Youth Employment

Matt Hancock Excerpts

Tuesday 15th July 2014 Westminster Hall

[The Minister for Skills and Enterprise (Matthew Hancock)]

Of course there is no complacency, and one young person not in education, employment or training is one too many, but on whether youth unemployment is falling faster than overall unemployment, will the hon. Lady note that in her constituency the claimant count is down 21.6% since 2010 overall and down 26.8% among 18 to 24-year-olds, which contradicts her analysis?

[Pamela Nash]

Of course. I was going to come on to that point, but I appreciate that interventions have led me to it now. I welcome that decrease, but the figures are not yet at the levels seen before the downturn. I appreciate that the figures are below what they were when the Government took office, but they are not where they should be. As the Minister said, one young person unemployed is one person too many. We should talk about the issues and how we get every single person back to work.

In 2012—I appreciate that the figures have moved on, but it is the last full year for which we have figures—youth unemployment cost the Exchequer £4.8 billion. It is estimated that it cost the economy £10.7 billion in lost output, so the Government need to look at this issue. To be clear, the £4.8 billion is more than the Budget forecast for oil and gas revenue to the Government in 2014-15. Youth unemployment is costing the Government huge amounts, so it makes economic sense to get young people back to work as soon as possible. In my constituency—Government Members seem to have good knowledge of the figures for my constituency; they are well prepared this morning—youth unemployment is still at 8.5%, which is higher than the rate for Scotland and for the UK as a whole. Although it is lower than when the Government came to power, it is still nowhere near the level it was before the financial crisis.

Unemployment in Scotland has gone down, but the total number of JSA claimants in Scotland is 140,000, which is the same as the population of Dundee. As it is in the rest of the UK, the youth unemployment rate in Scotland is almost double the adult unemployment rate. I accept Government Members’ claim that it has gone down, but I worry about complacency, which cannot be acceptable when such a huge number of young people are unable to pursue their dreams and aspirations after so many years of austerity. The all-party group on youth unemployment, which I mentioned in my opening remarks, recently disclosed that the dole queue of young people in the UK, were they all to stand in a line, would reach from Edinburgh to London.

Youth is sometimes seen as an afterthought when we discuss employment, which should not be the case. Young people should be our first thought in tackling unemployment. We know from the research into long-term unemployment that its effect on young people can be not just immediate, but can scar for life. It can leave long-term issues that stay with that person throughout their life, be it in the workplace or at home.

As I have said in private meetings, youth unemployment is often seen as a political football. The debate is always a bit heated because there are Government Members who really want to tackle youth unemployment and have the same aims as us, but who have different views on how to tackle it. I could say that some of their views are right and some are wrong, but the point is that we have the same aim.

Although I said I would never start an all-party group, having seen how many there were when I became a parliamentarian four years ago, I was shocked that there was not an all-party group looking at youth unemployment. We need that vehicle for cross-party discussions on what is an extremely important issue that successive Governments have not tackled completely, so I am glad the group exists. Since its creation, we have worked with the National Union of Students on its inquiry into youth underemployment. We have met Ministers, shadow Ministers and representatives from the third sector and trade unions, which are also working on this issue. Over the summer we intend to draft a report in the hope that we can persuade all the parties to propose high-quality, sensible polices to tackle the issue when they draft their manifestos for next year’s general election.

In setting up the all-party group, I felt it was important to look at youth unemployment and youth as a whole, but it is important that we take away from the debate the point that not all young people are the same. Often, they are spoken about as a homogenous group who all have the same unemployment issues, but they are not the same. The hon. Member for Norwich North and I spoke last week at an event in Parliament launching the youth-friendly badge, which will allow businesses to show that they are helping young people get back to work. The event was chaired by an extremely capable young lady called Shakira. She impressed me, and I am sure she impressed the hon. Lady. Shakira has become a youth ambassador for the scheme, and she told us a bit about herself during her remarks. I noted a definite reaction in the room when she happened to mention that she was a mother, and that is not the first time I have seen that. At one of the all-party group’s events, a young man who spoke about employment issues mentioned that he was a dad. I do not think the reaction was judgmental; it was one of surprise.

We seem to put young people and youth unemployment in a box. We have made the huge mistake of sometimes speaking about them as a homogenous group, but the facts are that some young people are parents, some care for sick relatives, some are disabled, some have mental health issues, some have left school with few or no qualifications, some are graduates, some live in urban deprived zones and some live in rural areas. Any policy that the Government create has to look at a solution that can be tailored to meet the needs of all young people. In the same way, different areas of the country are not the same, and businesses are not the same. Will the Minister tell us exactly how the Government are moving forward in creating a solution to youth unemployment that is not one size fits all?

I want to speak about the benefits of work experience, how the Government’s policies have worked so far and how they might move forward. I am aware that as part of the Youth Contract, the Government offer work experience to young people, but my understanding is that it is not offered until 13 weeks after a claim has started. I hope the Minister will correct me if I am wrong, but why does it have to take 13 weeks before a young person is offered work experience? Surely it could be offered earlier. Part of the reason for that might be the lack of work experience roles available to the young people jobcentres aim to serve. In my local area, the jobcentre is struggling to provide the number of work experience placements that are needed, and I will come on to that.

Jobcentre work experience has been tainted by mandatory work activity. I appreciate that mandatory work activity is a different policy from work experience for young people, but the bad press has caused harm and reduced the number of businesses that want to give work experience. Mandatory work activity appeared to be a punishment, rather than a programme designed to get people back to work.

I take the opportunity to congratulate those companies that are offering work experience—as mentioned in recent press stories—including Barclays, which the all-party group has met with. Barclays has offered lots of placements to young people, which are invaluable in gaining workplace experience, confidence and skills. Such placements, however, are not easy to come by, as I know from my area. Some employers have told me that that is because they have not been asked before, and others have blamed the bad publicity about the mandatory work activity scheme.

Alongside that has been coverage of wealthy, connected young people who are able to get internships more easily than others, while some cannot afford to take them up—a perfect media class storm. That upsets me because, as a young person, I benefited greatly from a work experience placement in a Member of Parliament’s office. I managed to do it by working part time and taking on a part-time placement. Unpaid work experience does not have to be exploitative, but it does have to be extremely well managed.

To be clear, wherever exploitation exists it has to be stamped out. Work experience has to be high quality and voluntary. Internships and work experience placements should be paid where possible, and if not, modified in order to reach out to young people from all backgrounds. I am therefore starting a scheme in my constituency—as I am happy to hear other Members are doing—involving high-quality and voluntary placements that reaches out to not only large but small businesses. We will write to more than 400 businesses in my constituency over the summer, asking them to take part. The scheme is supported by a trade union, and we are working with a local Jobcentre Plus office. Will the Minister tell us what the Government are doing to improve access for all young people to good-quality work experience? What are jobcentres doing to reach out to local small businesses, as well as large ones, to create such placements?

I want to touch on the work of my local council in North Lanarkshire, but I was also pleased to hear about the work of Inverclyde council from my hon. Friend the Member for Inverclyde (Mr McKenzie). Labour-led North Lanarkshire council has created North Lanarkshire’s Working, which I highly recommend that the Minister look at, if he has not already done so—it is easily googleable. The scheme offers local businesses a 50% salary subsidy for six months when they take on someone unemployed. It is primarily but not solely focused on young people. It is working extraordinarily well, not only creating new, sustainable jobs but offering additional support to businesses, which is allowing them to grow. Is the Minister looking at local authority examples of such support for business growth? North Lanarkshire’s Working is creating permanent jobs that otherwise would not have existed.

I have concerns about apprentices and the recent cuts at the national Skills Funding Agency, which were reported only a few days ago in the Telegraph. I understand that there will be a 47% reduction in staff, including those working on the National Apprenticeship Service. Will the Minister confirm those figures? Why are almost half those staff being cut, when the Government’s rhetoric talks about improving and growing the apprenticeship scheme?

Lots of figures have been bandied about today, as usual when we are talking about employment and youth unemployment. They are often confusing because they come from different data, such as the claimant count or young people who are NEETs. One of the figures adding to the confusion is the number of young people who are sanctioned: more 18 to 24-year-olds are sanctioned than other unemployed people. I appreciate that that is not part of the Minister’s responsibilities, but I ask him to ask the relevant Department why more young people are sanctioned than those in other groups. I also ask that he gets his colleagues to address the point that people sanctioned long term are unlikely to go back to the jobcentre and sign on, so they are not included in the claimant figures.

Young people in my constituency and throughout the United Kingdom need more action to be taken to reduce youth unemployment. I hope to hear what the Minister will do to increase skills, employability and quality of life for our young people. Will he address the points I have made in his closing remarks, and take the relevant ones back to his colleagues in the Department for Work and Pensions?

EU Council

Matt Hancock Excerpts

Monday 2nd July 2012 Commons Chamber

[Matthew Hancock (West Suffolk) (Con)]

I warmly welcome the announcement of the review into banking to replace the failed regulation drafted by Labour Members, but will the Prime Minister ensure that, as a deterrent, criminal sanctions are available in future for those bankers who are wholly irresponsible?

[The Prime Minister]

My hon. Friend makes an important point. The Chancellor will be going into more detail on this issue. We need to ensure that the regulators and the SFO have all the powers they need. People will not understand why crimes on the high street are punished in one way but crimes in the banks and elsewhere are punished in another way. That absolutely needs to be cleared up, and I am sure that this Government will do so.

G8 and NATO Summits

Matt Hancock Excerpts

Wednesday 23rd May 2012 Commons Chamber

[The Prime Minister]

The right hon. Gentleman makes a good point. However much one can look at the Greek situation and feel for the people who are suffering as a result of unemployment and living standards, there is a crying need for genuine reform in Greece, and for more straightforward and honest politics when it comes to dealing with those problems. That means making sure that people do pay their taxes, and making sure that industries are competitive.

The issue of defence spending is obviously more complex because of the relationship between Greece and Turkey, but as we are now both NATO members and Turkey is an aspirant EU nation, there should be an opportunity to decrease Greek spending on national defence, while of course encouraging it to be a good NATO member at the same time.

[Matthew Hancock (West Suffolk) (Con)]

At the G8 summit, did any of the leaders advance the argument that dealing with the deficit and supporting growth were alternatives, or did they argue that it was necessary to bring about growth through monetary policy, by supporting the banks and by getting trade going? Did anyone advance the argument that it was necessary to borrow one’s way out of debt?

[The Prime Minister]

My hon. Friend makes a very important point. Absolutely no one suggested that dealing with deficits and securing growth were alternatives. They are complementary: we need both. That is the view of everyone around the G8 table. There is only group of people who have their heads in the sand and are complete deficit deniers, and they are the people who gave us the deficit in the first place.

Public Disorder

Matt Hancock Excerpts

Thursday 11th August 2011 Commons Chamber

[The Prime Minister]

Everyone wants to see a fairer and more equal country, but I have to say to the hon. Lady that young people smashing down windows and stealing televisions is not about inequality.

[Matthew Hancock (West Suffolk) (Con)]

Will the Prime Minister join me in congratulating policemen from Suffolk and across East Anglia who came to London in support of their colleagues? Will he answer this question? My constituents were shocked to discover that only 3,000 of the 32,000 policemen in the Met were on duty. What are we going to do to change that and can we get cross-party support for it?

[The Prime Minister]

I certainly join my hon. Friend in praising Suffolk and other police forces in East Anglia and Essex who got police officers into our capital. The point I made about the deployment of officers is one of the lessons we have to learn about the ability to surge up numbers quickly when circumstances require it.

Public Confidence in the Media and Police

Matt Hancock Excerpts

Wednesday 20th July 2011 Commons Chamber

[The Prime Minister]

You know—urgh!

[Matthew Hancock (West Suffolk) (Con)]

Does it not raise serious questions about how the previous Government operated that Labour Members seem to think it would have been appropriate for the Prime Minister to be briefed on operational police matters? Do not the e-mails released show just what a professional his chief of staff is?

[The Prime Minister]

I thank my hon. Friend for putting that on the record because it is right. The judgment that my chief of staff reached was backed in advance by the permanent secretary at No. 10 and has been backed subsequently by leading police officers and the head of the Home Affairs Committee.

Phone Hacking

Matt Hancock Excerpts

Wednesday 13th July 2011 Commons Chamber

[The Prime Minister]

The premise underlying the hon. Gentleman’s question is wrong. My understanding is that when there is a police investigation, as there is with hacking, if evidence is destroyed that breaks the law. That investigation is happening right now. As regards setting up the inquiry, the terms of reference are now in the Library for the hon. Gentleman to see. If he has suggestions and ideas he can make them known, but I sent the terms of reference to his right hon. Friend the Leader of the Opposition this morning for comments from the Labour party and we have incorporated those comments in full.

[Matthew Hancock (West Suffolk) (Con)]

May I push the Prime Minister a little more on the culture of journalism? As with the bankers crisis and the MPs’ expenses crisis, changing the culture and self-responsibility of the industry is important. What will he do to take a lead on that?

[The Prime Minister]

My hon. Friend makes an important point. We should celebrate good journalism and social responsibility in journalism and media organisations. Let me put it on the record that many media organisations do some brilliant things in our country to build up what I call the big society. We must not damn all media because of what is happening and what has happened in some organisations. As well as a good regulatory system, we need a culture that is, yes, about getting to the truth but, no, not about breaking the law.

Oral Answers to Questions

Matt Hancock Excerpts

Wednesday 15th June 2011 Commons Chamber

[Mr Maude]

Point one: if we had not gone in for full transparency in what the Government are spending, the hon. Gentleman would not know anything about this. Point two: we inherited a massive programme of wasteful refurbishment of Government offices from the previous Government, including some unbelievably badly negotiated PFI contracts. If they had taken the same care as we are taking with taxpayers’ money, we would not have the biggest budget deficit in the developed world, which we inherited from his Government.

[Matthew Hancock (West Suffolk) (Con)]

T2. Does my right hon. Friend think that responsible Members of this House, in all parts of the Chamber, should condemn irresponsible strike action that puts children’s education at risk and diminishes public services? Does the silence—

[Mr Speaker]

Order. We are grateful. The hon. Gentleman has finished.

G20 Summit

Matt Hancock Excerpts

Monday 15th November 2010 Commons Chamber

[The Prime Minister]

I think that the biggest lesson is that the Irish followed one key new Labour policy, which was to join the euro. Fortunately, new Labour did not have the courage and bravery to follow through its own manifesto and listened very carefully to my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), who fought a very strong campaign to keep us out of the euro.

[Matthew Hancock (West Suffolk) (Con)]

I welcome the language in the communiqué on imbalances and the recognition that more needs to be done. Given the clear language in the communiqué and the support for dealing with deficits, can the Prime Minister think of any credible group that now opposes action on the deficit?

[The Prime Minister]

It is difficult to find a group that is against dealing with deficits. I think that even Cuba has now recognised that we need to take action—and that is the point. The G20 is united in the fact that we need to deal quickly with large and excessive deficits. That was the conversation around the table, and that is what is in the communiqué. There is only one group of people I can think of who would have been in the deficit denial corner: the Labour party.

Strategic Defence and Security Review

Matt Hancock Excerpts

Tuesday 19th October 2010 Commons Chamber

[The Prime Minister]

I am afraid that the hon. Gentleman’s break from Parliament did not do anything for his temper or his nature. He is completely wrong. We have to get these decisions right for the long term and, as I have tried to explain, a politically easier decision would have been a militarily wrong decision. That is a good way to start.

[Matthew Hancock (West Suffolk) (Con)]

Last week, the Public Accounts Committee heard from Sir Bill Jeffrey, who said that the lack of a strategic review over the last couple of years had made the situation in the defence budget more difficult. I welcome the Prime Minister’s assurance that there will be a strategic defence review every five years, but what can he do to entrench that and to ensure that the shambolic position of there having been no review for 12 years never happens again?

Superannuation Bill

Matt Hancock Excerpts

Tuesday 7th September 2010 Commons Chamber

[Matthew Hancock (West Suffolk) (Con)]

The right hon. Lady made the comparison between civil service and other public sector redundancy packages. Can she also make a comparison between civil service and private sector mandatory redundancy packages?

[Tessa Jowell]

I am surprised that the hon. Gentleman feels it necessary to ask that question. If employers in the private sector use the basic statutory scheme, it is considerably less generous than even the proposals in the Bill. In a way, that is not the point, because the value that we attach to public servants, to the importance of the jobs that they do and to the commitment to invest in security to prevent turnover and to compensate for what are often lower levels of pay is one of the reasons that such provisions have traditionally tended to be more generous. It is worth reminding the hon. Gentleman—the Minister took us through the history—that the scheme was created by a Conservative Government and amended by a Conservative Government and that attempts at reform were made under a Labour Government. Now, under the coalition Government, we have what amounts to a hollowed out version of the original scheme.

--- Later in debate ---

[John McDonnell]

Perhaps the hon. Gentleman was not listening. The period of six years has been used time and again to justify the measure. A tiny number of cases are involved, but we would like the exact number. If he can help us to extract that information from his own Ministers, that would be useful.

The vast bulk of civil servants who have been made redundant have been laid off on conditions of no more than three years’ pay, and the majority of them on considerably less. Under the terms of this measure, that will be reduced by two thirds. It is not about the tiny minority who receive six years’ pay, but about the vast majority who will lose up to two thirds of their payment.

[Matthew Hancock]

rose—

[John McDonnell]

I will press on, and give way to the hon. Gentleman shortly.

The position now is the worst of all worlds for civil servants, who are facing a double whammy. They enter a service in which they are paid less than the private sector, but at least they receive some benefits as a result of the security of pension and redundancy payments and so on, but their redundancy payments are to be cut while at the same time their pay is frozen or cut.

There is no protection in the Bill for the low-paid—we all agree about that. Members have appealed for details, but the ministerial response is that this is not the place to begin negotiations. The Bill begins negotiations, and it is a negotiating ploy. The Minister could at least set out the parameters or the options available to protect the low-paid. The argument goes that that will be negotiated with the unions in separate negotiations, but do Members of Parliament not have an additional responsibility to represent the interests of their constituents? When hon. Members vote on the Bill, they need security of information to protect their constituents’ interests. They need to know in more detail how their low-paid constituents will be protected as a result of the legislation. However no fragment of information has been given, nor have parameters been set by the ministerial words we have heard today.

When we deal with legislation of this sort, we need to consider the impact on people’s lives. The worst feature of the Bill is the Government’s almost brutal disregard of the human consequences. Tens of thousands of civil servants are likely to lose their job in the coming years. In the economic crisis, even if there is no double-dip recession, and we just rattle along the bottom for the next three years, most of those people will struggle to get back into work at all or find work offering similar wages. If we look at previous recessions, particularly for older workers, we can see that some of them never work again. We must recognise the devastating impact that that will have on individuals and families.

Most people in this country lack savings. Various reports by citizens advice bureaux show that even people in work lack savings beyond a month’s salary or wages. Most people have enough for only two months’ mortgage payments, so are close to default. Reducing redundancy payments in this way undermines people’s ability to survive the devastating impact of losing their job. It also undermines their ability to get back into work in many instances, because it is a costly exercise to travel around the country looking for work. The measure will introduce poverty and stress, and put pressure on people who have lost their job. The irony is that whatever savings are found will be significantly reduced by the benefits that we pay out. Many of the people we employ to administer unemployment benefits will receive those benefits themselves as a result of cuts in public expenditure.

Many of the PCS members I meet are desperate as a result of the anxieties engendered by the Bill, and they are becoming angry. When people perceive that an injustice has been done to them, they react. Boiling point has been reached as a result of the autocratic methods used by the Government to impose their way. They have introduced legislation before serious negotiations have taken place. It is like putting a cosh on the table before beginning a dialogue. The use of the money Bill device to prevent full parliamentary scrutiny is despicable. I have looked at “Erskine May”, and I urge other Members to do so. I cannot see how this can be defined as a money Bill. I hope the Speaker will rule against it after Third Reading. If it is passed as a money Bill, it will be implemented within a limited time scale, with no potential for amendment in the other Chamber.

The introduction of a sunset clause sends out a message that if the economic situation worsens, the Government will come back for more, and there will be further cuts in the scheme after that year. The Bill immediately soured the industrial relations climate under the new Government, and that does not apply just to the civil service. Across the public sector teachers, local government workers, health workers and those working in the emergency services are all on better terms than the terms introduced by the scheme in the Bill, so they see the legislation as the starting gun for an attack on their conditions and their redundancy payments.

Some have put a more sinister construction on the Government’s intentions. It is clear that the Government’s strategy is that the economic recession will be solved on the basis of cuts in the jobs, services, wages and conditions of employment of working people. For those of us who have been around a while, it smacks of the same old policies of the 1980s. In that period a Conservative Government decided that the unions had to be broken if the Government were to be able to force through harsher cuts. They took on the miners’ union, for which I worked at the time. It was an attempt to break a union as an example to others. The present Government appear to have identified the group of public sector unions as the modern day target. I am sure we will soon be hearing statements about enemies within and so on.

If that is the Government’s strategy, they are sorely mistaken. My sense is that the public servants who will be affected by such legislation will not take it lying down. Members have been lobbied already. They are aware of the growing anger, and there will be resistance. That will have public support, particularly as our communities begin to experience the impact of the cuts to their services and increasingly appreciate the scale of the damage that will be incurred by our society.

I appeal to the Government to pull back from this mistaken approach of imposition, which will lead to confrontation. I urge them to get back to the negotiating table and to agree a serious and sensible way forward. They should take the cosh of this legislative proposal off the table to allow proper negotiations. Ministers could sensibly withdraw the Bill tonight. Failing that, I urge Members to reject it because there is nothing in the Bill or in the words uttered by Ministers today that gives us the guarantee of the protection of our constituents that we require. The Bill will damage the civil service that we have all commended in today’s debate as an exemplar to the world.

I warn the Government that issues such as those raised by the Bill, which appear minor at first glance, become the combustible material that eventually brings down a Government. I urge Members to reject the Bill tonight.

--- Later in debate ---

[Mr McCann]

The hon. Lady is absolutely correct, but earlier contributors made it clear that that refers to a very tiny proportion of the civil service staff; the vast majority are under the terms that I have given the House—[Interruption.] The hon. Member for West Suffolk (Matthew Hancock) shakes his head, but it is absolutely true that the vast majority will receive severance terms based on a maximum three years’ payout. [Interruption.] His colleagues nod in agreement, so he seems to be in the minority.

[Matthew Hancock]

The surprise that I express is due to the argument that, because not many people will receive enormous payouts, there is somehow not a problem. I also want to add a couple of facts to the debate. In the past three years at the Department of Health, the average payout has been more than £100,000 each year. The argument that large payouts amount to a couple of small examples contravenes the facts.

[Mr McCann]

I thank the hon. Gentleman very much for that intervention, but he is simply wrong. A minute number of individuals will attract substantial payments; the vast majority will receive a maximum three years’ payment under severance terms and, for early retirement, up to six and two thirds added years. The Minister nodded when I mentioned that the maximum is a six and two-thirds years’ enhancement.

The most important thing about the February 2010 proposals that the previous Labour Government put forward was that they would have protected the lowest-paid civil servants. The cap was two years’ salary, with a maximum payout of £60,000, but given that the average salary of a civil servant is £20,000—that figure has been bandied about a lot in the debate—Labour’s proposals would have protected those individuals. Under the Bill, they face a two-thirds cut, which is unreasonable and, with the greatest respect to Government Members, demonstrates that we are not all in this together. The Bill anticipates that, as a result of the comprehensive spending review, many thousands of civil servants will be made redundant in the months to come, and it effectively says, “While we give you the pain of making you redundant, we’ll also hammer you financially as you walk out the door.” That is unacceptable.

--- Later in debate ---

[Matthew Hancock (West Suffolk) (Con)]

It is a great pleasure to speak in this debate under your speakership, Madam Deputy Speaker. I shall concentrate on the issue of fairness, which has come up again and again today. It is central to the Bill, and an extremely important factor. We are debating a sobering situation, and the Bill is a response in part to the enormous fiscal deficit that we need to tackle. It is clear that the negotiations and the Bill will have an impact on many thousands of civil servants who have worked extremely hard for the good of their country. Like many other Members, I pay tribute to the excellent work of the British civil service, and I echo the view of the Minister that it is the jewel in the crown of our constitution.

That is why it is so important that we consider the consequence for fairness as the negotiations go forward and the Bill goes through. That view has been reflected in speeches from both sides of the House today. I shall address the issue of fairness in three different ways. First, we must consider the fairness of these measures, given what else is going to have to happen if we are to tackle the deficit. Secondly, we must consider fairness across society and the economy. Thirdly, we must take into account fairness within the civil service in terms of working practices, and the consequences of the current system for some of those working practices.

The enormous fiscal deficit has overshadowed many of the debates in the Chamber since the election. We on the Government Benches argue that dealing with the deficit is a fair and progressive thing to do. In the short term, failure to do so would lead to higher mortgage rates and interest rates as well as create the risk of a catastrophic economic failure, which we do not want to do. It would also be unfair to burden our children and grandchildren with levels of debt that we had failed to deal with. It is therefore fair and progressive to deal with the deficit. It is important, when considering all the different aspects of that process, to think about the Bill in that context.

How can it be fair to defend a system, as Labour Members have done, in which payments of more than £500,000 have been made to certain individuals at a time when we are having to take other measures—as Labour Members would have had to do, were they still in office—to deal with the deficit? How can it be fair that the average redundancy package in some Departments has been more than £100,000 for the past three years? In an earlier intervention, I gave the example of the Department of Health, in which the average redundancy package last year was £122,000.

When this country is tackling its deficit, it is difficult to say that it is fair to make such enormous redundancy pay-offs. The argument has been put by Labour Members that there are only a few of them so it does not really matter. However, we as a country are going through a difficult process, and having extremely unfair examples of public spending like that only makes it even more difficult. We cannot argue that simply because there is not an enormous quantity of such payouts, they do not matter. They do matter and reforming the system is crucial, as the Opposition Front Benchers seem to recognise, but Labour Back Benchers too often do not.

[Michael Connarty]

I am amazed that the hon. Gentleman is still quoting the figure of £100,000 when one of his hon. Friends who spoke earlier provided him with the true average of £60,000. He ignores reality again and again. Some people get huge payouts, and some Labour Members have argued against them for the last 10 years but we could not convince our own Government to deal with these people. If the hon. Gentleman’s logic had been applied after the second world war, the huge deficit this country would have had to carry would have meant no rebuilding and our people living in poverty for the next 50 years. The hon. Gentleman may be lucid, but he is certainly wrong.

[Matthew Hancock]

The hon. Gentleman answers his own question when he says that the previous Government did nothing about the problem over the last 10 years. As for this new argument I am hearing expressed by Labour Members, that we had a large deficit in 1945—yes, we did, but we also had large cuts in 1945 and not least to the military because we had just won a war. There are no such easy reductions now because of the mess left by the Labour party—[Interruption.] I will take no lessons from what the hon. Gentleman shouts out from a sedentary position. At one point in the last three years, £8 billion was spent on redundancy payouts. I do not know whether the hon. Gentleman is willing to defend very high payouts, but we seem to be getting a reaction on the Labour side against any change to anything. It is a great pity that Labour Members do not engage in the process of trying to deal with the deficit as we Conservative Members do.

[Claire Perry (Devizes) (Con)]

I would like to focus on the average rather than the outliers, as that seems to elicit cries of outrage from the Opposition. It is an incontrovertible fact that if we look at the average redundancy payout and average compensation, we find that the average cost in the private sector in autumn 2008 was £8,981, while it was £17,926 in the public sector—almost twice as much. That demonstrates that we have reached a position where, on average, people are being paid twice as much to retire from the civil service as they are to retire from the private sector. There is nothing fair about that.

[Matthew Hancock]

It is always dangerous to give way to my hon. Friend, because she usually puts the point far more lucidly than one could oneself.

I was going to come on precisely to that point—my second point about fairness. Not only is it fair to deal with the deficit and, I think, unfair to give enormous payouts when we have to achieve other very difficult things, but fairness across the economy and across society is also important. The maximum payout in the mandatory private sector compensation scheme, for which this House legislated, is £11,400, yet the proposal is nowhere near that figure within the public sector.

It was interesting to note that when the shadow Minister, the right hon. Member for Dulwich and West Norwood (Tessa Jowell), responded to an intervention about whether it was fair to have a similar sort of payoff scheme in the private sector as in the public sector, she effectively said that she was not in favour of equality. I thought that Labour Members were in favour of equality, but obviously not when it does not suit.

[Tessa Jowell]

I am not quite sure what point the hon. Gentleman is trying to make. If the question is whether I agree the case for parity between the public and the private sector on these matters, the answer is that parity cannot be willed. We are not going to peg the public sector to the private sector other than in an indicative way. There are different incentive structures in the remuneration packages of people who work in the two sectors and they are in different ways reflected in aspects such as the compensation for redundancy that we are discussing this evening.

[Matthew Hancock]

I thank the right hon. Lady for her intervention. In some cases, it seems, one can talk about parity, and in other cases about equality. If one is favour of it, one might use one word, but if one is against it, use the other. The important point here is that we need to look at overall compensation packages and overall pay, including pensions and other terms and conditions of work.

That brings me back to the issue of fairness across the sectors. If we are to have a modern civil service and a modern flexible economy that work in the future, we also need to allow transfer between the two sectors. Bringing into line the working practices in the two is no bad thing; nor is bringing into line the redundancy payoffs as the Bill does—and, indeed, as the right hon. Lady’s former proposals did. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) raised an interesting point when he argued that we should put the members of the unions ahead of the rest of our constituents. I think that the most important thing for a new MP to do is to represent all of their constituents, not just those who are members of a union.

My final point is about fairness in employment practices. I asked the House of Commons Library about the concept of priority posting pools, which are groups of civil servants who are given nothing to do, but cannot be let go because of the cost of the redundancy package. The Library determined that there were a total of 1,946 such civil servants. When people working for their country have completed their jobs and their projects, it cannot be fair to tell them, “We would like to pay you to do nothing. We cannot find anything useful for you to do. We do not think you would be any good at doing anything else, but we cannot afford to get rid of you, so we are going to carry on paying you.” As of January 2010, there were 1,946 such people in the civil service. I believe it is unfair to them not to have a flexible employment system so that we can have a grown-up and modern civil service working for the future.

Such is my argument. We are here to look at the fairness of this Bill as well as other aspects of it. If we want to spend public money fairly, rebalance our economy fairly and try to improve the fairness of working practices in civil service employment, we should support the Bill. The alternative is defending £500,000 payouts, an unbalanced economy and out-of-date working practices. I do not want to defend those things, so I will support the Bill this evening.

--- Later in debate ---

[Mr Hurd]

I understand the argument. It is based on the fact that this is about money and public expenditure, but as the hon. Gentleman knows the main point is that my view is irrelevant because it is the judgment of the Speaker that counts and the Speaker will make his judgment before the Bill completes its passage through Parliament. It is ultimately a matter for the Speaker to decide.

[Matthew Hancock]

Whatever the result of the vote on the amendment, the Minister is right to say that the tone of the debate all day has been in favour of reform of some kind, so is he as surprised as I am that we have just heard from the Opposition Front Bench that they will vote against the whole Bill, which means they will be voting in favour of £500,000 payouts to some at a time of such economic difficulty?

[Mr Hurd]

My hon. Friend makes an important point about the lack of coherence in the Opposition’s position. They have set out clearly, and confirmed today, that they recognise the need for reform—and we have paid full tribute to the very honest effort they made when in government to reach an agreement. They recognise the reality of the situation, which is that effectively one union is holding the situation and the process hostage, and in all responsibility to the taxpayer we cannot let that continue. We have to break the deadlock, and that is the purpose of this Bill. It is needed in case we are unable to reach an agreement with the unions. It introduces caps so that we can limit the costs of the current scheme and we can go about the very serious business of reducing public expenditure while we discuss the contents of the new scheme. The critical point is that the Government’s aim is to reach an agreement that is sustainable through negotiation. Those negotiations are ongoing and vigorous, and they are being held in good faith.