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The right hon. Lady goes around talking about the flexible new deal. The Budget means that we can invest hundreds of millions of pounds extra to secure the flexible new deal. We will deliver that— [ Interruption. ] It has gone up because, owing to the world recession, we predict that there will be an increase in numbers. She, I am sure, agrees with that. We are putting more money in; she would not do that. If she were now Secretary of State, which would be a terrible thing, she would have— [ Interruption. ] We announced an increase in the Budget in my Department—one that, because of the policy of the hon. Member for Runnymede and Weybridge, she
would not be able to match. She would be sitting there, having to work out either how she would put the flexible new deal back by a year or how she would cancel it. That is the consequence of her policy. Today we are announcing the next stage in that extra help.
Christopher Fraser: Does the right hon. Gentleman accept that as a result of the inability to secure much needed investment many small firms are cutting back on staff, placing even more people in unemployment?
James Purnell: Actually, because of the tax deferral policy that we have put in place, £2 billion has been deferred. That is helping 100,000 companies and more than 600,000 people. Because of the policies that we are putting in place overall, we think that the jobs of 500,000 people are being protected. Because the hon. Gentleman’s party is against that extra help, the consequences under his policy would be far worse. [ Interruption. ] Again and again, the Opposition want to say that they will cut spending, but they do not want to live up to the consequences of that, which would be less help now.
The next stage of the extra spending is what we have announced today, which is a future jobs fund, which responds to the point that my right hon. Friend the Member for Birkenhead (Mr. Field) made about what we do if there are not enough jobs. What happened in the ’80s and ’90s when there were not enough jobs for young people was that they were simply abandoned and left on the scrap heap. Many right hon. and hon. Members will have seen the consequences in their constituencies. They will know that often those people never got back into work again and that often their children never got into work when they grew up. That was the root of many of our welfare problems, which we have been starting to put right.
Mrs. May: I am grateful to the right hon. Gentleman for his generosity in giving way to me for a second time. He has just been talking about the number of young people who are unemployed. Will he now confirm to the House what the Prime Minister was not willing to confirm in Prime Minister’s questions last Wednesday, which is that the number of young people not in education, employment or training is now higher than it was when Labour came into office?
James Purnell: The right hon. Lady knows perfectly well that the number of people overall has increased and the rate is actually down. She knows perfectly well that there has been an increase in the number— [ Interruption. ] Will she confirm that she knows that there has been an increase— [ Interruption. ] No, this is a debate that— [ Interruption. ] She knows perfectly well that the rate is down: it is because there are more 16, 17, 18 and 19-year-olds that that fact gets bandied about. What people actually care about is what we do about that. What we are doing about it, through the policy that we announced in the Budget, is saying that every young person aged 18 to 24 will be offered a job or a training place. That means that the problem that she has identified is being dealt with. We will put in place a guarantee that every young person will be offered a job or a training place. She cannot match that, and if she wants to say that she will, she should say how she would fund it.
Mrs. May: I am grateful to the Secretary of State for again giving way. I am going to try again. I asked a very simple question, which he did not answer: will he confirm to the House that the number of young people not in education, employment or training is now higher than it was when Labour came into office?
James Purnell: The rate is down and there are more people in full-time education than there were at the time. Because of the policy that we are putting in place today, all young people will be offered a guaranteed job or a training place before they are unemployed for a year, instead of being put on the scrap heap, as they were in the ’80s and ’90s.
Mr. Philip Hammond: As the Secretary of State insists on talking about rates rather than numbers, will he confirm that in 2000 the rate of NEETs was one in eight and that it is now one in seven? That is a rate, not a number.
James Purnell: Because of the policy that we are putting in place, 18 to 24-year-olds will be guaranteed a job or a training place.
Mr. Frank Field: Labour Members are delighted with the Government’s proposal to provide jobs. More is the pity that my right hon. Friend was not old enough to be Secretary of State in 1997, so that we could have that programme at the beginning of our stewardship, instead of all this new deal stuff. Earlier I was trying to address the problem of older workers, who are not covered by the scheme, whose national insurance benefit has run out and who will take any job available. Do the Government have any scheme to extend the national insurance scheme’s coverage beyond six months?
James Purnell: As my right hon. Friend knows, those jobseeker’s allowance policies have been in place since the 1996 legislation, but we are putting in place policies to help people who are in precisely the circumstances that he describes. There is a scheme to help with mortgages, whereby people can defer some of their mortgage payments. That would help people in those circumstances, as would the tax credits policy. It is right that there should be a contributory element, and that people should then get help, whatever the income in their family. After a period, however, it is also right that we should look at the income in that family overall. Anyone wishing to suggest an alternative policy would have to say how they would fund it.
Mrs. Jacqui Lait (Beckenham) (Con): Can the Secretary of State tell me what the Government are going to do about the 16 to 18-year-olds whose education has been cut, if he is not prepared to make a statement about the failure of the Learning and Skills Council to fund sixth-form education?
James Purnell: We actually announced £600 million extra in the Budget—again, money that the hon. Lady’s party would not be able to provide. The shadow Chief Secretary to the Treasury will note yet another spending demand from those on his Back Benches.
Anne Main (St. Albans) (Con) rose—
James Purnell: I want to make some progress on elucidating the policy that the Conservatives do not want to listen to—
Mrs. Lait: On a point of order, Mr. Deputy Speaker. I seem to remember, having sat through the Budget statement, that the £600 million fund to which the Secretary of State has referred was actually intended to replace the capital fund and not for sixth-form education. Perhaps you would like to invite the Secretary of State to correct himself?
Mr. Deputy Speaker (Sir Alan Haselhurst): The hon. Lady is a wise Member of the House, and she knows that that is not a point of order. It is a matter of debate, and it remains to be seen whether the Secretary of State will take up the point; it is not a point of order for the Chair.
James Purnell: The hon. Lady is wrong; it is revenue funding for extra places. I am afraid that she is the one who is confused.
We will offer young people 100,000 jobs in growing sectors of the economy. In addition, we will launch the future jobs fund, which will spend £l billion to create real jobs, paid at least at the minimum wage, which will lead to qualifications and careers. From this morning, the fund has been open for business. We want councils, social enterprises and charities to come forward with their ideas. There are two main criteria: the jobs have to be real jobs, and they have to be socially useful.
Today, my right hon. Friend the Secretary of State for Culture, Media and Sport and I announced that at least 5,000 of those jobs would be sports coaches. That meets the criteria: they are socially useful jobs and they are also real jobs. We expect that many of those young people will then go on to a career in sport. The others will learn good, useful leadership skills that they will be able to take into whatever career they go into. All those people will be better off than if they had been left without work or training, as they were in the past.
Those on the Conservative Front Bench do not want to welcome this policy, because to do so would be to recognise that their policy would involve doing less than the Government are doing. But perhaps they would like to take advice from the Conservative chair of the Local Government Association, who said that that fund was “excellent news”. She continued, and I could not have put this better myself— [ Interruption. ] The shadow Chief Secretary might want to listen to the advice from the Conservative chair of the LGA. She said:
“Previous recessions have left tens of thousands of people unemployed for years, even decades, and stuck in a dependency culture without the skills that they need to get a job. The devastating impact of this lost generation”—
the Conservative lost generation—
“from previous recessions is still being felt in many parts of the UK today”.
I could not have put that better myself, and I believe that that, rather than the view expressed by those on the Conservative Front Bench, is the proper view in the country. It is a shame that, on the same day, the right hon. Member for Maidenhead described the jobs fund as a con. Despite the lack of enthusiasm from some quarters, I hope that MPs on both sides of the House and councillors will lead their local communities and
apply through the documents that we have put on the Department for Work and Pensions website today.
There is a choice: stopping long-term youth unemployment, or cutting spending now. We are investing to prevent today’s unemployment from turning into tomorrow’s welfare dependency. The Opposition would simply abandon people to a life on benefits. In the 1980s Tory recession, the number of young people unemployed for more than six months went from 150,000 to 600,000, and it took 10 years to return to the pre-recession level. In the 1990s, it rose to more than 400,000 and took seven years to fall back. The costs were enormous: the cost to the economy and the taxpayer of the benefits bill, and the cost to society of drug abuse and crime. Yet, we know that the true cost was in the wasted potential of talented young people—the Conservative party threw them on the scrap heap—and that the consequences of making the wrong decisions in a recession are not theoretical. We remember—Labour Members certainly do—that the consequences were felt by real people, and the challenge for this recession is in ensuring that we do not repeat the mistakes that the Conservatives made in the past.
Mr. David Anderson (Blaydon) (Lab): The hon. Member for Broxbourne (Mr. Walker) asks, from a sedentary position, who writes this stuff. I do not know who wrote it, but people such as me lived through it.
James Purnell: It was because of the decisions of the party of the hon. Member for Broxbourne (Mr. Walker) that far more people were put out of work than ever needed to be—I shall give way to him.
Mr. Charles Walker (Broxbourne) (Con): This is absolute rubbish. I know that Damian McBride has left No. 10, but please could it get a new speechwriter so that it does not waste everyone’s time with this utter drivel?
James Purnell: Again, the hon. Gentleman does not want to hear the consequences of his policy, and that is not surprising. He wants to pretend that it is possible to cut spending now and not have less to spend on helping unemployed people now. [Interruption.] It is not rubbish; it is exactly what happened in the 1980s and in the 1990s, and it would happen again if his party ever got back into power. [Interruption.]
Mr. Deputy Speaker: Order. Sedentary barracking is not helping this debate—it has enough in it without having a chorus of interruptions and so on. I am not sure whether the Secretary of State was giving way to the hon. Lady—
James Purnell indicated dissent.
Mr. Deputy Speaker: He is not. I call Mr. James Purnell.
James Purnell: I wish to get on with my speech, because I know that a lot of people want to get in. The criteria on which we will be judged in this recession are very clear. We cannot be immune from the world economy, which is forecast to shrink this year, for the first time since the second world war.
James Purnell: I have said that I will not give way to the hon. Lady, so perhaps she will let me make progress.
We can and must aim to do better than in previous recessions, and that is why this extra money is so important. As a result of this extra money, we will be able to pay benefits on time; even though more people will be claiming, we aim to reduce the amount of time taken compared with previous years and to meet our target this year. The right hon. Member for Maidenhead would not be able to make that promise.
Because we have reformed Jobcentre Plus we have almost halved the average time that it takes people to get back into work compared with previous recessions, because of this money we can aim to continue to do better than in previous recessions, and because of the way that we have reformed the welfare state we are not seeing the big increases in the numbers claiming other benefits, as happened in the past.
Mrs. May: I am grateful, once again, for the Secretary of State’s generosity in giving way to me. Perhaps he could explain why, if he has done so much to reform welfare and if he is so concerned about the impact that being out of work has on people’s quality of life, we went into this recession with getting on for 5 million people on out-of-work benefits.
James Purnell: Actually, our figure was right at the bottom of the international scale; it was lower than that of the United States. The level of people on disability benefits and unemployment benefits in this country is lower than international levels. Of course we want to do more to reduce that level, and we have a policy precisely to do that—a policy that the right hon. Lady’s new colleague, David Freud, said was remarkable. I am sure that she shares the view that our record is remarkable. [Interruption.] She will know that people who were around in the 1990s remember that people were told to go on to incapacity benefit; the numbers were massaged and all the Conservatives cared about was getting the numbers on the unemployment register down. The problem was that when people were put on IB they were never offered any help to get off it, and that is exactly why the number of people on IB trebled under her Government.
We cannot be immune from what is happening, but we can aim to do better than in previous recessions, and we will aim to do so on three key tests: maintaining the active labour market regime and paying people’s benefits on time; getting people back into work more quickly than in the past; and ensuring that there are not the sharp increases in the number claiming inactive benefits that happened in the past.
Steve Webb: The Secretary of State rightly points out the waste when young people become long-term unemployed. Acting after a year is clearly better than nothing, but does he accept that for a 19-year-old a year is an eternity? Is it not apparent on day one of unemployment who are the groups with a high risk of not getting back to work quickly? Could there not be targeted intervention on day one, for example, to help young people who have no skills or poor literacy, rather than a wait of a year?
James Purnell: I am grateful for the hon. Gentleman’s question because it gives me the chance to put right a misunderstanding. We do not wait for a year; we give help to people even when the redundancy is announced. We give them help from day one. We do exactly what he says: we fast-track people on to the flexible new deal, and then at six months we provide the extra support by giving people help to set up a company or providing the golden hello of up to £2,500. The extra guarantee is that we will say to everybody that within a year they will be offered a job or a training place. Already, more than 80 per cent. of people get back into work within a year, but this is a new guarantee that everybody will be offered a job or a training place— [ Interruption. ] We are not wasting a year: we offer people help and training from day one. We have access to the advisory discretionary fund from day one, and we help them with CVs from day one. We refer them to jobs clubs early in their— [ Interruption. ] It does work, because it gets people back into work more quickly than in previous recessions, but in addition we are introducing a guarantee that within a year everybody will be offered a job or training place, and that has been widely welcomed outside the House as well as within it.
It is extraordinary that the Conservatives still have not said that they would match our spending on unemployment. I paid close attention to the Conservatives’ party conference at the weekend and they were able to commit to spending extra money on certain things. They say that they want an age of austerity. It is a strange sort of austerity when they will not commit to spending a single penny more on the unemployed, but will commit to spending billions of pounds on those in jobs earning over £150,000 a year. It is a strange sort of austerity when they cannot commit to help young people at all, but they can promise a tax giveaway of £200,000 to the 3,000 richest estates in the country. The Conservatives’ priority is clear—no more money for the unemployed, but £200,000 for the 3,000 richest estates.
Mr. Philip Hammond: The Secretary of State cannot defend his policies or his Government’s record, so he is making up some policies, attributing them to us and then attacking them. I do not recognise the statement that he has just made about people on incomes of more than £150,000 a year. We have explicitly said that while we think that the Government’s proposals will be damaging to the economy we cannot make any commitment to rolling them back. So what is he talking about?
James Purnell: The hon. Gentleman’s leader said that it was in the queue to be reversed. The only commitment that we know will be in the Conservatives’ manifesto is the cut in inheritance tax for the 3,000 richest estates in the country. Again, that is their policy and one that they cannot run away from. That is not an age of austerity: it is just not fair.
There is a choice between the parties. My party would put more money into helping people who become unemployed to shorten the recession and reduce the cost, but the Conservatives are ideologically opposed to such spending. They would not help people now and that would repeat the mistakes of the past and make the recession longer. That is the choice before the House today.
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