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Westminster Hall
Wednesday 22 June 2011
[Martin Caton in the Chair]
Youth Unemployment
Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Robert Goodwill.)
9.30 am
Steve McCabe (Birmingham, Selly Oak) (Lab): Thank you, Mr Caton, for calling me to speak.
I am delighted to have this opportunity to make the case for more to be done to help young unemployed people in this country. I begin by welcoming the drop in the unemployment figure for the 16 to 24 age group in the past three months, although I think that the Office for National Statistics attributes most of that drop to student behaviour, and it is fair to say that the overall claimant count for May for that particular age group is the worst for two years.
The purpose of this debate is to try to raise awareness of the scale of the problem of youth unemployment and to warn against complacency. In the early ’80s, I worked with unemployed young people in Wolverhampton. They were the usual assortment of youngsters: some high on ambition but unsure where or how to get started; some low in confidence but with obvious talents that needed encouragement and a chance to be developed; and some already despairing for their future.
During the long ’80s recession, it became clear to me that a generation of young people were being denied the chances and opportunities that they deserved. There were some success stories, because we should never underestimate the resilience and drive of youngsters and their capacity to cope with the things that life throws at them. However, some turned to crime and ended up in prison; some ended up on anti-depressants; and many ended up on long-term benefits. In some cases, those youngsters are now the people the Government say should be reorientated to the world of work, because of the difficulties that they experienced in the ’80s—in particular, the fact that they never got into the pattern of work.
During the ’80s, youth unemployment continued to rise for four years after the end of the recession, and I am very anxious that we guard against a repeat of that situation now. A recent poll for The Independent on Sundayrevealed that eight out of 10 people believe that it is harder for a youngster to get a job now than it was 20 years ago. Three quarters of the people who were surveyed called for a tax on bankers’ bonuses to fight youth unemployment, and two thirds of them said that they thought that the Government’s economic policies threatened to leave a generation of young people jobless and that not enough was being done to help young people into work. If we want to avoid a repeat of the tragedy of the ’80s and of the lives that were wasted then, we need to act now. Otherwise we risk having another lost generation of young people. I do not think that any of us who remember what happened in the ’80s are willing to stand by and see that happen again.
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I know that there will be endless arguments between the Labour Opposition and the Government about the origins of the recession. The politician in me is not really surprised that the coalition wants to pin the blame on Labour and trot out the familiar and ready-made excuses, especially when it is confronted with doubts and allegations of unfairness about some of its policies. But however the blame is apportioned, there is one thing that we can be certain of—the group that is not responsible for the difficulties we now face is the next generation of people seeking work. Their only crime is to come of age at a time of austerity and limited opportunity, and for so many of them the mantra sounds less like, “We’re all in this together,” and rather more like, “It’s everyone for themselves.”
Mr Andrew Turner (Isle of Wight) (Con): Does the hon. Gentleman agree that a great deal will depend on the quality of schools and education for those young people coming into work?
Steve McCabe: The education and skills base of young people is very important. Increasingly, however, employers talk about work experience and preparedness for work, which are slightly different from academic achievement or results at school. Nevertheless, I take the hon. Gentleman’s point.
David Simpson (Upper Bann) (DUP): I congratulate the hon. Gentleman on securing this debate. On work experience, does he agree that we need more work experience for young people? Education is good—there is no doubt about that—but it is no guarantee that young people will get a job. If we can get more work experience for young people, it will help them to make up their minds about what they want to do. Does he also agree that the further education colleges and universities need to supply courses that are relevant to the needs of industry today?
Steve McCabe: Yes. I welcome any initiative that is designed to help people to be better prepared for work and to help young people to get that first foot on the work ladder. I absolutely agree with the hon. Gentleman on that point.
Mr Iain Wright (Hartlepool) (Lab): I congratulate my hon. Friend on securing this debate, which is very important. His experience in Wolverhampton in the 1980s is very similar to my experience in Hartlepool in the 1980s. Following the two previous interventions, does he agree that the cancellation of the education maintenance allowance is a detrimental step in helping people to stay on in education? In addition, the abolition of the future jobs fund, which helped scores of people in my constituency and elsewhere, will also stop interventions that help young people gain work experience, which is so vital for their future careers.
Steve McCabe: I feel quite strongly that, so far, what we have seen from the Government is the cancellation of initiatives. I hope that during this debate we might hear something about a fresh initiative. However, I personally think that the wrong time to withdraw support is when we are in the depths of a recession and youth unemployment is rising. That is patently wrong.
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I am not alone in expressing my concern about youth unemployment. The CBI has recently voiced its concerns about the rising trend of youth unemployment, a trend that it fears. There are about 31,000 more young people chasing work now than there were last summer. Youth unemployment is hovering around the 1 million mark. That means that one in five of our young people are without work, which is an awful lot of talent and potential for any country to write off.
The Minister of State, Department for Work and Pensions (Chris Grayling): I am grateful to the hon. Gentleman for giving way. I hope he will forgive me for intervening so early in the debate, but I want to ask him to place on the record something that I think is material to the overall headlines, if not to the issue of youth unemployment itself, which we all agree is very serious. Will he accept that of the number of young people who are unemployed—a number that went close to 1 million and then came back down again—277,000 are full-time students who are looking for a part-time job alongside their studies? Those students are not “unemployed” as we would understand that word in its conventional sense.
Steve McCabe: I have acknowledged that students are part of the figures that we are discussing, and I am happy to accept that point. I will say a little more about both students and those who are not in education, employment or training later. However, I am happy to accept the Minister’s point that there are some students in the youth unemployment figures. Of course that is true.
In Birmingham, the youth unemployment figure is now about 13,000, which is quite a high figure for that city. OECD data show that Britain compares poorly with its competitors in terms of youth unemployment initiatives. NEETs are also part of that problem. That predicament not only has an effect on young people themselves, but is bad for the country, adding to the Government’s borrowing at the very time when they are concerned to reduce it. Over time, we will pay the price of this lack of activity. It has been estimated that the young people themselves suffer a long-term wage scar, earning between 8% and 15% less during their working lives than they might have done. The CBI tells us that youth unemployment costs the country about £3.6 billion per year, which is not a sum of money to be trifled with. A failure to provide initiatives or opportunities can lead to some young people disengaging completely, which clearly has a long-term impact on their employability. Persistently high unemployment, especially among younger and less skilled workers, leads to the problem that the Minister is now trying to grapple with. That problem involves people who are out of the labour market for so long that their potential to rejoin it reduces with each passing month, which explains, at least in part, some of the long-term benefit problems that he is attempting to deal with.
Jim Shannon (Strangford) (DUP):
There is a clear need for better co-operation and co-ordination between further education colleges, businesses and the Government to explore jobs, options and opportunities. Not everyone can be a hairdresser or a beauty consultant, but there
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are opportunities for engineers and in food processing. This week, Bombardier Aerospace announced a substantial investment on the home front, so the opportunities are there. Perhaps there is now a need for the Government, the further education sector and businesses to work together more closely to identify the opportunities, so that young people can gain skills and do training to get those jobs.
Steve McCabe: I entirely share that view. Part of my purpose here today is to argue that a greater effort is needed to respond to this problem rather than to collapse under its weight.
I was suggesting that the danger of persistent unemployment is that it makes people less employable. I was a struck by a young woman called Laura McCallum who came to see me at my advice centre the other week. She is 22 and has an excellent degree from Sheffield university, but she has been unemployed for two years, despite hundreds of applications and a number of interviews. I am told that she has an interview in three weeks’ time, so I hope that we will all keep our fingers crossed for her. Strangely enough, she wants to join the civil service—there are obviously lots of optimists around. Laura is a classic example of someone who has done everything right so far, but as the months go by her CV looks worse, because of this gap that she cannot plug.
If we look at people at the other end of the scale—not graduates but NEETs—we see a much bigger employability problem. We know that NEETs are three times more likely to end up in prison, that 50% of them are likely to suffer poorer health, that 60% are more likely to develop a drugs problem and that female NEETs are 20 times more likely to become teenage mums. Those figures were produced by the Prince’s Trust, on whose authority in this matter I am happy to rely. These young people lose out, but the country loses out, too. The most recent OECD figures suggest that joblessness in this country is more than double that in apprenticeship nations such as Germany, Austria and Switzerland.
The Minister mentioned earlier that if we look at figures we have to take account of the fact that students make up a proportion of them. I accept that, and it is also fair to say that if we look at NEETs, there are indications that some of the youngsters have additional hurdles, problems or difficulties that make it harder for them to access jobs, and I have no doubt that that is a factor. None the less, the numbers are worrying. The figure for NEETs in the west midlands is about 20%, and it is going up steadily—it currently stands at some 4% above the UK average. NEETs are a particular problem in our region.
I recognise that there are some special problems that require attention. About 10% of NEETs probably find it difficult to join the job market because they are either pregnant or parents with very young children. About 6% of them might be students on gap years, and it would therefore be reasonable to argue that we would not want to include them in an unemployment breakdown, and at any one time about 4% could be in custody. We should not, however, be complacent and say that we can discount those figures; we should instead say that we need not only measures on which everyone works together but, for particular youngsters, even more intensive measures to ensure that their potential for the job market improves.
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Labour’s proposals for tackling youth unemployment merit serious consideration. It has never been entirely clear to me, as it has not been to my hon. Friend the Member for Hartlepool (Mr Wright), why, even allowing for the scale of the cuts, the incoming Government were so keen to scrap the future jobs fund and the guarantee of work or training. When there is so much public support for it, I do not know why Ministers do not look again at the idea of a tax on bankers’ bonuses, especially as the bankers continue to take money they have not earned and show, in my view, little by way of contrition for the problems that they created for all of us, which have caused the suffering of the young people that I have discussed. If we chose to tax bonuses in addition to having the bank levy, we would have the money for the kind of employment programmes that some hon. Members have already mentioned. We estimate that £600 million would fund opportunities for at least 100,000 young people—perhaps more—which might mean that as many as 10,000 youngsters in the west midlands would benefit. That is not enough, but it is a start, and it is a lot better than the present situation.
These folk are our next generation; they are the people we hope will pay taxes, produce growth and finance pensions and health care. They are the people to whom the Minister for Universities and Science claimed we have a contractual obligation in his excellent book, “The Pinch”. We are not fulfilling that obligation at the present time, but instead we are denying those people jobs, pricing them out of higher education and threatening their ambitions by preventing them from getting a foot on the ladder.
I am sure that when the Minister replies he will itemise some of the things that his Government are doing to tackle the problem, and I hope that he will also tell us what will happen to the young people’s careers advice and support agencies now that the Government have decided to abolish Connexions. I want to make it clear that I welcome some of the Government’s initiatives. The national citizen service, which launches this summer, is to be commended. It will offer about 10,000 places for 16-year-olds, although it lasts for only six weeks. It is a step in the right direction, but it is too little.
The Government say that they want to create 100,000 more apprentices, but I am not clear how they expect to do that with so few incentives for businesses to take on more apprentices. I appreciate that this is not strictly the Minister’s responsibility—the Minister for Further Education, Skills and Lifelong Learning made it clear to me last night that everything to do with apprentices is in his domain. If there are criticisms, perhaps I should direct them at him. I am sure, however, that the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), has some views on the matter, as he thinks about the more general issue of youth unemployment.
I think that we could do more to make apprentices attractive, especially for smaller companies. The Federation of Small Businesses has argued for two specific measures. It thinks that some kind of national insurance holiday and some measure of wage support would be helpful. Its members have also made it clear that one of the biggest problems that they face is managing the administration and bureaucracy of apprenticeships. Interestingly, they are keen on apprentice training agencies, so will the Minister say something about that? Those
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agencies were initially a Labour initiative, but he does not have to set his face against every such thing. If it makes is easier for him, I think they originated in Australia, so he should not worry about the affiliations. They are something that the FSB wants.
It is important to recognise that only 8% of small businesses have taken on an apprentice in the past year. The figures for 2008 show that half of all apprenticeships were in companies with fewer than 50 employees, and it is vital that we make inroads in that regard.
Mr Gregory Campbell (East Londonderry) (DUP): I congratulate the hon. Gentleman on securing this debate. He is making a very important point about youth unemployment. In many parts of the United Kingdom, it is the small business sector, whether it involves the FSB or other groups, that will deliver for young people, rather than large, inward investment projects—we all love to see such projects, but their days are probably over. Does the hon. Gentleman agree that the small business sector needs promotion and assistance, and that it can offer some prospect of employment to young people?
Steve McCabe: I totally agree. As I have said, the figures for 2008 show that about 50% of all apprentices were in small companies. Moreover, if we look at micro-companies, we see that they are the businesses that need things such as an ATA or some sort of support or incentive. I think that that is where we will find the extra apprenticeships.
I did not call this debate to totally damn the Government, but I want the Minister to recognise that I am not alone in thinking that not enough is being done. The National Institute of Economic and Social Research argues that the current funding for apprenticeships is simply not sufficient to tackle the scale of youth unemployment. Its director told the Treasury Committee in March that neither apprenticeships nor work experience were sufficient to tackle the scale of the problem.
Of course, there are some good news stories, as is the case in all such situations. I received a letter in advance of this debate from Emma Reynolds, the government affairs director at Tesco. I know that Tesco does not always get a wonderful press, but it is the largest private sector employer in this country. It is worth noting that 25% of its almost 300,000-strong work force are under the age of 25. This year alone, it hopes to create 10,000 new jobs. It has provided 3,000 work experience placements, and last year, despite all the difficulties, it was able to take on 335 graduates. It also has a regeneration partnership, which means that it works with Jobcentre Plus in areas in which it is developing new stores or centres. I hope that I can work with it on that, because it has submitted a planning application in my constituency.
Not to be outdone, the Co-op has also announced that it plans to create 2,000 more apprenticeships over the next three years. It is worth noting that its chief executive, Peter Marks, joined the company at 17 and knows exactly what it is like for someone to get their first foot on the ladder and work their way through the company.
I urge the Government to think again about an immediate jobs and training programme. Like many other people, I believe that it could be funded, or part-funded, by a tax on bankers’ bonuses. I also think
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that the Government need to establish proper arrangements for careers advice and guidance for young people. Although it is welcome to see examples like the big retail chains— we should encourage more of that and I am all for it—we need to listen to what the FSB is saying and to recognise its problems, particularly in relation to ATAs. If the Minister can indicate that the Government are willing to take some of these things on board, we might be in a situation whereby the accusations that we do not care would not be so loud, and the likelihood that we repeat the things that happened in the 1980s would diminish significantly.
9.56 am
Robert Halfon (Harlow) (Con): It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on his thoughtful speech, even if I did not agree with all of it, and on securing the debate.
This is an important debate, because today is vocational qualifications day and apprentices throughout the country are being congratulated on their achievements. In my maiden speech, I said:
“In Essex, nearly 4,000 young people are not in employment, education or training, and Harlow is one of the worst-affected towns…If we give young people the necessary skills and training, we give them opportunities and jobs for the future.”—[Official Report, 2 June 2011; Vol. 510, c. 488.]
The argument is about not just economic efficiency, but social justice. I want to talk about where youth unemployment is coming from, what the Government are doing and what more can be done.
In 2000, there were 600,000 16 to 24-year-olds who were not in employment, education or training. By 2010, there were well over 1 million and the figure remains at that level. This massive surge was not the by-product of the credit crunch—youth unemployment rose steadily throughout the past decade and the direct causes are well documented. We asked teachers to spread themselves too thinly, with too many competing priorities. Maths and English suffered, and half a million children left primary school unable to read or write. The Education Secretary has recently argued that too many soft qualifications crept in at GCSE and A-level, undermining academic rigour. The recent review led by Sir Richard Sykes, the former rector of Imperial college, concluded that many students were forced to take easier courses, to raise schools’ positions in league tables. One member of the review panel said that our current system is a “national disgrace”, because it encourages pupils to drop tough subjects such as science. The result is a skills deficit.
In Austria and Germany, one in four businesses offer apprenticeships to young people, but in England the figure is just one in 10. Why do only 28% of British workers qualify to become apprentices or gain technical skills, compared with 51% in France and 65% in Germany? What has gone so badly wrong in the UK that our skills level is so low? Our population is less skilled than that of France, Germany and the United States. As a result, we are 15% less productive than those countries. For example, construction has long represented about 10% of gross domestic product, but we have consistently imported much of that labour from Europe.
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The consequence has been a rootless, under-educated, jobless generation of graduates who do not have the right skills for our growth industries.
Dr William McCrea (South Antrim) (DUP): Is it not true that, throughout the United Kingdom, we have given the impression that if a young person has not got a degree, they are not really a young person with great achievement? We have sent a lot of our young people to university to obtain a degree that has little relevance to working life. Therefore, do we not need to change that approach and say, “Listen, we need young people without a degree, but who are at least skilled and ready for the workplace”?
Robert Halfon: The hon. Gentleman is exactly right. I always find it astonishing that, when someone goes to university, it is regarded as something of great prestige—and, of course, it should be—but when someone does work experience or an apprenticeship, hardly anyone bats an eyelid. We must change the culture of skills and apprenticeships in our country.
Mr Iain Wright: The hon. Gentleman is making his argument in his usual thoughtful and considered manner, and I agree with virtually everything he is saying: for far too long in this country, we have had a culture of academic success but vocational failure. However, will not the changes to the English baccalaureate and the curriculum be a backward step? Is not the Secretary of State for Education embedding that negative culture, whereby academic equals success but vocational equals failure?
Robert Halfon: I thank the hon. Gentleman for his remarks, but I do not agree with them. As I will show later, we are gearing everything towards vocational training and apprenticeships.
I accept that the previous Government and many Opposition Members were concerned about and did their best to tackle youth unemployment. However, sometimes their policies were expensive and inefficient. The future jobs fund, which was mentioned by the hon. Members for Hartlepool (Mr Wright) and for Birmingham, Selly Oak, cost up to £6,500 per placement. Most placements were temporary six-month internships in the public sector. In comparison, the normal cost of finding work for a young person on the new deal was just £3,500 per job, which is better value for money.
Despite that, tens of thousands of young people who finished school were still on the dole a decade later. Although billions were spent on the new deal, around 100,000 of those who left school in the first term of the previous Government have never held a job. They are now in their 30s and have never worked in their lives. The future jobs fund and the new deal too often operated like a revolving hamster’s wheel back to benefits. People were shifted around and around but did not get anywhere. The future jobs fund was announced in 2009 and aimed to create 150,000 jobs in two years. By the end of the first year, fewer than 5,000 jobs had been created, which is 3% of the target. It just did not work. There were also problems with Train to Gain. Much of the training on Train to Gain was not actually training; it was bureaucratic assessments dressed up as training.
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Stephen Timms (East Ham) (Lab): The figure that the hon. Gentleman gave is a little bit misleading. Between October 2009 and January 2011, there were more than 90,000 starts thanks to the future jobs fund. Of course, the scheme did not run for the full two years, for reasons that we know about, but over the full period that it was in operation, a large number of young people got into work.
Robert Halfon: Yes, but the crucial thing is not just for someone to get initial work, but for them to stay in work. I hope that the Minister will announce later that our policies relate to giving people long-term jobs. The point is this: job creation schemes, however noble, will not break the poverty trap unless they give people new skills in real private sector jobs.
The Government’s skills strategy published last year sets out plans to refocus spending on apprenticeships and to make all vocational training free at the point of access, with costs repayable only once someone earns a decent salary. That will help many young people into training, especially single parents, people who have been made homeless, and ex-offenders. I strongly support the announcement that 250,000 new apprenticeships will be created over the next few years. I particularly support the establishment of 24 new university technical colleges, which are essentially pre-apprenticeship schools led by local employers.
In Harlow, we have applied for a UTC led by Harlow college. If we get it, that UTC will be a centre of excellence for engineering and journalism backed by local firms and Anglia Ruskin university. On top of that, I support the funding for 100,000 sponsored work experience placements for jobless 18 to 21-year olds. I hope that such policies will significantly reduce youth unemployment in the years ahead.
However, it is not just about national Government. In Parliament, I have often championed the pioneering wage-subsidy scheme run by Essex council and Harlow college. As I mention in early-day motion 1258, that scheme has boosted young apprentices in key growth industries, especially high-tech manufacturing. Essex council and Mr Dean Barclay have even helped to sponsor the apprentice in my Westminster office, Andy Huckle, who is combining a year in the House of Commons with a level 3 course in business administration. A few other MPs have taken on apprentices and I urge all hon. Members to do the same.
In Essex, that scheme is being taken to the next level by the Federation of Small Businesses, which has applied to the regional growth fund to sponsor 2,000 new apprentices, especially in the energy sector. That scheme will be similar to the targeted £2,500 wage subsidy proposed by the central business institute a few years ago. So despite the historic problem, a lot is being done to address the social injustice of young people who want to get on in life but cannot find a job.
Work experience and apprenticeships give young people a chance to see a busy workplace, and to make things happen in the real world. The hon. Member for Birmingham, Selly Oak mentioned the Prince’s Trust. As we speak, a young girl from the Prince’s Trust is doing some work experience with me. The Government must start to use their planning powers and their contracts to insist that there is a better uptake of apprenticeships in Britain. Harlow council is currently looking at ways
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of using planning law to require developers to employ young apprentices. In the same way, Essex council is exploring ways of putting clauses into contracts to boost apprenticeships for young people. The total value of public sector contracts is £175 billion a year. If even a fraction of those built in apprenticeships, it would make a huge dent in youth unemployment across the country.
The issue is not just about how to create job opportunities. Let us be honest: for too long apprenticeships have been seen as plan B if someone does not want to do A-levels, as the hon. Member for South Antrim (Dr McCrea) mentioned. That was the problem with the old technical schools of the past: attending them was seen as a lesser thing to do. That must be confronted, rather than swept under the carpet. The plans to enhance a level 3 apprenticeship to technician level will make a difference, but as I mentioned, we must give apprenticeships parity of esteem to make them more attractive to young people who are looking for work.
That is why at 3.30 pm today, in the Jubilee Room next door, I will launch a new apprentice card with the National Union of Students and businesses, who together have tens of thousands of apprentices on their books. The card has one simple aim: to give apprentices the same benefits as A-level and university students. I have worked for many months with the NUS and other organisations to establish a national society of apprentices. The card is the very first step towards such a scheme and it will give young apprentices discounts at restaurants, travel agents and high street stores, as well as access to free support services and legal advice. There will also be social events, mentoring, careers guidance and other planned benefits, including financial products such as interest-free overdrafts.
Dr McCrea: It is important to find out if the scheme about which the hon. Gentleman is talking is being rolled out throughout the United Kingdom or if it is just happening here on the mainland.
Robert Halfon: At the moment, it is an English apprentice card, but we hope to extend it as we slowly roll out the scheme. I urge the hon. Gentleman to come along to the launch this afternoon; he would be very welcome.
The effective rate of youth unemployment is devastating, and has been for the past decade. If we leverage Government contracts and planning, and boost the prestige of on-the-job learning through efforts such as the apprenticeship card, we will transform the lives of the 1 million young people who are out of work.
Martin Caton (in the Chair): Order. I want the winding-up speeches to start at 10.40 am, and I have five people indicating that they want to speak—so, more brevity, more speakers.
10.10 am
Ms Margaret Ritchie (South Down) (SDLP):
I commend my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) for securing this important debate. I come from Northern Ireland and represent a Northern Ireland constituency. Along with my colleagues from the Democratic Unionist party, we want to bring to the debate the perspective from Northern Ireland, where devolution has given us the prime responsibility for
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apprenticeships and for tackling youth unemployment. However, social security and jobseeker’s allowance are issues of parity, because the funding comes directly from the Treasury here in London. We are keen and anxious that the levels of youth unemployment are gravely reduced.
Some of the issues go back to educational attainment. For example, one in every five children leaves primary school in Northern Ireland without proper literacy and numeracy skills, which can be directly correlated to levels of economic inactivity later on, because such people are not properly equipped to undertake skills and training. That is an issue throughout the United Kingdom. Although we come from different political perspectives, we are anxious for youth to be geared and invested with the skills and training necessary to ensure that they do not get involved in violence and terrorism, such as we have witnessed for the second night running in east Belfast. That road leads only to a different way of life, and we want youth to be channelled into positive activity, so that deprivation and social disadvantage do not mean no active work or engagement.
To emphasise the scale of the problem, we need to look at the stark figures. The annual increase in JSA claimants in Northern Ireland is the largest among the UK regions. Over the past year, 3,900 people have joined the dole queue, and that is an increase of 7%, compared with a rise of 0.3% in the UK as a whole. Critically, the trend of increasing, long-term youth unemployment is most alarming, with Northern Ireland experiencing a sevenfold increase in long-term unemployment among 18 to 24-year-olds since the recession.
I do not want to indulge in ostrich economics. We must rebalance our economy in Northern Ireland, and that is why we are seeking the assistance of the Treasury. Some of us might have different views about the degree to which corporation tax should be lowered to attract foreign direct investment—I think it should be lowered—but I agree with my colleagues that small indigenous businesses must be encouraged as well to provide the opportunities for young people to be skilled.
David Simpson: The hon. Lady made a point about small indigenous businesses, but surely small businesses can be encouraged to take on more apprentices and young people by reducing the red tape and bureaucracy, as well as by the accessibility of bank credit. Currently, small businesses are experiencing such difficulties, which have a domino effect.
Ms Ritchie:
I thank the hon. Gentleman for his helpful intervention. I agree that the Government, with the British Bankers Association, need to tackle directly the lack of availability of credit facilities for young people who have the skills to set up in business. Also, a prevailing view is that the Government’s failure to act with the necessary urgency and immediate action casts doubt on the coalition’s ability to deal with this crisis before it becomes a structural liability that will weigh down on our economy in years to come. Over the past 20 years, successive Governments have instilled in young people, quite rightly, the sense that by investing in their education, they are investing in their future career. To have them leave university during a stagnant job market is a fundamental failing, and another failing is in the
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whole area of welfare reform. We are encouraging people to go into work rather than to apply for benefits, which is all very well if the job and skills opportunities are available but, sadly, in many instances, that is not the case.
We must be aware of the economic cost that goes hand in hand with the social cost of youth unemployment. The London School of Economics found that each young person in long-term unemployment costs the Exchequer up to £16,000 a year. The Prince’s Trust has stated that youth unemployment in Northern Ireland costs up to £4.5 million a week, which is almost £250 million a year. The economic cost of the failure to tackle the problem could not be more evident.
In conclusion, while the Northern Ireland Assembly and Executive must not shirk their responsibilities, there is no doubt that central Government have a profound role in influencing devolved Administrations. Youth unemployment lies at the centre of a constellation of other problems, including local economic performance, education, welfare dependency and the state of local infrastructure. It is most important that the Minister responds positively on how we can collectively tackle this pernicious issue, because we must ensure a future for our young people, that the issues of educational disadvantage and skills deprivation are properly dealt with and that a university degree is seen as on a par with skills training, and vice versa, because as soon as the public sees that equality of advantage, we will really be tackling youth unemployment.
10.17 am
Tony Baldry (Banbury) (Con): I want to make three points. First, we must put the debate into context—the good news and the bad news. The good news is that the June official unemployment figures showed the number of young people out of work falling in the quarter to April—youth unemployment has continued to fall sharply—and the number of unemployed people between the ages of 16 and 24 dropped by 79,000, which is the largest fall since official records began in 1992. That point needs to be made in this debate. Against that, we must recognise that 900,000 young people aged between 16 and 24 are still out of work. I accept the earlier caveat of the Minister, that a number of them are youngsters who are studying but looking for part-time work; even so, there is still a problem, in particular for those not in education, employment or training, who have that hideous acronym of NEETs.
Secondly, in the Budget the Government announced an extra £180 million to help fund 40,000 apprenticeships, so over the next four years a potential 400,000 on-the-job training schemes will become accessible to young unemployed people. However, employers have a responsibility, too. We might get more apprenticeships, but a two-way process is involved: employers need to offer the apprenticeships. In a constituency such as mine, where the overall unemployment rate is about 2%, employers often bemoan the skills shortages when things are going well but fail to realise that the wise employers with foresight ensure that they train their own staff for the future.
Pro Drive, Norbar Torque Tools, Crompton Technology and Bicester Village in my constituency are flagship businesses with nationally and internationally recognisable names, and all have excellent apprenticeship schemes.
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Pro Drive has a scheme to send apprentices to university. Bicester Village has introduced a scheme for retail apprenticeships, and Crompton Technology, Norbar Torque Tools and many others are enhancing their work force and their future by investing in young people today. We cannot just stand on the sidelines and shout at the Government. The Chancellor made opportunities available in the Budget, and it is now for small, medium and large business to take up the opportunities.
My third point relates to NEETs. The NEET rate in many places is far too high, but young people do not start to become disengaged with education and employment at 16. That often happens much earlier. In Oxfordshire, we are launching an early intervention service that will start at a much earlier age to provide specialist services to families facing exceptional difficulties. The whole point about the early intervention service is that it will try to help to improve outcomes in relation to reducing persistent absence and exclusion from school in the hope that when youngsters get to 16 they will still be engaged in education and training. It is sometimes unbelievably depressing to meet young people who have fallen out of education and training, and we must ensure that many more of them are engaged. If they are unqualified and unskilled at 16, the chances are that they will be unqualified, unskilled and unemployed not just at 24, but for the rest of their life. Banbury and Bicester job clubs are organising specialist job clubs during the summer for young people to ensure that every youngster in the area knows about all the available opportunities, and that they get the fullest possible support in finding a place in the world of work.
10.22 am
Karl Turner (Kingston upon Hull East) (Lab): It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) on securing this important debate. For me, it is crucial. Since the peak of the economic crisis, youth unemployment in my constituency was definitely falling steadily. It took a Tory-led Government to reverse that trend. The latest figures show that 1,450 16 to 24-year-olds in my constituency are collecting jobseeker’s allowance, which is one third of the overall claimant count, and 36 people chase each job vacancy. I am told that a year ago, 10 people chased each vacancy. Clearly, there is a problem that needs to be addressed.
It is crucial that Connexions is not allowed to close. The new Labour city council in Hull has overturned the Lib Dem council’s policy of withdrawing funding for Connexions, so we are lucky to an extent. But that raises the issue of what the Government’s agenda is, and that was made clear to me at my last surgery when a young, 18-year-old constituent, Michaela Droullos, came to my office. She is about to go off to do a degree in nursing at Leeds university. She said, “What have the Government got against young people?” I said, “How do you mean?” She said, “They are scrapping the future jobs fund, abolishing Building Schools for the Future, scrapping the education maintenance allowance, and trebling tuition fees.” The Minister is turning his back to me, but my constituent came to me highlighting how she perceives the Government’s agenda of the past 12 months. That is serious, and I respectfully ask the Minister to take notice of what my constituent thinks of his Government. They gutted funding for creative partnerships, and then attacked Connexions.
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I intend to be brief, Mr Caton, but I want to ask the Minister some questions. I am concerned about the care to learn programme in my constituency. It is an initiative that concentrates on youth parents under 20, and I wonder whether it will continue after the 2011-12 academic year. I also wonder whether the Government have acknowledged the fact that by scrapping EMA young people will become estranged from their parents and will claim income support. What assessment has been made about the financial implications of that?
Face-to-face careers advice is crucial, certainly in my constituency. Young people should have an opportunity to sit with an expert careers adviser and receive face-to-face advice. What are the Government doing about that, and what is likely to happen to the statutory obligations on special educational needs?
This is important in my constituency. As I said at the outset, 36 people chase every job, and it is not a coincidence that that has increased by a massive amount in the past 12 months.
10.27 am
Mr David Ward (Bradford East) (LD): I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe), who is a fellow graduate of the university of Bradford. I shall cut to the chase. I have quite a lot to say about the schemes to help young people aged 18 to 24, but that is not the contribution that I want to make. I want to follow on from some of the comments that the hon. Gentleman made about those in the school system. The Minister may say that I am making my speech to the wrong Minister, but in some ways that is the problem. There is a lack of joined-up thinking between Ministers.
The Secretary of State recently came to Bradford. I say Bradford, but it was Ilkley, where there are no NEETs, absolutely zero, and to Bingley where there are 19, but in my constituency, the average secondary school, let alone ward, has more young people than that on a reduced timetable and receiving specialist provision. I am not speaking behind the Secretary of State’s back because I have spoken to him about this, and I hope that he will remedy it with a visit to some parts of Bradford in the future.
The issue that I want to focus on is not what we do post-18 or post-16, but what we do from birth and certainly from the ages of 10, 11, 12, 13 and 14. At that point, although there are still many problems to be faced, there is a chance with appropriate and skilled intervention to do something about the future life chances of young people. A reduced timetable tends to be the answer, but we are often dealing with teachers who simply do not have—why should they?—the necessary skills set to deal with often difficult young people.
The consequences of failure are there to see in the statistics on NEETs post-16, and teenage pregnancies. In my area, 20% of DWP claimants aged 16 to 24 are lone parents. The other consequence—this is stark language, I know—is the number of young people who end up in Armley prison. That is how serious the issue is.
The main problem seems to be that we burden the post-16 world with remedial work as a consequence of a failure to support structured interventions pre-16. The pre-16 work is often unco-ordinated and insufficiently funded. It involves a mixture of separate units and reduced timetables, as I mentioned. I am sorry to have
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to say that for many schools it is simply a case of getting a young person through, without losing track of them, to the age of 16, when they can pass them on to someone else because it is no longer their responsibility.
Why is no permanent, mainstream, funded provision available? Within these four walls, that has repercussions. There is additional funding for pupils who have English as an additional language, but none for white working-class pupils, whose literacy skills may be just as bad and whose oral skills are often deplorable. No wonder we have issues with the British National party and the English Defence League in some of our white communities. We need to have a positive response to that.
The answer to the question that I have posed is that often the provision is regarded as just a temporary measure. We see schemes in schools that involve a pilot followed by another pilot. A short-term pot of funding is available and then another one needs to be found. There is no continuation and certainly no mainstream funding available. However, until we deal with the high levels of deprivation in some of our communities, there will be a constant flow of disaffected young people who end up requiring post-16 and post-18 support, which by then will be of no value.
Some schools are doing well. Carlton Bolling college, a secondary school with which I was involved, provides an example of sustained effort. That includes off-site provision; learning support units; timetables that are reduced but with a mixture of provision; and the development of a vocational curriculum. However, those options are expensive and are all without additional funding. The Ilkley grammars of this world have the same level of funding per pupil, but do not have the problems that a school such as Carlton Bolling college has. It is hoped that the pupil premium will provide support, but that should not be required. What is really required is intensive, integrated multi-agency work, and much of that has to involve family interventions. That work is difficult and expensive, but the cost to society of not doing it is of course even greater.
We must consider how we assess our schools. How will we ever adequately fund measures to deal with some of these issues when we assess and evaluate schools based on league tables that reward a school that lifts a young person from a grade D to a C, but does nothing at all to acknowledge the fact that to get someone from nothing to something—G or above—is often a far more prestigious accomplishment? Again in stark language, how will we ever adequately fund such measures when a school receives more credit for converting a student from a D to a C than for diverting a student from a life of crime?
Much work needs to be done. No doubt the Minister will say that he is not personally responsible for the group to which I am referring. However, the conveyor belt of failure has to be picked up by the Minister. We need clear evidence first that the Minister is aware of it and then that measures are being taken to join up the provision required to stop that conveyor belt.
10.34 am
Jenny Willott (Cardiff Central) (LD):
We have heard a lot today about the statistics, so I will not go into those. The good news is that youth unemployment is
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dropping, but everyone shares the concern that it is still too high. As I think almost every hon. Member said, we must tackle the implications of long-term unemployment; the issue is not just those who are out of work for short periods. That is where the picture is looking quite good. The number of 18 to 24-year-olds claiming jobseeker’s allowance for more than a year has reduced from more than 26,000 to just under 15,000 in a year. That is good for all our constituencies.
However, research done recently showed up some worrying findings. One finding was that young people are very disillusioned about their prospects of employment. They believe that they will find it very difficult to get work. A very worrying number said that they would like to work but they were not even looking for work because they believed that no jobs were available, so in some ways we have talked ourselves into an even greater problem than we need to have. We therefore need not only to tackle skills levels, as a number of hon. Members mentioned; we also need to increase young people’s motivation to go out and compete for the jobs that exist. There are jobs around. There may not be as many as we would like to see, but there are jobs and young people need to be encouraged and supported to go out and compete for them.
We must not lose sight of the short-term and long-term implications of youth unemployment, both on a personal level and for society as a whole. We have heard about the financial implications of youth unemployment, but there are other implications for the individual and for society in the longer term. The longer someone has spent unemployed, the less opportunity they have to go up the career ladder. They are likely to have lower lifetime earnings, which means that they and their families are more likely to struggle. It also means that they are less likely to save for their retirement, so in the very long term they will end up with low or non-existent pension savings and either are likely to have to work for longer or are likely to be living in poverty as a pensioner. The implications can be very long term for the individual and for society.
This is one of a number of debates that we have had in the past few months on youth unemployment and what can be and is being done about it. Hon. Members are right to say that we need to improve the employability of young people, but I believe that the Government are trying to do that. I am reassured by work that is being done by the Department for Work and Pensions and by the other Departments with a responsibility in this area. The Government have been investing in apprenticeships. The hon. Member for Harlow (Robert Halfon) has explained why that is critical and given very good examples of what can be done not only by Government, but by individuals. I congratulate the hon. Gentleman on the work that he has been doing in this area. He sets an example for all of us—we should be doing more.
I hope that the Minister will tell us more about what the Government are doing with regard to work experience placements, because for many young people that taster of the workplace and the opportunity that it provides for employers to see what young people are like and that they can step up to the mark is important. The Government are also investing in early support in the Work programme for NEETs, which many hon. Members spoke about.
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Without wishing to play the blame game, I think that it is important to put it on the record that Labour did not do enough to tackle the trends in youth unemployment when it was in government. In many ways, that contributed to the problem of long-term unemployment among young people that the present Government are trying to resolve. Labour threw money at the problem rather than focusing on what worked. A number of hon. Members mentioned the future jobs fund, but it was created to ease the problem of youth unemployment, not to create long-term sustainable jobs. That was the problem with the programme: at the end of the placement, there was not always a job to go to, so the young person ended up back on working-age benefits. That also knocked their confidence, which takes us back to the problem that I referred to at the beginning of my speech of young people feeling disillusioned. We need to create long-term sustainable jobs and a skilled work force—a cohort of young people who are willing and able to take up those jobs.
I therefore welcome the early access to the Work programme for NEETs. I would be grateful if the Minister told us whether there are any plans to roll that out, if it proves successful, to more young unemployed people who are not necessarily NEETs. I cannot remember which hon. Member mentioned investing in support for young entrepreneurs. A very small proportion of the under-24s are self-employed. That is understandable, but many young people have good ideas, are keen and enthusiastic and will generate wealth and jobs for the future. I would be grateful if the Minister could tell us a little more about the support that is being, or will be, made available to help and encourage those young people, whether that is mentoring support or access to capital to enable them to invest in themselves and in jobs for the future.
I welcome the significant progress that has been made in tackling long-term youth unemployment. We cannot risk another generation facing the same problems as those who left school and university in the 1980s and 1990s. The Government are doing a lot, but there are some areas I would be grateful if the Minister could expand on, and I hope that that work will continue.
10.40 am
Stephen Timms (East Ham) (Lab): I, too, congratulate my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) on securing this timely and important debate.
Unemployment is too high across the board, but young people are being disproportionately hit, and the impact of youth unemployment is particularly damaging. Long spells of unemployment early in somebody’s working life can permanently harm their future potential. Paul Gregg at the university of Bristol has shown how severe that scarring was after the 1980s recession, when my hon. Friend was working among unemployed young people in Wolverhampton and my hon. Friend the Member for Hartlepool (Mr Wright) was doing similar work in Hartlepool.
It is that long-term impact which makes this topic important and which explains why it is important that the Government tackle it. I have been looking at the Churches’ seminal 1996 report on unemployment and the future of work, which powerfully set out the key moral case for dealing with this issue:
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“it is wrong, in such a prosperous society as ours, for large numbers of people to be denied for long periods the means to earn a living”.
On youth unemployment, the report said:
“The reason for special concern about youth unemployment is not just that it is relatively high, but also that it comes at a crucial stage in a lifetime. The anxiety must be that young people who fail to obtain work experience at this stage will miss out an essential induction into adult responsibility and independence…It is…the main focus for the initiatives proposed by the Labour Party for their ‘new deal’.”
Indeed it was; in 1997, the new Government recognised the imperative to change things for the better, and they did so through the new deal.
Fifteen years later, however, that job needs to be done again. If anything, the case for action is even greater now than it was then. We have a particularly large cohort of young people aged 18 to 24, and large youth cohorts need to be cared for; there is a big risk of social damage if they are not. We now run the serious risk that this large group’s entry into adulthood will be stunted by unemployment.
As we all know, being unemployed has an impact on short-term and long-term health and even on life expectancy. However, if a young person is unemployed, it can hurt even more. Falling at the first hurdle in working life can mean missing out on the fulfilment that comes from a meaningful career. As the hon. Member for Bradford East (Mr Ward), among others, said, high levels of youth unemployment also tend to be associated with poor social outcomes, including increases in crime, particularly property and street crime. We need to keep our focus on that, particularly when police numbers are being cut, as they are at the moment.
Youth unemployment means a loss of productive work, adds to the benefits bill and increases the costs of policing and long-term social exclusion. A couple of contributors to the debate have referred to the work of the Prince’s Trust, which estimated in 2010 that the cost to the public purse of a young jobseeker was up to £16,000 per year, which is too high a price.
In a recession, young people are most at risk in the labour market. Often, firms will operate a last-in, first-out policy, which naturally works to the detriment of their younger employees. Firms facing an uncertain future will often not take on new staff at all, which, again, disproportionately affects young people.
The problem is being exacerbated by the fact that the Government are cutting public spending too far and too fast, hitting families, costing jobs and running the serious risk that they will make it even harder to reduce the deficit. The Labour party’s case is that we should put jobs first. We do, of course, need tough decisions on tax and on spending cuts, and it is absolutely right to tackle inefficiency and waste. However, getting people off the dole and back into work is the best way to bring the deficit down. As the Prince’s Trust has said, keeping young people on the dole is a waste of money and talent, and it puts the future well-being of our economy and society at risk.
On the most recent figures, there were 935,000 unemployed 16 to 24-year-olds in the three months to March. That is a welcome fall on the quarter, but it means that there were 31,000 more young unemployed people than there were last summer.
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Chris Grayling: The actual number in the last figures was 895,000, which is lower than at the general election.
Stephen Timms: Those were not the Office for National Statistics figures. The figure, as I read the release, was 935,000, which is 31,000 more than last summer.
Of course, it is no surprise that unemployment rose sharply in the downturn. However, a year ago, with the youth jobs guarantee and the future jobs fund in place, youth unemployment was starting to fall steadily, including in the constituency of my hon. Friend the Member for Kingston upon Hull East (Karl Turner). As we have heard, one of the new Government’s first acts was to scrap that successful programme, and we can see now some of the damage that has resulted. The rise in unemployment means the benefits bill is going up by more than £12 billion. As we have heard, that comes at a time when other Government decisions, such as scrapping education maintenance allowance and removing Connexions, are making it harder for young people who are starting out.
As my hon. Friend the Member for Birmingham, Selly Oak said in opening the debate, the Labour party is arguing for a second, one-off £2 billion tax on bankers’ bonuses. Of that, £600 million should be used to help create 90,000 more jobs for young people at this crucial time, when those jobs are so badly needed. The remainder of the funding should be used to build more affordable homes—that, in itself, would probably create about 20,000 jobs for young people—and to support small businesses by increasing the regional growth fund. Later this month, we shall seek to legislate for that proposal through an amendment to the Finance Bill.
Last year, the bankers’ bonus tax brought in £3.5 billion. By comparison, the current Government’s bank levy will yield less than £2 billion in the current financial year. It is estimated—conservatively, I think—that a repeat of the bonus tax could bring in an additional £2 billion this year. That funding could be put to extremely good use.
As my hon. Friend said, youth unemployment in the 1980s continued to rise for four years after the recession was over. We need to act now to avoid another lost generation of young people. A fair tax on bank bonuses can help to get young people off the dole and into work. It would be hypothecated, and people would see where the money was coming from, what it would do and where it was going.
Official figures show that between October 2009 and January 2011 there were, as I said in an intervention, 91,890 starts in future jobs fund vacancies. The hon. Member for Harlow (Robert Halfon) made some telling and important points, but his case was rather undermined by his suggestion that only 5,000 people started on the future jobs fund, which is not correct; it was well over 90,000, and the programme would have been well on track to achieve the 150,000 target had it been allowed to continue for the full two years for which it was planned.
A strikingly large proportion of those who started on the future jobs fund went on to other jobs when their placement ended. The crucial point, however, is that having a proper job for six months at an early stage potentially transforms a young person’s future career and life chances. That is why that intervention was so
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important and effective. More than 10,000 of the 90,000 were in the region of my hon. Friend the Member for Birmingham, Selly Oak—in the west midlands.
Of course the new youth jobs fund would be different. It would be linked with other schemes and with employers, to ensure that real jobs came out of it. No doubt lessons would need to be learned from the experience with the future jobs fund, and I agree about the importance of linking with apprenticeships; but the principle that substantial effort and investment are needed to safeguard the current generation of young people should be agreed across the House. The Government need to take that seriously, not just addressing the incentives for work, but taking responsibility also for there being jobs for young people to do.
10.50 am
The Minister of State, Department for Work and Pensions (Chris Grayling): I too congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on securing the debate. I want to set out, as several hon. Members have requested, the details of the Government’s strategy to deal with youth unemployment, but I should start by giving a little context to the problem we now have.
Let me be clear, first, that the shadow Minister is plain wrong and a month out of date: the latest unemployment figures, published in the past month, show that the total number of young people who are unemployed in this country, according to the International Labour Organisation measure, is 895,000. That is 35,000 lower than at the general election. Let us put that in context. We have heard a lot of rhetoric and comments in the debate about the record of the previous and present Governments, but we should be clear that youth unemployment—happily, and long may this continue—has fallen since the general election.
Stephen Timms: The Minister made a case in an earlier intervention for perhaps taking some people out of that figure, because they are full-time students looking for part-time jobs. Is he suggesting also that the number of full-time students with part-time jobs should be taken out of the employment count?
Chris Grayling: I have issues generally with the way some of the ILO’s data are collected. Perhaps the right hon. Gentleman or some of his colleagues would like to request another debate, and we can consider the question at length. What pleased me most fundamentally about the last set of figures was that the drop occurred not in the group of those in full-time education, looking for a part-time job, but in the group of those not in full-time education or employment. That is a welcome development.
There is a big challenge for us.
Steve McCabe: I do not want the debate to get bogged down in the question of figures, but I am not quite sure I understood that last point. I thought that the Office for National Statistics said that 61,000 of the 88,000 drop was accounted for by students becoming economically inactive because they are in full-time study. It is not true in that case to say that the bulk of the drop could be attributed to non-students. The reverse would be true.
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Chris Grayling: There is a headline number of 895,000, less 277,000, so there has been a figure for the past few months of six hundred and something thousand young people who have been unemployed but are not in full-time studies. It is in that group that the falls of the past few months have happened. That is welcome; but it is only a small step in the right direction. We accept absolutely that there is a big challenge. It has been arising for much of the past decade. It began not even in the recession but in 2003-04. I think that the previous Government did not do enough to recognise that trend—the hon. Member for Cardiff Central (Jenny Willott) was right. We inherited from that Government a collection of inadequate and expensive schemes, as well as a monumental financial deficit. That led to our having to take some pretty difficult decisions, which we might rather not have taken; we had to, given the scale of the financial mess left behind.
We have put in place in the past 12 months a strategy that I believe will start to make a difference. It is of paramount importance that we should focus on the hardest-to-help in the group. The numbers show that about 80,000 young people have been on jobseeker’s allowance for more than six months and that there is a core of 300,000 young people who have been out of work for more than six months, according to the ILO measure. Happily, the majority of young people who go on to jobseeker’s allowance move off pretty quickly. That is good; it is a temporary phase and they move into employment. Many who are not in education, employment or training are only in that group as a temporary phase between school and college, or a similar situation. However, a core of young people are struggling to get into the workplace, and they are, should be and will be a priority for the Government.
Mr Iain Wright: Does the Minister think that the ending of face-to-face careers guidance will have an impact on youth unemployment?
Chris Grayling: Of course, we are not ending face-to-face careers guidance. Under the plans that we have put forward it is, first, for head teachers to look after careers advice for school-age pupils. However, for those over 18 we shall provide a face-to-face option through the all-age careers service. We are working carefully to ensure that Jobcentre Plus and the all-age careers service will work extremely closely together, to ensure that not only do we deal with job search requirements, but we steer young people towards that advice, which of course will also be available online. That is the right approach, and the work being done in the Department for Business, Innovation and Skills is important on that front.
There are three key elements to our strategy. The first, as the hon. Member for Cardiff Central mentioned, is work experience, to try to tackle the age-old problem that someone without experience cannot get a job, but they cannot get the experience unless they get a job. Earlier this year we launched our work experience scheme. Our target is to provide work experience placements for 50,000 young people per year over the next two years.
On top of that we are launching work academies later this year, to provide additional combined training and experience placements. We are looking to provide a very large number of young people with opportunities to take first steps in the workplace. Jobcentre Plus is
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engaging employers throughout the country. There is a national effort to get bigger employers involved, and already several thousand young people have gone through the work experience placements. Many of those have now moved on into jobs and apprenticeships. That is the first essential part of our strategy, and we have commitments from employers for tens of thousands of work experience places, which I hope can provide an extra leg up into the workplace for some of those who are shorter-term unemployed—some of those entering the labour market after school and college, and wanting to take their first steps in the workplace.
The second key part of our strategy is apprenticeships. I pay particular tribute to my hon. Friend the Member for Harlow (Robert Halfon) for the work that he has done. He has been a great champion of apprenticeships, and the initiative that he is launching—the apprentice card—is valuable. He should take great pride in what he has achieved with that. Since the general election we have announced tens of thousands of new apprenticeships. The hon. Member for Birmingham, Selly Oak raised the question, and I can tell him that employers have taken up those extra places. We are meeting our goal of filling those apprenticeship places; long may that continue. It is an important part of building a long-term career opportunity for young people—not the six-month placements of the future jobs fund, which cost four times as much per job outcome as even the not terribly successful new deal for young people. Apprenticeships are a path to provide career skills for a lifetime and a long-term job in the private sector, where jobs are currently being created—with 500,000 more roles in the private sector since the election. That is where our focus should lie.
There is also, of course, the Work programme—intensive support for young people who are struggling to get into the workplace. Entry to that intensive support for any young person is after nine months, which is sooner than under previous schemes; but, crucially, there is entry after three months for some of those who are most challenged—those who have been NEET, and those who are struggling, from the most difficult backgrounds and circumstances—to get intense, personalised support from the Work programme providers. There is huge innovation among those providers, such as the recruitment of skilled military and leadership personnel to provide mentoring and guidance to young unemployed people; and the involvement of charities such as the Prince’s Trust, which have expertise in helping young people to meet their challenges and get into the workplace. All that is hugely important.
I accept the points made by my hon. Friend the Member for Banbury (Tony Baldry) and by the hon. Member for Bradford East (Mr Ward) about the need for a focus that is not just post-16 or post-18, and for a strategy of early intervention. That is why our school reforms are so important, and why we recently announced a package of support for 16 to 18-year-olds, who all too often are missed out in the current system. The innovation fund that we are launching this week will invite charitable groups to present proposals to tackle some of the challenges presented by 16 to 18-year-olds who drop out and do not go into education. That is all part of a strategy that we believe can make a big difference to an issue that is very real to the nation, and about which the previous Government did much too little.
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Education Capital Programmes (Coventry)
10.59 am
Mr Jim Cunningham (Coventry South) (Lab): It is a pleasure, Mr Caton, to initiate a debate under your chairmanship, and I thank Mr Speaker for granting me this debate. What I have to say will be supplemented by my two colleagues—my hon. Friend the Member for Coventry North West (Mr Robinson) and my right hon. Friend the Member for Coventry North East (Mr Ainsworth). They will go into more detail, particularly about the schools in their constituencies.
I start by giving an overview and some background. I am sure that the Minister knows about it, as today is the second time that we have debated Coventry’s capital programme. We obviously have not moved far since then, which was some months ago. It is worth reminding the Chamber that Coventry lost about £300 million of its schools capital programme as a result of changes made by the Government. That, of course, has had an effect on the quality of teaching in our schools and on its buildings; indeed, we should not forget those employed in the construction industry. We should not lose sight of the fact that Coventry’s local economy has lost that £300 million.
We are awaiting the Secretary of State’s response to the James review. Even after he has announced the results of that review, and possibly talked of implementing it, in our view it would still take many months before anything could be done. Meanwhile, back at the ranch, in Coventry, schools are crying out for repairs and, in some cases, rebuilds. We cannot go on like this for much longer.
We also want to hear from the Minister how the money is to be allocated to the various local authorities for their capital programmes. Will it be done on a regional basis? Will it be done by consortia? Exactly how will the money—if there is any—be made available and allocated?
We find it strange that the Government can find money for academies, but they cannot find money for school repairs. Many people in Coventry are asking why the Government can find money for academies but cannot find it for local education authority schools. It is obvious that the Government’s strategy about 12 months down the line will be to talk about profligate local authority spending. I and my colleagues will demonstrate that that is exactly what will happen.
Coventry is considering what it calls prudential borrowing. Following on from that, schools will probably be funding their own capital programmes. We should not lose sight of the fact that that will put an extra burden on them. As we have heard in our previous debates, schools are already finding money very tight, to say the least. The local authority obviously will have to service any debts incurred. Coventry will probably have to borrow about £3 million, and it will cost about £300,000 a year to service that debt. The council taxpayer will have to pay that money in addition to what has to be paid by the national taxpayer. Taxpayers will get a double whammy, yet get less from the Government. People in Coventry and the local authorities there want to know when we might have some information about the James inquiry and some answers to the questions that I have raised.
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The late Dick Crossman, a former Leader of the House many years ago, said that the first six months of any Government determines their future. The first six months have certainly determined this Government’s future. They have made a number of U-turns, which shows that they rushed into decisions that, had wiser counsel prevailed, would have taken longer.
The combination of a significant increase in the number of births in the city and some inward migration has placed pressure on school capacity, particularly in the primary sector. Coventry city council proposes to increase pupil places. By 2012, a total of 120 additional places will be required at six schools, at an estimated cost of £9.4 million. I shall refer specifically to a few schools, but I shall touch on them only lightly as they are in the constituencies of my colleagues, and I would not want to tread on their territory. I think, for instance, of the Grange Farm and Sacred Heart schools. The latter demonstrates that capital programmes in the public sector are not the only ones to be affected; there is also what I would call the religious side. There are Roman Catholic schools in Coventry as well as Church of England schools and they, too, will face the same problems as the local authority schools. Furthermore, the local primary care trust’s figures suggest that between 150 to 180 additional reception pupil places will be required for September 2014. Work to identify possible sites for these additional places is under way.
There are, of course, other school funding pressures in addition to the need to provide additional primary places. There is an urgent need to replace two large primary schools because of structural problems. Coventry’s five-year building plan includes the replacement of two primary schools that have major structural problems with their roofs. Engineers have confirmed that these schools need to be replaced in the next four to seven years. The estimated cost of replacing them at today’s prices is approximately £20 million.
A significant amount of ongoing basic maintenance and refurbishment work is required to ensure that schools in Coventry meet the minimum standards. In recent years, schools have used their devolved formula capital to deal with such needs. However, that has been reduced by 80%, and schools will not now have the resources to undertake these essential repairs. The overall financial implications include the pressures of pupil placement and the cost of essential improvements and replacement of buildings, and there is a total funding gap of almost £54 million pounds up to 2015.
I shall highlight the key issues. The time necessary for consultation, designing and building requires projects to be planned some years ahead. Officers have told me that undertaking this work in the context of a one-year allocation of funding is utterly unrealistic. The city council cannot commit to contracts of that value without certainty on future funding levels. The city council has already had to make provision for prudential borrowing so as to fund projects that need to be started immediately in order to provide sufficient places in 2011-12. That still has to be cleared by the school forum. We also have to consider the legal implications.
Further delay in making funding announcements will jeopardise the ability of local authorities to provide sufficient capacity in schools. The delay of the James review means that it is unclear how funding allocations are to be made. That will further complicate how local
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authorities plan school-based projects. I am concerned that this may be an attempt by the Government to fragment the school system. If the James review takes capital funding for schools out of the control of local authorities, how will the money be allocated? Will it be done on a regional basis or will there be consortia? Exactly how will it be allocated? Although the Government say that they are trying to abolish quangos, will they introduce another one?
I have outlined the problems that we experience in Coventry but, as I said earlier, my two colleagues will elaborate on them. In the interests of the pupils and the people of Coventry and the local authority, we would like some clear-cut answers from the Minister.
11.9 am
Mr Geoffrey Robinson (Coventry North West) (Lab): I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham) on securing this debate, and I thank Mr Speaker for granting it and the officers who preside here today. It is a timely debate for Coventry. It follows an earlier debate, in which we tried to explain the particular difficulties faced by Coventry. I am pleased to see the Minister here today; I know that he is well aware of the situation in Coventry. It was dreadfully compounded by the fact that, for whatever reason—it was not entirely the council’s fault, although it was partly responsible—the city failed to get a single school under Building Schools for the Future. BSF said that much needed to be done, even in the secondary sector. As a result, the overall programme, including that for primary schools, has to be increased if we are to overcome the terrible disadvantage that we incurred.
That was all the sadder because we were on the verge of signing those contracts. If they had been signed, we would be going ahead with three schools, two in my constituency and one in my hon. Friend’s constituency, behind which we could bring on the other schools. As it is, rebuilding in Coventry has come to a virtual halt, leaving schools such as Woodlands in my constituency suffering as a consequence. The central block of the school, which is rather inappropriately known as the Gibraltar block—it is anything but firm or solid—is propped up by scaffolding. Last week, we had to close the block because even the scaffolding had begun to collapse under the wear and tear of the past five years. That really is not good enough. That primary school has produced no fewer than three members of last two Lions rugby football teams. It has a great sporting tradition. That scaffolding around the main block is a great deterrent to a very fine school in a very good part of Coventry.
That problem may be resolved as the school has now chosen to become an academy, and I hope that that will loosen up funds and speed up the repair work. I recognise that that will take money from where it needed elsewhere in the city. It is a pre-emptive strike, but what was it supposed to do? On reflection, it is rather sad that the only way in which it can overcome the sudden chopping by this Government of a rebuilding programme and get something in advance of everyone else is to become an academy. That sole reason has been the driving force behind its decision to become an academy.
Ahead of or along with the James report, may we please have a clear programme for Coventry’s schools, especially its primary schools? That would be very
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welcome. At the moment, we are in no-man’s land; we cannot go forward and we cannot go back and the situation is deteriorating. I have mentioned two schools in the primary sector in this marvellous debate, but we could talk about all of the schools in the city. We do not have to be parochial about it.
Two schools need to be demolished. The estimated cost to rebuild them is £20 million, so we are looking at £10 million a school under the new regime. I am the first to admit that the old regime was too cumbersome and took too long. I fought with my right hon. Friend the Member for Morley and Outwood (Ed Balls), who was Secretary of State at the time, over the matter. I said to him, “Look, this is taking too long. We must get on with this.” None the less, I knew that the work would get done. I did not think that it would come to a grinding halt. It was just taking longer than it should. What the present Government have done is to bring the work to a grinding halt.
We also need two new primary schools. Fortunately, this is a happy period for us in that birth rates are up and migration is in favour of Coventry. Something in the region of 200 places will be needed by 2015. Again, where will we find that money? Time is also a factor. Even under the accelerated programme, of which I am all in favour, it takes engineers and architects three to four years to plan a project. If it is to be done to cost and on time, a good deal of planning is needed. When will we have the certainty that we can go ahead with such a project? When will we have adequate funds to meet the needs of the children who are coming into school? They do not want to go into over-crowded and unsatisfactory buildings.
As a minimum, we require £54 million for our building programme, which will take us through to 2015. Will the Minister tell us when we will be able to access such funds? I would also like the local council to be a lot more active. It has not been the most dynamic council in securing money for such purposes. Nevertheless, it is finding it extremely difficult to deal with the delays. I know that the present Secretary of State wanted to avoid them, but that is what we face.
Remarkably, Coventry council initially took the view that if it did not criticise the Government for cancelling BSF, and behaved responsibly and showed that it understood the difficulties of the Government, it would do better financially. Of course it has not; if anything it has done worse than expected. The leader of the council, John Mutton, now says:
“The antics of this government are appalling. Here we are in June and we still do not have a clue what we are going to have by way of a budget this year.”
Councillor Kelly, who is in charge of the education brief, makes similar remarks about the uncertainty over the Government’s intentions.
The position of Grange Farm school in Allesley is particularly concerning. It is in need of immediate improvement. Children can be scarred for life. Their impressions in primary school are vital. Will the Minister specifically respond to that concern?
In conclusion, the Coventry building programme has been cut to the bone and is full of uncertainty. The number of children is rising and we need new schools. Woodlands school in my constituency needs to be extensively refurbished. Perhaps funds could be released
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for it alone. It has had scaffolding around it for five years. One year into this present Government and little progress has been made in Coventry.
Mr Bob Ainsworth (Coventry North East) (Lab) rose—
Martin Caton (in the Chair): Mr Ainsworth, I did not receive prior notice that you wished to speak in this debate. I am happy to call you, but I need the Minister’s permission.
Mr Jim Cunningham: On a point of order, Mr Caton. I did tell you that Mr Ainsworth was going to speak in the debate.
Martin Caton (in the Chair): I may well have misheard you, Mr Cunningham, because I was trying to chair the meeting at the same time. Neither the Clerk nor I picked up a reference to Mr Ainsworth. We are wasting his time now, so let me call Mr Ainsworth.
11.16 am
Mr Bob Ainsworth (Coventry North East) (Lab): I apologise for the misunderstanding, Mr Caton. I thought that the procedure was that we had to make arrangements with the individual who has secured the debate. Thank you for allowing me to speak.
On 15 March, I raised the dilemma of Richard Lee school in Coventry. Over the winter, the condition of the school became quite disgraceful. Children were being taught in corridors because of water egress in classrooms. The sewers are inadequate and spill out on to the playground. The wonderful teaching staff wrestle with those appalling conditions and continue to provide a good education for the children. I said then that I was really worried about whether the school would get through another winter. Sadly, crisis has struck before another winter. Last Thursday, the ceilings came down in one of the corridors. Fortunately, the rain storm was at night. There were no children in the building, and it was a teacher training day the next day, so education was not dreadfully disrupted. None the less, my fears for Richard Lee school have been exacerbated by the latest crisis.
If we are not careful, we will remove all hope. We had a reasonable capital budget that was getting around the schools in Coventry, and Richard Lee was right at the top of the council’s priorities. The council’s capital programme, which was £49 million last year, is now £9 million. It will take £9 million to rebuild Richard Lee alone, leaving no money for the rest of the city. The devolved budget that the school has, which has enabled it to patch and repair, keep the children going and make the environment acceptable, has been cut from £49,000 to £9,000. This is a desperate situation. As my hon. Friend the Member for Coventry North West (Mr Robinson) has said, we need some certainty. We do not know where the funding is coming from. Coventry knows that it has to rebuild Richard Lee school without delay. It is already spending money on survey work, because it knows that that has to be done, but it has no idea from the Government whether it will get the necessary money to rebuild the school.
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We badly need certainty, and we need some hope to be restored to those schools that for very good reason had reached the top of the list for a rebuild. Patch and repair at Richard Lee is not feasible, nor is it feasible at Wyken Croft. Those Hills-built schools are structurally damaged. They have come to the end of their useful life and need to be replaced, and I hope that the Minister can give us some hope.
11.20 am
The Minister of State, Department for Education (Mr Nick Gibb): I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing this debate. Like the hon. Member for Coventry North West (Mr Robinson) and the right hon. Member for Coventry North East (Mr Ainsworth), he is no stranger to education provision in the Coventry area. He has assiduously raised the difficulties faced by schools in his area through questions and a number of debates in the House, and he and his colleagues met the Secretary of State last July.
I fully understand the difficulties in Coventry both in providing sufficient primary pupil places and in ensuring that repairs and desperately needed capital improvements are carried out in schools such as Richard Lee primary, which is again in the news because of maintenance problems. That school is in not the hon. Gentleman’s constituency but that of the right hon. Member for Coventry North East, who secured a debate on the subject on 15 March this year.
The Government are fully aware of the pressures that many local authorities face in the light of the very tight spending review capital settlement for the Department, but we must not forget why we find ourselves in this difficult position and why we have had to make difficult decisions. Because of the size of the budget deficit and the increasing caution of the capital markets to fund sovereign debt, our top priority in the medium term has to be to reduce the country’s budget deficit, which means that we need to prioritise a diminished level of capital funding for school projects, on the basis of need, primary places and deprivation.
In the context of what we are currently spending on debt interest payments alone, the action that we are taking is essential. Those interest payments could have been used to rebuild or refurbish 10 schools every single day of the year, but despite the difficulties we have been able to secure capital spending of £15.9 billion over the four years of the spending review period. We know only too well that there are schools in desperate need of refurbishment that have missed out on previous Governments’ capital programmes, and we fully appreciate that some people will feel that they have been treated unfairly, particularly if they fall just on the wrong side of the dividing line that had to be drawn. Despite the austerity of the capital programme, we will continue to spend significant capital on the school estate, at an average of almost £4 billion a year.
I know that schools and local authorities will experience difficulty in adjusting to these lower levels of funding. Nevertheless, they are historically high levels and, taking a wider perspective, they are still higher on average that those experienced in the 1997-98 and 2004-05 periods. Even when funding is tight, it is essential that buildings and equipment are properly maintained, to ensure that health and safety standards are met and to prevent an
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ever-increasing backlog of decaying buildings that will be difficult and more expensive to address in the long term.
By stopping the wasteful and bureaucratic Building Schools for the Future project, which the hon. Member for Coventry North West referred to as cumbersome and taking too long, we have been able to allocate £1.3 billion for capital maintenance for schools, with more than £1 billion being allocated to local authorities to prioritise their local maintenance needs. We have also been able to allocate £195 million directly to schools for their own capital repairs. It is clear that rising birth rates mean increased demand and pressure on primary places, with more parents unhappy with the lack of choice open to them. The education system has rationed places in good schools for too long, which is why our reforms are designed to allow more children to go to the best schools and to drive up standards in the weakest performers.
We are encouraging scores of new free schools to be set up, run by groups of teachers or educational charities, in places where parents want them, particularly in areas that have been failed educationally for generations.
Mr Robinson: I tried to intervene on the Minister when he mentioned BSF, but unfortunately I did not manage to catch his eye. I directly criticised BSF myself to the then Secretary of State for Education, my right hon. Friend the Member for Morley and Outwood. One thing that happens whenever a big programme of that kind gets into the hands of civil servants and others who want to control it to the nth degree is criticism, which is fair enough. However, nobody recommended bringing BSF to a screeching halt, which has been to the great detriment of Coventry. We have two schools at the moment where there are problems. We have Woodlands school, where the scaffolding itself is falling down and there is a danger that it will bring the whole building down with it. We also have Richard Lee school. The Minister must have seen reports on that school. There are gaping holes in that school that people might fall through. These are urgent matters. What will he do about them?
Mr Gibb: The hon. Gentleman has raised a good point, which I am about to come on to. We have allocated £800 million of basic need funding for 2011-12, which is actually twice the previous annual level of funding, to support the provision of increased places, particularly in primary schools, as a result of the increasing birth rate. In addition, we expect similar levels of funding to be allocated from 2012-13 until 2014-15, which will address some of the concerns that he has raised.
Mr Cunningham: How much of that £800 million will actually be allocated to Coventry? That is what my right hon. Friend the Member for Coventry North East and my hon. Friend the Member for Coventry North West were getting at when they talked about the two schools.
Mr Gibb:
The capital allocation for 2011-12 for Coventry city council and its schools was announced on 13 December last year, and it was in excess of £13 million. It is now for the council to prioritise how it will spend the available
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funding, taking into account the building needs of its schools and its own responsibilities to fulfil its statutory duties.
Mr Ainsworth: The Minister has said that it is important for schools to maintain their buildings, even if they are in need of a rebuild. How on earth can Richard Lee school do that with a devolved capital programme of £9,000? How does a school maintain an ageing building with that size of devolved capital programme?
Mr Gibb: We took a decision about how we allocate scarce resources to schools and local authorities. It was our judgment that, because of the cut in the capital budget, it is better to allocate the bulk of the capital to local authorities for them to decide where the greatest need exists in their area, rather than to allocate more of that money down to the school level, because there are many schools that do not have the same need as Richard Lee school. It is better to divert that money to the local authority, which can allocate it to those schools, such as Richard Lee school, that are in greatest need.
I will now turn directly to the difficulties encountered by the Richard Lee primary school.
Mr Robinson: This issue is not about the devolution of the budget, which is entirely up to the Government. The point is that £9,000 will not go anywhere, as my right hon. Friend the Member for Coventry North East has said.
Mr Gibb: I understand that, but £13 million, which is the amount of capital allocated to Coventry, is a very significant sum. It is not as high as we would like it to be, or indeed as high as it has been in recent years, but it is high historically compared with spending in other Parliaments in recent times. We face a difficult budget deficit, and we want to ensure that any capital available is spent where the greatest need exists. That applies to schools such as Richard Lee primary school in Coventry. That case is a classic example of how we are trying to target the funding at the schools that need it most.
Mr Cunningham: What the Minister is actually doing is asking the local authority to use the wisdom of Solomon, when it needs just more than £40 million to properly resource its schools. He is putting the local authority in a terrible position, so it is no good blaming the local authority.
Mr Gibb: I am not blaming the local authority. What I am saying is that we took a decision that it was better to give the bulk of the funds available for capital spending to local authorities to decide how to allocate them rather than to maintain the levels of the devolved grant formula to schools in this spending review period in which we are encountering these very difficult decisions on the budget deficit. That is because local authorities, rather than the man or woman in Whitehall, are best placed to decide which schools in their area have the greatest need for capital to be spent on them, and that applies to Coventry. That is the decision that we took.
Officials at the Department have been working—
11.30 am
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Azerbaijan and the South Caucasus
[Mr Philip Hollobone in the Chair]
2.30 pm
Bob Blackman (Harrow East) (Con): Thank you, Mr Hollobone, for calling me to speak. This is the first time that I have served under your chairmanship and I trust that it will not be the last.
I refer Members to my entry in the Register of Members’ Financial Interests.
At the outset of this debate, it is important to refer to the strategic importance of Azerbaijan in the surrounding region. We must always remember that Azerbaijan sits between Iran to the south, Russia to the north and Turkey to the west. Of course, it is also adjacent to Armenia and Georgia, which I will say more about later.
Azerbaijan is a strategically important country that has freed itself from the yoke of the Soviet Union, and it is making tremendous strides as a democratic republic. It is important that we understand and appreciate the strides that Azerbaijanis are making. It is also important that we understand the importance of Azerbaijan to the British economy. Azerbaijan is a country that is rich in oil and gas reserves. Those reserves are strategically vital not only for the region but for Britain’s future economy.
I am particularly pleased that the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt) will respond to the debate today. I know that the region that Azerbaijan is a part of is one that he picked up on quickly as part of his ministerial responsibilities. I congratulate the Government on taking a strong lead in encouraging diplomatic relations with Azerbaijan and the other countries in the region.
Azerbaijan was the first secular democracy in the Islamic world, created in 1918. It gave the vote to women before women in this country or the US had the vote, which is a tremendous history. However, Azerbaijan’s development was halted when it was annexed by the Soviet Union back in 1920. Of course, Azerbaijan was under the Soviet yoke for 71 years before its battle for independence began. After their second revolution and after large numbers of brave Azerbaijanis were killed by Soviet soldiers, the country was finally able to become free and to govern itself.
Azerbaijan has a variety of different arrangements with different international bodies, including the United Nations, the World Bank, the International Monetary Fund, the Council of Europe and the Parliamentary Assembly of the Council of Europe, the EU’s Eastern Partnership, the Organisation for Security and Co-operation in Europe, the Organization of the Islamic Conference, Euronest, the Non-Aligned Movement and the European Bank for Reconstruction and Development. So Azerbaijan is very outward-looking; it is not an inward-looking country. We must encourage and promote that outward-looking nature, and ensure that we safeguard the future of this burgeoning democracy.
There is one major issue that is mentioned by everyone involved with Azerbaijan, which is the current situation in the occupied territories. Between 1992 and 1994,
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there was a war with Armenia, which led to Armenia occupying the region of Nagorno-Karabakh. The ceasefire in 1994 resulted in 17% of Azerbaijani territory being occupied by Armenia, an issue which remains a running sore today. It has also meant that 870,000 Azerbaijanis have been forcibly removed from their homes, and those people have had to be accommodated elsewhere in Azerbaijan.
The international community has taken action on that. There have been no less than five United Nations resolutions covering this issue, four in the Security Council and one in the General Assembly. All those resolutions have demanded the withdrawal of Armenian troops. However, the Armenians have refused to honour those resolutions, and they still occupy Azerbaijani territory today. That is a serious problem, because it has created 870,000 internationally displaced persons whom Azerbaijan has to accommodate. On my visit to Azerbaijan, I was able to see the new facilities that the Azerbaijani Government are developing for some of those people to live in. However, there are too few of those facilities, because those people live in dreadful conditions. Some of them live in tents and have done so for 10 years. Others live in slums or in old student accommodation, which we in this country would rightly condemn and ensure that it was removed. So progress in accommodating those people is slow, but they are due to return to their homes once the Armenian forces are removed from the occupied territories.
The current position has been negotiated over an extended period of time, but the progress of negotiations is far too slow. As part of the process, there is the Minsk group, which is co-chaired by Russia, the US and France. However, there is a debate about whether that group is impartial or is actually influenced by the Armenians. The reality is that Russia is a direct political, economic and military ally of Armenia, operating military bases within Armenia itself, so it can hardly be said to treat Azerbaijan and Armenia equally.
Under the Madrid principles, which are a proposal to resolve the conflict, there should be a phased withdrawal of Armenian forces. However, those principles have been accepted by Azerbaijan but not by Armenia, so there is a stalemate. The next meeting to discuss those principles is taking place this week. We hope that there will be progress, but so far there is little optimism, because nothing has happened. We have a concern, and we are a major investor in Azerbaijan’s economy. It is my contention that we should have a much more direct, prominent and vocal role in the peace process, to defend our own economy and to promote both our national interests and the interests of the region of which Azerbaijan is part.
In Azerbaijan, there are excellent relations between different people of different backgrounds and different religions. It is an Islamic republic, but the constitution guarantees that anyone has the right to choose any faith, to adopt any religion, to express their religious views and to spread those views. As many hon. Members know, I am a strong promoter of the Jewish community, and I try to combat anti-Semitism wherever it raises its head. The Jewish community in Azerbaijan is an excellent example of Azerbaijan’s different minorities.
Krasnaya Sloboda, in the region of Guba, is the only completely Jewish town outside Israel. The Bet Knesset synagogue in the town was restored by Government aid
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to ensure that Jewish people in the area can celebrate their religion. Other than Israel, Azerbaijan is the only country in the world where the finance to rebuild and refurbish a synagogue has come from a national Government. Opposite that synagogue there is a leading mosque, so religions co-exist side by side in Azerbaijan. Indeed, Azerbaijan has excellent diplomatic relations with Israel, and in many ways the relationship between the two countries demonstrates the future of diplomatic relations between Islamic countries and Israel. Israel has an embassy in Baku, the capital of Azerbaijan. All communities in Azerbaijan have the opportunity to celebrate their religions and their faith, which is a shining example for other former Soviet countries as they emerge from years of dictatorship.
There is one sad fact. Relatively recently, mass graves were discovered. At the moment, the one certain fact is that large numbers of people were murdered—battered to death—but when that happened, who the people were and who was responsible is disputed. I contend that it is vital that the international community gets involved in the discussion, in analysing what happened, in excavating the graves and in dating the murders, so that an international inquiry can establish responsibility and the perpetrators can be brought to justice. That is clearly a concern for everyone. Seeing the mass graves is thought provoking, because terrible atrocities have gone on down the years.
On my recent visit, I was astonished to see a war memorial to British soldiers and sailors who sadly died at the end of the first world war. I have to confess that it was news to me that we had had any involvement with Azerbaijan at any stage during either of the world wars, but there the memorial stood, in all its glory, restored by the Azerbaijani Government. I plead with the Minister to visit that memorial and see that we need to honour those brave British individuals who gave their lives by ensuring that the memorial is brought up to a decent modern standard. Some colleagues and I were privileged to lay a wreath at the war memorial, because those brave people need to be remembered.
The key issue in relation to Azerbaijan’s economy is energy supplies. The country sits on the Caspian sea, which has huge deposits of oil and gas, which are strategically important. Azerbaijan is the only country that can guarantee a gas supply through the southern corridor without going through Russia. A pipeline exists to take gas through Azerbaijan, bypassing Armenia, and then through Georgia, into Turkey and on to Europe. BP has just signed a major contract, which means that by 2015, I think, that one gas field will be able to supply twice the needs of Europe in any one year, which offers huge future potential. We have a direct and natural interest, because BP is the only external contractor and, once the process is complete, it will be the biggest gas and oil terminal in the world. BP is investing $20 billion in Azerbaijan, and one of the great things is that the Azerbaijani Government say that they are ensuring that the wealth that is created is recycled among the whole Azerbaijani people, rather than going into the hands of relatively few individuals. The great attraction is that they will regenerate their economy while ensuring that everyone benefits.
There are, of course, things on which Azerbaijan needs to make progress. There is the problem of 870,000 internationally displaced persons. Azerbaijan is still at
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war with its immediate neighbour, so stability is its greatest priority, and here is an opportunity for Britain and the European Union to work in partnership with the fledgling Azerbaijani Government to ensure that things improve. Azerbaijan does not have a perfect democracy, but its Parliament building is a darned sight better than the one we sit in—especially in terms of the seats that we all enjoy. Importantly, Azerbaijan has embarked on peaceful elections, the last of which was watched by 2,500 foreign observers, who clearly stated that the election was free, fair and appropriate.
There is a worry about corruption. Corruption can be a problem anywhere there is oil, gas and a burgeoning economy, but when accusations have been made, the President has taken direct action by ensuring that people who have allegedly taken bribes are dismissed from the Government straight away.
The other worry is that Russia continues to wish to extend its interests and influence in the region. It has just extended its lease on the air base in Armenia by 40 years, even though the last lease had a full 10 years to go before expiry. That demonstrates that Russia is not going to let go and still wishes to influence and control the whole element of Azerbaijan and the surrounding areas.
In conclusion, the fact is that there is a great opportunity for Britain and its economy, for the promotion of jobs and for furthering British interests in the region. Probably more importantly, there is an opportunity to encourage and promote a democracy that is relatively in its infancy and freeing itself from dictatorship to ensure that it recognises and benefits from everything that goes on. We also have the opportunity of saying to Armenia, in our diplomatic way, “If you reach a satisfactory conclusion and a proper settlement on the occupied territories, there is absolutely no reason why you can’t benefit from the economic activity that will flow. If however, you continue to blockade and prevent progress, the natural result will be that you will not benefit from the burgeoning economy.”
My final point is that most people do not know where Azerbaijan is. Not the greatest thing in the world as far as I am concerned, but the greatest thing as far as Azerbaijan is concerned, was winning the Eurovision song contest this year. I will not sing the song—[Hon. Members: “Oh, go on.”]. Azerbaijan is looking forward to hosting the contest next year and having the opportunity to bring people in to witness it from all over Europe. It plans to build a concert hall specifically for the occasion. This really puts the country on the map, in a very positive way, which is, I think, warmly welcomed by all concerned. Of course, if we can encourage better diplomatic relations with Azerbaijan, it might give us votes come the next Eurovision song contest—[Hon. Members: “Please, no.”] On a serious note, the contest has put Azerbaijan on the map, as has the expansion of oil and gas. The country has become a major strategic area of Europe and of the world, and we can invest and be directly involved in it. I trust that I have given a flavour of the debate. There is now an opportunity for other hon. Members to join in with their contributions.
2.49 pm
Mr Gerry Sutcliffe (Bradford South) (Lab):
It is a great pleasure to serve under your chairmanship, Mr Hollobone. I, too, declare an interest as a
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member of the all-party group on Azerbaijan, and as someone who went on the recent visit to that country.
I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this important debate, and it is good to see colleagues around the room who have a great interest in what I found to be a tremendous country. I will come back later to the fact that Azerbaijan does very well in sport, but I am grateful that the Minister, who was a good footballing colleague of mine and who knows of my love of sport, will reply to the debate. It is also good to see my right hon. Friend the Member for Warley (Mr Spellar), who will be leading for our side, in his place.
I shall follow the lead given by the hon. Member for Harrow East on what we found in Azerbaijan. He is right that, when we speak to most people about Azerbaijan, they do not know where it is. As he has said, it is strategically placed between Russia and Iran, on the Caspian sea, and it is a strategic country internationally in terms of various economic and historic events over many years. He is right that we should do everything in our power to ensure that the good links that exist between the UK and Azerbaijan continue.
When we went to Azerbaijan, people were very hospitable, and we were able to ask any questions that we wanted and to see a whole range of things. We were welcomed by the President, who I thought was very forthright. I have spoken to the Prime Ministers and Presidents of other countries, and I found his honesty refreshing when he discussed some of the problems that the country faces as well as some of the successes. There is also a great deal of optimism within the country, which might be mildly surprising considering, as the hon. Gentleman has mentioned, the issue that they face in relation to Nagorno-Karabakh.
We were fortunate—if that is the right word—to go to the front line to see first hand the problems that have arisen there. We also had the opportunity to speak to villagers who had been displaced. These were moving events in which a group of small schoolchildren sang us a song and then the villagers talked to us about the problem of not being able to go back to their homeland. We could see that the Government had a dilemma. In the capital, Baku, we visited some of the tenements—that is the only way to describe them—that the displaced people were in, and the living conditions were very poor. The dilemma for the Government was, yes, they wanted to re-house people in better housing, but those people did not want better housing in Baku; they wanted to go back to Nagorno-Karabakh.
As the representative of a Bradford constituency, I see parallels between Nagorno-Karabakh and the issue of Kashmir, where UN resolutions that have been in place for more than 40 or 50 years have never been acted on. The situation is similar in Nagorno-Karabakh. We sometimes wonder why some Muslim countries are angry at the way in which we in the west deal with UN resolutions—the issue may be more significant and complex than the picture that I am painting—but, if we consider that those resolutions have been in place for so long without any action being taken, it is possible to understand why that is the case. Indeed, the refugees and villagers told us, “You act in Libya and elsewhere in
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the world, but you don’t act on the legitimate issue of our problems with displacement.” Every contribution and every discussion and debate that we had made us aware of people’s concern about Nagorno-Karabakh and the need for the issue to be resolved.
On Armenia and Azerbaijan, Armenia has a wonderful opportunity, if it could only be seen. The hon. Gentleman has discussed Azerbaijan’s success with oil, gas and the pipeline. Armenia could get the same sorts of benefits, if it thought about its people and its future. We were reminded of parallels with Northern Ireland. Some expatriate Armenians are highly placed in Governments and lobbying groups across the world. They remember their homeland and are passionate about what it used to be, but the reality is that Armenia is a poor country that needs investment and support.
I hope that the discussions with the Minsk group will result in a positive outcome and that the issue of Nagorno-Karabakh can be resolved. The optimism of the Azerbaijanis was reflected in what the President and others told us. They said that the country feels the issue deeply, but that it was not going to hold them back from doing the other things that they need to do.
The UK’s links with and investment into Azerbaijan have been mentioned, but the relationship can work both ways. In fact, I know a small community of Azerbaijanis at Bradford university. One of the things that we need to look at on a wider scale in relation to general Government policy is student visas. We need to make sure that we do not stop people from countries such as Azerbaijan coming to the UK to enrich and enhance our cultures.
As I have said, Azerbaijan has a rich history. It wants to get involved with the wider world, particularly the European Union, and there are plenty of opportunities. On oil and gas, it is interesting that there is not only a British Midland flight from Heathrow to Baku and then Tbilisi, but a regular flight from Aberdeen to Baku, which carries Scottish oil workers. The links are there, and the opportunities are many.
On the area in which I have a great interest, sport, we were pleased to see the Azerbaijanis’ Olympic training centres. They relish and love sport. The Olympics and Paralympics will be in London next year, and the Azerbaijani team will be based in Ipswich. That will offer opportunities for cultural and sporting debates and exchanges. I have spoken to the Ministers with responsibility for those issues and to regional spokespeople, and they are keen on setting up groups of young people to get together to develop sport.
On the football front, one of the teams whose name I cannot remember is trying to get a strong team in Europe. An ex-Arsenal player, whose name also escapes me—[Hon. Members: “Tony Adams.”] Thank you. Memory loss is a sign of old age. Tony Adams is the manager of Azerbaijan’s most successful team and there is an ambition for that team to do well in Europe. They will be playing friendlies in the UK soon. It is an outward-looking country that wants to engage with the European Union and with us.
I was as surprised as the hon. Member for Harrow East at the relationship with the UK. It was moving to see the war memorial to the soldiers and sailors in an area in which Azerbaijanis had lost their lives during so many conflicts. It was a pleasure for us to see the
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memorial and the way in which the country honours our fallen servicemen and women. I encourage the Minister to go to look at it, if he gets the opportunity. It is of great significance.
The Eurovision song contest may not be everyone’s cup of tea, but when Azerbaijan won, it provided a great opportunity that it wants to grasp. About 35,000 people attended the Eurovision song contest in Germany, and the same number will attend the event in Baku next year. Work is already under way to get the appropriate venue and the appropriate hotels in place. I think that there are five five-star hotels being built and that a number of other hotels are on the way. They also want to sort out issues in relation to visas and visa restrictions, and we have been informed by the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Weston-super-Mare (John Penrose), who has responsibility for tourism, that that will be resolved shortly. It would be difficult to have a year of tourism without people being able to get into the country. They recognise that and are going to try to do something about it.
I have a plea from a big fan of the Eurovision song contest. Richard Pengelly, who is senior barperson in the Strangers Bar of the House of Commons, is an avid fan of the Eurovision song contest. He has asked me, given my involvement with Azerbaijan, whether I can make sure that he gets there next year, so I shall put that on the record on the basis that somebody who is listening may give him the opportunity to attend. He has said that he could act as a cultural adviser to Azerbaijan. It is a great opportunity for that country to have the rest of Europe visit it and see its facilities. People will be heartened to see the investment being put into the infrastructure, the roads and all the other things. They will also see the housing developments, that people are working very hard and that the investment is going right down to the people who count.
The UK Government should be proud of our relationships, and we can develop them further. Cities such as mine would benefit from visits from people from Azerbaijan in order to discuss religious freedom and tolerance. Azerbaijan had a problem with mullahs from outside preaching radicalism. It decided to deal with that, and it has done so. A mullah who does not come from or was not born in Azerbaijan cannot preach in the mosques. There are also important issues surrounding education and integration. We can learn a lot as well as give a lot to Azerbaijan, and I hope that we will do so.
I thank all those who were involved in the visit to the country. From that, I know that those who support Azerbaijan in its attempts to ensure that it opens itself up to the wider world will gather in strength. I wish the country well.
3 pm
Mr Mark Field (Cities of London and Westminster) (Con): I am lucky enough to be the chairman of the all-party group on Azerbaijan, and I was also on the trip that the previous two speakers attended in recent weeks. In addition, in recent months I have been board adviser to the European Azerbaijan Society.
We had a tremendous trip to Baku, Nagorno-Karabakh and Quba during the Whitsun recess. I congratulate my hon. Friend the Member for Harrow East (Bob Blackman)
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on securing the debate. Like him and the hon. Member for Bradford South (Mr Sutcliffe), I was particularly moved by being at a war memorial that faced and was yards from the Parliament building. It was a particularly important war memorial because, as those who are familiar with the history of this region will know, fighting took place in areas such as Baku during the great war. Such areas were part of the Ottoman empire at that juncture.
I very much hope that the Minister will take the opportunity when he is next in Baku to visit that memorial. Clearly, I suspect that work has been carried out by the war memorials body to keep the memorial in reasonably good shape. What struck me was that the memorial is an important part of what is called Martyrs’ Alley, which is the memorial for various conflicts that have taken place in Azerbaijani and, indeed, Turkish history over recent years. In particular, there were problems during 1990 when there was a move by the then USSR, which was on its last legs, to try to put down conflicts on the streets of Baku. There was also the conflict with Armenia, which started two years later. What struck me was that, given the importance of pride and face in what one might broadly call the Muslim world, we should be intensely proud of the fact that a small corner of this sacred ground is in the hands of a British war memorial.
I reiterate both previous speakers’ words. There seems to be a tremendous opportunity in relation to Azerbaijan. It is essentially a secular Muslim state. Some 94% or 95% of its inhabitants are Muslim, and the remainder are a few Jewish and some Christian inhabitants. Given Azerbaijan’s strategic importance between Russia and Iran and the daily security concerns that we face in this country from difficulties in that part of the world, fostering closer links with Azerbaijan seems to be an extremely sensible way forward.
Although we had a tremendously interesting visit and we felt it was very open, it would be wrong to be ludicrously idealistic and not to recognise that Azerbaijan faces some issues. It is not a functioning democracy as we would understand the term here in the UK. However, it has made tremendous strides forward both politically and economically in recent years. That should be recognised and rewarded as far as our relationship with the country is concerned.
I became involved with Azerbaijan immediately after the previous election, when there was a move to reconstitute the all-party group. I did so partly because local Azerbaijanis who have business interests in the UK and other parts of Europe have had a big impact in trying to ensure that the country is not just seen as another oil and gas state. It would be all too easy to put the country in a box as being one of the “stans” of that region, as if such countries are somehow similar in history and outlook to other countries strong in the oil and gas area.
However, it would be wrong to understate the importance of oil and gas and of the tremendous trading links between the UK and Azerbaijan that go back some 20 years to the signing of long-term contracts by BP, which is and remains tremendously committed there. Some 4,000 or so permanent UK expats live in Azerbaijan. They are predominantly Scottish, but a significant number of people from other parts of the United Kingdom also live there. They make a good living and play an important part in developing the economy.
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The Azerbaijani economy has grown. There has been compound growth of 7% or 8% in recent years, partly on the back of oil and gas. However, Azerbaijan is keen to promote to the world that it is about other things. In particular, it is looking to develop its financial services expertise. Obviously, I hope that my background as a Member of Parliament for the City of London will assist in that regard. It is also looking to develop areas such as high quality agricultural produce—some significant manufacturing goes on—and the tourism industry. Baku was always regarded as the third city within the Soviet Union after Moscow and St Petersburg. It has tremendous tourism opportunities in a quasi-alpine area in the north of the country. Benefits will arise there in the coming years and I hope that the tourism trade begins to assert itself.
I very much agree with what the hon. Member for Bradford South said. There is clearly an issue with visas. It is probably fair to say that there is a two-way issue and that there is a problem at this end, too. I hope that people will begin to learn more about Azerbaijan. We can laugh about the Eurovision song contest, but it will provide a phenomenally important showcase for that country. On that particular weekend, Azerbaijan will have an opportunity to open itself up not just to the United Kingdom, but to the other countries of Europe to show what it is all about. I hope that Azerbaijan will use that opportunity to say more about some of its great beauty. As I say, Baku is a very cosmopolitan city. Obviously, it has benefited in recent years from oil and gas, but it is clear that it has a lot of architecture and history that goes back many centuries and shows what an important city it was.
It is only fair to say a few words, as other hon. Members have, about the Nagorno-Karabakh issue. That is understandably close to the heart of many political leaders. As my hon. Friend the Member for Harrow East mentioned, we were very fortunate to have a 40-minute audience with the President. As mentioned, he was very keen to talk extremely openly about all the issues that have been touched upon already in this debate, but he also wanted to stress the importance of Nagorno-Karabakh. There is an understandable feeling in what one might call the moderate Muslim world that perhaps it is all too easy to look at UN resolutions that are immediately acted upon, particularly UN resolution 1973, when other resolutions—there were four resolutions between 1992 and 1994 on the ongoing conflict between Azerbaijan and Armenia—have, to a large extent, been ignored. Lip service has been paid to trying to put those resolutions in place. I hope that the Minister will have something encouraging to say about the ongoing work that is being done not just within the UN, but as part of the bilateral relationship.
I totally agree with that the hon. Member for Bradford South said. It is in Armenia’s interests for the matter to be resolved as soon as possible. That country does not have the benefit of oil and gas and its people are becoming increasingly impoverished by its being regarded as a pariah state. As I say, it is evident that significant wealth from Azerbaijan’s oil and gas fields is going into building up a good life, even for those who feel themselves dispossessed in the Nagorno-Karabakh region. It would be in Armenia’s interests to recognise that there are
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tremendous advantages to being part of an area—albeit a little-known area as far as people in the UK are concerned—that has its eye on the future.
Finally, I wish to mention student visas. On a number of occasions I have made it clear that I have some concerns about the Government’s policy in that regard. We must recognise that education is a tremendous earner for this country and that our gold standard is recognised across the world—the English language has a part to play in that. We should also look to encourage the brightest and the best young people from across the world—not only Chinese and Indians, but Azerbaijanis—to spend time studying in this country. They could do two years of a postgraduate degree or part of a sandwich course, and they could, indeed, work for a year or two in this country afterwards. Such citizens from some of the less well known but fast-developing countries will be ambassadors for this country for the rest of their lives if they spend time here.
I recognise the political constraints that we are under in terms of getting our immigration numbers down, and there are, of course, great financial constraints on all our educational establishments, but it is self-defeating for this country to make coming to this country difficult for students and for highly skilled individuals from countries that are not members of the European Union or the British Commonwealth. We need a much more serious debate about that, and it behoves the coalition Government to be quite up-front about the issue. Immigration should not be about just headline figures and seeing such things as a great success going forward.
As I said, that issue is particularly important in developing countries, including not only Azerbaijan, but other south Caucasian countries, and I hope the Minister will be able to play some part in making a case on that issue. Indeed, I know he does that, and, like me, he probably believes that if Britain’s place as a trading and mercantile country is to be maintained, we need to make sure that we have as much free movement as possible for some of the best and brightest labour in the world.
Thank you for allowing me to contribute to this important and interesting debate, Mr Hollobone. I hope that the Minister and the Opposition Front- Bench spokesman, the right hon. Member for Warley (Mr Spellar), will take on board some of the positive impressions that we have all gained from our brief introduction to Azerbaijan.
3.12 pm
Jim Shannon (Strangford) (DUP): I thank the hon. Member for Harrow East (Bob Blackman) for bringing this matter to Westminster Hall for debate.
As previous speakers have indicated, the United Kingdom has important economic and business ties with Azerbaijan; indeed, almost 52% of Azerbaijan’s contact is with the United Kingdom and other countries. However, I want to discuss religious and racial discrimination, which I mentioned to the hon. Gentleman before the debate, and which he touched on early in his deliberations. Although incidents of discrimination have taken place over the past few years, I want to mention a couple that have taken place in the past two weeks, so they are very relevant to the debate.
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The secular Government continue to control religious freedom. Racial discrimination also affects religious freedom, because the Christian population is almost entirely ethnic Armenian and Russian, while the Muslim population is largely ethnic Azeri—given my Northern Ireland accent, some of those words will probably come out in a completely different way from usual, and I am not sure how they will be translated in Hansard, but that is by the way. A 1992 religious law initially granted more freedoms, but it has been amended several times, and restrictions have been introduced. Interestingly, Azerbaijan’s constitution clearly safeguards religious freedom, freedom of expression and human rights, but those things are not practised in reality, and that is where the problems are.
The state committee for work with religious organisations, which was formed in 2001, demands the registration of religious communities and censors religious literature. Christian groups that do not register are considered illegal and often face discrimination. In December 2007, following a police raid, five church members and three visitors were imprisoned and fined for meeting without state registration. Police officers also confiscated their books and other religious materials. On 20 June 2008, police arrested Pastor Hamid Shabanov on allegations of possessing an illegal weapon, which church members said was not true. They felt the arrest was an attempt to halt Christian activity in the area.
The state religious affairs official who led a police raid on a Baptist congregation in Sumgait during Sunday morning worship on 12 June this year explained away the lack of a warrant, saying:
“I’m the permission and the warranty”.
If a country enshrines religious freedom and human rights in its constitution, it must abide by that; it cannot make up the law as it goes along or discriminate against Christians and those of different racial identities.
Mr Gregory Campbell (East Londonderry) (DUP): My hon. Friend is outlining some recent and topical instances of religious suppression in Azerbaijan. Does he agree that the best way to draw attention to the problems faced by Azerbaijanis going about their religious worship under intense pressure is sometimes through diplomatic channels and all-party group discussions and visits? In that way, we can try to get the Governments of nation states such as Azerbaijan to look again at their human rights approach.
Jim Shannon: I thank my hon. Friend for his contribution, which clearly highlights the issues. We will be asking the Minister and perhaps the all-party group to take the opportunity to raise these issues on behalf of people in Azerbaijan who are discriminated against.
On 12 June this year—the same day the Baptists were raided—Jehovah’s Witnesses in Gyanja stated that they were raided because they did not have compulsory state registration. An official of the state committee for work with religious organisations defended its officials’ participation in the raids, saying that they were working
“in accordance with the law".
However, it is an oppressive law and it is not right. The law on religion has been amended 13 times since 1992.