Mr. Ernie Ross (Dundee, West): I am very pleased to be here this morning to talk about a subject that is so close to my heart. I spent 10 happy years as a member of the Select Committee on Employment. Although they were happy years for me because I was doing something that I enjoyed, they were disastrous for the people of this country because they were part of the 18 years of misery that we had to suffer as a result of the infamous pact to bring down the previous Labour Government. I make that point because I note that, once again, no representative of the Scottish National party is here. It seems that the nationalists do not give a hoot for the unemployed or for people living in poverty in Scotland. We should not be surprised. No doubt, they will have some excuse that will satisfy some of their colleagues.
We are here to examine the new deal's impact on Scotland. The idea of a new deal was born from our experience and that of people who were unemployed or seeking employment during those 18 years of Conservative Government. During the 10 years for which I was on the Employment Committee, we examined various Government initiatives but could perceive no coherence in the schemes: there seemed to be no policy framework surrounding them, other than an aim to reduce the claimant count, which was high and rising.
I fought the 1979 election alongside the Minister of State, Scotland Office, and my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall)--all of us aspiring MPs. I remember a poster--"Labour isn't working"--that had a picture, allegedly of a dole queue. By the time that we got rid of the Conservatives 18 years later, that dole queue could have been replicated three or four times, without reflecting accurately the damage that those 18 years had done to people, their life chances and the economy. That upset most of us who were trying to get our constituents back into work or help those seeking to enter the work force, for whom there was no ladder and no coherent strategy.
There was instead a series of schemes. I do not claim that every scheme that the Tories tried to introduce was wrong or bad--some were very good. I remember a community programme that many of us hoped might last, but did not, and there were other programmes that had a basis in good policy. The problem was that the Government did not believe in them. Their main criterion was to get the headline claimant count to below a magical number. We never really understood what that number was, but that was their idea. Every month, the Government would look anxiously at the claimant count, without noticing the individuals and their
A group of people working at the Department of Employment was allegedly attempting to help people into work. I say "allegedly" because, although those civil servants had once been full of enthusiasm and fired by the belief that their task in life was to help people find work, once they were in the Department under the previous Government, they quickly learned that their job was to discipline the unemployed for failing to have a job--not to help the unemployed but to sanction them. Those civil servants became very dispirited. My experience on Select Committees, visiting various Departments and parts of the country and meeting officials from the Department of Employment, means that I know how the frustration and anger was apparent in those individuals. They wanted to do a job for which they knew they had the capacity, but the Government and their policies would not allow them to do it. They were particularly frightened at conference time, when prophetic speeches would be made at the Tory party conference.
Mr. Ross : Probably both, but they certainly excited the masses at the conference. The Tories are not the only culprits; occasionally, we do the same--or we did before we reinvented ourselves and got back on to the straight and narrow. However, making a speech at conference and translating it into something that will work in the real world are entirely different things.
I remember a party conference at which the right hon. Member for Hitchin and Harpenden (Mr. Lilley), then Secretary of State for Social Security, waxed lyrical about how he would drive the unemployed back to work; he received great cheers from the audience. He was supported by the right hon. Member for Kensington and Chelsea (Mr. Portillo), then Secretary of State for Employment. The idea was that itinerant people were wandering the country, living in hippy communes on the south coast, enjoying the palm trees and cream teas of Devon. They were supposedly enjoying the good life and turning up for job interviews in such a poor condition either of dress or of attitude that they could not be employed.
Those of us who understand the nature of unemployment and the way in which the unemployed are driven down know that after six months, one year, a year and a half or two years of unemployment and living in a household in which no one works, people are in no mental or financial position to turn up to an interview in an Armani suit and Gucci shoes. However, it was thought that if they did not turn up in such style, the employer could write on the green card that they would not employ that person because his or her attitude was wrong, the green card would be sent to the Department of Employment, and a sanction would be levied against the poor individual. That was the theme of the speech made at the Tory conference.
That Government had no coherent policies or strategies, and no long-term aim. There was a succession of schemes, but I challenge the hon. Member for Beaconsfield (Mr. Grieve) to name one scheme, which the Tories introduced during their 18 years, that went from start to finish.
Mr. Dominic Grieve (Beaconsfield): The statistics do not bear out the success of the new deal compared with earlier approaches. Since 1997, there has been a 25 per cent. reduction in youth unemployment because of the new deal, as the hon. Gentleman says; however, over a similar period previously, the reduction was 29 per cent.
Mr. Ross : I understand that the hon. Gentleman is here to defend the indefensible, but he did not respond to the question that I posed. Can he tell me of a single scheme introduced by the previous Government that started and finished? No, he cannot, because none of them did. Can he tell me of a single scheme for which there is any record of how successful it was? Again, the answer is no, because when we asked successive Secretaries of State for Employment and representatives from the Department for Education and Employment, we were told that no records were kept. That is not unusual. If one reads the latest Select Committee on Education and Employment report, one finds not enough record keeping is done even in respect of our own new deal programme. Our Government accept that we need to keep records and they are instituting a series of initiatives to ensure that we have a record of how successful such programmes are.
Mr. Deputy Speaker : Order. I remind the hon. Gentleman that this is not a Committee. It is the equivalent of the main Chamber of the House of Commons, and whoever is in the Chair ought to be addressed as Deputy Speaker.
As I was saying, the trainers were a mixed bag. I remember a training and enterprise council in or just outside London that was allegedly providing horse riding for the disabled. The Select Committee discovered that the chairman of that TEC had bought himself a nice ranch: he owned the ranch, the horses, the paddocks and the fields and, even though the scheme went bankrupt he was--lo and behold--still left with the horses, the fields and the ranch. The disabled were left with no facilities.
We can look forward to the election, whenever it comes, knowing that we have met that pledge. We have not met it in its entirety--I remind those present that we set out a programme that ran until 2002, so we have not met all our targets. We still have at least a year to go before it can be judged whether we have met our targets. However, we are well on our way to meeting the initial targets, which included getting 250,000 young people back into work--
Mr. Grieve : The hon. Gentleman says that the target of getting 250,000 young people back into work has been met, but the statistics show that at the time that the Government were elected in 1997, there were not 250,000 young unemployed to be got back into work. Is that not an example of how the new deal has been a complete piece of spin?
Mr. Ross : I now see the way in which the hon. Gentleman intends to approach the debate. However, it will not work. The fact is that those people are well on their way to benefiting from a whole package of measures.
If the hon. Gentleman had allowed me to continue, I would have said that we realised that getting people back into work was not just a matter of welfare-to-work programmes--there was more to it than that. We had to deal with the economy as well. I would like to refer to a speech made by my right hon. Friend the Secretary of State for Scotland to the Centre for Scottish Public Policy on 12 March. In that speech my right hon. Friend clearly set out the criteria against which the Scottish economy should be judged as a part of the United Kingdom economy. She linked dealing with poverty, social deprivation, the long-term lack of investment and the need to develop the skills base of people in Scotland with the new deal--working hand in hand with measures to make work pay.
My right hon. Friend set out some facts that are worth sharing with the Committee. The new deal has helped 31,500 Scots to find work. The national minimum wage, which is part of the same package, is benefiting 120,000 Scottish earners. The working families tax credit is making work pay for 108,000 families in Scotland. My right hon. Friend clearly demonstrated that our overall economic strategy is right, both nationally and for Scotland. We can use the new deal to deliver programmes that will make people more employable and get them into real, long-term, sustainable jobs. The Labour Government have delivered a strong and stable economy as the foundation for such opportunities. Because jobs have always been at the heart of our programmes, we have provided employment opportunities for all and we are moving towards a stage at which there will be jobs for all.
Having won the confidence of the unemployed, we also won that of the civil servants in the Employment Service. They have realised that the new deal has made it possible for them to do the job that they are trained to do. I should like to recount some of our experiences in Tayside, which, although it is a small part of Scotland, plays a large part in our lives and in the Scottish economy. We have one of the best Employment Service teams imaginable. Under its manager, Bob Alexander, it is as good as any in Scotland. I make it clear to my hon. Friend the Minister that if there is any attempt to move Bob Alexander from Tayside, dead bodies will come into the frame. He is one of the best Employment Service managers in Scotland and has been a real find. Our new deal has liberated him and his team and I should like to share some of the positive things that have happened in Tayside as a result of their entering wholeheartedly into the scheme.
Since January 1998, Tayside has blazed the trail in the Government's crusade to fight unemployment and tackle the scourge of social exclusion. Helping people into work is the best anti-poverty strategy, and the Government's welfare-to-work initiative is a central plank in our efforts to achieve equality of opportunity. The new deal for 18 to 24-year-olds was the most important of the welfare-to-work programmes. It was introduced with twelve pathfinder districts throughout the United Kingdom, with Tayside piloting the programme for Scotland. The pilot was launched in Dundee by Donald Dewar, the then Secretary of State for Scotland who is sadly no longer with us; my right hon. Friend the Chancellor of the Exchequer; and my hon. Friend the Member for Cunninghame, North (Mr. Wilson), then a junior Minister at the Scotland Office.
When the new deal was launched in Tayside, we had to break the pattern of households with no working adults. Some of the young people of working age had never had a job and had become almost completely detached from society. We have enabled more than 2,250 people to find jobs, ranging from retail positions with major companies to jobs in information technology. Of these, 1,087 Dundee new deal clients gained employment between April 2000 and March 2001. We have helped 1,336 young people, 379 25-plus clients, 251 50-plus clients, 272 lone parents and 28 partners of unemployed people to find jobs.
Under Bob Alexander's leadership innovative practice has been introduced in Tayside that has now been copied elsewhere in Scotland. The new deal support personal adviser was something dreamed up in Tayside. We discovered that the period in which young people were most likely to opt out of the programme was the first two or three weeks; we would lose them completely. The new deal support personal adviser is an advocate working with the young person and the employer to prevent dropping out. The new deal
The range of innovative practices that I have outlined has been used by the local Employment Service team in Tayside, which is committed to preparing the people with whom it works for employment. Those involved have been happy to work in the relevant programmes. As well as seeing their own success in their chosen activities, they have witnessed the success of people entering real jobs. Those people have returned to thank the team and to ask for further help if they have difficulties.
There is also good news from Tayside about lone parents. A lone parent aged 33 joined the new deal case load in June 2000. She was an honours graduate in ecology and had experience as a care assistant. Initially she was trying only to find a job as a care assistant, but because of the presence of the Scottish Crop Research Institute nearby, she was encouraged to look for a job there. It was discovered that she was over-qualified for the job that she applied for. However, because of her qualifications and dedication and the intervention of the personal adviser, she found a research job at the institute, which is paying for her to do a masters degree. A lone parent aged 31 attended an interview with a personal adviser and was referred for an interview on the same day. She was offered the job, but the hours were unsuitable. The personal adviser intervened with the employer and as a result suitable hours were arranged. Another lone parent with a child of three had been claiming income support since August 1997. She attended an initial interview on 11 September and was referred by an adviser for 15 vacancies and several speculative approaches to employers. The client found a post, the local employer was delighted with the new employee, the person concerned was delighted to be working again and she was approximately £34 a week better off. That effect was repeated for another client, who was approximately £47 a week better off and loved the new job.
The new deal has been a success for people in Tayside because of a group of people working in the Employment Service who are doing the job that they have been trained to do. They get up in the morning and want to come to work. Under the previous Government, there was a series of shady trainers, but we have tried to ensure that there are much better training companies under the new deal. I want to quote one example from Tayside that is close to me personally, simply because it offers the best. Back in 1987, the Employment Committee accepted that Workstart, based in Dundee, was one of the best training companies, delivering
More than 300 local employers throughout Tayside currently use the Claverhouse Group as their main source for new employees. Their occupation areas cover a wide range, but are predominantly factory work, packing, assembly, printing, catering, driving and office work. In 1999, the company managed to progress 590 unemployed adults into employment. That increased to 694 in 2000, and projected targets indicate that the figure for the current year will be close to 775.
I am a member of that company, although I receive no remuneration from it. In fact, my hon. Friend the Member for Dundee, East (Mr. McAllion) and I have been associated with the company almost from the start. It is dedicated to providing the best training and helping people to reach the highest levels in their employment. It has not been prepared to cut the targets that it has set for itself or the targets that it has set in preparing people for jobs, even though it has meant that the company has occasionally lost contracts. Under the previous Government, it lost several contracts simply because the training that it delivers costs money. It does not cost as much as some other trainers, especially the bigger trainers in Scotland. The company provides the best training, but at a cost that the previous Government were not prepared to meet.
Last Wednesday saw the conclusion of all the company's efforts. The Claverhouse Group has been trying to provide a one-door approach for anyone who lives in Tayside and has a problem finding work or other associated problems--a one-door approach to getting people off the dole queue and back into employment. That one door is Claverhouse. Last week, the company signed a contract with the Employment Service in Tayside to deliver the new 25-plus programme--a £1.5 million three-year project. The contract will ensure that the company continues to deliver what businesses in Tayside require and what individuals require to get them back into employment.
When I was in Tayside last Wednesday for the signing of the contract, I noticed that one of the projects was called FUN, and I wondered whether the company had gone a bit too far. Then I was told that FUN stands for "further underpinning for novices". That programme recognises that some individuals need to acquire life skills in addition to training, and that unless they acquire those life skills, they will not be ready for employment. There used to be a community industry programme to deal with that, but the previous Government got rid of it. We now have an organisation that can get people job-ready for the employer and give them some knowledge of what will be expected not only from their employer, but from colleagues who will be working alongside them. That will ensure that they are ready for the job. The work force readiness certificate that people will be awarded at the end of that process will demonstrate to any employer that they understand the responsibilities that they accept if they take a job.
For Tayside, the Government's policies are right. They are committed to ensuring that the national economic situation is right, offering jobs and a way out of poverty. The Employment Service is dedicated to its job and has demonstrated through the innovations that it has introduced under Bob Alexander that it will respond to the challenge. We want training companies such as Claverhouse, which can implement programmes in a way that is acceptable to the employer and the person who has been offered a place as a client. We in Tayside are saying, "Yes, we have problems and we still need help." I look forward to hearing what my hon. Friend the Minister has to say.
Mr. David Marshall : My hon. Friend referred to Tayside. Does he agree that the story there is being repeated up and down Scotland and that far from being a story of spin, as the apologist for the Tory party said earlier, the new deal in Scotland is in fact a story of success followed by success? I say that as someone whose constituency had for far too many years the highest unemployment among adults and young people. The new deal has made a tremendous difference to my constituents--we cannot commend it highly enough.
Mr. Ross : I agree with everything that my hon. Friend said. He and I understood that unless we looked at the whole picture and got everyone working together, change would not be possible. No one assumes that the previous Government did not have difficulties or that the current Government do not. Governments do not make jobs as such.
Mr. Ross : Absolutely. However, much more disastrously, during their 18 years in government, the Conservatives destroyed people, communities and morale across the region. That is what I have been trying to say. They destroyed the organisation that was established to help the unemployed. Then, anyone entering one of the fortresses supposed to be centres to which people went to get themselves a job would have felt the tension. If we go into an Employment Service office now, we find it much more relaxed. I am not saying that there are not people who have got out of bed on the wrong side or who are trying to dodge the system; such things will always exist. However, there are now people in the Employment Service who see that they have a role in life and who can picture themselves getting on. They can enjoy the fact that some of the people with whom they work are moving into work either directly or after a period of training.
In the four years of our Government, we have managed with the help of many organisations and individuals--not least the Employment Service and training companies such as Claverhouse--to build a fairer society. We are on our way towards cutting unemployment, creating jobs and ensuring that the money that is intended to go round does so. Instead of using the trickle-down theory of the previous Govt, we are putting the money in at the bottom to ensure that it goes up. In that way, people will feel that their health and life chances are improving and that public service is
Mr. Deputy Speaker (Mr. Nicholas Winterton) : Order. I remind the Chamber that winding-up speeches must begin by half-past 10. At least three hon. Members wish to participate in this important debate, and if they are reasonably brief, all those who wish to speak will be able to do so.
Mr. Alex Salmond (Banff and Buchan): I listened with great interest to the hon. Member for Dundee, West (Mr. Ross), and I congratulate him on securing this debate. He talked about his experience on Tayside, and to generalise from a particular constituency is no bad thing.
I shall make specific points about the new deal, but go on to talk about the economic background against which the new deal has been experienced over the past few years to examine whether there will be a major change in the economic forecast, with the economic problems that are looming.
The hon. Gentleman skated over some of the perceived problems in the new deal. I would not suggest--as perhaps the Conservative spokesman would--that the new deal has been a major disaster in every respect. On the contrary, I think that it has done some--
Mr. Grieve : I assure the hon. Gentleman that I will not be making that suggestion. I do not think that the new deal has been a total disaster, but it has not been anything like it has been cracked up to be by the hon. Member for Dundee, West.
Mr. Salmond : I apologise--I was basing my remarks on the hon. Gentleman's two previous interventions. Obviously, he will develop the point in his own speech. I was going to suggest that a balanced view would be that there have been limitations in the new deal. For example, in the 18 to 24-year-old programme, 38 per cent. of people stay in their placement for fewer than 13 weeks, and after placement, 39 per cent. either move back on to benefits or to what is called an "unknown destination".
Many of us have doubts, scepticism and regret about the compulsory element in the new deal. The hon. Member for Dundee, West described it by saying that there was to be no fifth option, but it is actually a compulsory element. I am experienced enough to remember when many hon. Members regarded compulsory elements on employment programmes as being too similar to workfare to give them unqualified support. For all that, many of the points made by the hon. Gentleman are correct, and every hon. Member
My main point--I disagree with the hon. Gentleman--is that the new deal has been introduced against an economic environment that has not been a success. I must re-examine the speech of the Secretary of State for Scotland to see the criteria by which he judged the performance of the Scottish economy as excellent. I would have described its performance over the past few years as disappointing, certainly in terms of international comparisons. Most of us support the International Labour Organisation's definition of unemployment, and on that basis, unemployment in Scotland is currently 6 per cent. compared with Austria at 3.6 per cent., the Netherlands at 2.8 per cent., Denmark at 5.3 per cent., Sweden at 5.4 per cent., and Ireland at less than 4 per cent. Therefore, if one compares Scotland's rate of unemployment with other small countries in Europe, its performance is disappointing.
Growth figures in Scotland over the past few years, have also been disappointing. The manufacturing industry in Scotland has experienced serious problems--since 1997, 32,000 jobs have been lost. Recent figures for manufacturing exports for the last quarter of 2000 reinforce that view. Food, drink and tobacco exports are down 24 per cent. since 1997, mechanical engineering exports are down by almost 20 per cent., and exports in textiles--a very troubled sector--are down by 34 per cent.
Despite the disappointing general performance of the Scottish economy and its under-achievement when one considers its potential, and despite the problems that have been concentrated on manufacturing and exports in particular, the service sector in Scotland has, generally speaking, been performing pretty well during the past few years. Many new deal placements--not all, by any means--have been in the service sector. I should be interested if the Minister, when replying to the debate, would give us an analysis of what proportion of new deal placements have been in manufacturing and in the service economy.
There are signs that we are moving into a much harsher economic climate. That was shown to all of us yesterday by the hugely tragic announcement in Bathgate, but we can also see across Scotland--with Compaq at Erksine and the Panasonic announcement a couple of weeks ago in East Kilbride--that continuing major job losses are on the way.
If we are entering a more troubled economic environment, it will be much tougher for a scheme such as the new deal to find suitable placements for young people. Of course, a tougher economic environment and a more difficult employment situation reinforces the argument for interventions such as the new deal, but one of the failings of the many schemes employed during the Conservative period of office was that they were always identified as attempts to disguise the unemployment figures as opposed to generating genuine employment opportunities.
Mr. Salmond : I take the hon. Lady's point. Of course, there is structural unemployment. After a period of employment catastrophe such as there has been in many areas and many industries over the past 20 years, we would expect structural unemployment--those without experience of work, whose families have not had experience of work and who are not familiar with the work culture--to grow. It is obviously right for the Government to introduce policies to try to bring back work experience, lifetime opportunity and the work culture to people, families and communities who have been disadvantaged for a substantial period. My point is that that is much easier to do in a relatively benign economic environment. Attempting to address structural unemployment is much more difficult if general employment opportunities are limited, because the people who tend to be squeezed out are exactly those whom the hon. Lady and myself are anxious to help.
Mr. Graham Brady (Altrincham and Sale, West): Is the hon. Gentleman aware that when long-term unemployed people enter the new deal but then return directly to unemployment and to claiming benefit, they no longer count in the statistics as being long-term unemployed? One of the successes of the new deal from the Government's point of view has been in disguising long-term unemployment.
Mr. Salmond : I do not absolve the Government from disguising the unemployment figures. I merely suggest to the hon. Gentleman that if they were looking for lessons on how to massage unemployment figures, they had 18 years of tutelage from his party. I accept that this Government--perhaps all Governments--tend to pick up bad habits from their predecessors. In several areas they have taken lessons taught by the Conservative party to excess.
Mr. David Marshall : The hon. Gentleman has mentioned bad habits. I can pick on one bad habit displayed by him and his party. I am loth to raise the matter of voting records, because we all miss votes. However, apart from the vote on the national minimum wage, when no Scottish National party Member voted, the hon. Gentleman is well aware that the Finance Act 1997 contained the policy of levying the windfall tax on the privatised utilities in order to fund the new deal to reduce unemployment in Scotland. The vote on that occurred on 29 July 1997, less than three months after the last general election. Not one SNP Member voted to help the unemployed in Scotland. Where were they? Had they all gone on holiday early? Can we have an explanation? The hon. Gentleman comes along and criticises the Government--[Interruption.]
Mr. Deputy Speaker : Order. That was a very long intervention. I hope that the hon. Member for Banff and Buchan (Mr. Salmond) will deal only with the part of the intervention that is relevant to the debate.
Mr. Salmond : Unfortunately, that leaves me nothing to deal with, because the intervention was totally irrelevant. I can tell the hon. Gentleman that the House of Commons Library has furnished me with a list of hon. Members that shows, among other things, voting records. He will accept that I have been serving in two Parliaments for some time, and I am happy to compare my voting record with that of Labour Members who serve in two Parliaments. However, I shall not do so, Mr. Deputy Speaker, because you might prevent me.
The Library document shows that, if we examine hon. Members' speeches, interventions in the Chamber and questions together, it appears that I come 10th in the list of 72 Scottish Members of Parliament. I shall not embarrass the hon. Member for Glasgow, Shettleston (Mr. Marshall) by saying where he ranks, but it is substantially lower in the list.
Mr. Salmond : I apologise, Mr. Deputy Speaker, but I am sure that you agree that I was sorely provoked and tempted. My final point to the hon. Gentleman is that it seems that I have been more effective in two Parliaments than he has been in one.
I shall return to the new deal, which is the subject of the debate, and make a serious point. If we are moving into a more difficult economic and employment environment than that within which the new deal has operated over the past four years in the service sector in Scotland, the challenge for the Minister is to explain why, in such an environment, the new deal will not fall victim to the same pressures that I believe were instrumental in undermining confidence in previous employment schemes that were devised by the Conservative Government. I hope that we receive a substantial answer to that, because I do not want the matter to be yet another area of policy in which too many bad lessons were learned from the previous Government.
I want to reflect on a report by the Select Committee on Scottish Affairs about welfare to work in Scotland and the new deal, which was completed in January 1998. That was the first report with which I was involved following my election. It is worth looking at its recommendations in order to measure the success of the new deal in Scotland. As my hon. Friend the Member for Dundee, West (Mr. Ross) said, we visited Tayside,
The hon. Member for Banff and Buchan (Mr. Salmond) referred to the major concern felt by people about the compulsory element. They were worried that the new deal would be compulsory and that many young people would disappear down a black hole, come off benefits and not gain from it. However, that fear has generally been proved to be groundless. Because it was such a good--I was about to say "scheme", but I must avoid using that word--project for the young unemployed, it was spread by word of mouth that it was worth while becoming involved in it. The compulsory element has not been the big issue that many people feared that it would be.
Another fear was that there would not be enough personal advisers, or that they would not be properly trained or any different from those in the old Employment Service who just managed unemployment rather encouraging people into work. That fear has not been realised either. There have been enough personal advisers. Indeed, their mere existence has been the major success of the new deal and set it apart from previous schemes.
There was a misunderstanding about the meaning of the new deal. Some people thought that it was a job creation scheme. It was never intended to be that. It was about making people work-ready so that they could take up the opportunities that already existed in the economy. As I said to the hon. Member for Banff and Buchan, problems often arise for the long-term unemployed for whom the work culture and ethos have disappeared. Such people find it increasingly difficult to get back into work. Because of the success of the new deal for the young unemployed as well as for the long-term unemployed, many fewer people fall into that category in Scotland. In my constituency, youth unemployment has fallen by 90 per cent., which is an outstanding figure. It shows the deal's success. The drop in long-term unemployed is 46 per cent. The new deal is working.
I must remind hon. Members that several worries were expressed about how the new deal would work in Aberdeen, because traditionally we have low unemployment. It was feared that those young people who were not already in work would be difficult to place. My local enterprise company gave me a detailed brief setting out such fears and said that more options might need to be available so that people could swap between them. It said that in some cases the young unemployed needed a longer gateway to become work-ready. The Government have now put in place such changes, which have been an important development.
Provided that we continue to have a Labour Government, we can be optimistic that the new deal for disabled people will be expanded. It has not yet been fully rolled out and is only working in pilot form in some
Sir Robert Smith : Does the hon. Lady consider that the Government should ensure that the subsidies provided to employers in respect of mainstream new deal participants are available in respect of disabled people?
Miss Begg : That should certainly be considered. It may help to encourage more employers. One problem is the search for more employers. Good work is being undertaken by one of the access to work groups in Aberdeen that operate from Choices on Westburn road. It tries hard to interest employers in employing people who are desperate to find work and to be productive members of society. The new deal has proved successful, and I hope that it will continue to roll out for the disabled and for people who are still not engaging in work or getting involved in society.
I am grateful for the debate, as it has provided an opportunity to state that Government policies can make a fundamental difference to people's lives. Because of the new deal, in the recent past fewer people have been out of work or experienced long-term unemployment. I hope that, in the future, if people find themselves unemployed because of the vagaries of the economy, they will be better equipped swiftly to find new employment.
I have visited local Employment Service offices in my constituency and the people who work in them are enthused by the new deal because it greatly improves the service that they provide. There has been a significant reduction in unemployment among people aged between 18 and 24.
However, I am concerned by some remarks that appeared in a recent poverty report by the Scottish National party. Its attitude towards the new deal is very different from that expressed by the hon. Member for Banff and Buchan (Mr. Salmond) this morning. He was conciliatory, but I want him to comment on the poverty report's statement that it
"it has made little or no difference to the employment prospects of Scotland's people."
Sir Robert Smith (West Aberdeenshire and Kincardine): I congratulate the hon. Member for Dundee, West (Mr. Ross) on securing the debate, and I agree with the hon. Member for Hamilton, South (Mr. Tynan) that it is important to recognise that we are discussing a matter that fundamentally affects how individuals become involved and take part in society.
The economy creates the wealth that funds society, and it is important that as many people as possible are able and willing to work. There are also non-economic reasons why we should try to ensure that people are involved in society and become engaged and connected with the wider community. I support the new deal's aspiration to create a climate in which there are no barriers to work, except for each individual's skills and experiences.
Like the hon. Member for Banff and Buchan (Mr. Salmond), I had decided to mention that it is important to recognise that the new deal has been launched and tested in the most benign of world climates. It will face harder challenges in the future, and the Government should tell us how they intend to ensure that it can cope with them. The Chancellor has issued vague warnings that we should not be quite as optimistic as in the past.
The hon. Member for Dundee, West was coming from two different directions; when I intervened on him, he said that Governments did not create jobs, but he spoke about job creation later on. Fundamentally, Governments do not create jobs, but they do affect the climate and the likelihood of jobs being created. We welcomed the Government's recognition when they came into office of the need for an independent central bank, which would bring stability to economic planning and take interest rates out of the political domain, so that they would no longer be subject to short-term decision making.
As the hon. Member for Banff and Buchan said, there are changes on the horizon, as evidenced by what is happening at Motorola. If the world market for mobile phones collapses, it will have an impact on employment in this country. If the jobs are not there, the new deal faces a much bigger challenge in helping and supporting people back into work. The foot and mouth outbreak has exacerbated the problems of the strong pound for farming and tourism, especially in Scotland. As a result, the rural economy, and those parts of the economy that depend on those industries, face many challenges in providing jobs. The new deal cannot be judged in isolation. To achieve the goals of the new deal, we need
An important and welcome development, on which the hon. Member for Dundee, West touched, is the creation of the personal adviser, who provides a link with the individual. Although different factors affect the ability of different groups to get back into work, people must be treated as individuals. Rather than having a scheme for a group--whether of young people, disabled people, single mothers or the over-50s, or a group which does not fit into those categories--we should consider all those who face the challenge of long-term unemployment, and make sure that all of them have access to a personal adviser to help them get back into work. It does not matter to long-term unemployed people which group they are in; they still face the challenge of unemployment, and they need help and assistance. Once people become disengaged from getting work, they enter a cycle that must be broken; that is why intervention is so important.
The hon. Gentleman--rightly and understandably--went on a brief tour of Conservative failures. In dealing with the needs of individuals to get back into work, the new deal responded to the failure to invest in the education service to ensure that our young people--and the next generation--were equipped with the tools and life skills that they needed to meet the challenges that they would face.
Mr. Deputy Speaker : Order. The hon. Gentleman must refer to the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) by his constituency, or as "the hon. Gentleman". On the matter to which he refers, I have no view.
Mr. Clarke : I apologise, Mr. Deputy Speaker. I forgot where I was, and used the word "you" as if I were having a conversation. Does the hon. Gentleman accept that a policy must be laid down to tackle such bias?
Sir Robert Smith : I recognise the challenge of ageism. Given increased life expectancy, businesses are wasting talent and opportunities if they do not embrace the experience that people who have worked all their lives still have to offer to business and the community. The idea that a cut-off point exists at which people no longer have anything to offer means that we are wasting opportunities for society and the economy. I deprecate ageism and recognise the need to challenge it, and I encourage business to embrace that experience.
To break the cycle and, in the long run, to reduce dependency on intervention at the new deal and unemployment stages, we must ensure that the foundations are right. Good education stays with people for life; no one can take their skills away from them. Whatever happens to the economy or society, those skills are their personal assets and underpin people's participation in society and the economy. It is fundamental to our future to ensure that we put the necessary investment into education. Although the
The hon. Member for Aberdeen, South (Miss Begg) said that, in our area, the challenge for the long-term unemployed might be even greater. Constituents whom I meet want to work, but are not finding out how to find work or match their skills. Lifelong learning and the abolition of tuition fees in Scotland to encourage more people into higher education are positive proposals that will help to undermine some of the need for the new deal.
The Minister should assure us that he understands the challenges that are to come in the wider economy. In the Scottish Grand Committee on 29 February 2000, I cited figures from Sheffield university that showed that 600,000 people in the UK were economically detached--that is, not employed and not on benefit--and did not show up in our statistics or have access to the new deal. I asked whether the Government had a breakdown of the figures, or had examined them, to find out how they applied to Scotland. Has the Minister any further information? The new deal is designed to re-engage people in society by employment, but we must find and re-engage those who are not even showing up in the statistics.
The challenge in an area of high employment, such as the north-east of Scotland, is to find the skills and the people. For the economy to grow, we need more people to work in our industries. In the North sea oil industry, there is a great skills shortage. Similarly, in parts of the country that face high unemployment, we need to ensure that the Government do everything to avoid damaging job creation and putting barriers in the way of jobs, such as the problems of the strong pound.
I hope that the Government recognise that there is still a lot of work to be done to ensure that everyone has the best opportunity of getting a job. We welcome the work of personal advisers, and the Government must recognise not only the people who face unemployment, but the hard work of the people who make the scheme work, including the personal advisers. The service being provided and the atmosphere at employment centres is a breath of fresh air. We must congratulate those who are doing the work, give them all our support for their future endeavours and recognise the valuable contribution that they are making to improving our society.
Mr. Dominic Grieve (Beaconsfield): I congratulate the hon. Member for Dundee, West (Mr. Ross) on having secured the debate. I listened with great interest to his comments, especially his personal references to how the scheme had operated in his constituency. In my role as spokesman for Scotland, I am conscious that my constituency, being located in an area with the lowest unemployment in the United Kingdom--
Representing a constituency with low unemployment, as I do, it is easy to be glib about what the new deal sets out to achieve or to be critical without paying attention to how it works on the ground. To that extent, I am grateful to the hon. Member for Dundee, West for bringing his personal experiences to bear on the matter. However, I hope that he will forgive me if I highlight one or two areas where I believe that his arguments--and, indeed, some further arguments that have been presented--seem to be a little out of touch with reality.
The first is the suggestion that the new deal has achieved some great revolution in getting people into employment. If one examines the figures, it is obvious that that is not the case. The process by which employment availability in this country surged began in about 1994, and was due to the previous Government's economic policies. It was also doubtless due to a revival in the world economy. So when figures are bandied about for the number of people who have been helped into work since 1997 through the new deal, I would simply say that more people were helped into work in the period from 1994 to 1997 than have been helped since.
By the time that this Government came into office, the back of the major unemployment problem--in terms of figures--had already been broken. Nothing reflects that more than the fact that one of the Government's key promises in 1997 was to reduce youth unemployment by 250,000. However, the statistics for 1997 demonstrate that there were not 250,000 unemployed people aged under 25 looking for jobs; it was pure spin. In fairness to the Government, I suspect that they came up with that figure before they discovered that it had sunk below 250,000.
Miss Begg : The most recent statistics I have show that 270,000 young people have been helped into work as a result of the new deal. We somehow seem to have helped back into work extra people who did not appear in the official statistics quoted by the hon. Gentleman.
Mr. Grieve : I should point out that 40,000 young people have been through the new deal twice. I wonder whether the Government's statistics involve some double counting. The hon. Member for Banff and Buchan (Mr. Salmond) rightly emphasised that all Governments doubtless seek to massage statistics, but the massaging of unemployment statistics by this Government has been distinct. It is also worth remembering that the new deal was achieved by means of the windfall tax on utilities, which, frankly, amounted to a theft of £3.1 billion and had serious adverse consequences on the economy. I am sometimes left with the horrible, niggling feeling that if the Government decided not to do anything to help the unemployed, we would still see patterns of rise and fall for which no Government--Labour or Conservative--could take credit. I have a worrying feeling that the Government's intervention in such matters tends to be peripheral.
The Government have admitted that the new deal is flawed. They do not say as much in the House but, on one occasion--at the Franco-British Council--the Government admitted that the new deal was unlikely to bring new recruits into modern business and industry because those employers required youngsters with knowledge of new technology, which the new deal was
Miss Begg : The hon. Gentleman must take account of the fact that the new deal is not the only way for young people to get into work. They go through the normal education process, and investment in further and higher education--in the new technologies in particular--will allow them to be trained in the area that the hon. Gentleman mentioned. The new deal is specifically to help young people who are not job-ready; it is not meant to be a panacea to get all young people into work. It was never designed for that and nor should it have been.
Mr. Grieve : I accept that entirely, and have no difficulty with it. The new deal was designed to target those who were having great difficulty getting into work. As the economy began to boom and unemployment fell, obtaining jobs appeared to be relatively easy for those with the relevant aptitudes and skills. Indeed, in my constituency, the problem is not unemployment, but finding people. Those who are unemployed in a low-unemployment area tend to be those who have enormous difficulties holding down or attaining a job. However, we must consider whether we are getting a return on what we have put in. Various figures have been put around, but I believe that the correct statistic is that it costs about £20,000 a job to get people into the new deal.
Mr. Grieve : I shall listen in due course to what the Minister has to say on that subject. The provisions cost a great deal. The Financial Times noted last year that if one considered the amount of investment and the return--only about 20 per cent. of those involved hold on to a job in the long term--it is clear that we are not getting value for money.
I accept that the individual instances that the hon. Member for Dundee, West cited are heart-warming. I do not mean that pejoratively; it is pleasant to hear about them. I do not doubt that the staff are working hard and trying to help those who are trying to get a job. Nevertheless, the overall picture is not satisfactory. A great deal is being invested for a very limited return. In the long term, the number of people who are successfully placed in jobs that they then keep is poor.
Mr. Ernie Ross : Does the hon. Gentleman not accept that the unemployed individual who believes that he is outside the system will feel 100 per cent. part of the system by getting back into work? There are different levels at which people get back into work. We are beginning to approach employers, as happened in America; that is where many of our examples have come from. We are looking for ways in which to offer individual employers specifically job-trained people. That is the new deal.
I accept the point made by the hon. Member for Dundee, West, which is why I listened with such interest to what he said about the circumstances and individuals in his constituency. However, that does not get us away from the fact that the issues that we are discussing have arisen in a benign situation, as the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) said. It should be relatively easy to get people into work and to help them, but it costs a lot to do so. Furthermore, when we consider the overall statistics--I obviously cannot comment on the individual instances to which the hon. Member for Dundee, West referred--the overall return appears to be very poor in terms of the number of people in jobs.
As the hon. Gentleman will be aware, my party has suggested that we can and should make a radical reappraisal of the situation and that there is much to learn from the United States. We have suggested that the key to getting young people and people generally back into work when they have difficulties is not training so much as getting people into the workplace, keeping them there and ensuring that they get training there. That is why we have come up with the "Britain Works" scheme, which the Financial Times described as one of the best programmes for the jobless ever. It seeks to offer job experience to the long-term unemployed, which increases--[Laughter.] Labour Members laugh, which worries me even more. We have been provided with a classic illustration of the way in which the Government have sacrificed objective analysis of how to get people into work, replaced it with massaged figures and presented many individual instances that do not show the whole picture. There are better ways to approach the task, but I shall wait to hear from the Minister how the new deal is progressing. I am interested, but I hope for considered analysis rather than what I fear we shall be given; a further panegyric on a scheme with serious flaws.
The Minister of State, Scotland Office (Mr. George Foulkes) : I join other hon. Members in congratulating my hon. Friend the Member for Dundee, West (Mr. Ross) on securing this debate on a vital subject. His long-standing commitment to the training and employment prospects of young people is well known in Scotland and beyond and deserves the commendation of the whole Chamber.
I remind the hon. Member for Beaconsfield (Mr. Grieve) that it is beyond even me to accomplish a detailed analysis of this subject in 10 minutes, but several important contributions have been made in an excellent debate and I shall reply to as many as I can. The new deal has made a huge impact on Scotland. Several of my hon. Friends have already paid tribute to its success and its effect on their constituencies. Contrary to the patronising contribution from the Opposition spokesman, and while the new deal may not be needed in the leafy lanes of Beaconsfield, it is vital in Dundee, Glasgow, Carrick, Cumnock and Doon Valley and in other parts of Scotland.
The success of the new deal is to be found not just in statistics, but in the individuals affected. I do not apologise for giving two examples. The first, from Dundee, concerns Patricia, aged 51, who was unemployed for more than four years. She talked to a new deal adviser. My hon. Friends are right to say that personal advisers are a crucial element in the new deal. Patricia had been a voluntary befriender for the Dundee Society for Visually Impaired People. A full-time job was advertised, the adviser told her to apply for it and she found a job. She is now part of the success story of the new deal 50-plus, and there are many more. I say to my hon. Friend the Member for Midlothian (Mr. Clarke)--I do so with personal commitment--that people over the age of 50 are still vital to this country's work force, as well as to Parliament.
My second example is from my constituency and concerns Andrea Gardiner. She had been unemployed for three years and joined the new deal 25-plus. With the help of a personal adviser, she took a medical secretary course at Kilmarnock college in August 1999. On completing it, she applied for a job as a medical records clerk at Ayr hospital and started work in October 2000. Those are just two of the many real stories of people who have benefited from the new deal. Such carping criticism as we have heard from the hon. Member for Beaconsfield does the project a disservice.
The success of the new deal is to be found in the profound improvement in the situation of people who are given a chance, sometimes for the first time. As my hon. Friend the Member for Hamilton, South (Mr. Tynan) said, the Scottish National party did not acknowledge that in its poverty report. To be fair, the hon. Member for Banff and Buchan (Mr. Salmond) acknowledged it today. I think that he had to take his spokesman on poverty--or, rather, the spokesman of his colleague, the hon. Member for North Tayside (Mr. Swinney)--to task for not recognising the value of the new deal. It will be noticed in Scotland that not only did his party not vote for the new deal money, but it has talked it down day by day, month by month and year by year.
Mr. Salmond : On the subject of what will be noticed in Scotland, when the Deputy Prime Minister speculated yesterday about slashing Scottish public spending, did his analysis include cuts to new deal expenditure, or just to health, education and other public services?
When we introduced the new deal in 1997, unemployment among young people was effectively out of control. However, we did not accept the so-called accepted wisdom that, in a modern, high-tech, low-inflation economy, we could not find jobs for those people. We were determined to change a system that had consigned so many people to the scrap heap without any hope.
I would like particularly to talk about events in Dundee, because Dundee is a good example. Tayside has made a significant contribution to the new deal from the start. It operated as a pathfinder pilot area for the new deal for young people, testing and putting into
Since the new deal for young people was introduced throughout the country in April 1998, Tayside has gone on to help a further 3,000 young people to find work, 780 of them from the Dundee, West constituency. Under the new deal 25-plus, Tayside has helped 639 long-term unemployed adults into work, 144 of them in the Dundee, West constituency. That constituency and Tayside are a microcosm of what is happening all over Britain and are an example to all of us.
We welcome the hon. Member for Banff and Buchan back to Westminster. I congratulate him on his Pauline conversion on the way to Macduff. He has suddenly realised, once again, the importance of this Parliament to Scotland, and its particular importance in relation to employment. There could not be a better example. However, his economic comparisons with other countries were highly selective. He picked the ones that suited his argument and left the other ones out. He forgot that unemployment in this country is at its lowest level for 25 years. That is the significant difference. The number of people actually in work is at its highest level since 1960, when I was just coming out of school, which shows how long ago that was.
It may do the party of the hon. Member for Banff and Buchan some service to talk Scotland down. It may be wishful thinking on his part--he may wish to see more unemployment and more redundancies--but it does not help Scotland. If he is going to stand up for Scotland, not only must he and his colleagues turn up here, but they must speak up for Scotland and not keep talking it down. Of course there are job losses, but there are also significant job gains. If he had come with me to Atmel and to Caledonian Clear he would have seen job gains. Those gains must be significant, otherwise unemployment would not be steadily decreasing.
The hon. Member for Banff and Buchan talks failure. The SNP talk failure all the time. Why will the new deal not fail? It will not fail because it is personalised. It is not a job-creation scheme. People get real jobs in the real job market--sustainable jobs.
I will, however, reply to the ridiculous claims of the hon. Member for Beaconsfield about the cost of the new deal. Even the Conservative party's own policy announcement "Britain works" states that the cost per job is around £4,000, not the £20,000 that he mentioned today. For every £5 spent on the new deal, the
In conclusion, youth unemployment is now at its lowest level since the mid-1970s. Long-term unemployment among young people was 15,700 in 1997; now it is down to 4,400. That is a significant gain. The new deal has made a real impact, but we accept that there is still more to do. I say to the hon. Member for Beaconsfield that it is relatively easy to place people with doctorates and degrees in jobs. As unemployment reduces, we must find work for those who are more difficult to place. We are determined to find work for lone parents, for those with disabilities, for all people. Only a Labour Government will do that. Thank goodness, there will be a Labour Government for the foreseeable future.