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That this House notes that unemployment rose by 146,000 to 1.97 million in the three months to December 2008, the highest level since August 1997, that the number of people claiming jobseekers allowance in January 2009 rose by 73,800 to 1.23 million, and that the number of vacancies in the UK fell by 76,000 in the three months to January 2009 to 504,000, the lowest figure since records began; further notes that unemployment among 18 to 24-year-olds was 616,000 in the three months to November, the highest total since 1995; further notes that the Government has failed to establish a national loan guarantee scheme to increase the flow of credit to businesses, and calls on the Government to establish such a scheme; further notes that the Government failed to introduce necessary welfare reform during the years of economic growth; further calls on the Government to relax the rules on jobseekers allowance to allow unemployed people rapidly to take up training opportunities; believes that the Government should immediately cut taxes for firms taking on new employees who have been unemployed for three months; notes with concern the failure of the procurement process for Flexible New Deal, and further calls on the Government not to backtrack on the use of the private and voluntary sectors in welfare-to-work provisions; and calls on the Department for Work and Pensions to expand the use of an invest to save approach to welfare-to-work services, allowing the full potential of the expertise in these sectors to be realised.
I am sure that no one in this Chamber needs reminding of the unemployment challenge that this country faces. Every day, Members of this House deal with letters and e-mails from constituents who have lost their jobs and are unable to find another. People feel helpless, frustrated, distressed and utterly let down. Who can blame them? The recession is having a devastating effect on employment around the country. No industry or geographical area remains immune from this downturn and the people of Britain are dealing with its harsh realities every day.
What has been the Governments reaction to this crisis? Have they taken immediate action to help people now? Sadly not; unemployment has been rising constantly for more than a year, yet the Government closed an average of one jobcentre a week in 2008. As late as last July, Ministers were still issuing press releases patting themselves on the back for record levels of employment, and brushing the unemployment problem to one side. As Ministers were reminding us that we should see the rise in jobseekers allowance in context, perhaps I can provide a little context for the Government, in the hope that it will get them to face up to the problems that we face.
There are 1.97 million people unemployed. Youth unemployment is at its highest level since 1995. There are record redundancies, combined with the lowest level of vacancies since records began. Jobseekers allowance claims are up by 55 per cent. in one year, with the claimant count smashing through the 1 million mark,
and there are more than 130,000 fewer jobs in the economy since June last year. The reality is that Britain now faces an unemployment crisis.
Yet there is still no real action from the Government. Instead, true to form, they have given us only empty promises. In October, the Government announced £50 million of help for people currently facing redundancy. Five months on, how many have received that help? None. Why? Because the projects will not start until April. In December, the Government announced £79 million of funding. Two months later, they reannounced that help. Only then was it revealed that no new employment programmes would be in place as a result of that money until the end of this year.
The golden hello scheme was announced in January. We welcomed thatthe Government had finally taken up the proposal for tax breaks for new jobs that we announced in November, but again nothing will happen until April. Yesterday, the Secretary of State announced in an interview with a newspaper that he was spending £40 million to provide extra support for white-collar workers with one-to-one interviews, which they are supposed to have anyway, and the creation of job clubs, which some job centres, such as the one in Maidenhead, already run.
We should pity the poor unemployed white-collar worker who heard that and logged on to the Department for Work and Pensions website to find out more, because there is no more information. Indeed, the announcement is not even on the DWP website. So what sort of commitment is it? Is it new money? How many job clubs will be created? Where will they be, and crucially, when will what has been announced happen? I cannot refer to job clubs without mentioning the excellent work that my hon. Friend the Member for Banbury (Tony Baldry) has done in setting up a job club in his constituency, which I am looking forward to visiting this Friday. I am sure that many people will be helped by it.
If press releases created jobs, we could believe the Governments proclamations that they are offering real help now. Unfortunately, far too many people who are struggling to find work each day know that that simply is not the case. One of the reasons why the Government have been so complacent about tackling the unemployment crisis is their complete inability to acknowledge what caused the problems that Britain now faces. This is a global recession, but Britain entered it worse prepared than almost any other developed economy. If it is all Americas fault, why has the value of the pound plummeted against that of the dollar? Why is the UKs economy predicted to be worse hit than any other major economy, and why has the OECD predicted that unemployment will rise faster in the UK than in any other G7 country?
If the Prime Minister cannot admit the mistakes that he has made, he cannot help the British economy out of this recession, so perhaps this afternoon the Secretary of State for Work and Pensions will follow the advice of the noble Lord Malloch-Brown and take this opportunity to apologise to the 1.97 million people in the UK today who cannot find a job.
Anne Moffat (East Lothian) (Lab): As we are talking about apologies and unemployment, will the right hon. Lady take this opportunity to apologise, 25 years after the miners strike, for the time when a whole industry and thousands of people lost their jobs and their ability to participate in socially acceptable community life?
Mrs. May: I say to the hon. Lady that when the Conservatives left government, unemployment was coming down. Crucially, youth unemployment was coming down. Under this Government, unemployment is going up, and is predicted to go through the 2 million mark. The Government have an abysmal record on employment. After 10 years of economic growth, almost 5 million people are on out-of-work benefits. The Government boast of creating 3 million new jobs, but up to 80 per cent. of them went to foreign-born workers. There are pockets of deprivation where well over half the people are claiming out-of-work benefits, and we have the highest proportion of children growing up in workless households in the whole European Union. The challenge of dealing with rising unemployment is deepened by the huge figures for those already claiming out-of-work benefit. That is how prepared the UK was for the downturn under this Government.
In the past few weeks, I have spoken to jobcentre staff and unemployed people, spent time with providers of welfare to work services and listened to the experiences of my constituents. When someone becomes unemployed, they understandably often turn to the state for help, and usually they go to their local jobcentre for that help. What they badly need is support, advice, knowledge and reassurance, but the question that the Government must ask themselves is whether the Jobcentre Plus network can provide all those things. Despite grand announcements of billions of pounds of funding and thousands more staff, the reality is that the Government are just reversing previous cuts, not providing additional help.
Mrs. May: I am grateful to the right hon. Gentleman for his question. As he knows, we believe that parts of that fiscal stimulus have not had the effect that the Government said they wouldnotably the VAT cut, which cost £12.4 billion that will have to be paid off through future tax rises. As he knows, the Government were intending to put VAT back up not just to 17.5 per cent., but to 20 per cent. That will hit everybody in this country.
Mrs. May: I have just made the point to the Secretary of State that the money that he has put into Jobcentre Plus merely reverses previous cuts that were made by his Government. His Government have closed 500 jobcentres.
Mrs. May: Just wait. The right hon. Gentlemans Government closed almost a jobcentre a week at a time when unemployment was already going up. The Government set their face against the reality of what was happening to the economy in this country. That is why any measures that they claim to have taken have not worked.
Mrs. May: I have said to the right hon. Gentleman that all he has done is reinstate money that was previously cut from the Governments budget for Jobcentre Plus. If he is so pleased with himself, he might ask himself why the Government in the face of rising unemployment were cutting Jobcentre Plus offices and reducing the service to people who would become unemployed.
Tony Baldry (Banbury) (Con): The truth of the matter is that Jobcentre Plus staff are doing an incredibly good job in incredibly stressed conditions, but most of the time they just about manage to get on top of new applications for jobseekers allowance. The Secretary of State needs to address his mind and his Department to dealing with the ever-increasing number of people who are out of work and want to get back into work as quickly as possible. Jobcentre Plus is not addressing their needs. It is not rocket science. None of the £2 billion is coming through for that group. I would welcome his coming to my constituency and meeting young automotive engineers who have been made unemployed and who desperately want to get back into the world of work as speedily as possible. Jobcentre Plus at present does not meet their needs.
The problem that Jobcentre Plus has is that it is expected to support people in going back into work for the first 18 months of their jobseekers claim, but it is finding it desperately difficult just to be able to process the claims as people initially come in, because of the numbers that it is dealing with, as there has been a threefold rise in benefit claims.
I agree with my hon. Friend the Member for Banbury that Jobcentre Plus staff do an incredibly difficult and important job, but they are also frustrated by a system that hampers their best efforts and often causes hardship for claimants. Claims are taking so long to be processed that individuals are forced to apply for crisis loans. That cannot be right. There are people who have worked hard, often giving years in tax contributions, who find that the archaic system means that they have to apply for crisis loans to feed their families. We should be seeking to ease the pain and trauma of becoming unemployed, not adding to it.
not to backtrack on the use of the private and voluntary sectors in welfare-to-work provisions?
All the available recent evidence shows quite clearly that where outsourcing has taken place in recent years, it is less effective, more costly and unlikely to contribute towards the resolution of the problems that the nations economy is facing. Is it not the case that her friends in the private sector will be able to cherry-pick, at great cost to the taxpayer and little benefit to the unemployed?
Mrs. May: The evidence is the opposite to that. I am sure that the Secretary of State was pleased to receive the hon. Gentlemans warm welcome for the Governments Welfare Reform Bill, which is due to return to the House. If the hon. Gentleman comes along next Tuesday17 Marchfor the final stages of the Bill, the Secretary of State will no doubt welcome his contributions to that debate.
Mr. Gordon Prentice: What she just said seems to be contradicted by the evidence insofar as it relates to what is happening in Lancashire and Cumbria. On Friday I met Peter Chadwick, who is responsible for that area. I have a letter from him, in which he writes:
Despite the increasing volumes, I am pleased to be able to say that our average actual clearance times for the main benefits are holding up well.
He mentions jobseekers allowance being delivered in 10.1 days, compared to the 11.5-day target; incapacity benefit delivered in 13.1 days, against a 15-day target; and income support delivered in 8.5 days, against a 10-day target. So people are being dealt with more quickly than she would invite us to believe.
Mrs. May: I am grateful to the hon. Gentleman for referring to the experience that he quoted. Experience is patchy across the country and there are many areas where [Interruption.] Ministers on the Front Bench sneer at that, but they should not do so. In some areas people have had to find charitable support because their claims are taking so long to get through Jobcentre Plus. What is happening is not something to be sneered at; it is seriously affecting people at some jobcentres. Such delays are one of the issues with Jobcentre Plus. Giving people the fast, targeted and relevant support that they need is vital, yet all too often the processes can be slow, cumbersome and generic. We should be able to provide a smarter and more efficient service.
As I said a few minutes ago, I am sure that everybody in the House will join me in saying that Jobcentre Plus staff are doing the best that they can in incredibly difficult circumstances; any steps that the Government take to streamline the processes that those staff deal with every day will be welcome. Creating a jobcentre system that is fit for purpose is an essential weapon in the battle to tackle unemployment.
What of the services that the Government offer the unemployed? They launched the new deal, their flagship programme, in a blaze of glory, but it can be described at best as a damp squib and at worst as a damning indictment of the Governments failure properly to grasp the challenge of unemployment. In 2008, fewer
than 30 per cent. of the new deal participants found a job. One third of participants on the new deal for young people had been on the programme at least once before, and that figure rises to 40 per cent. for the new deal 25-plus. There can be no denying that the new deal is an abject failure. Half of all young jobseekers who leave the new deal for young people end up back on benefits within the year. I hope that when he responds, the Secretary of State will accept the failings of the new deal system
Those failings have been described by the right hon. Member for Birkenhead (Mr. Field), the former Minister and undoubted expert on the matter, as woeful and a calamity. If the Secretary of State does not accept that, will he accept the findings of a report published by his own Department last September? It said that claimants
were more or less unanimous in the view that the New Jobseeker Interview and the Jobseeker Agreement served administrative purposes only. It was seen by almost all as a form-filling exercise that offered no real help in getting back into work or training. Very few had read the Agreement in detail before signing it.
James Purnell: The right hon. Lady asked me about the new deal. Does she agree with her new boss, the soon-to-be Lord Freud, that by any measure the new deals have been a great success? He also said that they had been enormously successful.
I return to the words of the Departments own report, which found that half those interviewed said that they never spoke to anyone at these interviews; instead, they just handed their forms to a receptionist for processing. The view of one claimant was:
Its just: okay, sign it, theres your money, go.
sat there for six months,
spent the majority of the time playing solitaire on the computer or listening to music.
Rob Marris (Wolverhampton, South-West) (Lab): In the motion to which she is a signatory, the right hon. Lady has put forward some interesting ideas that are worth debating; I am thinking of the loan guarantee scheme, relaxing the rules on jobseekers allowance for training and cutting taxes for new employees. I see those as pump-priming measures. Will she say what her party would spend up front on those three measures in the financial year 2009-10?
Mrs. May: The hon. Gentleman is quick to suggest that we have a debate on the motion, and that is exactly what we are doing. If he is lucky, he will be able to catch Mr. Speakers eye and make a fuller contribution to the debate later.
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