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Mr. Blunkett: Will the hon. Gentleman give way?
Mr. Willetts: I shall be happy to give way to the Secretary of State, but first I make it clear that I was reading a quote that appeared in The Times and was attributed to the Prime Minister. When the No. 10 press office was asked why, if Scotland could receive those computers, England and Wales could not, it replied that perhaps they would be available in England and Wales. The No. 10 press office encouraged the story that the Secretary of State is now so keen to dismiss.
Similarly, we were told by the Chancellor in the Budget statement that there would be 1,000 computer learning centres. In the Department's announcement today, that figure is down to 800 new IT learning centres.
Mr. Blunkett:
The difference is that my Department is responsible for England, and the figure of 800 applies to England, while the figure of 1,000 applies to the United Kingdom.
Mr. Willetts:
If we are to have equality across the United Kingdom, why does not that equality apply to the computers that the Prime Minister announced last week as part of his election campaign for Scotland? He is willing to use the generality of British taxpayers' money to finance computers for teachers in Scotland, but he is not, when he is asked, willing to offer the same provision for teachers in England and Wales.
Of course, as we know from the press notice, there will be at least 30 learning centres in the first phase. The reality is that there has been massive hype, but very little will happen on the ground in any feasible time scale. That is why the Secretary of State has sceptics on his own side.
I shall quote from an article by the hon. Member for Sittingbourne and Sheppey (Mr. Wyatt), which is headed
I checked with the Library how we were doing on computers in schools. The Library's response on the reality of access to computers to schools stated:
I turn to employment and the new deal. There was no reference in the Budget or the Secretary of State's speech to a revealing little footnote on page 159 of the Red Book, which explains in Treasury gobbledegook that social security benefit expenditure has been
The National Audit Office independent forecast expects a steady rise in unemployment over the next three years. It is no use Treasury Ministers shaking their heads. I shall read out the figures from the NAO report, which was also released on Budget day, but not as part of the Budget documents. It says of unemployment:
We heard about the new deal, but not about the fact that three in 10 people leaving it do so for destinations of which the Government are ignorant. Nobody knows what happens to such people. We know that another one in 10 people leave the new deal for another benefit. We know that the gateway is increasingly causing concern as people are trapped. I presume that that is the reason for obscure references in the Budget to intensifying the gateway. The Government's labour force survey shows that, despite an overall fall in unemployment in the past year, one of the few areas where it has risen is among young people who are unemployed between six and 12 months. We know that, in the last quarter, there was
a 20 per cent. quarter-on-quarter rise in unemployment among young people unemployed between six and 12 months.
Mr. Vernon Coaker (Gedling):
Will the hon. Gentleman answer a couple of questions? Would he scrap the new deal? In response to constituents of mine who say that there are sometimes one or two problems with the new deal--to be blunt, there are--does he accept that at least we have a Government who are determined to make the new deal work and to try to get people who were abandoned under the previous Government back into work?
Mr. Willetts:
It is no good saying that the Government are determined to make the new deal work if it is not working. Our objection to the new deal is simply that it is not working. Evidence of that is that unemployment among the very group that it is most supposed to help is rising, when for other groups it is falling.
Look at what is happening on the options. We were told that 45 per cent. of people leaving the gateway to go on to an option would be going on to the employment option. In fact, only 24 per cent. of people are going on to the employment option. We know that 49 per cent. of people leaving the gateway for an option are going on to the education and training option.
That development may explain the extraordinary change in the pattern of expenditure on the new deal, which we see in table 4.1, where the expenditure this year is way below the level that the Government forecast, and expenditure next year is significantly higher than they forecast. However, we know that people who leave the education and training option do not seem to perform any better than the people who leave the new deal before they go on to any of the options.
Mr. Christopher Leslie (Shipley):
What would the hon. Gentleman do instead of the new deal?
Mr. Willetts:
We would not have had the new deal, because we would not have had the windfall tax on the public utilities. We believe that the new deal is making no improvement on what would otherwise have happened. It is making no improvement to the job opportunities of young people.
Perhaps the most arrogant statement in the Red Book is in the discussion of the new deal, where we read on page 54 that
The new deal cannot be claimed as the reason for any young person finding a job. The Government must show that they are doing better than would have been the case anyway. On that, the evidence is simply unavailable.
Mr. Barry Gardiner (Brent, North):
If, as the hon. Gentleman says, he would not have sanctioned the £5 billion worth of fiscal tightening--
Mr. Dominic Grieve (Beaconsfield):
Tax rises.
Mr. Gardiner:
Indeed--that the new deal entails, what would have been the consequences for inflation? How would the Opposition have moved to counter those? What effect would that have had on manufacturing industry--an issue on which they have been desperate to attack the Government?
Mr. Willetts:
Taking £5 billion off British industry made no contribution to Britain's economic performance. The taxation of the utilities must involve either higher prices being charged by them, or a fall in returns on their shares, which are owned by the pension funds that serve all of us.
The new deal is not doing any better for young people than they were achieving anyway. Youth unemployment was falling by 100,000 a year before the new deal came into effect. The fallacy that the Government are trying to exploit is the claim that anyone who has been unemployed and finds a job does so because of the new deal. That would be true only if no one who had been unemployed for six months ever found a job before the new deal was introduced. That is an insult to the young people who have been finding jobs as a result of their own initiative and efforts, and the many schemes that we introduced to help them.
The Secretary of State referred to individual learning accounts. Let us be clear about the reality behind the hype. We have never had the White Paper that we were promised. We have had only a Green Paper, and years of dithering and delay since it was published.
The individual learning accounts are financed by taking £150 million off training and enterprise councils. They are merely a redistribution away from TECs, which were in any case going to spend money to help in a targeted way with training and employment needs in their areas.
Although the Secretary of State mentioned the new tax reliefs announced in the Budget, he did not refer to the overall picture shown in the Red Book on page 13, which reveals that the cost for employers and employees of the abolition of vocational training relief--a tax relief specifically to help with training costs--matches the value of all the new tax reliefs for training that he is introducing. All those are zero-sum games--individual learning accounts financed by taking money from TECs and new tax reliefs financed by getting rid of a training tax relief.
What about the administration of ILAs? The Institute for Fiscal Studies green book states that
"Derek Wyatt takes the Government to task for failing properly to plan funds and put into effect the National Grid for learning."
The hon. Gentleman is one of the few Labour Members who has practical experience in the use of IT in communication. He referred to a paper with an
"enormous black hole--no budget attached and no strategy for implementation."
The article goes on:
"Headteachers and governors do not want large Internet bills one year hence, when the initial "free" trial is over. Teachers should not have been issued with laptops; you cannot see the screens in the classroom and therefore they cannot be used as teaching aids, except by a small number of pupils."
The Secretary of State's hon. Friend made the problem with the Government's strategy clear in that article: a lot of hype and very little practical implementation.
"the number of pupils per computer has remained relatively unchanged since March 1996."
Despite all the hype, and nearly two years of announcements, there has been virtually no improvement in what schools have to teach with.
"Adjusted since the PRB to take account of the new NAO-audited assumption for unemployment-related social security spending, which raises social security spending by an estimated £1 billion in 1999-2000, £2 billion in 2000-01 and £2¼ billion in 2000-02."
Those figures are in the Secretary of State's Budget document.
"1.55 million in Q4 99, 1.69 million in Q4 2000 and 1.73 million in Q4 2001."
That is what independent forecasters, on whom the Government's Budget arithmetic rests, say. The Government tell us that, compared with the pre-Budget document, we should expect a steady rise in unemployment. There was no reference to that in the Secretary of State's speech.
"The New Deal for 18-24s has already secured 58,000 jobs for young people."
That assumes that every young person who was unemployed for six months and who found a job did so because of the Government. Do not the Government realise that people were finding jobs before the new deal came along? Do they not know that 80 per cent. of young people who had been unemployed for six months were leaving unemployment benefit anyway in the course of the following year?
"it is questionable whether the administrative costs of setting up completely new accounts for the sole purpose of training are justified."
11 Mar 1999 : Column 524
The hon. Member for Amber Valley (Judy Mallaber) asked a pertinent question--sadly, she is no longer in the Chamber--which echoed the IFS criticism. The IFS stated:
In respect of training, the new deal, ILAs and the so-called extra expenditure on schools and on books for schools, the story is the same: announcement and re-announcement; launches and re-launches and a large amount of hype. However, the hype runs far ahead of reality--the reality in the classroom and the college; the reality of the burdens facing employers and of the performance of unemployed people in finding work. The Chancellor of the Exchequer claimed that 1999 would be the year of delivery, but 1999 will be the year of disappointment.
"It is unclear how much of the £150 million subsidy to account-holders will result in new training which would not have happened in the absence of the scheme, rather than just being a dead-weight transfer to people who would have done the training anyway."
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