Welfare Reform Bill
Liam Byrne Excerpts(15 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Duncan Smith
I am going to press on, because I think that I have dealt with the right hon. Lady’s point. She may not agree with me, but I think that this is the right position for us to take.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
This is an extremely important point. Is the Secretary of State saying that someone who is deaf-blind will be recalled for regular checks under the regime that he is aspiring to put in place—yes or no?
Mr Duncan Smith
The detail of how that works will be looked at during the passage of the Bill. My point is that built into this should be the requirement that it is necessary to see people. There is the question of who and what conditions we can look at specifically, but it should be right that it is bound into the system that we are going to look at people. In some cases, it may be entirely self-evident that the individual’s condition has not changed and there is not much to be done; in other cases, an assessment may be required because their condition has changed quite fundamentally. I do not understand why the need to see somebody who may be in receipt of a benefit should be such an issue for people. It should not be worrying; it is part of a process. [Interruption.] Before right hon. and hon. Members object to that change, they need to ask themselves what they would say to those people whose conditions have changed for the worse and who are confused and never make it back to make a proper claim. This is a debate that we can and will have.
Mr Duncan Smith
I think, with respect to the right hon. Gentleman, that I have dealt with this point, and I am going to make some progress. [Interruption.] Oh, go on then.
Mr Byrne
I am genuinely trying to be helpful to the Secretary of State. He says that his Bill is incomplete and that he has not been able to furnish the House with full details on how the powers that he seeks from us will be put into practice. Will he consider exempting people with certain kinds of conditions from the need to go back to go through check after check?
Mr Duncan Smith
I say to the right hon. Gentleman, despite his best intentions, that the mess that the previous Government got into over incapacity benefit—[Interruption.] It is all very well for Labour Members to sit in opposition and pretend that nothing went wrong under the previous Government. We are picking up an incapacity benefit system in which they left people parked, never seen by anybody for years and years. All we are putting into the Bill is the requirement that people be seen to check on their condition. That has to be in their interests, and it is not in any way a problem that it should happen. Of course, if the right hon. Gentleman wants to try to make amendments as the Bill goes through Committee, we will always be happy to debate those and listen to him. My point is simply this: it is right to see people, and wrong to leave them parked for ever on set benefits. Seeing them is more humane than inhumane, and that balance is the way that we should go.
As we introduce our new welfare system, we will have to take steps to clamp down on benefit fraud, as Opposition Members know. The system that we have is inefficient and too often ineffective. Despite significant overlaps between benefit and tax credit frauds, fraudsters are subject to different treatment in their cases as they are handled by different groups—DWP, Her Majesty’s Revenue and Customs or even a local authority. The mess and overlap is enormous. The Bill introduces powers enabling a new single fraud investigation service to investigate and prosecute all cases of benefit and tax credit fraud. I hope that the House supports that process. We will ensure that anyone found committing lower-level fraud will face a tough minimum fine as an alternative to prosecution. For all other fraudsters, we will seek prosecution whenever we can. We need to ensure that fraudsters get the message that repeated criminal behaviour will not be tolerated, so those found to have committed fraud may face losing their benefit for certain periods; I have already dealt with the detail of the timings.
I simply say to the House, because this was raised in the Select Committee, that I am absolutely clear that not every problem with overpayment or difficulties with those payments was down to fraud. I fully accept that with the complexity of the system, officials made mistakes and that we were often too ready to badge people as fraudsters when in fact they were not necessarily fraudsters but caught up in a system that left them confused and perhaps not making the right or necessary level of statements to the authorities. This process is about separating those people out. A recent trial of a changed reconsideration process at Jobcentre Plus led to a fall of some 15% in the number of appeals being heard. The general view is that process will be sustainable and will work.
We are also changing child maintenance. Much of the current system is designed to drive people into acrimonious disputes during family breakdown. We should all agree that we want to take the heat out of such situations, as far as we can. That is why we are reforming the system and introducing a gateway to the statutory scheme so that parents consider making their own arrangements. We will offer parents a calculation-only service to make it easier for them to make their own arrangements. Of course, if they choose to take matters further, they can.
We are introducing measures to allow non-resident parents to pay through Maintenance Direct when the case is within a statutory scheme. That will provide further flexibility for parents. We need to keep the burden of the cost of collection under control. In 2009-10, the cost of collecting every pound was more than 40p. However, should the non-resident parent fail to pay in full or on time, we will move the case swiftly into the collection service and take enforcement action where necessary.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House, whilst affirming its belief in the principle of simplifying the benefits system and good work incentives, declines to give a Second Reading to the Welfare Reform Bill because the proposal of the Universal Credit as it stands creates uncertainty for thousands of people in the United Kingdom; because the Bill fails to clarify what level of childcare support will be available for parents following the abolition of the tax credit system; because the Bill penalises savers who will be barred from the Universal Credit; because the Bill disadvantages people suffering from cancer or mental illness due to the withdrawal of contributory Employment Support Allowance; because the Bill contains no safeguards to mothers in receipt of childcare support; because it proposes to withdraw the mobility component of Disability Living Allowance from people in residential care and fails to provide sufficient safeguards for future and necessary reform; because it provides no safeguards for those losing Housing Benefit or appropriate checks on the Secretary of State’s powers; because it fails to clarify how Council Tax Benefit will be incorporated in the Universal Credit system; because it fails to determine how recipients of free school meals and beneficiaries of Social Fund loans will be treated; and because the proposals act as a disincentive for the self-employed who wish to start up a business; and is strongly of the opinion that the publication of such a Bill should have been preceded by both fuller consultation and pre-legislative scrutiny of a draft Bill.”
I start with a word of thanks to the Secretary of State for meeting me and my right hon. Friend the Member for East Ham (Stephen Timms) a week or so ago to discuss the Bill. As I said to him then, we genuinely want to approach the vital question of welfare reform in a spirit of national consensus. We believe that if we can forge such a consensus it will be good for our country, it will reduce the deficit and, crucially, as he said before he sat down, it will be good for the fight against poverty in this country. We have been forced to table the amendment to oppose the Bill because it fails such fundamental tests that we believe the Government should go away and bring back a better Bill that will deliver genuine and lasting welfare reform.
We could begin to forge that national consensus by drawing the right lessons from the past 13 years. The Secretary of State presented his view, but elided one or two prominent features of the past 13 years, such as the fact that the number of people on out-of-work benefits before the depression came down by 1 million and the fact that the claimant count halved. We did not once, let alone twice, see unemployment go through the 3 million mark. We can draw important lessons for this debate from that period, the first of which is that if the Secretary of State wants welfare to work to work, we need more jobs. Labour consistently put that approach in place.
The Secretary of State said to his spring conference at the weekend—
Mr Byrne
I not only listened carefully, but checked the transcript because I could not believe what the Secretary of State said:
“It’s not the absence of jobs that’s the problem.”
Given that five people are chasing every vacancy in this country and that 120 Members of this House have more than 10 people chasing every vacancy in their constituencies, the absence of jobs is very much a problem at the heart of his welfare reform programme.
Mr Duncan Smith
Does the right hon. Gentleman recall that I also said that notwithstanding the period of growth and the number of jobs created, more than half the jobs created by the Government did not go to British nationals sitting on unemployment benefit?
Mr Byrne
The employment rate under the Labour Government reached a record high and there were 64 quarters of consistent economic growth. The idea that welfare to work can work when the number of jobs is not growing is frankly laughable. There is an important lesson that we must draw from the past to get welfare reform right.
Mr Byrne
I want to move on to a second lesson before I give way.
When we brought laws to this House to set new obligations for people to work, we ensured that set alongside them were new opportunities to work. We also brought determination and care to the business of legislation. In the Bill, there is determined carelessness.
Mr Heald
Is the right hon. Gentleman seriously saying that at a time when it is more difficult on the jobs front we should not make the effort to help people off welfare and into work? If people are capable of working, they should get help. That is what this Bill does. Should we sit on our hands and say that all is hopeless?
Mr Byrne
That was an extraordinary contribution. Of course we believe that extra help—for example, the future jobs fund, which the hon. Gentleman’s party closed down—should be given to get people back to work.
In looking at this Bill over the past few weeks, I could not but remember Lord Birkenhead’s description of Baldwin’s method of Government:
“He takes a leap in the dark, looks around, and takes another.”
That is the approach that this ramshackle Bill proposes for millions of people in our country—a leap in the dark. I hope that we can begin to sort out, as is appropriate on Second Reading, where the Government have got their principles right—some of their principles are right—and where they have got them wrong. The Secretary of State says he wants to set a new course. The problem is that we are not quite sure where it will lead.
Mr Slaughter
Did my right hon. Friend notice that almost every time the Secretary of State was asked a question on free school meals, housing benefit or disability living allowance, his answer was, “I’ll get back to you.” There are no answers to those points. I have here a few of the letters from my worried constituents, just on disability living allowance. Thousands or millions of people are worried that they will not be able to make ends meet, and the Secretary of State has no answers.
Charlie Elphicke
I take issue with the right hon. Gentleman’s statement that the Bill is a leap in the dark. We know that 5 million people of working age could work but do not. We know from December’s labour market report by the Office for National Statistics that 1.2 million of the people who took the jobs that were created came from overseas. We need to get our 5 million countrymen who are out of work back into work. Surely that is the priority.
Charlie Elphicke
Of course there are quite a few people chasing each vacancy. As the right hon. Gentleman knows, the issue is not with this Government but with the mess left by the previous Government. This Government are trying to grow the economy and make Britain great again.
Mr Byrne
I am grateful for that observation. I say gently that, with five people chasing every job in the economy, if we are serious about getting people back into work—I think that the Government do want to do the right thing—we have to do more to create more jobs. We can pass laws and put in place extra help for unemployed people, but there must also be an economic policy that creates more jobs to absorb the very deep public sector job cuts that we know are coming down the line.
Geraint Davies
Does my right hon. Friend accept that the deficit was the price paid to avoid a depression caused by the bankers, and that the best way to get rid of it is to focus on economic growth, make bankers pay their fair share and make sensible savings over time, not to make the poorest pay the most while the richest are lavished with massive bonuses, which is what the Bill is about?
Mr Byrne
I will avoid getting into an extended debate about macro-economic policy, although I would happily discuss it all afternoon, but my hon. Friend is right. Under our approach, despite the fact that we faced the worst global crash since the 1930s, unemployment did not go beyond 3 million, as it did not once but twice under the Conservative Administration.
Mr Evennett
We are listening to the right hon. Gentleman with great interest, but is he not ashamed that although his party was in power for 13 years it failed to make work pay and that the UK now has one of the EU’s highest rates of children living in workless households? Is that not a disgrace?
Mr Byrne
I would do no more than encourage the hon. Gentleman to look at the analysis of his noble Friend Lord Freud, who examined our work to get people back to work and remarked on how fast the number of people on out-of-work benefits had fallen. He examined the number of children lifted out of poverty and said that our record was truly remarkable.
Mr Stewart Jackson
I fear that the right hon. Gentleman is going through the motions. He was a gifted and talented Chief Secretary to the Treasury, and I do not think he truly believes what he is saying. Will he at least concede that people who are no friends of the Conservative party, such as the Scottish TUC, have said that worklessness was exacerbated by the decision to import millions of low-skilled, low-wage workers from eastern Europe, which drove down wages and conditions and made it much more difficult for indigenous British workers to secure jobs and get off welfare dependency?
Mr Byrne
I do not think I should veer into a debate about immigration this afternoon, because you, Mr Deputy Speaker, would quickly call me to order. I would, however, make the point that, after consistent economic growth, employment went up, the number of people on out-of-work benefits came down and the number of people lifted out of poverty, including pensioners and children, was at a record high. The Government can learn something from that record.
Of course, that has to be put alongside the right legislation to encourage people back to work, which is where I fear the Bill will fall short, for a very simple reason. It fails the basic tests of whether it fosters ambition and whether it reinforces and consolidates our obligations to each other. Fostering ambition and nurturing compassion are the basic tests of welfare reform, and I am afraid the Bill fails both.
John McDonnell (Hayes and Harlington) (Lab)
I oppose the Bill, and given any opportunity I will vote against it.
As my hon. Friend the Member for Hammersmith (Mr Slaughter) said, the Government’s response to every representation that has been made by external organisations or today in the House has been, “These matters will be dealt with in regulations”. Attached to the Bill is a quantity of regulations that we have not seen before with a Bill of such stature. May I suggest that my right hon. Friend link up with the Secretary of State to discuss the procedure to be followed after Committee and before Report, so that the bulk of the regulations are published in time for us and others to consider them before our final debates on the Bill?
Mr Byrne
That is an extremely sensible proposal, and perhaps the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling), will reflect on it in his winding-up speech. It is important for the other place to be involved in discussions, too, to ensure that the Bill leaves this House in better shape.
Mr David Lammy (Tottenham) (Lab)
May I align myself with what my hon. Friend the Member for Hayes and Harlington (John McDonnell) just said?
Will my right hon. Friend put on record the fact that words that we used to use in the Chamber—equality and non-discrimination—must exist for people in the work force with disabilities and from ethnic minorities at a time when there are few vacancies? I think in particular of Haringey Phoenix Group, which represents blind people, whose representatives came to see me in my constituency.
Mr Byrne
That is a challenge that I know well, representing the constituency that I do. I will say a little more later about the challenges and the reforms that are needed on disability living allowance.
There are some principles in the Bill that we support. The principle of universal credit builds on the changes that we made to ensure that work pays, and we welcome some of the proposed reforms to the claimant commitment. We certainly welcome tougher and tougher measures on fraud, but the basic truth, which many hon. Members have rehearsed this afternoon, is that the Bill is not a pamphlet. It is not about theory; it is about practice. It is therefore important that we consider whether it will foster ambition and strengthen compassion in a number of important areas. I start with child care, with which the Secretary of State started.
For millions of families in this country, and especially for women, the truth is that extra help with child care is needed if they are to get back to work. Many families in our country receiving a combination of housing benefit, council tax benefit and child tax credit have up to 97% of their child care costs supported. The Secretary of State said today that he wants that budget to be frozen, which at least shows some progress, but he also confirmed that the number of people who will have a claim on that budget will grow. That of course means that some people will get less help with their child care than before. What we have not learned this afternoon is what that will really mean for people.
My hon. Friend the Member for Stockton North (Alex Cunningham) asked the Secretary of State a very straight question on 9 February: had he decided which child care option he would propose? “Not exactly, no,” said the Secretary of State.
“Can you give us a clue?”,
my hon. Friend persisted, gamely.
“I will give you a clue when we are a bit closer to the finalised detail”,
said the Secretary of State. Now, the right hon. Gentleman is asking for powers to end child tax credit. I am not sure how much more finality one could want, but there are still no answers other than the comment that the Government are still consulting. We hear rumours that for some people the cover for their child care costs will be reduced to 70%—a gigantic new bill for many families that could prevent people from getting back to work. Helen Dent, chief executive of Family Action, has said:
“The possible reduction in help with childcare costs could mean that many parents might end up being worse off under universal credit”.
I say today, on behalf of the 486,000 families who get child care help from the Government, that they need to know more.
Glenda Jackson (Hampstead and Kilburn) (Lab)
I absolutely agree with my right hon. Friend, but is there not a further black hole in the Government’s proposals, which is the failure to acknowledge regional variations? The cost of child care in London, for example, is massively higher than it might be in another metropolitan area of the country. The Bill reflects that lack of definition and flexibility and a complete ignoring of regional variations.
Mr Byrne
My hon. Friend is right, and I am afraid it gets worse. The Secretary of State has made much of his effort to reduce the disincentive to work, which we genuinely welcome, but, like me, he will have noticed that earnings are now growing at about half the rate of prices. He will also doubtless have noticed that once people begin to earn £43,400, they will lose their child benefit, which is worth several thousand pounds a year. That all puts pressure on second earners to go out to work, so the question must therefore be what marginal deduction rates will confront those second earners. The answer is not easy to find, but it is buried away in paragraph 69 of the impact assessment. Having read it, I am not surprised that the Government did not put it up in spotlights, because it states that twice as many earners will see their marginal deduction rates go up than will see them go down. Who is most likely to be hit? It will be couples with children, whose median deduction rates will go up.
That is what we do know, but what is worse is what we do not know. We do not know what will happen to those entitled to free school meals; what will happen to free prescriptions; which working families will be exempt from the benefits cap; or how unearned income such as widow’s benefit or child maintenance will be treated. We do not know about sick pay or maternity pay, and we have no idea how on earth council tax benefit will work. As the House knows, the council tax benefit system is going local, but the rules on universal credit are to remain national. The Secretary of State for Communities and Local Government, who likes to be straightforward with the House, boldly asserted on 17 February that he was in charge of drawing up the new rules on council tax benefit, but surely the final word must come from the Work and Pensions Secretary. Once again, there is total confusion. The questions for families are stacking up, and there are no answers to any of them. That is the story for families.
Grahame M. Morris (Easington) (Lab)
Would my right hon. Friend care to comment on reports in today’s papers that representatives of 30 cancer charities have written to the Secretary of State expressing concern about people who are recovering from cancer? Specifically, they are likely to lose their employment and support allowance after a year, but 75% of them or not in a position to return to work after a year.
George Hollingbery (Meon Valley) (Con)
The right hon. Gentleman makes a persuasive case on the detail—clearly a lot of it remains to be found, but this is a confusing and complex matter. Will he admit that the current system is unsustainably complicated? There are 8,600 pages of guidance on benefits administration at the DWP and 2,000 pages for local government, and there are 30 different benefits to administer. Change is required. If we have a framework and consult widely, we will have a better system.
Mr Byrne
The Opposition want welfare reform that sticks. When so many details are unclear, the danger is that the Bill will unravel progressively as it comes into effect.
We have discussed whether the Bill passes the test of fostering ambition for families and have shown that a great number of questions remain unanswered. Let us now consider savers. All hon. Members want to nurture the ambition to save. The amount that people must save for a deposit for a house is heaven knows how much, but now that tuition fees have been trebled, more families have to save harder to get their young people into college. One might have thought, therefore, that the Government would provide more incentives to foster the ambition to save, but the noble Lord Freud told the House of Lords that
“the £16,000 savings threshold would extend to all households eligible for universal credit.”—[Official Report, House of Lords, 15 December 2010; Vol. 723, c. WA204.]
There we have it. The Government are so keen to foster the ambition to save that once someone has £16,000 in the bank—the price of two and a half years at university—their tax and in-work benefits are taken away.
Mr Duncan Smith
May I remind the right hon. Gentleman that his system became completely absurd, because it allowed people with huge savings and income to claim benefits? The previous Government’s system supported not the bottom two or three deciles but people further up the income scale. That is one reason so few people from the bottom income deciles got back into work, and why poverty was so high.
Mr Duncan Smith
The right hon. Gentleman’s figures are incorrect. When universal credit comes in, the figure is more than likely to be no higher than about 100,000—[Interruption.] Wait a minute. I know where the right hon. Gentleman gets his figures from. Those 100,000, of course, will be transitionally protected, so they will not lose.
Mr Duncan Smith
Will the right hon. Gentleman give way, because he needs to answer my question?
Mr Byrne
The Secretary of State needs to answer my question. The Minister of State told my right hon. Friend the Member for East Ham that getting rid of the savings cap would cost only £70 million. Will the Secretary of State therefore look again? He must recognise, as I do, that he is currently not fostering the ambition to save for hundreds of thousands of people.
Mr Duncan Smith
I completely disagree with the right hon. Gentleman on that, but I want to challenge him to give an answer to taxpayers, who ask whether the welfare system is about supporting people who are most in need, or whether it is about casting money wider and wider to people who can support themselves in particular periods. How much more money does he really want to spend?
Mr Byrne
I am afraid that the Secretary of State has still not provided an answer to my question—he still cannot tell us how he will encourage people to save. Tuition fees have trebled, and people in my constituency are asking, “How on earth do we encourage our young people to go to college, and how on earth can we afford to get our young people into university?”—[Interruption.] I know the Secretary of State does not have those challenges to face, but thousands of people in our constituencies need to save to get their kids to university. The regime that he is proposing will strip in-work benefits from them, kicking the ladder away from aspiration in our country.
Angie Bray (Ealing Central and Acton) (Con)
Surely the right hon. Gentleman must recognise that tuition fees are not payable until such time as people come out of university and earn a salary of £21,000 or more. His argument is a red herring.
Mr Byrne
I do not know what the hon. Lady’s constituents are saying to her, but many in my constituency live in fear of debt—they want not to burden their children with debt, but for them to get a first-class education, so that they can contribute to the future of our country.
The wider point that is emerging is that we do not know enough about how the Bill affects families and savers, but there is also a question over how it will affect the self-employed. Over the last few weeks, we have heard a great deal of pitch-rolling from the Chancellor and the Prime Minister, who are now worried about the damage that their last Budget did to our economy. All of us hope that the Chancellor can upgrade his growth forecast at the forthcoming Budget after doing so well over the last year, and the Prime Minister is now promising that his next Budget will be the most pro-growth Budget in the universe. He told his spring conference:
“At its beating heart this is still a party of start-ups, go-getters, risk-takers…We’re the party of practical men and women, people with a passion and a mission to build a business and see it grow...We are the party of enterprise.”
No doubt, then, the Bill is part of that plan—no doubt the Bill will make it simpler, easier and more encouraging for people in this country to start a business and to make that entrepreneurial leap. Well, my hon. Friend the Member for Stretford and Urmston (Kate Green) asked the Secretary of State about the self-employed on 9 February. To be fair to him, I think he recognises the problem. Surveying the position of the self-employed, he told her that
“we are conscious that that area is the slight blip in the system.”
This is what the blips in the system at the Federation of Small Businesses told me yesterday. Mike Cherry, the FSB national policy chairman, said:
“We are concerned that the Government has assumed that entrepreneurs with a new business will be paying themselves…and will therefore lose all benefits under the Universal Credit system…A measure such as this simply creates yet another barrier towards self-employment which is particularly unhelpful at a time when we are relying on the small business sector to grow the economy”.
So much for the party of enterprise.
Rehman Chishti
Considering that the right hon. Gentleman agrees that it is absolutely right and proper to support families, does he concede that the Labour party got that wrong because couples were paid to live apart?
Mr Byrne
I do not know whether the hon. Gentleman was in the Chamber when my hon. Friend the Member for Swansea West (Geraint Davies) spoke of the disincentives for families to stay together under the new regime, but if he wants to pretend that the Bill ends the couple penalty in the welfare system once and for all, perfectly and immaculately, I look forward to him setting out his argument.
Mr Duncan Smith
The right hon. Gentleman raises the issue of the self-employed. I made this point to him privately and I will now make it publicly: they will fall within the universal credit. The point that I was referring to was how complicated and counter-intuitive the current systems have become, as he knows very well. We are seeking the best way to ensure that the right reporting structures are in place for those people, who will be inside the universal credit.
Mr Byrne
Perhaps the Secretary of State can tell the House this afternoon when those proposals will be ready for us to look at. [Interruption.] “In time for Committee,” he says from a sedentary position. We all look forward to seeing that.
It is now clear that for the self-employed, savers and families, this Bill at the very best poses more questions than it answers. The other question that the House has to ask the Secretary of State this afternoon is not about how we foster ambition, but about how we nurture compassion. How do we strengthen and reinforce our obligations to each other? That is something that we will hear a lot more about, when we talk about the reform of disability living allowance. What we know about the detailed reforms is not good. I welcome what the Secretary of State has said about the mobility component of DLA. I think that he has confirmed that he is withdrawing the proposal to cut £135 million from the mobility component of DLA. If that is true, it is welcome, because we are talking about a measure that the chief executive of Scope pronounced as “callous” and an
“assault on the most vulnerable”.
The rationale presented by the Minister of State has this morning been taken apart by 39 charities. I am afraid that I have to agree with the words of those campaigners who have said that
“many of these people”
—those in residential care—
“will be prevented from enjoying the freedom of movement that is taken for granted by people who are not disabled.”
Those are, of course, the words of the motion at the Liberal Democrats’ spring conference this weekend. I hope that together we may be able to prevail and get this measure dead and buried.
Mr Tom Clarke
On the crucial issue of the mobility component for people in residential accommodation, when my right hon. Friend put his question to the Secretary of State, I understood the Minister of State to be indicating dissent. Will my right hon. Friend give the Minister another opportunity to clarify this important issue?
Mr Duncan Smith
The right hon. Gentleman knows very well, because we had this conversation privately. As I assured him, and as I assure him now, what we have done is roll the proposal into the personal independence plan. We are reviewing what is necessary. I said to him then, as I have said to the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), that what we are looking for is the amount necessary for people who are in residential care. That is the commitment that I have given. That is the exact fact, that is how it remains, and all other things will fit around that.
Mr Byrne
The argument that the Secretary of State has rehearsed this afternoon is that the Bill will give him the flexibility either to withdraw or to reform the proposal, but what he has not set out for the House is whether he will reduce the savings target of £135 million that has been scored by the Chancellor against the measure.
Mr Byrne
I therefore look forward to the Government reflecting on this debate and perhaps giving slightly more clarity when the Minister winds up.
More alarming for many people is the lack of any safeguards on what the Government have in mind for the future of DLA, especially as we know that the Chancellor is determined to take £1 billion off the bill and then ask what kind of reform will be necessary to deliver his sums. Not for him the subtleties of asking what kind of reform might make sense. This is what the Multiple Sclerosis Society had to say about the measure: “We share serious concerns”—[Interruption.] It is incredible that when such organisations present their arguments, those on the Government Front Bench would rather talk among themselves than listen to what they have to say. This is what the Multiple Sclerosis Society said:
“We share serious concerns with a large number of other disability organisations that the Bill in its current form could lead to those most in need losing out on the support they rely on”.
The Secretary of State’s own equality assessment says that 13% of disabled households could be entitled to less help under the new system. He has simply not provided assurances on that point. When my hon. Friend the Member for Stretford and Urmston asked him about that, he said:
“I am sorry to be cagey about this. It is simply because this will become very clear when we publish the Bill.”
Well, here is the Bill, but where are the answers to the question?
Mr Duncan Smith
I am interested in what the right hon. Gentleman is saying. He is going on about the review and the issues around disability living allowance, but I notice that the Opposition make no mention of that in their amendment. I notice also that both he and his leader have said that they support the reforms to disability living allowance, so perhaps he would like to make it clear: is he in support of them or not?
Mr Byrne
Everybody is in support of reforming disability living allowance, but we have not said that £1 billion should come off the bill and that we should then work out what kind of reform would deliver those numbers. The Secretary of State must realise that this is why millions of people up and down the country are so alarmed about the reform proposals being put in place. Now he—or, indeed, his Minister—has a chance to say that he will listen to campaign groups that are worried about the proposals, that he will listen to amendments and that he will try to put in place safeguards to ensure that DLA reform is done in the right way. Yes, we should reform DLA, but we should not abolish it.
Charlie Elphicke
Would not one key reform be to ensure that those claiming the allowance are seen, to check that they are still in need of it? Some 140,000 people have not been seen by the Department for Work and Pensions in the last 20 years, going back to 1992. Surely that is unacceptable.
Mr Byrne
There is a strong case for reform of DLA. The lobby groups agree with that, as do we, but we do not agree with the way the Government have approached the issue. First, we had an announcement by the Chancellor of the Exchequer that DLA would be cut £1 billion, then we got a consultation, which has only just finished, and while all that was happening a Bill was published with no detail or safeguards dealing with how that reform would be conducted. The Secretary of State must realise that that is a serious concern for millions of people up and down this country.
That alarm is simply magnified by the proposals to set a one-year limit for those who can receive contributory employment and support allowance. I, too, think that there is a case for time limits—there is a good case for considering two years, for example—but this morning 30 cancer charities have written to the Secretary of State urging him to think again on that measure. His own Department’s statistics, they say, show that 75% of cancer patients still need ESA after a year. Their message is blunt:
“this proposal, rather than creating an incentive to work, will lead to many cancer patients losing their ESA simply because they have not recovered quickly enough.”
If this indifference is not addressed in Committee, the Secretary of State will have single-handedly dismantled any notion that compassionate conservatism is truly a reality. This simply cannot be right, and it needs to be looked at again.
Mark Durkan (Foyle) (SDLP)
I support the crucial points that my right hon. Friend is making, but has he noted that the impact assessment on the proposed changes to DLA makes no mention of the impact on carers? There clearly will be a consequential impact on carers, depending on what benefits the people for whom they care receive and which rates of the daily living component or the mobility component will entitle carers to claim carers allowances. There is no mention of that whatever. Is my right hon. Friend aware of whether the Government have even made an estimate of the number of carers affected, and if so, why it has not been published?
Mr Byrne
I will give way in a moment.
My final point is about the small question of whether the Bill will actually save any money in and of itself. The Bill would save money if it got people back to work, but it will not create a single job. By the time we get to Royal Assent, there will still be five people chasing every job in this country, and for 120 of us, there will still be 10 people chasing every job in our constituencies. The only way that this Government are going to save money through welfare reform is by cutting the benefits of working families. Indeed, once we take out the shift to a lower form of uprating, we see that half the benefit cuts hit working families, starting with 10 raids on the family budget, taking out £1.5 billion from this April. Two thirds of that bill would not be necessary if unemployment were not as high—in fact, if it where down it would have been under Labour. Nowhere is that muddle about whether the Bill saves money more confusing than when it comes to the housing measures.
Mr Byrne
I will give way in a moment, but I want to make this point first.
Clause 68 puts into the Secretary of State’s hands unprecedented powers to do whatever he wants with people’s rents. Normally, we would object to that kind of sweeping power because we would not know what a Minister was going to do with it. This time, however, we object because we know exactly what the Secretary of State is going to do. He has proposed a housing benefit cap, which he says will save money, but the Mayor of London has now said that the measure will cost more money because homelessness costs will rocket.
The Secretary of State says that his measures will bring rents down, but the Secretary of State for Communities and Local Government is putting rents up in the social housing sector to 80% of market value. The House of Commons Library says that that could cost up to £200 million. One half of the Conservative party does not know what the other half is doing, and taxpayers are picking up the tab. In fact, it was left to the Pensions Minister to tell the House on 3 February that, on his estimate, the housing bill would go up by £1 billion over the course of this Parliament. So how is this Bill going to save money on housing benefit?
Alison Seabeck
Before I ask my question, I need to draw the House’s attention to the entry in the Register of Members’ Financial Interests for my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), with whom I have an indirect interest: he is my partner. Now I can get on with my question.
My right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) has mentioned the increase in costs resulting from the impact of rents going up to 80% of market value. The Localism Bill contains measures designed to put homeless people straight into the private rented sector. That will put further pressure on that sector, which is already being squeezed, and push rents up. There is no evidence that rents will come down. Does he agree that the Government’s left hand does not know what the right hand is doing?
Sajid Javid (Bromsgrove) (Con)
At the last election, the Labour party manifesto contained a pledge to reform housing benefit to ensure that the people claiming it would not live in the kind of homes that ordinary working families could not afford. We believe in that policy. Is the right hon. Gentleman now renouncing it?
Mr Byrne
Not at all. The point that we are making is about the way in which this reform has been adopted and steamrollered through, and about the lack of consultation between the Department for Communities and Local Government and the Department for Work and Pensions. This has been so mismanaged that many people—the Mayor of London, Shelter, the Secretary of State for Communities and Local Government—are now saying that the cost of housing benefit could go up. Surely that is not the DWP’s intention. We need a bit more detail about a policy that might actually deliver the necessary savings on housing benefit.
Angie Bray
I was recently talking to some constituents in Acton, and I discovered that these proposals for changes to housing benefit are among the most popular proposals that the Government have introduced. My constituents like the idea that it pays to work, and that those on benefit will not be able to afford better houses than those in low-paid work can afford. They also wonder why it has taken so long for any Government to introduce a measure that is simply fair, regardless of the money it might save. They wonder why the Labour Government never did anything about this when they had the chance to do so.
Mr Byrne
I will take a couple more interventions in a moment.
I want to put on record my thanks to the scores of charities and campaign groups that have helped to brief us and offered to work with us to draw up amendments to improve the Bill in Committee. I am even more grateful to them for their commitment to mobilise their millions of members to help the Government understand why the Bill needs urgent reform. If the Government persist with the illusion that the Bill is immaculate, perfect and beyond improvement, and if they decline to hear the voices of those millions of members of charities and campaign groups that have worked with us, we will have no alternative but to vote against it on Third Reading.
In today’s debate, we will hear a lot of statistics; we will also hear about this record and that proposal. I just hope that the House will remember that behind every statistic is a person—one of our constituents. They are people like my constituent, Colin Hulme, who wrote to me at the end of last week. Mr Hulme suffers from Chiari malformation, a condition that affects about one in 1,000 people. It hit him in 2007, and he had to give up his job as an IT consultant and move home. He is a very brave man. He told me that his disability living allowance means that
“at least I can pay my household bills, my kids will have food on the table and clothes for school. More importantly, it means my wife can provide the care that I need.”
His view is that the Bill is about
“cutting costs and shifting responsibilities rather than improving the lives of sick and disabled people.”
It is a worry for him, and I think that the whole House will acknowledge that that worry is shared by millions of people up and down the country today.
My real point to the Secretary of State in this debate about principles is this: in the debate ahead, let us together put aside the politics of fear and division, and let us have the politics of hope—people’s hope for a job, the hope that they can get the help that they need, and the hope that they can get on and move up in work. That is what welfare reform should be about. That is the instinct expressed in our amendment, and I hope that the House will back it this afternoon.
Mr Oliver Heald (North East Hertfordshire) (Con)
I welcome this opportunity to support the Bill, which will bring about probably the biggest change in the welfare state for 60 years. I disagree with the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) on certain points. The Bill is about helping people into work and establishing big principles for the future, and it really is not good enough to make a speech saying, “We want to help people into work,” but then to deny the means to do that. He is saying that the Bill should not go ahead. He is saying that the details—which should be debated, I agree with him on that—are sufficient to allow him to deny this major Bill a Second Reading. Well, he is wrong about that. He has issues that he rightly wants to discuss in Committee, and he has the support of numerous groups throughout the country that want those points of detail to be considered. Yes, he is right about that, but, my goodness, he is wrong to say that the Bill, which does such important things, should not go ahead.
Let us consider the idea of the universal credit. We will finally be able to say that a person will always be better off in work. That is a big principle; that is important. I venture to suggest that the right hon. Gentleman agrees with that in his heart of hearts, yet he is saying that we should not introduce those measures. I notice that he is not prepared to listen to this—
Mr Heald
At the moment, it takes 45 minutes in a jobcentre to work out whether someone will be better off in work or not. The Bill will change that at a stroke. People will know that they will always be better off in work. That is an important principle.
My second point involves helping people to get into work, giving them support through the “black box” approach. This is something that Labour agrees with; the right hon. Gentleman actually trialled it when he was in government, and it worked. It is recognised internationally—
Mr Heald
Yes, it is in the Bill. The sanctions are about making the Work programme work. It will not work without sanctions and without the measures in the Bill. To deny the Work programme to people all over the country who should have help into work would be a big mistake. The right hon. Gentleman should support the principle behind the Bill.
My third point is that it is essential to make proper training available so that people can avail themselves of those training opportunities and then get the jobs that are available in this country. There are 500,000 jobs advertised in the jobcentres every month, but many of them are jobs for which people do not have the necessary skills. To introduce a system, through the “black box”, that will enable people to acquire those skills and get into those jobs is something good, and it is something that the right hon. Gentleman should support.
As for whether jobs are available, when the right hon. Gentleman’s party were in government many jobs were created, as he said, but the problem is that many of them went to people who were not from this country and had not been languishing on benefits for years. Members of the Select Committee visited Burnley earlier this week and we met people who were being helped to move from benefits into work. We found that many of them did not like the work capability assessments, so I hope that it will be possible for the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) to make the Harrington changes before that scheme is rolled out nationally. I see him nodding. Some people there had not worked for 10 years, and said that they were pleased to have the opportunity to be trained and to look for a job.
Burnley is not an area where there are as many jobs as there are in Hertfordshire, which I represent, but even in areas where there are not many jobs, it is wrong to say to someone who could work, “No, we’re not going to do anything about it; we’re not going to train you; we’re not going to give you those chances; we’re not going to provide the Work programme.” By denying this Bill a Second Reading, the right hon. Member for Birmingham, Hodge Hill would be depriving people of all those things.
Let us take some of the other issues that the right hon. Gentleman raised, such as child care. The Secretary of State has said from the Dispatch Box that there will be child care; the black box works only if child care is available. Support for single parents to get into work is necessary, but it is to be provided. If the right hon. Gentleman wants to talk about the details in Committee, we would all fully understand that. I believe that it is a mistake for him to try to deny this Bill a Second Reading.
Time is whizzing by, but I would like to make two further points. Child support is an important issue in the Bill, and it has been troubling for a long time. If single parents are to get into work, it is important for them to be able to rely on child support payments coming in. America has a system whereby, once the figure is set, it is automatically deducted from the salary of the parent who has to pay it. In this country we have always denied that possibility, and said that we should not do that. However, if we are to say to many lone parents, “Look, we really want you to go to work”—and we shall be saying that to a lot more lone parents—we must find ways of ensuring that the essential payments from the other parent come through.
Youth Unemployment
Liam Byrne Excerpts(15 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I beg to move,
That this House believes that the Government was wrong to cancel the Future Jobs Fund that would have created 200,000 jobs for young people; further believes that the Government’s economic policies have slowed economic growth, raised youth unemployment and created the highest graduate unemployment for over a decade; further believes that urgent action is now required to stop a generation of young people being lost to worklessness; and calls on the Government to commission an independent assessment of the Future Jobs Fund to report to Parliament before the Government’s Work Programme is implemented and to evaluate whether a guarantee and requirement of work incorporated into the Programme would bring down youth unemployment in the short and longer term and limit steep rises in welfare payments.
I am glad that we have been able to force the Government to come to the House to debate the employment figures—or, rather, the unemployment figures—published this morning, because those figures will worry families, young and old, up and down the country. The headlines from this morning’s numbers are bad enough—five quarters after the recession ended, unemployment is not going down but up; employment is not rising but falling—but the details are, I am afraid, even worse. Private sector employment is flat, while the number of public sector jobs is falling fast. It is becoming clear that the private sector is not creating jobs fast enough to absorb the redundancies that we know are coming down the line. There are now more women on the claimant count than at any time since 1996.
The consequences for young people are perhaps most serious of all. One in five of our young people is now out of work; the number of unemployed has risen again; we now confront youth unemployment of almost a million—the highest figure on record. That figure is a wake-up call to this Government to get their act together. The question we want the House to debate today is quite simply, what should the Government do next?
As if we needed it, this morning’s figures are, if anything, fresh evidence of the need for a plan B on economic growth. We have rehearsed the debate in the House plenty of times over the past year, and I do not plan to do so again this afternoon. Suffice it to say that the Government are cutting spending too far and too fast. The recession having been over for a year, we would expect to see unemployment now falling fast, and yet it is not. Longer dole queues make the deficit not easier to pay down, but harder. The result is that working families end up paying the price.
Alok Sharma (Reading West) (Con)
The right hon. Gentleman was part of a Government who presided over a record rise in youth unemployment. As his Government’s policies clearly did not work over 13 years, should he not, instead of carping from the sidelines, get behind the policies of the coalition Government, who are offering a fresh start to young people in this country?
The Minister of State, Department for Work and Pensions (Chris Grayling)
For the record, will the right hon. Gentleman confirm that last month’s unemployment figure in this country was 2.498 million, and that this month’s is 2.492 million?
Mr Byrne
The unemployment figures are getting worse, not better. This morning I heard the Minister quibble on the BBC that somehow unemployment in our country was stabilising, but the truth of today’s figures is that private sector employment is dead flat, and the number of announced redundancies is growing by the day. [Interruption.] The Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) carps from a sedentary position, but he would be better off reverting to the advice that he gave to the Conservative party before the election about the importance of taking further steps to help get young people back to work.
Mr Byrne
Before I give way to the Minister, let me finish this point, as I want to put a question to him.
As I said, the rise in the dole bill makes the deficit not easier, but harder, to pay down. Although the Chancellor likes to pretend that the welfare cuts are somehow hitting shirkers not workers, will the Minister confirm that once we factor out the lower uprating the truth is that more than half the cuts in welfare spending are hitting working families?
Chris Grayling
As the one who is intervening, I think it is my job to ask the right hon. Gentleman questions. Will he confirm that one of the bits of good news this morning is that, for the second month in a row, job vacancies in the economy have increased significantly? Does he agree that that is an encouraging development?
Mr Byrne
Any increase in vacancies is good news, but 40,000 is not an enormous increase, and when private sector employment is dead flat and public sector redundancies are mounting, I am afraid that it poses serious questions about whether unemployment will continue to rise over the next couple of years.
Toby Perkins (Chesterfield) (Lab)
Does my right hon. Friend agree that, worrying as the youth unemployment figures are, the complacency demonstrated by the Government in debate after debate is even more worrying. We heard today from the Prime Minister that youth unemployment has been a problem for a long time, but the Government’s policies are making the situation worse. In my constituency, 1,100 people will potentially lose their jobs as a result of Auto Windscreens going into administration this week. All we hear from the Government is complacency, rather than an admission that their policies are making this major problem worse.
Mr Byrne
My hon. Friend is right to highlight his constituency case, which has caused concern to families up and down the country. We saw figures today showing that earnings growth is now about half the rate of inflation. At a time when the jobs market is weaker, that will contribute to a tighter and tighter squeeze on working families over the coming months.
Joan Ruddock (Lewisham, Deptford) (Lab)
May I tell my right hon. Friend that in my constituency, in the first 10 years of the Labour Government, youth unemployment was halved? Then we had a recession, and of course it began to rise. Will not the Government’s cuts to the Connexions service, Opening Doors—one of our local facilities paid for by central Government—and education maintenance allowance for students who are in the middle of two-year courses result in more young people going on to the dole?
Mr Byrne
My right hon. Friend is right. Unless we hear something of substance from the Minister, I am afraid that her prediction is all too likely to pan out.
When the squeeze on living standards is about to get tougher and tougher, one would expect action from the Government to help. In fact, more than half the welfare cut will hit working families, and by the end of the Parliament £3.4 billion will be taken off benefits for children—far more than the amount being taken off bankers. Putting aside the question of what kind of Government take more money off children than off bankers, if the Chancellor had done what he should have done, and implemented a proper bonus tax on the banks, he would have about £3.5 billion to invest in jobs and growth, including in jobs for young people. That must be the substance of our debate this afternoon.
Damian Hinds (East Hampshire) (Con)
On the simple numbers, will the right hon. Gentleman confirm whether youth unemployment was higher or lower at the end of Labour’s term in office, despite the golden economic inheritance that it had?
Mr Byrne
Let me respond to that point in substance in a moment, and I will invite the hon. Gentleman to intervene again. Right hon. and hon. Members on both sides of the House will want to ensure that we draw the right lessons from the past 13 years, as they have a critical bearing on the programme that we want the Government to put in place for the future.
There are real differences between Government and Opposition about the macro-economic approach that we should take. We also share some values. Many of us share a passion to attack poverty in all its manifestations. We believe that the poverty of some impoverishes us all, not only because it affects the chances of many to lead the life that they would choose, but because it denies many the chances, opportunities, free range and scope to contribute to our country’s progress. I happen to think that the Secretary of State shares that belief, about which I feel passionately, as my constituency has the second highest unemployment in the country and, as this morning’s figures confirm, the highest youth unemployment. I do not have to go far to see wasted talent—I see it, and think about it, when I go to work every day. That inspires the passion with which many of us think carefully about the programme that the country needs to get youth unemployment back down.
Mr Frank Field (Birkenhead) (Lab)
If we are looking back on our period of stewardship and offering the Government lessons, does my right hon. Friend conclude, as I do, that one of our errors was not to introduce the future jobs fund earlier and put more resources into that than into the new deal?
Mr Byrne
We have learned many lessons from the future jobs fund, and there are many successes on which we can build. I will turn to that question in substance when I dwell on what we should learn from the past 10 years.
The key point, which my right hon. Friend underlines, is that the right strategy for the Government during the recession and the worst financial crisis since the 1930s, was not to sit by and do nothing, or to watch as unemployment went through 3 million not once but twice, but to act, to save jobs, to keep people in their homes, and to keep businesses moving.
Pete Wishart (Perth and North Perthshire) (SNP)
The right hon. Gentleman will welcome the fact that, under a Scottish National party Government, only in Scotland is unemployment falling and employment rising. He will also welcome the fact that we introduced 25,000 modern apprenticeships in our budget. Can he offer any explanation of Labour in Scotland’s opposition to that?
Mr Byrne
The right approach in the Scottish economy—where GDP growth has unfortunately been weaker than growth in the UK generally over the last period—is to build on the success of the future jobs fund and put in place not 3,000 opportunities for the future, but 10,000. That is the approach Labour will propose in the run-up to the coming elections.
Let us address Labour’s record in office, a substantive point which has already been mentioned. When Labour came to office in 1997 some 656,000 young people were out of work. As our economy grew, we introduced a welfare to work programme that included creating Jobcentre Plus and the new deal, and which made sure that three quarters of our young people who went on to jobseeker’s allowance were off JSA within six months. Setting aside those in full-time education—and we substantially increased the number of people in full-time education—that meant that the number of unemployed young people fell by some 20%. Indeed, between 1997 and the start of the global financial crisis the claimant count among young people fell by some 40%, and that was at a time when the number of young people in our country was rising; between 2000 and 2009 it rose by over 1 million. I think that Members will therefore forgive me for agreeing with the man who described the progress we made as “remarkable”, and who said:
“There is no question that the UK has made significant progress in the labour market over the last ten years.”
That man was the Government’s welfare reform Minister, Lord Freud.
Rehman Chishti (Gillingham and Rainham) (Con)
If the last Labour Government’s proposals and policies were such a success, why were one in five 16 to 24-year-olds out of work at the end of their period in office?
Mr Byrne
This may not have come up on the hon. Gentleman’s radar, but there was the worst financial crisis since the 1920s at the end of Labour’s term in office. During that crisis, Labour did the right thing by acting to get people back to work, to keep people in their homes and to help keep business on the move. That was a policy and approach which the hon. Gentleman’s party should have supported.
Rehman Chishti
The right hon. Gentleman says that those economic difficulties arose towards the end of Labour’s time in office, but the increase in unemployment started back in 2001, not near the end of its time in office.
Mr Marcus Jones (Nuneaton) (Con)
The right hon. Gentleman and his party seem to blame the global financial crisis for every ill, but figures I received from the House of Commons Library this morning make it clear that, as my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) said, youth unemployment has been rising since 2001, yet the global financial crisis did not start until 2008. How does the right hon. Gentleman explain that?
Mr Byrne
The facts speak for themselves. Between 1997 and the start of the financial crisis the number of young people on the claimant count fell by 40%. Because of the changes we put in place, the number of young people coming off JSA within six months was about three quarters of the number going on. That is why Lord Freud—the Government’s own welfare reform Minister—was right to say that the progress we have made was “remarkable”.
Damian Hinds
I am sure the right hon. Gentleman recognises the value of international comparisons as well as time series comparisons, so does he acknowledge that in years before the onset of the global financial crisis, such as 2005, the number of young people not in employment, education or training in this country was higher than the OECD average, higher than the EU average, higher than in France, higher than in Germany and higher than in the United States?
Mr Byrne
The number of young people not in education, employment or training was lower, not higher, when Labour left office than when we came to office. Far too often, Conservative Members pray in aid that number—a number that is pretty static—but fail to acknowledge that the number of young people in our country increased by 1 million between 2000 and 2009.
Rehman Chishti
On the effects of the previous Government’s policies, 279,000 people started on the flexible new deal, yet near the end only 3,000 were on it. That shows that the policy was a complete failure.
Mr Byrne
The hon. Gentleman forgets to mention that the flexible new deal was introduced in the middle of the recession when unemployment was high, so that is possibly not the best way to evaluate the success of getting people back into work. I am sure we will learn later precisely which elements of the new deal the current Government are continuing with in their Work programme.
Mr Byrne
I will give way to the Minister in a moment, but first I want to talk about the recession. As this afternoon’s interventions show, it is perfectly natural for Government Members to want to pray in aid figures from the beginning of 1997 and figures from the height of the recession. This point cuts to the heart of the debate we need to have this afternoon. When the recession hit, of course unemployment and the number of young people out of work rose, but we were not prepared to stand idly by and simply watch that happen, because we remember all too clearly the lessons of the 1980s when youth unemployment in this country spiralled up to 26%. Instead, therefore, we chose to act: we chose to expand student numbers and apprenticeships and the chance to work. That is why in the final two quarters of our time in office youth unemployment was falling, not rising, and by 67,000 or 9% by the time we left office. When the Minister intervenes, perhaps he will explain why, all of a sudden, that has now gone into reverse.
Chris Grayling
I am puzzled by a couple of points, and I wonder whether the right hon. Gentleman can answer them for me. First, he keeps referring to the claimant count. Can he confirm that on the claimant count measure youth unemployment is 75,000 lower now than it was at the general election? He also talks about the period before the recession. Why did the OECD publish a report in 2008 saying it was profoundly concerned about youth unemployment in the UK because it was rising here but falling in every other developed country?
Mr Byrne
I would expect the OECD to express concern about youth unemployment. Youth unemployment is a serious issue, which is why we are having this debate. We do not think the Government’s plan is adequate to deal with the problem. That is why youth unemployment is not falling at present, but is going up, which is what this morning’s figures said.
Youth unemployment in the final period of Labour’s time in office, which was also a time of economic difficulty, fell by 67,000 or about 9%. Now all of that hard work has been undone. Since we left office, youth unemployment has not continued to fall. It has not even held steady; it has gone up and up and up. We cut youth unemployment even in the face of the economic storm, yet the current Government have failed to do so even with the winds of recovery at their back. They have watched it rise while the economy is growing. That takes some doing.
Mr David Lammy (Tottenham) (Lab)
Does my right hon. Friend recall that two years ago during the passage of the Education and Skills Bill, we sought to extend the school leaving and training age from 16 to 18 but Members now on the Government Benches opposed that? How did that help youth unemployment at that time?
Mr Byrne
My right hon. Friend is right to raise that question, which underlines the dilemma so many young people now confront. With this morning’s numbers now on the public record, it is clear that young people face a summer of anxiety. If they do not make the grades to get into college—and we know the number of college places is now more limited—they will face a labour market that is tougher than ever. That is a worry for them and their families, and for older residents in this country who, having worked hard all their life, are now concerned about who will pay for the future.
Nick de Bois (Enfield North) (Con)
Does the right hon. Gentleman not understand that there is one significant distinction in respect of the figures he is discussing, in that there was massive over-reliance on putting people into the public sector through many of these programmes as a result of the legacy of economic failure that we have inherited? Therefore, there is naturally now some shrinkage in the public sector. That is the big difference. We have to create real jobs in the private sector for the long term.
Nick de Bois
I am grateful to the right hon. Gentleman for his invitation. A job is very important to the individual, no one doubts that; but we are talking about dealing with youth employment by creating work in a real sector that will last. That is the difference. We will only deal with the problem when the private sector has the opportunity to deliver long-term sustainable jobs—however well intentioned the programmes to which the right hon. Gentleman referred.
Mr Byrne
The hon. Gentleman exposes the dilemma that now perplexes the Government’s entire back-to-work programme. Figures issued this morning reveal that private sector employment is dead flat, yet public sector employment is falling fast. What has become clear from those figures is that because the Government have put the recovery in the slow lane, the private sector is not creating jobs fast enough to absorb the scale of redundancies that are being announced.
Albert Owen (Ynys Môn) (Lab)
Before I became a Member I ran a centre for the unemployed during the 1990s, so I know how painful things are for people who are unemployed long term. The hon. Member for Enfield North (Nick de Bois) referred to public sector jobs. Let us make it clear: nurses and teachers have real jobs and provide real service to our communities.
My right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) is right to compare and contrast the recessions of the 1990s and the present. In my constituency, unemployment was 100% higher during the recession of the 1990s, because the programmes—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I understand the point the hon. Gentleman is making, but we must have shorter interventions. I am sure the right hon. Member for Birmingham, Hodge Hill has grasped the point.
Mr Byrne
I am grateful to my hon. Friend the Member for Ynys Môn (Albert Owen). As many of my hon. Friends are doing this afternoon, he underlines the point that right across the country, over an extended period of Labour’s term in office, youth unemployment was falling fast. Unemployment can never be as low as Members want, but the question that confronts us is how to draw the right lessons from those overwhelming successes in getting people back into work and how to apply the lessons to the present crisis when one in five young people is not in work.
Andrew Griffiths (Burton) (Con)
Perhaps I can help the right hon. Gentleman by making a short intervention. Does he believe that the previous Government’s spending of £3.5 billion on programmes to get young people back to work while youth unemployment rose was good value for money?
Mr Byrne
I am not sure whether the hon. Gentleman was in the Chamber at the beginning of the debate when we explained the simple point that during the latter months of our term in office, when the recession was difficult, youth unemployment was not rising but falling. All that progress—the fall between the peak of youth unemployment and when we left office—has been undone in the months since May. The hon. Gentleman shakes his head, but it is a fact. That is why earlier this week the former chief economist at the Cabinet Office, Mr Portes, told the Government bluntly that the challenge of youth unemployment is serious. He told The Times that the Government were failing to address the scale of the problem. Without urgent action, he warned, hundreds of thousands of youngsters face a bleak employment prospect throughout the rest of their lives. That is why our motion calls on the Government to reflect again on the lessons of the future jobs fund, to commission an independent evaluation, draw the right lessons, learn from them, establish a more substantial programme for the future, and do it with urgency.
The future jobs fund is at the heart of the motion. Because we felt so strongly about the scourge of youth unemployment, a concern that is shared by many Members, we were determined to make sure that as it began to rise again after falling so far, something was in place that would help. We set up the future jobs fund because we knew that one of the greatest lessons from the 1980s is that when young people are allowed to drift too far from the jobs market they lose the habit of work, which is a curse that can stay with them for the rest of their lives. That is why we made substantial investment, which at the time was supported by the Conservatives, to get 150,000—rising to 200,000—new jobs that would last six months, 100,000 of them for young people and 50,000 of them in areas of high unemployment.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
My right hon. Friend said that he thought that the Conservatives supported the future jobs fund. In March, before the general election, the present Prime Minister came to Liverpool to visit Merseystride, a social enterprise that employed many people through the future jobs fund. He described the future jobs programme as a “good scheme” and said that his Government would keep any good scheme. Why does my right hon. Friend think that the Prime Minister has backtracked on what he said when he saw that project?
Mr Byrne
I think the answer is simple: despite good intentions, the Prime Minister has let the Chancellor get the upper hand. I am afraid that is a negotiation the Department for Work and Pensions has lost, which is why its back-to-work programme is being slashed with such dangers for the future.
I pay tribute to Steve Houghton, who was the leader of the local authority in Barnsley and did so much to pioneer the future jobs fund that has worked so well there. The Barnsley scheme is widely acknowledged to be one of the best in the country; it has 600 places for up to 12 months, a mixture of long-term and youth unemployed and a good track record on getting people into work. Barnsley, like other parts of the country, faces a future where that assistance is being pulled away.
The challenge for our young people is that they now confront a triple whammy. Education maintenance allowance has been cut, tuition fees have been trebled and the future jobs fund is a thing of the past. Without the chance to work, without the chance to study, what are our young people supposed to do? Can Ministers tell us? There is not even a big society for young people to retreat to. Three quarters of youth charities are actually closing projects; 80% say that is because targeted support for young people is ending.
In January, the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), decided to act. I commend him for that. He introduced a work experience scheme. It was only for eight weeks, not six months, it did not pay the minimum wage and it did not cover people leaving higher or further education, but at least he was getting the idea. A fortnight ago, we learned that he was stepping up the pace—moving up a gear: at the Tory party’s black and white ball we had the spectacle of an auctioneer selling prized internships at top City firms to the highest bidder. What started as a crusade against poverty has in just nine months become an auction of life chances for the wealthy. No wonder the young people of this country feel that they face a lottery, and the Minister is selling the tickets.
Five people now compete for every job opening, and this morning we heard that things are not getting better. According to the Library, in more than 120 of our constituencies, there are more than 10 people competing for every job. Those people would yearn for a ticket to the black and white ball. [Interruption.] We have just heard something very important: the Secretary of State is putting a ticket on the sale block.
If there was something better to replace the future jobs fund, we might more easily comprehend its abolition. After all, this is what the Prime Minister promised when he told the BBC on Sunday 4 October 2009:
“I want the new Conservative Party to be the party of jobs and opportunity and at the heart of it is a big, bold and radical scheme to get millions of people back to work.”
I am afraid that last night we learned the truth from the BBC, when it reported:
“The government’s new ‘work programme’”,
described by the Prime Minister as the “biggest and boldest ever” plan to get people off benefits and back to work,
“will actually help fewer people than the existing schemes that ministers are scrapping, the BBC has learned.”
The Department for Work and Pensions has revealed that it expects 605,000 people to go through the Work programme in 2011-12, and 565,000 in 2012-13, but the Department admits that 250,000 more people, around 850,000, went through the existing schemes in 2009-10.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. One at a time. If Mr Byrne does not wish to give way, the Minister will have to accept it. I am sure he has noticed that the Minister wants to intervene.
Mr Byrne
I will give way to the Minister in a moment. The whole House wants an explanation of why the promise to get more people back to work has been broken by the Prime Minister, because the Department for Work and Pensions has lost yet another battle to the Treasury.
The Office for Budget Responsibility says that the claimant count next year will be 1.5 million, the same, by the way, as this year. The problem is undiminished, yet the help is being cut away—the Minister’s Department is projecting 250,000 fewer places. When the correspondent from the BBC checked the figures this morning, she was told by a DWP official that she was right. So how is the Government’s scheme the biggest back to work plan ever? Is not the truth that the Minister has been done over once more by the Chancellor? Let him explain.
Chris Grayling
The right hon. Gentleman should not believe everything he hears on the television. It is absolutely clear that the Work programme will offer places through contracted-out providers to more people than was the case under the previous Government, and there is not one single person receiving JSA or employment and support allowance who wants and needs support through the Work programme who will not get it.
Chris Grayling
If the shadow Secretary of State wants a briefing on the Work programme from the DWP, we will be delighted to offer him one. I suggest that he does not take his information from the media.
Mr Byrne
That was not a straight answer to a simple question, which was why a DWP official confirmed the figures to the BBC yesterday and again this morning. The conclusion that the House can draw is a point that was made by the Office for Budget Responsibility—that there is not enough confidence that the Government have a plan in place to get people back to work. Indeed, the OBR has so much confidence in the Government’s plan to get people back to work that it is forecasting a declining rate of employment for the rest of this Parliament.
I do not claim that the future jobs funds was some kind of celestial design. I am sure there are aspects of it that could be improved. As my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) mentioned a moment ago, it was labelled “a good scheme” by the Prime Minister on his trip to Liverpool. The evidence on which it was abolished was simply not there.
In my constituency we have the highest youth unemployment in the country. The leaders of my jobcentre on Washwood Heath road have consistently said to me that the future jobs fund was one of the best programmes they have ever administered. Overwhelmingly, they say, the young people they send on the programme do not come back and join the dole queue. In their first months the Government rushed out some hasty research on its expense. This is what the Work and Pensions Committee had to say about that scribbled bit of analysis:
“A robust evaluation of the FJF has yet to be undertaken…insufficient information was available to allow the Department to make a decision to terminate the FJF if this decision was based on its relative cost-effectiveness.”
That is an extraordinary indictment of the Government’s rationale. The report says that half of future jobs fund graduates get benefits at seven months, but that is because the programme ends at six months.
The Government dispute the claim that the scheme created real jobs. I am not sure what Jaguar Land Rover would say about that and the places that it created on the future jobs fund, but surely the point is that when people do not have a job, any job is a good job.
Alison McGovern (Wirral South) (Lab)
Can my right hon. Friend suggest what Age Concern Wirral in my constituency might think of the slashing of the future jobs fund—a scheme that was not only providing work for my constituents, but helping intergenerational relationships in Wirral and looking after some of the most vulnerable people with early onset Alzheimer’s?
Mr Byrne
My hon. Friend makes an excellent point. In a recession private sector jobs are thin on the ground. Anything that keeps young people closer to the labour market, closer to the habits of work and closer to the disciplines of having a job must be a good thing. The lesson from the 1980s, when youth unemployment spiralled to 26%, is that if we let young people get too far away from the habits of work, they are scarred for generations to come.
Dame Anne Begg (Aberdeen South) (Lab)
When we looked into the future jobs fund in the Select Committee, it became clear that everyone who had experience of it, as a young person in a placement or as an employer, viewed it as a real job that lasted for six months, with a real wage, and was closer to the workplace than anything that could be offered by work experience. That is why it was successful. None of the providers had a bad word to say about it. They thought it was a very good scheme.
Mr Byrne
My hon. Friend, who chairs the Work and Pensions Committee, makes an important intervention. I hope her comments allow us to strike a note of consensus.
My final point is about the long-term costs. In all recessions and in all recoveries, it is our young people who face the toughest challenge. That is especially true of the fight that young women in our country now confront. Overwhelmingly, they are working in the public sector. Overwhelmingly, it is they who are exposed to the cuts and the redundancies that have been announced, which now number around 156,000. We must remember the lesson of the 1980s. When youth unemployment was allowed to soar, and allowed to fester for years, communities were damaged for generations. As the Cabinet Office’s former chief economist put it this week:
“If the Government doesn’t act it will not only damage the employment prospects of young people now but hurt them for the rest of their lives”.
The motion that we have tabled asks that the Government look again at the lessons of the future jobs fund, be ambitious about the programme that they put in place, and ensure that they learn the lessons from the 1980s. We fear that a generation is being lost to the clumsy behaviour of the present Administration, so I call on the Government this afternoon to think again, to preserve the promise that this country should make to its young people, to reconsider the action that they are taking to ensure that our children will do better and better than us, and to think again before we confront once again a lost generation.
The Minister of State, Department for Work and Pensions (Chris Grayling)
Following Mr Speaker’s ruling last week, it is clear that it would be utterly unparliamentary to accuse any other hon. Member of being a hypocrite. I therefore give an absolute assurance that I will not do so this afternoon. It is clear, though, that the Opposition Front-Bench team is suffering from a bout of collective amnesia. We should be concerned for their welfare. I looked up the symptoms of amnesia, and it looks like an open and shut case to me. Amnesia is a condition in which memory is disturbed or lost. In some cases it is described as almost total disruption of short-term memory.
What other possible explanation could there be for what we have just heard? I can only think that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) cannot remember his time in office, so let me remind the House what happened. He and his party stayed in power for 13 years. One of their great missions was to tackle youth unemployment. Their former leader, his former boss, the former Prime Minister and Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), made his maiden speech on the subject back in 1983. When, 14 years later, he took office and became Chancellor of the Exchequer, he said that the problem was a “human tragedy”, “sickening” and “an economic disaster”. He had a mission for change.
What happened? Nine years later, in the middle of one of the biggest booms that this country has seen—let us remember that that was at a time when the then Chancellor was saying he had abolished boom and bust—the youth unemployment rate had gone up compared with 1997. It was higher than it had been when the Labour Government took office. As my right hon. Friend the Secretary of State rightly said from a sedentary position a few moments ago, that was despite the billions of pounds spent on the new deal. In total, £3.8 billion was spent on new deal programmes to get more people into work, yet in the end youth unemployment had increased.
Chris Grayling
Well, we are still waiting for an apology from the right hon. Gentleman for his Government’s record. If he wants to quote colleagues, let me quote one of his, the right hon. Member for Birkenhead (Mr Field)—sadly no longer in his place—who is one of the wisest figures in the House. When the statistics were produced in the latter part of the past decade, he said of youth unemployment:
“We made huge gains at the expense of the Tories in 1997… and now we are not just back to where we started, but in a worse position.”
That is not from someone on the Government side of the House, but from one of the shadow Minister’s right hon. Friends. That was not the half of it, because after that things got worse. More money was spent on more programmes to get more people into work, but youth unemployment continued to go up and up. If he wants to intervene, perhaps he can explain why that was.
Mr Byrne
I am grateful to the Minister for his kind invitation. Will he accept that between 1997 and the beginning of the global financial crisis, the claimant count for youth unemployment fell by 14%? To return to my previous question, why did Lord Freud, the Minister responsible for welfare reform and his colleague in the Department, describe our progress as “remarkable”? Was he deluded?
Chris Grayling
I think that the right hon. Gentleman should listen to his right hon. Friend the Member for Birkenhead, who said in 2006 that youth unemployment was worse than when Labour took power, and it carried on getting worse after that. By the time of last year’s general election, youth unemployment was still 270,000 higher than it had been in 1997, and still they remained in denial—they remain in denial to this day. The greatest brass neck of all was that two months ago the previous Prime Minister had the effrontery to claim:
“Tragically Britain is entering yet another decade of youth unemployment.”
Just what does the Labour party think had been happening for the past 10 years when it was in government?
Perhaps the right hon. Gentleman also does not remember that during the last disastrous years of the Labour Government he was Chief Secretary to the Treasury. For those who do not know, that is the person in Government responsible for keeping spending under control. It was not we who built up the biggest peacetime deficit this country has ever known, but him. What did he do to stop his Prime Minister promising to spend money he did not have and making promises to the unemployed that he could not keep? Of course, there was the notorious letter to his successor:
“Dear Chief Secretary, I’m afraid to tell you there is no money. Kind regards and good luck!”
What characterised the period that he and his colleagues have so conveniently forgotten is that the Labour party spent more and more money and made less and less difference. It is no wonder amnesia has set in.
Chris Grayling
We spent years warning the Labour Government that their spending was getting out of control and that they were mismanaging our economy, and now we see the consequences of what they did. What are we to do about the mess they created? Let us start by debunking some of the myths that they are peddling. To listen to them, one might think that it was all the fault of the coalition. Only last night the shadow Secretary of State stated in a press release:
“Labour’s legacy was falling youth unemployment and a pioneering programme to get 200,000 young people back to work. The Tories scrapped that programme and now youth unemployment has escalated to a record high.”
What a load of complete tosh.
The programme to which the shadow Secretary of State referred is the future jobs fund. Listening to him, one would think that we had scrapped that programme last May, but as we sit here today, young people are still being referred to placements through the future jobs fund. Although Labour’s attempts to support the unemployed had largely proved to be expensive failures, we decided early on that we would not remove them until our alternatives were in place. If the right hon. Member for Birmingham, Hodge Hill is right and things are getting worse, even though all the programmes we inherited from his Government are still running, what on earth does that say about the quality of provision he put in place?
Mr Byrne
It says that this Government have put the recovery in the slow lane. That is why the figures we saw this morning show that private sector employment is dead flat and public sector employment is falling. It is clear that the Government now need a plan B for the economy. It must start with a proper tax on bankers and the Government must use the money to do something to get young people back to work.
Chris Grayling
I just do not think the right hon. Gentleman is listening to what I am saying. We have left in place the support programmes that his Government left to support young unemployed people, and as of today they are all still there. As he keeps pointing out, youth unemployment has risen, so what does that say about the quality of provision he left behind? It says that it was not much good.
Mr Byrne
If the Minister was so dead against it, why is the right hon. Gentleman leaving it in place until the end of March? Since the Government took over, youth unemployment has started to rise, even though the economy has now been in recovery for five quarters. We were bringing youth unemployment down at a time of economic difficulty; since things have got easier, youth unemployment has gone up. How on earth did the right hon. Gentleman achieve that?
Chris Grayling
What we know is that the programmes the right hon. Gentleman left behind were not fit for purpose.
Chris Grayling
I happen to think that youth unemployment is a significant issue and would rather retain for a few months a programme that is underperforming while we prepare something better than do nothing at all. The right hon. Gentleman seems to think that we are doing nothing at all, but the truth is that we are doing just the opposite. It was his party that did nothing at all for a long period of time.
Let us deal with the argument about the future jobs fund once and for all. It costs around £6,500 per start—net of benefit savings, just under £6,000. That is far more expensive than Labour’s other programme for young people, the new deal for young people, which costs around £3,500 per job, and several times more expensive than other elements of the young person’s guarantee. It is twice as expensive as an apprenticeship, which I happen to think is of much greater value. Even when we net off all benefit savings, the future jobs fund is still much more expensive than any other option that the previous Administration put in place, and it did not work.
Colleagues may disagree, but to me a future job is one that lasts and on which a young person can build a career and sustain an opportunity for a lifetime. The future jobs fund did, and does, create temporary short-term placements, mostly through the public sector, where young people did not end up getting the kind of sustained work experience and training leading to a long-term career. The grants that funded the future jobs fund included no incentives whatever to move people into permanent jobs.
Chris Grayling
If that were the case. In reality, we know that a number of placements continued for seven, eight or nine months after being funded by local money, so the first indications are that the final outcome of the future jobs fund will be no better than other employment programmes, but involve a much higher price.
Mr Byrne
The Minister is helpfully rehearsing a series of his uncertainties about the effectiveness of the future jobs fund. Why will he not therefore back the part of our motion which says that a proper evaluation is needed before a further decision can be taken on what is put in place in the future?
Chris Grayling
I fully accept that there is a difference between us. The right hon. Gentleman believes that the future jobs fund—six-month placements in the public and voluntary sectors—is the right approach. I happen to believe that apprenticeships—two years of training and the possibility of a longer-term career at half the price—is a better one. I am fully prepared to accept that that is a difference between us, but in reality our approach—tens of thousands of extra apprenticeships, which the Scottish Administration have also chosen but, I am surprised to discover, the Labour party opposes in Scotland—is a better route to follow.
Chris Grayling
I accept the principle but do not agree with the detail of what the hon. Lady says. I shall come on to discuss the Work programme and how I aim to use it to deal with the problem that she rightly highlights.
Opposition Members should remember that over the years they made lots of promises about apprenticeships but consistently under-performed on them. Our job is to make sure we do not do that.
Mr Byrne
The right hon. Gentleman surely accepts that the number of apprenticeships increased from about 63,000 in 1997 to more than 250,000 by the time we left office. Surely that is a record of success in backing apprenticeships, and I am glad that it is a point of consensus on both sides of the House.
Chris Grayling
I remember the right hon. Gentleman’s former boss standing in this House and promising about 400,000 apprenticeships. When Labour left office, the actual figure was 240,000, so I shall take no lessons from the Opposition about delivering promises on apprenticeships. We plan to deliver, and are already well on the way to delivering, 50,000 extra apprenticeships this year, 75,000 extra by the end of this Parliament and more apprenticeships for young people between 16 and 18 years old. Those apprenticeships will cost about half that of each future jobs fund placement, but they will deliver the skills that last a young person a lifetime, and the opportunity to progress on to a secure career path.
Chris Grayling
No, I have given way enough, and I am going to make progress. [Interruption.] When Labour Members have some useful contributions to make, I might give way again.
We now need to talk about what we are going to do about this. The Work programme, which we will introduce this summer, will, I hope, go a significant way towards dealing with some of the problems to which the hon. Member for Aberdeen South (Dame Anne Begg) referred. We have huge challenges in the labour market, with young people who face huge difficulties in their backgrounds. For them, the Work programme will deliver specialist intervention after just three months in the dole queue—much earlier than it has ever been done before. It will be a revolution in back-to-work support in Britain. It will provide a level of personalised support that we have not seen before, because in order to survive in a payment-by-results regime, the providers will need to cater for the individual. It is the kind of revolution we have needed for years—the kind that was promised in Labour rhetoric but never delivered.
Mr Byrne
It is curious that the Minister’s colleague Lord Freud noted in his report:
“The New Deals have been enormously successful”.
He also said:
“The creation of Jobcentre Plus…is…seen as…a model for effective public service delivery.”
He further commented:
“The Government has made strong, and in some respects remarkable, progress over the last ten years.”
I hope that those are lessons on which the Minister can draw.
There has been some dispute about the numbers that the BBC published. Will the Minister now set out for the House his assumptions for this year, next year and the year after about how many people will flow through the Work programme? If he is disputing the figures, let us hear it from him—what are they?
Jenny Willott
I will not.
The future jobs fund was clearly not working in the way that it was supposed to. As with many of Labour’s programmes, the words and the theory were positive but the practice was poor. It was not properly designed or monitored. It simply was not thought through. It did not deliver sustainable employment for young people.
Instead, we need to create a skilled work force and generate jobs for those skilled young people. Apprenticeships make people more employable, potentially by the people by whom they have been trained, but also by similar businesses. CBI evidence shows that 90% of apprentices find employment or become self-employed immediately after their training ends, which means that apprenticeships are clearly far more successful than the future jobs fund.
The group that concern me the most are those who are furthest from the jobs market. For many of them, apprenticeships are inappropriate. They are a particularly vulnerable group, and in the past they have been particularly ill-served. We need to ensure that the Work programme will work, and that the Government learn the lessons from previous programmes to ensure that those vulnerable young people are helped back into work.
I am glad to see that, under the Work programme, young people will get help at a much earlier stage than they do under the future jobs fund. They will be referred to the Work programme when they have been on jobseeker’s allowance for nine months, rather than 12 months as happens under the FJF. More tailored support will be available for those with the most severe disadvantages, and they will be referred after three months if they are not in employment, education or training. All the evidence shows that we need to get in there as early as possible if we are to have an impact. Even with all that evidence, however, the previous Government did not quite achieve their aims, so we really need to ensure that we learn those lessons now.
In addition, under the Work programme, the fees will be structured so that providers will get more if they help those who are furthest from the jobs market and keep them in work for longer. We hope that that will make a real difference to that group of people. Again, that is something that the previous Government tried to do, but they did not go quite far enough. I hope that the coalition Government will learn the lessons from that and ensure that these measures are implemented.
Following the demise of the future jobs fund, we all want to see much better, tailored support aimed at the needs of young people. We cannot afford to damage the career prospects of another generation of young people, as happened in the 1980s and early ’90s. We have to learn the lessons, particularly the ones that the previous Government did not learn from the work that they were doing.
The numbers are bad, and the individual stories are heart-wrenching. I am sure that we have all had people coming to see us in our surgeries who are at their wits’ end and absolutely desperate to find work. We need to ensure that another generation is not left behind, but the Opposition’s proposals in the motion today are simply not the way to do it. The future jobs fund has not worked so far, and given that the number of young people unemployed for more than 12 months has been increasing, why on earth do they think it will start working now? It is time to adopt a new approach, to ensure that we do not leave hundreds of thousands of young people behind. Instead, we must give them the skills and the confidence that they need to build a future for themselves and our economy.
Oral Answers to Questions
Liam Byrne Excerpts(15 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris Grayling
My hon. Friend highlights the chaos that we inherited in the benefits system that can lead to perverse incentives that often mean that work does not pay. The universal credit is designed to ensure that work always pays. I would be interested to meet my hon. Friend to talk about her constituent’s case, so that I may understand more clearly what has gone wrong, but we are clear that work must always pay.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
The recession has now been over for a year. Unemployment should now be falling, and the whole House is worried that it is in fact rising, especially among young people. One of the ways in which we tackled that was with the “Backing Young Britain” campaign, which created thousands of job opportunities for young people, including apprenticeships and internships. One of those schemes was a paid internship in the private offices of every Minister in the Department. Is that scheme still in place?
Chris Grayling
As I have said, we already have 300 apprenticeships throughout the Department and we intend to continue to deliver that support to apprentices. We inherited from the previous Government a collection of programmes that simply were not working. The future jobs fund, for example, cost twice as much as apprenticeships. We believe that expanding the number of apprenticeships—50,000 extra this year and 75,000 extra by the end of the Parliament, plus additional apprenticeships for 16 to 18-year-olds—will move us to the place we should be, and out of the mess that we inherited from the previous Government.
Mr Byrne
I am grateful for that answer and I will try to decipher it later.
I was interested to hear the Minister talk about how he is now using the Department’s resources wisely. At some point, he will no doubt tell us why in December his Department spent more on stationery than it did on employment zones or access to work programmes. I wonder whether that is part of an innovative new approach that includes getting more people into study by cutting education maintenance allowances and getting more young people into work by cutting the future jobs fund. I see now that the Conservative party is piloting new ways of helping young people get into internships, by auctioning them for £5,000 a time to Tory party donors. Did the right hon. Gentleman choke on his pudding when the auctioneer’s hammer came down, and when will this worthwhile scheme go nationwide?
Chris Grayling
I will not take any lessons on spending from a previous Administration who spent money like there was no tomorrow. We were shocked to discover how the Department for Work and Pensions under the previous Administration spent money as if there were no limits. This Administration have removed the absurd restrictions on work experience that meant that young people lost their benefits if they did more than two weeks’ work experience. We have changed that and are actively finding experience opportunities for young people, not standing in their way and preventing them from accessing those opportunities.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
As I did not do so earlier, let me now welcome my shadow, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), to his post. I hope that we shall have engagements in the future, and I am sure that he will adopt a positive approach to measures that he believes will benefit the estate.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
There will not be a hair of difference between us.
Mr Duncan Smith
Indeed. I am glad to see that the right hon. Gentleman models himself very much on me, which is also very helpful.
I have had meetings today, and I have more meetings to come. I should also mention that we are getting rid of the default retirement age, which we consider to be a positive move overall for older people which should also help to boost the economy.
Capital Gains Tax (Rates)
Liam Byrne Excerpts(15 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
We have had some excellent debates in the Chamber since the Chancellor presented his Budget to the House. They have been good debates not least because we have heard the speeches of some extraordinary new Members, and I hope I will be forgiven for dwelling for now on only the maiden speeches we have heard today.
The hon. Member for East Surrey (Mr Gyimah) rightly perceived that Budgets are not simply collections of statistics. They are important because they are statements about our ambitions for our country and our communities. I was glad to see the scale of his ambitions for East Surrey and I wish him the very best of luck in the difficult business of delivering them, but he showed us that he needs no shoulders to stand on.
The hon. Member for Maidstone and The Weald (Mrs Grant) put the emphasis on family and enterprise. She will find a ready audience for both subjects in the House. She spoke with real feeling about the need to draw politicians and civil servants into public life from a wider range of backgrounds. She is right about that.
My hon. Friend the Member for Airdrie and Shotts (Pamela Nash) spoke movingly about her memories of John Smith and of her debt to John Reid. I served as one of his Ministers and she got his character absolutely right. She was passionate about her constituents and will clearly be an effective fighter in this place on their behalf.
The hon. Member for Thurrock (Jackie Doyle-Price) spoke about her roots and how they have shaped her political outlook. She left us very much wanting to hear more. The hon. Member for Pudsey (Stuart Andrew) told us about some of Pudsey’s famous sons—if that is the word to describe both Sooty and Sweep; I have never been quite sure—and I now know the home of Britain’s best fish and chips. The hon. Member for Truro and Falmouth (Sarah Newton) was passionate and informed about green energy. The House is in need of those qualities on that subject, and we look forward to hearing more from her.
Listening to my hon. Friend the Member for Glasgow Central (Anas Sarwar) brought me enormous pleasure. He captured with brilliance his father’s passion and contribution to this place. He showed us that he is a magnificent successor to his father.
When all is said, however, at the heart of the debate is a judgment. The reality is that the Budget has presented us with the judgment of a gambler. That is not just our conclusion; we have heard it across the spectrum of informed opinion. KPMG said:
“This is a kill or cure budget”,
which
“risks choking off the recovery.”
The Chartered Institute for Personnel Development said that it
“will curb the demand for the goods and services that…drives business investment and exports.”
BNP Paribas—hardly a bedrock of socialism—said:
“We expect GDP will be much weaker than the Budget projections”.
Lombard Street Research said that
“there remain risks that aggressive fiscal tightening causes the UK recovery to stumble.”
IHS Global Insight said:
“There is undeniably a very serious risk that this accelerated and intensified fiscal tightening could derail a still fragile UK economic recovery.”
This afternoon, we have been presented with a contrast. In Toronto, international leaders gathered to agree that the need now was for what they called “growth-friendly” fiscal consolidation, yet at home we are presented with a Budget that suffered the instant indignity of its independent reviewers telling us that it will not speed up recovery, but will slow it down. It will not put more people in work, it will put more people on the dole. It will not move the Chancellor’s party—it is so kind of him to join us—from the 1980s, because at the heart of the Budget is an old calculation: unemployment is a price worth paying. That is a philosophy that the Opposition cannot and will not accept.
Only in the fine print of the Red Book does the scale of the Chancellor’s bet become clear. The Chancellor promised that he would be up front with us, but in the small print of the Office for Budget Responsibility report we see that he is gambling on growth of £192 billion in business investment and exports to pull us through. Last week, he told us he was all for caution, but now we have learned that he is relying on business investment that is higher, not lower, than Labour’s projections, helped no doubt by the cancellation of support for firms such as Sheffield Forgemasters and cuts to investment allowances for manufacturing firms.
What do manufacturers think of that? The Engineering Employers Federation said that manufacturers
“will now be left wondering where the necessary growth and investment will come from, given the cuts to investment allowances and capital budgets.”
Last week, the Chancellor liked to tell us he was all for caution, but now it turns out that he is relying on trade figures not seen in this country since 1974 and only beaten once—in 1950. Yet the prospects for trade in Europe, where half our exports go, are not better than when the March Budget was written; they are worse. Where, exactly, will all those exports go?
I wanted to know whether we had ever had a recovery like the one the Chancellor is gambling on in the next three years, so I asked the Library to do some research, and it said that only once has business investment and trade recovered in the way that he prays for, since the Library started collecting figures in 1966. Now, he is relying on the same performance for the next three years in a row. It is like betting not just on England winning the World cup, but on winning the next three World cups in a row. His strategy is nothing short of a massive bet on a recovery that has been hard-fought by businesses and families in this country. But of course, it has been made possible by the Liberal Democrats’ support, not least the imprimatur of the Secretary of State for Business, Innovation and Skills, who is not in his place tonight. Thus the man who made his reputation attacking casino banks has ushered in casino economics to the Treasury.
It is now right to give the Business Secretary a little credit: he at least had the decency to give the House an extended mea culpa for his change of heart. In January, as some hon. Members will remember, he told the House that he agreed with my right hon. Friend the shadow Chancellor about the way forward. Now, he agrees with the Chancellor. At least he spared us the nonsense that, somehow, Britain risks becoming Greece—a country still in recession, with debt twice the level of ours and no ability to devalue its currency.
All this is hinged, it seems, on the words of the Governor—words, I notice, that were entirely absent from the Monetary Policy Committee’s minutes for May. In essence, the Business Secretary made markets his defence—it was not his fault; the markets forced him—but somehow, he forgot to mention that those were the same markets in which interest rates were falling during the election. The MPC’s minutes for May are, in fact, very helpful. They note that 10-year spot rates were declining, not rising, by about 30 basis points in the month before the election.
The tragedy, of course, in the Budget is that there was an alternative. No doubt we will hear from the Chief Secretary a pretence that, somehow, he inherited no plan. Of course, nothing could be further from the truth, because until May he agreed with our plan. Labour’s plan to halve the deficit by 2013, with debt as a share of our national economy falling by 2016, is bang in line with the G20 communiqué announced to the House by the Prime Minister today. I notice that Sir Alan Budd agreed that we were on track to deliver that plan, not least because the public finances were £30 billion better than expected.
Mr Byrne
I will give way in a moment, because I want Government Members to hear this: far from the absence of detail in the Budget, the Budget prepared by the then Chancellor of Exchequer and presented to the House in March set out to the last penny £19 billion-worth of tax rises and, yes, £20 billion-worth of spending cuts, including £1 billion in cuts from the reform of public sector pensions, £1.2 billion in savings from welfare, £3.5 billion in holding down public sector pay, £5 billion in cuts to lower-priority programmes and £11 billion in savings through the biggest shake-up of Whitehall in a generation. That was on top of £15 billion of efficiencies in this year alone—all carefully broken down by Department.
Matthew Hancock (West Suffolk) (Con)
Will the right hon. Gentleman give way?
Matthew Hancock
Does the right hon. Gentleman think that there is no money left, or does he no longer agree with himself?
Mr Byrne
We can see at whose feet the hon. Gentleman has been training.
Our plan was different from the one the Chancellor presented. Unlike the plan that we heard last week, our plan really did have fairness at its heart. Last Monday night, the Chancellor’s spin doctors made fairness his key Budget test, and by Tuesday lunchtime he had failed it. The night before the Budget, we are reliably informed, Lobby journalists were equipped with an analysis of the Budget’s impact on different groups of citizens, yet somehow, someone forgot to tell the press that the picture was only fair because it included Labour measures. The Government would not dare to present a Budget to stand and fall on its own merits; they had to borrow ours. It did not take long to hear why.
What was the Budget’s impact on pensioners? Age UK says:
“Our research shows that cuts of this scale will be disastrous for older people”
and warns that thousands of lives will be lost. What is the impact on children? Save the Children says:
“Freezing child benefit…will hurt the poorest parents most, rather than their richest peers”.
A 20% VAT rate means driving some of the poorest parents into the arms of loan sharks. The Child Poverty Action Group said:
“This is a disappointing budget for child poverty…The increase in VAT is a regressive measure which will impact hardest on poorest families.”
Perhaps the final word should go to the Institute for Fiscal Studies. In a phrase that will come back to haunt Government Members, it said that the cuts to benefits will
“hit the poorest hardest and keep on hitting them harder year on year”.
Six days on from the main event, the Government’s progressive credentials already lie in ruins.
The price of keeping down unemployment in the worst global recession for 60 years was a price worth paying. It was the price of a national defence in a global storm. When we left office, unemployment was 500,000 lower than people expected a year ago. Repossessions were half the level of the 1990s, and company insolvencies were just a third of the rate they reached in the recession of the early 1990s. We are proud that we got the country though the recession in one piece and that we have delivered a return to growth.
It is true to say that no Government would have had an easy time in this Parliament, but the difficulty of the task demands that we do not take gratuitous bets with the nation’s hard-fought recovery and that we pay down the debt in a way that is fair. The Budget fails both those tests, and we will campaign for a plan that is better in this House and beyond.