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7.31 pm

Mr. Derek Foster (Bishop Auckland): I am delighted to be able to speak in this debate, and should like to thank the Liaison Committee for choosing to refer to the Education and Employment Committee's two reports.

My next task is to praise the members of my Committee. As a veteran talent spotter within the parliamentary Labour party, I have never seen such an array of current and future stars--and that includes the Liberal Democrat Members and our Conservative colleague, the hon. Member for Altrincham and Sale, West (Mr. Brady), who unfortunately cannot attend this debate as he is attending his child's carol service. All Committee members have an enormous amount to contribute, and I am very proud to chair the Committee.

We should like also to thank the Chancellor for giving us £5 billion in this Parliament with which to advance the flagship new deals. It is at least £5 billion more than was provided by the previous Government.

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I should like to thank the Secretary of State for Education and Employment and the Minister for Employment, Welfare to Work and Equal Opportunities for creating a listening and learning Department.

Mr. Paul Keetch (Hereford): Before the right hon. Gentleman concludes his thanks, should he not also thank the utilities that provided the money so that the new deal could start initially?

Mr. Foster: I cannot thank them, because they did not want to part with the money. We made them do so--and there is the difference between Labour and Liberal Democrat.

As I said, I should like to thank the Secretary of State and the Minister for creating such a listening Department. All our experience--I think that it is shared by hon. Members from every party--is that reasonable suggestions made to either the Secretary of State or the Minister are listened to and examined. Moreover, if they are practicable and sensible, they are likely to be implemented. That is not true in all Departments.

Mr. Willetts: Which ones?

Mr. Foster: I shall not name them today, but may go into a different mode on a different occasion.

I praise the liberation of the Employment Service. I was one of those who felt initially that the Employment Service--the agent of the harsh benefits system--was the wrong agency to be implementing the new deal. I doubted that that agency knew anything about being a sharing and caring organisation that could help younger and older people to negotiate all the difficulties of education and learning. However, I was wrong. The Employment Service--with its very able chief executive, Leigh Lewis--has through its 35,000 staff implemented a culture change. Those staff have been liberated from implementing a harsh benefit regime to doing what they enjoy doing: assisting people in finding work.

The welfare-to-work programme is absolutely central to reforming the welfare state. Moreover, getting people into jobs or training and developing them--whether they are in or out of work--is central to the Government's excellent supply-side measures. Reform of the welfare state and supply-side measures together should yield far more employable people--who are far more able to get a job, to keep a job and to find another job if they lose the first one.

I should like to mention Robert Reich, who hon. Members will know was Bill Clinton's previous Secretary of Labour. He said that running a successful economy and generating jobs was a bit like a three-legged stool. The first leg was to have a sufficient number of employable people; the second was to have an abundance of adaptable organisations; and the third was to have adequate demand. The three goals are mutually reinforcing and interdependent, and they must be pursued simultaneously. The Government are trying to do that. They are not always succeeding, but they are certainly trying.

If the new deal for 18 to 24-year-olds, the new deal for those over 25, the new deal for lone parents and the new deal for disabled people all succeed--I believe that they

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will; they have certainly made a very good start--we will end up with many more employable people, thereby enabling the economy to run at a higher growth rate than otherwise would have been possible.

Similarly, we will be able to respond to rapidly changing market opportunities if we succeed in making all our companies--global companies, small and medium- sized enterprises, and micro-employment and self- employment--more adaptable by investing in research and development; by energising a culture of innovation; by training, developing and properly managing staff; and by being entrepreneurial, which is a very rare skill about which most us know nothing. If we succeed in creating such adaptable organisations, we will also enable our economy to grow much faster than would otherwise be possible.

In the past few years, the United States of America--to which we tend to look--has created millions of jobs by making people employable and creating adaptable organisations. Nevertheless, Robert Reich eloquently said that, although they created millions of jobs, many of those were "crap" jobs. Although that is not the type of language that I usually use--he said it, not me--he was right.

I do not want to deal with the demand side of the equation, as that would tempt me to deal with the issues at far greater length.

I shall deal now with the two reports on which this debate is centred. Hon. Members who have read "New Deal Pathfinders" will see that our recommendations are on pages 24 to 27. I should like to mention just two of them. The first is recommendation 2, about personal advisers, and the second is recommendation 10 on the take-up by employers.

The personal adviser is rapidly becoming the agent of transformation of the Employment Service. The Committee wants that pursued vigorously and rigorously throughout the new deal, particularly if the responsibility of that personal adviser begins before a person's entry into the new deal and continues throughout its course and for some time after. If a continuity of support and advice is available, people will have more success in entering the labour market and staying in it.

In Australia, we discovered that the father of the new deal--the working nation--failed to a certain extent because the commitment of the private sector was not engaged. The Government have been extraordinarily wise in getting private employers signed up so readily. They went for the global players first--the people with the big reputations whom everyone looks up to. That enabled the small and medium enterprises to follow through.

The Government have been more successful than I expected. Some 30,000 employers have already signed up. The Employment Service has increased its market share to upwards of 32 per cent. In Australia, the figure was only 20 per cent. It is remarkable that a publicly led employment service has managed to secure 32 per cent. of the market and rising, whereas the private-led employment service in Australia has only 20 per cent. at the moment, although that could, and probably will, change.

Mr. David Willetts (Havant): The right hon. Gentleman is talking about the important issue of

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employer involvement in the new deal. I am sure that he is aware of the letter from Chris Humphries, the director general of the British chambers of commerce, who says:

    "Many companies report little or no contact from the Employment Service and so a severe lack of information . . . is magnifying their confusion and leading to significant disillusionment."

I should be interested in the right hon. Gentleman's comments on those concerns expressed by employers.

Mr. Foster: I have a high regard for Chris Humphries and I shall take that comment seriously. More important, my right hon. Friend the Minister has heard the comment. I am sure that he will take it seriously, and will do what he can to rectify the problem.

Mr. John Healey (Wentworth): Will my right hon. Friend give way?

Mr. Foster: I have no time. I am sorry, but I have to finish in two minutes if I am going to keep faith with my colleagues. I should love to be able to give way, but I must finish shortly.

The recommendations on the lone parents scheme are on pages xlii to xlvi. There is a helpful summary of them on page xlii in paragraphs 1 and 2. I want to mention two elements briefly. The first is education and training, which we considered immensely important. We found the Government's response dismissive--if I may say so kindly to my right hon. Friend the Minister--and we think that they are mistaken. We want to get lone parents out of the poverty pay market. There is no virtue in them being locked into poverty pay, because they would be only marginally better off than if they had not joined the labour market. We want to create ladders of opportunity that they can climb up, allowing them to progress and have more income, better opportunities and better jobs. Education and training is the secret to that.

My final point--well, I shall make another if I have time--is transport. In all the new deals that we have examined, it quickly became clear that the ability of people to get to where the job opportunities were was crucial to the success of the schemes and of the labour market.

One of the acid tests of the new deals is whether they have street cred. It does not matter what we think. What matters is what the people concerned think, particularly the young people. If they write the schemes off, they will not succeed. At the moment, that is not happening.

The other acid tests are how the schemes cope with the disadvantaged and how they cope with ethnic minorities. What I have seen so far does not impress me greatly. The Government are trying to deal with the problems. Young people from the ethnic minorities have a far greater share of unemployment than the rest of society. Dealing with that is a big challenge for the Government.

I thank the House for listening to my rather poor speech. I look forward to hearing the other contributions.

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