HC Deb 26 June 1997 vol 296 cc966-8
2. Mr. Fabricant

To ask the Secretary of State for Education and Employment what assessment he has made of the employment prospects for unskilled manual workers over the coming three years; and if he will make a statement. [4091]

The Parliamentary Under-Secretary of State for Education and Employment (Mr. Alan Howarth)

Our intention, through our welfare-to-work policies, is to improve the job prospects of unskilled people by enhancing their skills and employability. That is essential if we are to create an economy with high and stable levels of employment, in which all have the opportunity to prosper.

Mr. Fabricant

Does the Minister recall that in a previous existence, he said that it was businesses, not Governments, that created jobs? I welcome any scheme that will improve job prospects, but what will happen after the first year, when the money runs out? Will the Minister introduce a one-off windfall tax every year, or will he throw the people on the schemes out of work?

Mr. Howarth

It is indeed businesses that create jobs, and Governments who create the conditions in which businesses can create jobs. We are determined that the role of this Government should be to encourage and enable businesses to create good-quality jobs. I assure the hon. Gentleman that our costings for the new deal are well considered, and that the programme will be carried through the life of this Parliament. It will give young people the opportunity that they should have to develop their skills and employability, so that we can enhance the capacity of our economy to generate wealth and to provide security and employment.

Mr. MacShane

Is my hon. Friend aware that Britain has the highest level of unemployment among young males, and that in my constituency, where there are no more jobs left in coal or steel, that is a pressing problem? In the planning that he and his colleagues are putting into effect for the windfall tax, will he undertake to consider particularly the problem of young men, so that the lost generation, condemned under the Tories, can have some hope under the new Government?

Mr. Howarth

I fully understand and sympathise with what my hon. Friend says. His constituency has been through extraordinary adversity, as has the constituency that I represent, which is also an important steel-making part of Britain. Our new deal will offer better opportunities for those who are long-term unemployed—beyond two years—and for the young people whom my hon. Friend mentioned, so that we will be able to provide for them good-quality placements with employers, which will include an important dimension of education and training opportunities to enable them to enhance their skills and to be better placed for the future.

Mr. Boswell

I welcome the Minister on his return to the Department where we both served in different capacities. Given that youth unemployment has been falling for the past five years at a steady rate of 100,000 per annum, can he tell the House how much extra will be contributed by the welfare-to-work scheme? What mechanism will he set up to differentiate between the improvements that he seeks and claims and the improvements that are already taking place because of the buoyancy of the economy that he inherited?

Mr. Howarth

I am grateful to the hon. Gentleman for those comments. Yes, the whirligig of time produces unpredictable effects.

While we must be pleased that unemployment has fallen from its worst levels, the reality is that one in five households have no one of working age in employment. The social security bill has doubled in real terms since 1979. We face very grave problems, and unemployment remains shamefully high. We must act now. The new deal involves a strategy on a far larger scale than anything we have seen before. It will offer a choice of quality options and preparation, through a gateway, to ensure that people are counselled and steered towards the best opportunities for them. Employers have already made a very enthusiastic commitment to the strategy. I hope that hon. Members on both sides of the House will welcome this serious strategy to address the problems that remain even after the improvements that we have seen.

Ms Hewitt

I welcome the Government's initiative in persuading business leaders to begin to commit to participating in the welfare-to-work programme. What steps will the Government take to ensure that small and medium-sized businesses in my constituency and throughout the country have an opportunity to participate as well?

Mr. Howarth

It is important to build upon the very encouraging response that we received yesterday from senior people in Britain's top companies. They committed themselves—I think without hesitation—to supporting the Government and the strategy that we are unfolding.

Of course, we must reach out beyond the people with whom we were engaged in dialogue yesterday. I am pleased to confirm that representatives of prominent small business organisations were also present. We shall organise a series of regional conferences, and we intend to exchange views through constructive dialogue with employers across the country.

Mr. Dorrell

Is there not a contradiction at the heart of the Government's employment policy? The Government seem to believe that the prospects of the young unemployed may be improved by introducing a subsidy of £60 a week to reduce the cost of employing them, while the prospects of other unemployed people may be improved by introducing a minimum wage and increasing the cost of employing them. Which approach does the Minister think is more likely to prove successful?

Mr. Howarth

I am delighted that the right hon. Gentleman has assumed his new position. We look forward to his constructive and humane contribution to the national debate on these issues. However, his question is not necessarily a notable advance in the debate.

The right hon. Gentleman cannot accept that the most disadvantaged in the labour market—the long-term unemployed, including young people who have been unemployed for more than six months, and people of low and no skills—are left to fester in unemployment. I do not think that he wants that. Equally, I do not suppose that he is really happy to see 100,000 people earning less than £1.50 an hour and 200,000 people earning less than £2 an hour. That is not decent. It is also short-sighted because our employers need to invest in skills and quality; they cannot compete simply on the basis of cheapness.