House of Commons Hansard Debates for 5 Jun 1991

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Training and the Unemployed

Mr. Deputy Speaker (Mr. Harold Walker) : Mr. Speaker has selected the amendment standing in the name of the Prime Minister and his right hon. Friends.

7.28 pm

Mr. Tony Blair (Sedgefield) : I beg to move,

That this House condemns the Government for the recession which is affecting every part of Britain and every sector of industry, with serious long-term consequences for Britain's future ; notes with dismay that at a time of rising unemployment, the Government is cutting support for the unemployed ; and calls upon it to reverse the cuts in training provision and provide additional employment measures for the unemployed without delay.

Our case tonight is clear : this recession is the avoidable recession, the consequence not of events outside Government control but of errors of economic incompetence. It is now cruelly affecting the lives of millions of our citizens, and without urgent Government action--first, on interest rates, secondly, on training and, thirdly, on help for the unemployed-- there will be lasting and long-term damage to the future of this country.

In the past six months alone--the first six months of the Prime Minister's premiership--almost 500,000 people have been added to the dole queue. Ministers used to say that unemployment was not rising in the north, in Scotland, in the midlands and in Wales--just in the south. Last month shattered that illusion, when unemployment rose most sharply in the midlands, and the north and Scotland suffered their worst rise of the recession.

They used to clutch at the straw that unemployment was at least still below the European Community average. Now, according to the OECD, it is above it, and according to the National Institute of Economic and Social Research last week, by the end of 1991 only Spain, Ireland and what was East Germany will have higher unemployment rates than Britain.

This week Cambridge Econometrics and the London Business School forecast that unemployment will not only rise throughout the rest of this year but will continue to rise in 1992. Those bodies say that unemployment may rise to almost 3 million. Is any Minister prepared to contradict them?

Ministers used to take comfort from the idea that the recession was service -based, affecting white collar professionals. Now we know that even that was a false hope. Manufacturing output this year will fall by about 6 per cent., and investment by 10 per cent. According to the evidence given by the Confederation of British Industry to the Select Committee on Employment, about 90,000 to 100,000 manufacturing jobs have gone in the first few months of this year alone. Our analysis of vacancies at job centres shows engineering vacancies falling by 60 per cent. and technicians' vacancies by 70 per cent.

Worse still, it is clear that, over the period 1979 to 1991, we start from a lower base than other countries. By the end of 1991, manufacturing will have grown more slowly than in any other OECD country. It has risen by 62 per cent. in Japan, by 37 per cent. in the United States, by 27 per cent. in Germany but by only 6 per cent. in Britain. Manufacturing investment will have grown more slowly in Britain than in any other country except Greece.

The true distinctive feature of the recession is not that it is a sudden, service-based, white-collar recession, but

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that it is now affecting north and south, services and manufacturing, white-collar and manual jobs. No region, no sector, no occupation is now immune.

Let us be clear that, however the recession began, the reality today is that the companies going to the wall, the employees being made redundant, are those that took the tough decisions in the early 1980s, and reformed and changed as Ministers urged them to. These are the casualties not of wrong decisions taken by lazy managers or obstinate employees but of wrong decisions taken by Ministers, and it is Ministers who should now shoulder the responsibility.

In this recession, we are losing companies that we cannot afford to lose and skills that we desperately need to keep. Our concern lies not just in the present fears of the hundreds of thousands of people not under the threat of unemployment, and not just in the present difficulties of industry and home owners suffering under high interest rates. Our concern is that, without action now, we shall lose, and lose permanently, capacity and skills that we require to compete successfully in the future.

Mr. Andrew Mitchell (Gedling) : The hon. Gentleman is talking with great sincerity about unemployment. Has he had a chance to study the pamphlet produced by the Fabian Society, which shows that a national minimum wage policy would cost about 800,000 jobs? Does he agree with that estimate, and even if he does not, does he support his party's policy to introduce a national minimum wage?

Mr. Blair : I support that policy absolutely. The hon. Gentleman has been badly briefed by his researchers. The Fabian pamphlet that Ministers cite against a minimum wage was actually written in support of it. The job estimates are absolute nonsense. We know, as does the rest of the country, that Conservative Members are raising the issue only because they dare not talk about the unemployment that they are creating, day in and day out.

The other day, in an interview on "Frost on Sunday" on TV-am, the Chancellor of the Exchequer gave the Government's response to the recession :

"These are just vague stirrings at the moment, but the signs are there I know that when one talks to business men--I talk to business men all the time, and listen very carefully to what they're saying--lots of them say, We can't see it', but of course, they can't see round the corner. That is what the economist has to do, what the Treasury has to do, and what we have seen"

David Frost then asked the Chancellor :

"But the vague stirring? You're saying you've seen vague stirring?"

The Chancellor replied :

"Faint stirrings, yes."

Given three years of high interest rates and the number of small businesses going bankrupt--bankruptcy rates went up by 97 per cent. in the south this year, by 115 per cent. in the midlands, by 159 per cent. in Wales and by 261 per cent. in East Anglia--"faint stirrings" are a pretty poor record for any Government after 12 years. Ministers told us that there would be no recession when there was a recession ; they told us that it would be shallow when it was deep. Now, when the evidence of their own incompetence is piled deep around them, and when we have the worst recession in the western world, they still try to pretend that the problem does not exist, because they do not have a clue how to solve it.

Does the Chancellor of the Exchequer not understand that, as he and his colleagues looked round the corner--as

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he puts it--two years ago and told people that there was an economic miracle, and as people and businesses planned, borrowed and organised on that basis, those people and businesses are now entitled to experience feelings of betrayal, because, instead of a miracle, they have got a recession? Does the Secretary of State for Employment not understand the feelings of the unemployed, and their anger, not only about the fact of unemployment but about the fact that, at a time of fast rising unemployment--we have the fastest rising unemployment anywhere in the western world--the Government are cutting the budget for training the unemployed?

When unemployment was last at 2 million, in December 1988, the budget for special employment measures was £1.5 billion in real terms. Today it is £800 million. Then, unemployment was falling ; now, it is rising. Are not the training and enterprise councils, which have been landed with the responsibility for training the unemployed without the power or funds to do it properly, entitled to experience a sense of betrayal as well?

Mr. Patrick Nicholls (Teignbridge) : May I interrupt the hon. Gentleman in the full flight of his rhetoric and return him to reality? How does he explain the fact that the amount spent on training in real terms-- not in cash terms--is two and a half times higher than it was in 1979? That is a fact, and he cannot deny it. In the midst of all his waffle and rhetoric, he might compare the Government's record with that of their Labour predecessors.

Mr. Blair : As the hon. Gentleman wishes to talk about reality, are we not entitled to point to the reality of what is happening to training and enterprise councils? The hon. Gentleman does not need to take our word for it--

Mr. Nicholls rose--

Mr. Blair : The hon. Gentleman asked about the reality of TECs-- Mr. Nicholls rose--

Mr. Deputy Speaker (Mr. Harold Walker) : Order.

Mr. Nicholls : On a point of order, Mr. Deputy Speaker. The hon. Gentleman said that I asked about the reality of training and enterprise councils.-- [Interruption.]

Mr. Deputy Speaker : Order. I am quite prepared to listen to the hon. Gentleman's point of order when the House will allow me to hear it, as it must.

Mr. Nicholls : On a point of order, Mr. Deputy Speaker, the hon. Member for Sedgefield (Mr. Blair) is rather at fault. He said that I had asked him about TECs. Should he not have another chance to answer the question that I put to him? He said that training was underfunded, yet we are spending two and a half times as much as was spent when the Labour party was in office. That is the question that he should answer.

Mr. Blair : The hon. Gentleman's case--

Mr. Nicholls : Just answer it.

Mr. Blair : If the hon. Gentleman disputes that TECs are underfunded, he does not have to take my word for it but the word of the TECs themselves. One thing that one

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can say about the Government's case is that at least they have been clear, if not brazen, over the past six months. We have raised the question of the underfunding of training and the cuts in the training of the unemployed

Mr. Nicholls : But you oppose TECs.

Mr. Blair : For six months, the Government have consistently denied that there is any such under-funding [Interruption.] If the hon. Member for Teignbridge (Mr. Nicholls) listened, he might learn something. For six months--

Mr. Nicholls : Will the hon. Gentleman answer my question?

Mr. Deputy Speaker : Order. The hon. Gentleman must contain himself. That is not the way in which we conduct ourselves. Doubtless other hon. Members will seek the opportunity to make alternative arguments.

Mr. Blair : If the hon. Gentleman were to read the Government's proposals on preventive health care, he might find something that would help him.

Let us return to the training and enterprise councils and the cuts that have been made, and consider what the Government have been saying in the past few months. Many hon. Members of all parties will remember that, when the Opposition have raised the issue of cuts in training, the Government have consistently denied that any such cuts are being made. On 26 February, the Secretary of State said that Opposition complaints about funding were entirely unjustified. The Under-Secretary of State for Employment has said that the TECs are contracted to deliver the guarantee, funded accordingly, and will deliver the guarantee. The Secretary of State has also said that he has put in place the widest and most comprehensive range of assistance to help the unemployed. That is what the Government have been saying, but we are now able--

Mr. Phillip Oppenheim (Amber Valley) : Will the hon. Gentleman give way on that point?

Mr. Blair : No, I should like to finish my point.

We have conducted the first nationwide survey of training and enterprise councils and the problems that they have discovered, and we now have the evidence to put before the Government. This comes not from the Opposition, but from the training and enterprise councils which the Government themselves established. The 40 or so training and enterprise councils that replied to the survey report an average cut in training places of 25 per cent. That means that, in those TECs alone, 20,000 training places have been cut, and that 300,000 training weeks have been lost.

However, worse and more significant than anything else, is the reason that has been given. It is not the case, as the Government have said, that those TECs are merely switching training providers and reallocating contracts to different people. They have not said that there is any lack of demand for training places. Indeed, they have not said any of the things that the Government have been saying. The evidence has been clear. The north Nottinghamshire training and enterprise council has stated :

"there could be some difficulty in meeting the guarantee in North Notts given current funding levels for both ourselves and Employment Service."

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The Kent training and enterprise council, which covers the Secretary of State's constituency, has stated :

"The provision for ET this year is 30 per cent. less than 1990/1991. The budget amounts to £5.338 million but as we have carried over a large number of trainees into this financial year, our training providers are having to reduce numbers at a time when demand is increasing."

The Barnsley and Doncaster training and enterprise council has stated :

"Out of a total of 12 local (adult training) contracts, four have not been renewed. The rationale for these decisions is relatively simple, in that we have to strike a balance between the needs of the trainees ; increasing the quality of training ; and maintaining viable providers on a budget reduced in real terms by about 50 per cent."

That is what has been happening to the training and enterprise councils.

Mr. Oppenheim : Does the hon. Gentleman recollect that, not very long ago, he stated in answer to an intervention from myself that a future Labour Government would increase spending on training as a matter of priority? Did the hon. Gentleman get the chance to listen to his hon. Friend the Member for Derby, South (Mrs. Beckett) speaking on the "On the Record" programme on 19 May, when she clearly reiterated that a future Labour Government's only spending priorities would be pensions and child benefit? Who is right--the hon. Gentleman or the hon. Member for Derby, South?

Mr. Blair : If the hon. Gentleman looks at the Budget submissions that were produced by the Labour party in the run-up to the Budget, he will see that we showed exactly how the Government could have returned the training and enterprise councils to their previous funding level. The hon. Gentleman is talking absolute nonsense. I should like to quote to him from a letter from the north Nottinghamshire training and enterprise council to one of its local training providers. The House should recall that the Government have consistently said that no training providers are going under as a result of Government cuts in funding, but this is what that TEC has said :

"As explained by both Steven and Pearl on recent visits, the overall Adult Training budget for the North Nottinghamshire TEC has been reduced by about 30 per cent. Although this is clearly a strange situation to be in at a time of rapidly rising unemployment, it is nonetheless the case We realise that our decision has resulted in some unpleasant decisions to make regarding your staff. I am sincerely sorry that they will be redundant. I wish there was something that I could do to prevent it, but I am afraid that our hands are tied."

That is what is actually happening.

Another minute has found its way into our posession. It is a letter from the Department of Employment to a training provider in London--to the Brixton Neighbourhood Community Association-- [Laughter.]

Mr. Bob Cryer (Bradford, South) : What is funny about that? Why is the hon. Member for Wirral, South (Mr. Porter) laughing?

Mr. Blair : I must advise the hon. Member for Wirral, South (Mr. Porter) that that organisation was given approved organisation training status by the Government, so it is not very sensible for him to laugh.

The Department of Employment stated :

"After very careful consideration, I regret that we will not be seeking to renew our contract with you for the coming

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year. As you are aware, funding levels have been drastically reduced and it has just not been possible to continue to fund the existing network of providers."

I repeat that that came from the Department of Employment. Finally, a minute of a meeting on 2 May between the permanent secretary to the Department of Employment and the training and enterprise councils states :

"In both London and Sheffield the forecast for the period October 90 to October 91 was for a 50 per cent. rise in the levels of unemployment. Any arguments that the Treasury therefore had for a reduction in funding were now completely eroded and in fact there was a demonstrable justification for further funds."

In the light of those minutes and letters from the training and enterprise councils, and in view of everything that has been said, are we not entitled to an explanation from the Secretary of State? How does he justify at Employment questions, in debates, on radio and on television steadfastly denying that there is any problem with funding when there is now clear first-hand evidence of a funding reduction that is causing hardship and putting the Government's training guarantees at risk?

Mr. Robert G. Hughes (Harrow, West) rose --

Mr. Blair : I shall give way to the hon. Gentleman in a moment. There is not only a problem with the training and enterprise councils. My hon. Friend the Member for Bradford, South (Mr. Cryer) recently raised the question of skill centres with the Secretary of State. He was told that he was making up nonsense about skill centres closing and about there being problems following their privatisation. Yesterday, however, my office received a letter from someone who used to be employed by the skill centres, which stated : "Until last May, myself and hundreds of colleagues were civil servants employed by the Department of Employment and working in the Skill centres. I had worked in this field for 14 years and felt quite committed to retraining of the unemployed. I felt then, as I feel now, that training belongs in the public sector and responsibility for adult training and its funding should be taken by the Government. However, the decision was taken that we should be privatised, and Astra Training Services was born recently, due in the main to the poor funding of Employment Training and the inability of the private sector to play their part (due I am sure to financial problems) Astra is now making such a large loss that they are needing to shed more staff."

That is the reality of what is happening. Are we not at least entitled to an admission from the Government that that is what is happening?

Mr. Robert G. Hughes : Will the hon. Gentleman confirm the following figures? Does he accept that there are now 350,000 Government training places and that, when the Government came to power in 1979, there were only 6,000? Does that increase record a cut or is it, as I think, a record of the Government's commitment and real belief in training and in putting enterprise behind it?

Mr. Blair : It is a fact that unemployment is now more than double what it was when the Government came to power. The hon. Gentleman must explain why the Government are cutting funding for training the unemployed when unemployment is rising.

Mr. Richard Caborn (Sheffield, Central) : My hon. Friend has referred to Sheffield, whose TECs have been in dialogue with the Secretary of State and his Ministers about the budget cut of 38 per cent. When the pit bull

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terrier--the hon. Member for Teignbridge (Mr. Nicholls), who is constantly jumping up and down--was a Minister, representatives from the Sheffield TEC met him and tried to develop a proper partnership. A letter to the Minister from the Sheffield TEC says that the board of the TEC is not only frustrated because it cannot develop and deliver a quality service, but feels that it has been conned by the Government. That board consists of people from the private sector who spend two days a week trying to make training effective in a major manufacturing sector. They believe that they have been conned by the Government.

Mr. Blair : My hon. Friend is absolutely right. I am aware that those concerns have been raised with the Secretary of State, and I hope that he will deal with them later.

Many of the TECs consist of people who came to them from business on the basis that they would have a genuine partnership with Government. They have found that their commitment to do more has become an excuse for the Government to do less. That is what is wrong.

What have the Government done recently for the unemployed? They have published what they call a five-point plan for the unemployed.

The Secretary of State for Employment (Mr. Michael Howard) : Before the hon. Gentleman concludes his remarks on training, will he answer the specific question from my hon. Friend the Member for Amber Valley (Mr. Oppenheim) about his position in relation to the clear statement made by the shadow Chief Secretary to the Treasury, the hon. Member for Derby, South (Mrs. Beckett), on "On the Record"? If he cannot persuade the shadow Chief Secretary that training should be an immediate spending priority, nothing he has said in the past 15 minutes has any substance whatever.

Mr. Blair : The right hon. and learned Gentleman should have listened to what I said. He completely misrepresented the words of the shadow Chief Secretary. If the right hon. and learned Gentleman read our Budget submissions, which we published months ago, he would see exactly how funding should be restored.

Mr. Oppenheim : On a point of order, Mr. Deputy Speaker. I have a transcript of exactly what the shadow Chief Secretary said in the "On the Record" interview on 19 May.

Mr. Deputy Speaker (Sir Paul Dean) : That is a matter for debate ; it is not a point of order.

Mr. Blair : I was discussing the Government's five-point plan, which was first launched in April last year, again in October, and then in November, December, February, March, April and May. The five-point plan has been launched eight times ; it has been launched more often than the Liberal Democrats.

Let us analyse the plan which the Government boast is the most comprehensive package ever given to the unemployed. The plan offers "In- depth advisory interviews for the newly unemployed continuity at subsequent advisory interviews special advisory interviews extra help to those long- term unemployed"--

I presume that that means more interviews--and

"intensive help with job-search"

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Perhaps that is another interview. The idea that that amounts to the most comprehensive plan for the unemployed ever launched is risible.

Some Secretaries of State for Employment have tried to create jobs ; some of the right hon. and learned Gentleman's predecessors have created schemes ; but he has created interviews. He should be the Secretary of State not for Employment, but for interviews. If the local election results in his constituency are any guide to the general election, he may be the first Minister to create a plan for the unemployed and then to participate in it.

Faced with the highest level of unemployment in the western world, thousands of new redundancies each week, record bankruptcies, closures and cuts, what is the Government's response? They have cut training places and closed training programmes which has put their pledges at risk. Then, to add insult to injury, the right hon. and learned Gentleman claims that he is offering more to the unemployed, when on any rational basis he is offering less.

If we have any evidence of the uncaring face of Conservatism, surely this is it. The Government lack not just compassion, but common sense. What other country would cut its budget for training the year before 1992? Is not the worst aspect that we are cutting training when all the evidence points to it being the single most important element of our future success? Even if unemployment were falling--not rising--that policy would be foolish. When people are being made unemployed and need help to return to the labour market, and when we are at the bottom of the recession, should we not now retrain and reskill so that, when recovery comes, it will be our industries, companies and employees that take the advantage of it and not those of our competitors?

Yet what do the Government do? Nothing : they have not one new idea, fresh idea or new policy. They cannot even decide on the temporary work programme that we know has been under discussion since February, but that discussion is obviously well advanced. The occasional leak to the newspapers or radio tells us that it has not yet been ruled out, but four months from when that programme was first raised, there are another 250,000 people unemployed. What will it take to make the Government act? The answer, I am afraid, is fear of general election defeat : that is all.

At the moment, the Government do not sufficiently fear the consequences of unemployment. When the chairman of the Conservative party was interviewed on "Channel 4 News" after the local council elections, he was asked about unemployment. He said :

"The question is how much does it affect people's voting intentions, and, I don't think that there is very much evidence that it has all that much impact on people's voting intentions."

The Labour party's task from now until election day will be to prove him wrong, and we will.

When the pressure becomes too much, the headlines too bold, and the editorials too savage, when surrender becomes easier than resistance, the Government will do, what they were asked, as they did on the poll tax, the 16 to 19-year-olds training, transport, Europe and anything else. It will be too little, half-hearted and too late.--The Government are uncertain whether to make a virtue of listening or of standing firm. There will be a fit of indecision succeeded by a rash of misjudgments. That is not a healthy basis for government.

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I understand that the Prime Minister has the first editions of the newspapers sent to him at 10 o'clock each evening. That is a revealing fact. Is not the difference between the present Prime Minister and the former one this : she used to read the newspapers the next morning to discover what she had done ; he reads them the night before to discover what he should do?

We need action now on interest rates and we need the Government to stand up for the interests of small businesses. It is now that we need training cuts restored and special help for the unemployed. The tasks are too urgent and the needs too great to wait until the Government's indifference over unemployment is eventually replaced by their fear of the election result.

Two weeks ago, the Chancellor of the Exchequer told us that the recession and unemployment were a price "well worth paying". It will be the Labour party's job to ensure that a price is paid by the Government--at the election.

7.58 pm

The Secretary of State for Employment (Mr. Michael Howard) : I beg to move, to leave out from "House" to the end of the Question and add instead thereof :

congratulates the Government on the success of policies which have created over a million new jobs since 1979 ; welcomes the introduction of the most comprehensive range of measures ever available to help the unemployed back to work ; notes the very substantial increase in spending on training over the last 12 years ; and, in particular, supports the measures in the recent White Paper, Education and Training for the 21st Century.'.

The speech we heard from the hon. Member for Sedgefield (Mr. Blair) was full of his usual blend of indignation, disingenuousness and false promises, and was punctuated by a total failure to answer any of my hon. Friends' questions. It is beyond dispute that had, the hon. Gentleman's party been in office, it would have made unemployment immeasurably worse and its current policies, if they were ever implemented, would raise unemployment sharply. On training, it is beyond dispute that the Labour party would not have made the enormous progress which we have made since 1979 and that its policies would ensure that all the progress that we have made would be put rapidly into reverse.

Let me begin by setting out our achievements. This country has made more progress, more rapidly, on training and employment in the past 12 years than in any previous period in our history. There are over a million more jobs in Britain today than there have ever been under any Labour Government, and last year we recorded the highest number of jobs in our history. More of our work force are qualified now than ever before and more are taking part in training than ever before. Employers are more committed to training than ever before. More young people are entering work well qualified ; more of the adult work force is qualified, and at higher levels ; and more high-skill jobs are being created and filled. The Government have played their full part at every stage.

The hon. Member for Sedgefield made much of the increases in unemployment in the past 12 months. He has taken to issuing ever more excitable press releases in recent weeks about the levels of unemployment in Conservative- held marginal seats. Before he counts his chickens, he might care to check his facts. He has recently produced a list of 46 Conservative seats, where the numbers of registered unemployed exceed the size of our majority. He neglected to point out that, in 45 of those 46 seats,

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