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Mr. Harper: The hon. Gentleman makes an excellent point. Businesses, particularly small businesses, are the engines of job growth. The Government should focus on allowing good businesses to succeed, perhaps by adopting some of our sensible insolvency proposals,
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and supporting small businesses instead of increasing borrowing and taxing them, which will drive jobs out of the economy rather than into it.

In response to the hon. Member for Llanelli (Nia Griffith), I should point out that it is not the Conservatives who are the doom and gloom merchants. As my right hon. Friend the Leader of the Opposition said at Prime Minister’s questions, the European Commission has pointed out that unemployment is set to soar to 7.1 per cent. as Britain suffers the longest and deepest recession of the EU’s big economies. The Commission’s outlook for Britain is particularly bleak, with a Budget deficit and a forecast of spiralling debt as the national economy contracts at its fastest rate since 1992. Reading forecasts by the European Commission is not being a doom and gloom merchant—it is recognising the world as it is rather than the parallel universe that Ministers sometimes seem to inhabit.

Lyn Brown (West Ham) (Lab): I do not want to score any cheap points, but I wonder what the hon. Gentleman’s solution is. Is it to go back to where we were under the previous Administration, when unemployment was seen as a good price to pay while we waited for the markets to right themselves? We are offering a solution to the problems that we face and having real concern about people’s jobs and opportunities, whereas the Conservatives are telling us to take no action and wait for the markets to re-regulate themselves. About 3 million to 4 million people would be unemployed by the time that the markets righted themselves. Does he think that that is the right price to pay?

Mr. Harper: That is a helpful intervention, but as I have been speaking for only seven minutes I have not got to our policies on welfare reform. When the hon. Lady has listened to that, she will be welcome to intervene on me again if she has any questions. No one in this House, certainly on our side, is proposing that the Government sit and do nothing, but we think that they should take the right action rather than the wrong action.

The Parliamentary Under-Secretary of State for Work and Pensions (Jonathan Shaw): When the hon. Gentleman was challenged by my hon. Friend the Minister, he said that he had not seen some of the Government’s proposals and was unable to comment on them. On the right or the wrong action, the hon. Member for Havant (Mr. Willetts) said at his party conference—I can provide the website connection for the hon. Gentleman if he wants—that the Conservatives would cut the Train to Gain budget by £1 billion and use it for inheritance tax. We have readjusted Train to Gain to help small businesses. Does the hon. Gentleman support Train to Gain or changes to inheritance tax, or does he agree with the CBI, which was aghast at those proposals?

Mr. Harper: As the hon. Gentleman should know, my hon. Friend the Member for Havant (Mr. Willetts) did not suggest that we use those savings to pay for changes to inheritance tax. I am surprised that the Minister did not mention the proposals that the Government have announced on the £100 million and the £350 million. When challenged on those, the Under-Secretary had to acknowledge that there was no new money—it was already in the Train to Gain budget and was being re-focused and re-prioritised.


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Jonathan Shaw: Will the hon. Gentleman confirm that it is his party’s policy to cut £1 billion from the Train to Gain budget?

Mr. Harper: It is not our policy to do any such thing, and the hon. Gentleman should get his facts right before he makes such accusations.

Jonathan Shaw: I will send him the quote.

Mr. Harper: The hon. Gentleman can send it.

Ministers have repeatedly fallen back on optimistic assertions about their welfare and employment record, and we heard the Under-Secretary, the hon. Member for Burnley (Kitty Ussher) do that today, when she claimed that Britain had record employment. The Secretary of State said, as recently as 7 October, that the employment rate of 74.3 per cent. under this Government was

As my hon. Friend the Member for Epsom and Ewell (Chris Grayling) said when he challenged the Secretary of State during the last Work and Pensions questions, Ministers need to take a long, hard look at the figures that they present to the House. According to the Library, the rate of employment is below what it was in the late ’80s, and lower than it was in the 1970s. According to the Office for National Statistics, only 300,000 more British-born people are in work today than in 1997—not very impressive after those years of growth.

Why does the Under-Secretary think that employment among British people has fallen by more than 350,000 in the past two years while employment among migrant workers has risen by nearly 1 million? When that point was made to the Minister of State, the right hon. Member for Harrow, East, he had no answer. The real position is very different from that set out by the Under-Secretary today. If we count unemployment using the accepted international measure—the International Labour Organisation measure—Labour has cut unemployment by just under 300,000 during their 11 years in office. Unemployment fell faster between 1992 and 1997 than it did during the 10 years since 1997.

In reality, the Government have built their employment record on the back of migrant labour. The number of British-born people in work has fallen by 365,000 in the last three years, and during the same period the number of migrant workers finding employment in Britain has risen by 865,000. As my hon. Friend the Member for Hertsmere (Mr. Clappison) said:

Lyn Brown: Does the hon. Gentleman recognise the difference between British people in jobs and British-born people in jobs?

Mr. Harper: I am simply citing the figures.

The Minister with responsibility for employment and welfare reform, the right hon. Member for Harrow, East, could not answer the question at oral questions. The question was asked by my hon. Friend the
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Member for Epsom and Ewell, and the Minister cast doubt on the veracity of the figures. He said at oral questions:

My hon. Friend is still waiting for an answer, and perhaps when the Under-Secretary, the hon. Member for Chatham and Aylesford (Jonathan Shaw), makes his winding-up speech he will clarify whether the figures are accurate, or perhaps tell us what they actually are. They paint a revealing picture of Labour failure. Ministers constantly repeat how they have created 3 million new jobs, but forget to mention that up to 80 per cent. of those have gone to migrant workers.

Mr. Todd: I am a little concerned at the thrust of the hon. Gentleman’s argument, which appears to be in favour of restrictive practices to prevent the arrival of foreign workers in our country, who are required for a competitive economy. If that is what he is drifting towards, has he run his thoughts past any industrialist in the UK to test their reaction to such policies?

Mr. Harper: I have two points in response to that. First, I mentioned the figure because at a time when we have seen growth in the number of migrant workers getting jobs, we still have, as the Under-Secretary, the hon. Member for Burnley, acknowledged, nearly 5 million British-born people on out-of-work benefits, and we want to ensure that they can share in economic growth. Secondly, the hon. Gentleman is a little behind the curve. If he had listened to what the Minister for Borders and Immigration said, he would have noted that it is the Government’s policy to restrict the number of people coming into this country, but it is simply the case that their policies to date have not worked.

Mr. Todd: I do not think that the hon. Gentleman detected in my remark any agreement with my colleague.

Mr. Harper: That may be his view, and he is perfectly entitled to it, but it is not the view of the Government. His right hon. and hon. Friends have a different view from him, and as far as direction of travel is concerned, they want to achieve what we want to achieve.

The Under-Secretary, the hon. Member for Burnley, spent a fair amount of time on child poverty. Child poverty is up for the second year in a row, rising in the last two years by 200,000, and it is the same now as it was in 2002. The UK has a higher proportion of children living in workless households than any other EU country. I noticed that the Under-Secretary referred to the Government’s 2020 target, but she did not mention their 2010 target to halve child poverty. She and I had an exchange on this matter at oral questions a short while ago, and I challenged her to say whether the Government were going to hit the target. She failed to answer on that occasion, and I would be grateful if the hon. Member for Chatham and Aylesford told us, when he makes his winding-up speech, whether the Government are likely to hit their 2010 child poverty target.


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Roger Berry (Kingswood) (Lab): Does the hon. Gentleman acknowledge that under the previous Government child poverty doubled, and that in 1997 this country inherited the worst child poverty record in Europe?

Mr. Harper: The hon. Gentleman will notice from my remarks that we still have a very poor record compared with the rest of Europe, after 10 years of economic growth. It is interesting to note how many Labour Members spend all their time looking at the past, rather than focusing, as we are, on the future. They have been in government for 11 years—it is interesting to note, on a day like today, when we acknowledge the tremendous achievement of Senator Obama, that that is 50 per cent. longer than an American President is allowed to serve. After 11 years, they have not made a great deal of progress, and things are going into reverse.

The Government’s record on welfare reform and getting people into work is not as rosy as the Minister would like us to believe. It is worth reflecting on the current state of play and the challenges that we face. After 11 years in power, Labour’s record on welfare reform is disappointing, to say the least. It was Tony Blair who said, as far back as 1995, that welfare reform would be

of a future Labour Government. He boldly professed that he was

and that it would take a Labour Prime Minister radically to reshape the welfare state. When we look at the facts, we find it clear that that rhetoric has not been translated into effective policy. The figures for the number of people claiming out-of-work benefits make for bleak reading. There are still 2.6 million people claiming incapacity benefit, a figure that has stayed broadly the same during the period in which the Government have been in power. The number of people claiming for more than five years is higher than it was 10 years ago, and it continues to rise. About half a million people—almost one in five of those incapacity claimants—are under 35.

As the right hon. Member for Birkenhead (Mr. Field) has said on many occasions:

The Government’s failure to deliver the promised change is all the more a missed opportunity now that the economic situation has darkened. Delivering real welfare reform would have been somewhat easier in a steadily growing economy rather than in one heading into a sharp recession. At a time when such matters are so important, it is important that Ministers are focused on the job in hand. Unfortunately, three of the six Ministers in the Department are effectively only part time. The Minister of State, the right hon. Member for Harrow, East, who is responsible for employment and welfare reform, doubles up as Minister of London. The other Minister of State, the right hon. Member for Doncaster, Central (Ms Winterton), who is responsible for pensions, doubles up as Minister for Yorkshire and the Humber, and the Under-Secretary, the hon. Member for Chatham and Aylesford who, as well as being responsible for disabled people, doubles up as the Minister for the South East. Given that they all have two jobs, they are
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either 100 per cent. focused on their jobs in this Department, and focused on the challenges of work and welfare reform, while neglecting their regional duties, or they are spending time on regional duties when they should be focused on ensuring that those thrown out of work as the recession deepens are the centre of their priorities. It is disappointing to have part-time Ministers at a time of full-time challenge.

I want to challenge one or two points that the Under-Secretary made in her opening remarks. She mentioned the performance of the Government’s new deal. Again, it is worth quoting the former Minister for welfare reform, the right hon. Member for Birkenhead, who described the performance of the Government’s new deal for young people as “woeful” and, more recently, as a “calamity”. It is also worth remembering that the new deal is a revolving door back to benefits. Half all young jobseekers who leave the new deal for young people are back on benefits in a year, and 75 per cent. of new jobseeker’s allowance claims are made by people who have claimed previously. Half those repeat claimants spend more time on benefit than in work, and 500,000 new claimants have spent at least three quarters of the past two years claiming benefits. The system has not been successful in getting people into long-term, sustainable employment.

My hon. Friend the Member for Epsom and Ewell raised the manipulation of statistics in a recent debate in the House and pointed out that young people who claim jobseeker’s allowance for six months, and over-25s who claim for more than 18 months, are automatically referred to the new deal. If they fail to find a job initially, they are referred to a period of mandatory activity, moved off jobseeker’s allowance on to a training allowance and removed from the Government’s official claimant count. At any one time, around 40,000 people are hidden in that way. If they were included in current figures, the genuine claimant count would exceed 980,000.

Approximately one in three people who leave the new deal return straight to benefits. At that point, they rejoin the claimant count, their previous claim is wiped clean and they appear to have only just become unemployed. Under the Government’s current system, it is possible to be unemployed for more than two years, but for it to appear as though a claimant has been on benefit for only two days. That obscures the true picture.

Kitty Ussher: I am glad that the hon. Gentleman has raised the point because it gives me the opportunity to ask for some clarification. First, did not the Conservative Government introduce the system in 1995? We are simply operating under the rules that that Government introduced. Secondly, there is an enormous difference between a system that keeps people near the job market and makes no attempt to disguise what is happening, and the Conservative party’s policy of moving people away from the labour market and on to incapacity benefit.

Mr. Harper: I shall deal with our proposals on welfare reform shortly. However, the new deal is the Government’s programme. They have been in power for 11 years, and Ministers must learn to take responsibility for the things that they have done. Trying to pretend, after 11 years in power, that every ill in the world can be laid at the door of the previous Conservative Government is not credible.


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Mr. David Evennett (Bexleyheath and Crayford) (Con): My hon. Friend is making a superb speech, highlighting the flaws in the Government’s argument. Will he reinforce the point that we should look forward to change and improved welfare and job opportunities? We do not want to go back to the 1990s or earlier because that is history. We are talking about now and ensuring that there are better opportunities for all people, so that they can be in work, with their welfare looked after when they are not, but with the opportunity to get back into jobs.

Mr. Harper: My hon. Friend makes a good point. It might help if the Under-Secretary confirms in his winding-up speech whether the Government hold to the claim that they have abolished long-term unemployment. They made such a claim in the past, but failed to confirm it more recently.

Given that we have a huge problem to fix, now combined with the more challenging economic climate, we are pleased that the Government have followed our lead and adopted many of the proposals that we published in January in their Green Paper, which they published in the summer. I agree with the Under-Secretary that, with the downturn in the economy, there is an even stronger case for providing the right support to get people into work or back into work. Most people on benefits can and want to work, but, in many cases, they need the right support to do that.

Last week, I visited the very good NeuroMuscular Centre at Winsford, which does an excellent job in providing physiotherapy and rehabilitation for those with neuro-muscular diseases, such as muscular dystrophy. One of its powerful achievements is that 100 per cent. of people who use its services are able to stay out of hospital and more than 80 per cent. are able to stay in paid employment. That is a good example of an organisation that provides the right practical support to help people stay in work, even when they have long-term health conditions or other disabilities.

There is consensus between the parties about the direction of welfare reform, but there needs to be a greater sense of urgency and ambition in implementing the Freud proposals in full. Although we are pleased that the Government have accepted that using the expertise in the private and voluntary sector is effective in getting people into work, they have not matched our commitment to fund that properly.

David Freud, who was, stopped being and is again an adviser to the Government on welfare policy, said that the major ingredient necessary for welfare reform to work was to change the DEL-AME—departmental expenditure limits-annually managed expenditure—rules. That may sound obscure, but in English, it means using the savings one makes from getting people off benefit and into work to help fund programmes to provide support. One can therefore have the ambition of helping everybody—rather than only a few—who is on an out-of-work benefit. David Freud, the Government’s adviser, said that that was the single most important item necessary to make the proposals work.


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