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“The kind of support that I expected was advice on bill payment, debts, council tax etc., opportunities to retrain and grants and bursaries available... The JCP seems to be woefully understaffed and I had to wait 20 minutes for my last appointment, with the amount of people waiting to be seen it has the overall effect of an assembly line or cattle market.”
Mr. Heald: A constituent of mine has written to me about Woolworths in Letchworth, saying that she has not had any help from a rapid response unit. She thought there was special help. Where is it? I have written to the Secretary of State today to ask him what is going on. In response to my intervention, he said that a lot is happening. Has the hon. Gentleman seen any evidence of it?
Paul Rowen: Like the hon. Gentleman, I met the local Jobcentre Plus manager to discuss that. To be fair, I know that there were some problems with the receivers in allowing Jobcentre Plus staff into Woolworths, but once those redundancies had happened, the help referred to in the motion tabled by the official Opposition and in our amendment to it was not available—it is not there at the moment. That is one of the main differences between the policies of the Opposition parties and Government policy.
Many people who are currently not long-term unemployed have never been unemployed before. The lady I referred to worked at Woolworths for 35 years, but suddenly she finds herself redundant. Those people need advice not only on benefits and job seeking, but on debt counselling and mortgage advice, which my constituent referred to. If someone’s weekly income suddenly drops from £500 a week to £60.50, radical lifestyle changes are needed, and people need support and help to make those changes. Those changes and that help are not available at the moment, but the Government amendment to the motion and Government policy reiterate support for the Government’s welfare reform proposals and the flexible new deal.
There is an almost daily drip of the announcement of new initiatives. Yesterday, the Secretary of State announced £45 million for white-collar workers, but where is the coherent strategy? What help is coercion of the long-term unemployed when those newly unemployed have to wait 12 months before they can access the full range of services that Jobcentre Plus has to offer? How are young people such as those who started a new deal for young people programme after six months out of work helped by that period being changed to 12 months? Those policies were written for the labour market of two years ago and are totally inadequate for the current circumstances.
The Work and Pensions Committee report “DWP’s Commissioning Strategy and the Flexible New Deal”, published last week, raised major concerns, including
whether the £236 million budget for phase 1 is enough. The Centre for Economic and Social Inclusion has estimated that to achieve the flexible new deal targets, an additional £1 billion would be needed in 2009-10. Can the 37.5 per cent. improvement in job outcome performance over what has been achieved by DWP contractors in the past be met in the context of a significant reduction in funding? What is the evidence base for the wholesale marketisation of welfare-to-work provision in the United Kingdom?
The position has not been helped by reports in The Observer at the weekend suggesting that the Minister for Employment and Welfare Reform had suppressed figures showing that private firms
“placed just 6 per cent. of incapacity benefit claimants on their books into work, rather than the 26 per cent. they had claimed would be possible when they bid for contracts. This compared to 14 per cent. achieved by state job centres during the same period.”
I note the Secretary of State’s response, but perhaps he should remind the Prime Minister of the rules regarding the release of statistics. He certainly did not apply the same strictures when it came to the release of knife crime figures.
Ideologically, as Liberal Democrats we are not opposed to marketisation, although we are concerned about the headlong rush into it with what appear to be inadequate resources. The DWP’s own research, shown in the review of adviser discretion released on 16 February, showed that
“advisers... believe they could get better results if they had discretion”.
We agree with that, and would give people the help that they need from day one.
Both the Government and the Conservative Opposition propose giving employers subsidies for taking on unemployed people. In January the Government proposed £2,500 golden hellos, while the Conservatives have proposed tax breaks for those taking on unemployed people which would cost £3 billion. Where is the evidence that that sort of generalised employment scheme works? Back in the 1980s and 1990s there were numerous employment schemes, including the national insurance contribution holiday, which ran from April 1996 until 1999. It was expected to attract 130,000 applicants, but there were only 2,718 applications. The work start scheme ran from July 1993 until April 1998. John Atkinson of the Institute of Employment Studies found that the
“NIC Holiday appeared to be a bonus for recruiting a long-term unemployed person, rather than an incentive for so doing.”
We fear that, regrettably, the Government’s golden hello and the Conservatives’ national insurance holiday are likely to have the same result.
The real problem facing businesses and stopping them from recruiting is not just a lack of credit, but a real and prolonged lack of demand for their goods and services. That is why the Liberal Democrats’ proposal to launch a “green road” out of the recession, using the £12.5 billion being used to fund the VAT reduction, is so important. It will fund insulation and energy efficiency schemes in 2 million homes, and will begin a five-year programme to insulate every school and hospital.
Mr. Graham Brady (Altrincham and Sale, West) (Con): I am very interested in what the hon. Gentleman is saying. How much of the £12.5 billion has already been spent?
Paul Rowen: That is a question for Ministers to answer, but I would imagine that a proportion, probably a third, has already gone. When commenting on a policy, however, it is important to suggest an alternative. At least we are costing our policy, which is more than the Conservatives are doing.
John Mason (Glasgow, East) (SNP): Does the hon. Gentleman agree that if the money used for the VAT cut had been invested in capital construction, about twice as many jobs would probably have been created?
Paul Rowen: I do agree. We would expect between 90,000 and 100,000 extra jobs to be created with that £12.5 billion if our proposals were implemented. We consider ours to be a more constructive and long-lasting approach. We would build 40,000 extra zero-carbon homes and provide a raft of public transport schemes that together would create 100,000 jobs. Most of the money would be spent now, this year—not in the future—and would leave us with a lasting legacy that would save energy, reduce fuel bills and fight climate change. It is supported by the Renewable Energy Association, which has argued that investment is essential to ensure that the UK catches up on what Europe, the US and China have already committed towards green energy. Investment in people—their skills, homes and communities—is the best way to demonstrate faith in people and show that that “Yes we can” approach can be adopted.
We need flexibility and a willingness to adapt and build on the strengths of our communities. Last year, part of my constituency, Falinge, was highlighted by the media as the “benefit capital of Europe”, and ranked the worst in England—and the Secretary of State visited it. In addition, it is ranked third worst for people with poor health, sixth worst for income and 15th worst in overall deprivation. It is very easy in the current climate to give up on areas such as Falinge. However, that has not happened in Rochdale; the council, the Jobcentre Plus, the primary care trust, the police, Churches and the local community have come together to develop, first, the key themes, and then key areas of transformation. Over the past six months, more than 350 people have taken part in that process. That process comes to a head today, when all members of the local strategic partnership board are touring the estate and meeting residents. There is a plan and there is a range of activities, but, above all, there is a belief that things can be changed for the better. That commitment, flexibility and support for the long term is what is needed not just locally, but nationally and globally.
Madam Deputy Speaker (Sylvia Heal): Order. Before I call any Back Benchers, may I remind all hon. Members that Mr. Speaker has imposed a 15-minute limit on Back-Bench speeches?
5.1 pm
Alan Simpson (Nottingham, South) (Lab):
I am pleased to follow on from the concluding comments of the hon. Member for Rochdale (Paul Rowen), because it is terribly important that this debate does not end up as a contest between different parties in which they make comparative claims as to who can offer the better quality of unemployment. Somehow, we have to reach beyond the
merits, or otherwise, of jobcentres and Jobcentre Plus, to address the nature of employment in the UK, rather than the quality of unemployment.
Probably the only good thing that we can say about any recession is that it gives the Government of the day, and the country, the chance to come out at a different place from where we went in. We do not have to try to reconstruct parts of the economy that have gone into recession and contraction, and that probably are not suited to the nature of the economy in which our children and grandchildren will have to find a secure place. So we can use the trauma of a recession to give ourselves a transformation moment, and that is what the House needs to discuss.
That transformation moment must address not only where the work will be, but how we will create a society that is able to meet other non-negotiable obligations that we will all have to meet. That includes dramatic reductions in our carbon emissions—how we will achieve reductions in the ecological footprints that we place on society. I want to try to address the issue of unemployment in relation to those unavoidable obligations, and this is the key question that I want to ask of all parties and Members: where are the jobs that we see ourselves seeking to construct, in a society that will be able to live sustainably as we come out of the recession?
In the past couple of weeks there have been two important reports that should be shaping this debate. This week, there was a report from the Met Office Hadley centre in Exeter, which said that, on our current policies, if all goes well we still probably have only a 50:50 chance of surviving this century. By implication—and, in some cases, quite directly—it is saying that nothing in the current framework of public policy, other than “a flip of a coin” prospect will deliver the scale of carbon reductions that will allow society to survive in any civilised way by the end of the century. It is telling us that we need a dramatic shift in our priorities, in our intervention strategies and in the jobs we seek to deliver in order to get us out of the mess we are in and into a different future.
The second report that should frame the terms of reference of this debate is “A Climate for Recovery”, which was produced by HSBC. It is an assessment of the intervention packages pursued by different Governments around the world in trying to address the recession into which we have all been thrown. It looks at how far the nature of our intervention strategies relates to a transformation moment rather than a recreation of the past. The report specifically produced a league table placing different countries in a pecking order based on their green stimuli. A great deal of publicity has been given to that, both in the UK and in other countries.
The difficulty is the gap between what we claim and what we do. Just before the Prime Minister gave his press conference about this issue last week, the United Nations Secretary-General, Ban Ki-moon, and Al Gore had a letter published in the Financial Times. In that letter, they not only warned about the consequences of and threats to the world from climate change, but they pointed out the opportunities. They said that, worldwide, there are now more jobs in renewable energy industries than in the entirety of the gas and oil sectors. They thought that this represented not just a policy choice and shift but a real opportunity to bring together employment agendas and strategies for getting out of global crises.
However, the HSBC report pointed out that, although Britain tries to claim that it wants to lead the world from the front, only £1.5 billion of our current economic recovery package goes into green initiatives and green stimuli. By comparison, France is spending three times as much, Germany is spending six times as much and China is spending 110 times as much, in straightforward cash terms. Britain may wish to lead the world, but it is difficult to do so from the back of the pack.
To address the point slightly differently, I should point out that Lord Stern has said that in order for us to have a viable and sustainable economy for the future, this country needs to be spending about 20 per cent. of its economic recovery packages on green investments. The tragic thing is that the current figure for the UK is about 6 per cent. Even on those percentage terms, the UK compares badly with other countries facing the same recessionary problems. Germany is spending 13 per cent. of its economic recovery package on green stimuli, and the figures for France, China and South Korea are 21, 38 and 81 per cent. respectively. Those are real resources going into a green transformation to deliver sustainable jobs for a sustainable future.
It is somewhat embarrassing to read the HSBC report, because the UK is one of only three of the evaluated countries that it puts into a category referred to as “pending”. I do not think that we have a way out of the recession if our intervention measures cannot get beyond the category of “pending”. It is the gap between the promises and the delivery that leaves us in this “pending” category. I do not doubt for one moment the good intentions of Ministers and Secretaries of State in different Departments. The difficulty is levering the matter out of the Treasury, so that the recovery measures for the real economy can be at least as generous as they have been for the financial economy, which got us into the mess in the first place.
The real challenge that we have to address is the fact that the Government, as well as the Opposition parties, need an employment strategy, not an unemployment strategy. It is not enough for the Opposition to table a motion that barely mentions an employment strategy. That is the great weakness of what the House is being invited to vote on today.
It is helpful that at least the motion refers to the national loan guarantee scheme. I thought that it said a lot about the Opposition that it was not mentioned at all in the speech made by their Front-Bench spokesperson. It fell to the Secretary of State to refer to the scheme, but at least there is recognition that it is an important part of the platform that we have to address. My concern is that the House should describe fairly specifically the nature of the scheme.
I invite the Minister for Employment and Welfare Reform, the Secretary of State and the House to consider the model for such a scheme that can be found in a microcosm of the UK economy. In Kirklees, a remarkable initiative known as the RE-Charge scheme has offered households interest-free loans of up to £10,000—as a second charge against the house, redeemable only at the point of sale—to enable them to shift into energy-saving and energy-generating systems. The response has been overwhelming. The lesson for us is that giving the public the chance to make that shift shows a hunger in the land to live more sustainably and more lightly than we do at
the moment. We need to start to attach such conditions to the way in which a national loan guarantee scheme should work.
It is not enough to talk about guaranteeing a business just because it is in business. We have to use the levers of intervention mechanisms to deliver a business that will be fit for the future rather than a legacy of the past. The way in which the scheme needs to be extended has been set out for us in the references made by the hon. Member for Rochdale to the follow-up report produced by the Renewable Energy Association.
I am sure that other organisations around the country are able to spell out where the jobs might be, but the REA is the first that I have come across that has tried to do so. It has said to the Government, for instance, that if we were to expand the low-carbon building programme to deliver 70,000 renewable energy systems in the next two years, that could deliver 10,000 jobs. Those jobs would go to people in the construction industry who are being discarded from jobs and who have skills, rather than our having to deliver those skills from scratch. The tragedy is that, if we lose the skills, by the time we make that transformation the only people who we will find to do the work will probably be in France, Germany or other parts of Europe, where they are already intervening to give themselves the skills base, and the jobs base, for a different future. If we were to extend the programme, that would allow the Government to deliver the commitments that we have made to turn 7 million houses in the UK into energy-efficient houses by 2020. We will need those skills if we are to make that transformation and act even remotely to timetable.
If we extend the thinking behind the conditionalities of the national loan guarantee scheme, we can see how it could impact in various other sectors. In transport, for instance, we should not offer loan guarantees for the purchase of yesterday’s vehicles instead of tomorrow’s. Germany has introduced a scrapping scheme under which people are paid incentives to trade in their old cars in favour of low-carbon vehicles—the vehicles of tomorrow. The scheme will keep people in car manufacturing in work, but for tomorrow’s models rather than yesterday’s.
Britain could do the same. To underpin the 2012 Olympics, the Government could make a simple commitment to convert 500 buses and other vehicles in London to run on biomethane. That shift in sustainability could be part of a national strategy to provide jobs, vehicles and transport systems, and it is an example of the direction in which we must move.
In the energy sector, we need to bring forward our commitment to feed-in tariffs. We must not allow their introduction to slip back to 2010, because we need them this year. We need Government funding for demonstration projects on heat networks, biogas injection into the grid, smart grids and decentralised transmission networks. We also have to remove restrictions on the carbon emissions reduction targets—CERT—so that we can replace the 4 million band G boilers. All those changes would translate into jobs, and that will be the test against which the Government are judged.
The Government should not be judged on promises, or on the network of jobcentres or Jobcentre Plus offices. They should be judged on where the jobs will be delivered tomorrow. It is right for the UK to want to
lead the world, but to do that we have to change the plan. If that is going to happen, it will be driven by deeds from the front, not by words from the back.
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