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I am grateful to my hon. Friend the Member for Ynys Môn (Albert Owen). As many of my hon. Friends are doing this afternoon, he underlines the point that right across the country, over an extended
period of Labour's term in office, youth unemployment was falling fast. Unemployment can never be as low as Members want, but the question that confronts us is how to draw the right lessons from those overwhelming successes in getting people back into work and how to apply the lessons to the present crisis when one in five young people is not in work.
Andrew Griffiths (Burton) (Con): Perhaps I can help the right hon. Gentleman by making a short intervention. Does he believe that the previous Government's spending of £3.5 billion on programmes to get young people back to work while youth unemployment rose was good value for money?
Mr Byrne: I am not sure whether the hon. Gentleman was in the Chamber at the beginning of the debate when we explained the simple point that during the latter months of our term in office, when the recession was difficult, youth unemployment was not rising but falling. All that progress-the fall between the peak of youth unemployment and when we left office-has been undone in the months since May. The hon. Gentleman shakes his head, but it is a fact. That is why earlier this week the former chief economist at the Cabinet Office, Mr Portes, told the Government bluntly that the challenge of youth unemployment is serious. He told The Times that the Government were failing to address the scale of the problem. Without urgent action, he warned, hundreds of thousands of youngsters face a bleak employment prospect throughout the rest of their lives. That is why our motion calls on the Government to reflect again on the lessons of the future jobs fund, to commission an independent evaluation, draw the right lessons, learn from them, establish a more substantial programme for the future, and do it with urgency.
The future jobs fund is at the heart of the motion. Because we felt so strongly about the scourge of youth unemployment, a concern that is shared by many Members, we were determined to make sure that as it began to rise again after falling so far, something was in place that would help. We set up the future jobs fund because we knew that one of the greatest lessons from the 1980s is that when young people are allowed to drift too far from the jobs market they lose the habit of work, which is a curse that can stay with them for the rest of their lives. That is why we made substantial investment, which at the time was supported by the Conservatives, to get 150,000-rising to 200,000-new jobs that would last six months, 100,000 of them for young people and 50,000 of them in areas of high unemployment.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): My right hon. Friend said that he thought that the Conservatives supported the future jobs fund. In March, before the general election, the present Prime Minister came to Liverpool to visit Merseystride, a social enterprise that employed many people through the future jobs fund. He described the future jobs programme as a "good scheme" and said that his Government would keep any good scheme. Why does my right hon. Friend think that the Prime Minister has backtracked on what he said when he saw that project?
I think the answer is simple: despite good intentions, the Prime Minister has let the Chancellor get the upper hand. I am afraid that is a negotiation the
Department for Work and Pensions has lost, which is why its back-to-work programme is being slashed with such dangers for the future.
I pay tribute to Steve Houghton, who was the leader of the local authority in Barnsley and did so much to pioneer the future jobs fund that has worked so well there. The Barnsley scheme is widely acknowledged to be one of the best in the country; it has 600 places for up to 12 months, a mixture of long-term and youth unemployed and a good track record on getting people into work. Barnsley, like other parts of the country, faces a future where that assistance is being pulled away.
The challenge for our young people is that they now confront a triple whammy. Education maintenance allowance has been cut, tuition fees have been trebled and the future jobs fund is a thing of the past. Without the chance to work, without the chance to study, what are our young people supposed to do? Can Ministers tell us? There is not even a big society for young people to retreat to. Three quarters of youth charities are actually closing projects; 80% say that is because targeted support for young people is ending.
In January, the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), decided to act. I commend him for that. He introduced a work experience scheme. It was only for eight weeks, not six months, it did not pay the minimum wage and it did not cover people leaving higher or further education, but at least he was getting the idea. A fortnight ago, we learned that he was stepping up the pace-moving up a gear: at the Tory party's black and white ball we had the spectacle of an auctioneer selling prized internships at top City firms to the highest bidder. What started as a crusade against poverty has in just nine months become an auction of life chances for the wealthy. No wonder the young people of this country feel that they face a lottery, and the Minister is selling the tickets.
Five people now compete for every job opening, and this morning we heard that things are not getting better. According to the Library, in more than 120 of our constituencies, there are more than 10 people competing for every job. Those people would yearn for a ticket to the black and white ball. [ Interruption. ] We have just heard something very important: the Secretary of State is putting a ticket on the sale block.
If there was something better to replace the future jobs fund, we might more easily comprehend its abolition. After all, this is what the Prime Minister promised when he told the BBC on Sunday 4 October 2009:
"I want the new Conservative Party to be the party of jobs and opportunity and at the heart of it is a big, bold and radical scheme to get millions of people back to work."
I am afraid that last night we learned the truth from the BBC, when it reported:
"The government's new 'work programme'",
described by the Prime Minister as the "biggest and boldest ever" plan to get people off benefits and back to work,
"will actually help fewer people than the existing schemes that ministers are scrapping, the BBC has learned."
The Department for Work and Pensions has revealed that it expects 605,000 people to go through the Work
programme in 2011-12, and 565,000 in 2012-13, but the Department admits that 250,000 more people, around 850,000, went through the existing schemes in 2009-10.
Mr Byrne: So there we have it-one more broken promise. Next year, in 2011, the Office for Budget Responsibility forecasts that the claimant count will be 1.5 million, the same as this year-[Hon. Members: "Give way!"] In a moment.
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. One at a time. If Mr Byrne does not wish to give way, the Minister will have to accept it. I am sure he has noticed that the Minister wants to intervene.
Mr Byrne: I will give way to the Minister in a moment. The whole House wants an explanation of why the promise to get more people back to work has been broken by the Prime Minister, because the Department for Work and Pensions has lost yet another battle to the Treasury.
The Office for Budget Responsibility says that the claimant count next year will be 1.5 million, the same, by the way, as this year. The problem is undiminished, yet the help is being cut away-the Minister's Department is projecting 250,000 fewer places. When the correspondent from the BBC checked the figures this morning, she was told by a DWP official that she was right. So how is the Government's scheme the biggest back to work plan ever? Is not the truth that the Minister has been done over once more by the Chancellor? Let him explain.
Chris Grayling: The right hon. Gentleman should not believe everything he hears on the television. It is absolutely clear that the Work programme will offer places through contracted-out providers to more people than was the case under the previous Government, and there is not one single person receiving JSA or employment and support allowance who wants and needs support through the Work programme who will not get it.
Mr Byrne: Will the Minister explain why a DWP official confirmed to the BBC yesterday that 850,000 places were available under a Labour Government, and that that would fall by 250,000 under the present Administration?
Chris Grayling: If the shadow Secretary of State wants a briefing on the Work programme from the DWP, we will be delighted to offer him one. I suggest that he does not take his information from the media.
Mr Byrne: That was not a straight answer to a simple question, which was why a DWP official confirmed the figures to the BBC yesterday and again this morning. The conclusion that the House can draw is a point that was made by the Office for Budget Responsibility-that there is not enough confidence that the Government have a plan in place to get people back to work. Indeed, the OBR has so much confidence in the Government's plan to get people back to work that it is forecasting a declining rate of employment for the rest of this Parliament.
I do not claim that the future jobs funds was some kind of celestial design. I am sure there are aspects of it that could be improved. As my hon. Friend the Member
for Liverpool, Wavertree (Luciana Berger) mentioned a moment ago, it was labelled "a good scheme" by the Prime Minister on his trip to Liverpool. The evidence on which it was abolished was simply not there.
In my constituency we have the highest youth unemployment in the country. The leaders of my jobcentre on Washwood Heath road have consistently said to me that the future jobs fund was one of the best programmes they have ever administered. Overwhelmingly, they say, the young people they send on the programme do not come back and join the dole queue. In their first months the Government rushed out some hasty research on its expense. This is what the Work and Pensions Committee had to say about that scribbled bit of analysis:
"A robust evaluation of the FJF has yet to be undertaken...insufficient information was available to allow the Department to make a decision to terminate the FJF if this decision was based on its relative cost-effectiveness."
That is an extraordinary indictment of the Government's rationale. The report says that half of future jobs fund graduates get benefits at seven months, but that is because the programme ends at six months.
The Government dispute the claim that the scheme created real jobs. I am not sure what Jaguar Land Rover would say about that and the places that it created on the future jobs fund, but surely the point is that when people do not have a job, any job is a good job.
Alison McGovern (Wirral South) (Lab): Can my right hon. Friend suggest what Age Concern Wirral in my constituency might think of the slashing of the future jobs fund-a scheme that was not only providing work for my constituents, but helping intergenerational relationships in Wirral and looking after some of the most vulnerable people with early onset Alzheimer's?
Mr Byrne: My hon. Friend makes an excellent point. In a recession private sector jobs are thin on the ground. Anything that keeps young people closer to the labour market, closer to the habits of work and closer to the disciplines of having a job must be a good thing. The lesson from the 1980s, when youth unemployment spiralled to 26%, is that if we let young people get too far away from the habits of work, they are scarred for generations to come.
Dame Anne Begg (Aberdeen South) (Lab): When we looked into the future jobs fund in the Select Committee, it became clear that everyone who had experience of it, as a young person in a placement or as an employer, viewed it as a real job that lasted for six months, with a real wage, and was closer to the workplace than anything that could be offered by work experience. That is why it was successful. None of the providers had a bad word to say about it. They thought it was a very good scheme.
Mr Byrne: My hon. Friend, who chairs the Work and Pensions Committee, makes an important intervention. I hope her comments allow us to strike a note of consensus.
My final point is about the long-term costs. In all recessions and in all recoveries, it is our young people who face the toughest challenge. That is especially true of the fight that young women in our country now confront. Overwhelmingly, they are working in the public sector. Overwhelmingly, it is they who are exposed to the cuts and the redundancies that have been announced,
which now number around 156,000. We must remember the lesson of the 1980s. When youth unemployment was allowed to soar, and allowed to fester for years, communities were damaged for generations. As the Cabinet Office's former chief economist put it this week:
"If the Government doesn't act it will not only damage the employment prospects of young people now but hurt them for the rest of their lives".
The motion that we have tabled asks that the Government look again at the lessons of the future jobs fund, be ambitious about the programme that they put in place, and ensure that they learn the lessons from the 1980s. We fear that a generation is being lost to the clumsy behaviour of the present Administration, so I call on the Government this afternoon to think again, to preserve the promise that this country should make to its young people, to reconsider the action that they are taking to ensure that our children will do better and better than us, and to think again before we confront once again a lost generation.
The Minister of State, Department for Work and Pensions (Chris Grayling): Following Mr Speaker's ruling last week, it is clear that it would be utterly unparliamentary to accuse any other hon. Member of being a hypocrite. I therefore give an absolute assurance that I will not do so this afternoon. It is clear, though, that the Opposition Front-Bench team is suffering from a bout of collective amnesia. We should be concerned for their welfare. I looked up the symptoms of amnesia, and it looks like an open and shut case to me. Amnesia is a condition in which memory is disturbed or lost. In some cases it is described as almost total disruption of short-term memory.
What other possible explanation could there be for what we have just heard? I can only think that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) cannot remember his time in office, so let me remind the House what happened. He and his party stayed in power for 13 years. One of their great missions was to tackle youth unemployment. Their former leader, his former boss, the former Prime Minister and Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), made his maiden speech on the subject back in 1983. When, 14 years later, he took office and became Chancellor of the Exchequer, he said that the problem was a "human tragedy", "sickening" and "an economic disaster". He had a mission for change.
What happened? Nine years later, in the middle of one of the biggest booms that this country has seen-let us remember that that was at a time when the then Chancellor was saying he had abolished boom and bust-the youth unemployment rate had gone up compared with 1997. It was higher than it had been when the Labour Government took office. As my right hon. Friend the Secretary of State rightly said from a sedentary position a few moments ago, that was despite the billions of pounds spent on the new deal. In total, £3.8 billion was spent on new deal programmes to get more people into work, yet in the end youth unemployment had increased.
Mr Byrne: Will the Minister explain why his colleague Lord Freud described the progress that we made in tackling youth unemployment, long-term unemployment and unemployment in the round as "remarkable"? Was he deluded, or was he right?
Chris Grayling: Well, we are still waiting for an apology from the right hon. Gentleman for his Government's record. If he wants to quote colleagues, let me quote one of his, the right hon. Member for Birkenhead (Mr Field)-sadly no longer in his place-who is one of the wisest figures in the House. When the statistics were produced in the latter part of the past decade, he said of youth unemployment:
"We made huge gains at the expense of the Tories in 1997... and now we are not just back to where we started, but in a worse position."
That is not from someone on the Government side of the House, but from one of the shadow Minister's right hon. Friends. That was not the half of it, because after that things got worse. More money was spent on more programmes to get more people into work, but youth unemployment continued to go up and up. If he wants to intervene, perhaps he can explain why that was.
Mr Byrne: I am grateful to the Minister for his kind invitation. Will he accept that between 1997 and the beginning of the global financial crisis, the claimant count for youth unemployment fell by 14%? To return to my previous question, why did Lord Freud, the Minister responsible for welfare reform and his colleague in the Department, describe our progress as "remarkable"? Was he deluded?
Chris Grayling: I think that the right hon. Gentleman should listen to his right hon. Friend the Member for Birkenhead, who said that in 2006 that youth unemployment was worse than when Labour took power, and it carried on getting worse after that. By the time of last year's general election, youth unemployment was still 270,000 higher than it had been in 1997, and still they remained in denial-they remain in denial to this day. The greatest brass neck of all was that two months ago the previous Prime Minister had the effrontery to claim:
"Tragically Britain is entering yet another decade of youth unemployment."
Just what does the Labour party think had been happening for the past 10 years when it was in government?
Perhaps the right hon. Gentleman also does not remember that during the last disastrous years of the Labour Government he was Chief Secretary to the Treasury. For those who do not know, that is the person in Government responsible for keeping spending under control. It was not we who built up the biggest peacetime deficit this country has ever known, but him. What did he do to stop his Prime Minister promising to spend money he did not have and making promises to the unemployed that he could not keep? Of course, there was the notorious letter to his successor:
"Dear Chief Secretary, I'm afraid to tell you there is no money. Kind regards and good luck!"
What characterised the period that he and his colleagues have so conveniently forgotten is that the Labour party spent more and more money and made less and less difference. It is no wonder amnesia has set in.
Tristram Hunt (Stoke-on-Trent Central) (Lab): Will the Minister explain why the Conservative party committed itself to the previous Government's spending plans when in opposition?
Chris Grayling: We are taking decisions in the interests of the country. When I look back to 2005 and 2006, we always knew that Labour was making a mess of things, but we never imagined that they could do it quite so spectacularly.
Toby Perkins: If you realised that they were making such a mess of things, why did you agree to follow those plans? Is it not the right hon. Gentleman who has the amnesia?
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Members should not be using "you"-I have no responsibility for this and am certainly not guilty for the unemployment figures.
Chris Grayling: We spent years warning the Labour Government that their spending was getting out of control and that they were mismanaging our economy, and now we see the consequences of what they did. What are we to do about the mess they created? Let us start by debunking some of the myths that they are peddling. To listen to them, one might think that it was all the fault of the coalition. Only last night the shadow Secretary of State stated in a press release:
"Labour's legacy was falling youth unemployment and a pioneering programme to get 200,000 young people back to work. The Tories scrapped that programme and now youth unemployment has escalated to a record high."
The programme to which the shadow Secretary of State referred is the future jobs fund. Listening to him, one would think that we had scrapped that programme last May, but as we sit here today, young people are still being referred to placements through the future jobs fund. Although Labour's attempts to support the unemployed had largely proved to be expensive failures, we decided early on that we would not remove them until our alternatives were in place. If the right hon. Member for Birmingham, Hodge Hill is right and things are getting worse, even though all the programmes we inherited from his Government are still running, what on earth does that say about the quality of provision he put in place?
Mr Byrne: It says that this Government have put the recovery in the slow lane. That is why the figures we saw this morning show that private sector employment is dead flat and public sector employment is falling. It is clear that the Government now need a plan B for the economy. It must start with a proper tax on bankers and the Government must use the money to do something to get young people back to work.
Chris Grayling: I just do not think the right hon. Gentleman is listening to what I am saying. We have left in place the support programmes that his Government left to support young unemployed people, and as of today they are all still there. As he keeps pointing out, youth unemployment has risen, so what does that say about the quality of provision he left behind? It says that it was not much good.
If the Minister was so dead against it, why is the right hon. Gentleman leaving it in place until the end of March? Since the Government took over, youth unemployment has started to rise, even though the
economy has now been in recovery for five quarters. We were bringing youth unemployment down at a time of economic difficulty; since things have got easier, youth unemployment has gone up. How on earth did the right hon. Gentleman achieve that?
Chris Grayling: What we know is that the programmes the right hon. Gentleman left behind were not fit for purpose.
Mr Byrne: Well, why did you keep them?
Chris Grayling: I happen to think that youth unemployment is a significant issue and would rather retain for a few months a programme that is underperforming while we prepare something better than do nothing at all. The right hon. Gentleman seems to think that we are doing nothing at all, but the truth is that we are doing just the opposite. It was his party that did nothing at all for a long period of time.
Let us deal with the argument about the future jobs fund once and for all. It costs around £6,500 per start-net of benefit savings, just under £6,000. That is far more expensive that Labour's other programme for young people, the new deal for young people, which costs around £3,500 per job, and several times more expensive than other elements of the young person's guarantee. It is twice as expensive as an apprenticeship, which I happen to think is of much greater value. Even when we net off all benefit savings, the future jobs fund is still much more expensive than any other option that the previous Administration put in place, and it did not work.
Colleagues may disagree, but to me a future job is one that lasts and on which a young person can build a career and sustain an opportunity for a lifetime. The future jobs fund did, and does, create temporary short-term placements, mostly through the public sector, where young people did not end up getting the kind of sustained work experience and training leading to a long-term career. The grants that funded the future jobs fund included no incentives whatever to move people into permanent jobs.
Mr Lammy: The Minister mentioned apprenticeships, and of course the whole House will know that there is an ambitious target to deliver 50,000 apprenticeships over the next year. We are now eight months in, so can he tell us how many new apprenticeships have been delivered?
Chris Grayling: The latest information I have received from my colleagues in the Department for Business, Innovation and Skills, who are responsible for this, is that apprenticeship vacancies are currently over-subscribed by both employers and employees. We are making good progress towards delivering on that target and will obviously publish full figures in due course. I am confident that we are making inroads in the apprenticeship market and creating opportunities for young people that will last a lifetime, not just six months.
Will the right hon. Gentleman please take no lessons from the Labour party on apprenticeships? Some 25,000 were offered in the Scottish budget last week, but Labour, for some reason, voted against it.
The Conservatives supported it, so does he know of any reason whatever why Labour cannot support an increase in apprenticeships in Scotland?
Chris Grayling: It makes no sense at all.
I have a theory. The hon. Gentleman and I agree that apprenticeships are by far the best way of delivering long-term, sustained career opportunities for young people, but the future jobs fund was introduced a few months before the general election, and it was designed to move a large number of young people into temporary placements. He will form his own judgments as to what might have motivated that decision.
The reality is that, in early tracking-and I accept it is early tracking-of outcomes from the future jobs fund, the very first data showed that a substantial proportion, about 50%, of people who had been on the scheme were already back on benefits seven months after they started; and that did not take into account the fact that in many areas local authorities had extended future jobs fund placements by two or three extra months. In April, we will get a sense of the scheme's real impact, but the first evidence suggests to me that it has not proved to be any more effective than previous new deals or other similar schemes that cost much less money.
Pamela Nash (Airdrie and Shotts) (Lab): On that point, do the Government honestly believe that for 50% of young people to be in work a full month after their future jobs fund placements-
The Minister of State, Department for Work and Pensions (Steve Webb): That's not what he said.
Pamela Nash: My point comes from the same statistics. Do the Government honestly believe that 50% of young people being in full-time work a month later is a failure? In our opinion, it is a great success for the fund.
Chris Grayling: If that were the case. In reality, we know that a number of placements continued for seven, eight or nine months after being funded by local money, so the first indications are that the final outcome of the future jobs fund will be no better than other employment programmes, but involve a much higher price.
Mr Byrne: The Minister is helpfully rehearsing a series of his uncertainties about the effectiveness of the future jobs fund. Why will he not therefore back the part of our motion which says that a proper evaluation is needed before a further decision can be taken on what is put in place in the future?
Chris Grayling: I fully accept that there is a difference between us. The right hon. Gentleman believes that the future jobs fund-six-month placements in the public and voluntary sectors-is the right approach. I happen to believe that apprenticeships-two years of training and the possibility of a longer-term career at half the price-is a better one. I am fully prepared to accept that that is a difference between us, but in reality our approach-tens of thousands of extra apprenticeships, which the Scottish Administration have also chosen but, I am surprised to discover, the Labour party opposes in Scotland-is a better route to follow.
Albert Owen: I, too, have supported apprenticeships over the past decade, and they have been a great success, but companies in my constituency, and one in particular, say to me that they cannot take on apprentices because they are faced with a consumption tax rise of 2.5 percentage points in VAT. Is that not one reason why businesses are not taking on apprentices? Indeed, the Minister is unable to tell us how many additional apprenticeships there have been in the past eight months.
Chris Grayling: Does the hon. Gentleman honestly think that businesses in his constituency would have been better off with a 1 percentage point jobs tax rise, as the previous Administration planned? That would have caused more of an increase in unemployment than anything else the Government could have done.
The right hon. Member made one point, however, which is absolutely right and with which we absolutely agree. Youth unemployment is a major problem for our society and one that absolutely must be tackled. The failure to tackle youth unemployment with schemes that work contributes so much to many other issues that we have to deal with on streets and in neighbourhoods throughout the country.
Endemic worklessness is underpinned by an ever more complex benefits system that traps people in unemployment. Inter-generational poverty is fuelled by welfare dependency, involving generation after generation of people who have not worked. There is a lack of aspiration, especially among young people who lack role models in a country where almost 2 million children are growing up in workless households. Worst of all, the young people who escape welfare dependency and poverty will still carry the economic scars of unemployment for years afterwards, in terms of lower wages and future employment gaps. That is the harsh reality of Labour's legacy for our young people.
Dame Anne Begg: I worry about the either/or in the Minister's equation. He says that the answer is either apprenticeships or the future jobs fund, but it should be both, because the young people who go into apprenticeships are not the same cohort who suffer the inter-generational worklessness to which he refers. They need extra support, and that is where the future jobs fund has been very, very effective.
Chris Grayling: I accept the principle but do not agree with the detail of what the hon. Lady says. I shall come on to discuss the Work programme and how I aim to use it to deal with the problem that she rightly highlights.
Opposition Members should remember that over the years they made lots of promises about apprenticeships but consistently under-performed on them. Our job is to make sure we do not do that.
Mr Byrne: The right hon. Gentleman surely accepts that the number of apprenticeships increased from about 63,000 in 1997 to more than 250,000 by the time we left office. Surely that is a record of success in backing apprenticeships, and I am glad that it is a point of consensus on both sides of the House.
I remember the right hon. Gentleman's former boss standing in this House and promising about 400,000 apprenticeships. When Labour left office,
the actual figure was 240,000, so I shall take no lessons from the Opposition about delivering promises on apprenticeships. We plan to deliver, and are already well on the way to delivering, 50,000 extra apprenticeships this year, 75,000 extra by the end of this Parliament and more apprenticeships for young people between 16 and 18 years old. Those apprenticeships will cost about half that of each future jobs fund placement, but they will deliver the skills that last a young person a lifetime, and the opportunity to progress on to a secure career path.
Alison McGovern: I thank the Minister for giving way, because this is a truly important point. When I have asked parliamentary questions about targets for the number of apprenticeships, the Government have told me that they no longer set such targets, so will the Minister make clear the status of the pledge that he has just made?
Chris Grayling: We fund a certain number of apprenticeships, and there are 50,000 extra this year. They are being filled at the moment, as we speak. We will fund 50,000 extra apprenticeships this year and 75,000 extra throughout the course of the comprehensive spending review. A few days ago BIS set out a clear goal to increase the number of apprenticeships in this country to 350,000. We have been in office for nine months; the Labour party was in office for 13 years, and it consistently under-delivered on apprenticeships throughout those 13 years.
Mr Lammy: The Minister has been extraordinarily generous in giving way, and I am very grateful, but he has not been able to tell the House how many apprenticeships he has delivered in the past nine months. I set up the graduate talent pool, which involved internships for graduates. Alongside the internships that were offered at the Conservative party event recently, how many internships have been delivered for our graduates in the past nine months?
Chris Grayling: Let me tell the right hon. Gentleman what we are doing to get young people into the workplace for the first time.
One of the first things I received on entering government was an e-mail from the mother of a young woman who had arranged a month's work experience for herself but been told by Jobcentre Plus that she could not do it, because the rules, which the previous Administration put in place, prevented her from doing so. We have therefore changed things.
We now encourage work experience. Through Jobcentre Plus, we will actively find work experience for young people, without their losing their benefits, and give them the opportunity to solve the age-old problem whereby, if someone cannot get the experience, they do not get the job, but, if they do not get the job, they cannot get the experience.
We have also strengthened volunteering opportunities for young people, and we will have Prince's Trust representation in every job centre, so that we can steer young people towards voluntary work and take advantages of the trust's skills to help unemployed young people.
Mr Stewart Jackson (Peterborough) (Con):
Is my right hon. Friend as incredulous as I am at the Opposition's faux outrage? They are members of the party that, during 13 years of government, imported low-wage,
low-skilled people from eastern Europe-more than 1 million of them-and pushed thousands of young people into welfare dependency and on to the dole. They should be ashamed of themselves.
Chris Grayling: My hon. Friend is absolutely right. There is collective amnesia among those on the Labour Benches. One of the things they have also conveniently forgotten, which was revealed by one of their number, the right hon. Member for Birkenhead, is that over the course of those years nearly 4 million new jobs were created in this country, the vast majority of which went to people coming to the UK from overseas. The Labour Government completely failed to make a serious inroad into the nearly 5 million people on benefits, or to get British people into what was once described as the goal of the previous Prime Minister-British jobs for British workers.
Mr Lammy: Will the Minister give way?
Chris Grayling: No, I have given way enough, and I am going to make progress. [ Interruption. ] When Labour Members have some useful contributions to make, I might give way again.
We now need to talk about what we are going to do about this. The Work programme, which we will introduce this summer, will, I hope, go a significant way towards dealing some of the problems to which the hon. Member for Aberdeen South (Dame Anne Begg) referred. We have huge challenges in the labour market, with young people who face huge difficulties in their backgrounds. For them, the Work programme will deliver specialist intervention after just three months in the dole queue-much earlier than it has ever been done before. It will be a revolution in back-to-work support in Britain. It will provide a level of personalised support that we have not seen before, because in order to survive in a payment-by-results regime, the providers will need to cater for the individual. It is the kind of revolution we have needed for years-the kind that was promised in Labour rhetoric but never delivered.
Chris Grayling: I will give way once more, and then I am going to wrap up.
Mr Byrne: It is curious that the Minister's colleague Lord Freud noted in his report:
"The New Deals have been enormously successful".
"The creation of Jobcentre Plus...is...seen as...a model for effective public service delivery."
"The Government has made strong, and in some respects remarkable, progress over the last ten years."
I hope that those are lessons on which the Minister can draw.
There has been some dispute about the numbers that the BBC published. Will the Minister now set out for the House his assumptions for this year, next year and the year after about how many people will flow through the Work programme? If he is disputing the figures, let us hear it from him-what are they?
Chris Grayling: We published those figures in December. I suggest that the right hon. Gentleman read the invitation to tender for the Work programme. I will tell him, however, that the number of people who went through contracted programmes in the last year of the Labour Government was well under 600,000, and that next year's projections for the Work programme are over 600,000. As for my noble Friend Lord Freud, if he thought that the Labour Government were doing so well, why does the right hon. Gentleman think that he joined us?
The Opposition were in government for 13 years, during which they systematically delivered for this country a higher level of youth unemployment than they inherited. They spent almost £4 billion on new deal programmes, much of it aimed at getting young people into work. Even while all that money was being spent, we saw youth unemployment grow between 2005 and early 2007 and rise steadily in the run-up to the recession. Back in 2008, the OECD published a report raising concerns about what the British Government were doing and stating that only in Britain was youth unemployment rising, while everywhere else it was falling.
So let us have no more accusations from Labour Members about the coalition's record. We have been in office for nine months. We inherited from them 600,000 young people who left school, college or university and have never worked. We are moving ahead with plans that will make a real difference to those young people-through the Work programme, through apprenticeships, and through the schemes we are introducing at Jobcentre Plus level to help them into employment.
Joan Ruddock: Will the Minister give way?
Chris Grayling: No, I am going to wind up now.
The Opposition were in government for 13 years, and they failed abjectly. They spent billions; they delivered nothing at all. They left youth unemployment as a national challenge and a national disgrace-part of a legacy of chaos and failure from a Labour Government who ran out of money and ran out of ideas. It is time that the right hon. Member for Birmingham, Hodge Hill and other Labour Members recognised the damage that they did to this country, and time they realised that it will be a long, long time before the people of this country even start to consider the possibility that they might ever be fit to govern again.
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Before I bring other Members in, let me just say that the Front Benchers have taken up quite a lot of time because of interventions. We now have an eight-minute limit on speeches. Not all Members have to take all eight minutes, and fewer interventions will mean that I can get more people in. I call Mr Chris Ruane.
Chris Ruane (Vale of Clwyd) (Lab): Thank you, Mr Deputy Speaker, for calling me so early in the debate.
In 2002, the unemployment statistics for my county of Denbighshire showed that out of its 34 wards, 50% of the unemployment was in two wards alone-Rhyl West and Rhyl South West. Rhyl South West contained the
council estate where I grew up and lived for 26 years. Many of those unemployed people were related to me. Over the past nine years, it has been a personal crusade of mine to do something about that. In 2002, I established an unemployment working group, with people from the college, the Department for Work and Pensions, Jobcentre Plus, the police, economic regeneration bodies and the Welsh Assembly Government getting together around the table to create jobs for people, including young people, in my constituency.
In 2007, the DWP agreed that Rhyl could be one of 15 city strategy pilots for the whole of the UK. Although it is not a city but a town of only 27,000 people, Rhyl was included mainly as a pilot scheme for 52 seaside towns in the UK. Since then, we have made great strides in putting young people back to work in my constituency. The leader of the people who have administered the future jobs fund for the Rhyl city strategy is Ali Thomas, a dedicated professional in getting young people back to work. This is what she said about the Government's decision to abolish the future jobs fund:
"The subsidy enabled employers to consider taking on long term unemployed people, many with multiple problems. They were able to do this because of the subsidy. The employers were taking a risk with these young people but the subsidy made the risk worthwhile."
"It wasn't a one way street. Employers gained well motivated young workers. Nearly 60% of those that completed the placement scheme went on to gain long term employment with the employer."
Apart from those 60%, a further 10% to 20% went on into full-time education at the fantastic Rhyl college, built by the Labour Government-the first college we have ever had, and a £10 million investment. A 70% to 80% placement rate in full-time education or full-time employment is not bad by anyone's standards.
I ask the Minister, who is chatting away down there, what targets he is setting for his new Work scheme: 50%, 60%, 70% or 80%. I hope that he will intervene and tell me. He did not know the figures on the number of apprenticeships or internships but can he tell me his target for full-time employment placements of young people on the schemes that he is going to put in place?
Chris Grayling: The Deputy Speaker does not want extended interventions, so I simply refer the hon. Gentleman to the invitation to tender for the Work programme, which will give him some of the details he wants.
Chris Ruane: The Minister does not know.
From my perspective as a constituency MP, and from that of young people affected in my constituency, the decision to end the future jobs fund is nothing short of political spite. The Work and Pensions Committee report said that the DWP
"should conduct a comprehensive evaluation of the effectiveness of the Future Jobs Fund and publish the results."
This obviously should have been done before the closure of the FJF. That is common sense, but it was not done.
Yasmin Qureshi (Bolton South East) (Lab): Will my hon. Friend give way?
Chris Ruane: No-I am afraid that I might get my head bitten off.
Why did the coalition Government not take evidence? They could have come to my constituency and consulted Ali Thomas and the young people taking part in these schemes, who were gaining confidence, experience, camaraderie and esprit de corps in their groups of 10 to 15, and feeling pride and joy in being able to plan their first holiday, take their first driving lesson, or gain a certificate from the local college, and in having meaningful work with a meaningful pay packet at the end of the week. I will be sending the Minister, who is still not listening, a DVD made by those young people about their job placements. I hope that he will look at it and get back to me.
When I stared those young people in the eye at the presentations, they were full of pride and joy at their achievements-achievements that will be dashed by the Conservative party. One of the main attractions to the young people in the scheme was that it was a proper job with a proper rate of pay. They could be sacked if they did not turn up or if they were not motivated enough, and they had to be punctual. Their reward was the potential for a job at the end of the six-month placement.
Shorter, cheaper, unsubsidised placements will not have the same take-up or buy-in among young people. Such schemes that were introduced by the Conservatives in the past were pilloried and laughed at by the young people who attended them. YTS was called "young, thick and stupid" by young people. They want no part in such schemes. They want quality schemes like those introduced by the previous Government and abolished by this Government.
The future jobs fund has the respect of the young people who have participated, the employers who have taken them on and the people who have administered it. The main reason given for its abolition was the cost. The Government deemed £6,500 too much to pay to turn around a young life. I ask Government Members who send their children to private schools how much they pay a year to turn their children's lives around. There is one rule for the rich and another for the poor.
Michael Dugher (Barnsley East) (Lab): Thirty grand for Eton.
Chris Ruane: I am informed by my hon. Friend that it is £30,000 for Eton. Under the scheme, its cost £6,500 to turn around a young life. But no, that is too much. There are a million young people-and the number is rising-on the dole. What will be the cost if they fall into a life of crime? If that positive path is denied them, they might turn down a negative path. It costs £50,000 a year to keep a person incarcerated. That is money down the drain.
Sajid Javid (Bromsgrove) (Con): Will the hon. Gentleman give way?
Chris Ruane: No, I would get told off. I am sorry, Mr Deputy Speaker, but I feel that I would.
My local future jobs fund is administered by Rhyl city strategy and is one of the most effective in the country. It had a monthly target to put 320 people back to work. It was bang on every month. It was so effective that it had to hunt for another 100 young people to put
back to work, which it got through the WCVA. That effective partnership has been snuffed out by the Conservative party. A key part of the success of the FJF in my constituency was that the funding was delivered to a local partnership. That minimised bureaucracy and red tape, which the Conservative party is always banging on about-there was no red tape or bureaucracy in the FJF in Rhyl. That was welcomed by the employer.
Shorter-term, unsubsidised schemes will not work. They did not work in the past, and they will not work in the future.
Jackie Doyle-Price (Thurrock) (Con): I am sure that every Member of this House believes it is a tragedy that so many of our young people are not in work, education or training. Nearly two-thirds of unemployed 18 to 24-year-olds have not done any kind of work since leaving school or college. That trend has accelerated over a number of years; not just over the eight months of this Government, as the motion states.
The motion is right about the need for urgent action to tackle long-term joblessness among our young people. However, the future jobs fund is not the answer, as the Minister has explained. It has been expensive and ineffective. What we need is support that delivers real skills and jobs, and that adds to the employability of young people. With that in mind, I endorse the Government's commitment to investing further in apprenticeships. I believe that the Work programme will provide personalised help based on individual needs, through working with private and voluntary providers. Ultimately, we need more engagement with employers to equip young people with the skills that will enable them to find work.
So far, this debate has centred on what we do to help young people when they become unemployed. I would like to talk about initiatives in my constituency that are intended to prevent young people from becoming unemployed. That means investing in skills training for young people while they are of school age. In areas such as mine, where comparatively few young people go on to university, such initiatives are extremely important if we are to get the proportion of people not in employment, training or work down further.
The first initiative is run by one of the new academies in my constituency, the Gateway academy in Tilbury, which has gone out of its way to develop a strong focus on employment options and to offer advice to its pupils. It has developed a curriculum that is tailored to the needs of its pupils and to the job opportunities in the area. In addition, it has established a project called Gateway Connect, which uses a redundant industrial workshop as a strong vocational learning facility to offer pupils work-based training and vocational qualifications. Through that project, 18 pupils have been able to pursue vocational training and only two are not in employment, education or training now that they have left. That shows the impact of such strong work-based projects. With that focus, the proportion of pupils who become NEETs on leaving the school has fallen from 18% in 2008 to a mere 4% in 2010. That makes the case for tackling this problem in schools, rather than waiting until young people are on the dole.
There are other projects in Thurrock that are not based on the school curriculum. In a week in which we
have considered the big society, I would like to share with the House some examples of imaginative and proactive partnership working that I have witnessed on the ground in Thurrock to give young people more skills. Thurrock trade school offers evening classes to children aged 14 to 16 who want to learn a trade. It offers courses in carpentry, bricklaying, plumbing and electrics. Young people attend two-hour classes over 12 weeks. The courses are sponsored by Morrison, a local building contractor, which provides tools and mentoring to guide young people towards the opportunities that might be open to them through pursuing the training. Morrison has also engaged as apprentices people who have been through the courses.
The background to Morrison's involvement is that it was awarded the housing maintenance contract by Thurrock council. As part of that contract, the council asked it to invest in such training. That is a brilliant illustration of how imagination can be used to make use of commercial partnerships to deliver outcomes for the benefit of the entire society. That is the kind of thinking we want to encourage as we build the big society. The example of Thurrock trade school also illustrates the value of working with employers, because they will invest in the skills that they need. We all benefit from such involvement.
Finally, we need to open the eyes of young people to the opportunities that work-based training can bring. With that in mind, I commend another initiative to the House: Thurrock's Next Top Boss awards. Next Top Boss is another partnership scheme that is run by Thurrock council, the Thurrock development corporation and a large number of private employers such as Procter & Gamble, Carpetright and other big employers that operate in Thurrock. The competition is open to 17 to 19-year-olds. The objective for the employers is to help equip teenagers with the skills, confidence and contacts they need to enter the world of work. Competitors are invited to take part in events in which they can show all their skills, such as working with a team and responding to projects. The employers that participate can show the vast assortment of careers that are available in their organisations. The incentive for the young people is that they compete for prizes, including gift vouchers, work placements and even jobs. It is, dare I say it, "The Apprentice", Thurrock-style. Central to its success is the involvement of local employers that are attracted to the opportunity to identify future apprentices for their workplace and to showcase the opportunities that they offer.
I do not mourn the passing of the future jobs fund. I look forward to the Government's reforms delivering improvements in the opportunities available to young people. I hope that Thurrock's big society examples will inspire other employers, councils, schools and voluntary organisations, as they consider how they can contribute to tackling joblessness among our young people.
Michael Dugher (Barnsley East) (Lab):
I am proud to say that the future jobs fund was inspired by the review by the excellent leader of Barnsley council, Steve Houghton. I thank my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) for his warm and fitting tribute to Steve Houghton earlier in the debate. Barnsley was one of the first councils to implement the scheme, which has made an important difference to many, not only in my constituency but across the country. Since its
inception in 2009, the future jobs fund has given young people and the long-term unemployed valuable opportunities by creating real work, with real experience and real job prospects. In Barnsley, a third of those on the programme have already gone into jobs. It is hoped that 200 people will be in employment before the funding regrettably expires in March.
The Government's decision to scrap the fund-a scheme that would have created up to 200,000 jobs for young people up and down the country-is sadly just another example of how they are letting young people down. Ending the future jobs fund was one of the Government's early decisions. Since then, the education maintenance allowance has gone, tuition fees have been trebled, we are seeing cuts to Sure Start and the school building programme is being cut across the country. Tackling youth unemployment has been a challenge for all Governments, but thanks to initiatives such as the future jobs fund, youth unemployment fell by nearly 25,000 between February and April 2010.
Since this Government were elected, there has been a massive jump in youth unemployment. Figures out today show that it has risen to a record high, with more than one in five 16 to 24-year-olds now out of work-a rise of 66,000 people to nearly 1 million. In my constituency, nearly 14% of the population are aged between 18 and 24, yet that age group accounts for 35% of people claiming jobseeker's allowance. We are facing a youth unemployment crisis in this country the scale of which we have not seen since the 1980s. If the Government do not act, this will not only damage our young people's employment prospects, but affect them for the rest of their lives. It is well documented that early spells of unemployment for an individual, result in reduced employment prospects and lower earnings over their lifetime. Today, for every 100,000 people that this Government put out of work, £500 million is added to the cost of paying jobseeker's allowance, so theirs is not even a strategy for reducing the deficit.
The fundamental flaw in the Government's Work programme is that there is simply not enough work. They fail to understand that in parts of the country there are still unemployment blackspots. Focusing on job output may be fine in some parts of the country, where the economy may be expanding, but it will not work in more deprived areas such as Barnsley, where there are still serious structural problems in the local economy and where simply not enough jobs are available. In my constituency, there are currently just over 190 Jobcentre Plus vacancies for more than 2,500 people claiming jobseeker's allowance. That amounts to 14 claimants for every job vacancy. However, this Government's approach is solely about getting people into existing jobs. There is no policy for either job creation or the growth that would create those jobs, particularly in the weaker economies.
The Government have to think again, as our motion says. There is an overwhelming need for a job creation programme targeted particularly on those areas with the highest unemployment. The main criticism of the future jobs fund is that not enough jobs were created in the private sector. We all want to see more jobs in the private sector, and in my constituency we will have 2,000 more jobs.
Nia Griffith (Llanelli) (Lab): Does my hon. Friend agree that, right in the middle of a recession, the whole point was for the public sector to provide some of those jobs-in construction, for example-to keep people's skills up, ready for when the private sector picked up?
Michael Dugher: My hon. Friend is exactly right.
Those 2,000 private sector jobs in my constituency are coming from ASOS, the online fashion company-I do not see too many takers in the Chamber for its clothes, but we live in hope-but those jobs did not happen by accident. The reason 2,000 jobs are coming to my constituency is that when Labour was in government, we built the facilities that will house those jobs. We built the road that attracted the company in the first place. The public sector plays a big part in supporting private sector jobs.
Sajid Javid: Will the hon. Gentleman give way?
Michael Dugher: No; I want to make some progress.
We want to see more private sector jobs, but the Government need to move away from the mentality that says that public sector jobs are not, as the hon. Member for Enfield North (Nick de Bois) said, "real" jobs. In many parts of the country, the choice is not between a public sector job and a private sector job; it is between a job and no job. The criticism that too many of the jobs were in the public sector-a criticism that I share-is not a reason to scrap the scheme, but a reason to strengthen it. It is an argument to expand it to include more private sector businesses in those unemployment blackspots and to invest in industry.
The positive benefits of employment cannot be overstated. Most people cite a lack of confidence and skills as the reason for not finding work. Having a job is good for people's well-being and their physical and mental health. It provides them with an opportunity to prove themselves, giving them an identity, confidence and self-worth-the pride that comes from having money in their pocket and the dignity of knowing that they have just earned it. Everyone knows that it is also easier to get a job for those who already have one.
We saw the impact of previous Conservative Governments in areas such as the one that I am proud to represent-a whole generation of young people growing up with little or no hope of getting a job. It is clear that this Government have not learnt from those mistakes, and are once again letting young people down. There is a growing consensus that the Government need a plan B to get the economy right-growth has stalled-but it is equally obvious that they need a plan A to deal with unemployment and, in particular, the lack of opportunities for young people in my constituency and throughout the rest of the country.
Jenny Willott (Cardiff Central) (LD):
It is worrying how many young people are unemployed at the moment. We can bandy figures around all day, but the figure that sticks with me is that one in five young people between 16 and 24 are out of work. That is a worrying-indeed, horrifying-statistic, and is a tragedy for every one of them, and for their families and the communities around them too. However, when we look more deeply it becomes
clear that this situation is, in part, the Labour legacy, as has been mentioned over and over today. The number of people who have been unemployed for more than 12 months has increased. This Government have not yet been in power for more than 12 months, so we are clearly dealing with a legacy left by the last Labour Government. As a result of Labour messing up the economy, the Government are having to deal with a serious financial mess and the unemployment that goes alongside that.
People have talked about complacency about the youth unemployment figures. I have not seen complacency on either side of the House today-clearly people are seriously concerned-but if Labour Members were that concerned they could have done significantly more when they were in office, rather than leaving a lot of young people on the shelf. Labour could have done more in power to ensure that people had the opportunities that they needed.
Mr Lammy: Will the hon. Lady give way?
Jenny Willott: I will not give way. Everyone will have the chance to speak later if they wish.
As has been mentioned, unemployment among young people has gradually increased since 2002, and that was during the good times, so clearly in the bad times it will not be easy to get people back into work. It is now even harder for the new Government to get them into work, as they have already been out of work for longer, and we know that the longer people have been out of work and the further they are from the jobs market, the more effort, money and time it takes to get them back into work. However, the problem is that the future jobs fund was not working. It was created to ease youth unemployment and make the figures look better; it was not established to create long-term sustainable jobs. Opposition Members have mentioned that many times, but it is not that public sector jobs are not real jobs-of course they are-but rather, that the jobs created for the future jobs fund were not real jobs. They were short-term, six-month placements created for the purpose of the fund; they were not jobs that were sustainable in the long run. That has been borne out by the initial information on what people have done after being placed by the future jobs fund. About 50% of people were back on working-age benefits after seven months-one month after finishing their placement. Of those in a comparable group who found work through other programmes or found work for themselves, only 35% were back on jobseeker's allowance after seven months. Clearly, the future jobs fund has not been working. It is performing less well than the other programmes that the previous Government put in place.
Chris Leslie (Nottingham East) (Lab/Co-op): Will the hon. Lady give way?
Jenny Willott: No; I want to ensure that there is time for as many people as possible to speak.
The future jobs fund is not cost-effective. It costs a lot, and that money could be better spent. In theory, it was aimed at those who were furthest from the jobs market, but it seems that a large number of those people in placements were graduates. For example, about 20% of the people taken on by Birmingham city council had at least one degree.
Mr Byrne: Will the hon. Lady give way?
The future jobs fund was clearly not working in the way that it was supposed to. As with many of Labour's programmes, the words and the theory were positive but the practice was poor. It was not properly designed or monitored. It simply was not thought through. It did not deliver sustainable employment for young people.
Instead, we need to create a skilled work force and generate jobs for those skilled young people. Apprenticeships make people more employable, potentially by the people by whom they have been trained, but also by similar businesses. CBI evidence shows that 90% of apprentices find employment or become self-employed immediately after their training ends, which means that apprenticeships are clearly far more successful than the future jobs fund.
The group that concern me the most are those who are furthest from the jobs market. For many of them, apprenticeships are inappropriate. They are a particularly vulnerable group, and in the past they have been particularly ill-served. We need to ensure that the Work programme will work, and that the Government learn the lessons from previous programmes to ensure that those vulnerable young people are helped back into work.
I am glad to see that, under the Work programme, young people will get help at a much earlier stage than they do under the future jobs fund. They will be referred to the Work programme when they have been on jobseeker's allowance for nine months, rather than 12 months as happens under the FJF. More tailored support will be available for those with the most severe disadvantages, and they will be referred after three months if they are not in employment, education or training. All the evidence shows that we need to get in there as early as possible if we are to have an impact. Even with all that evidence, however, the previous Government did not quite achieve their aims, so we really need to ensure that we learn those lessons now.
In addition, under the Work programme, the fees will be structured so that providers will get more if they help those who are furthest from the jobs market and keep them in work for longer. We hope that that will make a real difference to that group of people. Again, that is something that the previous Government tried to do, but they did not go quite far enough. I hope that the coalition Government will learn the lessons from that and ensure that these measures are implemented.
Following the demise of the future jobs fund, we all want to see much better, tailored support aimed at the needs of young people. We cannot afford to damage the career prospects of another generation of young people, as happened in the 1980s and early '90s. We have to learn the lessons, particularly the ones that the previous Government did not learn from the work that they were doing.
The numbers are bad, and the individual stories are heart-wrenching. I am sure that we have all had people coming to see us in our surgeries who are at their wits' end and absolutely desperate to find work. We need to ensure that another generation is not left behind, but the Opposition's proposals in the motion today are simply not the way to do it. The future jobs fund has not worked so far, and given that the number of young
people unemployed for more than 12 months has been increasing, why on earth do they think it will start working now? It is time to adopt a new approach, to ensure that we do not leave hundreds of thousands of young people behind. Instead, we must give them the skills and the confidence that they need to build a future for themselves and our economy.
Ian Lavery (Wansbeck) (Lab): I would like to focus on the young people who have lost their jobs. They are real people, and I welcome this opportunity to discuss on the Floor of the House of Commons the betrayal of those young people. They represent the nation's future, but they have been bruised, battered and neglected. They are not needed and not worthy-that is the message the Government are pushing to those people.
We have a serious problem, in that those young people are in danger of becoming the lost generation. Employment is a major social ingredient in anyone's life, and in modern, civilised society. It gives self-esteem and confidence. It breeds purpose in individuals. It is a rung on life's ladder, which can often be quite cruel. As we debate this issue today, we see an increase of 66,000 young people who are unemployed.
The constituency statistics in the information from the House of Commons Library show that, in the 100 worst-affected constituencies, there are 10 applicants for every job vacancy. On average, across all constituencies, there are five applicants for every job. In my constituency, however, 14.3 people apply for every vacancy. Is it any wonder that our young people, our future generations, feel so let down and demoralised? They feel utterly betrayed by the actions of this Government. Is it any wonder that they are taking to the streets and demonstrating in their tens of thousands in every city against the Government's attack on young people? They are organising and giving voice to their views. As politicians, we should listen to their call for opportunities, for a chance in life, for dignity, for decency and for equality. That should be readily recognised by the Government.
Sajid Javid: Will the hon. Gentleman give way?
Ian Lavery: No! [ Laughter. ] Go on, then. I apologise for that.
Sajid Javid: I thank the hon. Gentleman for so graciously giving way. There is a lot that hon. Members on different sides of the House can disagree on, but will he acknowledge, perhaps in a bipartisan spirit, that some of the Government's welfare reforms-for example, the introduction of the universal credit, the increase in apprenticeships, and the move to ensure that people are better off in work than out of work-are a step in the right direction?
Ian Lavery: I thank the hon. Gentleman for his intervention. I believe that we should wait to see the details of the universal credit. The devil is often in the detail.
The future jobs fund was abolished within days of the election by the Tories. At this stage, I must offer my personal view that I do not accept that this is a coalition Government. It is a full-blooded, blue-blooded Tory Government, propped up by a few desperate Liberal
Democrats who are prostituting every principle that they have ever stood for, and abandoning every young person in this country.
The future jobs fund offered a golden opportunity to 200,000 people, but those full-time jobs will be wasted. They were much needed in communities such as mine. The future jobs fund was sowing the seeds of success, and it was proving successful to those young people. It was giving young people who had never had a job before a much-needed break in life. They need and deserve an explanation from the Government. They need to know why, immediately after taking office, the Government abolished a great opportunity, perhaps one of the last opportunities that they will be given for a long time.
I am aware of the eight-minute limit on speeches, Mr Deputy Speaker, but at this point a triple whammy comes to mind: the attack on education maintenance allowance, the increase in tuition fees, and the cancellation of the future jobs fund. People will not forget, and they are asking now why the attack on young people continues and where it will end. The number of unemployed young people has risen by 66,000, and the Office for Budget Responsibility predicts huge further increases in the not-too-distant future. Everything in the garden is not rosy for our young people or for our future. Every 100,000 people who are out of work cost the Treasury £500 million. We cannot, in any circumstances, return to the days of the 1980s, when 26% of people were unemployed.
In my constituency, there are 14.3 applicants for every job vacancy. Unemployment in the region stands at 9.6%, and 46% of working women in the northern region are employed in the public sector. In my constituency, the public sector employs 11,000 women-68% of working women-and more than 50% of men. How dare any Member say in the House that public sector workers deserve redundancy before anyone else? We are talking about teachers, firemen, policemen, council workers and cleaners. How dare anyone suggest that their jobs are meaningless because the private sector should rule?
The attack on public services in my constituency will be unbelievably harsh. The creation of 200,000 jobs through the future jobs fund would have been immensely valuable. Moreover, 10,000 jobs would have been created in the north-east in the renewable energy, environmental and emerging low-carbon technology sectors, and 15,000 would have been created in social enterprises. That is much-needed employment. The Government's action in abolishing the future jobs fund is an absolute disgrace: it was politically motivated and ideologically driven.
I will not forget 20 October 2010, when the Chancellor of the Exchequer announced the loss of 490,000 jobs. I shall not forget the triumphant, jubilant cheers from the Government Benches. That made me sick to the pit of my stomach. The people will not forget, and I will not forget. I am pleased to have been able to take part in the debate, and I support the motion wholeheartedly.
Nick de Bois (Enfield North) (Con):
It is a pleasure to follow the hon. Member for Wansbeck (Ian Lavery). I hope that he will understand if I return to some of his more outrageous comments a little later. First, let me say how pleased I am that we are debating youth
unemployment: it is a major issue, and it is clear that Members on both sides of the House understand the need to discuss it.
Before I came to the House, I derived real pleasure from being able to offer someone a job in our company. I also understood the absolute nightmare of having to make someone unemployed in difficult times. I hope that Members on both sides of the House have approached the debate with the shared goal of alleviating what are very difficult circumstances. I also feel, however, that the debate should be put into context. It takes place against a background of economic failure, a legacy of banks that were not supporting business, a massive decline in manufacturing, and an essentially unbalanced economy.
Governments can take a wide range of measures to ease the problem of youth unemployment, but in my view nothing is more important than enabling the economy to grow at a sustainable level so that business can expand, create those much-needed jobs and, indeed, flourish. That is why difficult measures are being taken: vital measures to deal with deficit control, and positive fiscal measures to support investment. We are seeing changes in employment law, export support for small and medium-sized enterprises, and a review of many of the welfare schemes and benefits out there to encourage people to move from a life of dependence to one of independence.
I am therefore somewhat disappointed by the fact that the debate is focusing almost entirely on the future jobs fund. It was, I am sure, a project born of good intentions, and I admit that there are good stories about it from various parts of the country. The fact is, however-this brings me back to the hon. Gentleman's speech-that we were creating a large number of temporary jobs, predominantly in the public sector, which did not offer a sustainable solution to the problem of youth unemployment. I hope, indeed I know, that I speak for Government Members when I say that any suggestion that we were disparaging public sector workers is utterly unacceptable. The hon. Gentleman shakes his head, but he has had his say, his say was wrong, and the House should not accept it.
What is wrong, and what we do challenge, is the temporary nature of many of those jobs. We intend to deliver permanent, sustainable jobs, and I believe that most of them will have to be in the private sector. If Members are not willing to take my word for it, as I am sure some are not, let me tell them what the Confederation of British Industry said to the Work and Pensions Committee.
"We are concerned the programme for the most part failed to deliver a long-term strategy to tackle youth unemployment. While there are undoubtedly some successes within the programme, the CBI argued there needs to be better business involvement and a greater focus on long-term job sustainability with future programmes. The Work Programme is the way to deliver this."
I am surprised that the Opposition have not raised some of the other measures that we have had to consider to help employers take people on. It is beyond question that employers who feel restricted by the heavy hand of all the employment legislation that has grown up over the last decade will think twice not just about employing people, but about retaining them. They may feel that someone who has worked for the company for nearly a year-just before the employment legislation protection
kicks in-needs more training or help because he is not quite up to the job. At that point they will seriously consider whether it would be better to lose that employee immediately, before the rules kick in and cause difficulties in future, than to invest more time in him. That is a trade-off governed by excessively burdensome regulation. Such a restriction is not acceptable, and I am pleased that the Government are loosening it to provide flexibility for both employers and employees. [Interruption.] If the hon. Member for Preston (Mark Hendrick) wishes to intervene, all that he need do is ask, rather than chuntering from a sedentary position. I should be more than happy to take his intervention; otherwise I shall press on.
There is, I believe, evidence that we will produce more long-term sustainable jobs through apprenticeships. What evidence is there for this? I witnessed the hunger of those who wish to work and the appetite for recruitment in the private sector when I held a jobs fair in my constituency. It was put together without any cost to the state, and we managed to engage with local businesses and those who were looking for work, either immediately or in the near future. We brought in the voluntary sector too, so that those who wished to keep their CVs active and engaged could do so. We brought more than 40 companies together after a two-month period. Hundreds of visitors turned up and companies such as Johnson Matthey offered apprenticeships. That company is running a programme of apprenticeships which is not supported by the state but which will offer sustainable, long-term jobs to some of those who successfully get through. We had people willing to go to work in the voluntary sector, such is their appetite to keep their CVs active. I admire them and their hunger. Above all, we should note that at this jobs fair the jobs fundamentally came from the private sector in the local economy, thus keeping local jobs for local people. That is the future, which is why I believe that the combination of our enterprise economies, our welfare reforms and our support for apprenticeships will lift us out of this situation and help tackle youth unemployment.
Katy Clark (North Ayrshire and Arran) (Lab): I am grateful for the opportunity to contribute to this important debate and to speak in favour of the motion, which is far from narrow. It goes much further than simply criticising the cancellation of the future jobs fund, which would have created 200,000 jobs. The motion states clearly our belief
"that the Government's economic policies have slowed economic growth, raised youth unemployment and created the highest graduate unemployment for over a decade".
It is in that context that we need to have this debate. As Members from all parts of the House have said, youth unemployment is a significant problem in this country at this time. Given the economic figures that we are seeing, particularly the most recent growth figures indicating that the economy is shrinking and the revised figures from the Office for Budget Responsibility showing that levels of growth are projected to reduce, it is incredibly important to have this debate.
It is unfortunate that the future jobs fund and apprenticeships are being counterposed. The number of apprenticeships created by the previous Labour Government has been mentioned, and I would have liked Labour to
have done even more on that. I hope that this Government will set about an ambitious apprenticeships scheme, but we have not seen it yet. I assure the Government that if they do so, they will get the full support of Labour Members, because we fully recognise the value of apprenticeships in both the public sector and the private sector.
My constituency has a strong tradition of public sector apprenticeships in engineering and in organisations such as the Ministry of Defence. Individuals have been trained in the public sector and have worked in it for a number of years, and have then gone on to work in other parts of industry and in the private sector. We want to encourage these apprenticeships and we want the Government to take this on board. Labour Members wish to see policies that will develop our industrial and manufacturing sector, that will support apprenticeships and that will do everything possible to create employment in the private sector. That is particularly important in constituencies such as mine, which faces a significant problem of unemployment, particularly youth unemployment.
My part of the world traditionally had a strong industrial and manufacturing sector, but those manufacturing jobs have gone over the course of many decades. In the 1970s, 17,000 people were employed by ICI at Ardeer in my constituency; 7,000 or 8,000 jobs went in the 1980s at the Glengarnock steel mill; and even when I was at school in the 1980s some 10,000 miners worked at the Killoch pit in south Ayrshire. So I come from a part of the world that has a strong and proud industrial past, but which has been devastated. The manufacturing base is now comparatively weak and we are dependent on the public sector to replace the jobs we had, so the 500,000 public sector jobs cut that the Government are proposing will have a disproportionate impact on areas such as mine.
My constituency has probably the worst youth unemployment problem in Scotland. The statistics show that 20% of our young people between the ages of 16 and 24 are receiving benefits, which is the highest level in Scotland, and that 14.7% of our 18 to 24-year-olds are claiming jobseeker's allowance.
So it is very fair to say that the part of the world that I represent faces significant challenges, and it is the duty of any Government to create policies that address those challenges and create the economic environment that will ensure that young people are able to get employment. There has been a significant increase in the number of young people in my constituency going into further and higher education over the past 20 years, which is to be welcomed. However, further and higher education is not necessarily the best choice for every young person. It may be something to consider at a later stage, but well-paid employment that gives hope for the future is the best option for some young people.
We have heard tragic stories today of young people who are unable to get jobs, and we know from experience that it takes many decades to recover from a period of high unemployment. All sorts of social problems are associated with high levels of unemployment and youth unemployment, and we spend many hours debating how to grapple with those. Such problems include crime, and drug and alcohol misuse, and they arise when we
have the kinds of poverty that are associated with unemployment. Many of the benefit changes being proposed by this Government will disproportionately affect the unemployed, particularly the long-term unemployed. I am thinking of policies such as reducing housing benefit for those who are unemployed for 12 months or more- there are more and more of those people. The number of 18 to 24-year-olds in Scotland claiming jobseeker's allowance for six months or more has risen by 119% in the past two years, and the number of these people out of work for 12 months or more has risen by 349%. So we face significant challenges.
We have heard criticism of the future jobs fund today, but all the feedback I have received in my constituency, both from people using the fund and from those placing people on to it, has been very positive. The motion calls for an independent evaluation of the fund. We need that to be done, because the future jobs fund is one of the few schemes that is delivering for young people. We need to do everything we can to give young people political priority, so I think it is a tragedy that the scheme is being cancelled. I call on this Government to do more. They should not only support the future jobs fund, but take other steps to give young people the future they deserve. I thank you, Madam Deputy Speaker, for letting me contribute to this debate.
Damian Hinds (East Hampshire) (Con): It is good to strike a bipartisan note in our debates, even on an Opposition day motion, and I am happy to concur with what a number of Opposition Members, including the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), have said about the scourge of youth unemployment and that these are things we cannot wait to tackle. I am pleased and proud to speak in favour of one of the key clauses in the motion-the bit that says,
"urgent action is now required to stop...young people being lost to worklessness".
I think we can all agree on that but I suspect we might differ on something that I firmly believe-that the change of management in this country in May 2010 was an important first step towards doing that.
The right hon. Gentleman's Government left one in five young people out of work. The sharp rise in unemployment started in March 2008, but the sad truth is that there was double digit unemployment among young people according to the standard International Labour Organisation measure even in the good years-the years when the Government were borrowing to the hilt and spending money like it was going out of fashion. In an earlier intervention, I presented the right hon. Gentleman with the international comparisons that he declined to comment on in detail, but perhaps he will do so later.
Of course, Government programmes play a part in all this. I do not think that anyone in the House is suggesting there should be no Government intervention on youth unemployment-of course not. However, I say to the hon. Member for Vale of Clwyd (Chris Ruane), who I am delighted has just returned to the Chamber, that the piece of analysis that he presented concerned entirely the wrong question. We should not ask whether turning around a young person's life is worth £6,500-of course it is. It is worth that and a whole lot more.
Damian Hinds: The hon. Gentleman displays-I shall not go on.
The important thing to ask is whether that £6,500 is better spent on the fund or on something else that will achieve the same result. It is vital to ask that question at any time, but particularly at a time when the Government and the country not only have no money, but have minus money.
There are examples of the future jobs fund working well. We have heard about what has been happening in Birmingham and Merseyside and I am sure there are many other examples, but we have to examine whether it was doing its job properly across the piece. I think there were three main problems with the future jobs fund-the future problem, the jobs problem and the fund problem. For the future, it was not sufficiently focused on people's personal development; the jobs involved were not the private sector jobs needed to drive the recovery; and its funding was simply not the most cost-effective way of spending money. Those problems are quite apart from the onerous application procedures, which were partly why so many of the jobs were in the public sector.
I welcome the new Government's Work programme, which will be more flexible, centred on the individual and, because of the payment by results element, will result in better value for money. As the Prime Minister said a few hours ago in Prime Minister's questions, it has often been asked why we cannot use the money that will be saved in future and spend it on those interventions now. That is exactly what the Work programme does.
The expansion of apprenticeships is very welcome. Many hon. Members have mentioned that so I shall not say any more on it, but I do want to talk about the new enterprise allowance, which seems to be based on the best features of the Prince's Trust work mentoring scheme, which I know a little about having formerly been a Prince's Trust business mentor. That fantastic programme gives young people who are starting businesses access not only to finance but to support, mentoring and coaching to help see things through. I am delighted that the Government are taking such a programme forward. I hope that we will also see more development of microfinance through community development financial institutions and credit unions once the relevant legislative reform order is brought through.
Welfare reform is also vital to the whole picture-not just the ambition but the intention and the plan to make sure that work will always pay in future. Programmes are only ever a part of all this, and I am glad that my hon. Friend the Member for Enfield North (Nick de Bois) mentioned that we need to broaden the debate. The most important thing of all for youth unemployment-indeed, any unemployment-is the state of the economy and our ability as a nation to take advantage of opportunities. We need a healthy physical and, just as importantly, human infrastructure.
There are three key elements to any overarching programme, which are interrelated. The first is having a buoyant private sector, the second is ensuring that the incentives are there to hire and invest in home-grown workers and the third is ensuring that we have the right skills and capabilities across the economy to take advantage of key growth markets.
Chris Leslie: In the city of Nottingham at this time last year, youth unemployment fell for five months continuously, but this year it has been rising. The hon. Gentleman talks about growth and how central it is, but does not he have some doubts that his Government are not doing quite enough on the growth strategy? Could he elaborate on that?
Damian Hinds: I do not have such doubts. I cannot comment in detail on Nottingham's figures over the past few years, but as we have been examining in this debate, the problem of youth unemployment has not started in the past few months: it has been with us for a long time and we have a structural issue.
I was talking about the buoyancy that is needed in the private sector. That starts with investment because when there is investment, businesses grow and take on workers, including young workers. To encourage investment, we need to keep interest rates low. To keep interest rates low, we need a Government who take the nation's finances seriously. We also need to ensure that lending is happening, and I am pleased that the Government are taking a very robust approach with the banks on that. Something that we need to work on more, but which will take some time, is ensuring that British firms are not bogged down in regulation, dead-weight administration and an enormously complicated tax system.
As well as a buoyant private sector, we need to make sure that we have the right skills to take advantage of the opportunities in the market, both generally and targeted at specific sectors. When we talk about productivity, we tend to focus on manufacturing, but the service sector now accounts for two thirds of the private sector and for much of the productivity gap that we have in relation to other leading nations. Services will continue to be important in future and we need to build up the skills base of our young people-not just their craft skills but their interpersonal and communication skills.
It is also right to have a targeted approach-a strategy for Great Britain plc. Our record on picking winners is not unblemished, but we do need a strategy. We will never again make T-shirts cheaper than China, but there are sectors in which we can excel. The trick is to find sectors in which there is the coincidence of a high-value, attractive growth market and something that Britain is uniquely well-placed to take advantage of, such as advanced manufacturing, pharmaceuticals, the creative industries, financial services, higher education and tourism.
Let me say a word on tourism, because my background is in the hospitality, leisure and tourism sector. [Hon. Members: "Ah!"] I do not know why people are saying "Ah." That market is in long-term growth and remains a great export opportunity for this country. We are well-placed to take advantage of that market because of our great heritage, our vibrant cities and our beautiful countryside. In that regard, I must say, on a local level, that I am delighted that the South Downs national park will be opening its doors in a few weeks' time.
When it comes to tourism at Great Britain plc, the marketing department is very good but I am afraid that the human resources department still needs some work.
Tristram Hunt (Stoke-on-Trent Central) (Lab): This is about the future jobs fund.
Damian Hinds: Actually, this is about unemployment and creating a vibrant economy in which people can be employed. If the hon. Gentleman reads every clause of the motion, he will discover that I am correct.
In the hospitality sector we find that at entry level, kids who have grown up in this country do not have the same skill sets as some of their rivals from other countries. It is not just about being able to make the best eggs benedict: it is about having the interpersonal skills I was talking about-greeting the customer, making eye contact, smiling, offering to help and owning the problem of the customer. Those are the sorts of skills that we need to build up. It is because of some of those gaps that some employers, sadly, actively prefer to take on young people who have not been educated in this country. That is a huge shame.
I am running out of time. I hugely welcome the Work programme, the enterprise allowance and the expansion in apprenticeships. I equally welcome the review of vocational education and training and the fresh look we are taking at the national curriculum and our commitment to improving education and benchmarking it against the very best in the world. I also welcome the fact that the Government are getting a grip on immigration, which is related to this, and the radical welfare reform. Most of all, I welcome the fact that the Government are living up to their responsibilities to eliminate the structural deficit, to keep interest rates low, to get businesses investing and to grow the economy and create jobs.
Tristram Hunt (Stoke-on-Trent Central) (Lab): This is a very important debate, and it is a shame to see the Government Benches so empty, not least because the number of unemployment claimants in Stoke-on-Trent Central was more than 250 higher in January 2011 than in December 2010. The good work done by the Labour Government in stopping unemployment, preventing youth unemployment and preventing the worst of the recession is being steadily undone. That was the Labour vision-helping the least well-off through the toughest times. Now we face the morass of a noblesse oblige, laissez-faire big society model that will do little for my constituents.
Part of the Labour approach was the future jobs fund, which secured training and work for young people and slashed long-term ingrained unemployment. Many of my colleagues have spoken very effectively of how well the scheme has worked in their constituencies, and I can say the same of my constituency and the broader north Staffordshire area. The north Staffordshire future jobs fund put hundreds of people into work across Stoke-on-Trent, Newcastle-under-Lyme and Staffordshire Moorlands.
A good example was to be found at Epic Housing, a housing association in Bentilee in my constituency, a tough part of Stoke-on-Trent with ingrained problems of worklessness. Epic looks after 900 homes in the Bentilee area and put 26 people through the scheme, 10 of whom now have permanent jobs-six with Bentilee Environmental Services and Training and four with the parent firm, Epic. Malcolm Burdon, the social enterprise team leader-something that I believe the Government are in favour of-said:
"In six months, the lads go from sitting at home watching Jeremy Kyle to getting up in the morning and coming into work. It makes them disciplined."
I have nothing against Jeremy Kyle personally, but I am in favour of work and the discipline and pride that come with it, which I used to think the Conservative party believed in.
The future jobs fund has worked not just in Bentilee but in Abbey Green, and it has attacked a culture of worklessness in some tough communities in the city. It is important for my city because Stoke-on-Trent is now on an economic journey, which the Labour Government were helping. It lost its traditional industries, the pits and the pots. Mrs Thatcher did for the mining industry, globalisation did for the steel industry and mechanisation put tens of thousands out of work in the ceramics trade. We are now on a journey of retraining, reskilling, education and attacking worklessness. The collapse of those industries ingrained a culture of worklessness in many communities. People still had the idea that they could go to work in those traditional sectors without needing education and training, and when those jobs went, so too did a culture of workfulness. That filtered down the generations and there was a problem with getting people to work.
The current generation cannot go into the jobs of their fathers and forefathers. As the hon. Member for East Hampshire (Damian Hinds) said, we cannot make T-shirts cheaper than China, nor can we make ceramics cheaper than China in many instances, or steel. We therefore need to train people and give them skills, but we also need to get them back into a culture of work, and that was partly what the future jobs fund was about. My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) explained very well how the fund got into communities and got people back into the culture that they needed.
The real problem with the attack on the future jobs fund is that it forms part of a triple whammy attack by the Government on young people. We had the withdrawal of the education maintenance allowance, which had allowed many people to make the transition to education and learning, which is very important in a city such as mine. We then had the rank stupidity of the teaching budget for universities being slashed by 80%, thereby imposing a £9,000 charge on tuition fees. We should not think for a minute that not all the good universities in the UK will seek to charge £9,000. That leaves many of us wondering what on earth the Government have against young people.
When those moves are combined with an economic policy of cutting too far and too fast, we see that the Government do not have a policy for growth. They have a policy that looks after the banks and supermarkets but slashes business investment.
Mr Edward Timpson (Crewe and Nantwich) (Con): Will the hon. Gentleman give way?
Tristram Hunt: I would be delighted to give way to a fellow north Staffordshire Member.
Mr Timpson: Cheshire, actually, but I know we are fairly close to each other. You'll get to know the geography fairly soon.
Will the hon. Gentleman take this opportunity to enlighten us on his party's policy for growth?
Tristram Hunt: My party's policy for growth is to rebalance the British economy, and to invest in industry, manufacturing and engineering, which are vital to the north Staffordshire economy. This Government give corporation tax cuts to the banks and the supermarkets, and end initiatives that help investment in science, manufacturing and engineering.
Welfare bills and jobseeker's allowance accounts are being added to by the undermining of the economic recovery and the scrapping of the future jobs fund, which itself imperils the Government's hopes of paying down the deficit. The argument about the extraneous cost of the future jobs fund is economic nonsense. My right hon. Friend the Member for Birkenhead (Mr Field), who is no longer in the Chamber, mentioned the great success of the scheme. Government Members like to pray my right hon. Friend in aid at every single opportunity, but on that point they would do well to listen to him.
Many of my colleagues wish to explain the success of the future jobs fund in their constituencies, but it would be unfair to leave my speech without a good old-fashioned example of Liberal Democrat hypocrisy. In a letter dated 21 April 2010, the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), wrote:
"We have no plans to change or reduce existing commitments to the Future Jobs Fund. We believe that more help is needed for young people, not less."
We now know how far those commitments go.
Liberal Democrats say that they did not know what the books looked like or what the conditions were, but the Secretary of State for Business, Innovation and Skills spent his life writing about the storm and the catastrophe and the crash and all the rest of it, so the situation was not exactly unacknowledged. That talk was either over-egging or dissimulation.
The youth unemployment crisis and the future jobs fund policy points to three things: first, a series of broken promises, denials and U-turns by this shoddy Tory-led Government; secondly, the fact that they have no policy for growth or job creation, eggs Benedict and all; and thirdly, the perils of the Government's vision of the big society. Labour believes in civil society working with the state, but the Government believe in the withdrawal of the state, which will have terrible results in the communities that we represent.
Mr Marcus Jones (Nuneaton) (Con): I welcome the opportunity to contribute to this debate on youth unemployment. As I am sure all hon. Members know, youth unemployment is a huge problem that needs to be tackled. We should try to avoid playing politics on such an issue, but, sadly, the motion serves to make a party political point.
The future jobs fund is currently part of the policy, but the hon. Member for Stoke-on-Trent Central (Tristram Hunt) seems to think that it is the be-all and end-all, and a utopian solution to the problem of youth unemployment. He does not take into account the fact that it is part of an overall policy to tackle the huge problem of getting our young people into the labour market on a sustainable footing-I emphasise the word "sustainable".
In proposing the motion, the Labour party is creating a smokescreen-it is a red herring-to disguise the many years of failure to tackle youth unemployment. One in five young people are out of work, nearly 1 million are unemployed, and 600,000 who left education under the previous Government are yet to find work. That record of abject failure and that legacy leave little room for the Labour party to lecture the Government who are trying to sort those problems out, having taken on the worst public finances in living memory.
The future jobs fund was, I am sure, beneficial to some young people, but was it cost-effective and sustainable? Did it lead to permanent and sustainable employment for our young people? The evidence tells us that it did not.
Dame Anne Begg: As an employer, would the hon. Gentleman employ the person with two weeks' work experience on their CV or the person with six months' of work?
Mr Jones: It is incumbent on the Government to offer not short-term help but long-term sustainable help for young people. It is important for this Government to make sure that we create a culture in which our young people are ready for work, not force them into short-term work to try to prove themselves to employers. Our youngsters must be ready for work.
The evidence tells us that the future jobs fund was twice as expensive as an apprenticeship. In some places, particularly Birmingham, only 3% of jobs were in the private sector and in most instances very few permanent jobs were created. Most young people, however, are looking for permanent jobs. A grandmother who came to my surgery a few weeks ago wanted her grandson to have a sustainable, long-term future.
I would also like to explore the job market and the culture behind it, which is very important. Throughout Government policy, we must promote the idea of getting our young people into employment and it must be a priority across Departments to reduce the barriers that prevent young people from getting work and take down the barriers that prevent employers from taking young people on, because such barriers do exist.
We also need to look at aspiration, which is acknowledged, particularly by head teachers, as a problem in my constituency. On a number of recent visits to schools, I was told that many of their young people have two aspirations: one is to become a footballer and the other is to become a pop star. My lifelong knowledge of my constituency tells me that during my lifetime we have probably bred three or four people who have become professional footballers and made a living from the sport.
Mr Jones: John Curtis, Peter Whittingham, Darren Gradsby, Julian Alsop-there's four. They have all done well at varying levels at the professional game. I can tell the hon. Member for Vale of Clwyd (Chris Ruane) that I cannot name anyone who has made it as a pop star. That is why I said that we need young people to have reasonable and achievable aspiration at all levels, which does not seem to be the case at the moment. We have to be honest and recognise that people have different abilities and different levels. That is the case in this House and in the country as a whole.
We must ensure that those who can become doctors and those who go into the trades are valued. We must ensure that the work of young people on the checkout or stacking shelves at Tesco is also valued. We must show those young people that they can make it by working from right at the bottom up towards the top. One good example of that is Terry Leahy who went from stacking shelves at Tesco to become its chief executive; he has been very successful in the business world. We need to show young people that it is worth starting at the bottom of the ladder and working their way up, which can often be a fulfilling experience.
We need to ensure that employers have the right culture, particularly for apprentices. As part of national apprenticeship week, I last week visited a fine small business called MES Systems in my constituency. It employs two young apprentices who are doing fantastic work; they are both excellent and well rounded young men. They were hindered, however, because the culture makes it difficult for employers to give our young people the necessary leg-up to get out and do things on their own. This company employed two youngsters, as I say, one of whom was perfectly able to fit and maintain alarm systems under his own steam. Unfortunately, however, he still had to go around with an engineer and could not go out on his own in his van, as the company could not get access to insurance for him because he was too young. That is the sort of barrier that holds companies back. From what the company told me, I have no doubt that it could take on more young people if it had access to that type of facility.
On the Work programme, I welcome the policies put forward by the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling). The integrated package of support will replace an unclear, confused system that lacks accountability. We will reduce the bureaucratic burden of the current system, and make it simpler for young people and employers to understand, increasing the number of young people who get into work. It is important that we do not have a one-size-fits-all policy for such young people. As the hon. Member for Stoke-on-Trent Central and others have mentioned, things are not as they used to be: sons do not follow their fathers down the pit, or into the car factories as used to be the case in Coventry- [Interruption.] The hon. Member for Bassetlaw (John Mann) comments from a sedentary position, but in my area, which was heavily dependent on manufacturing, thousands of jobs at some of the biggest manufacturing names in this country were lost on his Government's watch, so they do not have such a proud record on that.
I reject the assertion in the motion about the future jobs fund, given the gravity of the problems faced by the Government in tackling youth unemployment. Members must work hard and take responsibility, across the House, to sort out the problem. I hope the Minister will elaborate on how that work will be taken forward.
Julie Hilling (Bolton West) (Lab): I want to speak about the support needs of unemployed young people.
In the 1980s and '90s, I spent 10 years as a youth worker in a youth co-operative project for unemployed
young people. At that time, more than a quarter of young people were unemployed. There was a generation of young people with no jobs, no hope and no future. Some of those young people never recovered: some committed suicide; some turned to drugs and alcohol; others ended up with long-term mental health problems. Even when the economy started to recover, those young people who had spent many years unemployed found it incredibly difficult to get a job. Let us be honest: would an employer prefer to take a 16-year-old fresh out of school, or a 26-year-old who had spent most of the previous 10 years out of work with nothing to get up for and nothing to do? The youth co-operative tried to stop the cycle of despair for unemployed young people, helped them to gain skills and set up their own businesses, gave them driving lessons and taught them how to use computers, built their confidence and gave them a reason to get out of bed. Then we were closed by Tory cuts to the youth service.
The Labour Government came along and introduced the Connexions service-careers advice plus. It provided straightforward careers advice for young people and a dedicated service of support for young people not in employment, education or training or those at risk of becoming NEET. The Government funded other programmes that provided support, training and education to young people, including a summer programme for 16-year-olds from the New Opportunities Fund. There was an activity agreement, a learning agreement, and from the working neighbourhoods fund a range of projects, including bespoke projects aimed at the most vulnerable young people, such as teenage parents and young offenders.
What happened as a result of that support and such programmes? From 1997 to the start of the global financial crisis, youth unemployment fell by 40%, and more than half of young people were off jobseeker's allowance within three months. Now we have a Tory-led Government, and it is back to the future. All the support programmes are being slashed, the Connexions service, future jobs fund and EMA are going, youth services are on the brink of destruction, and youth unemployment is at its highest since 1992. What are young people, especially those who need additional support because of poverty, disability or low educational attainment, to do? How will such young people compete with those who have more advantage?
The Government have also cut completely the funding to v, the national young volunteers service, and vinvolved provided fun, exciting, eye-opening volunteer experiences for young people, and one-to-one, tailored, maintained support. Most of the young people engaged in the project were experiencing difficult social and economic circumstances. Volunteering enhances young people's employability, gives them the opportunity to gain experience to put on their CVs, and allows them to get references and develop contacts to help them to get into full-time work. It also enables them to give back to their communities and, perhaps most importantly of all, gives them confidence and self-respect. The Government's replacement for it is merely an eight-week summer programme for 16-year-olds.
On Sunday I had the honour of presenting the volunteer of the year award for Greater Manchester to Matthew, a 21-year-old from Bolton. Matthew has multiple disabilities, had no confidence and was doing nothing. His Connexions adviser referred him to get involved in vinvolved. He was offered a number of volunteering opportunities,
which he took up. When his support worker visited him a few weeks later, she did not recognise him. He has continued to volunteer and is now training as a coach for disabled football. Matthew is on the road to getting a full-time job. He would not be if it were not for vinvolved.
Most young people from advantaged backgrounds will achieve the transition to work easily, but those from difficult backgrounds often find it less simple. Youth unemployment cannot be solved overnight. Therefore we must provide support, not only in jobs but in positive activity and action so that our current generation of young people will survive, have hope and have a future.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): Scrapping the future jobs fund is a false economy for this country, because in saving a relatively modest sum in the short term the Government are recklessly running up much greater costs for society in the long term. Those greater costs will come from poor mental and physical health, to which persistent worklessness is linked, and which will have a long-term impact on the NHS and other social services. There will also be greater costs for the economy. A whole generation of people will be unskilled and unequipped for work. That will be a much greater cost for the economy because if we do not provide these young people with the right skills and experience during the downturn, we will lack the human capital to take advantage of the recovery down the line.
The future jobs fund was a serious response to the crisis of joblessness. At its heart was the guarantee of paid work for those who have been unemployed for more than six months. Underpinning it was the economic rationale that investment in jobs now would prevent a repeat of the lost generation of the 1980s. I was amused earlier today to hear the Prime Minister describe the Work programme as the biggest back-to-work programme since the 1930s. That is not much of an achievement, because there were no back-to-work programmes worth the name in the 1930s.
The analogy with the 1930s does hold in the following respect however. In the 1930s we had a Tory-led coalition presiding over mass unemployment. The unemployed were concentrated in the same areas that face the biggest challenges in creating jobs now. When the unemployed marched to London from Jarrow and elsewhere, the Government told them, "Sorry, but we can't help you as the financial markets won't wear it." Does that sound familiar?
The FJF was a creative response to a crisis of youth joblessness. Its abolition is to be regretted for a number of reasons. It is a tragedy for young people in my constituency, which has 13 people chasing every vacancy according to the most recent figures, and it is a tragedy for the country. Unless we invest now in these young people, we will not be able to reap the benefits of the recovery which will flow at some stage down the line. Investment is necessary now. Not investing in these young people is a false economy.
Alison McGovern (Wirral South) (Lab): I will be very brief, because many Members on both sides of the House have contributed to the debate and have made excellent points.
Young people are always the victim of recessions; they are always the least able to cope. That is true around the world now: in both wealthy nations and developing countries, young people are the victims of the recent global economic crash. It was true in 1992 as well, which was a recession I remember only too well.
We live in a changing world. It is no longer possible to be like my dad and fail at education but succeed in the world of work. We have a different economy, where skills are necessary not just for well-paid jobs but for all jobs. That will continue in the future; our place in the global market has changed and we must recognise what that means for young people.
The existing culture of worklessness that other Members have mentioned and which my neighbour, my right hon. Friend the Member for Birkenhead (Mr Field), has done so much to research and question, arose from the failure in the 1980s to plan for change. Because we failed to plan then for better employment, we have an entrenched culture of worklessness. I hope that Ministers in this Government will not make the same mistake. I have certainly seen their commitment and I hope they will build on it by changing course.
To make sure that young people, especially those on Merseyside and those I represent in Wirral, do not pay the price of the crash, the Government should slow down the cuts, and invest to save. We shall not fix the deficit by forcing young people to remain on the dole. The Government must rethink their plans for work experience schemes that bear too many of the hallmarks of the short-termism of YTS in favour of real jobs in the voluntary and social sector. We can support that sector, which means so much to us, by investing in such jobs, as the future jobs fund was doing. That is the lesson the Government need to learn. It is not by pandering to hard-line calls for cuts that we shall fix the deficit, but by investing in young people for the future.
Stephen Timms (East Ham) (Lab): We have had a good debate. From both sides of the House we have heard mounting alarm about the youth unemployment crisis that is battering every community in the land, not least, as we heard, those in Thurrock, Cardiff Central, Enfield North, East Hampshire and Nuneaton. We learned today that the number of unemployed young people has risen again and is perilously close to 1 million. The rate of unemployment among 16 to 24-year-olds, which came down in response to Government initiatives from the summer of 2009, rose sharply at the end of last year to the highest rate ever recorded. My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) is right to underline the fact that the rate of unemployed new graduates is 20%. Not only is employment falling; young people are being deterred from education. My hon. Friend the Member for Wansbeck (Ian Lavery) was right; for young people, this is a perfect storm.
The Government should heed the warning, for example from Brendan Barber, that there
"is a real danger of losing another generation of young people".
That warning is coming not just from Labour and the trade unions. David Blanchflower, professor of economics at Dartford college, New Hampshire, formerly of the Monetary Policy Committee puts it thus:
"Our labour market problem is primarily a youth problem...The data shows that the coalition has sent the youth labour market back into crisis."
Ministers should certainly listen to the Recruitment and Employment Confederation. In the foreword to its report, "Avoiding a lost generation", the chief executive wrote:
"These young people risk becoming a 'lost generation' unless action is taken by all those with a role to play."
The REC calls for a series of specific measures from Government and others. The message is consistent. The Government need to act, but action from this Government is what we are missing.
What about the prospects for the coming months? We are at the start of a massive cull of public sector jobs. The Office for Budget Responsibility says that more than 400,000 of them will be lost over five years. Others say it will be worse. The OBR told us that in the current financial year 5,000 jobs would be lost, but the Chartered Institute of Personnel and Development said the figure would be nearer 50,000-10 times as many. We see from figures published this morning that the CIPD was right: 60,000 public sector jobs lost in six months.
What about the coming year? The OBR says that 40,000 jobs will go, but the Conservative-led Local Government Association says that local authorities alone will shed more than 100,000 jobs next year. The OBR seems to have failed to grasp the magnitude of what is going to happen.
There is no sign at all of the boom in private sector jobs that the Government promised to take up the slack. The Office for National Statistics spelled it out this morning. Growth in private sector jobs in the past quarter was nil. Nothing. Zero. With the Government, as Richard Lambert pointed out, having no growth strategy, we will not see a private sector job resurgence any time soon.
We wish the Work programme well, but if there is no work, as my hon. Friend the Member for Wansbeck said, it is not going to work. Now, in an extraordinary about-turn on the promises that Ministers have made about the Work programme, it turns out that it will help far fewer people than the programme that it is replacing. The scorecard published today by the think tank Reform sums up the position. For the Department, the DWP, it is a case of
"promising too much and delivering too little".
The Government have scrapped the future jobs fund, which has been the focus of the debate. People in Jobcentre Plus echo what we have heard in the debate. Those in my area say that FJF was clearly a success, with up to half of those who were placed in jobs being kept on by their employers after their six-month placement ended, with still others going on to other jobs with the benefit of great experience on their CV. We heard from several Members in the debate about the achievements of the fund. My hon. Friend the Member for Wirral South (Alison McGovern) mentioned people placed with Age Concern Wirral supporting voluntary sector capacity building.
My hon. Friend the Member for Bolton West (Julie Hilling) was right to underline the importance of volunteering as a route back into work. My hon. Friend the Member for Vale of Clwyd (Chris Ruane) paid tribute to Ali Thomas and her work at Rhyl city strategy. My hon. Friend the Member for Barnsley East (Michael Dugher) spoke about 200 young people whom, it was
hoped, would be in work by the end of March. We heard from my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) about 26 people being placed in work through Epic housing association. There is a raft of achievements around the country, brightening the prospects of young people for the future.
The problem of youth unemployment is particularly serious at present because there is such a large cohort of young people. The size of that cohort will decrease over the next few years, so there is a strong case for the future jobs fund or something very like it, at least in the next few years. The Minister may not need to announce a long-term initiative, but she needs to grasp the scale of the problem in the short term and come up with proposals to tackle it.
It was the Churches report, "Unemployment and the Future of Work", that made the case 14 years ago that it was wrong in as prosperous a society as ours for large numbers of people to be deprived for long periods of the chance to earn a living. More than 250,000 of the young people currently out of work have been unemployed for more than a year. As we saw in the 1980s and in the early 1990s, long-term youth unemployment does untold long-term damage. We cannot afford the Government doing what those previous Governments did-abandoning yet another generation of young people. Young people do not need warm words or sympathy. They need action, and the time for action is now.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): I thank Opposition Members for giving us the chance today to debate the record of the previous Labour Government. It has been a lively debate, which is perhaps unsurprising, given that the record of Labour is so fresh and bears the fingerprints of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who opened the debate for the Opposition. I shall deal first with his contribution, which was a master-class in the selective use of statistics.
Let me clear up one or two of the right hon. Gentleman's statements. He asserted that redundancies are going up. In fact, redundancies are unchanged in the past quarter, at 145,000-less than half the level during the recession-and the number of people on JSA is 20,000 lower than at the election. The number of unfilled vacancies has risen by 40,000 this quarter to 500,000-the sorts of new jobs that can make a real difference in people's lives.
The right hon. Member for East Ham (Stephen Timms) called for action, and that is what we as a coalition Government are delivering. The Government are determined to make a difference to the lives of young people, which means tackling the root causes of unemployment, not just dealing with the symptoms. That is why we are supporting a host of new measures, including work clubs, Work Together, enterprise clubs and the new enterprise allowance, to help unemployed people move off benefits and into self-employment.
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