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House of Commons

Thursday 8 December 2005

The House met at half-past Ten o'clock


[Mr. Speaker in the Chair]


London Local Authorities and Transport for London Bill

Considered; to be read the Third time.



Contingencies Fund 2004–05: Accounts of the Contingencies Fund, 2004–05 showing:—

(1) a balance sheet,

(2) a cashflow statement; and

(3) notes to the account; together with the Report of the Comptroller and Auditor General thereon.—[Tom Watson.]

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Youth Unemployment

1. Mrs. Siân C. James (Swansea, East) (Lab): What recent assessment he has made of the economic effects of reducing long-term youth unemployment. [35531]

The Chancellor of the Exchequer (Mr. Gordon Brown): It is because of measures we have taken and the new deal that youth unemployment has fallen 90 per cent. since 1997, with large falls in almost every constituency. At a cost of £140 million, we will now pioneer new learning agreements for teenagers, with a grant for training in return for undertaking courses. At the same time, we will offer activity agreements to move teenagers from unemployment back into the world of training and then into work.

Mrs. James: I thank my right hon. Friend for his answer. In my constituency we have seen those successes. Some 1,300 young people and 1,080 lone parents have found work as a result of those schemes, benefiting the local economy. Will he ensure that schemes such as the new deal continue to support our local economy and stop young people being put on the unemployment scrapheap?
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Mr. Brown: In the mid-1980s, there were nearly 400,000 young people out of work for more than a year. Today, the figure is less than 6,000 throughout the whole country. It is because of the new deal that we have achieved that, and that is why we will not abolish the new deal as the Opposition would do: we will strengthen the new deal with our measures.

David Simpson (Upper Bann) (DUP): What progress is the Chancellor making on funding for the young enterprise programmes across the UK, as the budgets have been cut dramatically?

Mr. Brown: I take a big interest in the enterprise insight programmes. They have been held in England and there are additional programmes in Scotland and Wales, and of course there is a special programme in Northern Ireland, which has been very successful. I am happy to meet the hon. Gentleman to talk about the enterprise programme in Northern Ireland. During enterprise week, only a few weeks ago, hundreds of thousands of young people were involved in the activities and there were 2,000 special events, which ranged from master classes in enterprise to competitions, including one for the young entrepreneur of the year. It is that interest in enterprise and starting businesses among young people that we want to encourage, especially in areas that have seen slow growth in small businesses in previous decades, such as the area that the hon. Gentleman represents. We are determined to do more and I am happy to talk to him about the issue.

Mr. Brian H. Donohoe (Central Ayrshire) (Lab): While I praise my right hon. Friend for the massive drop in youth unemployment in my constituency, I am concerned that statistics are not available for the new constituencies north of the border, as he will know. Can he correct that situation so that we can see just how good the figures are for the new constituencies?

Mr. Brown: I am happy to take up that issue with the Scottish Administration, if necessary, so that we can have the full statistics on the decline in youth unemployment, long-term youth unemployment and unemployment generally that has taken place under our Government. I can give him a rough estimate: the decline in youth unemployment in his constituency is of the order of 90 per cent. since 1997.

David T.C. Davies (Monmouth) (Con): Would the Chancellor agree that the surest way to reduce youth unemployment would be to follow the Irish example and reduce corporation tax, instead of imposing ever more costs, bureaucracy, red tape and taxation on our businesses and stifling their opportunities for growth?

Mr. Brown: I thought that with the new Conservative party we would have heard some concern about the unemployed—[Interruption.] We have cut corporation tax by 3p, from 33p to 30p. We have cut small business tax from 23p to 19p. We have cut capital gains tax from 40p to 10p for long-term assets. If the hon. Gentleman is telling me that the solution to long-term youth unemployment is to abolish the new deal, he is living in the world of the 1980s, not 2005.
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Mr. Martyn Jones (Clwyd, South) (Lab): Does my right hon. Friend agree that the proposals that he announced on Monday to make banks give up unclaimed money for the benefit of youth and community programmes will also help long-term youth unemployment?

Mr. Brown: I thought that we might have had a strong welcome for our proposals on the new deal and to put more money into youth and community services through the use of unclaimed assets. The banks and the Government have signed an agreement about what will happen once the figure for unclaimed assets has been agreed. The money will go to financial education, but mainly to youth and community services. That gives us a chance to do something in an area in which we have failed to invest for decades—the provision of facilities in all our constituencies, be it internet cafes, youth facilities generally or sports facilities. It is important that we do something so that the good, decent majority of young people have facilities to enjoy. I hope that we will receive all-party support for the development of youth facilities through the use of unclaimed assets.

Job Creation

2. Mr. Jim Devine (Livingston) (Lab): How many new jobs have been created since 1997; and what assessment he has made of the effect of these new jobs on the economy. [35532]

The Chancellor of the Exchequer (Mr. Gordon Brown): As a result of the new deal and other measures, 2.3 million jobs have been created since 1997. British unemployment is half that of Germany and France and below that of America. I can also inform the House that, from April, the new deal will pioneer new compulsory interviews and intensive work preparation courses for those unemployed six months or over so that we can get more people back into work.

Mr. Devine: Is my right hon. Friend aware that unemployment in my constituency last week was 2 per cent.? When the Conservative party was in power, it was 26 per cent. We were told that if it was not hurting, it was not working. I worked in primary care psychiatry and watched patients being prescribed anti-depressants and valium. If they could have been prescribed a job, they would not have been near the health centre. Does he agree that there is no such thing as compassionate conservatism?

Mr. Brown: If Conservative Front Benchers had come in on the first question, we might have seen whether their attitude to the new deal had improved since the previous Administration. However, they have appointed a former party leader to run their commission on social action and he is already committed to the abolition of the new deal for young people and the unemployed. My hon. Friend makes a very important point. Conservative Members may have some reason to be grateful to the Government, as unemployment in most of their constituencies has halved as well. We will continue to create more jobs. There are 600,000 vacancies in the
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economy—and this economy has created 300,000 jobs in the past year. We should be congratulated by the Opposition on our policies, not criticised or condemned.

Peter Bottomley (Worthing, West) (Con): If the Chancellor were to read out the names of the constituencies where unemployment was now higher than it was nine months ago, how many would he name?

Mr. Brown: I do not have a list of 650 constituencies. We have created 330,000 new jobs during the past year. Those, including the Leader of the Opposition, who prophesised that this year we would be unable to create the jobs that we have managed to create will find that we have created 6,000 jobs per week, and that 3,500 new small businesses have been created a week. [Interruption.] I am sorry that Conservative Members cannot congratulate us or feel happy that the economy is creating 330,000 jobs. We are not seeing much evidence of a new Conservative party today.

Andrew Gwynne (Denton and Reddish) (Lab): As well as the 2.3 million new jobs in the UK, unemployment in my constituency has fallen by 51 per cent. since 1997. Does my right hon. Friend agree that our resources are best used to continue supporting people in finding work, rather than on the waste of the cost of unemployment that we had when 3 million were unemployed under the Tories?

Mr. Brown: People will see that when we mention unemployment and the creation of jobs, Conservative Members in this new anti-Punch and Judy show that they are trying to operate are laughing. The fact is that we have created 2.3 million jobs since we came to power in 1997, and 330,000 jobs have been created in the past year. Some 6,000 jobs have been created on average every week. This has affected almost every constituency in the country. I believe that we are showing that with low inflation, we can create high employment in a modern economy and that we do not have to pursue the polices of the 1980s where, to get inflation down, unemployment was at 3 million. That is the difference between a Labour philosophy and a Conservative philosophy.

Sir Nicholas Winterton (Macclesfield) (Con): While the Chancellor's figures are encouraging, and I congratulate him, does he accept that the situation facing manufacturing industry is very grim? Many tens of thousands of jobs have been lost in manufacturing, which is the only source of non-inflationary sustainable growth. Is there nothing that he can do to give further encouragement and support by creating the right environment for a growth in manufacturing jobs, which is essential to this country?

Mr. Brown: I am grateful to the hon. Gentleman, who has taken a long-term interest in manufacturing industry. I think that he would agree that the first foundation for industrial strength is low inflation and economic stability. That has been achieved over recent years. What is happening in every advanced industrial country is that the number of manufacturing jobs is declining. America and Japan have each lost 3 million manufacturing jobs. America has lost 1 million manufacturing jobs in the past
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two years. That trend is happening right across the world—[Interruption.] I am sorry; again, the Conservatives must face up to facts. If America and Japan each lose 3 million manufacturing jobs, all advanced industrial economies are affected. What we are trying to do—I think that the hon. Gentleman will be interested in this—is to provide greater support for research and development in manufacturing, greater support for the development of new skills, new investment allowances for small businesses and support through the Small Business Service and the regional development agencies. We are trying to help our modern, high skill and high-value-added manufacturing become more competitive across the world. We will continue with that policy, and I am sure that the hon. Gentleman will support it even if those on the Conservative Front Bench do not find it at all interesting.

Mrs. Madeleine Moon (Bridgend) (Lab): Will my right hon. Friend confirm that our economic success is a result of his commitment to the TANSTAAFL principle—"there ain't no such thing as a free lunch"—and that economic growth comes from investment in jobs, skills, education and communities, not inflation-busting tax cuts?

Mr. Brown: Our policy is to invest in both jobs and skills in the economy. At some point, the Conservatives must face up to this issue. If we want employment and modern skills, we must invest in the new deal and education. Their policy to cut £12 billion from public expenditure would damage jobs, skills and education.

Mr. Michael Fallon (Sevenoaks) (Con): What proportion of the new jobs since 1997 are public service jobs? Why will the Chancellor not give the House the current estimate of the public service pension liability that arises from those new jobs and must then be paid for by the private sector?

Mr. Brown: The hon. Gentleman knows that two thirds of the new jobs are in the private sector and that almost 1 million jobs have been created in small businesses alone. If he wants to cut public sector jobs, perhaps he should look at his election address, in which he said:

He than said:

That is not someone trying to cut the public sector; it is someone trying to increase it.

Angela Eagle (Wallasey) (Lab): Does my right hon. Friend recognise how successful the policy of getting down unemployment has been so far, especially in my constituency? Will he give the House some indication of how he intends to take that success further, particularly with skills, so that we can ensure that the jobs that are created in the future for my constituents will be ones that can support families, that are well paid and that are not bumping along the bottom of the labour market?

Mr. Brown: I am grateful to my hon. Friend. Perhaps there could be all-party support for the extension of the national employer training programme, which was
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announced on Monday, to all areas of the country, where employers will get help so that they can train their workers and get time off, with some support for the wage costs in doing so. That new partnership between the Government, employers and employees involves some public money—£47 million to help small firms to give time off to their workers. We are prepared to make that public investment. The question is whether the Conservative party is prepared to support the public investment that is necessary for the skills and training that we need in the economy.

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