Examination of Witnesses (Questions 300-302)
BARONESS VADERA
12 MAY 2009
Q300 Mr Hoyle: Minis are built here.
Do not worry; if Tom Watson can fit into a mini I am sure you
will fit in very easily. But he is backing Britain. What we see
is support being given at the Jobcentre to train people so they
can find work. Have we considered short time working subsidy to
keep people in manufacturing and in jobs and train them in the
workplace rather than lose the jobs and people going to the Jobcentre?
When the upturn comes we will have to find the skills which are
spread all over and try to get them back into manufacturing companies
when they look for recruits. Have we thought about doing that?
If not, will you consider the value of that? It has happened in
Wales and it has happened in France, Germany and Italy and has
proved to be a very successful way forward to retain skills, provide
retraining and keep the jobs there.
Baroness Vadera: I understand
the scheme to which you refer. I think I am correct that it was
a scheme proposed by the TUC. The government completely agree
with the object of the exercise. It is absolutely vital that as
we go into recovery we maintain the skills level and do not have
the degree of deskilling that we have seen in previous recessions,
particularly the impact on young people that we saw during the
1980s which then lasts for a generation. Our focus has been very
much on train to gain and giving subsidies to train people in
work. We have looked at the scheme proposed by the TUC and we
have not found evidence that it has worked very successfully in
the past. It costs a significant amount more than was suggested
in the costings, and we are not yet convinced that it works effectively.
I am very happy to go into that in more detail.
Mr Hoyle: The estimated cost is £1.2
billion for 600,000 jobs for 12 months. There is already evidence
from France, Germany and Wales. It has proved successful in Wales,
which is only down the road. I would have thought that existing,
not historic, evidence proves it is successful and maybe it is
something we should look at again and re-evaluate.
Q301 Chairman: Lord Mandelson is
to appear before us in July. As to this particular issue, unemployment
tends to fall after recovery begins and this issue will still
be relevant in a few months' time. I think we will want to ask
quite a lot of questions about it at that time. I have a good
deal of sympathy for what Lindsay Hoyle says, but if you have
evidence to suggest that it is not working that is also very important.
Baroness Vadera: It is important
to look at the evidence and the cost. The cost of £1.2 billion
is not in our view the correct figure because basically before
the training costs it assumes there is no dead weight which is
one of the biggest issues and sometimes has a perverse impact.
It assumes a period of four and a half rather than six months.
There is an assumption about all of the cost of the benefits would
not otherwise be paid, so it is significantly more expensive.
Q302 Mr Hoyle: But you are not deducting
the cost of what you pay people to be unemployed and spending
that money to train them.
Baroness Vadera: That is exactly
my point. The assumption of the scheme is that everybody on that
scheme would otherwise be unemployed. That is not the case.
Chairman: Economists would say ceteris
paribus, or all other things being equal. This is an issue
to which we shall return with the Minister because it is one that
we need to explore at some length. Minister, we have taken two
hours and you have been very patient. We are very grateful to
you.
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