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At present, Tomorrow’s People receives between £2,500 and £6,000 per case, depending on the complexity of the needs of the person it is seeking to help. However, she says that significantly less money is being proposed
under the new system—down to some £1,500. Dave Simmonds, chief executive of the Centre for Economic & Social Inclusion, a welfare think-tank, says that a further £1 billion is needed to allow for the likely increase in the long-term unemployed, now that we are entering a recession.
I am particularly concerned about the policies relating to lone parents, who are already subject to conditionality and have to attend work-focused interviews. David Freud acknowledged in his report that lone parents “want to work”. Although he advocated conditions on their receipt of benefits, he said that that should be dependent on adequate child care arrangements being available. Conditionality is justified by pointing to countries such as Sweden and Denmark, where more lone parents are in work, yet there are several different factors at play in relation to lone parents in this country. They are younger and likely to have children, and they are more likely to live in poverty than their European counterparts. Crucially, UK parents contribute some 75 per cent. of the costs of child care, compared with 11 per cent. in Sweden. Parental contributions across the EU are between 25 and 30 per cent.
I, too, thought that my hon. Friend the Member for West Ham (Lyn Brown) made an excellent speech. She referred to people feeling crushed by the system, and I am concerned that that could be exacerbated by the move from income support to a system in which lone parents have to sign on compulsorily. I have seen the benefits of the new deal programmes and of supporting people into work. I have spoken to people who have been helped, and to staff at Jobcentre Plus and in the private sector, such as those at WorkDirections. They get tremendous satisfaction from the work they do in supporting people to achieve their ambition—most people have such an ambition—to contribute through the world of work.
However, if these programmes are worth while, conditionality should be a last resort. The threat of losing up to 40 per cent. of benefits, which are not generous in the first place, is going to make life very difficult. It will make vulnerable people’s lives more difficult. My hon. Friend the Member for Llanelli explained very effectively the pressures that lone parents face in trying to take their responsibilities seriously. Some lone parents have a disabled child or a disability themselves. In fact, the statistics show that very few lone parents whose children are over 11 are not in work, and those who are not usually have a disabled child or a disability themselves.
The DWP is well aware of the problems faced by lone parents. In its 2005 five-year strategy, it discusses the failed work test in New Zealand, introduced without a good child care infrastructure. It said that
“we think it would be wrong simply to move lone parents from Income Support onto the Jobseeker’s Allowance regime: an unrestricted requirement to search for work is inappropriate, given the complex and difficult circumstances many lone parents face...such an approach would be expensive, unfair and ineffectual.”
That is why I ask the Government to look again at the recommendations of the Social Security Advisory Commission, which says that, although it has supported the programmes for lone parents in the past, it feels that the proposed changes will make life more difficult for lone parents. It says that, at the very minimum, those changes should not be introduced until a comprehensive
system of wrap-around child care is available. This is not just about the availability of child care; it is about the quality and reliability of that care. Although the Government have said that they will be flexible and that no lone parent will be sanctioned if it is clear that child care is not available, no detail has been provided about exactly what will be regarded as suitable and reliable child care. I would like the Government to address that point.
On the flexible implementation of these regulations, I also wish to highlight the situation faced by lone parents who educate their children at home. The Government policy is that such people have made a lifestyle choice. That may be the case in some instances, but I have had drawn to my attention an example where it has not been a lifestyle choice but a necessity. One of my constituents has written to me about his sister, who has a child with diabetes and Asperger’s. She decided to take her child out of school when his blood-sugar level was discovered to be dangerously low because he needs four injections every day and he had not been receiving them in a timely manner while he was at school. He also had to deal with the added disability of Asperger’s. She is very worried that she will have difficulty in continuing to support her child when the new regulations come into force.
Will the Government make it clear that they will make a distinction in respect of those parents who are educating children at home out of necessity and thus exempt them from the need to sign on for work? The Government’s argument is that when someone is being educated at home, the school week and the school year can be disregarded. That is true to some extent, but one would hope that those children might have at least some relationship with other children in the locality and might not be treated completely differently. In addition, it will be more difficult for those lone parents to get wrap-around child care, because that is often associated with the school that the child attends. I hope that the Government will pay more attention to the needs of such parents.
Finally, I wish to flag up the fact that income-based employment and support allowance is more generous than contributions-based ESA in relation to permitted work. Permitted work is very important in helping people to move into the world of work. The permitted work regulations and the therapeutic work regulations need to be more flexible. I understand that people can continue on such programmes for only a limited time—12 months—whereas many people who have disabilities, particularly those with fluctuating conditions, may find that only small amounts of work can be coped with on a regular basis. Such programmes should be encouraged on a long-term basis if longer hours are inappropriate, and there should be no automatic cut-off. Again, the flexible new deal will perhaps address the issue—I hope so. I must apologise for the fact that I will have to leave the Chamber shortly to attend a Select Committee meeting, so I will not be able to hear the Minister’s response. I will, of course, read it with great interest tomorrow when I collect my copy of Hansard.
4.24 pm
Andrew Selous (South-West Bedfordshire) (Con):
We hold this debate at an opportune time as, sadly, unemployment is increasing at its fastest rate for 17 years.
I join my hon. Friends the Members for Broxbourne (Mr. Walker) and for Henley (John Howell), and the hon. Member for Llanelli (Nia Griffith) in praising the work of Jobcentre Plus staff in trying to help our constituents to get back into work. I am also pleased that the hon. Member for Birmingham, Selly Oak (Lynne Jones) mentioned Tomorrow’s People, because we should not forget those in what I call the not-for-dividend sector, who are also engaged in the very important work of trying to return our constituents to the labour market, or at least to get them more job-ready. The Opposition believe in a partnership approach between Jobcentre Plus and the not-for-dividend sector.
At this difficult time, we must do everything possible to boost employer confidence to help businesses weather the economic conditions. However, we can deal with those serious problems only if we recognise their scale and act accordingly with a plan to make the necessary changes. I had hoped for a slightly more serious recognition of the scale of the problems from the Under-Secretary of State for Work and Pensions, the hon. Member for Burnley (Kitty Ussher) who opened the debate. Without such recognition, I fear that we will not see the scale of Government action needed. She said that things have gone relatively well over the past 10 years. I think that she said, “So far, so good.” I am sure that she is aware that unemployment in her constituency has increased by 27 per cent over the past year alone, and is 6 per cent. higher than in 1997. I am not sure, therefore, what her constituents would make of her remarks.
On 16 January, the Prime Minister boasted that this country had its best employment record in history. However, I wish to set out the real context of this debate, because I think that we have been lulled into a false sense of security about the situation in our labour market. The real level of UK unemployment is between 3 million and 3.5 million. How did I get to that figure? The International Labour Organisation unemployment count—the Labour party always used its figures when in opposition—is 1.79 million, and David Freud, whom the Government have quoted frequently this afternoon, said that 1.7 million incapacity benefit claimants want to work and should be able to do so with the right support.
In addition, 750,000 people are under-employed. We must not forget those who want full-time work and need more income, but who can only get part-time work. If the Government had recognised that, we could have had earlier and more urgent action on welfare reform involving personalised support to help people overcome barriers to work and creating a welfare system with a higher vision for the unemployed. It is frankly unacceptable that in some cases three or more generations of the same family have been lifelong benefit dependents when, with the right personalised support, jobs could have been found for them.
This is at a time when many hundreds of thousands of jobs have gone to people who have come to this country from overseas. In 2006-07, and the first half of 2008, the number of people in employment who were born in the UK fell by 365,000. However, the number of migrant workers finding jobs in the UK has risen by 865,000. I take issue with the comments of the hon. Member for South Derbyshire (Mr. Todd). I think that those are real concerns, and our constituents would be amazed if we did not mention them today—it was
another thing that the Under-Secretary did not mention, however. Those figures are an indictment of the Government’s skills and welfare policies. Since 2003, a staggering 1.6 million national insurance numbers have been issued to non-European Union workers, which we can do something about.
Mr. Todd: The hon. Gentleman referred to my comments. However, the migrant workers he mentions have not been forced into jobs, but have been willingly employed by employers who—presumably—found their skills appropriate to the jobs on offer. I am puzzled by his economic logic.
Andrew Selous: I think that the hon. Gentleman and I are at one about the fact that, in an expanding labour market where there is genuine demand for many jobs, we can cope. It is a given between us that any advanced international economy will always have a certain amount of migration—that is, immigration and emigration. However, I ask him to consider the relationship between the hidden, real level of unemployment in this country—welfare—and the arguments about immigration that I have just set out. We need to think more seriously about the interrelationship between those three factors in a way that we have not yet seen.
During oral questions only this month, we learned that in Newham, where the Olympic village is being built, 20,000 new national insurance numbers have been issued to foreign workers. In London as a whole, three times more new NI numbers have been issued to foreign workers than there are young people under 25 looking for work.
On the subject of jobseeker’s allowance, does the Minister intend to have any discussions with EU counterparts as to whether this country should carry on paying British JSA to EU nationals who have returned to their home countries and yet continue to claim? I think that many of our constituents will want to know about the signing-on criteria for those people. Will Ministers at least have a conversation with our European colleagues about that? I think that that is what many of our constituents would like.
What do we need to do about the current situation? Like many other hon. Members, I should like to pay tribute to the hon. Member for West Ham (Lyn Brown) for her excellent speech. She quite rightly raised the need to reform the housing benefit system, and to look at the whole issue of benefit traps, of which housing benefit is easily the most significant. I think that every Member here will have recognised similar stories from their own constituencies.
The hon. Member for South Derbyshire also praised the hon. Lady’s contribution, and I can tell her that my party is looking hard at this matter, as are the Government. It is long overdue for serious reform, but we need to remember that jobs are created through enterprise and entrepreneurship. They do not grow on trees; they grow because people who have a vision, provide a service or manufacture a good are able to provide employment.
We need to look more seriously at alternatives. Recently, I have heard stories about some inner-city communities where there were very few formal jobs on offer. For example, one community, with some help from the local authority, was able to set up a new fast-food business. The people involved had worked out that a lot of
money was going off their estate to fast-food businesses outside, and the new venture helped employ many people on the estate who were out of work. Another, similar example about which I heard recently involved the provision of social care for a community’s elderly people. The people behind the scheme looked at the needs of the community and at those who did not have jobs, and managed to marry the two together. We need to keep enterprise and entrepreneurship at the heart of this debate if we are to deal with the problems that have been identified.
Skills are also incredibly important, and they have not featured prominently enough in our comments this afternoon. Only 28 per cent. of British workers have qualified to apprentice, skilled craft and technician level whereas, if we cast our eyes across the continent, we see that the figures for France and Germany are 51 per cent. and 65 per cent. respectively. How can the Government reasonably expect our businesses to compete on the international stage when they so consistently fail to provide a suitably skilled work force?
Earlier, the Under-Secretary of State for Work and Pensions, the hon. Member for Chatham and Aylesford (Jonathan Shaw) and I had exchanges across the Dispatch Box about apprenticeships, so may I put his mind at rest? My party wants 100,000 additional apprenticeships a year, and we will make it easier for companies to run apprenticeships. We are proposing a £2,000 bonus for each apprenticeship at a small or medium-sized enterprise, and we shall also provide an additional £5 million to make it easier for small employers to come together and form group training associations. In that way they will be able to pool their resources and talents to create and run their own apprenticeship schemes. We also plan to introduce a business skills development fund to promote the non-apprenticeship skills that businesses need and employees want. We are really engaged with skills, training and the types of apprenticeship that will lead to sustained work, which is what we need to talk about.
Welfare reform has featured throughout the debate. I have to chide the Government for making serious proposals only in their 11th year in office. The Conservative party made proposals before the Government did so. We want reforms in Jobcentre Plus so that, as soon as an individual enters the system, there is early assessment of their skills and the barriers to their working. We differ from the Government, who say that the work of private, not-for-dividend providers should begin only after 12 months. We think that the situation is too urgent to leave people without an early in-depth assessment.
We want individualised support to help people get back to work. That theme has featured throughout the debate, expressed skilfully by the hon. Member for Kingswood (Roger Berry). My hon. Friend the Member for Ilford, North (Mr. Scott) and the hon. Member for South Derbyshire spoke particularly movingly about autistic people—an issue about which my hon. Friend the Member for Buckingham (John Bercow) feels strongly, too.
I congratulate my hon. Friend the Member for Henley both on his excellent contribution and on recently joining the Select Committee on Work and Pensions, where I am sure he will make a valuable contribution. We shall note his warnings this afternoon about what the Netherlands has not got right.
We expect our proposed employment programmes and welfare reforms to provide much better job-search facilities, specialised training to increase suitability for work, personalised career and recruitment advice, with interview training with real employers, and greater help in preparing CVs. We believe that the private and voluntary sectors have something to offer. The results for organisations such as Tomorrow’s People, which was mentioned earlier—as was Debbie Scott—show that they have a good record. When we look at the research on the subject, there is no dispute about that. We believe in a partnership approach. Let us not get into stale, state versus private arguments, but simply look at how we can help people. We should find out what works and use it.
We should talk about what we can do to help businesses, which are suffering at present. My party colleagues have often talked about the need for reform of the insolvency system, yet each time we have mentioned it the Secretary of State for Work and Pensions says, “There’s no need—it’s all been dealt with by the Government in an earlier Act.” I shall explore briefly what we think we can do to help businesses keep people in work.
We want to introduce an automatic stay of enforcement of debt against a company by its financial creditors, while the management stay in place and attempt to negotiate restructuring. We want priority funding for distressed companies. In America, unlike the UK, firms in chapter 11 can raise finance even after they have petitioned for bankruptcy. Lenders will advance them money in exchange for “super priority” over other unsecured creditors; in fact, there is a whole market for such rescue funding in the US that does not exist in the UK.
No Member can want fundamentally decent businesses to go under if an extra financial lifeline could be thrown to see them through these hard times. I implore the Government to look again at those proposals. We will be happy to share our ideas; we may not have the last word on the matter but we really believe that there is something useful we can learn from the United States.
Businesses are suffering, so we propose cutting the main rate of corporation tax from 28p to 25p and reversing the Government’s planned increase in the small company rate from 20p to 22p. I find it incredible that in the current economic conditions the Government propose to increase the rate of corporation tax for small companies, which my colleagues will definitely oppose. Cutting corporate tax rates would be an important boost to the competitiveness of the British economy. We would pay for them by scrapping some of the tax reliefs that businesses and accountants find it difficult to administer, so there would be a simplicity advantage, too.
Encouraging flexible working will be key in helping people to stay in work and to balance their caring commitments. We also want a great expansion of personalised budgets, to help people to get back into work. There have been big advances in that respect in the area of social care. We want to break down the departmental silos. We want to pool budgets, intervene early, and work with whole families, inter-generationally if necessary.
Let me go back to where I began. We will not deal with problems of the scale that we face unless we are honest about recognising them. The hon. Member for
Llanelli said that the UK economy had been vastly superior to that of our European neighbours in recent years. I wonder whether she knows that the United Kingdom’s employment growth in 2007 was one of the lowest in Europe. That was in 2007, before our present difficulties began. The UK’s employment growth was level with that of Estonia, and we beat only Hungary and Portugal. That is a pretty shocking international comparison.
Nia Griffith: I wonder whether the hon. Gentleman realises that that was because other economies were catching up; they had been very slow to start with. Countries such as France, which were very slow to get their economy moving, were beginning to pick up. We had already had a large increase in our economy, so we did not look so good in comparison.
Andrew Selous: I hear what the hon. Lady says, but is she aware that the UK has a higher proportion of children living in workless households than any other EU country, including Bulgaria and Romania? Frankly, the international comparisons are not quite as rosy as some Labour Members would have us believe. The hon. Member for Cardiff, Central (Jenny Willott) said that there are 1.3 million young people aged 16 to 24 who are not in work or full-time education; that is 19 per cent. more than in 1997. As for the Department’s claim that long-term unemployment has been virtually eradicated, I wonder whether Ministers are aware that more than one in 10 jobseeker’s allowance claimants have spent six of the last seven years on benefits? Let us just have honesty. I do not want to have to score points on these issues; my contention is that we will not deal with the serious questions unless we are a bit more open and honest about the real situation that we face.
I have set out why we believe that the need for real welfare reform is urgent, that non-EU migration into a shrinking job market must be capped, that skills training must be enhanced, and that businesses must be given the practical support and confidence that they need to survive and prosper in future.
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