Oral Answers to Questions

Danny Alexander Excerpts

Tuesday 1st November 2011 Commons Chamber

[Mr Kevin Barron (Rother Valley) (Lab)]

12. What assessment he has made of the effects on unemployment of the outcome of the comprehensive spending review.

[The Chief Secretary to the Treasury (Danny Alexander)]

The independent Office for Budget Responsibility published its forecast for unemployment in March. Unemployment is a serious problem for the UK, with about 1 million people continuously on out-of-work benefits for more than a decade. This Government have introduced a number of reforms to the welfare system, including the Work programme—the biggest single payment-by-results employment programme this country has ever seen, which is expected to help 2.4 million claimants over the next seven years.

[Chris Williamson]

The Chief Secretary should stop being so complacent about long-term unemployment. The truth is that this Government are spending more to keep people on the dole and they are losing income from tax revenues that would otherwise be paid on income tax and VAT. Is it not time that the Government adopted a plan for jobs and growth to get the economy moving again? The right hon. Gentleman could do worse than adopt Labour’s five-point plan for economic growth and avoid the spectre of stagflation for years to come.

[Danny Alexander]

I am not sure that Labour’s five-point plan would help the British economy, given that it involves spending an extra £20-odd billion, putting at risk the fiscal credibility that is so important to maintaining employment in this country. Nor do I think the hon. Gentleman should be so critical of the Work programme, which after all is designed to tackle the legacy of 1 million people who have been out of work for more than 10 years—a legacy for which his party is responsible.

[Mr Barron]

Is it not true that the increase in unemployment caused by the comprehensive spending review is a heavy burden both for the individuals and the families concerned and for the economy? What does the Minister say to the fact that the Government have had to borrow £46 billion more this year than they were planning to borrow?

[Danny Alexander]

The right hon. Gentleman is absolutely right that unemployment is a heavy burden for any individual or any family. We inherited from Labour the largest budget deficit this country has ever seen. It was incumbent on this coalition Government when we came into office to take the action necessary, otherwise we would have found ourselves in a position that many other European countries face, which would have been a great deal worse for the very people the right hon. Gentleman claims to be concerned about.

[Karen Bradley (Staffordshire Moorlands) (Con)]

One of the key weapons in tackling youth unemployment is the use of apprenticeships, so will my right hon. Friend join me in welcoming the news that in Staffordshire Moorlands the number of apprentices has gone up from 480 in 2009-10 to 760 last year—an increase of 60%?

[Danny Alexander]

I certainly join the hon. Lady in welcoming that. It will provide significant new opportunities for young people in her constituency. Of course it is part of the increase of 250,000 apprenticeships that this Government have put in place.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

After this morning’s encouraging news, does my right hon. Friend accept that one way of maximising employment is to give people the right to have flexible employment if that is what they wish? Given that the coalition agreement pledged to give people the right to request flexible employment, can he report on progress in implementing that commitment?

[Danny Alexander]

My right hon. Friend is correct, and it is a great shame that Labour Members sneer at the economic growth that has been reported today. As my right hon. Friend says, flexible employment is an important part of that growth. We set out plans in our coalition agreement, and we have announced proposals to implement them by the end of the current Parliament.

[Rachel Reeves (Leeds West) (Lab)]

I must say that I find the Chief Secretary’s answers incredibly complacent. Given that unemployment is at a 17-year high and long-term youth unemployment has risen by more than 60% since the start of the year, we all know what impact the Chancellor’s policies have had on unemployment. Instead of being complacent, will the Government support calls for them to repeat the bankers’ bonus tax in order to create 100,000 extra youth jobs and to introduce a national insurance holiday for small businesses taking on new workers? That is what Labour has proposed in its five-point plan. We need policies that will get the economy moving again and reduce unemployment, thus reducing the deficit. When will the Government act?

[Danny Alexander]

The hon. Lady’s position would have more credibility if she recognised the fact that youth unemployment rose during Labour’s time in office, as did long-term unemployment. As for her proposal for a bonus tax, that was written off by the last Chancellor of the Exchequer, who said that it could not work. She should listen to her own colleagues first.

[Stuart Andrew (Pudsey) (Con)]

3. What steps he is taking to reduce tax avoidance and evasion.

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[Mark Garnier (Wyre Forest) (Con)]

6. What recent discussions he has had on social impact bonds.

[The Chief Secretary to the Treasury (Danny Alexander)]

Important work is going on within both the social investment sector and government to develop and test social impact bond models, and we meet regularly with colleagues to discuss the progress that the Government are making in growing the social investment market, including through social impact bonds.

[Mark Garnier]

My right hon. Friend will be well aware of the exciting potential that social impact bonds have, not only in offering financial support for the third sector, but in securing genuine savings for the Government. Will he or one of his Ministers meet me and representatives from the Social Finance investment bank to explore ways in which the Treasury can help to maximise the potential of this nascent financial instrument?

[Danny Alexander]

The hon. Gentleman is absolutely right about the enormous potential of this sector, and I congratulate him on his work and the close interest he has taken in this subject. The Exchequer Secretary to the Treasury would be very happy to meet both him and representatives of the Social Finance investment bank.

[Mr Speaker]

I call Kelvin Hopkins.

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[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

16. What recent discussions he has had with the Secretary of State for Business, Innovation and Skills on funding for the regional growth fund.

[The Chief Secretary to the Treasury (Danny Alexander)]

I regularly discuss the regional growth fund with the Secretary of State for Business, Innovation and Skills. Yesterday we announced the outcome of round two of the fund. In total we expect the regional growth fund to support more than 325,000 jobs in the private sector over the next three years.

[Tom Blenkinsop]

Teesside has not yet received any of its promised RGF funding. The Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk) says that is down to due diligence, which takes an average of between four and six weeks. No one doubts the need for due diligence, but how much is the Chancellor charging businesses that receive RGF funding for seven months of due diligence limbo?

[Danny Alexander]

The hon. Gentleman will be aware that well over half the projects that were given funding in round 1 are under way, mostly with the private sector funding to start with; the public sector funding will come in later. But I should have thought he would want to welcome the fact that two specific round 2 bids were successful in Middlesbrough in the round that we announced yesterday.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

17. What recent assessment he has made of the potential effect on household spending of an increase in interest rates.

--- Later in debate ---

[The Chief Secretary to the Treasury (Danny Alexander)]

I do agree with my hon. Friend. We will set out more details of our credit easing plan in the autumn statement later this month, but it is a mark of the Government that we are prepared to think differently and intelligently about how we can use such mechanisms precisely to get small businesses going in this country.

[Andrew Gwynne (Denton and Reddish) (Lab)]

T9. Youth unemployment now stands at a shocking 34% in Tameside and 23% in Stockport. Is not the right thing to do to listen to Labour’s five-point jobs plan, get the bank bonus tax reinstated and invest in 100,000 jobs for young people?