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Gavin Shuker: Within the context of the debate about the evidence basis for RDAs and the benefit that they give, does my hon. Friend agree that financial information about the amount of money that goes in and comes out of the public purse is a much better guide than ideological points about how people feel about regional development agencies?
Catherine McKinnell: I absolutely agree, and my hon. Friend makes his point very well indeed.
A large number of my constituents lack any formal educational qualifications. Such individuals, should they be already unemployed or, as is likely to happen in my region, should they be made redundant, will be hugely affected by the cuts announced to the DWP's job creation and training schemes, which have been widely debated today. They will no longer have the necessary help to prepare themselves to take advantage of new opportunities arising from the eventual recovery, and that is especially concerning in relation to youth unemployment. The future jobs fund has been abandoned, and the £1,000 incentive for businesses to employ a person who has been unemployed for six months or more has been scrapped. Extended periods of unemployment and a lack of appropriate training mean that those vulnerable groups will be dangerously ill equipped to enter the future jobs market. The decision to ask the Department for Education to make huge cuts is also disproportionately damaging. It is clear that, because only 10,000 of the promised 20,000 extra university places are now available, access to higher education for state school pupils will inevitably be restricted.
Jo Swinson (East Dunbartonshire) (LD): I am listening to the hon. Lady with great interest. She is clearly making a passionate case, expressing her genuine concerns about the cuts, but she mentioned ideological cuts. Does she really have no ideological problem with the debt interest that this county pays out every year potentially rising to as much as £70 billion? That would mean £70 billion not spent on public services and a debt for the next generation in the north-east and elsewhere to repay.
Catherine McKinnell: I do not have an ideological concern about the debt that is the current deficit, although I share the concern of all Labour Members that the deficit needs to be reduced. Fundamentally, however, it needs to be reduced in a way that does not throw thousands or millions of people on to the scrap heap, in the way that they were left there in the 1980s. I know that this is not taken very seriously by Government Members, but generations of people were left on the scrap heap.
Mr David Anderson (Blaydon) (Lab): Will my hon. Friend give way on that point?
Catherine McKinnell: I think I need to make progress.
Finally, some additional cuts have been announced and, although they have perhaps not been talked about today, I believe that they will fundamentally affect future jobs and the ability of people in the north-east to take them up. I refer to the cuts to child tax credits. Although the Liberal-Conservative Government have announced a £150 increase in the per-child element of
child tax credits, that is nothing but a fig leaf for the abolition not only of the Sure Start maternity grant, worth £500, but of the baby addition to the child tax credit and the health in pregnancy grant, as well as for the decision to reject Labour's proposals for a £4 a week supplement-a toddler tax-for each child.
For people on low incomes, tax credits are fundamental to empowering families to support their children and ensure that they get the best start in life, thereby breaking the cycles of deprivation that we see in so many parts of the country, particularly the north-east. As the mother of two small children, I know from experience how vital financial help can be. To be honest, I have been stunned by the callous manner in which that help has simply been abandoned by the Liberal-Conservative Government. Some £3 billion-worth of cuts have been made to support for families. Such decisions will be devastating for parents, preventing them from getting out to work or creating either a work environment or the capacity to work in their households, thereby breaking the cycle of deprivation that can so often take hold in workless households.
Joined to the unfair rise in VAT-a tax that punishes the poor-those cuts will have an impact on unemployment and child poverty in my region, thereby causing further unemployment in the long term. The national economy remains weak, especially in areas of the country such as Newcastle, where large numbers of children, unemployed people and low-income families are already struggling and will struggle more under this Budget. They are the people who must be protected and not punished by the Government's policies during this difficult time.
Mr Deputy Speaker: Order. Before I call the next speaker, I remind the House that I asked hon. Members to limit the amount of time they took. Can we try to stick to 10 minutes? Hon. Members should please not take as many interventions, because otherwise people will miss out. I did not want to turn the clock on, but I am getting more tempted by the minute.
4.14 pm
Esther McVey (Wirral West) (Con): I rise to speak in this debate concerned about youth unemployment and job prospects, and I do so as we discover that the number of 18 to 24-year-olds not in employment, education or training has reached an all-time high of 837,000. That is 17.6% of our 18 to 24-year-olds neither earning nor learning.
The previous Government did not meet their apprenticeship targets, but they did leave us with a record deficit. That is a disastrous combination for the next Government not only to pick up but to clear up. We have unfulfilled targets, sluggish economic growth and a record deficit-a triangular tragedy for youth and unemployment. In my patch of Wirral West, we have some of the worst unemployment rates for 16 to 24-year-olds in the north-west. We were ranked seventh worst of the 39 local authorities in September 2009. The number of my constituents claiming jobseeker's allowance has risen in the last year, and we are also below the national average for 16 and 17-year-olds in education and work- based learning. It is particularly worrying that those who are not in education or employment now will
continue along that path, and it is vital that the Government put every effort into getting young people into work and training as soon as possible after they leave the compulsory education system.
The cost to the economy of youth unemployment is not insignificant. According to estimates, each of these so-called NEETs who drop out of school at 16 will cost the taxpayer almost £97,000 over their lifetime, when their unemployment benefits and their inability to pay taxes are taken into account. We have heard a lot about the economy today, and about what unemployment costs the country, but I want to look beyond the economics of the situation to the well-being of each individual, and to their physical and mental health, their self-esteem and their morale. To stare into an unknown expanse of time, not knowing how it will be filled or paid for, erodes the soul and destroys the spirit. That suffering cannot be quantified, but it seeps into the common unconscious of our nation.
We already have some of the highest levels of youth unemployment in Europe, and we need to be creative about how we are going to get out of that situation. We need to think of a new way forward. I like to think that there is light at the end of the tunnel, and I would like to bring to the attention of the House the Wirral Apprentice programme, which is leading the way in the apprenticeships field. It has created more than 100 new opportunities for young people by offering private sector organisations an 18-month wage subsidy for a minimum two-year apprenticeship. Working with the National Apprenticeship Service, the Wirral Apprentice scheme is delivered by Wirral council's children and young people's department and provides a dedicated member of staff to support each business that takes part. It has been hugely successful, and it is now in its second year.
The Wirral Apprentice scheme is heavily oversubscribed, however. Last year, more than 1,000 people submitted 3,117 applications but fewer than 150 businesses took part. It does not take a genius to see that many people will be left without an apprenticeship. The scheme is oversubscribed and under-resourced. Such oversubscription is not specific to Wirral or the north-west; it is to be found throughout the whole country, and we need to look at what we are going to do about it.
Alison McGovern: As a Wirral MP, I totally back what the hon. Lady says about Wirral Apprentice-it is a cracking scheme-but how does she think her Government's cuts to local authorities will help Wirral to keep that fantastic scheme going?
Esther McVey: The Government are planning to get best value for money. They want to increase the apprenticeship scheme across the country by 50,000, and they are planning to put a significant amount of money into it. That is what we need to do. We need to look at places where the apprenticeship scheme is working. As I have said, however, the scheme is oversubscribed and under-resourced and we need to look at that as well. Perhaps the hon. Lady and I can do that together with the Government. The scheme is working, but we need to expand it so that more people in Wirral, the north-west and the rest of the country can be fulfilled.
As the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes) recently said:
"Demand for apprenticeship places is growing and one of our priorities is to encourage more employers to participate. Apprenticeships are both a route to key competences for employees and a vital way to help employers".
I should like to extend an invitation to the Minister or the Secretary of State to come to Wirral to see how the scheme is working, and also to use what limited funds we have put aside to extend apprenticeship schemes. We do not need a new generation of our youth not knowing how to fill their time or how to pay their way.
4.19 pm
Mr David Lammy (Tottenham) (Lab): It is a great pleasure to speak from the Back Benches under your chairmanship, Mr Deputy Speaker.
I hope that all of us in the House share a passionate commitment to what we might generally call human dignity. When we think about human dignity and where it comes from, we think of the component of family and love, and of how beneficial education and nurturing are as the centre of that human dignity. I think we would all agree, too, that for very many people purpose in life comes from employment, and in particular from skilled employment. I hope that all of us can agree on that basic principle.
Listening to what has been said this afternoon, I have reflected on my memory of standing at a bus shelter in Tottenham high road as an 18-year-old, wearing a suit a little cheaper than the one that I am wearing today and with a big Afro-looking a bit like the Michael Jackson figure before all the plastic surgery-and being approached by other people in the neighbourhood who imagined that I was there for one of two reasons: either I was on my way to the local magistrates court, or I was on my way to church. That was the context in which wearing a suit was seen in a community like that, back in the late 1980s and early 1990s. The dignity of work was something not experienced by far too many young people in that community.
In the 1980s, unemployment reached 20% and, in some parts of the community, 40%. When we came to power in 1997, it was at a record 28% in the constituency of Tottenham. Tottenham has the highest unemployment in London, but today the figure stands at just under 11%. This is paradoxical, but I sincerely wish the Government well in ensuring that we do not see another generation of, in particular, young people left floundering, feckless, restless and workless in communities like those that we saw before.
What concerns me about the Government's policy is their ideological commitment to slashing the deficit so quickly. They seem to imagine that it is possible to take £113 billion out of the economy by means of cuts, and that if they cut the public sector, in a short space of time the private sector will move in to provide the necessary jobs. I have seen it done before; it did not work then, and I am not convinced that it will work now. I ask the Government to think again.
Many of us who are in the Chamber must remember the old youth training scheme-the YTS-run by the Manpower Services Commission. I recall that 58% of
those on the scheme left before time, and that 50% of those who stayed ended up with no qualifications and no employment at all. It became a joke scheme, not just in this country but internationally. When I hear about the Work programme that will be presented to the House in a few months' time, it has the imprint of the old YTS scheme. When I am asked to believe passionately in the 50,000 apprenticeships that the Government claim they will provide, I recall that this is the same party that left us with 67,000 apprenticeships in the entire country when they left office last time. We built the number of apprenticeships back up to 250,000, and it was hard because persuading the private sector to offer those apprenticeships took considerable effort.
When the Minister winds up, perhaps she can tell us how many apprenticeships the Government have been able to encourage the private sector to provide since the announcement of the 50,000. By what date will the 50,000 be provided? So far, I have seen only one apprenticeship, and that is the Chief Secretary to the Treasury. I look forward to the numbers that will join him, and to some of my constituents being able to take up these apprenticeships.
There are constituencies where, historically, the private sector has not been present as it has in other areas. My constituency is certainly one of those. Most of my constituents, since the beginning of the welfare state, have been employed in the public and voluntary sectors. That is where they have always looked for employment and I say, with no shame, that because of historic discrimination black and ethnic minority people in this country have always looked to the public sector. Through the race relations legislation in the 1970s, we brought the public sector into the frame to ensure that employment, so they have always looked to the public sector-the very public sector that is now being slashed.
The slashing of the public sector sits alongside the Conservatives' proposals on higher education, which are a double whammy. Higher education is a key sector for economic growth, but it is not ring-fenced or protected. It is outside the commitments that the Government have made on health and schools, and it will see its budget cut by up to 40% in the spending review to come. One part of the coalition is committed to the abolition of fees and the other is probably committed to a marketplace in fees. The likely result is a quagmire, a gap that will not be filled, and the issue will be kicked into the long grass. That means that universities will not get the money and that the expansion we have seen in constituencies such as mine will not continue.
That is the outlook for higher education. We are unlikely to see a growth in apprenticeships-we do not know the time frame or how many are likely to be created. We also see the scrapping of the future jobs fund that was a buffer and an ideological commitment that we must stand by on this side of the House. We borrowed £1 billion to create the future jobs fund, working with the public and voluntary sector, to ensure that we did not see another wasted generation. We believed that that commitment to young people would mean growth in our economy-that it would come good. We believed that because we had seen the evidence, not least from after the war when we built the NHS. We saw the evidence in the new deal that was set up by Roosevelt in much harder times in the US. That was our commitment to young people and, in the Government's
first few days in office, it is gone. There will be a reduction in employment in constituencies like mine, and there is a real prospect that the 1980s and 1990s will visit our communities again.
I shall end on a tough point that I believe with conviction. Very sadly, in parts of our communities in London, there are young people who would pick up a knife and who have experienced really chaotic lives. Their parents are the same age as me, and they are precisely the people who were failed previously. That is the social consequence of this ideological mistake that the Government are set on. I ask them to think again.
4.31 pm
Zac Goldsmith (Richmond Park) (Con): I shall keep my speech brief, Mr Deputy Speaker, as instructed.
One key element of our response to the recession and the pressing need to create jobs has to be a recognition of the value of the green economy. I think that more or less all of us now accept that it would be a mistake to try and recreate the conditions that brought us the crisis in the first place, but we have an opportunity to raise from the wreck of an economy built on housing bubbles, uncontrolled public spending and financial services an alternative that is both stable and sustainable.
Whether or not we are concerned about climate change, it is worth recognising that clean technology is an emerging global market that is expected to be worth trillions of dollars in the coming decades. In fact, that market globally is already worth hundreds of billions of dollars. This is a massive opportunity for job creation, by any standards, and Britain should be at the forefront, but unfortunately we have just a 5% stake in those clean companies.
We should be a leader in innovation: we are not, and in the past decade we have seen virtually no sign of a coherent programme. We have seen no real investment in carbon capture and storage-
Mr Anderson: Does the hon. Gentleman recollect the closure in 1986 of this country's coal mining industry by the Conservative Government? That included closing the most advance clean-coal technology site in the world-at Grimethorpe colliery in Barnsley.
Zac Goldsmith: I thank the hon. Gentleman for that intervention. Times change: the case now for clean coal has been renewed on the back of emerging evidence for climate change. If he does not mind, I will not go back 25 years, but I shall continue with a very brief description of what I regard as a huge failure over the past 10 years.
I mentioned carbon capture and storage, but there have been no effective incentives for home owners or organisations in the commercial sector to pursue energy efficiency. There have been virtually no incentives to develop renewable energy: as a result, we have seen virtually no progress over the last 13 years.
The CBI said last year that it is politics and policy, and not the recession, that have prevented green investment in the UK, and it pleaded with the Government to just "get on with it". When Jonathon Porritt stepped down after nine years as the chair of the Sustainable Development Commission he also accused the Government of gross failure. He added, sarcastically, that the UK had become
"a world leader in green rhetoric."
We should broaden our economic base to include more green technologies and more engineering and high-value manufacturing. We need to reconfigure our energy systems and find a way to wean ourselves off our dependence on imported hydrocarbons. That dependence is dangerous environmentally, economically and politically. We need to turn Britain into a world leader in green innovation, and we have the chance to do that now. In my view, the existing commitments of the coalition Government will set us absolutely on the right path
Paul King, chief executive of the UK Green Building Council, described the green deal as follows:
"This is a bold and welcome move. The biggest barrier to low carbon refurbishment-the upfront cost-is set to fall. Pay As You Save is a radical scheme, which could"
"at least 100,000 new jobs, saving money and conserving energy."
The green deal is just one initiative, as the Chancellor has announced plans to create a green investment bank to facilitate investment from the private sector in new clean-energy technology companies. In addition to that, we have plans to create a number of large-scale marine energy parks. It is extraordinary that this country has 14,000 miles of coastline, yet we have barely begun to tap this extraordinarily valuable resource. We have plans-indeed, we have a commitment-to roll out smart meters and the feed-in tariff. If the example that Germany has shown us is to be believed, the feed-in tariff will lead to a revolution in decentralised energy and to huge job creation.
We have plans to lay out a national recharging network. It will trigger a shift, which we absolutely need, from the traditional, conventional car to electric vehicles and hybrid plug-ins. I realise that time is short, and I could cite endless examples of Government initiatives that will foster the shift we are going to see. At every stage of the shift, we will see huge opportunities for job creation and wealth creation, and we need to tap into those.
In green policies, as in most policies, the most powerful role the state can play is not to dictate or direct, but to empower. Instead of introducing a mind-numbing array of quangos, conflicting initiatives and schemes, all aimed at micro-managing our way towards a low-carbon future, we need to establish a clear framework, set the signals and let the market deliver. In truth, that is our only option. We cannot rely on public money because, as we all know, there is none. Instead, we have to find ways of ensuring that existing money flows in a new direction and if we are successful, we will prosper on the back of an economic recovery that might last. We will have done the right thing and we will be rewarded for having done so.
4.36 pm
Jack Dromey (Birmingham, Erdington) (Lab):
Historically, Birmingham and the midlands was the industrial heartland of Britain. In the 1970s, the regional economy outperformed the national average, but in the 1980s Birmingham and the midlands was blitzed by the effects of the Conservative Government and 200,000 people lost their jobs, overwhelmingly in manufacturing. A proud region paid a terrible price. Sadly, decline has continued since, and the area has gone from being at the
top of the league to the 7th best region on economic performance. If my region had matched the UK average on output per head, the regional economy would have benefited by an additional £16.5 billion.
The human cost of that long-term decline starting in the 1980s has been immense. Four of the five most deprived wards in Britain are in Birmingham, 10 of the 20 most deprived wards in Britain are in the midlands and the constituency I am proud to represent-Birmingham, Erdington-is the sixth most deprived in Britain. The statistics are stark and so, too, is the appalling human price that I see day in, day out in my constituency. Birmingham and Erdington both believe in a tradition of self-help, but the problems we face are incapable of resolution, other than through the role of good government. The role of government is not to wash its hands of responsibility for the unemployed, because that is a Pontius Pilate approach towards those who need the help of government.
I wish to focus on Advantage West Midlands, which is the most successful regional development agency in Britain; the National Audit Office's recent report gave it a rating of four out of four, and for every £1 of public money spent, the regional economy benefits by £8.14. AWM is a constantly improving RDA with an outstanding track record. Sir Rod Eddington's transport study said that its work on transport infrastructure was the best in Britain. The Treasury review of June 2009 said that AWM was the most cost-effective RDA in Britain. I have seen at first hand the power of its work. I remember that when Rover was saved from closure in 2000, it was thanks to what AWM did in diversifying the supply base that when Rover tragically went under in 2005, tens of thousands of jobs that would have gone in the supply chain in small and medium-sized enterprises were preserved. I, too, experienced that terrible day when 5,000 workers lost their jobs at Longbridge. Advantage West Midlands swung into action immediately, and in nine months, by way of effective programmes, 4,000 of those 5,000 workers had been found alternative employment.
The transformational change has been remarkable. The development of the Longbridge innovation centre and Bournville college has meant 10,000 new jobs and 1,450 new homes. The development of our regional infrastructure, with the New Street Gateway, the single-biggest investment by any regional development agency, involves £100 million of public money, but it levered in £2 billion of private sector investment, with enormous economic benefits, including 10,000 more jobs.
There have also been solutions for business. Since 2002, 5,000 manufacturing companies, overwhelmingly small and medium-sized enterprises, have benefited from the world-class advice of the Manufacturing Advisory Service, adding £150 million to their turnover. It is little wonder, therefore, that the midlands business community strongly supports Advantage West Midlands. The voice of the business community, Business Voice WM, having consulted its members in June, said to the Government, "Do not abolish the regional development agency. An intelligent debate about change and reform? Perhaps. But do not abolish the regional development agency."
John Howell: How much of Advantage West Midland's programme reflects the wishes of local councils, rather than those of central Government?
Jack Dromey: I shall come in a moment to why it is important to have a regional structure by way of co-ordinating local authorities, because sometimes the competing views and demands of local authorities do not necessarily work in the best interests of the regional economy.
I shall provide a practical example of why, right now, we need an effective regional development agency. There are 150,000 people working in the automotive cluster in the midlands-from the major manufacturers such as Jaguar and its plant in my constituency, through the machine tool, logistics and component companies, to the universities and research and development institutes. All work together in an effective cluster, with the regional development agency bringing together local authorities and the private sector to work in partnership and galvanise and consolidate that which is absolutely key to the success of our regional economy.
Damian Collins (Folkestone and Hythe) (Con): Is there not an arbitrary nature to the structure of regional development agencies and the areas they cover? That automotive cluster would not include, for example, Cowley in Oxford, which is part of the south-east region. My constituency is also in that region, which covers an area stretching from Dover up to Oxford and Milton Keynes. Some of the structures do not necessarily fit the economic realities of local areas.
Jack Dromey: I accept that, and I am very familiar with Cowley because I have been to the plant there many times. However, if we want that automotive cluster to succeed, there is a simple reality to acknowledge. I am in discussions right now with Jaguar Land Rover about its decisions for the future. It says that the power and effectiveness of that automotive cluster is absolutely vital for its organisation, and in turn Advantage West Midlands is crucial to the cluster's success.
Why destroy a success story and replace it with-what? I am all in favour of an intelligent debate about, for example, how one might have sub-regional arrangements in the midlands. Crucially, however, if we throw away the advantage of that regional, strategic approach, with it will go the co-ordination and initiative, working with strong business leadership, that has been absolutely key.
We need the Government to clarify their approach to the issue. I hope that during the debate the Minister will respond to that point, because there are mixed messages: on the one hand, the Secretary of State for Business, Innovation and Skills says that he is open-minded about the retention of a strong regional structure if that is the wish of the midlands; on the other hand, the Secretary of State for Communities and Local Government has taken an ideological position, which says, "We will wind up the RDA and not have a strategic approach, come what may." We need clarity. I am in dialogue, right now, with local authorities, with the business community, and with many others who want that intelligent debate on what kind of structure we have for the future. Are the Government open to the retention of a strong regional strategy, which is what the midlands wants?
We have heard it said that according to the Treasury's leaked documents, as yet unpublished, 1.3 million jobs will go, while the hope is to create 2.5 million new jobs. With the greatest respect, if we look at the history of job creation in Britain, believing that, in the current
climate, with the savage cuts being made to public investment, 2.5 million jobs are going to flourish in the private sector is as respectable a view as that of the economist in the 1930s who argued that what caused the recession was sunspots that interfered with the mechanisms of the market and the minds of the bankers in the marketplace. The simple reality is that all informed sources, including the CIPD, have said, "There's not a hope in hell."
We look to the Government to respond constructively to the dialogue that we want on the future of Advantage West Midlands. We also want them to think again about some of the decisions that have been made: the abolition of the future jobs fund; the cutting back of the working neighbourhoods fund, with £4 million of cuts in Birmingham, the largest cut anywhere in Britain, despite the deprivation that we face; the cutting back of Connexions, with £2.7 million of cuts in Birmingham, the second largest cut in Britain; and the impact of the jobs tax-the VAT increase.
All this from a marriage of convenience-two parties that have come together. On the one hand, there is a party with a once great progressive tradition, the party of Lloyd George, Beveridge and Keynes; on the other, there is a Conservative party that once had a different tradition, that of Harold Macmillan, who, scarred by the memories of the 1930s, said, "Never again." Sadly, in the 1980s the Conservative party, in the immortal words of Julian Critchley, got taken over by the garagistes, and in the 21st century it has been taken over by the bankers. Those parties are abandoning their own traditions whereby they remember the bitter period of the 1930s and know that if we walk away from the unemployed, this country pays a terrible price. The Con-Dem alliance may do that; this Labour party never will.
4.47 pm
Julian Sturdy (York Outer) (Con): I shall try to be brief, as I have been told, and I will certainly keep my comments shorter than some of the contributions made last night.
I am grateful for the opportunity to contribute to this debate on support for the numerous measures already taken by the new Government to assist the unemployed and encourage the creation of new jobs, particularly in the private sector. Let us be clear: we face an extremely difficult employment situation. The dire economic recession has seen unemployment jump to just under 2.5 million, while the number of inactive people of working age has increased to a record high of 8.2 million. To put it simply, we cannot continue to sustain such economic inactivity.
A new approach is required, and key to any lasting Government support will be the creation of an economic environment in which private enterprise can compete and invest with confidence. I therefore welcome many of the measures in the recent emergency Budget which are designed to do just that. For example, lowering corporation tax to 20% will attract new business investment to the UK while giving us the lowest rate of this form of taxation in the G7. Meanwhile, combining that move with the small business rate relief will benefit more than 500,000 businesses up and down the country. If we are serious about driving down unemployment, we must welcome such moves to drive up private sector competitiveness.
In addition, if we are to achieve true economic recovery, we must ensure that those areas of the country whose economies were unbalanced even before the recession receive additional focus and Government support in the recovery. The sad truth is that regional disparities grew under the Labour Government. In my region of Yorkshire and the Humber, workplace-based gross value added per head increased by only 18.5% between 1997 and 2008, compared with a 37% increase in London in the same period. Indeed, all northern cities experienced slower rates of economic growth than the rest of the UK in the past decade. Frankly, if the Labour Government's aim was to support the economies of the north, they failed. In contrast, the new Government have already announced that a new £1 billion regional growth fund will be set up in 2011 to help those areas that will be especially affected by reductions in public spending.
Another unfortunate aspect of Labour's legacy was to leave areas completely dependent on public sector employment. That cannot be allowed to happen again, and I urge the new Government to do all they can to encourage the transition to private sector-led investment and growth locally, regionally and nationally. Empowering local communities will involve empowering individual business owners. By providing small and medium-sized businesses outside London, the south-east and the east of England with tax relief on national insurance contributions, the Government are indeed encouraging small businesses to employ and expand in the next three years, particularly in the neglected areas I discussed.
In addition to providing support to business and encouraging private sector-led employment and growth, it is also necessary for the Government to provide support for those who find themselves unemployed. Measures must be taken to ensure that a negative cycle of dependency does not take hold in the areas that suffer the most unemployment. Support must be targeted and streamlined, because for too long, the previous Government's various employment schemes were overly complicated, frustratingly bureaucratic and woefully inefficient. Owing to the number of schemes, people slipped through the net and were lost in the system or not contacted. The new Government's Work programme needs to be accessible and straightforward, so that anyone who finds themselves unemployed can get the help and advice they need swiftly and effortlessly. Support for the unemployed must be personal, local and flexible, and it must put the individual first.
Launching the Work programme, delivering personalised support to the unemployed, cutting corporation tax and introducing regional growth funds are together the ingredients for a far more business-friendly environment in which our economic recovery can take place. The recovery, however, is far from secure, and it is essential that the Government continue to address unemployment and job creation with the same vigour and determination as they have shown to date. I strongly believe that the initial measures taken by the coalition are setting us on the right course. However, those policies need to be implemented swiftly and reviewed regularly if we are to have progress on the ground.
I urge the Government boldly to push forward on this crucial matter. We have inherited a horrendous financial situation, and only the most robust and
ambitious policies will get us back on the road of rising employment, job creation, economic stability and long-term growth.
4.54 pm
Nick Smith (Blaenau Gwent) (Lab): I want to talk about jobs in south Wales, and the future jobs fund in particular. I do not believe the Government's Budget will help boost employment in my constituency and in Wales. Instead, there is a great danger of the Budget reducing growth and increasing unemployment. Jobs are important in Blaenau Gwent. My constituency has the high unemployment rate of almost 12%. We used to rely on coal and steel, but those days are gone; now we need to develop a more balanced economy. We need green jobs, digital jobs and better services. We need to help those who have been unemployed back into work. We need the future jobs fund or a similar employment initiative, and, most importantly, we need it now.
Before I elaborate on my argument, however, I want to talk about an important event that took place in Blaenau Gwent last week. On Monday 28 June we commemorated the 50th anniversary of the Six Bells mining disaster. That commemoration was a tremendous event; thousands were there, including many relatives of the men killed that day. I met a Mrs Evans, a former senior nursing officer of the National Coal Board in Wales, who said that, apart from Aberfan, helping attend to the bodies taken from the pit that night was the worst evening of her career. Wayne Thomas, secretary of the south Wales National Union of Mineworkers told me that the wonderful steel and stone memorial is the biggest mines memorial in the country. I encourage Members to visit the Six Bells memorial, as it is a terrific reminder of the importance of coal and how it has sometimes left a tragic mark on our communities. It is a wonderful, evocative and powerful piece of art, and it is also a reminder that while coal is still part of the south Wales valleys, it will never again be the big employer it once was.
I had hoped that the Minister would talk today about policy plans that I would have found encouraging for Blaenau Gwent, but I have been disappointed by what I have heard. For me, the Government's plans must include those that will deliver the programme. While Ministers have been quick to attack the future jobs fund, many important lessons have been learned from that project. That is certainly the case in Blaenau Gwent: that important initiative has been managed by our borough council and it has led to our streets being cleaner, our environment being cleaned up and our youngsters being kept out of trouble. Furthermore, the local people given work include redundant workers, those who find it hard to keep down a job and young teenage mums and dads. All those are groups that I would hope the Government would want to support back into employment and, in Blaenau Gwent, more than 500 people have, or will have, benefited from this initiative in recent months.
I must also say that I believe the Government have made a big mistake with their austerity Budget. At this difficult time, a better judgment would be to recognise that the best way to boost employment is to grow the economy, not cut it back. In south Wales, it is likely that the Government will find that the private sector is too weak to pick up the slack after Con-Dem cuts in the public sector. In the Financial Times last Wednesday it
was reported that the private sector is not ready to employ the hundreds of thousands of public sector workers likely to be laid off as a result of Budget cuts. There was a study of 12 companies employing more than 375,000 people in various sectors, including household names like Morrisons, Jaguar, the Co-op and Arriva, and those companies said they had no plans to grow as the state shrinks.
Several companies have said that the financial situation is still too uncertain to consider recruiting. Experts such as Tim Leunig of the London School of Economics believe the economy is too frail for the private sector to grow and absorb jobs in the way it has in the past. That fatally undermines the Government's argument. Mr Leunig has said:
"If the government thinks the private sector is automatically going to step into the gap left by the public sector, it is sadly mistaken."
While there may be regional growth in the south-east, and the home counties may prosper early as we come out of recession, we need investment in Wales through the Assembly Government and local councils. We do not need a hope-and-a-prayer policy that somehow assumes the private sector will ride to the rescue, as all our experience in recent years has been that that will not happen.
I understand that the Government's programme is not set to start until next summer. Also, it appears to include no guarantees that everyone will get work or training regardless of how hard to help they may be. Given what we know so far, it seems that this is an untested experiment on a large scale and carries considerable risk to the country and constituencies such as mine.
All this compares badly with Labour's employment record. There are about half the number of young people signing on now than in the recessions under the Tories. Long-term youth unemployment is under a third of what it was when Labour came into office. Furthermore, because of Labour's welfare reforms, investment in child care and family-friendly working policies, 365,000 more lone parents are in work now than in 1997. That good and important record will be undermined by the Government's Budget.
Losing the future jobs fund is a mistake. It looks as though it will be followed by another initiative in the medium term, but in the meantime we will lose important momentum and delivery, and hundreds, if not thousands, of people will miss out. The Government should listen now to the agencies that are doing the hard yards on job delivery. The indications are that employment growth in the economy is still in the balance and that there is a real danger of much higher unemployment in the months ahead. I am grateful that the Under-Secretary of State for Wales has agreed to come to Blaenau Gwent in the coming months to talk about employment. That is generous of him, but if he is to make good on the Prime Minister's recent fine words about this fantastic work programme, he has much to deliver on. In the meantime, some very good work and much good will is being squandered.
5.1 pm
Sarah Newton (Truro and Falmouth) (Con):
Thank you for letting me join this important debate, Mr Deputy Speaker. I want to pick up where my hon. Friend the
Member for North East Hertfordshire (Mr Heald) left off. He talked about the lessons that must be learned from the past regarding welfare-to-work programmes. It is a great pity that Opposition Members will not join the Government parties in what should be one of the most important challenges-uniting to make sure that people in this country get the work and employment they need. Taking the bold and decisive action of creating a single Work programme that will streamline and focus help for all those who need to get into work is essential.
Taking action on employment is about creating a fairer society and social justice. Work is the way out of poverty and dependency, and it helps people to reach their potential. The gaps in our society have grown in the past 13 years, and nowhere more starkly can the consequences be seen than in health inequalities. The Marmot review which was published in February clearly demonstrates the links between the social and economic circumstances of people and their health. Key to closing the gap in average life expectancy is improving people's educational and work opportunities. We need to create an enabling society that maximises individual and community potential. The benefits of reducing health inequalities are economic as well as social. The review states:
"The cost of health inequalities can be measured in human terms, years of life lost and years of active life lost; and in economic terms, by the cost to the economy of additional illness. If everyone in England had the same death rates as the most advantaged, people who are currently dying prematurely as a result of health inequalities would, in total, have enjoyed between 1.3 and 2.5 million extra years of life. They would, in addition, have had a further 2.8 million years free of limiting illness or disability. It is estimated that inequality in illness accounts for productivity losses of £31-33 billion per year, lost taxes and higher welfare payments in the range of £20-32 billion per year, and additional NHS healthcare costs associated with inequality are well in excess of £5.5 billion per year."
The current time of financial austerity is an opportunity-a time to plan to do things differently. The welfare state and the NHS were born in a time of austerity after the war. Today, we need to do the same and to have the same courage and determination to ensure the well-being of future generations.
5.4 pm
Chris Evans (Islwyn) (Lab/Co-op): Thank you, Mr Deputy Speaker, for calling me to speak in this debate, which is important not only for the country but for my constituency. When we face difficult economic times, the primary task of Government is to protect existing jobs and to provide all possible assistance to get people who are out of work back into employment. If not tackled, unemployment can have long-term effects on society. It destroys communities, ruins lives and tears the very heart and fabric of society.
I was brought up in the south Wales valleys and I well remember my first day at secondary school in 1987. I remember a teacher saying to me, "I've one tip for you, boy." I said, "What's that?" He said, "Have no ambition, because nobody from round here ever amounts to anything. If you're lucky, you'll have a job in a factory-if there are any factories left when you leave school-but most probably you'll be signing on." For me, that summed up the attitude of the Tory Government in the 1980s, and I have not come to this place to see that happen ever again.
I must tell the House that it has been only in the past few years that our communities in the valleys have begun to recover, with the confidence that new jobs bring. Without the right Government support to encourage job creation, we risk repeating the mistakes of the past. To ensure we develop the right environment for new jobs to be created, it is vital that we maintain growth.
The Government have been keen to express sympathy for those facing unemployment. For Ministers, describing unemployment as a "tragedy" and mentioning helping the "forgotten millions" of unemployed workers into jobs might come easy, but it is action that counts. In contrast to those sentiments, the Government's main labour market policy so far has been to cut support for unemployed people. The Government claim that the measures they are taking are necessary-after all, their tough words about getting people off benefits and into work will be meaningless if there are no jobs to get people into.
To create real jobs we need real investment across the country. Getting unemployment down requires two things: businesses must offer more jobs and the unemployed must have the necessary skills to enable them to take the new jobs as they become available. That means that the Government must invest in people and create the environment in which the private sector can invest to create jobs. If we cut too quickly, we will leave no room for the Government to work with the private sector and make job creation possible. We need a real partnership between Government and the private sector. That requires the Government to spend money to create jobs. The question is how we can minimise job losses and prevent another lost generation in constituencies such as mine.
The Government believe that if they cut public sector employment and slash departmental spending, the private sector will ride to the rescue and fill the void. They seem to have forgotten, however, that many private sector jobs are dependent on Government contracts. If departmental spending is slashed, those contracts are vulnerable, as are the jobs that depend on them. If we do not think seriously about the scale of cuts, there is a real risk that they will remove vital support for private sector industry and, crucially, for private sector jobs. Equally, however, it is vital that as companies develop, their employees' sets of skills develop, too.
That is where Train to Gain has been so important. Across the country, 1.3 million people go to work every day without the skills that they need to do their jobs well. That affects productivity and limits how successful those employees can be. Often, though, employers are unwilling or unable to provide the extra training needed for their staff to realise their potential. It is only when the Government offer assistance that training opportunities can be realised and employees can fulfil their potential. It is therefore critical to our economic future that we invest in training and upskilling our people. In the US, 80% of people in work have been back in a training situation since leaving school. In Germany and Japan, the figure is 56%, but it is only 30% here. That is the measure of how far we still have to travel to improve training and opportunities for our people.
Train to Gain benefits both employers, by increasing the abilities of their workers, and employees, by giving them the skills they need to succeed. That in turn is
good for the whole country and for our economic future. The Welsh Assembly Government-the only Labour-led Administration in the UK-have introduced ProAct, a progressive scheme that offers funding for employee training and a wage subsidy while the training is being undertaken. Companies are eligible for ProAct money only when they are on short-time working and when, without ProAct funding, the company would have to consider redundancies. ProAct not only keeps people employed when they might otherwise be made redundant but gives employees a wider skills base, meaning that companies can use quiet periods to upskill their staff. That is precisely the sort of thing that should be happening across the United Kingdom. It has a positive impact for employers, employees and the wider economy.
In addition, to help employers to keep people in work, the Government also need to help those who are currently out of work. It is particularly important that we get young people who have never been employed into their first jobs. That is why the young person's guarantee and the future jobs fund were so crucial, yet that flagship policy has been scrapped.
The Government claim that their new Work programme will meet the needs of unemployed workers. However, there are several flaws to that argument. Nearly 2.5 million people are unemployed now, and the impact of the cuts is that less support will be available to them and any other people who lose their jobs over the next year. In addition, the Work programme is essentially replacing the flexible new deal initiative. The experience provided by the future jobs fund and the guarantees was in addition to new deal measures. So far, no details are available on the funding for the Work programme. It seems likely that, even when it is introduced, overall investment in tackling unemployment may fall.
At the end of March 2011, the future jobs funds will have funded more than 100,000 jobs, the majority of which will have gone to 18 to 24-year-olds who have been out of work for six months. Given that the Secretary of State for Work and Pensions has said that he wants to get young people off benefits and into work, it absolutely beggars belief that one of the first acts was to cut a scheme that does exactly that.
I should like to take this opportunity to point out to the Secretary of State that, if people are to be asked to travel to find work, it is vital that transport links are good enough to support them in doing so. In south Wales, there is no train link between Newport and Islwyn. Although there are plans to establish such a link by opening the Gaer junction, there is still no timetable for doing so. I ask the Government to ensure that that project goes ahead, so that the people of Islwyn and Blaenau Gwent can commute to work in Newport and the surrounding areas.
We should be striving for growth, but the Budget will mean lower growth and more unemployment. The Government are making the wrong decisions in all those areas, and it shows me that they believe, as they believed in the 1980s, that unemployment is a price worth paying to cut the deficit. [Hon. Members: "Oh!"] Yes, they think that unemployment is a price worth paying.
Nick de Bois (Enfield North) (Con): Will the hon. Gentleman give way?
Chris Evans: No, I am making progress.
Those of us who represent areas that lost out the last time that the Tories were in government know that the cost of unemployment is too high. I urge the Government to reconsider before they condemn areas such as mine to large-scale unemployment all over again.
5.12 pm
Margot James (Stourbridge) (Con): There have been quite a lot of references to history in this debate. In the first few hours, which I sat through and enjoyed, many such references were made, including by the shadow Secretary of State for Work and Pensions, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), who said that she left school in the 1980s and that many of her friends became unemployed in the early '80s. As I was born a decade earlier, I had a ringside seat in the decades that led to the 1980s. Throughout the '60s and '70s, various Labour Governments presided over truly disastrous industrial intervention policies.
I, too, come from Coventry, as does the hon. Member for Wakefield (Mary Creagh), who also contributed to the history lessons in the debate. She will remember the creation of British Leyland, the demise of our car industry, the massive subsidies that those Labour Governments poured into failing companies and failing industries, combined with marginal personal tax rates of up to 98%. In the end of course, as we all know, the country had to be rescued by the International Monetary Fund. That is what led to unemployment in the 1980s, not the Governments led by Margaret Thatcher.
A pattern developed during those previous Labour Governments, just as it has done in the past 13 years, and it results in the end in rising unemployment. Every Labour Government, I believe, have left office with unemployment higher than when they came to office. We must not forget that in a debate on unemployment. Unemployment among the young is greater now than it was in 1997. During the past five years there has been a 72% rise in my constituency of people on jobseeker's allowance, more than a quarter of whom are between the ages of 18 and 24. Much has been said about the tragedy of unemployment among this age group with which I agree.
Alison McGovern: Does the hon. Lady think that it is appropriate to compare unemployment in 1997 with unemployment today, at two completely different points in the economic cycle? That is not how economists would normally do it.
Margot James: The previous Government inherited falling unemployment in 1997, and it steadily increased during the first decade of this century. We have been through a couple of economic cycles during that time, but historically unemployment is always greater when a Labour Government leave office than when they arrive.
Rising unemployment under Labour Governments is always followed by a lot of well-meaning interventions to try to support people back into work. That is a laudable aim, with which we all agree, but it leads, as it has during the past five or six years, to a confusing array of individual benefit programmes that create a flourishing array of different funding streams and agencies, and they grow like Topsy. They beget a flourishing
cottage industry of providers, all of which make money out of the taxpayer in trying to deliver the same services. It is imperative that the Government simplify, as they are doing, the 12 support-for-work programmes. I congratulate the new team on the steps that they have taken to integrate everything into a single get-back-to-work programme.
I do not want to be wholly negative about the interventions under the previous Government. I was a governor of Stourbridge further education college in my constituency, and a good programme was developed with Westfield, the company that manages the retail centre, and it was known as the retail academy. It took long-term unemployed people, such as women who had left the workplace to have a family, who had not been able to get back into work and who had lost their confidence. They did not have to lose their benefits. The programme was a 9-to-5 commitment, and more than half of them managed to get proper long-term jobs in the retail sector. I would not want to imply that all the individual programmes were a waste of money-of course some of them helped, and I am sure that we will learn from them-but simplification and better co-ordination is key, as another example that I want to share with the House demonstrates.
A few weeks ago, like me, some Members will have visited the manufacturing insight conference that took place just off Westminster Hall. I was struck by the story of a managing director of a small business in Lincolnshire employing about 30 people who wanted to access training for her finance staff. They wanted NVQ level 2 finance training, but in order to qualify she had to guarantee that eight people from her workplace would attend the course. She did not have eight people who needed the course, but there was only one provider that she could approach, and it was subcontracted by another provider that had the contract with the college.
All these providers and subcontracted providers take a slice of taxpayers' money, which is another reason why we must simplify and codify the work, so that just one company or social enterprise is charging the taxpayer a fee for delivering a much-needed service. Business needs support, but it knows, for the most part, what it needs to employ people, and we must give companies much more direct access to the funding. They should not have to go through all these multiple layers of provision, and they should not have to go through regional development agencies, Business Link and so on-they should be able to access the vital help much more easily.
Mr Stewart Jackson (Peterborough) (Con): Does my hon. Friend agree that laudable aims sometimes have perverse consequences? She will no doubt have come across people on the doorstep-usually women-who want to work more, but because of the extremely complex tax credit system built up by the former Government, it is simply not worth their while working. They therefore have an incentive to stay at home and remain on benefits, which cannot be right for them, their families or the wider community.
Margot James:
I thank my hon. Friend for that excellent intervention. It is absolutely true. We have to create a situation in which people do not fall off the face of a cliff when they lose their benefits overnight, as
soon as they take on a job for not that many hours a week. It is a poverty trap-it traps the children as well as the parents-so we have to address that. He raises an important matter.
We have talked a lot in this debate about various Government support initiatives with which we will continue under the new simplified Work programme. However, let us not forget that what the private sector really needs is a vibrant economy. First and foremost, that is what drives jobs. It is not rocket science: we need an educated and skilled work force; controlled immigration, so that businesses are not tempted simply to seize on quickly available, easy and cheap labour-we really must stop that-a benefits system that does not discourage people from going into work, as my hon. Friend the Member for Peterborough (Mr Jackson) said; and, above all, a low tax and a light regulatory regime that encourages investment, rewards risk and stimulates growth. That is our golden vision on the Conservative Benches, that is what we will deliver over five years, and that is what the Budget was all about.
I am pleased to say that, despite the dire economic circumstances we are having to deal with, and the deficit reduction plan that has been forced upon us, we are making great headway in creating the conditions for business that I just described. I will conclude by running through some of the excellent programmes that will drive the recovery. For a start, the employers' national insurance increase will be tempered and the planned increase on the employers' side will not go ahead. Although the employees' side will go ahead, it will be compensated for by the raising of the nil rate on personal tax allowances. We are also looking at tax relief for small businesses, and the first 10 members of staff in any business will be exempt from national insurance contributions.
Whenever I do a survey of businesses in Stourbridge, I find that one of the biggest complaints is the cost of business rates, and by increasing the small business rate relief for one year from October, we will help an estimated 500,000 small businesses. Furthermore, as a west midlands Member, I can say with great passion that the regional growth fund and the commitment of £1 billion will help areas and communities particularly affected by the spending reductions forced upon us. There are other regional policies designed to correct the balance as far as we can. The number of jobs in the boom years created in London, the south-east and the east rose at 10 times the rate of new jobs everywhere else in the economy. Having come from the west midlands, worked for many years in London and gone back to the west midlands, it is deeply striking to me how we have almost become two nations. I am therefore delighted that my right hon. Friend the Chancellor of the Exchequer is so committed to helping regions outside London, the south-east and the east.
Finally, I wish to acknowledge the words of the Secretary of State for Business, Innovation and Skills, who has said that
"the Government's role is to create the right business environment and the right skills base. The Government cannot simply keep writing out cheques."
That is the nub of how we propose to stimulate the recovery that this country so urgently needs.
5.25 pm
Alison McGovern (Wirral South) (Lab): I wish to focus my remarks specifically on young people, and with that in mind I should like to comment on what my hon. Friend the Member for Islwyn (Chris Evans) said. Like him, I grew up in the 1980s in a part of the world where it sometimes felt as though very few people had any faith in us. That motivated many of us in the House who come from such parts of our country to stand for election and stand up for investment in young people today.
With that in mind, I wish to say a few words on business confidence and its importance for young people's employment prospects. I was concerned to read about the Deloitte survey of FTSE 100 directors of finance that was reported this week. The report explained that those finance directors saw an increased probability of a double-dip recession, up five percentage points from a 33% to a 38% likelihood in the past three months. That was attributed to the Government's policies. That concerns me, because the last thing that I want is falling business confidence that will cause this country similar problems to those that we saw in France and other European countries years ago. At times when business did not want to invest, people at the start of their careers were disproportionately affected, and young people suffered much more than others in their career progression in times of downturn. I call on the Government to guard against that.
In addition to the importance of business confidence and the Government demonstrating counter-cyclical measures, I have a few comments to make at a practical level. Throughout the election and since being elected to the House, I have been concerned about what is happening in my local Jobcentre Plus. The people who work at that centre in Bromborough, about a mile away from where I was born and grew up, work incredibly hard and responded very well throughout the recession to help people who had been made redundant and suffered unemployment.
Over recent months, there has been a real threat of that jobcentre losing some of its work force. They have built up their capacity and skills to try to encourage people back to work and to find the best avenues for them, but now the centre is working under the shadow of the threat of losing its work force and their skills when they are most needed. I call on the Government to consider the matter carefully and not cut away front-line Jobcentre Plus staff at the very time when we need them most.
Members have mentioned the future jobs fund. Although my right hon. Friend the shadow Secretary of State has already referred to the Prime Minister's comments, it is appropriate for me to say again that when he visited Liverpool, he said that the future jobs fund was "a good scheme" and that
"we've got to help people who are unemployed for a long time and social enterprises like this help. It demonstrates where giving more power and control to projects like these works."
I was struck by the comments made to me by my friend John, who is a trustee of an older people's charity in Wirral. He told me about the two young men who came to work for the organisation, doing practical tasks in the building where the charity is housed, and described the confidence boost that this had given them and the
important skills that they were learning. Those jobs would not necessarily be jobs for life, but they were going to keep the CVs of those young men consistent. That example, along with the evidence from the Prime Minister, shows that perhaps the Government could have thought more carefully about the future jobs fund. The Government's decision, added to the loss of the young person's guarantee, has caused me real concern about the prospects for young people in my constituency and the part of the world where I grew up.
I hope that the House will permit me a small amount of partisanship.
Mr Stewart Jackson: Before the hon. Lady continues, let me say that the House would be slightly more accommodating of her partisanship-which is no doubt coming-if she were willing to admit that the number of NEETs under her Government was the highest ever and that the further education capital programme was a calamitous disaster. The corollary of that negative news is that this Government are setting up 50,000 more apprenticeship places and expanding higher education. In the spirit of fairness, surely she can concede that her Government made mistakes and that this Government have new and fresh ideas.
Alison McGovern: I will certainly concede that any plans to increase the number of apprenticeships are welcome. Such plans are vital for my constituency and, I am sure, the hon. Gentleman's constituency too. When I meet the people from Wirral borough council who work on the Wirral apprenticeship scheme and they tell me about the proactive way in which they have helped young people not in employment, education or training in my area, I can only applaud their work and hope that we will support them on a cross-party basis to continue that work. In that regard, where there are increases in the number of young people who face the threat of unemployment or who are not in employment, education or training, we all need to redouble our efforts and find what can be done. We are all aware of the potentially scarring impact of that not just on those young people, but on their families and communities.
The tenfold increase that we have seen in apprenticeships in Wirral since 1997, which I mentioned in an intervention, has been so welcome partly because of its intergenerational aspect and how it has built up our community. Parents no longer feel that the options for their young people are university or nothing very much. They are now starting to feel that there might be some options; so, to respond to the hon. Gentleman, as Members of this House we must redouble our efforts to focus on apprenticeships and encourage business to invest. However, that needs to involve the public and private sectors working hand in hand. It is important to recognise that we cannot expect those in the private sector to take a chance on young people where the public sector locally is not working alongside them.
As well as talking about those who go into apprenticeships, I want to say a few words about graduates. In this discussion about unemployment, we need to recognise that getting a degree these days is no magic bullet for securing a future career, and we must not pretend that it is. In fact, we need to encourage young people, both pre-university and while they are there, to gain the work-relevant skills that will assist them with their careers.
Margot James: Will the hon. Lady give way?
Alison McGovern: I will make a bit of progress, if that is okay.
We should recognise that the downturn that we have faced has been worse for graduates from lower-income backgrounds, and there are a few reasons for that. Graduates from lower-income backgrounds are much less likely to go on to further study. When I was studying philosophy at University college London, at a time when the economy was growing, I remember my tutor saying to me that downturns were always good for philosophy departments, because they kept hold of people who would otherwise have gone straight into the City, as their parents could pay for them to do a master's degree or something like that for a few years.
We need to recognise that graduates from lower income backgrounds are less able to progress their careers, because they are less likely to have the informal networks that will help them as graduates to take the first steps into their careers. Unless we are able to rebuild business confidence, even graduates will continue to face difficulties. I return to my original point that the key to unlocking the problem of unemployment, especially among young people, is to improve business confidence and to ensure that the private sector and the public sector continue to invest in jobs.
In liaising with the CBI in the north-west on apprenticeships, I heard about companies in Wirral that were very keen to employ local young people. I talked to those companies at length about how we could support them in their endeavour to build new infrastructure in Wirral while training young people in my area. Those companies were working on vital infrastructure projects such as Building Schools for the Future, and the problem with the Government's decision to cut the deficit more quickly than we would have liked is that the withdrawal of Government input into the economy will be counter-productive because those companies will no longer feel that they have the backing of the Government to hire young people and build up their skills.
Jake Berry (Rossendale and Darwen) (Con) rose-
Alison McGovern: I should like to make some progress. I do not want to prevent others from speaking in the debate.
I fear that that withdrawal of Government input, especially in areas where the employment picture, though recovering, is historically fragile, will result in more people on the dole, which will make it even more difficult for us to reduce the deficit.
5.37 pm
Nadhim Zahawi (Stratford-on-Avon) (Con):
I want to talk about one of the biggest challenges that the coalition Government, the House and the country face: jobs and unemployment in our country, and what the Government can do to tackle them. The Opposition motion would be hard to support in any circumstances, but it would be more credible if it had started with an apology. Nearly 2.5 million people are now unemployed. To put that in perspective, that is 500,000 more than the entire population
of Slovenia, a nation that we recently played in the World cup. That is a terrible figure, and also a terrible legacy to have inherited from the previous Government.
Thomas Docherty (Dunfermline and West Fife) (Lab): Will the hon. Gentleman give way?
Nadhim Zahawi: I will not, as I would like to make some headway in my speech.
Following the election of the new Government, it immediately became clear to us that we faced a series of immense challenges in tackling unemployment and worklessness. Let us be honest-those problems have not come about purely because of the recession. Over the past decade, the very fabric of this nation has been altered. This is now a nation of huge government and huge inefficiency, and one that does not do much for those looking for work. Instead, it seems to encourage those who do not want to work. Those factors have undermined this country's competitiveness, its efficiency and-perhaps most importantly-its social fabric.
This is a self-aggravating situation. Those who are brought up in workless households are themselves more likely to experience worklessness, welfare dependency and poverty in later life. This is not an issue we can ignore. It is vital that we address the causes and begin to secure solutions to these enormous problems. That can be done by making changes to the way in which the welfare state is operated. My right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), the Secretary of State for Work and Pensions, alongside the right hon. Member for Birkenhead (Mr Field) and John Hutton, the former Member for Barrow and Furness, have the historical credibility and experience to make a real difference. Focusing on key issues such as the long-term unemployed and the high level of youth unemployment is critical.
Business is another key area in which a real impact can be made. Supporting our businesses and reducing the regulation that strangles them will lead to more opportunity and more jobs. That is a tried and tested solution and one that I, as a business man, will address shortly, but for now I feel that I cannot ignore the record of those sitting opposite me. After 13 years of a Labour Government, huge numbers of people are living off the welfare state. A whole swathe of society has been led to believe that the culture of aspiration and hard work on which Britain has long prided itself can be ignored in favour of welfare and idleness. Yet I do not blame those people, because it is the last Government who allowed that culture to become ingrained in the British psyche. It is the last Government who bloated not only the welfare state but the public sector. I would never accuse them of doing that for reasons of self-interest, but the questions have to be asked: why was it allowed to happen, and what can we do to rectify it?
Let me turn briefly to the figures, for they do not lie. As I mentioned earlier, unemployment is now just shy of 2.5 million, with nearly 1.5 million people claiming jobseeker's allowance. We also have 1.7 million people who are long-term unemployed, having been without a job for at least 12 months. Of those, 1.4 million have been on out-of-work benefit for nine or more years; that is a deep rut that is hard to climb out of. I should also
make it clear that that does not take account of the 2.6 million people in receipt of incapacity benefit and employment and support allowance. Ours is the nation with the highest number of workless households in Europe. There were 5.9 million working-age benefit claimants in November 2009, and we have an incapacity benefit system that makes it more likely that those on it will die or reach pension age, rather than getting another job after two years of claiming. That is the legacy we have been left.
The last Government have clearly failed. They led this great nation for 13 years, and that is the record that has been left. They may point to and blame the recession; they may claim that factors out of their control led to this situation; but I say no, they cannot so easily shirk the responsibility that the people of Britain placed on them in 1997. They claimed that they would take "Britain forward not back", yet it is backwards that we have gone: back to the dole queue, back to unemployment, and back to poverty. It is now up to us, the coalition Government, to rectify the mistakes of the past and ensure that once again we "Get Britain working".
Of course, an enormous number of areas must be discussed if we are both to understand and to begin to deal with this problem: the welfare system and what we can do to change and streamline it, the huge problem of youth unemployment, and what we can do to help lone parents back into work. But as a business man myself and a keen believer in the power that enterprise in the UK has in job creation, I intend to focus on that area. I am a firm believer in creating real jobs in the real economy. We have made it clear that a key element of our programme is boosting economic growth and, as a direct result, creating jobs to ensure that Britain has an economic climate in which private enterprise can compete and invest with confidence. It is vital that we ensure that jobs are available both for those looking for work, and for those whom we will try to get into work.
Mr Stewart Jackson: Does my hon. Friend agree with my comparison between what the Conservative party did in government in the 1980s, when they brought about a real transfer of wealth and capital to working people through shared ownership and the right to buy, and what the Labour Government did, which was to ossify social mobility and widen the gap between the richest and the poorest 10% in our country?
Nadhim Zahawi: My hon. Friend is right. One example is the way in which the gap between the south-east and the rest of the country has grown. Labour Members just do not seem to understand what it takes to create an enterprise economy.
Mr Anderson: Further to the point made by the hon. Member for Peterborough (Mr Jackson), a lot of people were made wealthy in the 1980s, and 200,000 coal miners got £20,000 to go on the dole queue-paid out of the public purse.
Nadhim Zahawi: And your point is? At the end of the day, you only have to look at the facts. The facts are that you have left us with a legacy of £500 million a day-
Mr Deputy Speaker (Mr Nigel Evans): Order. I did not leave anybody with a legacy of anything.
Nadhim Zahawi: It is not sustainable to follow the path of the previous Government and bloat the public sector. Business needs confidence to invest. Our first Budget last month has laid the groundwork for these aims. We will drop the headline rate of corporation tax by 1% each year for the next four years, lowering it to 24%. We have ended the disastrous jobs tax that the last Government tried to introduce for employers, a key policy in ensuring that our businesses once again begin to hire people.
The measures in this Budget are intended to give businesses the confidence to invest for the long term, and to reduce the burden of tax and regulation. One area where we need to, and can, do more, is in funding for business. If we expect business to take up the slack of the reduction in the size of government, we must send it a clear message on funding. There is a disconnect between what the banks are telling us regarding the amount they are lending and what businesses are experiencing and telling us about the access they have to funding. I hope that in my new role as a member of the Business, Innovation and Skills Committee we can spend some of our time inquiring as to how we can alter that dynamic.
Nick de Bois: Will my hon. Friend add to that the outrageous attack on many SMEs, with banks inflating margins for captive customers with nowhere else to go? Does he welcome the opportunity for competition in that marketplace?
Nadhim Zahawi: My hon. Friend is right, and that is one of the areas I am passionate about.
Thomas Docherty: I am deeply puzzled that the hon. Gentleman argues, on the one hand, for less intervention and regulation, and on the other that the privately owned banks have to be instructed to lend more money. Which argument is he making this evening?
Nadhim Zahawi: That is not the point I was making. If the hon. Gentleman had been listening carefully, he would have realised that my point is that we have to inquire into what is happening. I am not talking about instructions, but about understanding the dynamic so that we can create a similar environment to that in Silicon valley, for example, where people can get access to funding more easily than in our country.
As a business man, I also know first hand the damaging effects that over-burdening business with regulation has on British companies. It is imperative that we reduce regulation. The coalition Government aim to do just that. The level of regulation in this country is simply staggering, and another example of the top-down bureaucratic approach taken by the last Government. The Institute of Directors has estimated the annual cost of regulation to UK business at £80 billion, and has stated that the ever-increasing burden of paperwork hinders business from growing and, ultimately, creating jobs. That is why we have announced plans fundamentally to review all regulations scheduled for introduction over the coming year. We will put in place a system of sunset clauses so that regulations cease to be law after seven years, and we have also created the one in, one out rule to reduce for ever the regulation created in Whitehall.
All of these are key measures in ensuring that our businesses have the opportunity to thrive and, more importantly, to hire.
The level of unemployment in this country is a huge problem, but I am confident that, with the new coalition Government in power, we can address and reduce it. This issue requires a complete set of solutions, all of which need to be implemented together in an effective and decisive manner.
If we balance the books of Government, hold down interest rates, encourage business to invest and reduce the regulation that strangles business, I believe that, at the very least, we will ensure that there are jobs available for those who want them and an economy that can support them.
I support the amendment to the motion.
Mr Deputy Speaker: Order. There are still several Members who wish to catch my eye. The Front-Bench speakers will be called at half-past 6, so the House will see that we have only 40 minutes or so. I hope, therefore, that hon. Members will show restraint and try not to go over six minutes, although the one maiden speech that is to be made may be slightly longer.
5.51 pm
Rushanara Ali (Bethnal Green and Bow) (Lab): Thank you for allowing me to speak, Mr Deputy Speaker.
I wanted to speak in this debate because employment is of such great concern in my constituency. It is absolutely vital that we invest in the talent of local people in different areas around the country, and that their talent is not wasted. The hopes and aspirations of people who want to contribute to our economy must not be cast aside in the way that I believe that this Government will do.
In Bethnal Green and Bow, unemployment is just under 11%, significantly higher than the national rate. The experiences of white working-class groups and of ethnic minority groups-especially those of British-Bangladeshi or Somali origin-are particularly challenging. They face the double whammy of trying to find work in difficult circumstances and in a difficult economic climate, but also of the social class barriers, and the ethnic penalties that are well documented by Cabinet Office research.
Unemployment in my constituency is faced by people who live only a stone's throw from the City and Canary Wharf. They see the wealth and opportunities there, but struggle to reach them. Even during the boom years, unemployment was higher than the national rate, and youth and graduate unemployment were also high. Businesses in the City and Canary Wharf made efforts to recruit people, but not enough. We need the private sector, Government and local agencies to work together to create opportunities, and we need the Government to support those opportunities and enable that sort of cross-organisational working.
We also need the voluntary sector. Through organisations such as City Gateway in my constituency, and with the help of the future jobs fund and the working neighbourhoods fund, it has made enormous progress
in trying to get people into work. Funding like that is an enabler, and we need that kind of support if we are to get people into work.
Tower Hamlets has managed to cut unemployment-not enough, but it has made significant progress. The current proposals stand to damage that progress. In my constituency, a lot of positive work is being done across sectors. I hope that this Government will look at ways to enable that to continue.
I am saddened that £1 million of the working neighbourhoods fund has already been cut. That is not a good sign. Figures show that 9.6% of young people are NEETs-that is, not in education, employment or training-and that is too high, but in Tower Hamlets we have managed to reduce that proportion to 6%. That is a fall of 40%, and it could not have happened without help from the Government, or without the September guarantee and the future jobs fund.
I remind the House that 8,500 young people across London managed to stay off the dole queue thanks to the help of Government interventions. I also appeal to the Government not to delay the introduction of the programme of setting up 50,000 apprenticeships that has been announced. If they do delay, it will be a case of "too little, too late": we cannot afford to waste the talent and potential of people in this country.
The Conservative mantra in the 1980s was, "If it's not hurting, it's not working." The unemployment rate then was very high, but that is not a price that is ever worth paying. I hope that people across the House recognise that. Research by Cardiff university found that unemployment was associated with a doubling of the suicide rate, so let us not forget the kind of damage that can be done, especially by unemployment of men.
Jake Berry: Does the hon. Lady agree that, after 13 years of a Labour Government, it is a disgrace that one in five people under the age of 24 are out of work? Does she think that has been a price worth paying for 13 years of a Labour Government?
Rushanara Ali: The Labour Government made every attempt to help people into work. There are great challenges and complex circumstances in helping and enabling people to work, but at least the Labour Government did not shirk their responsibility. At least they tried to support people, as Labour Governments will always do. I appeal to the coalition Government to try to provide support, so that people can achieve their potential. This is not about handouts; it is about giving a helping hand. That is the progressive route to supporting communities.
Matthew Hancock (West Suffolk) (Con) rose-
Rushanara Ali:
I am short of time, so I would like to make some progress and share the following example. At a recent employment fair in my constituency, 10,000 people were queuing up for jobs, but there were only 1,000 places at the work fair. That does not show that people are not interested in jobs or that people will sit idly by waiting for opportunities to come to them; they want to work, they want opportunities and they need
support from the private sector, the Government and the voluntary sector. I hope that that is the spirit in which this Government will seek to work.
The cost of unemployment is ill health, depression and anxiety; it is many social consequences that we cannot afford. I regret that unemployment remains high for some sections and that some people continue to feel left behind. I acknowledge that my party did not achieve as much as it would have liked, but the fact is that my party never walked away from people who needed support in constituencies such as mine.
Matthew Hancock: I thank the hon. Lady for a very thoughtful speech. Will she join me in welcoming the new Government's proposal to increase the number of apprenticeships, because she mentioned that earlier?
Rushanara Ali: I welcome any effort to try to help people to get work but, as I said in my earlier intervention, it is important to ensure that training programmes are meaningful. I would say that to my own party and my own Government-in fact, I lobbied my Government to keep making progress, because that is the right thing to do. The point is that there is no guarantee of a job at the end of this. Young people, with whom I have spent some years working, need to be convinced that when they get involved with these programmes, there will be a result and the programme is meaningful, not a fudge. That must be our focus. I welcome the 50,000 apprenticeship opportunities, but people will have to wait until next spring. What am I meant to say to my constituents, who have been waiting for help from this Government? We contributed support. The problem is that the recent announcements, whereby all this is to be left until next spring, are not good enough.
I wish to conclude by saying that we must not fail the challenge of trying to help people get into work. We must give them hope, we must realise their potential and we must help them to meet their aspirations. We have not seen evidence of investment in the aspiration that the Prime Minister talked so much about when he was campaigning. I hope that we will see that, and that this Government will not turn their back on the people who want to contribute to this society and this economy, and whose potential we need for economic growth. I hope that this coalition Government will deliver a progressive solution, not one that leaves people behind.
5.59 pm
George Freeman (Mid Norfolk) (Con): Thank you, Mr Deputy Speaker, for the opportunity to make my maiden speech in this important debate about jobs and unemployment. I take my seat in the shadow of three eminent predecessors, all of whom have been gracious enough, with some help from the Boundary Commission, to cede portions of their constituencies to the new Mid Norfolk constituency. They are my hon. Friend the Member for Broadland (Mr Simpson), who represented Mid Norfolk with great distinction, my hon. Friend the Member for South Norfolk (Mr Bacon) and the former Member for South West Norfolk, all of whom are held in the highest esteem locally and in this House.
Mr Deputy Speaker, you are no doubt thinking, "Where is Mid Norfolk?" Indeed, its boundaries have baffled many of its constituents since being redrawn. Centred on Dereham, the ancient heart of Norfolk, it
includes the three market towns of Attleborough, Watton and Wymondham, and 110 charming villages. I should like to take the House on a quick-130-mile-tour that I have had the great pleasure to make by bicycle in stages over the past three years, in the spirit of past parliamentarians, such as most famously, William Cobbett, on horseback, and more latterly my hon. Friend the Member for Penrith and The Border (Rory Stewart), on foot. Following the instruction of the former Member for Chingford, and more recently the example of my right hon. Friend the Prime Minister-perhaps the only time that they have agreed-I opted to go by bike.
We start at The Crown in Colkirk, the northernmost point and only a few furlongs south of the magnificent Fakenham race course. We then pass through Beeston, home of a new micro-brewery and the excellent "Worth the Wait" ale, which I hope the House might feel is worth a glass after my maiden speech; Dereham, the capital, which received its charter in the 16th century; Swanton Morley, the home of the Light Dragoons, whom I know the House will want to thank for their brave service to our country; Hingham, the home of Abraham Lincoln's family and the relaunched Lotus motor racing team; Wymondham, with its famous abbey, crucible of Robert Kett's revolution and home to Wymondham college, a rare state boarding school, and Wymondham high-two of the top state schools in the country-Attleborough, home of Banham Poultry, our largest local business, and Liftshare, the world's fastest-growing car-share company, set up in a former turkey shed by a local entrepreneur; and Watton, heart of the Wayland valley and home of the famous horse fair.
Eschewing the metropolitanism of Norwich, Fakenham, Thetford and Swaffham, which guard its perimeter, Mid Norfolk is the rural core of this most rural and historic county, a county that I need hardly remind the House has given us our first Prime Minister, Sir Robert Walpole, our greatest military hero, Horatio Nelson, and the seeds of the agricultural and, therefore, industrial revolution, courtesy of Coke of Holkham and "Turnip" Townshend. The turnip is a vegetable that has had a tricky press of late, but it is held in the very highest esteem in Norfolk.
My constituency has come of late to feel increasingly marginalised, however. Tackling that sense of marginalisation in order to unlock the talents and aspirations of its people is, and will remain, the central theme of my work as its MP. The people of Mid Norfolk feel marginalised by the decision-making process and too often forced to change in ways that they have neither chosen nor like. The small, local, voluntary and rural is all too often crowded out by the big, national, professional and urban. As reported this week, rural Britain has been especially hard hit by unemployment during this recession, and my constituency has pockets of rural deprivation which are often hidden and invisible to the passer-by. Pensioner poverty can be especially invisible.
Post offices, pubs and village shops close, while more and more people are forced to commute increasing distances from the mass housing estates that have been forced on our market towns and councils. In my three-year candidacy I insisted on another way. Opposition Members might call it a third way, but we call it the Norfolk way: a vision of a vibrant rural society based on a renaissance of rural enterprise; smaller pockets of mixed housing
spread more fairly and sustainably; fast-growing small businesses and jobs back in our villages and towns; less commuting; a richer mix of ages; and blue and white-collar jobs in active communities.
Some may ask, "Where are those new jobs and businesses to come from?" Let me tell the House. Situated between Norwich and Cambridge are two of the world's leading centres of scientific research and innovation in food, biomedicine and the clean technologies of which my hon. Friend the Member for Richmond Park (Zac Goldsmith) spoke earlier, all of which are so vital to the global challenges that we face, Mid Norfolk is perfectly positioned to become a hub of entrepreneurial activity and new jobs. With the world-leading John Innes centre, the Institute of Food Research, world-class agriculture and high-tech engineering along the A11 corridor, we can lead those new economic sectors on which we will increasingly depend.
As someone who came to politics after a 15-year career in creating new technology businesses, I hope to be able to put my experience to good use in that area. However, that revolution cannot happen without two essential things: new models of investment in infrastructure, including the A11, rural broadband and rail links, and some local leadership.
The stale post-war model of statist centralisation and dependence on the Whitehall handout has failed Norfolk and needs replacing if we are to have a sustainable recovery. The benefits of this empowerment and liberalism will not just be economic. Rural Britain is, I believe, the repository of some important virtues that our modern culture has neglected: a deep belief in self-help and responsibility; an insistence that everybody in a community has a role, and the rejection of a shallow media culture's obsession with celebrity; and a love of the small, the different, and the local. These are qualities that are deeply rooted in the English character.
The people of Mid Norfolk sent me here to speak up for them, so I shall. My constituents, proud of those values, have found themselves increasingly powerless in the face of a tidal wave of legislation and "big government" from Europe, Whitehall, and unaccountable regional quangos. Many worry that our culture has been hijacked by an increasingly intolerant, politically correct "anything goes" multiculturalism which seems to have too little respect for the longer traditions of tolerance, personal freedom and responsibility embedded in our traditional heritage. By pumping the bellows of local empowerment, I believe that we can reignite the embers of a culture which can and should be allowed to coexist with metropolitan Britain, to mutual benefit.
At the heart of this manifesto is a big idea: that citizenship is forged not through dependence on the state as espoused by new Labour and its philosopher king, Anthony Giddens, but through the empowering act of the state granting responsibility to its citizens. That is the central idea which has brought me into politics as a Conservative, and which I am delighted is once again the idea at the heart of modern Conservatism and this coalition.
I hope that the House might allow me to close on a personal note. As no doubt for all hon. Members, taking my seat in this great House is the culmination of a long journey and a lifetime's dream. I can recall very clearly when that seed was sown: coming here on a school trip aged 12, inspired by childhood stories of my
great-uncle Gladstone. As the child of a broken and at that time unhappy home, I recall seeing the worn edges of the Dispatch Box and being struck by a deeply reassuring idea: that whoever and wherever you are in our country, there is a place where the nation takes responsibility for its affairs, a place where your problem matters, a place here, for you, whoever you are. I still believe there is no greater honour than to be sent here by a constituency to serve. I believe the public want to believe that too, and want this new Parliament to raise aloft the standard of a politics of which we can all be proud. I thank the people of Mid Norfolk for the chance to be part of that, and I thank the House for its patience this evening.
Mr Deputy Speaker: Order. Five Members are trying to get in; if they restrict themselves to five minutes, everybody will do so.
6.7 pm
Sheila Gilmore (Edinburgh East) (Lab): Thank you, Mr Deputy Speaker, for calling me to speak in this debate.
In the few weeks that I have been here, it feels a little as though I have walked into an Alice in Wonderland world where everything has been turned on its head. A lot of myth-making has been going on. If one says something often enough, even if it is not true, people will come to believe it. I have to say, as somebody who studied history, that we need to ask what sort of regimes are particularly good at doing that. I trust, and I am sure, that my constituents will not fall for these myths.
So what are the myths? Myth No. 1, which concerns a terribly important issue, is that Labour causes unemployment. Let us take 1997, and let us take 2010, after a major recession, and then allege that during the course of the Labour Government we have had high unemployment. If my constituents were asked which were the recent periods of long unemployment, they would not say the period from 1997 to 2008 but the periods of the 1980s and the 1990s-they know that full well. By the mid-part of this decade, we had reached a position in Edinburgh whereby unemployment had been virtually reduced to a hard-core minimum. We had a very healthy economy for all that time, so it is simply not true to suggest that we have had a period of Labour Government with high unemployment.
Neither is it true that we have the highest unemployment figures in Europe-I do not know where that that comes from. A year ago, my cousin from Spain came to visit and told me that he was very worried because Spain's unemployment stood at 19% or 20%. That myth about our unemployment figures is another one that we must destroy.
Public support and funding makes a lot of the economic development in the Edinburgh area possible, but the Tory view is that public spending is a drag on, rather than an encouragement to, the economy. For example, the public spending and support we put into a wave power project in Leith docks-£4 million of public spending in past year-will create lots of employment, but nothing would have happened without that degree
of public support. The offshore wind projects in the River Forth would not have happened without public support.
During the election campaign, a construction engineer in my constituency told me that he was seriously worried about school building projects drying up, because his firm had been associated with those nationally and in Scotland for all the years of the previous Labour Government. However, in 2007, the Scottish Government came under the control of the Scottish National party. They chose-they were not forced-not to use public-private partnership, which was Labour's funding mechanism. As a result, they have been unable to start a single new school in my area, because they have not come up with another form of funding, meaning that my constituents' employment prospects are much diminished. That was before public funding was cut further. If that construction engineer-he has always worked in the private sector-were asked whether he could manage without the public sector, he would say no.
Another big myth that is being perpetrated is that increased funding for welfare spending-I do not particularly like that term-means that it is all being spent on people who sit at home doing nothing. That is not true. One of the big triumphs of the Labour Government was to create a situation in which single parents, for example, can work. Single parents have been enabled to work, but only a very low proportion of them used to work, even compared with other countries, because the benefits system made it very difficult for them to do so. Tax credits, which come under the big heading of welfare spending, are designed specifically to let people work. That is what they are about. They are not about people sitting at home doing nothing. That is another myth.
I was interested to hear another hon. Member praise an academy project. We have set up similar projects in Edinburgh. I hear people talking about having a single, unitary, simplified form of training; the point is that it must be relevant to particular areas. Our training was in health care, because we had brand-new hospitals, but one size will not fit all.
Let us give up on the myths and talk about the reality. I hope that our prediction that things will not go well in the next few years does not come true, but my constituents are very afraid.
6.13 pm
John Howell (Henley) (Con): May I begin by paying tribute to my hon. Friend the Member for Mid Norfolk (George Freeman), whose maiden speech was erudite, sophisticated and entertaining? It has almost persuaded me to abandon my plan to go and live in the south of France in my retirement-when the date comes, a long time in the future-and instead to go and live in Norfolk.
I should like to talk about the words at the end of the Opposition motion and the decision
"to abolish regional development agencies",
which the hon. Member for Birmingham, Erdington (Jack Dromey) and the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) mentioned in their speeches. We need to put RDAs into some sort of perspective. Between 1999 and 2008, RDAs cost £13 billion; salaries increased from £38 million to £120 million and running costs increased by 159%.
PricewaterhouseCoopers said that the return was £4 for every £1 put in, but it is not clear whether that takes account of the increase in overhead costs. Either way, it is not a particularly interesting amount of return.
In addition, we should not forget the rather destructive way in which RDAs have gone about promoting areas overseas and reaching out for inward investment. The total cost of RDAs' overseas activities in the seven years to 2008 was £24 million. Even Advantage West Midlands, which the hon. Member for Birmingham, Erdington much praised, has 11 offices overseas. There is wasteful competition between RDAs. Five RDAs have offices in China, which, as I have mentioned in the House before, prompted a rather indignant group of business men returning from China to complain that the Chinese do not understand the difference between the east and west midlands.
The creation of employment through the RDAs essentially happens through the regional economic strategies. We have all heard about the regional spatial strategies, but the regional economic strategies are their precursors. The RSSs are there to deliver in planning terms what the RESs deliver. I suspect very few Members have read, or even heard of, the RES for their own region. That is unsurprising; like the RSSs, the RESs are reflective not of a bottom-up approach, but of a top-down approach.
In my own region of the south-east-where I am asked to believe that the town of Henley has an enormous amount in common with the town of Dover-the concentration of resources on infrastructure has been around the Government's agenda in Kent, whereas places such as Oxfordshire, which is an economic area in itself, have been left out of receiving any investment for many years. Such areas have had to fight to get what is due to them.
I agree that the RDAs have done some good work, but we must accept that most regions are artificial. They are political constructs, and there is no identity with the region. There is quite a lot of academic work on that, including papers by, among others, Hadjimichalis and Hudson, which I recommend to Members. Few regions have longevity or a common identity. The potential exception is the north-east, where there has been some argument for a common focus since the 1930s. The reality, however, is that the boundaries are artificial. Local Government Association research into the trading, travelling and working patterns of the British economy demonstrates that the principal sub-national economic unit is sub-regional, not regional. That was a good piece of analysis. The Labour approach to RDAs has, therefore, been part of the tired centralist agenda. It has ignored natural areas and, arguably, suppressed growth by focusing on a centralist agenda that ignores local flexibilities and opportunities.
Opposition Members tried to suggest that abolishing the RDAs would leave regions and sub-regions in a vacuum, but nothing could be further from the truth. We have proposed local economic partnerships, some of which may, if local councils and businesses wish, have similar configurations to the current RDAs. What is important is to give control back to local councils and business, and to liberate growth and local ideas. That challenge has been welcomed by local councils. I was interested to see press reports of 22 councils in Yorkshire
and The Humber agreeing to support local economic partnerships, and, again, the LGA has shown there is huge support for that.
Local government is up for this. My own county has a very good vision of a technology arc from Oxford across to Cambridge. It does not need an RDA-or in this case, two RDAs-to tell it how to do that. There is no better quote with which to end my comments than one from the chairman of South East England Councils, the leader of Kent county council, Paul Carter, who said:
"The future is local. We need to strip away the old bureaucratic, regional structures quickly. Councils"-
in this case in the south-east-
"are ready and willing to take on the role of working with businesses."
I think that is an extremely powerful route to real growth in our local economies.
6.19 pm
Mr David Anderson (Blaydon) (Lab): It is an old but true saying that if we do not learn the mistakes of history, we end up repeating them. For some Members of the House, this discussion is not just theoretical, because we have lived it-our families and our areas have lived it. My grandfather was sacked in 1926 for having the temerity to go on strike. He was blacklisted for eight years and died in poverty. My father was forced to go down the mines in 1935 as a 14-year-old at a time when, he has told me, miners were treated like slaves. People did not march from Jarrow to London just for the fun of it: they did it because the private sector had let them down.
In the 1930s, a miner was killed in the mines every six hours because of the success of the private sector. That was not because there was too much red tape, but because people did not invest in the mines. That is why, at the end of world war two, the people of this country, despite having a GDP-to-debt ratio of 262%-not 62%-did the right thing and threw that Government out. They then built a million houses, created the national health service and nationalised the major utilities and the railways. They did all that right and what was the result? In 1959, the Prime Minister said that this country had never had it so good-that was because of the things that Labour Governments had done in the 1940s and 1950s.
Unfortunately, in the next period there was general consensus in the country on one-nation Toryism. Of course, that was done away with in 1979 when Mrs Thatcher came along. She had a view of one-nation Tories from the Wash southwards and we ended up with people on the dole, mines closed, shipyards closed and steelworks closed. That was said to be a price worth paying only because the people represented by the Conservatives were not paying it. The price was paid by the people of my constituency and those of Scotland, Wales and other industrial areas while the yuppies in London were swanning around in their Porsches, drinking champagne and smoking big cigars. Conservative Members can smile because they were not there, but some of us were, and we were suffering. People struggled and saw communities going down the drain. People were burgled by their neighbours' children and saw drugs in villages where there had been nothing but hard work for two centuries. We saw houses falling down that people had kept going for a hundred years. This is not a joke; it is serious stuff.
Hon. Members talk about unemployment-in the constituency where I lived before I became an MP, the highest unemployment rate in the past 13 years has been 7.8%, which is far too high, but in 1986, in the week that the mine I worked in was closed and 721 miners were put on the dole, the unemployment rate was 18.6%. The Conservatives should not come here lecturing us about unemployment when it is just some sort of theoretical debate they have had in the students union.
At the end of the 1980s, the public services were attacked, compulsory competitive tendering was introduced and people were put on wages of £1 an hour. We had a situation where people who had given their lives to organisations such as the health service were told, "We don't want you any more-go and work for Joe Bloggs' cleaning company." People were underestimated and undervalued. The next thing was that the private sector came back in. We gave the utilities back to the private sector and we ended up with a utilities sector that was not fit for purpose. The reality is that we will probably end up with power cuts or running out of gas. Alternatively, we will end up, as the hon. Member for Richmond Park (Zac Goldsmith) suggested when he spoke so eloquently about green issues, being dependent on people like the Russians or the Ukrainians for gas and oil supplies. Why? It is because of lack of investment by private companies.
When Labour came back into power in 1997, we took action and used public money to put right some of those wrongs. We introduced the national minimum wage, we brought in rights for people at work and we introduced good-quality health and safety legislation that saves lives. We introduced regulations that stopped business people from exploiting people at work, and we should never move away from that or apologise for it. We also introduced the regional development agencies, which have not been successful in some regions-it is pointless to pretend otherwise-but the areas where they have been successful are probably those where they are needed more than anywhere else, such as in my region, where the RDA has been very successful. Taking RDAs away will cause a repeat of the past and will be the wrong way to go.
Some people say that we have no choice and that we are all in it together, but we do have a choice. We do not have to follow past accidents: we could introduce a financial transaction tax on the banks, we could take real action to attack tax avoidance and tax evasion, and we do not have to cut corporation tax. I know that it is highly unlikely that the Conservatives will want to do that, because they still want to be the party of business at the helm of the work force, but the Opposition will not stand for it. It is a shame that the hon. Members on the narrow Government side of the House-the Liberal Democrats-are supporting the other Government Members in doing that. They should be ashamed of what they are doing.
6.24 pm
Amber Rudd (Hastings and Rye) (Con):
I have noticed this afternoon that there has been a lot of talk about young people in unemployment. Both my hon. Friend the Member for Wirral West (Esther McVey) and the
hon. Member for Wirral South (Alison McGovern) were talking about that, and it is a common theme. It is one area that, I know, we all care about so much.
I was talking in Hastings, where we have very high levels of youth unemployment, to a young lady from Tressell training, which is a NEET-not in employment, education or training-college. I asked her what she was doing and she said that she was doing a training course, making a film about BMX bikes. I said, "That's great. Do you do BMX biking yourself?" and she said, "No, I couldn't possibly, because it's dangerous and I'm pregnant." My face fell, reflecting slightly what I thought about that, and she said, "No, don't worry. I know what you're thinking-you're thinking I'm too young but I'm not, because I'm 16 next week." She was reflecting something that we see a lot, and I do not think that it is a problem just in Hastings. A lot of young people are making a choice, because they look at the potential for jobs and do not see that it has anything to do with them.
In Hastings, 43% of the work force are in the public sector. To get into the public sector, people need qualifications. I welcome the comments made by the Secretary of State for Education today about the changes to education and the changes to our schools, which, I hope, will start to work with the lowest achievers and with the people who are struggling most. At the moment, I feel that we have a real problem with the young unemployed looking at the work force-they have no qualifications-and thinking, "That's not for me."
I have a radical proposal that I would like the Secretary of State and the Minister to consider. Instead of people going on to unemployment benefit-instead of their going on to the circuit of jobseeker's allowance, then the flexible new deal and then, sometimes, back again-why not consider putting them on something new, which we could call "Vision for Jobs", to give them purpose, work and training? In the example I am thinking of, people could start at 9 o'clock in the morning and be given two to three days of community service, one day of learning skills and one day of job search. They could be given pride in what they are trying to do by being given a weekly wage. In my vision, this weekly piece of paper would have on the right hand side "35 hours of meaningful work", which would be set out, and-
Mrs Mary Glindon (North Tyneside) (Lab): Will the hon. Lady give way?
Amber Rudd: Yes-actually, no, I will not give way.
On the left hand side, that slip would show what they had received-not just the jobseeker's allowance but the council benefit and any credits that they might receive. Many young people do not know the full extent of the benefits they receive.
I know that such a scheme will be hard to deliver and that it is not straightforward, but I think that the current unemployment benefit system leaves young people to fend for themselves. It does not look after them. We need a new system. I ask those on the Front Bench and the Secretary of State to consider piloting such a scheme in Hastings. I know that he has had conversations with Tomorrow's People and Debbie Scott, and she would be delighted to do that. We could make a change, and start it in Hastings.
6.28 pm
Thomas Docherty (Dunfermline and West Fife) (Lab): I shall be brief, given the time available. May I begin by wishing the hon. Member for Mid Norfolk (George Freeman) all the best? He made an excellent maiden speech and I am sure that he will be a valuable addition to his Front Bench in the not-too-distant future if he continues at that pace of contribution.
In just over half an hour, the House has the opportunity to send a message to the country. On this side of the House, we know that Conservative Members are ideologically driven towards cuts. There is nothing new or fresh about their ideas. This is an opportunity in which they are revelling as they make cuts to programmes and policies that they have never liked and never supported.
Those Liberal Democrats who are sitting alongside their new best friends, however, need to hang their heads in shame. It is interesting to look at the roll of dishonour that lists the names of those Liberal Democrat Ministers who have signed this appalling amendment, which revels in a programme of cuts. Fife, Scotland and the whole of the United Kingdom is watching again and the Liberal Democrats must face up to reality-they cannot cosy up to their Conservative pals for the next five years without realising that the people of Britain will punish them for it at the next general election.
6.29 pm
Helen Goodman (Bishop Auckland) (Lab): I begin by congratulating the hon. Member for Mid Norfolk (George Freeman) on making a most amusing maiden speech. As far as I could tell, its gist was that Mid Norfolk was really big in the middle of the 18th century. I looked at "Dod's" to find out a little more about him, and one of his recreations is hill walking, which is a shame: he will not get many opportunities to do that in Mid Norfolk.
I am proud to have belonged to a Government who decided to support young people through the recession, to have confidence in them, to invest in them and to back them. We knew that unemployment was not a price worth paying. We knew from our experience of the 1980s and 1990s what a scarring effect unemployment has and how the young are worst affected. However, it seems that this Government have learned nothing. Not only are they introducing huge cuts to public expenditure, with massive knock-on effects on private sector jobs, but they are freezing recruitment to the public sector, cutting the number of university places and now abolishing the future jobs fund.
The Tories and the Liberals said in the run-up to the general election that they were backing the future jobs fund and that they would continue with it, so I am sure that many voters will be extremely disappointed by the decision to abolish it. It is notable that not one Liberal Democrat has spoken in the debate. I assume that they are getting rather weary of their role as fig leaf to the Government. I am glad to see the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) in his place at last, but it is significant that the Liberal Democrats have been unable to face defending the amendment that the Government have tabled.
The Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) began without any acknowledgement
of the fact that we faced the largest global recession since the second world war. He went on to talk about the proposals for the new Work programme, but there remain a huge number of practical questions, which he was completely unable to answer. What will happen in the gap between the time when no more people can be taken on by the future jobs fund and the time when the new scheme is introduced? What will happen to those people whose skills atrophy if they are unemployed? We are talking not just about people's technical skills, but about their social skills, which are important if people are to maintain their morale and get another job.
My hon. Friend the Member for Wakefield (Mary Creagh) spoke about the importance of the private sector retaining its confidence and about the work that the future jobs fund has done in Wakefield, by creating 700 places for young people. She spoke about environmental projects, green businesses, young people learning to make honey and the skills that they were gaining. She pointed out the importance of apprenticeships. The Government keep telling us about the number of apprenticeships that they are creating, while conveniently forgetting that we trebled the number of apprenticeships in the past 13 years. My hon. Friend asked how the national contracts would work and how the providers would bear the risks. They are good questions, and more questions that the Minister was completely incapable of answering.
The hon. Member for North East Hertfordshire (Mr Heald) spoke about the problem of worklessness, the need for greater private sector employment and the importance of technological skills. He did not seem to be able to take into account the fact that the number of people on inactive benefits has fallen by 350,000 in the past 12 years. He did not seem to be aware of the fact that the Office for Budget Responsibility's forecast shows that private sector employment will be lower in each of the next five years than was forecast before the Chancellor's Budget.
The hon. Gentleman went on to talk about the importance of education and technology. I hope sincerely that he has a word with the Secretary of State for Education-he will have an opportunity to do so shortly-about the dire mistake that has been made in the cuts to the Building Schools for the Future programme that were announced earlier this week.
My hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) spoke about the importance of the construction industry. He has a great deal of experience of that, and he talked about how it was a driver for the economy.
Helen Goodman: I am sorry, but I have to respond to 22 Members and I do not have much time.
The hon. Member for South West Norfolk (Elizabeth Truss) spoke about the importance of infrastructure and education spending, and about the great returns that there are from that. I hope that she will have a conversation with her right hon. Friend the Chancellor of the Exchequer and press on him the need to maintain spending on some of those.
My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) spoke about the issues in her constituency. She reminded the House that
during the general election the Prime Minister said that he wanted to see cuts in the north. She was absolutely right. It was quite clear that if someone voted Cameron they would get cuts, and if someone voted Clegg they would get Cameron. She pointed out that a third of the workers in the north-east worked in the public sector, and that its efficiency can be improved by having more workers in low-cost areas.
The hon. Member for Wirral West (Esther McVey) spoke about the problem of NEETs and what needed to be done to increase apprenticeships. She spoke about a public-private partnership, which was picked up by my hon. Friend the Member for Wirral South (Alison McGovern), who pointed out that if spending in local authorities is maintained, it might be possible to continue with that.
My right hon. Friend the Member for Tottenham (Mr Lammy) gave a passionate speech about the importance of human dignity in considering all these issues. He also asked a number of questions, to which it would be interesting to hear the answers when the Minister replies-in particular, how many placements has the Minister succeeded in getting for the apprenticeships that Government Members keep trumpeting? My right hon. Friend also spoke about the connection between young people being able to work and the importance of keeping down antisocial behaviour and crime. He pointed to the huge gap between the reality and the Government's rhetoric. We heard it even today in Prime Minister's questions, when the Prime Minister said, in answer to a question from my hon. Friend the Member for Streatham (Mr Umunna), that he wanted a long-term strategy to engage young people. If he wants that, why is he abolishing the future jobs fund?
The hon. Member for Richmond Park (Zac Goldsmith) spoke extremely interestingly about the importance of moving to a low-carbon green economy, and he talked about how that should be done, but he left out one key thing, which is that one of the major barriers is a skills shortage. The future jobs fund had a green strand. Will he please press Ministers to have a green strand in their work?
My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) spoke with huge passion about his constituency and the role of the RDA in the west midlands. I can recall being in Birmingham and finding out about the partnerships that the DWP had with the RDA to build employment in that region. I hope that the Minister will be able to inform the House of what she said about the loss of that partner when her colleagues in the Department of Communities and Local Government came up with the proposal to abolish the RDA.
The hon. Member for York Outer (Julian Sturdy) spoke about the importance of the private sector and the need to see SMEs grow, and I think that the House would agree with that.
My hon. Friend the Member for Blaenau Gwent (Nick Smith) spoke about the need for new jobs in former mining areas. He spoke about the 50th anniversary of the Six Bells tragedy and the huge impact that mining still has on many communities. Hon. Members can come to the miners' gala in Durham on Saturday, where they can enjoy the culture that flowed from the mining communities.
The hon. Member for Truro and Falmouth (Sarah Newton)-she does not seem to be in her place now- spoke about the importance of work and the Marmot report. I hope that Ministers listened to her and will appreciate the severe consequences for people's health and mental health of soaring unemployment.
My hon. Friend the Member for Islwyn (Chris Evans) made a passionate speech about how the Tories treated his constituency in the 1980s and pointed out the great significance of Train to Gain, which is the programme being cut to finance the much trumpeted apprenticeships. The hon. Member for Stourbridge (Margot James) took us back to the 1960s and talked about what she perceived to be the waste in the contracting process. I hope that such waste will be reduced and less money will be spent on contractors in the new scheme that the Government will introduce. My hon. Friend the Member for Wirral South made a wide-ranging speech displaying a great understanding of the constituency she represents. She also spoke about the good work being done by Jobcentre Plus and the threat to the jobs of its staff. She mentioned how foolish that is at a time when these workers are most needed.
The hon. Member for Stratford-on-Avon (Nadhim Zahawi) said that business needs to be freed up. My hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) spoke about the imbalance between the number of jobs and the number of vacancies, and pointed to the scale of the problems we face. My hon. Friend the Member for Edinburgh East (Sheila Gilmore) made a myth-busting speech pointing out, in particular, that tax credits go to those in work, and help people to finance child care and take jobs. The hon. Member for Henley (John Howell) spoke about the regional development agencies and revealed, I am sorry to say, the complete ignorance of the Conservative party about some of the regions in the north and the significance of the RDAs, and its really foolish decision to take the same approach to the south of the country as to the north.
My hon. Friend the Member for Blaydon (Mr Anderson) made a passionate speech and pointed out that the question of unemployment is not a theoretical one, but about real people and real lives. The hon. Member for Hastings and Rye (Amber Rudd) began her speech with a story about a 16-year-old having a baby and her concerns about it. I wonder whether she has addressed with her hon. Friends the fact that the programmes to reduce teenage pregnancy are being cut. She then talked about her vision and spoke about what she wanted to see-it sounded rather as if she wanted a version of the youth guarantee, albeit a rather bureaucratic version. I point out to her that her hon. Friends have just abolished it. My hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) also spoke about the great importance of a sensible approach to tackling this problem.
What the Government have done is totally unjust. They are pulling away support precisely at the time of maximum need. Today, we have had a statement from the OECD stating that this is the moment in the recession when it is most important to have properly funded support. That is in addition to statements from local authorities, young people and the voluntary sector. We are seeing the wanton destruction of people's lives. These are not numbers. The abolition of the youth guarantee and the future jobs fund demonstrates how
little the Government care. They do not care about the young man and his partner who want to do their best for their new baby; they do not care about the mother anxious about what is going to happen to her children when they leave school; and they do not even care about the ex-soldier who wants some hope in his life. All those people currently benefit from the future jobs fund. This is why I urge all hon. Members to vote for the motion tonight and to reject the Government's amendment.
6.44 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): I start by commending Labour Members on securing this debate, because it gives us an opportunity to talk about something we think is integral to putting Britain back on the right tracks. It has been an interesting debate, but sadly, that probably has less to do with the quality of the facts from the Front-Bench team, and more to do with some of the theatrics and selective memories that have accompanied them. In the interests of everyone here, I hope that hon. Members will permit me to set the record straight, because we need to be absolutely clear about the legacy left by Labour after 13 years of failed policies.
The spin from the shadow Secretary of State simply does not match the facts. In the real world, almost 2.5 million people are unemployed across our country, and 1.4 million under-25s are not in employment, education or training. Some 2.2 million are currently languishing on old-style incapacity benefits, written off by the system that was designed to help them. Even before the recession, more than 15% of children were growing up in a household where no one worked. Income inequality is now at its highest level since records began.
Maria Miller: I hope the right hon. Lady will forgive me for not letting her in, but I want to pay tribute to Members who have contributed to the debate today, as the hon. Member for Bishop Auckland (Helen Goodman) did.
We are now staring down the barrel of the largest peacetime deficit this country has even seen. That is Labour's record loud and clear.
Maria Miller: Okay, I will give way.
Yvette Cooper: Will the Minister confirm that the number of children in workless households fell between 1997 and 2010 from 2.3 million to 1.8 million?
Maria Miller: The fact that I would give back to the shadow Secretary of State is that we have the highest number of children living in workless households. If she is proud of that fact, she deserves to be on the Opposition Benches.
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