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In terms of what happens after six months in respect of the back-to-work credit, the evidence suggests that people do not drop out of work after the credit finishes-in any case, the vast majority of people are significantly better off in work. The addition of the credit not only guarantees that they will be £40 a week better off, but it gives them the clear and simple message that they will be better off by that amount when they might be concerned about housing benefit or the interaction
between different benefits, which can be difficult to understand. This credit gives people the simple message that they will be £40 a week better off, and it allows them to get back into work so that they can build their confidence and understand that, in the future, they will still be better off in work than unemployed.
The hon. Gentleman's point about mortgages is important. Some people will find themselves with unsustainable mortgages, perhaps taken out before the credit crunch began. For those people, we want to ensure that there is long-term help, if possible to get them back into a job that pays them enough to maintain their mortgage payments, but if not, to provide support to them via some of the mortgage rescue schemes or via housing associations and other bodies, so that we ensure that they have sustainable long-term housing finance as well. That matter obviously raises a wider range of issues to consider.
Under the Welfare Reform Bill it is possible to remove income support, but that is not our intention at this time, because we need it for precisely the reasons the hon. Gentleman mentioned. We think there is a case for providing a single working age benefit and for undertaking much wider benefit reform in the future, but such reform must be undertaken in stages, which is why we are making individual changes through measures such as the reform of housing benefit.
The hon. Gentleman raised concerns about the work capability assessment. We are reviewing it and we have been working on that with expert stakeholders and medical professionals. We are also closely monitoring the appeals process. We believe that some sensible changes and modifications can be made to the work capability assessment, and discussions on this issue are ongoing.
In the White Paper, we refer to the additional assistance that we want to provide to those people on jobseeker's allowance who may be able to work but who may also have health conditions and therefore need some additional support in that context even though they are able to take up employment and work as well. We will want to consider that possibility as part of a review of the pathways programme.
The hon. Gentleman asked about the high sums of housing benefit and about high rents in some areas. We think it is right to look at the possibility of excluding the highest proportion of rents from the calculations. The rent officers used to do that under the old local reference rent scheme: they used to exclude some of both the highest and the lowest rents when working out their calculations. There is a second issue to consider: because of the wide areas within which the local housing allowance applies, the average in an area can be raised by the presence of some very high cost and expensive properties in certain neighbourhoods, and that ends up having an impact on nearby neighbourhoods. We think it is possible to exclude some of the highest rents that are distorting the system and leading to unfairness without jeopardising the existence of mixed communities, because it is right that we continue to support decent housing in mixed communities across London and many of our areas.
The hon. Gentleman asked about what more we can do from the very first day of unemployment. Jobcentre Plus trials will be starting in his area and several others to give jobcentre advisers precisely the flexibility he was talking about, so that they are able to consider people
very much as individuals in respect of what help they need and whether they should be fast-tracked to particular forms of support or additional help. Those trials will consider how we can enable jobcentres to work more flexibly. Jobcentres have done a fantastic job in the difficult period of the last 12 months by not only responding to the very big increase in the number of people coming through their doors, but helping people and getting people back into work and paying benefits on time. We should pay tribute to the immense amount of hard work done by many of the people in our jobcentres, and we want to give them more support so that they can do a better and more flexible job in future as well.
Mr. Terry Rooney (Bradford, North) (Lab): When my right hon. Friend is judging people by what they do and not what they say, will she recall what happened to apprenticeships in the 1980s, who abolished the old wages councils and who pursued poverty pay? May I particularly welcome the announcements that she has made today on housing benefit run-on and the carer's allowance, both of which have been strong recommendations of the Select Committee on Work and Pensions in the past and, thus, are even more relevant and important? I welcome her announcement on the extension to the youth guarantee, but can she tell the House how many jobs have so far been filled through local employment partnerships?
Yvette Cooper: I believe that the local employment partnerships are filling more than 30,000 jobs a month. I cannot recall, off the top of my head, the cumulative figure for the LEPs, but they have certainly helped far more people into work than we expected them to do, which is why we have provided them with some additional support and funding so that they can expand their work. They are working closely with employers, and providing people with additional targeted training has been very successful. My hon. Friend is also right to say that apprenticeships had been pretty much killed off before 1997, since when there has been a big increase in their number, with more than 230,000 people starting apprenticeships in the past year. Apprenticeships are a good opportunity for young people to receive training as well as work experience.
Mr. John Redwood (Wokingham) (Con): As someone who welcomes anything that can tackle the big problem of unemployment, may I ask the Secretary of State to give me her estimate of how many additional unsubsidised sustainable jobs there will be in 18 months' time if the Government spend this £400 million?
Yvette Cooper:
The right hon. Gentleman is asking for the number of unsubsidised jobs there will be, and one of the things that we are doing through the future jobs fund is to subsidise employment for young people, because we think that that is the right thing to do. So of that £400 million, £300 million is helping not only to expand things such as the future jobs fund-that deals with the subsidised jobs-but to deliver additional targeted training to get young people back into work. The overall level of employment in the economy and the number of jobs that exist will depend not simply on our work to help people into work, but on the wider work to support
the economy. It has been estimated that the measures that we have taken to support the economy, for example, the wider fiscal stimulus, and the support provided through the Bank of England and quantitative easing, have helped to prevent the loss of up to 500,000 jobs as a result of the recession. We need to keep supporting the economy, rather than to cut back on support for the economy and for jobs, as his party is proposing right now, in the middle of the recession.
Miss Anne Begg (Aberdeen, South) (Lab): I, too, welcome the three month run-on for housing benefit, because it is important in letting people settle down into jobs before there is any threat of their having their benefit taken from them. Did not my right hon. Friend say something in the White Paper about discussion as to whether housing benefit can be paid directly to landlords? I have been in correspondence with one of her colleagues about a local citizens advice bureau and the eviction of some of its clients because they have chaotic lifestyles. They are drug addicts and they have been pleading for their housing benefit to be paid straight to their landlord. I would welcome such an approach.
Yvette Cooper: My hon. Friend makes an important point, and I know that she and others on the Select Committee have been examining this issue. Clearly it ought to be possible already for those with the most chaotic lifestyles to have their housing benefit paid directly to their landlord. We will be issuing new guidance very shortly to make that clearer for local authorities, although they should be doing more of this already. As part of the document, we are also consulting on giving tenants a wider choice and to be able to have their rent paid directly to their landlords if they so choose. It is important that the choice should lie with the tenant, not simply with the landlord because that has been an important way of empowering tenants and giving them more choice, as opposed to simply paying the money directly to landlords. The other thing on which we want to consult as part of this proposal is whether there should be any conditions on the landlord where rents are paid directly to them. Such conditions could relate, for example, to the quality or the energy efficiency of the property, and we would like to seek people's views on whether that is the right thing to do.
Tony Baldry (Banbury) (Con): One of the aspects of this recession is that employers have learned to retain older, skilled workers so that they are still in work when there is an upturn in the market. Concomitant to that has been the fact that they have not been so willing and/or able to take on new, younger staff-school leavers and others. Will the Secretary of State explain what the future job fund offers to employers in the private sector? How can they access the fund to enable them to employ younger people so that its application does not simply lead to a further burgeoning of the public sector? I am sure that the Secretary of State will understand that many local authorities up and down the country are going through the difficult task of having to consider their staff levels against the current economic background, and it is very difficult for them to explain to their staff that they are simultaneously taking on people through the future jobs fund while trying to slim down the existing labour force in local government.
Yvette Cooper: The hon. Gentleman makes an important point about the impact on young people. He asked how private sector employers can benefit, and they can do so in a series of ways because it is not just about the support provided through the future jobs fund, but the additional support that is available for apprenticeships, via Train to Gain, recruitment subsidies and internships, if employers can offer them. For a lot of private sector employers, this is the opportunity to take on the talent of the future-to get talented people and to train them up. That is good for business as well as good for those young people.
We are also asking all employers, through the backing young Britain campaign, to see what they can do. Some might work with other partners through the future jobs fund, but others might simply offer a graduate internship for six months, for example. We can provide additional support and help when internships can be offered. Employers could even simply act as mentors to young people, and could perhaps give them just a couple of weeks of work experience, too. The backing young Britain website provides a range of ways in which employers can also get more information and support through Jobcentre Plus and other agencies to help them to help young people.
Mr. Ronnie Campbell (Blyth Valley) (Lab): I agree that tenants should have the choice on housing benefit, but what worries me is the young people who leave school very early-the under-achievers-and drift into drugs, alcoholism and crime. They are left for perhaps six months to wander the streets. They worry me-I see them in my constituency, as all other Members will in theirs-because they are the ones who get into trouble and end up in a hostel and sometimes in prison. What can we do for them?
Yvette Cooper: My hon. Friend is right that it is that small minority of people who can be most vulnerable and who also need the greatest support. It is often vital that agencies and organisations work together to help them, otherwise they slip through the net. Today, we are publishing a revised strategy to help young people, particularly 16, 17 and 18-year-olds, in exactly those circumstances. I draw my hon. Friend's attention to that. We are also keen for jobcentres to work more closely with other agencies that provide both family support and support for those young people, so that the jobcentre does not simply start to work when somebody reaches 18; jobcentres can do their bit to help provide employment support or skills advice, where appropriate, for 16-year-olds.
John Mason (Glasgow, East) (SNP): The £40 in-work guarantee sounds very positive, but does that not still leave an issue with the marginal tax rate being about 85 per cent. when they move beyond the £40? Should we be considering the minimum wage as part of the answer?
Yvette Cooper:
As the hon. Gentleman will know, the minimum wage is established by the Low Pay Commission, which considers every year how the national minimum wage can be increased. The national minimum wage has been an important part of ensuring that people are better off in work. As a result of the changes to things such as the tax credits, we have, over the past 10 to 12 years, reduced the number of people facing the very highest marginal deduction rates, which occurs when
there are complex interactions between different benefits. That is also one reason why we think that the long-term approach will include measures such as simplifying housing benefit and considering how to apply it better in future, for example through a housing tax credit or different approaches to a single working age benefit. A further impact of that is ensuring not only that people are better off, but that they get continued support. If all support was immediately withdrawn once people moved into work, although they would be able to work more hours and see their income increase with every hour that they worked, they might lose the substantial additional support that we think it is right to give to people on low incomes. Such people, especially those with families, should have additional support, and there should also be extra support for their children.
The issue is important, but we have done a lot to reduce the number of people facing the highest marginal deduction rates. The long-term approach to the issue should be through such measures as major benefit and tax reform.
Malcolm Wicks (Croydon, North) (Lab): Given that we reformed housing benefit for private tenants with the introduction of housing allowances to enable those tenants to make the kind of housing choices that the rest of us take for granted, although we should recognise that there will always be a small minority who do not pay their rent on time and therefore have a facility to deal with that, can we be careful that we do not re-reform housing benefit purely in the landlord's interest, as the right hon. Member for Maidenhead (Mrs. May) requests, and that we use housing allowance as a way out of benefit dependency and towards greater freedom and empowerment?
Yvette Cooper: My right hon. Friend is exactly right. The issue is extremely important, which is why we are consulting on how we should proceed. There are some cases in which it would be easier for tenants to have their rent paid directly to their landlords, but equally, in the vast majority of cases, we think that it is much better for rent to be paid to tenants so that they have the financial power to take decisions themselves. It is important that decisions and reforms are taken forward in the interests of tenants, rather than simply as a response to things for which landlords have asked. Tenants are at the centre of these reforms.
Mr. Philip Hollobone (Kettering) (Con): The overall level of unemployment has not risen as much as the Government expected, which is a good thing, but the level of youth unemployment has risen by more than they expected, which is a bad thing. The Secretary of State confirmed today that she anticipates that that rate will carry on rising beyond the date of the general election. What led the Government to underestimate the recession's impact on young people?
Yvette Cooper:
I do not think that that is accurate. The Budget forecasts earlier this year reflected independent forecasts at the time, and the average of those independent forecasts suggested that the overall rate of unemployment would be about 400,000 higher than it is today. As a result, and to anticipate that, we ensured that there was additional funding in place to help as many people as possible back to work. We said from the very beginning, however, that additional help needed to be provided for
young people, especially. Historically, young people have always been those who are more affected by recessions, especially because they are the people who are trying to find a new job at a time when employers have cut back on recruitment. That was why we introduced the future jobs fund, and we talked about £1 billion of additional support for young people at the time of the Budget exactly because we wanted to ensure that extra help would be available for them.
The figures, including the Independent Labour Organisation measure, show that about 12 per cent. of the youth population who were not full-time students were unemployed in the 1990s, while the figure was 13 per cent. in the 1980s. The current proportion of the youth population who are unemployed and not in full-time education is 9 per cent. I think that the expansion of higher education and places for 16 to 17-year-olds has been important but, of course, the hon. Gentleman is right that there is much more that we need to do.
Andrew Miller (Ellesmere Port and Neston) (Lab): My right hon. Friend will know that Lord McKenzie of Luton came to my constituency to look at the fantastic partnership work going on between the retail sector, the further education sector and her Department that has helped keep down the pressures on youth unemployment. May I ask her to tweak things just a little more by making her Department a little more customer focused? An example of the present lack of flexibility is that people required to undertake their six-month interview are asked to go, not to their nearest jobcentre, but to one structured for the convenience of the jobcentre. Tiny changes like that would make a massive difference to customers.
Yvette Cooper: I am happy to look into the points that my hon. Friend makes about having that flexibility for the customer, and he is also right to point to the partnerships between Jobcentre Plus and other agencies and employers. Major employers have got involved, especially in the retail, leisure and other sectors, and they are working to provide pre-employment training that the jobcentre will fund. That helps people secure a first interview who might not get the chance otherwise, and it also helps them to get the training that gets them into work. That partnership work is making a difference, and helping a lot of people avoid the kind of long-term unemployment that they might have experienced in previous recessions.
Mr. Gregory Campbell (East Londonderry) (DUP): Tens of thousands of people have been made redundant in the past three years, many of them having been employed by large multinationals. Will the training opportunities outlined by the right hon. Lady today target getting self-employed people into the small and medium-sized enterprise sector? If so, young people might at least have a greater opportunity to get sustainable employment than has been the case in the past.
Yvette Cooper:
The hon. Gentleman is right that we need to support job growth, for which SMEs may be crucial over the next four or five years. We are also setting out proposals today to make it easier for people who want to start their own businesses. They will be able to get additional advice and support on starting up a business from the very first day that they become
unemployed, and a self-employment credit of £50 a week will be available for them once they reach three months of unemployment. In that way, people who have ideas, initiative and an understanding of what they want to do will get the support that they need to get started. That will be good for them and their businesses, and for the economy as well.
Mrs. Anne McGuire (Stirling) (Lab): When my right hon. Friend is reflecting on actions, I trust that she will remember the massive increase in child poverty and the tripling in the number of people on incapacity benefit that were the hallmarks of the last time that the Conservatives had the opportunity to put their words into action. I welcome her contract for young people, but does it extend to Scotland? If so, has she or any of her colleagues had prior discussions with the Scottish Government and other devolved agencies? They will be crucial in the delivery of the contract for young people in Scotland.
Yvette Cooper: My right hon. Friend makes an important point, and she is right too about the number of lone parents, for example, who have got back into work. Levels of employment in that group have increased over the last year, despite the recession, and that is helping children right across the country to get out of poverty. She also asked about Scotland, and I can tell her that the single skills budget is for England. However, the vast majority of the proposals that we have set out today apply in Scotland as well, and the Scotland Office is taking forward discussions on skills with the Scottish Executive, where there are relevant issues with which they need to be involved.
Mr. Russell Brown (Dumfries and Galloway) (Lab): The future jobs fund has already delivered 144 jobs in my area, so I thank my right hon. Friend for her announcement today of additional support for 16 and 17-year-olds. The current economic climate demands that we support that vulnerable group of citizens, but does she agree that the Opposition's attempts to rewrite history simply add nothing to this important debate, as we have seen in the recent past with other elements of welfare reform?
Yvette Cooper: My hon. Friend is right. This is not just about rewriting history, as we well remember what happened with youth unemployment in particular during the 1980s and 1990s. The problems did not arise only during the recession, as they were also evident during the recovery, when youth unemployment soared. However, the future is more important now, and he mentioned 144 job opportunities that the future jobs fund has delivered in his area. That is 144 people who would have their job taken away if the Conservatives were elected to government.
Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab): I very much welcome the announcement today of additional support for young people, carers and parents. My right hon. Friend will be aware that the lack of affordable child care is a real obstacle to many parents entering work. Will she therefore tell me a little more about her proposal to fund travel and child care costs for jobseekers in part-time training? It will be important not only for them, but for ensuring that there is ongoing child care so that, when they get jobs, those jobs are sustainable.
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