highest proportions of workless households in Europe, and as I have pointed out, the working age welfare budget increased by a shocking 40% in real terms in 13 years of Labour government. That is another area where the Opposition failed to fix the roof while the sun was shining. However, we now have a Government who are determined to tackle the welfare dependency that developed under the previous Government and oversee the creation of sustainable, private sector jobs as we work to rebalance our economy. The Opposition do not want to hear the good news about employment statistics, but despite their sniping, real progress has been made. Some 1.2 million jobs have been created; employment is up by a net 750,000; and there are more people in work than ever, including more women employed than at any time in our country’s history.

One statistic that the Government should be particularly proud of is the fact that more than half a million people started an apprenticeship in the past year. In my constituency of North West Leicestershire, there were 420 apprentice starts in 2009-10, but 940 in 2010-11—a growth rate of 124%. I would like to mention the excellent work undertaken by community groups and charities to boost apprentice numbers. In my constituency,

Whitwick Community Enterprises has undertaken sterling work, reaching out to young people who are not even classified as not in employment, education or training—they have slipped under the radar altogether—giving them life skills in preparation for their return to full employment. I am delighted that that group has successfully applied for Government grants, which means that even more people in my constituency will be given the opportunity to learn skills for life. It should be extremely proud of that.

Opposition spokespeople have discussed the Work programme, and what they perceive as a lack of success. According to the Employment Related Services Association, the industry has helped 207,831 people back into work since the Work programme was introduced, and 29 in every 100 people who have gone on the programme since June 2011 have been supported into a job. Indeed, every month, more than 20,000 people are finding jobs through the Work programme, and the figures improve month on month, as many of my colleagues have said.

Many people would suggest that the Work programme is the biggest and most ambitious scheme of its type in the world. It is, and we should be positive about it. According to the Employment Related Services Association, the official statistics released by the Government yesterday represent a limited snapshot of performance in the early months of the programme, bearing in mind that it has been running for only a year. For someone to qualify as undertaking fixed employment they have to be on the programme for six months and employed for six months. Very few people fit those criteria, but I am assured by the providers that there is more good news in the pipeline.

The Work programme has helped 64,601 people into work. Over that period, unemployment fell by 49,000, so it is difficult to argue that it has not had an impact in reducing unemployment. I would have liked more time, but it was Labour that proposed the jobs tax—the increase in national insurance—which we reversed. It was under Labour that youth unemployment increased by 40%, and half a million of people were left on benefit facing marginal tax rates of over 80% if they found work. The Opposition are as credible on welfare reform as they are on the economy: no apologies, no new ideas, and still nothing to say.

Photo of David Lammy David Lammy Labour, Tottenham 6:24 pm, 28th November 2012

I am grateful for the opportunity to speak in this debate and to follow my good friend, my hon. Friend Lucy Powell. There are fewer and fewer Members of Parliament who come from their constituencies, and many people will look on her maiden speech with tremendous pride. You will be familiar with the St Pauls area of Bristol, Madam Deputy Speaker, so you will know that there is great affinity between areas such as Moss Side, St Pauls and, indeed, Tottenham.

Last week, together with my right hon. Friend David Miliband, I held an event with chief executives from the voluntary sector in north London. It was a jobs summit in which the London boroughs of Waltham Forest, Haringey and Enfield came together to discuss the urgent issue of unemployment in our areas, what we could do and what the voluntary sector could do and is doing. We talked, for example, about the Haringey jobs fund, where Haringey council itself is providing apprenticeships and subsidising jobs in a similar way to the future jobs fund that we ran when we were in government.

We also got down to neighbourhood level and looked at what Waltham Forest is doing with its Going the Distance initiative with problem families in that borough, working with families whose young people are caught up in gang violence. The aim is not just to deal with former gang members, but to help parents into employment in such communities.

We were conscious when we got together that we were meeting in Tottenham town hall which, throughout the 1980s and 1990s, had emblazoned on the front the figures for unemployment in my constituency. It is important to recognise when we have these debates in the House that there are many constituencies around the country that have seen successive appalling levels of unemployment, particularly youth unemployment, over many generations. I recall the deep recessions of the early 1980s and the recessions of the early 1990s that scarred so many in the community in Tottenham and in many communities across London.

I do not want to doubt the sincerity of Members on the Government Benches, who must recognise the urgency of youth unemployment. I particularly do not want to doubt because I have worked cross-party with the Secretary of State on these issues, but we must be very concerned that, since the Work programme began, the figure for long-term unemployment in London has risen by 30,000. If we look at young people in London, the figure has risen by 7,000. That is an increase of 420% since the Work programme began in our city. My constituency is one of those that still has high unemployment, fluctuating between eighth and ninth in the country. It is deeply unsatisfactory that the Work programme has benefited only 110 people in Tottenham, or 2.7%.

We cannot afford to have young people long-term unemployed, and often their parents long-term unemployed, in a constituency such as mine. We should take no great comfort from the zero-hour contracts that are being handed out, which do not allow people to budget for next week, for the future or for their benefits. That is causing chaos and hardship in our communities. We should not take comfort either from apprenticeship figures that are massaged by the number of people over 25 who are put on to apprenticeships.

When we look at the numbers, we see that a fifth of apprenticeships are in the retail sector, a third are in administration, and some do not last longer than 15 weeks or so. Are they really the apprenticeships that we understood them to be? The number of apprenticeships in London in construction is falling. The number in engineering is disappearing. Much of this goes to the heart of what growth is meant to be in our economy, and we should not take great comfort from the fact that we are, in effect, asking the retail sector to take up the slack because we are not doing the hard work to identify where growth is to come from in Britain.

We should also be deeply concerned about the number of people who are effectively the working poor—6 million at the last count, who are working, often on those zero-hour contracts, often in temporary or casual employment, who are not able to make their way and certainly do not have a living wage to provide for their family.

Two and a half years into this Government, we now have some data coming forward, and Opposition Members are genuinely concerned, because the scars are deep, and I say that as an MP who has seen those scars over successive generations. My hon. Friend the Member for Manchester Central, who made her maiden speech, will be all too aware of the repercussions in Moss Side if we do not get this right on this attempt.

Several hon. Members:

rose —

Photo of Dawn Primarolo Dawn Primarolo Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. The winding-up speeches will start at 20 minutes to 7. I will divide the remaining time equally between the two Members who are yet to speak, which means they have five minutes each.

Photo of Ian Lavery Ian Lavery Labour, Wansbeck 6:30 pm, 28th November 2012

I will obviously be very brief, Madam Deputy Speaker—I have no choice now.

Yesterday’s report on the Work programme was very revealing, and my constituents are absolutely horrified by the statistics on Wansbeck. The coalition’s flagship Work programme has created fewer jobs than would have been created had no programme been in place at all. Members across the House have scorned that finding, but it is an absolute reality. Only two people in every 100 who have been referred to the programme have actually gained employment. That is absolutely astonishing—astounding, in fact.

Yet the Secretary of State said yesterday and today that the results are excellent and that the scheme is on track. The Minister of State, Department for Work and Pensions, Mr Hoban, said yesterday that we should not worry because the information used in the report gave only a snapshot and that it is against the backdrop of growth that was much weaker than expected. Well, whose fault is that? It is the Government’s fault. We need a plan B, or C or D, whatever we want to call it.

In Northumberland, one of the biggest counties in the country, only 80 of the 4,570 people in the Work programme have found a job. That is 1.75%. And the Government say we are on track. Goodness me, what would happen if we were not on track? Perhaps the Minister will answer that simple question. In Wansbeck we have very few job opportunities, a lack of new business start-ups and increased levels of bankruptcy. In fact, the constituency has the highest rate of bankruptcies in the country. Many businesses are doing what they can and working very hard indeed, and I say well done to them, but we have huge problems. We are still reeling from the job losses at Rio Tinto Alcan and seeing 26 jobseekers apply for every job at the jobcentre. That means that 25 are absolutely disappointed because the jobs are not there.

My heart goes out to the unemployed, those who are searching for jobs; searching for dignity. The Deputy Prime Minister and the Prime Minister have talked time and again about “alarm clock Britain”. There are those in alarm clock Britain who peek from behind their curtains every morning to watch their neighbours getting into their cars and going to work, wishing that they had the same employment opportunities. The problem is that there are no jobs in the region. There are not many jobs for young people either, with 15.9% of 18 to 24-year-olds in Wansbeck unemployed.

I do not have much time left but I want to say something about social security, which is also mentioned in the motion. A huge problem up and down the country is the way the Government are casting disabled people aside and on to the scrap heap through their vicious work capability assessment. It is absolutely outdated and needs to be cast aside. We need to look at the situation and look after the elderly and disabled people who are suffering so much as a result of the Government’s attacks on benefits. Nothing short of getting rid of the WCA will do.

We need to look at enterprise zones and be more imaginative and creative on job creations. Why not invest the £435 million that has already been spent on the Work programme and the £725 million for the next five years on people who have a stake in their communities and who want to create employment for the right reasons, not for mass profit?

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East 6:35 pm, 28th November 2012

Whenever any Government Minister, from the Prime Minister down, is asked what they are doing to tackle unemployment, they always answer by setting out a litany of schemes, starting with the Work programme. The problem is that the Work programme does not create any jobs. Jobs are created by other aspects of the economy. In the past financial year, the number of affordable homes in Scotland has halved compared with the previous two years, so we can see where the problem lies. An awful lot of building jobs are not being done, because houses are not being started, because the funding is not in place. Since the start of the Work programme, one of our issues has been that it does not create jobs, and if the jobs are not there in the right areas for the right people, no amount of money put into the programme will resolve that. Perhaps the Government have just convinced themselves of their own propaganda. They have spent so long saying that the employment problem facing Britain is that people either will not or cannot work and that benefits are too generous that they have swallowed their own propaganda.

Another question about the Work programme is whether it is actually effective in doing what it sets out to do, namely training people, giving them confidence and skills, and helping them to meet employers to get jobs. We were told a lot about the black-box approach, the trouble with which is that we do not know and are not allowed to know what is happening.

Guto Bebb spoke about visiting one of his Work programme providers, which I have also done. I heard a whole load of stuff—this was near the beginning of the programme—about how it would give people personalised programmes, have medical people on hand and give people counselling. It sounded wonderful, but the anecdotal evidence from my constituents—yes, it is anecdotal; we are not told much about what is happening because of the black box—is that all that is lacking.

I met one constituent last weekend whose view was that he could have done what his Work programme provider got him to do equally well at home. He went there once a fortnight—it was not an intensive programme—to do a job search on a computer, but he already knew how to do that and had been doing it himself. It was what he did with the jobcentre before he ever went on the Work programme. There did not seem to be a huge amount of value in what was happening.

The problem lies partly with the Government’s pride in cheapness. If we pay peanuts, we do not get very much. Gingerbread, an organisation that represents single parents, has told me of single parents on the Work programme who, because their provider does not provide child-care costs—it is not funded to do so—cannot necessarily take up any available training opportunities. Perhaps we are not investing enough in the programme to get the job outcomes. It may be cheap, but it is not producing the outcomes.

I have also visited in the past couple of weeks a social enterprise in my constituency that does employability services work, mainly with people with mental health problems. It gets some of its funding and a substantial number of referrals through Edinburgh’s health services, which is probably just as well, because that at least gives it some steady income. It is also a Work programme subcontractor. It carries out an intensive programme with people with mental health difficulties and understands the lack of confidence that they often have. The constituent I mentioned who had had the bad experience could have done with that, because he had suffered a nervous breakdown previously. The enterprise does 95% of its work with people who are got into work, and it is successful and involves less than half the contract price. Might it not be more efficient to contract directly with such organisations, which have been a proven success? That could be done locally through Jobcentre Plus or local councils. I offer that as a possible solution to the problems with the Work programme. I am not just criticising it but suggesting how to make it better.

Photo of Stephen Timms Stephen Timms Shadow Minister (Work and Pensions) 6:40 pm, 28th November 2012

We have had a good debate to which the backdrop is yesterday’s publication of the first Work programme outcome data. One cannot help but admire the former employment Minister, Chris Grayling, who ensured that no data at all were published before the reshuffle and so secured his trouble-free ascent into the Cabinet, rather unfairly leaving the new Minister to face the music yesterday.

Nigel Mills, at least, recognised that the figures published yesterday were disappointing, and he is absolutely right. The Secretary of State did not recognise that; in fact, he claimed the opposite. It has been suggested that we have been unfair in evaluating the performance of this programme after only 12 months, but all we have done is to apply the measures and the criteria set out by the Department for Work and Pensions itself. The invitation to tender for the Work programme says:

DWP will set a non-intervention performance…reflecting the number of job outcomes that would be expected to occur in the absence of the Work Programme.”

It goes on to say that the figure would be 5% based on historical job-entry rates—that is, that it would expect 5% of people referred to achieve a job outcome within

12 months. It then says that it would expect the situation to be better than that, and so makes the figure up to 5.5%, adding:

“DWP expects that Providers will significantly exceed these minimum levels.”

We discovered yesterday that they did not significantly exceed 5.5%; in fact, they got nowhere near it. The BBC reported yesterday that the figure was 3.5%, but for the first month’s cohort it is 2%. Oddly, despite the fact that the DWP refers to the “key performance measure”, that number does not appear in the data published yesterday. Strangely, it has been omitted and we have to work it out for ourselves. Given that the Minister’s Department describes it as the key performance measure, will he give us his calculation of it based on yesterday’s data?

The Secretary of State suggested that we were unfairly taking the employment and support allowance data out of the numbers and therefore reducing them. In fact, the reverse is the case. The ESA data are by far the worst. The key performance measure for the ESA data comes to 1%—a disgraceful level of performance. The Minister needs to tell us what he is going to do to address the lamentable failure of the programme to help new ESA applicants.

I congratulate my hon. Friend Lucy Powell on her excellent maiden speech. The depth of her roots in the community she represents was very clear, and I know that she will robustly defend her constituents from failures of the kind that we are debating.

Ministers need to sort out specific problems with the design of the Work programme. First, for over a year we have been pointing to the folly of the secrecy in which the programme has been cloaked. With previous programmes, providers have gladly published their performance data so that everybody could see how they were getting on and make comparisons between them—it was simply taken for granted that that was what they did—but the previous Minister banned them from doing that. I wonder whether he read the “Open Public Services” White Paper that was published by the Minister for the Cabinet Office and Paymaster General in the summer last year. It is worth a read. It asserts—rightly in my view—that:

“Open public services that are more accountable to the people they serve (both the users and the taxpayers who fund them) will be better services.”,

and that, importantly:

“Providers of public services from all sectors will need to publish information on performance and user satisfaction.”

Not only have Ministers not required providers to publish such information on the Work programme, they have actually banned them from doing so. Yesterday’s data were the first on job outcomes in almost 18 months since the programme began. If providers had published their own data, everyone would have seen quickly which approaches were working well—and which were not—and changes could have been made. As it is, we have had to wait almost 18 months, and that cloak of secrecy is one reason for the disappointing performance.

It would be useful to have data on Work programme user satisfaction, as the White Paper demanded, although I fear that after the drubbing yesterday, there is next to no chance of us getting it. Such data should be published because, as the Prime Minister argued in the foreword to the White Paper, that information would be a powerful lever for improvement. Will the Minister at least commit to lifting the ban on providers publishing their own performance data? The ban was imposed only to ensure no impediment to his predecessor’s appointment to the Cabinet, but since that has been accomplished, it should now be scrapped. Lift the veil and let the sun shine in!

I have a couple of other suggestions on how to salvage the programme and I want to pick up on a point made by my hon. Friend Mr Sheerman about skills. The Government have increased the number of apprenticeships—my right hon. Friend Mr Lammy rightly expressed some concern about what those have amounted to, but nevertheless, numbers have increased. Hardly anybody on the Work programme ever gets on an apprenticeship, however, although many should be able to—most people think that apprenticeships exist to help unemployed people develop skills to get into work—and I urge the Minister to work with his opposite number to make that possible. My hon. Friend Kate Green is right to say that we must address the current rate of unemployment among young black men, which is more than 50%, and the Work programme cannot be blind to the scale of the problem.

The Minister has spoken about what has gone wrong, and in an interview with The Daily Telegraph published on Saturday he made clear who he thought was to blame. He said it was “proving difficult” to return people to long-term work—he was getting his excuses in early—and the article stated that:

“He called on private firms…which have been given the task of retraining the long-term unemployed and placing them in jobs, to ‘get their act together’.”

So, it is their fault. Private firms are the reason the programme has not delivered—by the way, the Telegraph headline was:

“Just one in 20 aided by back to work scheme”.

Presumably that is what the Minister hinted at, but in fact the number was a great deal smaller. The Financial Times got the number right yesterday morning when it stated that,

“the employment minister, will confirm the actual figure—which some believe could be as low as 3 per cent—when he publishes official statistics on Tuesday.”

The Minister reassures us that poor performance means the Government are saving money, but as my hon. Friend Sheila Gilmore said, that is no comfort for the young unemployed parent who is worried about paying for Christmas but has been parked and is not getting the help they need to get back to work. They do not want to know that the Government are saving money; they want the help they were promised to get a job.

Why has it gone so badly wrong? The Minister says that providers need to get their act together, but it is Ministers, not providers, who have got this so badly wrong. Ministers assured providers bidding for the Work programme that their economic policies would lead to steady growth and falling unemployment. They did not say those policies would lead to a double-dip recession, although tragically they did.

My hon. Friend Ian Lavery is right: we need a plan B. It is not Work programme providers who must get their act together but Ministers who must come forward with policies to deliver jobs and growth. It is difficult to get people into jobs if there are no jobs. The lack of growth and jobs is hobbling the Work programme—no amount of providers getting their act together will change that.

The Work programme has fallen miles short. I hope the Minister comes clean on how far short. What is that key performance measure? It is not the providers’ fault. The Government promised steady growth and falling unemployment, but that has not happened. The providers are not to blame for the ludicrous ban on data, which has undermined the programme. I urge the Minister to announce tonight at least that that ban will be lifted.

I also ask the Minister to commit to address the truly appalling performance among applicants for employment and support allowance. Just 1% of those referred to the programme in the first three one-month cohorts were placed in a sustainable job. When will he sort those problems out?

Photo of Mark Hoban Mark Hoban The Minister of State, Department for Work and Pensions 6:50 pm, 28th November 2012

This useful debate has exposed comprehensively the emptiness of the Opposition’s policies on welfare reform and their deeply patronising attitude to part-time work and apprenticeships. I shall come back to those points.

My hon. Friend Nigel Mills was right to point out the scale of the ambition of the programme. It meets a wide range of needs and provides tailored, personal support to some of the hardest-to-help and hardest-to-reach people to get back into work. It supports people who have been on incapacity benefit for 10 or 15 years. They had been condemned to a life on benefit, but the programme gives them the opportunity to get back into work.

My hon. Friend Guto Bebb was right to highlight the importance of self-employment as a route back into the labour market. We see many examples of people who are able to juggle self-employment with caring responsibilities and people who return to the labour market after ill health through self-employment. That is why we have extended eligibility for the new enterprise allowance. We have seen good examples—for instance, in Humberside—of people using the enterprise allowance to get back into work and creating businesses for themselves and their community.

My hon. Friend Priti Patel will be pleased to know that 80% of the increase in employment in the past year was for UK nationals. That demonstrates progress compared with the empty slogans of the previous Government. My hon. Friend Andrew Bridgen was right to hold Labour Members to account for their record in government, the legacy that they left this country and the appalling economic mess that this Government must clear up.

Mr Sheerman spoke of the deep-seated structural challenges that we face. He is right: we are in a global race, and we need to respond to threats from overseas. The model that we have set out to broaden the economic base and move away from Labour’s debt-fuelled model of consumption provides sure foundations for us to win that global race.

Lucy Powell gave an accomplished speech. I particularly liked the bit when she said she was delighted that the baton had passed from red to blue, but perhaps she was talking about football. As the son of a former miner, I know just how much family pride there is in achievements such as hers and mine.

The hon. Members for Swansea West (Geraint Davies) and for Stretford and Urmston (Kate Green) were dismissive of people who have part-time jobs. For so many people, taking part-time work is the right thing to do. It gets them back into employment.

Photo of Mark Hoban Mark Hoban The Minister of State, Department for Work and Pensions

I will not give way; the hon. Lady had her chance earlier.

The last labour market survey showed that 80% of people in part-time work wanted part-time work—it is right for them to do so. It is the right route back into employment for many people.

Mr Lammy

Photo of Mark Hoban Mark Hoban The Minister of State, Department for Work and Pensions

Let me address the right hon. Member for Tottenham, who was critical of apprenticeships in retail. How many of our supermarket bosses started off on the shop floor? We should not close down any route to advancement. He also criticised apprenticeships in administration. For many people, a job in an office is a route out of poverty. He should welcome opportunities to broaden the range of skills that are available to people.

I should tell Ian Lavery that I get fed up with people talking down the north-east. I was born and bred in the north-east, and I went there a couple of weeks ago. Let us look at what has happened there. Employment is up by 40,000. People are talking about the need for more skills. There are big challenges in the north-east, but he does his region no service by talking down its people. While I am at it, let me say that he talked about the work capability assessment. Let me remind him that his Government introduced it. This Government are reforming it to ensure that it is the right policy and that it gets people into work and off a lifetime condemned to inactivity.

Photo of James Wharton James Wharton Conservative, Stockton South

I welcomed the Minister to the north-east recently, and I am delighted to hear him say such positive things about the region. Is it not in places such as the north-east, where welfare dependency can be seen to do the most damage, that these sorts of programmes are so important?

Photo of Mark Hoban Mark Hoban The Minister of State, Department for Work and Pensions

My hon. Friend is absolutely right. We need to see programmes of reform to get people off benefit and into work. It is about making sure that we equip people with the skills they need in a 21st century economy. Programmes such as the Work programme enable that to happen.

I was rather disappointed that we did not hear more from the shadow Minister about Labour’s bank bonus tax. This is a big feature of the motion before us today. Yet again, the Opposition trot out the bank payroll tax as the solution. The problem is that it is their solution for everything. How would they pay for a VAT cut? The bank payroll tax. Higher capital expenditure? The bank payroll tax. Reversing changes to child benefit? The bank payroll tax. At the last count, a tax that they think would raise £2 billion has been used 15 times over to fund tax cuts and spending increases.

Photo of Mark Hoban Mark Hoban The Minister of State, Department for Work and Pensions

I have three minutes left, so I am going to continue.

The other thing in the motion that neither the right hon. Gentleman nor the shadow Secretary of State referred to—[ Interruption. ] No, let me talk about something that they did not refer to in their motion. The right hon. Gentleman talked about the increased benefit bill—£20 billion. Is he actually saying, given that most of that relates to uprating, that he is opposed to uprating pensioners’ benefits? Is he opposed to the triple lock that we introduced? Does he want to see a return to the days when the previous Government increased the state pension by 75p? Is he really saying that that is what is against? The reality is that that is part of the reason why we have seen the benefit bill rise, and that is also because we are seeing post-dated cheques left by the Opposition who, when they left government, told us there was no money left.

Photo of Mark Hoban Mark Hoban The Minister of State, Department for Work and Pensions

I am not going to give way. I want to try to address some of the points that have been raised in the debate.

It is clear that the Work programme is in place. What we saw yesterday was a snapshot—207,000 people have got into work as a consequence of the Work programme. The Opposition should be celebrating that achievement, not criticising it. In the same way that we heard nothing in their speeches to congratulate the private sector on creating 1 million net new jobs, they said nothing about falls in unemployment and nothing about the fact that the previous Government fiddled figures and that youth unemployment is now lower than when we came into office. They have no ideas. They complain about the welfare bill, but oppose measures to bring it down. They fail to acknowledge the doubling of long-term unemployment during the recession and the rise in youth unemployment even when the economy was growing. They fall back on the empty rhetoric of the bank payroll tax and hark back to schemes that were bad for the unemployed and bad for the taxpayer.

The truth is that more people are in work, fewer people are unemployed and youth unemployment is down. One million net new jobs have been created by the private sector since May 2010. We are making work pay by reforming the benefits system and introducing universal credit. There are 190,000 fewer people now on out-of-work benefits than there were in 2010. That is the scale of the welfare reform that we are introducing. Rather than condemning people to a lifetime on benefits, we are providing support to get them into work. We have provided more help for young people, through the £1 billion Youth Contract. The work experience element is cheaper and as effective as the future jobs fund jobs that the Opposition parade.

Photo of Alan Campbell Alan Campbell Opposition Deputy Chief Whip (Commons)

claimed to move the closure (Standing Order No. 36 ).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.

The House proceeded to a Division.

Photo of Dawn Primarolo Dawn Primarolo Deputy Speaker (Second Deputy Chairman of Ways and Means)

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided:

Ayes 212, Noes 283.

Division number 106 Opposition Day — Bankers Bonus Tax — Impact of Disability Benefit Changes

A majority of MPs voted against introducing a bank bonus tax to fund jobs for young people and against an impact assessment of disability benefit changes.

Aye: 211 MPs

No: 283 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Absent: 149 MPs

Absents: A-Z by last name

Question accordingly negatived.