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Mr. Rowe: Is the hon. Gentleman comparing like with like? Most studies seem to suggest that the proportion of the population that falls into that unskilled category has shrunk.
Mr. Byers: I am comparing like with unlike unfortunately, because it has been shown that there is a lasting problem: that young people from unskilled families are not entering higher education. That figure has remained constant over the past 35 years.
Unequal opportunities are not just an affront to those of us who feel passionately about social justice, but an economic disaster in a world where education increasingly determines employment opportunity, earning power and national prosperity. The question that the Labour party is prepared to address is how to end the cycle of educational failure, unemployment and poverty. It is clear that to do so, we must bring to an end the national education lottery at 16. At present, some 16-year-olds receive grants while others do not for exactly the same educational courses, and some have their fees paid while some do not. Current educational maintenance allowances are both arbitrary and inadequate--they range from 90p a week in some areas, up to as much as £20 a week in others, with as few as one in 1,000 obtaining them in some local education authorities.
It is against that background that we make no apology for establishing our public spending review of post-16 education finance. The review will examine loans, grants, educational maintenance allowances, course fees, tax relief and child benefit from the age of 16. The review has only just begun, so no decisions have yet been made. But our intentions have been widely misrepresented and distorted by Conservative Members, who, all too often, prefer prejudice to stand in the way of facts.
Today, I shall put some facts on the record. There is not, and never has been, any intention to include in the review, child benefit where it is available as a right--where it is universal. That means that child benefit will continue to be available to all mothers of children up to the age of 16. But, at present, at 16, child benefit ceases to be a right or to be universal. Mothers of 43 per cent. of 16 to 18-year-olds do not receive any child benefit--that means that the mothers of 846,000 young people do not receive child benefit.
Mr. Tim Smith:
Will the hon. Gentleman give way?
It is also important to note that, in real terms, child benefit brings no extra money to most financially disadvantaged families because child benefit is deducted, in full, from the income support received by income support claimants. Almost one in five mothers who receive child benefit are also on income support. Therefore, they do not gain financially from receiving child benefit.
Labour's review of post-16 education funding will be based on five clear principles. First, the policy must ensure value for money and the most effective use of public finances. Secondly, it must improve participation rates significantly by ensuring that no financial hurdles stand in the way of young people's taking advantage of post-16 education. Thirdly, it must introduce a coherent system that operates nationally. Fourthly, it must provide financial assistance more fairly rather than withdrawing support. Finally, it must broaden opportunities and ensure genuine equality of opportunity.
We are confident that when our review, which is based on those five principles, is completed and the policies brought forward, they will command broad and popular support. They will stand in stark contrast to the tired policies of the Government, who can offer only the discredited youth training programme. That is the only option for young people who decide that full-time education is not for them.
However, as Sir Ron Dearing illustrated clearly, the programme is failing many of our young people. He found that only 46 per cent. of young people who enter youth training schemes complete the course of study. The breakdown according to training and enterprise council areas is even more revealing. In Merseyside, 72 per cent. of all young people who start youth training fail to complete the course. In Sunderland, the figure is 66 per cent. and, in Norfolk and Waveney, it is 63 per cent. Only one in five training and enterprise council areas has a completion rate better than 50 per cent.
For those reasons, Labour has introduced its Target 2000 programme: a high-quality training initiative that will offer hope to a lost generation. The initiative has been costed at £1.5 billion and it will be financed by the money
that we shall save by abolishing the youth training programme and the money that will flow from the windfall tax on the newly privatised utilities.My hon. Friend the Member for Dunfermline, East(Mr. Brown) has made it clear that the money will be targeted at two specific groups: the long-term unemployed and the young unemployed. Those two programmes will be funded by the windfall tax on the privatised utilities. We aim to kick-start the economy by giving our young people high-quality training opportunities.
Mr. Byers:
I shall not give way, as time is limited. If the Minister were to allow me to use some of his speaking time, I would be happy to give way. However, he will not do that, so I shall not give way.
The Parliamentary Under-Secretary of State for Social Security (Mr. Andrew Mitchell):
This has been a most interesting, and in some cases illuminating, debate and it has occurred on a day when another socialist Administration has been unceremoniously booted out of office--the third in recent weeks. The hon. Member for Oldham, Central and Royton(Mr. Davies) opened for the Opposition with a very interesting speech. He accused my hon. Friend the Member for Beaconsfield (Mr. Smith) of not reading the right papers to discern Labour policies. Conservative Members were mesmerised as we waited for the various answers that he promised but, despite the great length of his speech--45 minutes--none came to light.
The windfall levy--a remarkable, reusable, elastic tax that appears to have quite extraordinary regenerative qualities--has been mentioned. It has already been prayed in aid for 11 different uses by Labour spokesmen. As the hon. Member for Bath (Mr. Foster) made clear--the Liberal party is at least honest about this--money cannot be spent more than once. The Liberal Democrats at least admit that their proposals would lead to an increase in income tax. Today their spokesman expressed a withering contempt for Labour proposals that will have been echoed in all parts of the House.
My hon. Friend the Member for Mid-Kent (Mr. Rowe) made an interesting speech that included a plea for back to basics in primary education. He praised the league tables that the Government introduced in the teeth of opposition from the Labour party and wisely advised the Government to build on our achievements and not to uproot for its own sake.
My hon. Friend the Member for Beaconsfield made a robust, wise and convincing speech. He exposed the fallacy of Labour policies. My hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant) spoke warmly of his local training and enterprise council and the success of local schemes. He made a number of interesting suggestions to Sir Ron Dearing and his speech was thoughtful, if not politically correct--except when he agreed with the hon. Member for Rotherham(Mr. MacShane). That happens to us all from time to time, but it is easily curable.
My hon. Friend the Member for Shoreham(Mr. Stephen) brought considerable expertise to the debate, particularly in respect of training, which he uses so well in the service of his constituents. He made a useful speech, inveighing against the fashionable nostrums of the 1960s which caused so much damage to children's education.
I cannot forbear to mention the hon. Member for Rotherham who, thanks to the generosity of both Front Benches, made a six-minute speech. As usual, it was both witty and original, but unfortunately not simultaneously.
We then heard from the hapless shadow Minister, the hon. Member for Wallsend (Mr. Byers), who was sent to the House to spin away the ghastly mess that his party has got into in respect of child benefit. I approached today's debate as the Minister with responsibility for child support, which is a central issue.
The debate takes place against the background of the welcome further fall in unemployment that was announced this week. The reductions in the number of people out of work for a year or more and in youth unemployment are particularly welcome. Long-term unemployment is down by 80,000 on a year ago and youth unemployment is down by 64,000.
Despite the various figures that have been batted backwards and forwards today, the United Kingdom now has the lowest unemployment rate of any major European country. It is lower than that in Germany, France, Italy or Spain, and well below the 11 per cent. average for Europe. We are reaping the benefits of our trade union and supply-side reforms, our opt-out from the social chapter and the absence of a statutory minimum wage.
Today's debate underlines the key point that our world competitiveness demands a highly motivated, adaptable and well-trained work force. My hon. Friend the Minister of State mentioned the modern apprenticeship scheme, which is a success story. There is strong demand for it. It is the work-based route to higher skill levels. Already, 25,000 young people are taking advantage of it. The Government are playing a supportive role--providing financial help and facilitating the partnership at national level; industry and employers are in the driving seat.
Close links between education and employment remain the key, as has been made clear in our competitiveness White Papers. As my hon. Friend the Minister of State mentioned in his opening remarks, 92 per cent. of secondary schools now have links with business, and more than 190,000 teachers have had placements in business since 1989.
When I left university--just before Mrs. Thatcher became Prime Minister--only one in nine people went into higher education. Now, the figure is one in three. The
Conservative party understands the role of Government in facilitating the right economic circumstances in which markets--businesses--create jobs and opportunities for young people. The Labour party does not understand that. As The Sun said so eloquently in an editorial yesterday:
Organisation for Economic Co-operation and Development studies, the International Monetary Fund world economic report and the European Community White Paper "Growth, competitiveness and employment" all acknowledge that a statutory minimum wage would have a damaging effect on employment prospects. Even the deputy leader of the Labour party has made it clear that a minimum wage would destroy jobs, yet Labour persists with this totally counter-productive proposal.
Even if people on low wages still had a job to go to, a minimum wage would be an ineffective way to help them. Most low-paid workers live in households with two, or even three, earners. Research by the Institute of Fiscal Studies shows that the richest 30 per cent. of the population would gain more from a minimum wage than the poorest 30 per cent.
Conservative policies of welfare into work have proved to be successful. The growth of family credit, enhanced support of child care and the panoply of into work measures that the Government have introduced have helped people into the labour market. By contrast, Labour's policies would lead from work on to welfare, particularly for younger people, who are the subject of today's debate.
Neither would a minimum wage help people who receive in-work benefits. Many are already paid in excess of £4 an hour. In practice, a minimum wage would result in job losses that would hurt those currently in low-paid employment and hurt the taxpayer, because reduced employment inevitably leads to higher benefit bills.
As to the grotesque debacle of Labour's plans for child benefit, they are--as has been elegantly pointed out by an unholy alliance of just about everyone apart from the Leader of the Opposition and the shadow Chancellor--wrong in principle, wrong in practice, based on inaccurate information and research, and likely to achieve precisely the opposite result from that intended.
We had the assertion from the shadow Chancellor that 80 per cent. of children from homes with unskilled parents do not stay on at school after the age of 16. Were that to be the case, it would be truly appalling. It was the case in 1978, after nearly four years of the last Labour Government, but the picture has changed considerably. Whereas, under Labour, only 20 per cent. of children of unskilled parents stayed on at school after the age of 16, the figure now is 56 per cent. and rising.
Having wrongly analysed the problem, Labour presented its solution--removing child benefit from 16, 17 and 18-year-olds, which would take £560 a year away
from families with one child. That proposal would result in the UK being the only country in Europe not to provide help to families with 16 to 18-year-olds in non-advanced further education.
For less well-off families--the very group that Labour suggests it wants to help--the loss of child benefit could make the difference between keeping their children in education and requiring them to go out to work so that they can make a contribution to the household budget. The hon. Member for Islington, North (Mr. Corbyn) pointed out in an article in the Evening Standard:
What was billed as an example of Labour making "tough choices" on spending is instead a spectacular example of Labour shooting itself in the foot--as my right hon. Friend the Deputy Prime Minister said,
The potential damage is even graver. The hon. Member for Brent, East (Mr. Livingstone) said:
I shall now deal with the new suggestion from the hon. Member for Dunfermline, East (Mr. Brown) that child benefit should be withdrawn only from those at fee-paying schools--a suggestion that found an echo in the Chamber today. That proposal would affect about 75,000 children and save about £40 million a year. Withdrawing benefit on the basis of the type of school attended, as was subsequently suggested, would penalise parents' efforts to do their best for their children. That is a particularly nasty piece of socialist ideology that shows that the green-eyed god of envy is alive and well on the Opposition Benches and sits happily with that other act of spite promised by new Labour--abolishing the assisted places scheme, which currently helps 60,000 families.
We have seen all this in the very week when the Labour party has argued in another place that foreigners who have no right to remain in this country should be able to claim child benefit while simultaneously seeking to deny it to the parents of A-level students who have lived here all their lives.
As Labour's social security spokesman said, we need to set priorities for the social security budget. Labour has now revealed what an astonishing set of priorities it really
has. Its policy on child benefit will hurt not only young people--the Opposition spokesman on social security has not enjoyed it either. On 18 April, the shadow Chancellor's team briefed the press that Labour would abolish child benefit for 16 to 18-year-olds. We know that he did not consult his colleagues in the shadow Cabinet. A few days later, the Opposition spokesman on social security was in the House answering questions, and it was perfectly clear to every hon. Member that he wanted to be anywhere but here, having to defend that ludicrous and ill-thought-out policy.
All that demonstrates that a Labour Government would be an unmitigated disaster for young people. We have known about some of Labour's disastrous policies for some time. It has, for example, been committed to a minimum wage throughout the lifetime of this Parliament. I should think that, after such failures, it would now steer clear of policies designed to damage young people's prospects--but no.
On Wednesday, the Leader of the Opposition announced his plan to take away more of the opportunities that we have created. He lined up the shadow Chancellor, the shadow Home Secretary and the Opposition spokesmen on education and employment and on social security. We were supposed to witness the strength of the unity of the shadow Cabinet, but--as the hon. Member for Bath said--the smiling faces did not hide the gulf between them.
On Wednesday, we witnessed the unveiling of another unthinkable policy for young people. The shadow Cabinet announced that Labour would compel every employer to train 16 to 18-year-olds on their staff for one day a week. Labour's new document states:
Private sector employers are training young people--including the modern apprentices I mentioned earlier--because they want to, not because they have to. Employers are, increasingly, training young people. Labour would make training compulsory and turn training young people into a cost and a burden--something that employers do because Whitehall tells them to do it--rather than an opportunity. Employers would resent training, instead of valuing it.
Employers would respond by choosing to employ people aged over 18 whom they could train in the right manner for their company rather than in the manner decided by a Labour Government. Labour would, therefore, give employers a strong reason not to take on young people.
On Wednesday, the Leader of the Opposition claimed that he had a "new deal" for Britain's young people, but it is not so much a new deal as a raw deal. We can now
detect the substance behind the soundbite. Under a Labour Government, fewer young people would stay on in school. Under a Labour Government, fewer young people would get jobs. Under a Labour Government, fewer young people would get the right training. Under Labour, young people would be forced to start their lives on benefit, which is hardly the best foundation for a successful working life.
"Labour is full of . . . contradictions. Yesterday we saw another one as plans to train and find work for 16 to 25-year-olds were unveiled.
If we want to help young people into work, we should not introduce a national minimum wage--as my hon. Friends the Members for Eastbourne (Mr. Waterson) and for Beaconsfield pointed out. Commentators of all political persuasions have acknowledged that a minimum wage would destroy jobs.
But Governments can't create jobs--only businesses can do that.
And yet Labour would cripple business with the social chapter and a minimum wage."
"I know of many young people and families who rely on Child Benefit to help them out and enable them to continue in education. We should maintain that and put more money into education for the young."
Labour would achieve the very thing that its absurd proposal started out trying to avoid.
"not so much pay as you earn but rather pay as you learn."
It is also, effectively, an increase in taxation. Child benefit replaced child tax allowances, and the effect of Labour's proposed change, of removing £560 each year from families with one child, would be the equivalent--as my hon. Friend the Member for Eastbourne said--of a 5p hike in income tax for families on average earnings. That is Labour's teenage tax.
"We now need a clear statement by the party Leadership that Labour will stand by its past pledges to retain Child Benefit in full".
If the Labour party is prepared to remove child benefit for 16, 17 and 18-year-olds, what is the rationale for keeping it for younger children? Children become more expensive as they get older. The hon. Member for Brent, East has rightly spotted that the withdrawal of child benefit for 16 to 18-year-olds is the thin end of the wedge. There is no logical reason for paying child benefit for children of compulsory school age if it is not needed for older children, as the Labour party's leadership now apparently believes.
"Everyone under 18 who does not have level two qualifications should be studying, normally off the job, for at least six hours a week or equivalent. Employers will have an obligation to ensure that this happens for their employees."
That is absurd, and it is also extremely bureaucratic. How would Labour check that every employer of a young person had trained them for the requisite number of hours? Would there be a new corps of inspectors with clipboards and stopwatches? It is not a well-thought-out policy. More important, it would be a disaster for any young person looking to learn a trade or to do an apprenticeship.
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