Inequality and Social Mobility
Nadhim Zahawi Excerpts(4 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Education (Nadhim Zahawi)
I welcome the opportunity to respond on behalf of the Government. I was sorry to hear the hon. Member for West Ham (Lyn Brown) accuse the Government of not responding to the report of the UN rapporteur. That is not true; we have responded. I was also sorry to hear her exploit Allie, an 18-year-old, in an attempt to weaponise this issue, when we have heard really thoughtful contributions from other colleagues. Labour employs the politics of division; it was sad to see that today.
I thank colleagues who have spoken, including the hon. Member for Airdrie and Shotts (Neil Gray), my right hon. Friend the Member for Putney (Justine Greening), the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), my hon. Friend the Member for Chichester (Gillian Keegan), the hon. Member for Bradford South (Judith Cummins), my hon. Friend the Member for Chelmsford (Vicky Ford), and the hon. Members for Birmingham, Edgbaston (Preet Kaur Gill), for Leigh (Jo Platt), for Battersea (Marsha De Cordova), for Oldham East and Saddleworth (Debbie Abrahams), for Glasgow North East (Mr Sweeney), for Mitcham and Morden (Siobhain McDonagh), for Bedford (Mohammad Yasin), for Glasgow East (David Linden), and for Ellesmere Port and Neston (Justin Madders).
Many of the contributions this afternoon were about the long-term issue of delivering social mobility. As Under-Secretary of State with responsibility for children and families, I will naturally focus in my speech primarily on the work of my Department. You will not be surprised to hear, Madam Deputy Speaker, that I believe that one of the most effective means of reducing inequality is education. As someone who came to these shores unable to speak a word of English, I know at first hand how education can change lives and truly open doors. Everyone has the right to a good education, regardless of their circumstances.
Social mobility, tackling inequality and social justice are rightly critical priorities for my Department and of course my Government as a whole. That is why, for the Social Mobility Commission, we have recruited a fantastic chair in Dame Martina Milburn, along with a board of commissioners each with a unique experience of social mobility. I will say a few words about their vital work.
At the end of April, the commission published a comprehensive “State of the Nation” report which shines a light on where the Government, businesses and employers can continue to raise the bar for everyone living in this country.
Nadhim Zahawi
If I have time at the end, I will happily take an intervention.
We welcome the commission’s thorough analysis and its efforts to promote social mobility and social justice across the United Kingdom, and we have therefore awarded it £2 million to undertake further work on that agenda. Indeed, despite some claims to the contrary, social justice is already an intrinsic part of the commission’s role. It is already concerned to help the most disadvantaged in society and to ensure that someone’s background does not determine future chances in life.
This Government share the view that everyone should have the chance to fulfil their potential. That is why we are taking action across the whole Government in order to make real progress.
Nadhim Zahawi
I will at the end if I have time. I have a lot to get through. I will try to respond to the hon. Lady and to other contributors to the debate, and I will happily take interventions at the end if possible.
Making progress means building a strong economy, achieving record levels of employment and reforming the welfare system so that it supports people into work. Now, 665,000 fewer children grow up in workless households, the support of an income making them less likely to grow up in poverty. The UK’s national living wage is growing faster than similar or higher minimum wages in other OECD countries, such as Belgium, France or Germany.[Official Report, 17 June 2019, Vol. 662, c. 2MC.]
Nadhim Zahawi
I will try to take some interventions at the end. I want to get through my remarks and to address some of the questions asked of me.
In 2014, we extended benefits-related free meals to cover further education—not something that the Labour party had contemplated—and introduced universal infant free school meals, benefiting a further 1.5 million infant pupils. In 2018, we introduced new eligibility under universal credit, and we estimate that by 2022 more children will benefit from free school meals than under the previous benefits system. Such efforts are targeted at the root causes of poverty and disadvantage.
Improving this country’s education system starts in the early years—Martina Milburn focused on that in her report. We have already made progress in closing the gap that emerges between disadvantaged children and their peers: 71.5% of children achieved a “good level of development” in 2018, up from 51.7% in 2013. Despite that very encouraging progress, far too many children still start school behind their peers, in particular in language development, which a number of colleagues mentioned. We have set out an important ambition to halve, by 2028, the proportion of children finishing their reception year without the communication and reading skills that they need.
To tackle that, this year alone the Government will spend about £3.5 billion—yes, Mr Deputy Speaker, you heard me right—on early education entitlements, which is more than any previous Government have spent. Our early years social mobility programme, backed by more than £100 million of investment, includes a professional development programme for early years practitioners, who will shape those little ones to make the most of their lives as they become adults; and work with Public Health England to train 1,000 health visitors to identify speech, language and communication in families who need that additional help. We will soon launch a home learning environment campaign, because what happens in the home in the earliest years has a huge impact, and there are many opportunities to help parents to support their children to learn—to have the confidence to help their children to learn better and faster. I look forward to working with hon. Members across this House to ensure that we make the most of the very significant potential of that campaign to help disadvantaged children.
This Government have focused on raising school standards because we know that what happens in our classrooms is critical to reducing inequality. There is nothing moral or decent about crashing an economy and leaving the most vulnerable people behind. That is why we are targeting extra support at the areas of greatest challenge and least opportunity, to raise standards and attract great teachers to our primary and secondary schools. This has helped to ensure that, as of December of last year, there are 1.9 million more children in good and outstanding schools compared with when we came into office in 2010, representing 85% of children, compared with just 66% in 2010. That is partly down to our reforms.
I am pleased to say that this Government have also made significant progress in closing the opportunity gap with regard to education. The difference in attainment between disadvantaged pupils and their peers has fallen across all stages of education. Commenting on the changes we have made to the system, including the pupil premium, the Institute for Fiscal Studies, which has been mentioned a number of times today, said:
“A system that was substantially skewed…towards the better off is now, if anything, skewed towards the least well off.”
It also said:
“Reforms since 2010 are likely to have increased total funding in favour of pupils from poorer backgrounds.”
Our efforts do not stop there, when school comes to an end. To tackle inequality, everyone must have the right level of ongoing support to help them on a path to a skilled job, whether via university or a more practical, technical path. That is why widening access in higher education to ensure that an academic route is open to all is a priority for this Government, as shown in the recent report by Philip Augar.
Nadhim Zahawi
I have said that I will at the end when I have a bit of time.
In 2018, 18-year-olds from disadvantaged backgrounds were proportionally 52% more likely to go to university than they were in 2009. Higher education providers have committed to spend £860 million in 2019-20 on measures to improve access—up significantly from £404 million; in fact, this is more than a doubling since 2009. This Government have also embarked on a long-overdue overhaul of technical education, backed by significant investment. Over 1.7 million people have started an apprenticeship since May 2015. Alongside this, we are introducing T-levels, which will offer a rigorous technical alternative to academic education, available to all.
On children’s social care, this Government take the view that all children, no matter where they live, should have access to the support they need to keep them safe, provide them with a stable and nurturing home, and overcome their challenges to achieve their potential. This Government are committed to improving outcomes for children in need of help and protection. That is why, owing to the work of my Department, my officials and all our teams, and of course all the brilliant social workers on the frontline, our children’s social care reform programme is working to deliver a highly capable, highly skilled social work workforce, with high-performing services everywhere and a national system of excellent and innovative practice.
It is both an economic and moral imperative that we ensure that the skills system works for all—my right hon. Friend the Member for Putney spoke eloquently about why the system really matters—and that it does so up and down the country. That is why we are taking action in every region, at every stage of a young person’s life, to close the opportunity gap. We are targeting extra support at some of the poorest areas of the country through our £72 million opportunity area programme and £24 million for Opportunity North East.
Members made a number of points that I would like to address. The hon. Member for Mitcham and Morden asked how many academies are in debt. I will be happy to respond to her question in writing, but I can say that the reforms of the last eight years show that autonomy and freedom have allowed the best leaders and teachers to make the right decisions for their pupils to reach their full potential.
The hon. Member for Glasgow East rightly held us to account for our own behaviour in this place. There really should not be any unpaid internships. I remind colleagues of the care leaver covenant, which all Departments have signed up to, meaning that we offer 12-month paid internships to those most vulnerable children who, through no fault of their own, have had to be taken into care.
The hon. Members for Mitcham and Morden and for Bradford South attacked the Government about what steps they would be taking to support children who live in food insecurity. I remind them that we are supporting more than 1 million children with free school meals and investing up to £26 million in school breakfast clubs, providing approximately 2.3 million children aged four to six with a portion of fresh fruit or vegetables each day.
Nadhim Zahawi
The hon. Members for Battersea, for Oldham East and Saddleworth and for Bedford talked about the national living wage and the inequality—[Interruption.] I am trying to address the issues that—
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. Let me say to those on the two Front Benches that if the Minister wishes to give way, that is his choice, but I do not need somebody next to him chuntering that the shadow Minister only gave way once. Let us continue.
Nadhim Zahawi
Thank you, Mr Deputy Speaker. I was trying to address some of the issues raised.
The issue of inequality was raised by the hon. Members for Battersea, for Oldham East and Saddleworth and for Bedford. Our policies are highly redistributive. This year the lowest-income households will, on average, receive more than £4 in public spending for every pound they pay in tax—
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put and agreed to.
Resolved,
That this House notes the findings of the Institute for Fiscal Studies that the UK is second only to the US in terms of income inequality among the major world economies in Europe and North America, that the share of income going to the wealthiest one per cent of households has nearly tripled in the last four decades and that deaths from suicide and from drug and alcohol overdoses are rising among middle-aged people; further notes that 1.6 million food parcels were handed out by Trussell Trust food banks last year and that child poverty has increased by 500,000 since 2010; recognises that following the resignation of the entire Social Mobility Commission in November 2017 in protest against the Government’s inaction and a near year-long delay in appointing replacements, the new Commission has found that social mobility has stagnated for four years; considers that the Government’s programme of austerity has decimated social security and led to growing inequality of provision across education, health, social care and housing; further considers that the Government’s austerity programme has caused and continues to cause suffering to millions of people; and calls on the Government to end child poverty, to end the need for the use of food banks and to take urgent action to tackle rising inequality throughout the UK and increase investment in public services.
Welfare
Nadhim Zahawi Excerpts(8 years, 1 month ago)
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Stephen Crabb
The statement was very clear. The kind of changes that the hon. Lady describes would be cuts to people’s benefits, so we as a Government are not looking at that at this moment in time.
Nadhim Zahawi (Stratford-on-Avon) (Con)
I congratulate my right hon. Friend on his appointment. There is no one more appropriate to take on the reform and social justice agenda of his predecessor. What is his Department doing for disabled entrepreneurs? May I remind him not to forget entrepreneurs who are disabled?
Stephen Crabb
There are some amazing examples of disabled people who have set up really successful small, and not so small, businesses around the UK. In my previous role as Welsh Secretary, I recently had the pleasure of meeting a number of them in Cardiff. They are absolutely the kind of people that we as a Government need to be backing and supporting. Schemes like Access to Work are a really important part of that.
Universal Credit
Nadhim Zahawi Excerpts(9 years, 10 months ago)
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Mr Duncan Smith
There have not been any such discussions, and I hope that he will take that argument back to his counterparts in Northern Ireland and try again to persuade them that the full welfare reform package will benefit Northern Ireland dramatically, as will the universal credit part of that reform.
Nadhim Zahawi (Stratford-on-Avon) (Con)
It is worth remembering that the tax credit disaster meant that £6 billion was overpaid in the first three years of its operation. Does my right hon. Friend agree that when implementing so crucial a change, it is right and proper to take time and to implement it stage by stage?
Welfare Benefits Up-rating Bill
Nadhim Zahawi Excerpts(11 years, 3 months ago)
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Mr Byrne
I will give way to the hon. Gentleman, even though he could not be bothered to get here for the beginning of the debate, but let me first ask him how he can justify giving away £3.4 billion to Britain’s richest citizens while taking money away from Britain’s working families. Justify that now!
Nadhim Zahawi
My question to the right hon. Gentleman is about the honesty with which he delivered his message in 2010, in which he told us that there was no money left and wished us good luck. Will he show the same honesty now and acknowledge that we are taking more from the wealthiest in this country in every year of this Parliament than was taken in the 13 years of the Labour Government? That is the honesty we require from him. Yes or no, please?
Gavin Williamson
That too was an excellent point. What we have seen is total fiscal irresponsibility. The whole idea of the Labour party’s proposals is to trap more people in welfare, not to take them out of welfare.
Nadhim Zahawi
My hon. Friend has made a very good point about Labour’s past record of fiscal irresponsibility, but what about its current record? Labour Members will vote for millionaires to receive child benefit.
Gavin Williamson
I am afraid that the Labour party’s proposals on so many matters are completely inconsistent. The greatest shame is that there are no ideas coming from Labour Members. They have no ideas about how to deal with the legacy that they left, in relation to welfare reform or in relation to the many billions of pounds of debts with which they have saddled the country.
David Miliband
I do not want to give the hon. Gentleman a maths lesson—I did not get good marks in maths—but percentages are percentages; that is the whole point. If we change the denominator it plays through in the percentage that comes later. I do not want to get too diverted by that, but I thank him for the extra 50 seconds.
Let me get on to the question of affordability, which is central to the Government’s case. The Government claim that the alternative to this Bill is higher borrowing or higher taxation, but I want to show why that is not true. The Government themselves have projected the total cost of all benefits, all tax credits and all tax relief for the next few years, and I am happy to debate priorities within that envelope. I will take the envelope that they have set, but let us have a proper debate about choices, not the total sum—a priorities debate, not an affordability debate.
David Miliband
Just a minute.
The measures before us raise £3.7 billion from poor and lower-middle-income people in 2015-16. The Chancellor cut tax relief for pension contributions by wealthier people, but by how much? It was by £200 million in 2013-14 and £600 million in 2015-16. The cumulative saving from the richest between now and 2015-16 is £1.1 billion; the cumulative saving from those on lower-middle incomes on benefits and tax credits is £5.6 billion. Taking five times as much from poor and middle-income Britain as from the richest in Britain—
David Miliband
I will address it directly; I am very happy to do so. If a couple on £5,500 a year or someone on £3,700 a year gets a 1% increase, that is different from someone who is on £15,000, £20,000, £25,000, £30,000 or £35,000 getting the same increase, because although the people on £15,000, £25,000 or £30,000 are making tough choices, those on £5,000 or £3,700 are making a choice between feeding their kids and heating their home.
David Miliband
Let me make some progress and I will come to the hon. Gentleman if I have time.
The truth is that this rancid Bill is not about affordability; it reeks of the politics of dividing lines that the current Government spent so much time denouncing when they were in opposition in the dog days of the Brown Administration. It says a lot that within two years they have had to resort to that dividing-line politics. We know the style: you invent your own enemy, you spin your campaign to a friendly newspaper editor, you “frame” the debate. But the enemy within in is not the unemployed; the enemy within is unemployment.
I do not want to live in a society where we pretend that we can enjoy the good life while our neighbours lose their life chances. It is bad enough to have no economic growth, or 420,000 young people out of work for more than six months, or rising levels of child poverty, or declining levels of social mobility, but it is hard to stomach a Government who take absolutely no responsibility for their mistakes. It is intolerable—[Interruption.] Government Members are laughing, but I am ready to say what we did wrong; I have not heard them say a word about what they are doing wrong. It is intolerable to blame the unemployed for their poverty and our deficit. That is why I will vote for the amendment and against this rotten Bill.
Oral Answers to Questions
Nadhim Zahawi Excerpts(11 years, 6 months ago)
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Mr Hoban
As I said in answer to earlier questions, we are monitoring the effect of our policies. We are ensuring that the work capability assessment is fit for purpose and that is why we asked Professor Harrington to carry out a third review to ensure that the process is right and fair. The hon. Lady should also remember that the work capability assessment is an assessment of people’s ability to work, not a diagnostic test.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Will the Minister confirm that all Atos doctors, nurses and physiotherapists are fully trained and registered with their relevant professional body?
Oral Answers to Questions
Nadhim Zahawi Excerpts(12 years, 5 months ago)
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Nadhim Zahawi (Stratford-on-Avon) (Con)
1. What steps he is taking to tackle benefit fraud in areas where its prevalence is high.
Stephen Mosley (City of Chester) (Con)
15. What steps he is taking to tackle benefit fraud in areas where its prevalence is high.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I remind my hon. Friends of our inheritance from the previous Government: fraud and error in the benefit system were at £3.1 billion and progress had plateaued since 2005. The joint strategy with Her Majesty’s Revenue and Customs started in 2010 and included mobile regional taskforces to look at different areas. We are targeting claimants in high fraud areas with visits, phone calls and letters. One pilot has been completed in Birmingham and we have two more in Cardiff and Croydon. We will carry out evaluation once all three are completed. So far, since October, from case cleansing alone we have saved more than £100 million.
Nadhim Zahawi
I thank my right hon. Friend. Will he share with the House how many benefit fraudsters were actually prosecuted last year?
Mr Duncan Smith
We prosecuted almost 10,000 benefit fraudsters in 2010-11, up from 8,200 the year before. Of those, 86% were successfully convicted—[Interruption.] I would have thought that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) would like to keep quiet, because he has made one mistake already and is bound to put his foot in it again. We will push for the strongest possible sentences. In all cases, benefit fraudsters are required to pay back the money they have stolen.
Oral Answers to Questions
Nadhim Zahawi Excerpts(13 years, 9 months ago)
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Chris Grayling
I just do not think that Labour Members understand. If someone is given a six-month job under the tag of the future jobs fund, the word “future” does not apply. It is things like apprenticeships that are genuinely about the future and about creating sustainable employment. That is why this Government announced 50,000 extra apprenticeships. That is why the work programme will focus on long-term opportunities. The tragedy of the future jobs fund is that it is precisely not a future jobs fund: it is a six-month work placement, at substantial cost to the taxpayer, at the end of which—in almost all cases—there is no job. That is a tragedy, but the fund was all about the engineering of figures under the previous Government—unlike the long-term strategy under this Government.
Nadhim Zahawi (Stratford-on-Avon) (Con)
9. What steps he is taking to assist disabled people to work.
Damian Hinds (East Hampshire) (Con)
12. What steps he is taking to assist disabled people to work.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
Nearly half of all disabled people are already in employment. However, many more could work with the right support, and want to do so. We have announced plans to implement the Work programme, which will provide personalised help to those and other customers to return to work, and we will also ensure that there is a specialist package of provision to help the most severely disabled people.
Nadhim Zahawi
In my constituency, people are rightly worried about relatives with severe mental health disability attending the work capability assessment. Can my hon. Friend tell us what safeguards will be put in place for those people?
Maria Miller
The work capability assessment was, of course, developed in consultation with medical experts and disability specialist groups. There will be an annual review to ensure that any problems with the assessment are dealt with, and there has already been a Department-led review dealing with some of the issues that my hon. Friend raises in connection with people with mental health problems. Modifications will be made, especially by expanding the support group to cover people with severe disability issues, to ensure that they are not inappropriately put into groups of activity.
Mr Duncan Smith
We are assessing all the impacts of every change we are making. As the right hon. Lady knows, we will be publishing those relating to housing benefit, and as and when we have the full details, I will quite happily let her know.
Nadhim Zahawi (Stratford-on-Avon) (Con)
T4. In my constituency, a large number of people—much larger than the national average—are pensioners, and in my region an amazing 22% of pensioners are in effective poverty. What will my hon. Friend be doing for the most vulnerable pensioners?
The Minister of State, Department for Work and Pensions (Steve Webb)
We need to ensure that, as well as lifting the level of the basic state pension, the most vulnerable pensioners, who receive the pension credit, get the full benefit of the increase that we will be introducing next April. However, in the longer term we do not want to allow people to retire poor and then try to catch them through a means test; we want to ensure that more people have, for example, workplace pensions, so that fewer people retire poor in the first place. That is a better strategy for the long term.
Jobs and the Unemployed
Nadhim Zahawi Excerpts(13 years, 10 months ago)
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Yvette Cooper
My hon. Friend is right, which is why all young people, no matter what the difficulties they face, should have a guarantee of a job, training or support to get into work. She might also be interested to know that significant numbers of the people going into the future jobs fund were disabled, so it was providing additional support for people who might have found it more difficult to get their first job elsewhere in the economy and to get that start and get into work.
The former Chief Secretary to the Treasury, the right hon. Member for Yeovil (Mr Laws), told the House that DWP officials had advised that the future jobs fund was not effective and not working. That is not what young people and voluntary sector providers are telling us. For example, the Scottish Council for Voluntary Organisations said:
“It is obviously very disappointing that the Future Jobs Fund is not continuing as it was a highly successful initiative which was popular with employers and employees”.
Angie Wilcox, whom I met, from the Manor residents association in Hartlepool, said that
“in one area alone, manor residents have recruited 118 young people, of which the first 17 finished their six months last month, all 17 secured sustained employment...This is a vital programme that must stay”.
So what advice did DWP officials really give to the Treasury? The Employment Minister, the right hon. Member for Epsom and Ewell (Chris Grayling), has so far refused to publish any advice or evidence that it is not effective. That is because, in the end, he does not have any. He has commissioned a detailed evaluation of the future jobs fund for 2011, so there is no evidence to show that the fund is not working and plenty of testimony from young people and employers across the country that it is transforming people’s lives. The Government did not talk to a single voluntary sector provider before they axed the fund, and they did not talk to a single young person on the fund before they made their decisions—actually, the Prime Minister did. He talked to young people at a social enterprise in Liverpool, and told them he would keep the fund. He said that
“it is a good scheme, and good schemes we will keep.”
Was he setting out to deceive those young people, or does he just not care about the broken promises from the election?
The Employment Minister has, I understand, been back to that same corner of Liverpool to see the same social enterprise. He has told us in previous responses that he has not received any representations about the decision to cut the future jobs fund. Yet someone who was at the meeting said that
“when Chris Grayling visited Everton on the 26 May we raised with him the very negative impact cutting the Future Jobs Fund will have and 2 local people said the difference having a future jobs fund position was already having on their lives, their self esteem and their long term job prospects...We asked him specifically about whether his replacement scheme was going to give at least the minimum wage. He couldn’t guarantee that at all...The FJF has already made a big difference to us in Everton... Young people on the FJF have got their heads back up and are going for it.”
So what other excuses have the Government given us for cutting the future jobs fund and the support for the unemployed? The Secretary of State claimed on 8 June that the cost of the programme was “running out of control”. That is rubbish—it is a fixed-cost programme. It costs just over £6,000 per job and is paid when the job is delivered. Furthermore, the taxpayer saves six months of benefits too. It is a fixed cost, so it cannot escalate out of control.
The difference between us is that we want 90,000 people in jobs. The Government would rather have them on the dole than pay for the extra support that those young people and long-term unemployed need. So, from next year, they are cutting the rest of the guarantee. In total, they are cutting £1.2 billion from support for the unemployed—and they tell us it is all right because there is going to be a Work programme. But where is it? The soonest the Secretary of State will be able to deliver it is next summer, but what about the people in the meantime who need support and help? What about the young people leaving school, college or university this summer who need help? What about the people who have been unemployed for six months and who need support now? Yet now is the time when he is cutting future jobs fund opportunities in favour of a Work programme that cannot be in place for at least another 12 months.
Yvette Cooper
I shall give way. Perhaps the hon. Gentleman can provide some clarity on that point.
Nadhim Zahawi
The right hon. Lady talks about the young people coming out of schools and colleges. Did she think about them when she was in government and borrowing £500 million a day? Did she think about their future while the Government were borrowing £100 for every £300 they were spending?
Yvette Cooper
Had we not increased borrowing during the recession, we would have seen recession turn into slump, millions of people on the dole being scarred for life, and huge increases in repossessions. Unless the hon. Gentleman is prepared to support the economy and growth, he will never see the deficit come down. The best way to get the deficit down is to keep the economy growing, and the only way to get us through the recession was to support the economy at a very difficult time. He seems to want to return to the madness of the 1930s when economies across the world were pushed into depression and slump as a result of the kind of narrow-minded, short-term policies that he is now advocating.
Nadhim Zahawi
I have to come back on that point. Your policies have mortgaged and remortgaged the future of those young children, so for you to stand up and say that without borrowing you cannot sustain the recovery is inaccurate. You have to admit that borrowing £500 million a day—not a week or a month—is unsustainable.
Mr Deputy Speaker (Mr Nigel Evans)
Order. May I remind Members to use the third person? When Members refer to “you”, it means me. I have just been accused of a few things that I do not own up to.
Catherine McKinnell
Absolutely, and I thank my hon. Friend for his intervention. It is notable that, since the emergency Budget that we debated yesterday was announced, the growth forecasts have reduced as a result of that Budget.
I return to the subject that I want to address today: the impact of the Budget on the north-east. Approximately 266,000 people in the north-east are employed as public servants—almost one in three workers—and many of those individuals, and the families they support, live in Newcastle and the surrounding areas. Large-scale redundancies in the public sector, which are now certain, will be disastrous for the city’s economy, which is, in turn, an engine for regional growth. The likely result will be lasting unemployment and an enforced exodus of talented professionals from what, during the past decade, has been a rapidly emerging region.
That is not the full picture, however. The public sector is so economically vital that it is not hard to imagine the impact of large-scale redundancies on private firms in the region. Simply throwing public sector workers out of their jobs will mean not only a loss of direct employment, but the devastation of private firms. More than in other areas of the country, such firms in my region depend upon revenue from public sector organisations.
That is directly linked to my next point, which is my deeply held opposition to the abolition of my region’s very popular and highly respected development agency, One NorthEast, which is located in my constituency on Newburn Riverside park. Owing to massive cuts in Government spending on regional development, combined with the Liberal-Conservative pledge to transfer RDAs’ functions to local authorities, the Government have announced, after damaging indecision and backtracking, that One NorthEast is to be abolished. Its closure will remove a vital local driver for recovery and eliminate a key means of building a stronger local private economy.
In March, the National Audit Office published its report on RDAs and concluded that £3.30 had been generated for every pound of Government funding given to them. A year ago, another investigation into RDA effectiveness, this time carried out by PricewaterhouseCoopers, showed that for every public pound invested there had been a return of £4.50 to the private sector. The ill-thought-out shunting and transfer of some of the RDAs’ roles—I presume not all of them—to under-resourced local authorities will be totally unworkable.
Nadhim Zahawi
The hon. Lady cites the PricewaterhouseCoopers report, but the Institute of Directors also produced a report on the RDAs, which showed that only 18% of directors thought that they made a contribution, and 60% thought that development would have taken place in the regions without the RDAs being in place. To cite selectively from PricewaterhouseCoopers is slightly misleading.
Catherine McKinnell
I thank the hon. Gentleman for his intervention, because it highlights my point that these issues cannot be examined as a whole across the UK. The situation in each region is incredibly different and unique, which is why the RDAs were so successful in particular parts of the country and why the removal of the north-east’s RDA, which is successful and which business leaders across the region accept as a major driving force in the private economy, is a travesty.
Nadhim Zahawi (Stratford-on-Avon) (Con)
I want to talk about one of the biggest challenges that the coalition Government, the House and the country face: jobs and unemployment in our country, and what the Government can do to tackle them. The Opposition motion would be hard to support in any circumstances, but it would be more credible if it had started with an apology. Nearly 2.5 million people are now unemployed. To put that in perspective, that is 500,000 more than the entire population of Slovenia, a nation that we recently played in the World cup. That is a terrible figure, and also a terrible legacy to have inherited from the previous Government.
Thomas Docherty (Dunfermline and West Fife) (Lab)
Will the hon. Gentleman give way?
Nadhim Zahawi
I will not, as I would like to make some headway in my speech.
Following the election of the new Government, it immediately became clear to us that we faced a series of immense challenges in tackling unemployment and worklessness. Let us be honest—those problems have not come about purely because of the recession. Over the past decade, the very fabric of this nation has been altered. This is now a nation of huge government and huge inefficiency, and one that does not do much for those looking for work. Instead, it seems to encourage those who do not want to work. Those factors have undermined this country’s competitiveness, its efficiency and—perhaps most importantly—its social fabric.
This is a self-aggravating situation. Those who are brought up in workless households are themselves more likely to experience worklessness, welfare dependency and poverty in later life. This is not an issue we can ignore. It is vital that we address the causes and begin to secure solutions to these enormous problems. That can be done by making changes to the way in which the welfare state is operated. My right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), the Secretary of State for Work and Pensions, alongside the right hon. Member for Birkenhead (Mr Field) and John Hutton, the former Member for Barrow and Furness, have the historical credibility and experience to make a real difference. Focusing on key issues such as the long-term unemployed and the high level of youth unemployment is critical.
Business is another key area in which a real impact can be made. Supporting our businesses and reducing the regulation that strangles them will lead to more opportunity and more jobs. That is a tried and tested solution and one that I, as a business man, will address shortly, but for now I feel that I cannot ignore the record of those sitting opposite me. After 13 years of a Labour Government, huge numbers of people are living off the welfare state. A whole swathe of society has been led to believe that the culture of aspiration and hard work on which Britain has long prided itself can be ignored in favour of welfare and idleness. Yet I do not blame those people, because it is the last Government who allowed that culture to become ingrained in the British psyche. It is the last Government who bloated not only the welfare state but the public sector. I would never accuse them of doing that for reasons of self-interest, but the questions have to be asked: why was it allowed to happen, and what can we do to rectify it?
Let me turn briefly to the figures, for they do not lie. As I mentioned earlier, unemployment is now just shy of 2.5 million, with nearly 1.5 million people claiming jobseeker’s allowance. We also have 1.7 million people who are long-term unemployed, having been without a job for at least 12 months. Of those, 1.4 million have been on out-of-work benefit for nine or more years; that is a deep rut that is hard to climb out of. I should also make it clear that that does not take account of the 2.6 million people in receipt of incapacity benefit and employment and support allowance. Ours is the nation with the highest number of workless households in Europe. There were 5.9 million working-age benefit claimants in November 2009, and we have an incapacity benefit system that makes it more likely that those on it will die or reach pension age, rather than getting another job after two years of claiming. That is the legacy we have been left.
The last Government have clearly failed. They led this great nation for 13 years, and that is the record that has been left. They may point to and blame the recession; they may claim that factors out of their control led to this situation; but I say no, they cannot so easily shirk the responsibility that the people of Britain placed on them in 1997. They claimed that they would take “Britain forward not back”, yet it is backwards that we have gone: back to the dole queue, back to unemployment, and back to poverty. It is now up to us, the coalition Government, to rectify the mistakes of the past and ensure that once again we “Get Britain working”.
Of course, an enormous number of areas must be discussed if we are both to understand and to begin to deal with this problem: the welfare system and what we can do to change and streamline it, the huge problem of youth unemployment, and what we can do to help lone parents back into work. But as a business man myself and a keen believer in the power that enterprise in the UK has in job creation, I intend to focus on that area. I am a firm believer in creating real jobs in the real economy. We have made it clear that a key element of our programme is boosting economic growth and, as a direct result, creating jobs to ensure that Britain has an economic climate in which private enterprise can compete and invest with confidence. It is vital that we ensure that jobs are available both for those looking for work, and for those whom we will try to get into work.
Mr Stewart Jackson
Does my hon. Friend agree with my comparison between what the Conservative party did in government in the 1980s, when they brought about a real transfer of wealth and capital to working people through shared ownership and the right to buy, and what the Labour Government did, which was to ossify social mobility and widen the gap between the richest and the poorest 10% in our country?
Nadhim Zahawi
My hon. Friend is right. One example is the way in which the gap between the south-east and the rest of the country has grown. Labour Members just do not seem to understand what it takes to create an enterprise economy.
Mr Anderson
Further to the point made by the hon. Member for Peterborough (Mr Jackson), a lot of people were made wealthy in the 1980s, and 200,000 coal miners got £20,000 to go on the dole queue—paid out of the public purse.
Nadhim Zahawi
And your point is? At the end of the day, you only have to look at the facts. The facts are that you have left us with a legacy of £500 million a day—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I did not leave anybody with a legacy of anything.
Nadhim Zahawi
It is not sustainable to follow the path of the previous Government and bloat the public sector. Business needs confidence to invest. Our first Budget last month has laid the groundwork for these aims. We will drop the headline rate of corporation tax by 1% each year for the next four years, lowering it to 24%. We have ended the disastrous jobs tax that the last Government tried to introduce for employers, a key policy in ensuring that our businesses once again begin to hire people.
The measures in this Budget are intended to give businesses the confidence to invest for the long term, and to reduce the burden of tax and regulation. One area where we need to, and can, do more, is in funding for business. If we expect business to take up the slack of the reduction in the size of government, we must send it a clear message on funding. There is a disconnect between what the banks are telling us regarding the amount they are lending and what businesses are experiencing and telling us about the access they have to funding. I hope that in my new role as a member of the Business, Innovation and Skills Committee we can spend some of our time inquiring as to how we can alter that dynamic.
Nick de Bois
Will my hon. Friend add to that the outrageous attack on many SMEs, with banks inflating margins for captive customers with nowhere else to go? Does he welcome the opportunity for competition in that marketplace?
Nadhim Zahawi
My hon. Friend is right, and that is one of the areas I am passionate about.
Thomas Docherty
I am deeply puzzled that the hon. Gentleman argues, on the one hand, for less intervention and regulation, and on the other that the privately owned banks have to be instructed to lend more money. Which argument is he making this evening?
Nadhim Zahawi
That is not the point I was making. If the hon. Gentleman had been listening carefully, he would have realised that my point is that we have to inquire into what is happening. I am not talking about instructions, but about understanding the dynamic so that we can create a similar environment to that in Silicon valley, for example, where people can get access to funding more easily than in our country.
As a business man, I also know first hand the damaging effects that over-burdening business with regulation has on British companies. It is imperative that we reduce regulation. The coalition Government aim to do just that. The level of regulation in this country is simply staggering, and another example of the top-down bureaucratic approach taken by the last Government. The Institute of Directors has estimated the annual cost of regulation to UK business at £80 billion, and has stated that the ever-increasing burden of paperwork hinders business from growing and, ultimately, creating jobs. That is why we have announced plans fundamentally to review all regulations scheduled for introduction over the coming year. We will put in place a system of sunset clauses so that regulations cease to be law after seven years, and we have also created the one in, one out rule to reduce for ever the regulation created in Whitehall. All of these are key measures in ensuring that our businesses have the opportunity to thrive and, more importantly, to hire.
The level of unemployment in this country is a huge problem, but I am confident that, with the new coalition Government in power, we can address and reduce it. This issue requires a complete set of solutions, all of which need to be implemented together in an effective and decisive manner.
If we balance the books of Government, hold down interest rates, encourage business to invest and reduce the regulation that strangles business, I believe that, at the very least, we will ensure that there are jobs available for those who want them and an economy that can support them.
I support the amendment to the motion.