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Rob Marris: Is not the answer to the hon. Gentleman's question in the final sentence of paragraph 10 of the supplementary partial regulatory impact assessment, which reads:

"The Exchequer cost of extending the same package of support as for full-time education to unwaged trainees in all programmes of Government Supported Training is £105 million"?

Mr. Laws: I am grateful to the hon. Gentleman for making that point. That is not how I read it. My reading is that that cost estimate of £105 million is based on the conditions imposed in paragraph 9, which relate specifically to particular Government-supported training programmes that will be spelled out. I think that that is an attempt by the Government to make sure that there is not abuse of those entitlements by employers or others who make bogus claims about people on unwaged training programmes. I fear that some people may be missing out, perhaps understandably, as the Government want to make sure that it is policed effectively, but it would be useful to know a bit more about it.

Mr. Tyrie: The hon. Gentleman is on to a strong point, which I considered making myself. The point was made to me by the Prince's Trust, whose letter I have in front of me. It strongly urged clarification on this point, and specifically wanted to know what is meant by Government-supported schemes, and whether voluntary work, work experience and other more informal forms of training will be ineligible.

Mr. Laws: I am grateful to the hon. Gentleman for reinforcing that point, which seems to indicate that it may be useful for the Economic Secretary to clarify that issue today.

My other concern is that there may be employer incentives to switch between waged and unwaged training, which I mentioned earlier. The Government seem to share that concern, because in the initial regulatory impact assessment, in paragraphs 20 and 21, they set out that there might be some problems in that
 
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area. Paragraph 21 says specifically that devolved organisations, with responsibility for securing the progression of trainees from unwaged to waged status, may have to bring in new accountability arrangements to ensure that no adverse impacts or unintended consequences flow from treating unwaged Government supported training more generously. I would be grateful if the Economic Secretary could comment on what proposals there may be to make sure that there is no abuse or adverse impacts.

Finally, Barnardo's has made some useful representations. It is concerned— including on the issue of unwaged trainees—about whether the proposals will reach the underachieving and hard-to-reach group of young people with whom it must often deal, who do not always fit into the neat packages in terms of behaviour, work patterns and benefit entitlements, that the Government, and all Governments, would like. The Barnardo's briefing, which many of us will have received before today's debate, states:

"The aim of the new financial support package is to encourage more young people into training or education but it is difficult to see how a measure that 'rewards' the family rather than the individual young person will assist training programmes to recruit under achieving or hard to reach young people."

That touches on the argument that the hon. Member for Wolverhampton, South-West also made earlier. I would be grateful if the Economic Secretary could comment on that, too.

On extending the benefit entitlements and child tax credit entitlement to those who reach the age of 19 and over, we support the change, which seems entirely sensible. Clearly, there are risks of wilful or passive abuse, and the Government's initial suggestion that the cut-off would be raised only to 20 rather than higher seems sensible. The hon. Member for Wolverhampton, South-West also pointed out the sheer oddity of potentially extending child benefit to 20 and 21-year-olds and he is absolutely right that we should hope that that is not the long-term mechanism that the Government intend to use to get help to those young people. Fortunately, we understand that the Government are engaged in a much more far-ranging inquiry into support for young people in future, which will be designed to rationalise all that. I do not imagine that the Government will be considering child benefit to support people in those circumstances in future. If the Economic Secretary could clarify that it would be useful, and it might also address the concerns of the hon. Member for Wolverhampton, South-West about parents getting involved, even though the young people concerned have become adults under UK law.

Barnardo's also makes a very effective point about hard-to-reach young people and the age 19 cut-off. Its briefing says that

"from our own experience we know that there are young people who, because of their life circumstances, do not access training until later and require a longer period of training before they are fully ready to move into employment . . . If the Child Benefit and Tax Credit extensions are not to apply to them—and we acknowledge the incongruity of "Child" benefits for 21 year olds—then we would wish to see some other sort of continuing financial support for this group of young people."

That reinforces the comments made by the hon. Member for Wolverhampton, South-West and the need for us eventually to move beyond reliance on child benefit in this area.
 
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Those are the issues that are specifically relevant to this Bill, with which I hope the Economic Secretary will deal. It is also worth making a couple of points about the Government's wider strategy, because this Bill is something of a milestone along the way to a new system of support for young people. We ought to be thinking about what we are seeking to achieve in that new system.

There is a degree of ambiguity in the Government's strategy in relation to what they are seeking to achieve. A useful paper came out earlier this year, "Supporting young people to achieve", which was sponsored by the Treasury, the Department for Work and Pensions and the Department for Education and Skills. On page 34, it states:

"As well as providing a stable bridge of income between activities, support paid at the same level irrespective of activities would not distort choices."

The argument is that the Government would put in place a system of support for young people in which choices between different elements of education and training would not be distorted by economic incentives and the way in which young people are supported. That comes back to the level playing field argument and the reasons for extending benefits to unwaged trainees. If we read on, the next paragraph states:

"Financial incentives would influence young people's behaviour in several ways. First the additional weekly amount payable direct to the young person would provide an incentive for them to progress into learning."

There we come to the other part of the Government's agenda, which is not really to have a simple level playing field, but to try to tackle some of the problems to which the hon. Member for Wolverhampton, South-West alluded earlier—the inability of many young people to stay on in education and training at age 16 or 17 because of economic pressures to go into work and earn money. That is causing the Government not to create a level playing field, but to create certain incentives that are deliberately designed to encourage people to stay in education and training. That may be a very good thing, but it is not the same as a level playing field. It also raises a series of problems in terms of Government policy—which brings us back full circle to the issue with which the hon. Member for Chichester began, namely, costs and benefits.

If the Government are going to spend a lot of money, they must be very cautious. They must ensure that spending that scarce money actually does change behaviour, rather than simply leading to the deadweight costs that we spoke of earlier. The incentives that the Government implement may not always achieve that balance between costs and benefits. Moreover, in making these changes the Government may, as Barnardo's suggests, impose conditions that will not be easily met by the most vulnerable in society.

There are a number of concrete issues on which we need reassurance from the Government—not just the issue of the cost-benefit balance, but some of the practicalities involved in the Bill's implementation. There are far bigger issues relating to the Government's strategy, with which we will deal on another occasion.
 
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3.1 pm

Mr. Liam Byrne (Birmingham, Hodge Hill) (Lab): I am grateful for the opportunity to speak in this important debate. It is important because it is about young people—the people who will inspire us and take our country, our communities and our economy in new directions during this century. They are the young people who, I hope, will not just reinvent the country but support us in what I trust will be a long and happy retirement.

The fact is, however, that many young people do not receive the credit they deserve. Sometimes our communities blame them for many of society's problems; sometimes, indeed, they are afraid of them. Nevertheless, our young people are not just an equal part of society but—as President Kennedy once put it—the gold reserve of any nation. They are the source of our future wealth and well-being.

I came to understand that vividly last Friday, when I was joined at Shard End community centre by the chief constable of West Midlands police, Paul Scott-Lee—a remarkable public servant in his own right, who has served the west midlands extremely well. He joined me for a cup of coffee and a talk with local residents about antisocial behaviour. It was a feisty meeting, as such meetings often are, but Mr. Scott-Lee made a simple and powerful point: he said that as a community, we must take care never to demonise our young people. It is true that some young people will always cause problems for others, just as many old people will. I have dealt with enough nuisance neighbours in Hodge Hill to know that the middle-aged are sometimes just as big a problem as the young.

I have to say that when I first heard Paul Scott-Lee express his views I was sceptical, but on reflection I realise that he was right. We should remember that young people can be inspirational too. We need only think of the way in which Amir Khan captivated a nation at the Olympics; we need only think of young Ms MacArthur battling her way around the southern oceans at this very moment. Indeed, this country once appointed someone in his early 20s as Prime Minister. Young people in history and today have helped to make the country great, and it is young people of genius and spirit who will power it to a greater future.

Everyone who will work in the labour market of 2020 is now alive, yet that world of 2020 will be very different from the world of today. First, our young people will have to support rather more senior citizens. By 2020, 30 per cent. of the UK population will be over 60, up from 20 per cent. today. Today the over-65s constitute 24 per cent. of the working population; by 2025 that will rise to 33 per cent., and by 2050 it will rise to nearly 40 per cent.

Secondly, it will fall to our young people to rise to the challenge of reinventing the way in which our world works. We can see clearly some of what will happen in the future when we reflect on what has happened over the past 20 years. Today, a throwaway musical birthday card has more computing power than the mainframe computer of a couple of decades ago. In 2020, computers will be 4,000 times as powerful as they are today. Nowadays, an estimated 10 to 20 new medicines resulting from biotechnology are launched every year. By 2015, genetic therapy will treat 30 per cent. of
 
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life-threatening diseases with a genetic root. All those new possibilities will change the way our country looks, and will power an economy that by 2020 will be 50 per cent. bigger than it is today. It is our young people who will drive those changes.

We will all have different stories about what that means in our constituencies. I know what it means in Hodge Hill. I recently visited Hodge Hill mixed school, where the head teacher, Marie McMahon, rightly talked proudly of the transformation in the school's results over the past year. She introduced me to some of the school's outstanding graduates. Once upon a time, they would have left school for unemployment, or worse; now, thanks to this Government's reforms over the past seven years, they are ambitious to stay in education, and financially equipped to do so.

All those young people had one thing in common: an ambition to leave school and go on investing in themselves—working hard not just for themselves but for their families and communities. They were, quite frankly, an inspiration. In a way, the Bill is about how we as a country can support people like them as they face the possibilities of tomorrow. That is of particular concern to many of us in Hodge Hill, because we have one of the lowest post-16 participation rates in education, and consequently one of the lowest rates for participation in higher education. Children and young people are now very well served by many of the schools in my constituency, and by many of the local further education institutions—organisations such as City college, blessed by great public servants such as Kate Morris, who retires today after a lifetime of service.

Nevertheless, the country confronts two problems. How can we create an economy that is healthy, but in which each of us has an equal chance to become wealthy? To achieve that goal we must not just improve our national productivity but ensure a more equal distribution of skills. In the past few years, we have made great strides in transforming productivity. We are now as productive as Germany, and we are fast catching up with France. That is due in no small measure to our national investment in skills. In 1981, 7.8 million workers were without qualifications; now 90 per cent. have formal qualifications. Today 28 per cent. of the work force are educated to NVQ level 4 and above, an increase of 133 per cent. in 20 years. Seventy per cent. of those aged between 25 and 64 have had a secondary education, and half those between 16 and 18 are in full-time education or training, compared to just one third in 1985.

That is a pattern that we must sustain and improve if we are to stay ahead as a nation. In the years to come our economy will need reskilling, and reskilling again. In 1980 almost no one predicted the advent of the personal computer, and in 1990 no one predicted the rise of the internet; yet today information technology skills are judged essential by every employer. If we are to accelerate the pace of investment in productivity and create real opportunities for all our young people to share in the wealth of tomorrow, we have a long way to go in terms of investing in skills, as my right hon. Friend the Paymaster General explained so eloquently.

Today, the single most important reason for economic inactivity is a lack of education and training. Our intermediate skills still do not compare well with those of our competitors. Indeed, just over one third
 
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of the UK work force have reached NVQ level 3 or equivalent, whereas three quarters of the German work force have done so. That is why the Bill is so welcome to the 7,500 young people in Hodge Hill. It provides nothing short of a 40 per cent. pay rise for those of our young people who seek a training-based option at 16.

Thanks to this Government, students from poor backgrounds who want to stay on at school can now access up to £30 a week in education maintenance allowance—a payment that does nothing to affect access to a range of other benefits. Yet those who take up a training allowance might receive as little as £40 a week, with their access to supplementary benefits disallowed. Given that income support currently stands at £43.25 a week, we can see that any such person, no matter what their ability or ambition to learn, would face a very difficult decision if they were experiencing hard times. We must change that. We must make sure that investing in oneself has a pay-off. We have to ensure that the right benefits are available to our young people, and maximise their chances of living a life off benefits.

Many Members from all parts of the House share a simple ambition for this country: that if we can find a shred of talent or potential in any of our young people, we should nurture it and invest in it, and help it to grow into something of pride and value not just to one family but to a whole community, and not just for a fleeting moment but for a lifetime. That is surely a worthy ambition for this House, which is why the Bill deserves unanimous support.

3.11 pm

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