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James Purnell: The rapid response service cannot go into all companies—sometimes companies do not agree to that—but, wherever it goes in, benefits are clearly an important part of the information it gives people. I can therefore give my hon. Friend that assurance.
In November, we announced £680 million extra, which the right hon. Member for Maidenhead would oppose, for Jobcentre Plus. She claimed that we had announced but not delivered that, but we have already recruited 4,000 of the extra 6,000 staff that we said we would fund. Again, that is not fantasy policy, but genuine delivery. What would happen under Tory policy? Conservatives would cut all that help and revert to the position in the 1980s, when it was no longer necessary to sign on to receive benefit. Consequently, it is estimated that the claimant count in 1986 was around four percentage points higher than it otherwise would have been. That cost more than £4 billion in today’s money of extra benefit spending. Conservative Members would make exactly that mistake again today. They are not prepared to put the money in now to help people get back to work, and they would therefore increase the cost in future and the amount that taxpayers had to pay. The Conservatives thought that public spending was not a price worth paying; consequently, the long-term unemployed paid the price.
Rob Marris: My right hon. Friend mentioned statistics. I know that he was in short trousers at the time, but I remind him that, when the Conservatives were in government, they changed the figures 18 times—an average of once a year. They cooked the books for what counted as unemployment and what did not. I pay tribute to the Government, who changed the figures once in 12 years to put them on the International Labour Organisation standard. The Government have kept the figures transparent. Does my right hon. Friend fear that, if the Conservatives got in, they would start cooking the books again on measuring unemployment?
James Purnell: My hon. Friend makes a powerful point in his usual way. He is right—the Conservatives were more interested in fiddling the figures than in helping people back to work. That was no accident; they were not prepared to increase spending to get people back to work. As I have said several times, they would repeat that mistake.
Mrs. May: I thank the Secretary of State for his continuing generosity in giving way. Before the hon. Member for Wolverhampton, South-West (Rob Marris) interrupted him, the right hon. Gentleman made a point about being prepared to put money in to provide a service to people. The Department’s budget will be lower in real terms in 2010-11. What changes will he make?
James Purnell:
I will deal with that later in my speech. [Hon. Members: “Ah!”] I can do it now, if hon. Members want. We will continue to make efficiency savings because, like any industrial organisation— [Interruption.] It is extraordinary—the Conservatives claim that they can fill their spending black hole through efficiency savings in all Departments, without affecting front-line services, yet, when a Department achieves £1.5 billion of efficiency savings, they immediately say that they are cuts. We have been able to improve our services, reducing processing
times from 13 to 10 days, precisely because we have achieved efficiency savings, but that has released money to go to the front line. We will continue to have those efficiency savings, by using automation, computerisation and better working practices, but we will also put in £2 billion of extra money. [ Interruption. ] The Opposition say that they would do that too, but they would not put in the extra £2 billion. They did not do that when they were in power, so why would they do it now?
Paul Rowen (Rochdale) (LD): Does the Secretary of State agree with the Minister for Employment and Welfare Reform that the £230-odd million allocated for the first phase of the flexible new deal is adequate, or does he accept the concerns of the Select Committee on Work and Pensions that it is not adequate for the numbers flowing on to the system?
James Purnell: Actually, my right hon. Friend said that we had to look at that, and that is what we are doing. One of the uses to which we are putting the money from the pre-Budget report is increasing the amount going to the flexible new deal, precisely because the costings are increasing. However, the hon. Gentleman can ask me about that issue again when I turn to it later in my speech.
I was glad that the right hon. Member for Maidenhead recognised that job clubs already exist. Perhaps she should tell the Leader of the Opposition, because he keeps saying that we should introduce them. The truth is that job clubs continued after her Government lost power, but we modernised them, contracting with the private and voluntary service providers to deliver them. What we announced yesterday was an extra £40 million to ensure that we can widen the service and ensure that everybody gets a service that is personalised to them, so that, for instance, professionals and blue-collar workers get the right service for them.
That is exactly the right thing to do and, since the right hon. Lady asked, the programme will start in April, along with the rest of the six-month offer. [ Interruption. ] She says, “Along with everything else,” but that is when we said we would introduce the programme. We announced in January that we would introduce it in April and we will introduce it in April. She may not realise that the difference between being in opposition and being in government is that people actually have to do things in government—they cannot just put out a press release on something and somehow it magically comes along. When people want to do things in government, they need a certain amount of time to implement them. We said that the programme would start in April and it will start in April.
Let me turn to welfare reform. As I am sure the right hon. Lady would agree, the Government have made strong—and in some respects remarkable—progress on welfare reform over the past 10 years. That is a genuinely impressive record. Does she disagree with the soon-to-be-Lord Freud’s views on that issue? No. So I am sure that she will agree with him that we have made remarkable progress over the past 10 years. She will welcome the fact that 300,000 more lone parents are in work now than in 1997. She said that the level of people on sickness benefits was too high in this country. Actually, it was lower than in Finland, Denmark, Holland, Sweden, Australia and the United States. This country was at the
bottom of the league of international comparison, precisely because we reformed the welfare state and had a labour market that got people into work.
Paul Rowen: Can the Secretary of State confirm the story in The Observer at the weekend that only 6 per cent. of claimants on incapacity benefits working through private companies secured employment? Can he also tell us why that report has not been made public?
James Purnell: I am sure that the hon. Gentleman has seen the letter in the Library from our head of statistics on 13 February—before the press speculation, therefore—which explains precisely why, in his professional judgment, he has to wait for the figures to be validated before they are issued in a parliamentary answer. We have to follow the advice of our head statistician.
I am happy to speak to the hon. Gentleman about the policy in general, however. Overall, private and voluntary sector providers have helped us to improve performance significantly. Last year, they got more people into work than the year before, despite the fact that the economy was declining. However, that is in no way to criticise Jobcentre Plus or to say that it does not have a fundamental role; rather, the truth is exactly the opposite. It has always been a false choice between public and private. The point is to have a system that, through competition, gets the best out of both and ensures that people can get the contracts that they can best deliver.
With pathways to work, we also had a number of teething problems when Jobcentre Plus started working with those groups. Hon. Members might remember people who had been on incapacity benefit—often for a long time—being subject to mandatory referrals. We recognise that we need to improve performance—that is an issue for our providers, but it is also an issue for us and for Jobcentre Plus. We need to work on how we are referring people to those private providers and ensure that our systems are properly integrated. That is what we are working on, and performance is already improving. As soon as the figures are validated, we will release them through a parliamentary answer.
The right hon. Lady asked me about the flexible new deal. There is no mystery about this. Jobcentre Plus has had to change its plans and get more money, to reflect the fact that unemployment is rising, and we have had to do exactly the same thing with the FND. Doing that with private providers in the middle of a contracting process has meant that we had to write to them and ask them to amend their plans, which they have done. We continue to be committed to getting this in October, so, far from being in crisis, as the right hon. Lady’s motion says, all that is happening is that we are adapting the policy to reflect the fact that the economic situation has changed since we started the contracting process. I hope she will withdraw the allegation that the system is in crisis.
Mrs. May: I did indeed ask the Secretary of State a specific question about the flexible new deal. I did not say that it was in crisis; I said that there were problems with it. I recognise that there has been a need to go back to the contractors, but what I specifically asked him was whether he would guarantee that it would start in October. It is due to start on 1 October, and he has said that the Government are committed to an October start. Will he guarantee to the House that the flexible new deal will start in October?
James Purnell: Yes, we are committed to doing it in October. The right hon. Lady should read her own motion, which talks about
“the failure of the procurement process for Flexible New Deal”.
I hope that she will not be saying that again. She had not even read her own motion; that much is clear.
Tony Baldry: Is not the issue that we have two sorts of unemployment? There are those who have been unemployed for a considerable time, whom the welfare reform measures are trying to get back into work. The old job clubs were helpful for such people. Then there are the newly unemployed, about whom we hear practically every day in all our constituencies. They are desperate to get back into the world of work—they want to do it tomorrow. We require a step change in how we help those people by supporting them while they are out of work and getting them back into the world of work as speedily as possible. There is no lack of motivation among those people. I do not wish to make a partisan point, but I have to tell the Secretary of State that, until one started in Banbury, there was no job club in Oxfordshire. We are trying to meet the needs of those who have lost their jobs and who want to get back into the world of work tomorrow, if at all possible.
James Purnell: Two or three years ago, the people who came on to jobseeker’s allowance with very high qualifications—if they came on to JSA at all—were getting back into work very quickly. In the new economic circumstances we have had to adapt our policy and to expand job clubs. The hon. Gentleman is absolutely right to say that there should be more help for people early on, and that is exactly why we are putting in an extra £2 billion. I hope that he, unlike those on his Front Bench, will support that.
The hon. Gentleman is also right to say that there are two broad categories involved. The first includes people who have been out of work for a long time, including workless parents and those who are sick or disabled. For them, we need to ensure that we keep up the pace of welfare reform. Some people say that we should postpone that reform until the economy recovers, but I profoundly disagree. That would involve saying to someone who was sick or disabled, “Okay, you’re not going to get any help for the next couple of years”, or to a lone parent, “You’re not going to get any help with your skills or with motivational courses.” It would also involve telling drug users that they were not going to get any help to get clean and get back to work—
Mrs. May: That is not our policy.
James Purnell: I did not accuse the right hon. Lady of having that policy, but I am happy to make that accusation, given that it actually is. She is obviously a bit too sensitive about it. We have to recognise that it is going to be harder for people to find work in the next couple of years. That is precisely why we should redouble our efforts, and not postpone welfare reform. I know that she agrees with that point.
Mr. Heald:
Does the Secretary of State acknowledge that the problems relate not only to those with significant skills who are going to find work fairly quickly? There will also be a big rise in long-term unemployment as people with skills that would have got them a job a year ago will not find a job very quickly in the current
climate. The estimate that we on the Select Committee were given was that there would be a three to fourfold increase in long-term unemployment over the next three years. Does the Secretary of State agree with that estimate?
James Purnell: That is precisely the point that I was making. A few years ago, people with those qualifications would have found work very quickly. Now, we need to increase the help for them, because it will be harder for people in those groups to find work due to the state of the economy.
Mr. Evennett: I am listening intently to the right hon. Gentleman. Does he agree that adult and community learning provides an important route to training for many people who have been long-term unemployed? Have not the Government cut the number of community learning opportunities over the last couple of years?
James Purnell: On spending on further education, £83 million of the £2 billion extra spending that we announced—I risk boring the House by pointing out again that the Opposition are against it—is intended for training, so perhaps the hon. Gentleman will have a word with his Front-Bench team and try to persuade them to give up this frankly insane policy, which would repeat the mistakes of the past.
Anne Main (St. Albans) (Con) rose—
James Purnell: Perhaps the hon. Lady is going to say that the policy is insane.
Anne Main: On training, I recently participated in a debate on the curry industry, which has vacancies for skilled chefs. So far, however, the proposal to set up a specialised NVQ training for ethnic cuisine has fallen on deaf ears so far as the Government are concerned. Is the Secretary of State prepared to give more support to set up specialist training so that we can fill the vacancies in the curry industry, as some unemployed people would like to see better opportunities provided in the catering industry?
James Purnell: As I have said, we have announced an extra £83 million to help people who are out of work back into work—and the hon. Lady has Innovation, Universities and Skills questions every month if she wants to put that question to the relevant Minister.
We can redouble our efforts, unlike the Conservative party, because we are prepared to increase our investment. We can also increase conditionality because we can increase our investment. The Conservatives would reduce that investment, cutting support and, in the end, they would cut the conditionality, which is exactly what happened when they were in power. That is why they ended up using unemployment as a tool of policy; that is why they said it was a price worth paying, because they were not prepared to pay the cost of the right policy. The right policy is to increase support for people: we are doing that and we are prepared to pay that cost; the Conservatives are not, and the people who would pay the price if the Tories ever got back into power would be the unemployed.
4.47 pm
Paul Rowen (Rochdale) (LD): I, too, welcome the opportunity to debate unemployment. Aside from the loss of a family home or a bereavement, there can be few more traumatic things than losing a job. Yet since we last debated this topic on 7 October last year, another 146,000 people have lost their jobs and unemployment is predicted by the CBI to reach 2.9 million by the start of 2010. The claimant count was 1.23 million in January 2009—the highest figure since July 1999—and is up 480,000 on the year. The total number of economically inactive people of working age now stands at 7.86 million. As the right hon. Member for Maidenhead (Mrs. May) said, more than 5 million of those are on inactive benefits. We all know that many of those people want to get back into the job market.
Unlike in previous recessions, today’s unemployment is not restricted to manual jobs or to the north, Wales or Scotland. No, it is rising evenly across all employment sectors and in all parts of the country.
Mr. Peter Bone (Wellingborough) (Con): I am listening to the hon. Gentleman and he is quite right to say that unemployment is one of the most devastating things that can happen. Does he agree that it is strange that only one Government Back Bencher is in the House, while the Opposition Benches are full? Does that not say something about how seriously the Government take this issue?
Paul Rowen: I agree with the hon. Gentleman that this is a hugely important subject; the presence of several Ministers reflects that. Some Labour Back Benchers seem not to agree with some of the Government’s proposals, which might well be another reason why those Ministers are here.
The Minister for Employment and Welfare Reform (Mr. Tony McNulty): Name them!
Paul Rowen: Well, the hon. Member for North-West Leicestershire (David Taylor) may be one.
Young people have been the hardest hit by the recession. Over the past 12 months, we have seen a 48 per cent. increase in the number of 18 to 24-year-olds claiming jobseeker’s allowance—the highest increase of any age group. Back in 1997, 18 to 24-year-olds represented 24 per cent. of the unemployed; today they account for 32 per cent. The Government’s plans to increase the number of apprenticeships are laudable, but with more than 1,000 redundant apprentices in the construction industry and approximately 150 apprentices previously employed by Woolworths now unemployed, where are those companies willing and able to take on young people without some form of fiscal stimulus to assist them?
Julia Goldsworthy: Does my hon. Friend agree that local authorities are leading the way in this respect? A number of local authorities are helping to support young people who are finding it difficult to get into work by providing apprenticeships. Is that not something that the Government should support—devolved responses rather than trying to direct everything centrally?
Paul Rowen: I entirely agree with my hon. Friend. Indeed, I intend to refer to such an example from my constituency. People who traditionally have never been unemployed are losing their jobs, and the support and advice given to those people have to be reviewed and changed.
I want to share with hon. Members an account of the experience of a former Woolworths employee who went to our local job centre in the new year. More than 550 people from Woolworths were made redundant in Rochdale. This is what she said:
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