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Mr. Graham Brady (Altrincham and Sale, West) (Con): The hon. Member for Wolverhampton, South-West (Rob Marris) mentioned pump-priming and the Secretary of State talked about fiscal stimulus. Treasury Committee members were in Leeds this morning and heard remarkable
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tales about the capital programme in further education. It was completely suspended in December, leaving construction companies, which are waiting for the work and desperately trying to keep people in employment, floundering and unable to know how to proceed. Is it not ironic to hear about fiscal stimulus from a Government who prevent their own projects from going forward?

Mrs. May: My hon. Friend makes an extremely important point. There is, of course, a double-whammy: not only are jobs not being created because the work is not taking place, but there will not be the extra places that would have been available to people to retrain and reskill. At a recent forum on the new deal that I chaired in Maidstone, I heard from someone who had been on the new deal and from an employer, both of whom said that the right training was not being provided and that it did little to help people to get into work.

Mr. David Evennett (Bexleyheath and Crayford) (Con): I am listening to my right hon. Friend with great interest and I support what she is saying; she is putting the real situation vividly before the House. Does she share my concern about the growing number of young people who are not in employment, education or training? Is not that another example of Labour failing in government?

Mrs. May: I could not have put it better myself; my hon. Friend makes an extremely valid point. [ Interruption. ] We hear laughter from those on the Government Front Bench—laughter about the fact that so many young people are not in education, employment or training, and that their life chances are being affected as a direct result of decisions taken by this Government. It does not look from the reaction that we have had so far as if this is going to be possible, but I had hoped that Ministers might want to accept that reform is desperately needed. [ Interruption. ] I am grateful to my hon. Friend the Member for Hertsmere (Mr. Clappison) for pointing out to me the increase in the number of young people who are not in education, employment or training. Over the period from 2007 to 2008, there was an increase from 655,000 to 857,000, so 200,000 more young people are in that position.

Mr. Oliver Heald (North-East Hertfordshire) (Con): My right hon. Friend is talking about the new deal. Does she agree with the Select Committee on Work and Pensions that there must be great concern about the viability of the flexible new deal now that, on Government accounts, there will be some 300 per cent. more entrants to the scheme than was first thought? How can it be viable with the same amount of money and so many more people?

Mrs. May: I am very conscious of what the Select Committee report said about this point. As my hon. Friend says, it raised some genuine questions about what the Government are doing. We need clarification from the Secretary of State as to where things stand on the flexible new deal, because the numbers have increased. I would have hoped that the scheme would resolve some of the problems that we have seen with the Government’s new deal programme, but not only have concerns been expressed in the Select Committee report, but there has been a lot of speculation in the press that there are considerable problems with the contracting process and
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that the October start date is in jeopardy. I hope that today the Secretary of State will be able to guarantee to the House that the flexible new deal will start in October, as promised.

However, that scheme represents only small steps towards the kind of welfare reform for which my party has been calling for years. I hope that the Government will be in a listening mood and that we can finally persuade them to take proper measures to tackle this recession and the unemployment crisis. First, we need a proper national loan guarantee scheme, because businesses need to get credit flowing again; then firms can keep people in their jobs and the unemployment rate can be checked. We urgently need to protect the jobs that exist. I hope that the Secretary of State will accept the need to introduce a proper scheme that covers all businesses of all sizes and in all industries.

Secondly, we need more support, and sooner, for everyone who is unemployed. The flexible new deal will bring the wait for support down from 18 months to 12, but that is still too long. Under Conservative welfare reform proposals, no one will have to wait more than six months for a personalised employment programme, and for those under 21 support will be available after three months. Youth unemployment is at its highest point since 1995, and it is essential that people just starting out in their working lives do not become detached from and disheartened about the whole process of trying to find work. For everybody who has been unemployed for three months or more, we are calling on the Government to provide employers tax cuts for new jobs. With a record low of vacancies in the economy, it is essential that people have the skills to allow them to compete for every job they want to, so we need to relax jobseeker’s allowance rules to allow everyone the opportunity to go on a full-time training course from day one of their claim. This is not the time for half measures and timid steps forward. I urge the Secretary of State to be brave and to take the proper action that these times call for.

In the past few weeks, the Secretary of State and the Minister for Employment and Welfare Reform have been keen to reassure us that jobcentres are better because they no longer look like those seen in the film “The Full Monty”. I have been somewhat bemused by their preoccupation with that issue, for what matters is not what the job centre looks like, but the service that it can offer. Whether someone is blue collar or white collar, when they lose their job such distinctions seem immaterial—they just want help and they want it as soon as possible.

The last 12 years of Labour government have left us woefully ill-prepared to deal with this recession and its impact on employment, but I call on the Secretary of State to prove his progressive credentials and to adopt our proposed measures. That would offer immediate help to people worried about their jobs and to people waking up everyday without a job to go to, and it would make a real difference to the lives of millions of people.

4.20 pm

The Secretary of State for Work and Pensions (James Purnell): I beg to move an amendment, to leave out from “House” to the end of the Question and add:

We are debating a serious issue today, and I expect that there will be some areas on which we agree. There is no disagreement in my party that this is a serious recession. We all recognise that unemployment is rising sharply. Although the Conservative motion does not refer to it, I think that the right hon. Member for Maidenhead (Mrs. May) will agree that rising unemployment is a global problem and that countries around the world are being affected by it. In the UK, for example, unemployment is 6.3 per cent. It is 6.9 per cent. in the United States, 8 per cent. in Germany and France and now nearly 14 per cent. in Spain. Industrialised countries are all trying to respond to the same challenge, and we are all trying to do two simple things: first, to prevent job losses wherever possible, and, secondly, to get people back into work as quickly as possible.

I am sure that the right hon. Lady agrees that those should be our aims, but there is a difference between us about how we should respond and, in particular, about how we should fund that response. In that respect, I thank the right hon. Lady for calling today’s debate to highlight the fact that she would cut £2 billion from the employment budget precisely when unemployment is rising.

Mrs. May indicated dissent.

James Purnell: The right hon. Lady says that she would not, but she confirmed it in answer to my question. She refused to say that she was in favour of the fiscal stimulus, so she would not put the £2 billion in. When my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) asked her where any of her policies were coming from, she refused to answer that question as well. She can intervene now if she wants to, and confirm that she would put that £2 billion in. Where would it come from? Exactly—she knows, and the whole House can see, that she would cut £2 billion from the budget precisely when unemployment is rising, repeating the mistakes of past recessions.

Rob Marris: Does my right hon. Friend agree that an official Opposition whose motion proposes at least three plans to tackle the extreme difficulties facing our work force, but who refuse on the Floor of the House to put any figures on their plans, are merely full of hot air and are not a serious Opposition?

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James Purnell: The first test of a serious Opposition is whether they are able to say how policies are funded, and they have completely failed that test today. As is so often the case when people try to divert attention from the fact that they are embarrassed about their policy, all the Opposition have succeeded in doing is draw attention to the fact that they would cut £2 billion from the budget. That is why, as my hon. Friend says, their motion is a mixture of straw men and fantasy policies. Their policy on national insurance is a fantasy policy; they have absolutely no way of funding it. They cannot say that they will cut tax on employers without saying where the money will come from. That is a fantasy policy—the sort of thing that the Liberal Democrats do most of the time. I would have thought that they at least aspired to meet the test of being more intellectually credible than the Liberal Democrats, but they have failed in that as well.

The right hon. Member for Maidenhead says that people should be able to train from day one. That is a straw man: they can train from day one, as long as they are looking for work. People are doing that all around the country. The Opposition want to say that they would increase the pace at which the invest-to-save policy is rolled out. That is our policy, so that is another straw man. If they are saying that that would fund the £2 billion hole in their spending plans, it is not just a straw man, but a fantasy policy as well.

Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP): I am listening to the right hon. Gentleman talk about cuts and straw men. Let us leave the straw men to one side. Will he answer this question, which no one else in his Government has: why are his Government cutting half a billion pounds for Scotland over the next two years?

James Purnell: We are increasing spending in Scotland. Indeed, the money we are spending here will be spent in Scotland as well. The £2 billion will be spent in the normal way through Barnett consequentials in Scotland.

Mrs. May rose—

James Purnell: I think the right hon. Lady wants to intervene to tell me where the £2 billion is coming from.

Mrs. May: I did indeed want to intervene on points that the Secretary of State is making, particularly about invest to save. He is absolutely right—he has followed our policy on welfare reform and he is adopting our proposals on invest to save. However, he is being timid about it, which means that people will not get the help that they deserve as quickly as they should. Will he not now adopt our welfare reform proposals in full, rather than take the rather timid approach that he has taken hitherto?

James Purnell: The right hon. Lady’s new boss—I am sorry to mention him again—said clearly that it would

which is exactly what we are doing. She is obviously happy to have him as a Tory Front Bencher, but she cannot say that he is right and then suddenly say that he was talking nonsense when he said that we were proceeding at the right pace. I am glad that she agrees with our policy on introducing that system.

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The Opposition’s motion is a do nothing motion. They are not prepared to spend the money, so it is a motion full of fantasy policies. This is not just a theoretical debate, it is about real people. Every time someone loses— [Interruption.] They might want to listen to this, because it is about real people. Every time someone loses their job it is a crisis, but the fundamental thing to do to prevent it from becoming a tragedy is to help people back into work as quickly as possible. The inability to do that was not a theoretical debate in the past; it was Government policy. In the 1990s’ recession, the number of people claiming incapacity benefit increased by half a million. The unspoken Government policy at the time was to shift people off the unemployment roll and classify them as sick and disabled. As if that were not a sick enough policy, the truly sick thing about it was that when people were put on to benefits, they were given no help to get better and no help to get back into work. It is because of this Government that people are getting that help.

The reason unemployment was considered a price worth paying under the Conservative Government was simple: they were not prepared to spend the necessary money on employment services. The people who paid the price for their policy were the long-term unemployed. We are determined to ensure that that does not happen again.

Mrs. May: I am grateful to the Secretary of State for his generosity in giving way for a second time. If his Government’s policies on people on incapacity benefits were so great, why do we still have 2.5 million people on incapacity benefit?

James Purnell: The number tripled under the Conservative Government. It went from 700,000 to 2.6 million. It is only because of our policies that it is starting to fall. I am happy to deal with welfare reform at the end of my speech, but I shall go through it in the right order.

We know the history of previous Tory Governments and their mistakes, but the extraordinary thing is that the Opposition want to repeat those mistakes. It is as though they believed that the ’80s and ’90s were not mistakes, and that they followed exactly the right policy all along. They are not prepared to pay the cost of increasing borrowing, so they would not be prepared to help people back into work over the next two years. We would therefore pay the cost over the next two decades, as we have over the past two.

When it comes to the Tory response to unemployment, it is not about theories. It is about the history of our constituencies and of too many families that were abandoned by the Tories’ policies. The danger of the right hon. Lady’s policy is that that could be the situation in the present, too. It is important to ask ourselves what an employment policy without the extra £2 billion would look like. That is the question that she wants desperately to avoid.

In considering that question, let us start with the rapid response service. Today, if a company announces redundancies, it is helped by the rapid response service. We announced last November that we would double the funding for the service, and we will double it again next year. That is not fantasy policy but real delivery. The right hon. Lady said that we have announced policies but not actually delivered them. Through the rapid
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response service we have already helped more than 800 companies, and we will continue to help. That is not fantasy policy but real delivery that is helping people, through jobs fairs, advice on writing a CV, debt advice and reskilling. If the Tories had their way, of course, those things would not be funded and we would have to cut the rapid response service.

Mr. Heald: Woolworths closed with 30,000 redundancies. What has the Secretary of State’s rapid response service done for those people?

James Purnell: We have been working with Woolworths ever since it went into liquidation. [Interruption.] We have provided help for people in job searches, and we have provided jobs fairs and a wide range of help. Indeed, a large number of people who worked in Woolworths have found work through Jobcentre Plus. Clearly the situation is very worrying for anybody who has not yet found work, and it is our responsibility to continue to help them.

Julia Goldsworthy (Falmouth and Camborne) (LD): Many constituents have come to see me not because they have lost their jobs but because their hours have been reduced—a lead indicator that businesses are in trouble and people are at risk of losing their jobs. Should not the Government pay more attention to supporting those businesses to ensure that redundancies are a last resort, and can be avoided when possible?

James Purnell: The hon. Lady is right—that is important. Losing overtime and hours is clearly a challenge. However, the right response is the tax credits policy, which we introduced. It will significantly cushion the reduction in people’s funds, but I believe that the Liberal Democrats oppose it. The right response to people who must reduce their hours is to say that the tax credits policy will help cushion that. She might like to discuss not opposing it with her colleagues.

Under the Conservatives, the rapid response service would be rolled back. The right hon. Member for Maidenhead nearly said some kind words about Jobcentre Plus. I agree with the hon. Member for Banbury (Tony Baldry) that it has done an incredibly good job. Many people already recognise it as world class, but, in the past few months, it has really earned that reputation. For example, despite the doubling of the claims with which it deals, we are processing claims in 10 days, down from 13 days two years ago. The right hon. Lady said that it was wrong to close jobcentres, but I thought that Conservative party policy was to make public services more efficient. We have done exactly that. We have improved the service that people get and reduced the time that they have to wait to get their benefits, while decreasing spending on back-office processing and increasing front-line advisers. We have made the welfare state more active by making it more efficient. I would have thought that she supported that.

Sandra Osborne (Ayr, Carrick and Cumnock) (Lab): Will my right hon. Friend confirm that, when people lose their jobs, the rapid response team or those at Jobcentre Plus will inform them of all the benefits to which they may be entitled, and that the onus will not be only on the person to find out for what they are eligible? A constituent made that allegation to me last week, so I would welcome the Secretary of State’s confirmation that that is not the case.

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