Jobs and the Unemployed

Steve Rotheram Excerpts

Wednesday 7th July 2010 Commons Chamber

[Yvette Cooper]

The hon. Member for Stratford-on-Avon (Nadhim Zahawi) should learn a few lessons from economic history. He should look at what happened not just in the 1980s, when there was not the same scale of world recession, but in the 1930s and at the orthodox views being put forward then by Bank of England Governors and senior politicians and the devastating consequences that they had. Keynes was led to write his general theory because of the deeply destructive approach that so many people in senior positions took and the consequences that devastated the lives of millions of people who were pushed into unemployment and poverty. Businesses were destroyed for many years as a result of that approach—the approach that the Conservatives seem to want to go back to.

I agree that borrowing needs to come down, and of course we need to ensure that the deficit comes down in a steady and sensible way as the economy recovers. However, by cutting an extra £40 billion for ideological reasons in a way that will hit jobs and the economy, the Conservatives are turning their back on the unemployed. Ministers need to tell us what they will do to help young people this summer. What are they going to do to reassure parents that their sons and daughters will not be stuck on the dole for more than a year? All that they promise is a Work programme sometime in the future, with incentives for private sector companies to help people find work but no guarantees to young people or anyone else that they will actually get work. There are no jobs for them to go to.

Ministers also want people to move house to help the labour market, but it is not clear where they want them to move to. The Secretary of State has said that he wants the unemployed to move to more affluent areas where there are more jobs. In fact, if they do not and they are out of work for a year, their housing benefit will be cut. At the same time, the Government are telling working people on housing benefit in affluent areas that they have to move to cheaper areas because their rents are too high. If they do not, their housing benefit will be cut, too. The Secretary of State is telling my constituents that if they do not move south to get a job he will cut their benefit, and his own constituents that if they do not move north to get a cheaper home he will cut their benefit too. Presumably they can wave at each other as they pass somewhere along the A1.

The Secretary of State wants people to give up cheaper housing to find work, but he also wants people to give up work to find cheaper housing. He is telling people to get on their bikes, but with no clue about where they are supposed to go. That is the same Secretary of State who said last year that he wanted to maintain community ties. He said:

“It is getting more and more difficult for parents in some poorer backgrounds…that extended family link is often severed by the fact that they can’t get living near their parents.”

Yet those are the very same community ties that the Government’s policies on employment and housing would rip up right now. They are cutting help for people to get jobs and cutting their benefits too.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Does my right hon. Friend agree that the Government’s contention appears to be that the future jobs fund is simply training without a job guarantee? Is that not just snobbery, as they do not put forward the same argument—nor should they—that people accessing degrees should have a guaranteed job outcome? Quite simply, is it not true that the Tories have never believed in parity of esteem between vocational and academic training routes and still believe that unemployment is a price worth paying?

[Yvette Cooper]

My hon. Friend is right. I know that his constituency was hit very badly in the 1980s as a result of the decisions that previous Conservative Governments took, and that that is why he feels so strongly that we should not take those decisions again. We have to do everything possible to help people back into work.

The Guardian has even reported that Ministers want jobcentres to give out charities’ food vouchers, so now they are turning the clock back not just to the 1980s but to the 1930s. It is looking less like welfare to work and more like welfare to the workhouse.

--- Later in debate ---

[Mary Creagh]

I think that we should have both. I do not think that 50,000 apprenticeships will be enough; nor do I think that cutting Peter to spend money on Paul is a fair way to allocate resources.

[Steve Rotheram]

I am a product of something similar to the future jobs fund. In the late 1970s, there was something called a pre-apprenticeship scheme. I did six months on that and was very fortunate to complete it. The scheme was not just academic, as it gave me some transferable skills. It taught me to get out of bed and it led me, in later life, to do a master’s degree in contemporary urban renaissance. That is the sort of opportunity that the future jobs fund is providing.

[Mary Creagh]

I thank my hon. Friend for that intervention. He truly is a renaissance man, and I hope that many of the young people whom we met who got their entry-level work through the future jobs fund end up sitting on these green Benches. I hope that they can make the same incredible progress and journey that he has made in his life.

I turn now to the Work programme set out by the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling). I have a great deal of concern about it. In a speech on 27 May, the Secretary of State spoke about

“a single scheme that will offer targeted, personalised help for those who need it most, sooner rather than later”.

If it is a matter of sooner rather than later, why are we waiting until next year for it to come in? I suppose that that has to do with the fact that the Government want to set up what I presume is a national contract with large-scale training providers. I tried to intervene about this earlier, because the Government are asking those providers to bear the risk of training people even though their contract payments will depend on outcomes.

That raises a series of questions. First, at a time when deflation, very low growth or even a double-dip recession are all possible, why does the Minister think that the private sector will turn to the banks for loans to cover this training given that, as we heard earlier, the banks are averse to risk and not very good at lending? Output-related funding is currently calculated on the basis that it takes six or nine months to get a person into work and then 13 weeks to ensure that he or she has lasted in that job. Why does he think that organisations in the private sector such as Capita or BT will line up to take on the massive risk involved in training people and employing them, when there is such a huge amount of uncertainty?

I have another question for the Minister, and I will give way to him if he can answer. How does he think voluntary sector organisations such as Nacro—the National Association for the Care and Resettlement of Offenders—will be able to do this? Such organisations have specialist programmes working with the most difficult, hard to reach and disadvantaged people—prisoners, young offenders and ex-offenders. They have the benefit of being present in and running training courses in prison and are then able to offer some sort of continuity when the offender leaves. I am also thinking of providers such as Rathbone training, an organisation that I had the privilege of serving as a trustee for seven years. These are small-scale organisations—Rathbone’s turnover when I left it in 2005 was £40 million. Why does he think that they will go to the bank—or their trustees would say that they should go to the bank—and borrow up to £20 million at a time, with a personal guarantee of the trustees, who are jointly and severally liable, who are for a programme when it is not clear that they will get the rewards from it?