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The point that the hon. Gentleman raises must be one of a range of considerations in the decision to close job centres. I should emphasise that we are shifting
more and more staff to the front line to deal with people. One aspect of the expansion and improvement of the network is the fact that people are accessing the services of Jobcentre Plus in other ways than the old traditional method of going into the office. However, I take the broad point and I have in my diary a series of meetings with people who have such concerns.
Mr. Oliver Heald (North-East Hertfordshire) (Con): In the Select Committee yesterday, we heard evidence that long-term unemployment is set to quadruple to some 600,000 a year. Does the Minister agree that it is a bit odd that a debate on this issue has not attracted a single Labour Back Bencher?
Mr. McNulty: My hon. Friend the Member for Luton, North (Kelvin Hopkins) is in his place. Pointing to attendance is an easy game to play and I shall not get into it. I firmly and passionately believe that the Ulster Unionist party, Plaid Cymru, the SNP, the rest of the Liberal Democrats and my colleagues share our concerns about unemployment. I am not about to suggest at any stage in my speech that Labour Members, present or absent, have a monopoly on sentiment when it comes to the serious issue of unemployment— [I nterruption. ] Well, they are busy doing other things, probably not least helping people in their constituencies, given that this debate is subject to a one-line Whip. That is entirely a matter for them.
The hon. Gentleman’s first point, about the trends in unemployment and the extent to which we might see a rise in longer-term and harder-to-reach unemployed, is well made, and it goes to the point that I was about to make. Now is not the time to flinch on conditionality, pathways to work or providing active support for the unemployed. That happened—I am not making a political point—in the early 1980s, and we need to learn the lessons of that. I am happy to suggest that the Opposition have learned those lessons. Conditionality and helping the longer-term unemployed back into work remain uppermost in the work of Jobcentre Plus.
Mr. Simon Burns (West Chelmsford) (Con): Will the Minister give way?
Mr. McNulty: I see that the Whip has moved from the Front Bench to the Back Bench, and I shall give way so that he can make his no doubt facetious point.
Mr. Burns: I am disappointed that the Minister thinks that I wish to make a facetious point, given the seriousness of the problem of unemployment in Chelmsford and the east of England. What is he doing, with the Minister for the East of England, to address unemployment and the need for skills improvement? Can he also enlighten my constituents as to who is the Minister for the East of England?
Mr. McNulty:
That is a reasonable point. In the broader context, the National Economic Council, the regional economic councils that are being developed and the regional councils for Ministers are addressing the issue of unemployment, and working with local authorities and regional development agencies on that.
I have yet to attend a council for Regional Ministers so the name of my hon. Friend escapes me, which I am sure will assist the hon. Gentleman in his attempt to be facetious— [I nterruption. ] No, the east of England has not escaped me— [In terruption. ] Well, that is a matter for the hon. Gentleman.
The serious point was about the National Economic Council and regional economic development, and how unemployment fits in with that. That point was fairly made and I shall ensure that the hon. Gentleman gets a little paper outlining those structures. I do not know about the east of England, but I know that the east midlands already has in place regional economic forums that meet regularly to bring together all the key partners, including the RDA, the private sector, Jobcentre Plus and others, to discuss economic development and address any deterioration in the labour market. In any case, I say well done to the hon. Gentleman for making his facetious point.
There continues to be a real dynamism in the labour market. There is a huge churn in jobs and vacancies, with people coming on to jobseeker’s allowance and coming off it too. The picture is not static. The House will know that there are regularly as many as 600,000 vacancies, but that figure is also subject to churn. Some vacancies never reach those statistics because they are filled before they can be correlated with the figures.
Mr. Philip Hollobone (Kettering) (Con): I am receiving a growing number of complaints from constituents who are taking up jobs after being out of work. They suffer from the delay between the immediate loss of benefits and the receipt of their first wage packet, which provides a clear disincentive to finding work for many people, especially single mothers in straitened circumstances. What steps are the Department taking to try to smooth that transition?
Mr. McNulty: That is a fair point and I will look into the technicalities of it. The transition into work should be as smooth as possible, and there should be no disincentives en route. I am pleased that some 60 per cent. of JSA claimants get back to work within three months, and 80 per cent. do so within six months. Although we need to do better, those are phenomenal performance figures. Nobody yet knows the exact nature of the new inflow—to use the jargon that I have just learned, although I am trying to avoid it—as they may come from different sectors and geographic areas. It is almost a cliché now, but I have said in the past that Halifax and Bradford & Bingley are not simply brand names but places. In those places, there are many employees who are wondering about the consequences of the upheaval in the financial sector. I do not know how that will shake out, but Jobcentre Plus is considering what will happen when a newer cohort of financial professionals presents in greater numbers than they have done before. We need to start looking at such issues.
John Penrose (Weston-super-Mare) (Con):
The Minister mentioned the dynamism of the labour market. Does he accept that part of the problem with the current unemployment figures is the churn caused by people getting a short-term job, then losing it and going back into unemployment? Some of that is negative, rather than evidence of dynamism in the job market. It is
important for the Government to ensure that jobs are sustainable, and they may need sustaining through Government help in the crucial first weeks and months.
Mr. McNulty: I accept that. That is why I tried to use dynamism in the most literal sense, to mean a lot of change and a lot of activity. There will be those who will come on to employment at the shorter-term end, and we need to stop that. Increasingly, particularly with some of the harder-to-reach groups, that means we must ensure that when we say that they are ready to work, they are ready to work and can do so in a sustained fashion. I accept that it is in no one’s interest to have a merry-go-round of on-off claimants.
The answer to the question asked earlier by the hon. Member for West Chelmsford (Mr. Burns) is that the Minister for the East of England is my hon. Friend the Member for Stevenage (Barbara Follett).
Mr. Burns: Was that answer from the Box?
Mr. McNulty: No, it was just inspiration from somewhere or other. Where it came from is not the hon. Gentleman’s concern.
I take the point made by the hon. Member for Weston-super-Mare (John Penrose) about sustainability. I repeat the fact that 80 per cent. of reported people who go on to jobseeker’s allowance get back into work within six months. That is a very good figure, but clearly we need to do better; we need to ensure greater sustainability. There will always be a hard core of people who go into work, come out, go back in, and then come out. We need to try to prevent that, especially in the hardest-to-reach groups, such as lone parents and others.
Kelvin Hopkins (Luton, North) (Lab): I congratulate my right hon. Friend on his promotion and on his new job. He talked about Bradford & Bingley, the financial markets and what has happened. That catastrophe has occurred because financial markets have been left to themselves and globalised without intervention or regulation. Is not the same true of skills? If we leave skills to be developed by the markets, by people learning on the job and by people picking things up, we will suffer the same disadvantage, with other developed nations. Does my right hon. Friend accept that we have to be proactive, to drive skills forward and to teach young people rigorously to ensure that they have the skills and that we do not suffer such disadvantages in future?
Mr. McNulty: I agree with much of what my hon. Friend says. I do not agree that there is now a mixed economy, for want of a better phrase, in skills provision or that there has been a laissez-faire approach that has somehow led to a diminution in the importance of skills. I do not think that that is necessarily accurate. The work that the Department for Innovation, Universities and Skills is doing alongside the Department for Work and Pensions is very important and there has been much progress.
I agree with my hon. Friend that in much of the other work that DWP and Jobcentre Plus are doing we need to start looking forward and to understand the consequences of the economic turbulence, not least in the financial sector, and to respond accordingly to what we think the future of skills provision might look like. I can assure my hon. Friend that a lot of close work takes place between the Department for Innovation, Universities and Skills, my Department and others in that regard, in
trying to preserve people in their jobs, to support sectors and to encourage reskilling and refocusing where possible. I was going to come on to that in the short time that I have left.
My hon. Friend will know that in collaboration with the Department for Innovation, Universities and Skills we announced last week a cash injection of some £100 million over the next three years to help people who are newly redundant, or who face redundancy, to move into another job quickly by supporting them to refresh their skills or to retrain. Earlier this week, my right hon. Friend the Secretary of State for Innovation, Universities and Skills announced a £350 million fund that will refocus the in-work support available through Train to Gain to help small businesses deal with the tougher economic climate by developing the skills of the staff.
My hon. Friend the Member for Luton, North might not yet have seen the details of the announcement by my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform of his wider solutions for business and of the company support package that was announced earlier today.
Mr. Heald: Is this really new money? The £350 million Train to Gain budget was already there. Is the £100 million genuinely new money or is it a re-announcement?
Mr. McNulty: I said very clearly that the £350 million was about a refocus given the context of the situation. I was not saying that it was new money. At the moment, the £100 million is made up of £50 million of new money, via the European Social Fund, and £50 million of Train to Gain money, refocused and reprioritised. It must be right for us to refocus and reprioritise, given the extraordinarily fast pace of change in the wider economy.
I want to discuss the matter in more detail with the relevant Ministers, but I agree with my hon. Friend the Member for Luton, North that there is an issue about the wider life skills that people are getting in schools. If the future is to be a far more credit-restricted period than otherwise, the notion from the 1980s and 1990s that people could secure credit for anything they liked, any time they liked, must change. That level of responsibility and focus on the individual through their life skills is probably something that we need to do more about. I do not accept, either from the DWP perspective or that of DIUS—I was trying to resist saying DIUS—that the circumstances of the provider, whether they are private, third sector or public sector, determine the level of professionalism in what they offer.
Notwithstanding the point made by the hon. Member for North-East Hertfordshire (Mr. Heald), the money that we are making available along with the Department for Innovation, Universities and Skills, the greater focus on Train to Gain, what my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform has said today about support for business and the announcements already made—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order.
12.46 pm
Mr. James Clappison (Hertsmere) (Con):
We, too, welcome the opportunity to debate work and skills, but before we do so I want to welcome the Minister to his
new post. We look forward to debating these issues with him. For quite how long we will be able to do so, I do not know. He will be aware that there was a major reshuffle in the Government ranks just before the summer recess. In fact, so far this year every member of the ministerial team has changed, including the Secretary of State. The right hon. Gentleman’s predecessor was in place for only nine months, and his predecessor for only six months. The right hon. Gentleman might just have enough time to master the jargon and wish us “Merry Christmas and a happy new year” before he is on his way again. However, we look forward to debating with him in the time that is left.
This is a Government debate in Government time. We note the level of participation on the Labour Benches, although we look forward to having a debate with the hon. Member for Luton, North (Kelvin Hopkins) as well as with the sole representative of the Liberal Democrats and my colleagues in the Opposition. Notwithstanding that limited participation— [ Interruption. ] The hon. Member for Stroud (Mr. Drew) is a latecomer to the debate, in quite what circumstances I do not know.
Notwithstanding the levels of participation on the Government Benches, we understand the salience of this subject to our country today. It is certainly not lessened by last week’s news on unemployment. That news makes it all the more important that we should have an effective system for helping people to get off benefits and into work and, in the case of the newly unemployed, preventing an undoubted blow from becoming a longer-term tragedy.
This time last week, I was in the jobcentre in Harlow, hearing first hand what is happening. Part of the picture seems to be that alongside the rise in the number of people becoming unemployed, there is a reduction in the number of job vacancies. I know that Ministers are apt to talk about the level of vacancies, but I have to tell this Minister that people are reporting fewer vacancies. That is the real experience of people looking for jobs.
The Minister mentioned the situation with Bradford & Bingley and the pain that job losses can cause. In fact, several hundred of the job losses announced by Bradford & Bingley fell in my constituency, in the town of Borehamwood. I was in the jobcentre in Borehamwood a fortnight ago. My hon. Friend the Member for Weston-super-Mare (John Penrose) made a good point about helping people who have come from financial service backgrounds to find work. The Minister’s response to it was also well made. We will certainly work together with the Government on that.
Mr. Heald: Vacancies are often mentioned as a sign of dynamism in the labour market, but is my hon. Friend aware that the number has roughly halved since July 2004? It has gone down from about 1 million to about 575,000. The number of vacancies usually halves in a recession. That will mean that if we go into recession, we will be looking not at a dynamic labour market but a stultified one.
Mr. Clappison: My hon. Friend makes a very important point about statistical trends, and it is borne out by what people tell us that they experience when looking for a job.
Quite apart from people who are unemployed and in the job market, there is a longer-term problem that we must not lose sight of. Behind the unemployment statistics, there is a picture of deep-rooted worklessness and economic inactivity that has persisted for a number of years. It has been aggravated by a lack of skills in key areas and in some sections of the population.
The official measure puts unemployment at 1.79 million, but we know that millions more people who are not in the labour market are economically inactive for a number of different reasons. The national statistician has told me that, of the people who are economically inactive—and quite apart from those measured as unemployed—there are 2 million who say that they would like to get a job. In many cases, they could get a job with the right help and support but, as matters stand, that is not always available for them. It may be that many of them are present in the ranks of those in receipt of incapacity benefit, and at 2.6 million people that remains a stubbornly high figure. It is a particular worry that, in the past seven years, the number of claimants in receipt of incapacity benefit for more than five years has increased by 270,000—a total that accounts for the majority of incapacity benefit claimants.
All too often, existing claimants have been put at the back of the queue. It is very much part of our thinking that, wherever possible, we want to help all economically inactive people, including the hardest to help. I invite the Minister to turn his attention to our policy proposals in that regard.
Mr. David Drew (Stroud) (Lab/Co-op): With that in mind, does the hon. Gentleman not think it rather strange that the Department should continue to remove people working in Jobcentre Plus? Would he like to join the campaign of the Public and Commercial Services Union to draw attention to the need to stop that? Does he agree that there should be a moratorium on those job losses?
Mr. Clappison: We would certainly join forces with the hon. Gentleman and others in giving individual help to people. I invite him to look at our proposals to put in place a funding mechanism to allow that help to be provided, including to the hardest to help. Under our proposals, they would not be at the back of the queue while the “easier” people are helped first.
We should not allow ourselves to be misled by the picture that is sometimes painted about the level of employment in the UK. In part, that picture reflects the number of people from both inside and outside the EU who come here to work. In those circumstances, talking about the level of employment is not the same as getting economically inactive people back to work. Ministers need to be aware of the scale of what is happening with people from inside and outside the EU coming here to work, and its effect on the employment level.
Two weeks ago, the Secretary of State for Work and Pensions asserted that
“800,000 more UK-born people are in work than there were in 1997.”—[ Official Report, 7 October 2008; Vol. 480, c. 205.]
A different complexion is put on that figure by what the national statistician told me this week in a written parliamentary answer. She said that, over the same period, 1.7 million people who are non-UK born have found work in the UK.
Similar deep-rooted problems exist in the field of youth unemployment. It is a simple yet salutary fact that, despite all the claims made for the new deal, there are more unemployed 16 to 24-year-olds in the country today than there were in 1997. That may have been what led the right hon. Member for Birkenhead (Mr. Field) to write of the new deal a week ago:
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