New Deal

HC Deb 10 December 1998 vol 322 cc542-77

[Relevant Documents: Seventh Report from the Education and Employment Committee of Session 1997–98, on Pathways into Work for Lone Parents, HC646, and the Government's response thereto, HCI 122; Eighth report from the Education and Employment Committee of Session 1997–98, on New Deal Pathfinders, HC1059, and the Government's response thereto, HC1123; Department for Education and Employment and Office for Standards in Education Departmental Report: The Government's Expenditure Plans 1998-99, Cm3910.]

Motion made, and Question proposed, That a sum, not exceeding £6,826,077,000 be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charge for the year ending on 31st March 2000 for expenditure by the Department for Education and Employment on voluntary and special schools; the Assisted Places Scheme; the provision of education for under-fives; City Colleges and other specialist schools; grant-maintained schools and schools conducted by Education Associations; music and ballet schools; the school curriculum and its assessment; the youth service and other educational services and initiatives; careers guidance and services; payments for or in connection with teacher training; higher and further education provision and initiatives; loans to students, student awards and other student grants and their administration; the payment of access funds; reimbursement of fees for qualifying European Community students; compensation payments to teachers and staff of certain institutions; expenditure on other central government grants to local authorities; the provision of training and assessment programmes for young people and adults; initiatives to improve training and qualifications arrangements and access to these; the promotion of enterprise and the encouragement of self employment; payments for education, training and employment projects assisted by the European Community and refunds to the European Community; events associated with the UK presidency of the EU; the UK subscription to the ILO; help for unemployed people; the promotion of equal opportunities, disability rights, childcare provision and co-ordination of certain issues of particular importance to women; the payment of certain fees to the Home Office; the Department's own administration and research and that of Capita; information and publicity services; expenditure via Training and Enterprise Councils and amounts retained by them as surpluses and spent by them on training; other initiatives within their articles and memoranda of association; expenditure in connection with the sale of the student loans debt; and on expenditure in connection with the Welfare to Work Programme and Millennium Volunteers.—[Mr. Andrew Smith.]

7.31 pm

Mr. Derek Foster (Bishop Auckland)

I am delighted to be able to speak in this debate, and should like to thank the Liaison Committee for choosing to refer to the Education and Employment Committee's two reports.

My next task is to praise the members of my Committee. As a veteran talent spotter within the parliamentary Labour party, I have never seen such an array of current and future stars—and that includes the Liberal Democrat Members and our Conservative colleague, the hon. Member for Altrincham and Sale, West (Mr. Brady), who unfortunately cannot attend this debate as he is attending his child's carol service. All Committee members have an enormous amount to contribute, and I am very proud to chair the Committee.

We should like also to thank the Chancellor for giving us £5 billion in this Parliament with which to advance the flagship new deals. It is at least £5 billion more than was provided by the previous Government

I should like to thank the Secretary of State for Education and Employment and the Minister for Employment, Welfare to Work and Equal Opportunities for creating a listening and learning Department.

Mr. Paul Keetch (Hereford)

Before the right hon. Gentleman concludes his thanks, should he not also thank the utilities that provided the money so that the new deal could start initially?

Mr. Foster

I cannot thank them, because they did not want to part with the money. We made them do so—and there is the difference between Labour and Liberal Democrat.

As I said, I should like to thank the Secretary of State and the Minister for creating such a listening Department. All our experience—I think that it is shared by hon. Members from every party—is that reasonable suggestions made to either the Secretary of State or the Minister are listened to and examined. Moreover, if they are practicable and sensible, they are likely to be implemented. That is not true in all Departments.

Mr. Willetts

Which ones?

Mr. Foster

I shall not name them today, but may go into a different mode on a different occasion.

I praise the liberation of the Employment Service. I was one of those who felt initially that the Employment Service—the agent of the harsh benefits system—was the wrong agency to be implementing the new deal. I doubted that that agency knew anything about being a sharing and caring organisation that could help younger and older people to negotiate all the difficulties of education and learning. However, I was wrong. The Employment Service—with its very able chief executive, Leigh Lewis—has through its 35,000 staff implemented a culture change. Those staff have been liberated from implementing a harsh benefit regime to doing what they enjoy doing: assisting people in finding work.

The welfare-to-work programme is absolutely central to reforming the welfare state. Moreover, getting people into jobs or training and developing them—whether they are in or out of work—is central to the Government's excellent supply-side measures. Reform of the welfare state and supply-side measures together should yield far more employable people—who are far more able to get a job, to keep a job and to find another job if they lose the first one.

I should like to mention Robert Reich, who hon. Members will know was Bill Clinton's previous Secretary of Labour. He said that running a successful economy and generating jobs was a bit like a three-legged stool. The first leg was to have a sufficient number of employable people; the second was to have an abundance of adaptable organisations; and the third was to have adequate demand. The three goals are mutually reinforcing and interdependent, and they must be pursued simultaneously. The Government are trying to do that. They are not always succeeding, but they are certainly trying.

If the new deal for 18 to 24-year-olds, the new deal for those over 25, the new deal for lone parents and the new deal for disabled people all succeed—I believe that they will; they have certainly made a very good start—we will end up with many more employable people, thereby enabling the economy to run at a higher growth rate than otherwise would have been possible.

Similarly, we will be able to respond to rapidly changing market opportunities if we succeed in making all our companies—global companies, small and medium-sized enterprises, and micro-employment and selfemployment—more adaptable by investing in research and development; by energising a culture of innovation; by training, developing and properly managing staff; and by being entrepreneurial, which is a very rare skill about which most us know nothing. If we succeed in creating such adaptable organisations, we will also enable our economy to grow much faster than would otherwise be possible.

In the past few years, the United States of America—to which we tend to look—has created millions of jobs by making people employable and creating adaptable organisations. Nevertheless, Robert Reich eloquently said that, although they created millions of jobs, many of those were "crap" jobs. Although that is not the type of language that I usually use—he said it, not me—he was right.

I do not want to deal with the demand side of the equation, as that would tempt me to deal with the issues at far greater length.

I shall deal now with the two reports on which this debate is centred. Hon. Members who have read "New Deal Pathfinders" will see that our recommendations are on pages 24 to 27. I should like to mention just two of them. The first is recommendation 2, about personal advisers, and the second is recommendation 10 on the take-up by employers.

The personal adviser is rapidly becoming the agent of transformation of the Employment Service. The Committee wants that pursued vigorously and rigorously throughout the new deal, particularly if the responsibility of that personal adviser begins before a person's entry into the new deal and continues throughout its course and for some time after. If a continuity of support and advice is available, people will have more success in entering the labour market and staying in it.

In Australia, we discovered that the father of the new deal—the working nation—failed to a certain extent because the commitment of the private sector was not engaged. The Government have been extraordinarily wise in getting private employers signed up so readily. They went for the global players first—the people with the big reputations whom everyone looks up to. That enabled the small and medium enterprises to follow through.

The Government have been more successful than I expected. Some 30,000 employers have already signed up. The Employment Service has increased its market share to upwards of 32 per cent. In Australia, the figure was only 20 per cent. It is remarkable that a publicly led employment service has managed to secure 32 per cent. of the market and rising, whereas the private-led employment service in Australia has only 20 per cent. at the moment, although that could, and probably will, change.

Mr. David Willetts (Havant)

The right hon. Gentleman is talking about the important issue of employer involvement in the new deal. I am sure that he is aware of the letter from Chris Humphries, the director general of the British chambers of commerce, who says:

Many companies report little or no contact from the Employment Service and so a severe lack of information … is magnifying their confusion and leading to significant disillusionment. I should be interested in the right hon. Gentleman's comments on those concerns expressed by employers.

Mr. Foster

I have a high regard for Chris Humphries and I shall take that comment seriously. More important, my right hon. Friend the Minister has heard the comment. I am sure that he will take it seriously, and will do what he can to rectify the problem.

Mr. John Healey (Wentworth)

Will my right hon. Friend give way?

Mr. Foster

I have no time. I am sorry, but I have to finish in two minutes if I am going to keep faith with my colleagues. I should love to be able to give way, but I must finish shortly.

The recommendations on the lone parents scheme are on pages xlii to xlvi. There is a helpful summary of them on page xlii in paragraphs 1 and 2. I want to mention two elements briefly. The first is education and training, which we considered immensely important. We found the Government's response dismissive—if I may say so kindly to my right hon. Friend the Minister—and we think that they are mistaken. We want to get lone parents out of the poverty pay market. There is no virtue in them being locked into poverty pay, because they would be only marginally better off than if they had not joined the labour market. We want to create ladders of opportunity that they can climb up, allowing them to progress and have more income, better opportunities and better jobs. Education and training is the secret to that.

My final point—well, I shall make another if I have time—is transport. In all the new deals that we have examined, it quickly became clear that the ability of people to get to where the job opportunities were was crucial to the success of the schemes and of the labour market.

One of the acid tests of the new deals is whether they have street cred. It does not matter what we think. What matters is what the people concerned think, particularly the young people. If they write the schemes off, they will not succeed. At the moment, that is not happening.

The other acid tests are how the schemes cope with the disadvantaged and how they cope with ethnic minorities. What I have seen so far does not impress me greatly. The Government are trying to deal with the problems. Young people from the ethnic minorities have a far greater share of unemployment than the rest of society. Dealing with that is a big challenge for the Government.

I thank the House for listening to my rather poor speech. I look forward to hearing the other contributions.

7.46 pm

Mr. Paul Keetch (Hereford)

I am delighted to follow what was not a poor speech but an excellent one by the right hon. Member for Bishop Auckland (Mr. Foster). As the only Opposition member of the Select Committee present, I thank him for the courtesy that he gives to me and the other members. He may be surrounded by rising stars—I see one or two next to him and behind him—but I am sure that his star is not yet in decline.

The problems and hardships of lone parents are considerable. The Liberal Democrats recognise how the new deal affects them. I shall be brief in my contribution to this short debate, because I want as many people as possible to have the chance to speak. I shall concentrate on the new deal for young people and specifically the results from the pathfinder areas.

There are direct and indirect lessons from the experience of the pathfinder areas. Some of those lessons have not yet been addressed by the Government. The report is old and time has moved on, but I hope that the Minister will respond to three specific points.

The first was mentioned by the right hon. Gentleman in his closing remarks. People from ethnic minority backgrounds have made relatively poor progress under the new deal. During the Select Committee's visits to the west midlands in March, I asked about the participation rates among the ethnic minorities. At a meeting at Bilston college, people from 20 or so social groups from a wide range of areas came to talk to us. I asked them, in their judgment, what percentage of people from the black and Afro-Caribbean communities bothered to sign up to the jobseeker's allowance. Was it 70 per cent.? Was it 60 per cent.? They told me that in their experience less than 50 per cent. of young people from the ethnic minorities bothered to sign up for the jobseeker's allowance. That means that 50 per cent. are excluded from any help under the new deal.

Such schemes are of value only if they help those most at risk of exclusion from the labour market. It is easy to design employment schemes to get middle-class, well-to-do white people back to work. We have to judge schemes by how they affect those most at risk. If the new deal fails such groups, it will be no better than its predecessors.

I welcome the Government's decision to provide fuller statistical information on the progress of ethnic minorities in the new deal and beyond, as long as that involves producing initial survey material on those who are not claiming the jobseeker's allowance as well as those who are. We need to know what is happening to them.

The Lambeth pathfinder has a large percentage of people from ethnic minorities. I drew the area to the Minister's attention in an oral question on 19 November. I pointed out the poor progress of young people from Lambeth in the subsidised employment option. Discrimination is an easy accusation to make, but difficult to prove. However, there is worrying evidence that employers are more reluctant to offer subsidised jobs to young people from the ethnic minorities than to people from the white community. In his reply, the Minister tried to reassure me that the glass was "half full". That is no comfort to those who find themselves in the empty part of the glass.

Ms Abbott

Is the hon. Gentleman aware that the same problem affected the old Manpower Services Commission programmes? Employers were unwilling to take on black young people even when they were well qualified, so they tended to be shoved into the voluntary sector. We have to be particularly watchful and prevent that from happening under the new deal.

Mr. Keetch

The hon. Lady is right. I have one or two proposals that might solve that problem.

It is no comfort to those in the empty half of the glass, especially if the Employment Service monitors only half the number of young, black unemployed people who register for the jobseeker's allowance. If the Department is still only considering setting up an employer database that could tell us where the subsidised vacancies were and the number of starts on the employment option by employer, how can we identify best practice and improve the scheme? How can we ensure that the glass will ever be full? As long as members of the ethnic minorities have only a 50 per cent. chance of obtaining subsidised employment in Lambeth or in any inner city, the new deal will be no deal for them.

The first essential step is to collect the right information which must then be used to combat bias in the system. We want a scheme that works for the long-term unemployed. We do not want to pretend that half a glass is enough.

My second concern is the cost of the scheme. I am talking not about the so-called costings produced by the Conservative party, which is not known for its book-keeping, but about the discrepancy between the replies that my hon. Friends and I have received from the Minister.

In May, I was given costed options—other than the subsidised employment option—of about £4,000 per person. Last month, my hon. Friend the Member for Bath (Mr. Foster) received a reply costing them at £2,600 per person. Only yesterday my noble Friend Lord Tope was informed by the Minister of State in the other place that the cost was only £1,000 per person. Last week the Minister of State told the Select Committee that that was a result of the contracting process. Yesterday in another place we heard a slightly different tale. Does any Minister in the Department know the answer?

The Select Committee would have had a better idea and a better view of the progress of the pathfinder areas, had more information about costing in general and the contracting process in particular been made available. For example, the Government have finally released the specification document in respect of the new deal pilots for the over—25s on which all those tendering for the work based their bids. I have it here. In that document, the Government make it clear to potential bidders that £1,300 per person is being made available. I do not recall the Committee being shown a similar document for the new deal for young people. If such a specification was produced, I suggest that the Minister places a copy in the Library. Perhaps he could also refer to it and let us know the figure. Was it £4,000, £2,600 or £1,000?

Thirdly, I want to refer to the planning assumptions on which the scheme was based. The specification for the over—25 pilots shows just how limited the Government's ambitions really are. It states quite clearly that the pilots should do "at least" as well as the labour market would do by itself. That is hardly the "new beginning for Britain" that the Secretary of State for Education and Employment promised when he launched the new deal in 1997.

After seeing the result of the pathfinder areas, the Liberal Democrats have yet to be convinced that the new deal programme will meet the claims made by Ministers or, more importantly, the needs of those whom it was designed to help.

In his response to the Centre for Policy Studies, the Minister of State said that the Government should not claim the new deal a success too soon. I could not agree more.

7.54 pm

Ms Diane Abbott (Hackney, North and Stoke Newington)

I am grateful for the opportunity to speak in tonight's important debate, because the new deal is a flagship programme for the Government. I take a keen interest partly because my constituency in Hackney has the highest unemployment rate in the south-east. It has particular problems with structural unemployment. The new deal must work in inner-city constituencies such as Hackney and Brixton and in Manchester and Birmingham or it will not have delivered.

I have been in correspondence with the Minister about the new deal programme since last autumn and before that with his predecessor. This evening I want to touch briefly on three issues: the wider economic context in which the Government are attempting to roll out the new deal, the role of Reed as a private-sector partner in Hackney, and the particular issues relating to black young people. I congratulate the Select Committee on its important and interesting recommendations. I hope that Ministers will read the report again, and provide a more positive response on those issues.

Let me start by addressing the wider economic context. The new deal can deliver on the hopes and aspirations that are riding on it only in the context of economic growth. It seems a long time since the Labour party spoke in terms of full employment. Ministers may sneer, but only full employment will combat the structural unemployment in Hackney and elsewhere in inner London and get people back to work. Unless the Government set full employment as their goal, many of the hopes resting on the new deal programme will remain just that.

Certain aspects of the Government's economic policy—their monetary policy and the limits on public expenditure that account for poor public sector participation in the new deal—cause me concern. Anyone who mentions economic slowdown is accused of talking down the economy, but the manufacturing sectors are in recession and in time they will carry the rest of the economy in that direction.

I make those points to stress that on its own the new deal is not enough. It must operate in the context of economic growth, and certain aspects of the Government's economic policy give rise to concern about the prospects for growth.

I was particularly keen to speak tonight because Hackney is one of the two initial pathfinder areas with a private sector partner, Reed, for the new deal. I have no principled objections to a private sector partner. I share the reservations of some of my colleagues about whether the Employment Service is the best vehicle to deliver the new deal and there is no doubt that fresh thinking and fresh ideas are needed.

I have worked closely with Reed in Hackney on the new deal. The team led by Chris Melvin comprises pleasant, approachable young men who seem eager to do their best, but the role of Reed in relation to the new deal in Hackney is problematic. Reed was a major donor to the party and Alex Reed is an adviser to the Department. In February, when I asked the Reed team about the process of tendering, those nice young men said, "We did not tender on costs, but on the originality of our ideas." As someone who has worked in local authorities and knows how the tendering process works, I have never heard of a tender being awarded on that basis. When I asked those young men what was the value of the contract, they said, "We are still in negotiation on that."

I have asked Ministers for more details about the tendering process. Although I do not expect a response tonight, I should like to know the value of the contract. I would prefer not to be fobbed off by arguments about commercial confidentiality. In awarding a contract to a group that makes big donations to the party, we must be like Caesar's wife—above reproach. We need greater transparency on Reed's involvement, the value of the contract and how the tender worked.

Having received the contract in Hackney, Reed has won a series of new deal contracts. Although the people from Reed are pleasant and enthusiastic, they have yet to meet their own targets for putting people into work in Hackney, so it is strange that they should have been offered contracts in other areas.

I am glad to have this opportunity to speak about issues relating to ethnic minorities, which, as other hon. Members have said, will be important in judging the success of the new deal. I remind those hon. Members who represent suburban or rural constituencies that do not have the ethnic minority populations of inner-city areas that, in London, the level of unemployment for young black males between the ages of 18 and 24 is approaching two thirds. I live in my constituency and with the consequences of those high levels of unemployment—the hopelessness and anger, and the social and, yes, criminal problems.

If I have been persistent on the new deal and a nuisance to the Minister—and to the former Member for Enfield, North—it is because I feel so strongly about the ramifications of the high levels of unemployment, particularly among young black males. I accept that suggestions are now being made on how the new deal could tackle ethnic minority issues and that the Select Committee has made some interesting recommendations, but I regret that a concern for those issues was not, from the outset, built into the way in which the new deal programme was structured.

When the contract was put out for tender in Hackney, for example, there was no specific requirement for expertise in and understanding of ethnic minority issues, and no one from the ethnic minorities was put on the selection panel. It would have been better if an understanding of those issues and of the structural problems had been required from the beginning; instead, we have belatedly to employ working parties and consultants.

There is a danger that we are re-inventing the wheel. Those of us who worked in the community sector and in local authorities in the inner cities in the 1970s and 1980s know the difficulties of attracting young black people to such projects, of engaging them in those projects and of putting them in work. In their enthusiasm to be new and modern and to reach out to the private sector, the Government have ignored the wealth of knowledge and expertise among long-standing party members, albeit old Labour party members.

Mr. Derek Foster

My hon. Friend makes some valid points, which were put to us when we went to—if I may use the expression—the black country. Those hon. Members, including me, who do not have many members of the ethnic minorities in their constituencies, misunderstand the vigour and richness of the community life of black and Asian people, just as people often misunderstood the vigour and richness of the mining communities. One has to live in an area to experience such qualities. Does she agree that part of the problem is a failure of communication?

Ms Abbott

Yes. I have had to draw Reed's attention to the existence of groups and networks. Indeed, I was surprised that Reed won the contract, as it does not have an office in Hackney; its knowledge of labour market conditions there is limited. As I said, the Reed people are pleasant and enthusiastic young men who are willing to learn. However, Reed put into Hackney a team that was all white and that had no experience of the area. Instead of bringing in experienced Reed staff, who at least would have had some knowledge of and contacts in the private sector, it recruited fresh people to deliver the new deal programme. Hackney had the down side of private sector involvement but not the up side—specialist recruiters and job placement people. Unless one lives in these places, it is easy not to understand the community's richness.

Some of the people to whom the Committee spoke were dismissive of local organisations, but those organisations know their communities. They know why young black people may be unwilling to sign on and why they may be cynical; they know of the small ethnic minority businesses that may be able to deliver for the new deal. I regret that some of those issues were not built in to the new deal in the beginning. I regret that, in putting out tenders to organisations such as Reed, the Government did not include more specific stipulations to work in partnership with ethnic minority and other voluntary organisations with real knowledge of the communities. I am glad that statistics are now being collected, but a new deal programme that fails young black people in Hackney will fail all people in Hackney; it will fail to engage with some of the most pernicious problems of social exclusion in society.

I refer to two recommendations in the Select Committee report to which I do not believe the Government have given an adequate response. Recommendation 21 suggests that capacity-building funds could be provided for some ethnic minority organisations. I ask the Government to reconsider that, as organisations—even black and Asian small businesses—exist that would take on new deal trainees. The Government must be more creative in engaging directly—not through consultants and experts—with the black and Asian community and with black and Asian businesses, which have a big role to play in the new deal. In the Hackneys, the Brixtons, the Moss Sides, the Handsworths, the only businesses—with the exception of the Sainsbury's and the big retailers—are small ethnic minority businesses. Again, if the new deal is not proactive in the inner city in involving ethnic minority businesses, it will not put our young people, black and white, back to work.

I am also sorry that the Government dismissed recommendation 22, in which the Select Committee suggested a survey of unregistered unemployment. It is precisely because black young people are not on the electoral register that no one knows how many there are. I am sure that my hon. and long-standing Friend the Member for Tottenham (Mr. Grant) would say this even more vehemently—our perception, as people who have lived, who have been brought up and who have worked in these communities, is that the proportion of black youngsters who do not register even for the jobseeker's allowance is vast. Until the Government survey, unregistered unemployment—I shall say this in the House on every opportunity that I have—they will not deal with social exclusion, the issue that the new deal is supposed to tackle. What is the point of a new deal that gets X per cent. of black youngsters to work if the majority of black youngsters are not even in contact with the Employment Service?

Mr. Keetch

The hon. Lady will have heard me cite the figure—around 50 per cent.—that was given to us at Bilston. Given her vast experience in this matter, will she give her estimate of what the figure really is?

Ms Abbott

The Government dismissed that estimate. I do not want to get into estimates, but my guess—and my hon. Friend the Member for Tottenham says the same—is that, for a variety of reasons, more black youngsters, particularly young males—I could talk at length about the issues relating to young black males—do not register than register. That is why it is so important to conduct a survey. If the survey proves me wrong, all well and good—I shall stop harping on the issue—but I am frightened that Ministers will say that the new deal programme is a success, even though, as those of us who live in Hackney, Tottenham and Brixton will know, thousands of young men continue to live on estates, idle and hopeless.

The new deal is a flagship programme. In an area such as Hackney with terrible unemployment—and the terrible social problems that go with that—a lot is riding on the new deal. It is relatively easy to have a new deal programme that works on paper. It is harder to have a new deal programme that really works—and, in particular, a new deal programme that works in the type of community that I represent.

The Select Committee has done good work, and I support all the recommendations. I have spoken mainly about two because of the problems of time. I know that the Minister has taken steps on the question of ethnic minority communities with high unemployment—I know because I have been to see him more than once—but there is more to be done.

It gives me no pleasure to raise the issue of Reed, but it is time for transparency about the way in which it obtained the contract, and about how much it is obtaining from that and other contracts. We can carry no credibility unless our relationships with such corporate donors is wholly transparent and completely above reproach.

In closing, I congratulate Ministers, who have pursued the new deal programme with much enthusiasm and commitment—although they have not engaged some of the issues that I would like addressed. I congratulate the Select Committee, which has produced a useful and important report. However, many eyes are watching the new deal—some of those eyes do not even know that that is what they are watching. For a community such as mine, much rides on the programme. I am anxious to work constructively with Ministers, with Reed in Hackney and with any colleagues who share my interests to make sure that this programme delivers for all our people.

8.12 pm

Judy Mallaber (Amber Valley)

I agree whole-heartedly with many of the important points made by my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott), who brought to life the Committee's recommendations on ethnic minority communities. I hope that the Minister will respond to those points, and that we have a continuing dialogue.

I wish to illustrate some of the positive aspects of the new deal by talking about individual examples. The Committee Chairman, the right hon. Member for Bishop Auckland (Mr. Foster), gave an excellent introduction—in spite of his protests—in which he spoke of the broad context of the new deal, and of our recommendations. However, talking about individuals brings the subject to life.

Half of my constituency is in the southern Derbyshire pathfinder area, and I shall refer to examples from my area. I also wish to refer to examples given to me last night over coffee, when I was talking to hon. Members who are unable to be here tonight. I shall start in Plymouth, as my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson) was at a conference a couple of weeks ago. I have read some extremely positive quotes from the conference of the new deal providers and the personal advisers, who said:

Everyone deserves a pat on the back … Achievement even within short time-scale … New Dealers feel they 'own' New Deal … New Deal clients feel they are getting more opportunities … New Deal is 'a foot in the door' … the ambassadors are the New Dealers themselves. I have spoken to some of the new dealers in my area in the past couple of days about the positive examples. There are many issues to be addressed—including some which have been raised tonight—but I wish to address some other issues also. The gateway is a positive part of the programme, which takes the person who is having difficulty in finding employment and looks at their needs. It does not say, "We will try to get you somewhere to go. You will go into that position and it will either work or not." The gateway looks at the needs of the individual—something that the Select Committee found to be positive.

The key issue—which was addressed by our Chairman—is the role of the personal adviser. My hon. Friend the Member for Stockton, South (Ms Taylor) gave me an example yesterday of a lone parent in her constituency whose take-home pay went up by £70 a week as soon as she got a tele-advertising job through the new deal. She said:

I feel confident. I didn't feel anyone would take me seriously. I thought it would be one interview and then I would be left to find my own way. I have a personal adviser who is there for me all the time. They are the make or break of New Deal. She said that she could now plan her life, and had been able to get subsidised child care, provided by the local authority. She also said:

It's the first time I have ever been taken seriously. That is a real condemnation of previous programmes, and it highlights a recommendation that we have been pressing on Ministers. We must ensure that there are sufficient resources and training for the new deal personal advisers to be able to take on the role of personal mentor. That is a key part of the programme.

Another positive aspect is the role of training. I spoke yesterday—it gave me great pleasure to do so—to someone working in the Red Admiral pub in Codnor in my constituency. The pub happens to be right opposite the Conservative office in my constituency, and it is the place from which I could see that my predecessor's name, as Member of Parliament for Amber Valley, had been taken down from over the office. I spoke to Dwain Palfreyman—who was happy to have his name used—who has been unemployed, off and on, since 1994, when he got a medical discharge from the Army.

Dwain was unable to get more than odd jobs—nothing that he really liked. He was doing casual bar work at the Red Admiral—a very fine pub—and the publican said that he would like to take him on and train him up. However, he did not have the money to do so. The publican said that, because of the new deal, he was able to put the money into sending Dwain on courses. Dwain is now a licensed door supervisor, and has a national licensee's certificate. He has been on a number of courses, run by the British Institute of Innkeeping and by Bass.

Dwain said that he would not have been able to go on those courses if it were not for the money that was available through the new deal. To my delight, he is now going to be running a new bar in my town. The only thing that, worries me slightly is that, according to Dwain, it is a pub for the more mature customers—which he defined as the over-25s.

My third example concerns the experience of people being able to pursue their goals. I talked earlier today to Steven Wheatley, who is working at Prometheus Developments, down the road from where I live in Ripley. The company provides hi-tech research and development and advice in fire protection and flame-retardant materials. Steven left school at 16 with GCSEs at E grade. He has been unemployed for two years. He did a GNVQ science course, and has been taken on as a lab technician.

Steven's employer said that if he was prepared, through the training that the company was giving him—both in house and at college—to show that he was able to develop his theoretical understanding of the science and his research understanding, the company would be prepared to consider keeping him on. The company is on the point of offering him a permanent job, and he has started on a higher national certificate course at Nottingham Trent university.

The Committee recommended emphasising capacity-building for small enterprises. I have been talking to small businesses in my area, and saying that the new deal is a way in which they can take on people, see whether they can expand their business and get money for training and development. Steven had had a work trial somewhere else that did not work out. However, the company and Steven were able to try each other out and see how they did.

There are many extremely positive elements in the new deal. For the first time, people have been going out from my local employment service to the nearby industrial estate and knocking on doors. There are some difficulties, because the programme is as much client-centred as it is designed to meet employers' needs. There is some dislocation, because those who signed up expected people to come through their doors immediately, but it takes some time to process people through the gateway.

Everyone involved will have to keep a close eye on that, to ensure that, as the programme comes more on stream, employers, the voluntary and environmental providers and the task force providers get the people coming through.

Mr. Willetts

Does the hon. Lady agree that it would be helpful if the Department could provide statistics showing the number of employers who have signed up for the new deal, but have not yet taken on a single new deal participant?

Judy Mallaber

The Select Committee has been in favour of keeping statistics on every subject under the sun. We have been overwhelming people with requests for statistics. From the beginning, I have been going on and on at my local employment service to get as many and as varied opportunities as possible. In the past, I have been told of young people going to a jobcentre and being offered only work such as bricklaying—it was almost a matter of digging ditches—and being told that they will lose their benefit if they do not take it.

The whole point of the programme is to have a wide choice of opportunities so that we can meet the individual's aspirations. Steven, to whom I referred earlier, said that he was able to get other jobs but he really did not want to do them—for little money—because he knew that he wanted to be a lab technician.

There will be some dislocations, but the more statistics and information that are kept on all aspects of the programme the better, as long as we are not totally overwhelmed with figures.

Ms Abbott

Clearly there is a plethora of statistics. Does my hon. Friend agree that among the key statistics are the drop-out rate and the number of people who go through the scheme and end up with a job? In Hackney, 20 per cent. of people drop out right at the beginning, and no one knows what has happened to them; and only one in 10 of those who have gone through the new deal have actually got a job. Either the new deal gets more people into jobs than would otherwise have been the case, or it is not a success.

Judy Mallaber

I agree that it is important to keep an eye on what happens to people. We are now getting better information than in previous employment programmes. The criticism was made in South Derbyshire that about a quarter of people disappeared. Attempts are now being made to track those people down. A substantial proportion of the people who disappear have gained employment, but there is no particular reason for them to come back to the service and say so. I agree that monitoring is very important, and that is certainly happening in my area, although setting up monitoring systems is not always easy.

I know that my hon. Friend the Member for Pontefract and Castleford (Yvette Cooper) will pursue this point, and the Committee Chairman has already referred to it: the education and training option for lone parents is very important. We were concerned that sufficient attention was not given to it in the Government's reply.

When we started to consider the new deal for lone parents, we assumed that child care would be top of the list, but the more we looked at the statistics, the more we realised that education and training were key, because graduate lone parents could get jobs much more easily. Those without qualifications had a bigger gap to bridge to pay for child care, travel and the other expenses of being in employment.

We realised that it was perfectly possible for lone parents to study and to remain on benefit, as the Government said in their response, but we wanted education and training, as a way of getting lone parents off benefits, to be given a higher profile and to be treated as a critical issue. All the evidence suggests that the way to get a decent standard of living is to get into work, that most lone parents would like to be able to work—certainly when their children are of school age—and that those who are in work would often like to be able to work a few more hours.

There are some difficulties with people not turning up to the gateway provision that has been made for them. At a gateway providers meeting in my area last Friday, I was told that some people came along to begin with and then stopped turning up. If one has not been in employment for some time, it is often difficult to take the first step. That is another reason why the personal adviser's role is crucial.

In my area, a gateway to the gateway has been introduced. There is a pre-induction course for each group of people who are about to come on to the gateway, to tell them what will be available, so they can start to think about their needs and what they want. I was told, however, that a number of people who were meant to be on one of the first courses were not at home when they were telephoned, which suggests that some of them may have some form of employment elsewhere. We do not know the figures, but we formed that impression.

As the report says, we need to keep a close eye on what is happening with people going through the gateway. We must keep statistics and have strategies for dealing with problems. That is now happening in my area.

A couple of days ago, I chaired a meeting at which the Minister dealt with questions from young environmentalists and those involved in the environmental task force. There are interesting examples of what can be done, and we have perhaps not yet focused sufficiently on them. In my area, forestry work—woodland management—is being done by six or seven trainees at Catton hall, in the South Derbyshire constituency. At the Midland railway centre in my constituency, which is a haven for train buffs, people are not only working on the railways, but doing animal husbandry at the neighbouring, and lovely, Britton Pit farm.

Many other jobs in management and IT, for example, have an environmental element, and the potential for job creation in that area is huge. The programmes must also be monitored to ensure that they are environmentally sensitive and that they can be used, with the millennium environmental volunteers, to promote environmental awareness. The Committee will probably return to that issue in future, but I raise it now because it was discussed at a meeting we attended recently.

The value of the five-year programme is that we can review it, and discover which areas are working well and which areas need tweaking or changing. I have found that Ministers have been responsive to our comments, and communication across the spectrum of those involved has been good. Many Back Benchers have become very involved in the work in their areas, and found it very rewarding.

Last night, I was talking to my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw), and he told me of a 24-year-old father of two in his constituency who has been unemployed for six out of the past eight years and who told my hon. Friend that he had reached rock bottom. He is now working, through the new deal, for a local construction firm, and he told my hon. Friend: "Now I have my bills sorted out. I am looking forward to buying presents for my kids. Why wasn't new deal brought in years ago?"

8.30 pm

Mr. John Healey (Wentworth)

I welcome this debate. The new deal programme is important to every Member of Parliament, because every constituency contains groups of the long-term unemployed who will benefit from it. I am therefore disappointed that not one Back Bencher from either of the main Opposition parties is present in the Chamber.

In areas such as Rotherham and South Yorkshire—and the constituency of my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott)—the new deal is the single most important policy programme of this Labour Government. For those whom the new deal aims to help, it is the first serious investment that they have seen from any Government in giving them real hope and opportunities to work and train, instead of drawing the dole.

Rotherham was proud to be picked as a pathfinder area for the new deal. We were proud to place in work the first new deal recruit in the country on 5 January. That recruit was Simon Turner, a 23-year-old who had never worked since leaving education. R. G. Components took him on as an engineering trainee, and, after he settled in, Steve Corbridge, the personnel manager, said that he was a smashing lad who loved working and was eager to do whatever was asked of him.

The twist in the tail is that, in September, R. G. Components was hit by a serious factory fire and had to lay off several workers, including Simon. However, by the start of October, Simon was in work again, through the open labour market, and he is still there. That is one case, like the many cited by my hon. Friend the Member for Amber Valley (Judy Mallaber), that is testimony to the new deal achieving the twin aims of employability and employment.

I cannot understand the Conservatives, who begrudge the investment in the unemployed and belittle the achievements in opening up new opportunities for unemployed people. The Conservatives have opposed the new deal from the start. We should never forget that, without a Labour Government, we would never have had a new deal for lone parents, for disabled people or for older unemployed people. Without a Labour Government, Simon Turner would not be in work today, and 441 other youngsters in the Rotherham area would not hold the jobs that they now have.

In paragraph 1 of the Committee's report on pathfinder areas, we state: It is too early to say with certainty that the New Deal works but we find the early evidence of success very encouraging. The early signs of success include 185,000 young people taking up the new deal, of whom 38,500 are now in jobs. Youth unemployment is at its lowest level for 30 years. An interesting pattern is emerging, because the new deal is doing well, and not just in those areas whose local economies are doing well.

The unemployment unit, Youthaid, probably the most authoritative source of analysis and comment on the new deal, will release next week an analysis of the performance of the delivery units across the country. To do that, it will draw on data already published by the Department. I pay tribute to my right hon. Friend the Minister for making available on an unprecedented scale detailed information and figures to do with the operation of the new deal so that we can analyse its performance.

The unemployment unit will produce what it calls job entry rates, area by area, showing the proportion of young people who have begun the new deal, and who are in work. In some areas of high unemployment, a large proportion of young people are going into jobs. Other areas in which local jobs growth and the economy are strong are performing poorly. We can draw the conclusion that, although the state of the local economy is important to the success of the new deal, the most critical factors are perhaps the commitment of the Employment Service and the new deal partner organisations, and the drive of key figures in those organisations.

That has certainly been my experience in Rotherham, and I pay tribute to Peter Little, who leads the Employment Service; Chris Mallender, assistant chief executive of the local council; Chris Duff and Paul Iseard, who head new deal work at the chamber of commerce training and enterprise council; Roy Barnes, who does the lifetime careers input; and, Pat Heron, who, crucially, leads the local employers' coalition on the new deal.

The commitment of employers in the Rotherham area has been fundamental to the programme's success. That experience was reflected in the Select Committee, where Members were impressed with the evidence of Employment Service district managers. That is why the Committee recommended, in recommendation 20, that the Department's review of contracting procedures should invite first-hand information from district managers and new deal partner organisations. I am disappointed that the Department is missing that opportunity to gather valuable insights from the front line, and to emphasise that the new deal is inclusive, flexible and adaptable in the light of experience of what does and does not work.

The Select Committee paid attention to three other areas on which recommendations have been made to the Department. Paragraphs 39 to 43 of the report relate to new deal jobs in the public sector. Local authorities lobbied hard to be included in the jobs option of the new deal. Ministers listened, and, last September, adapted the programme to allow the wage subsidy arrangements of the new deal for public sector jobs. However, having risen to the challenge in leading local partnerships and in contracting for gateway provision, voluntary sector places and the environmental task force, the local authorities have failed so far to rise to the challenge of generating real jobs within the option for which they so strongly argued.

There are exceptions. Seventy jobs as classroom assistants have been created in Wales under the new deal, and 240 jobs have been created in the national health service in Scotland. Those are new jobs created under the new deal. To some extent, that shows the way ahead for the public sector part of the programme. We should expect local government and the NHS to raise their games. The Government should more forcefully encourage them to do so.

During its inquiry, the Select Committee went to one of the country's leading pathfinder areas, in Cornwall.

Ms Candy Atherton (Falmouth and Camborne)

Hear, hear.

Mr. Healey

I have to say that it is one of the leading areas, not least as a tribute to all the work done to develop the new deal by my hon. Friend the Member for Falmouth and Camborne (Ms Atherton).

I sat in on a discussion with local employers—small employers, in the main—signed up to the new deal. They said that the local economy was all right and that they were doing relatively well. They were looking to expand, but, being small, they could perhaps offer only a new part-time post. However, with the new deal, the job subsidy and the training dowry that comes with the new deal recruit, they could turn that part-time post into a full-time one.

We heard the same evidence from the district manager of the Eastbourne office of the Employment Service. She made it clear that in Eastbourne the wage subsidy was in large part used as a subsidy for small firms, and was essential in their expansion. I am therefore concerned that, by focusing simply on employment, and not on the potential for employment growth as well, we are to some extent missing the opportunity to get more for the money that we are investing in the new deal.

The Department's response to some of the points in our report is rather vague. In response to recommendations 11 and 12 in particular, it talks rather vaguely about what it terms a "sample survey of employers" in relation to new deal job creation, rather than building the issue into the Employment Service's negotiations of new deal contracts, employer by employer. I hope that the Minister can at least give us some more details about the planned evaluation of the extent to which the new deal is contributing to economic growth and local economic expansion.

The Committee's report deals at some length with the gateway and with the personal advisers who are the essential foundations of the gateway. Personal advisers are not just the starting point for the new deal; in my view, they are the pivot on which the success or failure of the new deal programme for the client turns.

My right hon. Friend the Member for Bishop Auckland (Mr. Foster), the Chairman of the Committee, described personal advisers as agents of transformation within the Employment Service. I agree. To my mind, personal advisers are the single most important innovation in the new deal for young people and in the new deal for lone parents. I pay tribute to the work that they do and to the way in which they have transformed the experience of the programme for the young people and lone parents involved. Personal advisers have to be the basis on which we develop the future of our employment and benefit services, and certainly the future of our proposed single work-focused gateway.

Although the report endorsed the role of personal advisers, it also reflected criticism from providers that they were not referring new deal clients fast enough, either to providers of gateway services or to providers of options. Instead of experiencing the gateway as an intensive spell of assessment, tasters and guidance, many young people found that they were on a regime of weekly or fortnightly interviews with their new deal personal advisers.

Having examined the problem in some detail in Rotherham, I have found that it is not caused simply by the personal adviser wanting to build a solid relationship with the new deal client before referring him to a possible provider. Many young people in Rotherham area have been to the providers before. They have done the interpersonal skills, time-keeping and job-search skills courses. Even within the new deal programme, they regard referrals to some of the same places and agencies as merely another part of the scheme.

Rotherham has been selected as a pilot area for the 25-plus new deal. We are linking the completion of basic skills modules with what we are calling a "skills for Rotherham passport". Under the scheme, employers in Rotherham, organised by the new deal employers coalition, guarantee a job interview and work trial to any unemployed person who has this passport. In that way, unemployed people are beginning to see a clear link between the employability skills training that they are required to undertake and workplace outcomes and potential results.

In Rotherham, we need to reflect that experience and replicate it in the main new deal for 18 to 24-year-olds. We need also to make the linkage between the gateway and the new deal options a good deal more flexible. For instance, in the gateway period there may be training for a particular job that a young person could be lined up to take. There may, for instance, be more workplace tasters and fewer jobcentre or classroom sessions. There may also be the opportunity for basic skills courses, partly delivered in gateway, as part of the option that the young person moves on to, thereby enabling him or her to move on to that option more quickly.

In summary, the pathfinders for the main new deal and the pilots for the loan parents new deal show the way forward, including the adjustments that we still need to make to both programmes to obtain the most from the new deal. The experience of both to date shows strong signs of the success and importance of the new deal.

8.45 pm

Ms Candy Atherton (Falmouth and Camborne)

I am grateful to be able to take part in the debate. It has been a fascinating experience as a Member in a pathfinder area to monitor the new deal for 18 to 24-year-olds, and an area where the new deal for the over-25s is being piloted.

I am a member of the Select Committee, and we have seen other members of it in fine performance this evening. I have found the investigations that we have been conducting as we monitor the new deal some of the most interesting aspects of my work as a Member of this place. I sometimes wish that we had a new deal to enable us to spend more time monitoring this work. It seems that this interest resides on the Government Benches, given the vast ranks of empty Opposition Benches.

Mr. Keetch

Will the hon. Lady give way?

Ms Atherton

Oh, dear.

Mr. Keetch

I always enjoy intervening on the hon. Lady. Does she think that more interest might be shown on the Opposition Benches—the Government Benches are not exactly crowded—if we had more than one debate on unemployment per year? Our most recent debate on unemployment took place almost exactly a year ago. Perhaps we should have some more debates on unemployment. The Liberal Democrats, if the Government would care to give us some more Opposition days, would love to have a debate on unemployment on one of those days.

Ms Atherton

The hon. Gentleman's memory is a little short. I remember debating employment less than three weeks ago, when the hon. Member for Havant (Mr. Willetts) was present. If the hon. Member for Hereford (Mr. Keetch) had been present, he might have contributed to the debate on the Gracious Speech as well as being involved in this debate.

It is amazing to see the results of the new deal. Some hon. Members may remember my holding forth last winter on a young black man in Cornwall who wanted to work in home insulation, but whose dreadlocks, unfortunately, were seen by a local employer as a disadvantage. The local company was looking for a new deal recruit and the young man was desperate to work in home insulation. Sadly, the company told the jobcentre, "No way."

The young man's personal adviser talked to the company and with the young man. His adviser persuaded him to compromise by putting on a hat, and persuaded the company to give him a try. Two weeks ago, I met that young man again as I helped promote home insulation for older people in the Falmouth area. He is now employed full time with the company—well past six months—and he has been joined by another new dealer.

Mr. Healey

Is he wearing his hat?

Ms Atherton

Wait. Both he and the company are as happy as Larry. He no longer wears a hat and, interestingly, he has cut his hair slightly. He still sports the dreadlocks, but everyone is happy.

Some of the life stories and life-changing events of the past eleven and a half months are breathtaking. One example is the young man who had been a heroin addict in Cornwall for four years. He failed to tell his bewildered family, and finally admitted all to his personal adviser. He then felt able to tell his father, accepted help from the community drugs team, is now off heroin and is about to start the full-time education option.

How, I ask Opposition Members, does one put a price on that? How does one compute the costs of that young man's benefits, the tax that he was not paying, the possibility of his family following in his footsteps, the probability of a life leading into crime, and the effects on the rest of the community? I could go on. Those are the social costs that never appear on a spreadsheet, but mean the earth to those whom they affect.

I find as I visit local companies that many of the young people taken on through the new deal have been promoted and offered full-time permanent jobs at the end of six months. That will be the key to the long-term success of the new deal. Charities and voluntary organisations are taking on the young people when they finish their six months. It is now rare for me not to find a new dealer on my visits to local companies or organisations.

There is no doubt about it—the Cornish know a good deal when they see one. That is why the grapevine has spread the news. Young people on the new deal are to be found in all parts of the county. In an area where jobs are precious, more than 1,200 job opportunities have been notified by employers across the county. More than 600 employers have signed up.

The figures are illuminating: 385 people have been placed in unsubsidised work, not including the young people who found their own jobs during the gateway; 445 are on the employment option; 332 are in full-time education; and about 400 are split evenly between the voluntary sector option and the environmental task force. If one puts all those bewildering figures together, one finds that more than 1,500 young people have been offered opportunities that they would not otherwise have had.

In an area where almost 90 per cent. of our companies employ fewer than 10 people, it is clear that many small businesses each see the new deal as the way forward to create jobs and develop their businesses. Indeed, as was mentioned earlier, in our report we note the capacity-building opportunities that the new deal presents to small companies. I have anecdotal evidence of that from employers across Cornwall, as has my hon. Friend the Member for Wentworth (Mr. Healey) from his area. I pay tribute to his work in Rotherham, as he paid tribute to mine in Cornwall.

Employers in Cornwall are saying that they have made the jump from employing a part-time worker to employing a full-time worker because of the opportunities that the new deal creates. The Government could pay more attention to that aspect of the new deal. Particularly in areas such as mine, it has been a major incentive for employers to improve their competitiveness locally and expand their companies.

One of the issues that Opposition Members raised frequently during the debate on the Queen's Speech was the costs of the new deal and the alleged lack of benefits to employers. I challenged hon. Members to visit Cornwall and hear for themselves what local employers are saying. What was said from the Opposition Benches bore no relation to what employers in the county—let alone young people—are saying to me. Surprise, surprise—Opposition Members have not taken up the challenge to visit an area which they know is a Tory-free zone. They dare not. The new deal is one of the great success stories of the Government, and there have been many in the county of Cornwall.

I find it wonderful to watch a previously ground-down service—the Employment Service—thrive and bloom with the new deal. I do not want civil servants to feel that they cannot be proud of working for Government. There is no doubt that, where the Employment Service locally has offered inspired leadership and driven the programme forward, it has succeeded.

There are lessons to be learned, and the reports that we are debating today—as well as future reports—will focus on that. I pay tribute to Michelle Maslen, the leader of the Employment Service in Cornwall, for the work that she and her team have done to drive forward the new deal in the county. Let us be clear about this: the offices look different, and attitudes are different. An energetic and committed Minister—my right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities—has been vital in driving the programme forward, and, oh, what a difference there is between the Employment Service now and under the Tories.

Our report on the pathfinders placed heavy emphasis on the importance of personal advisers. Members of the Select Committee share concern that they may become overloaded and that quality might be sacrificed for quantity. The personal advisers have been one of the great successes of the new deal. Let us not waste this opportunity to invigorate civil servants and put pride back into the service.

Time is moving on, so I shall not say much of what I wanted to say. My hon. Friends—[Interruption.] My hon. Friends are telling me that I am all right to continue; I have time.

We are currently piloting the new deal for people aged 25 and over, and I am pleased that early entry is offered to people over 50 who have been unemployed for more than three months. Crucially for an area that had five of the top 20 unemployment travel-to-work areas this January, there will be entry from day one of unemployment for seasonal workers. I am talking not only about tourism, but about our struggling horticulture industry, which is facing severe difficulties. Day-one entry is very important. Classic low pay alongside seasonal employment has always been a double whammy for many in the county. Roll on April, and the national minimum wage.

Work has also started on tackling the other end of the problems that we face—those who slip through the education net at 15 and 16. As 30 per cent. of 15, 16 and 17-year-olds in Camborne are lone parents, many of my colleagues and I are desperate to raise many of those young women's aspirations. Should the area achieve education action zone status next year, as I hope it will be able to do, more work can be done to tackle the situation.

It cannot be right for a third of young girls in Camborne to see lone parenthood as the be-all and end-all of their aspirations. Colleagues on the Education and Employment Committee will smile, but the judicious use of objective 1 funds will be important in raising aspirations. I am delighted that the new deal is reaching many of the brothers and sisters of those girls and enabling them to hold their heads up and see a future.

Mr. Derek Foster

Will my hon. Friend give way?

Ms Atherton

Yes, if my right hon. Friend is brief.

Mr. Foster

I congratulate my hon. Friend on the way in which she has campaigned to achieve objective 1 status. We failed to achieve it in the county of Durham, but I am delighted that she has succeeded, as are many people in my county.

Ms Atherton

I thank my right hon. Friend. We await the final signature on the dotted line, but we hope to achieve objective 1 status for the county of Cornwall.

I want to tell hon. Members about a new dealer aged 24 who had no qualifications, only six months' work experience and literacy and numeracy problems. He completely lacked confidence, but his personal adviser guided him towards the environmental task force. He gained work experience, a reference, a fork-lift truck certificate and units towards a general national vocational qualification. He found permanent employment within a month of completing the option. How do we put a price on that? We should compute the benefits that he and a future family might have required for generations, and think of the social benefits of that young man presenting a role model to his family and tackling his educational problems.

Last month, Opposition Members claimed that the new deal was failing, but clearly for many thousands of young people it has offered opportunities that were previously undreamed of. More than 38,500 young people who previously had no job now have one. We all know that anyone can play around with figures—the Tories did it frequently with the unemployment figures—but seeing young people happy and settled in long-term jobs, and in many cases careers, has been a real achievement for the Government. If one does not deduct payments made by employed people, one ends up with a totally spurious figure, as the Tories did last month. Given that so many of their former colleagues now qualify for the new deal, one would have thought that they would be willing it to succeed.

This week, I opened a training centre in Camborne. It operates from a former derelict site in the town centre, so we benefit from a refurbished town centre site and a new training centre. Behind the quiet, restrained exterior was a positive blooming of skills: young men training for building and other skills in a quiet and studious atmosphere. As the Eden project is being built in Cornwall—probably the biggest greenhouse in the world—we shall need many brickies, not to mention glaziers. New-dealers are working for the project, so it all goes round in circles.

May I sound a cautionary note? Some further education colleges do not believe that the training funding is sufficient. Other providers, however, have told me that it is more than sufficient, which just goes to show that one cannot please all the people all the time.

Ms Abbott

The point that my hon. Friend has made about training colleges is important. The Government must look again at the level of funding in areas with problems of literacy and basic skills.

Ms Atherton

I am quite prepared to accept that. I was implying that training providers outside further education colleges, which, let us face it, also receive funding, said that they were not getting enough money, yet training organisations said that their funding was sufficient. Perhaps we do need to look again at funding; I accept what my hon. Friend says about numeracy and literacy.

We must also ensure that bureaucracy does not deter business, particularly small businesses. Red tape could be the devil of the scheme. Although I am aware that the Committee demands ever more statistics from the Department, those statistics must be sensitively collected.

Another interesting fact that the new deal has brought to light is that colleges and training providers are finding that a new group is becoming involved in the new deal—young people from areas that are so rural that they have little or no access to public or any other form of transport. As a result, in the past they have opted out of the educational and training system. The new deal has flushed them out. Some inspired leadership has had to be shown in devising a means of getting such people to work by training providers, the transport broker appointed by Cornwall county, and by the Employment Service.

One interesting new dealer travels to work on his skateboard. He was just about to leave Cornwall and head off to another part of the country to get away from what he called "the economic blackspot known as Cornwall" when he entered the new deal in January. He had no transport other than his skateboard, which he used to look for vacancies. He was prepared to take on any job that was offered to him. A local company was looking for a new production trainee. It gave him the job, and he offered to take on all extra duties and to work through holidays when other members of staff were away. So impressed was the employer that he was taken on full time at the end of the six months. He still travels to work on his skateboard.

May I sound another note of caution? In its travels the Committee found that other schemes, such as Working Nation in Australia, have tended to restrict opportunities and flexibility due to the inevitable adverse comment that journalists just love to make. I urge my hon. Friend the Minister to take courage and retain flexibility so that personal advisers can respond in the most appropriate manner to a person's needs. Do not make people fit the programme; let the programme be flexible enough to fit the individual.

The Minister must consider with great care the area of the new deal that we have not announced. I am concerned about the group of people—mostly older men—for whom no programme is in place. That is a great oversight. I urge the Minister to consider introducing a new deal for hereditary peers as a matter of great urgency. It is all they deserve.

9.5 pm

Yvette Cooper (Pontefract and Castleford)

I, too, welcome the debate on the new deal. It is an extremely important area of Government policy. Rather than repeat many of the points ably made by my colleagues on the Committee, I shall concentrate my remarks on the second of the two reports we are considering, which is on the new deal for lone parents.

We should not underestimate how revolutionary the new deal for lone parents is, because it helps a group of ople who have been ignored by the Employment Service and by the state for a very long time. They have been abandoned as the passive recipients of benefits. The underlying assumption that mothers are at home looking after children, that if they want to work they can manage that themselves without any assistance, and that they probably stay at home anyway, is out of date. Some women will choose to stay at home and look after their children, particularly young children. The Committee has made it clear in its report that individuals should be left to make that choice. The Committee felt that it was not a matter on which we should make recommendations.

Those choices are more available to some than to others. It is a striking fact that 62 per cent. of mothers are in work, whereas only 42 per cent. of single mothers are in work. Single mothers do not have the same range of choices as mothers with a partner who helps them bring up the children. I make no apology for concentrating my remarks on single mothers. It is true that many of the points we have made in our report are equally applicable to lone fathers who are at home bringing up children. However, as the majority of lone parents are single mothers, and as women in the labour market face particular additional problems, I have chosen to concentrate my remarks primarily on them.

It is easy to understand why single mothers face more obstacles getting into work. If there is someone else at home, there is someone else to juggle the child care responsibilities, so that child care or the lack of it is less of an obstacle. There are also two wage packets to share the cost of child care, which increases the chances of going out to work. If mothers are on their own, the sheer work load of looking after the children makes it harder for them to keep their skills up to date and to keep in touch with the world of work.

For the first time, the Government are facing up to those problems. The Employment Service contacts lone parents saying, "We're interested in you. We care about you." Lone parent new deal advisers provide women with information about jobs, child care and, most important of all, the benefits system and the impact of in-work benefits, which are incomprehensible to most people, even if they have begun to work out the details of the system.

Mr. Healey

One of the experiences from the pilots of the new deal for lone parents is that new deal advisers build up a special relationship with customers, and that has not happened before. On Monday, a new deal adviser for lone parents told me that her colleagues do not know whether it is a personal call or a customer on the line, because they all ask for Lorraine.

Yvette Cooper

We should not underestimate the support that personal advisers can give. I have a letter that was sent to the new deal lone parent adviser in my local employment service by a woman who has now got a job through the new deal for lone parents in my area. She wrote: I am overwhelmed with tears as I cannot believe that all of you should take so much time and effort in helping me in the way you have done. Without your compassion, expertise and backup I know I would have given up and been back at stage one on income support. Personal relationships such as that give people the confidence that enables them to go out and try things that they would not have tried before—to take the step into work that they might not otherwise have had the strength to take.

Judy Mallaber

We have found evidence of that positive relationship with new deal advisers everywhere. I feel that I have let the side down by not mentioning advisers in my area. The two people I mentioned earlier were looked after at the job centre by Tina and Paula. Does my hon. Friend agree that that relationship has been a universal theme?

Yvette Cooper

Yes—and those of us who have been concerned about the Employment Service and its history should especially congratulate those who have turned around its functions to such an extent, enabling it to play a very different role from the role that it used to play. While we are engaging in this congratulations love-in, let me pay tribute to Dave Barrett, the Employment Service manager in Castleford, and to his team, who have done so much locally.

Mr. Derek Foster

I am supposed to be the expert here—the one who is long in the tooth, having been in the House for nearly 20 years—but I have not even mentioned my constituency, let alone any personal advisers.

Yvette Cooper

The new deal for lone parents is only just getting going in my area. So far it has held 58 interviews; many of those interviewed did not receive a letter, but volunteered to go in. Thirteen people have been helped into work. One person wrote to an adviser: Thank you for all your help in getting me back to work. I am really enjoying the job and all the money. That is great stuff. It epitomises what the new deal is all about. Part of the role of the Employment Service, and the Benefits Agency, is to enable people to do things, rather than merely handing things out.

I have some anxieties about the new deal for lone parents, however: I do not think that it is fulfilling its potential. Although its approach is revolutionary, and although it is doing much that has not been done before, I feel that it could do more. As the Committee's report states, we believe that the new deal for lone parents should include an education and training option like that provided by the young unemployed new deal. Education and training are important to lone parents, and the new deal should focus on them more.

If we look at the figures, 79 per cent. of mothers with degrees are in work, and 79 per cent. of single mothers with degrees are in work. A single mother with a degree is just as likely to be in work as a mother with a partner. At the other end of the qualifications scale, it is a different story: 40 per cent. of mothers with no qualifications are in work, while only 21 per cent. of single mothers with no qualifications are in work. In other words, those with no qualifications are twice as likely to be working if they have partners.

Skills make a massive difference to lone parents' chances of being employed. Let us look at the position in a slightly different way: a lone parent with a degree has a 79 per cent. chance of being in work, while a lone parent with no qualifications has a 21 per cent. chance. All the evidence that we took on the Select Committee reinforced that point. All the anecdotal evidence, and all the evidence from the groups, experts and lone parents themselves was that low skills and low qualifications were a huge barrier to getting into work.

Obviously, child care, benefit advice and all those things are important, but, fundamentally, skills are the key thing that make a massive difference. That should not surprise us.

Ms Abbott

My hon. Friend has made an important point. Does she share my concern about a constituent of mine who went to the new deal for lone parents office for help with child care because she was going to study, and was refused that help on the basis that her course was too advanced? She was going to do an access course for teaching. Teachers are badly needed in Hackney. The new deal needs to maximise the level of skill that people are encouraged to acquire.

Yvette Cooper

Hear, hear. My hon. Friend makes a good point. The link between child care and education, particularly child care and further education, has to be developed further if we are to help many single parents and, also, many parents generally into work who currently are unable to work.

None of that surprises us. Ministers spend the whole time talking about the importance of education, training and skills, and the barrier that low skills pose for people who want to get work and find that they cannot. That is, after all, what the new deal for young people is all about. That focus on raising employability is the key to the new deal for the young unemployed. It is why, in the long term, the new deal for the young unemployed will successfully keep people in work five years down the line, not just help them into their first job tomorrow.

The emphasis in the new deal for lone parents seems to be slightly different. Rather than focusing on employability, it seems to focus more on employment. The Select Committee recommended that the education and training option should be flagged up in bold, as it were, to focus women on reskilling—not just on getting their first job—and to help them to get a long-term career.

I found the Government's reply to the report's comments on that issue slightly disappointing. It points out that support is readily available for women on income support to go into further education. That is right. The Committee has never recommended that there should be a new funding stream, for example, or that we should change the structure in relation to lone parents' entitlement to join education and training courses if they are on income support. However, the key issue is to flag it up to people to make them aware that that is something that they can do. In my experience, many lone mothers are not aware that they are entitled to have their fees paid for various further education courses and other such courses.

The Department mentions in its reply that it has amended the letter that goes out to lone parents to flag up the education and training possibilities. I have a copy of that letter. It says: If you've been wondering whether work is right for you then you've probably thought about all the difficulties. No doubt you've got many questions. Our team is here to provide answers. As Personal Advisers for lone parents, we've been specially trained to help you through the process of getting a job. We can advise on which jobs may be right for you and we can calculate how much better off you may be in work. We can help you with applications and, if you want, suggest training courses. That is it. That is only the reference to training courses.

The letter goes on to refer to benefits and to help in finding child care. There are several more paragraphs saying, for example, that if lone parents decide that the job is not right for them, they do not have to proceed. It is a good letter, but, in the five paragraphs, there is only one brief reference to training courses. The letter does not mention that lone parents will not have to pay for those courses, are already entitled to them, or that they might be an extremely good thing to think of doing.

Many single mothers who are out of work have low skills and may have left education earlier than they needed to, or may be anxious about going back into education—or it may not have occurred to them—but the letter does not give them the idea of perhaps going on a training course. If it did, it might raise the take-up rate. It might raise the number of lone parents who go along to the Employment Service and respond to the letter. Many people will not feel ready yet to go into work. Perhaps their children are still quite young, or they do not know whether child care arrangements will work out. Perhaps it has been a long time since they have been in the labour market and they do not feel very confident because their skills are out of date. Perhaps they will not want to start something and then have to let people down. However, if there were a transition mechanism—such as a course, for example, which could help people to build their confidence, update their skills, give them time to work out child care arrangements and to discover whether the kids can cope getting home on their own—some people would be able to get into work who would not be able to without it.

I wondered whether the Department's letter was expressing a fundamental difference in approach between the new deal for lone parents and the new deal for the young unemployed. It is possible that the Department is taking a different view—it is perfectly valid, although I disagree with it—of the new deal for lone parents. If such a view is being taken, I should like to hear more about it from the Minister, as we should have a public debate on it. The view is essentially that work comes first: we get people into work first, and training, education and lifelong learning will follow. Such a view maintains that we must make families better off, and that the quickest way of doing that is to get parents into work, rather than diverting them from jobs into education and training.

There is evidence from other countries.

Mr. Keetch

Sadly, the hon. Lady was unable to join the rest of the Committee members in Australia. However, the point that she is making was made very strongly in the countless meetings and discussions that we had there on the precursor of the new deal and on the current scheme. People who have had the mere opportunity of training and of turning up at an interview looking smart and presentable were able not only to get a job but to find better jobs, and so to progress. She is making a very valid point.

Yvette Cooper

It is true that the best thing for many people will be to go into work first, and subsequently to consider lifelong learning and further education and training. However, for lone parents, the reverse is more likely to be true. As they have child care responsibilities, are more likely to be anxious about those responsibilities and are more likely to have already spent several years out of the labour market, the reverse approach—to ease them into work through education and training—would be more beneficial for them than for other groups who are currently outside the labour market. However, there is no conclusive evidence on that. Nevertheless, it seems that the work-first option—unlike the education-and-training-first option—is being heavily pushed in the new deal for lone parents, and that is a mistake.

We should be pushing the education and training option for lone parents. I ask the Minister to consider rewriting the letter and to flag up a big education and training option for lone parents. After all, we are pushing that option for those who are participating in the new deal for the young unemployed. For them, we are thinking about their long-term employability and what they will be doing not only tomorrow but five or 10 years down the line.

If we decide that the lone parents' new deal should concentrate on employment, whereas the young person's new deal should concentrate on employability, I fear that we will be in danger of fuelling some dangerous prejudices. Although I do not think that the Department is inspired by such prejudices, there is a danger that we might fuel them. The first prejudice is that men have careers, but women have jobs. I think that, across society, that is still the prevalent view. An aspect of that view is that women, especially those with children, are fine in relatively low-paid and low-skilled jobs because their jobs take second place to their family responsibilities, whereas men think about long-term careers. After all, the young person's new deal is dealing primarily with men.

Secondly, I fear that concentrating on employment for lone parents but employability for the young unemployed will fuel the prejudice that the problem of low skills affects primarily men. That is increasingly evident in the media. It is said that women do not have a skills problem because girls do better than boys at school. Women have child care problems. Men have a skills problem because the old unskilled manual jobs have gone, so they need to be reskilled or they are not going to get jobs. The assumption is that lone parents need only child care to help them get through. Those views are mistaken. I hope that the Government will adapt the new deal for lone parents to take into account the importance of education and training.

I congratulate the Government on their revolutionary approach to the new deal for lone parents, which is incredibly important. They are doing more than any Government before. It is not clear that any Government before has done anything to help that group into work. The new deal for young people is brilliant. I hope that the Minister will be able to ensure that the new deal for lone parents can be brilliant, too.

9.26 pm

Mr. David Willetts (Havant)

This has been an interesting debate, following some valuable reports from the Select Committee. I thank the right hon. Member for Bishop Auckland (Mr. Foster), the Chairman of the Committee, for the way in which he introduced the report and explained why the Conservative Member of the Committee was not able to be present tonight.

Sometimes the debate became a little like an Oscar ceremony, with speakers naming all the individuals who have made the achievement possible. When it was not an Oscar ceremony, it was like a revivalist meeting, in which individual personal triumphs were celebrated, with the education Whip leading the hallelujahs from the Front Bench.

We have to look rationally and coolly at the spending of £5 billion of public money. The right hon. Gentleman introduced the debate in a spirit of appraising how effective the programme was and what information we had to judge it on. Some Labour Members were so preoccupied with celebrating individual successes that they did not seem to accept that young people were finding jobs before the new deal came along. There were even young people who had been unemployed for more than six months who found jobs before the new deal came along.

Judy Mallaber

Does the hon. Gentleman recall that, when we talked about those who had disappeared and we did not know what had happened to them, I pointed out that, in my area, a number of them had got jobs? We are well aware of that. We are seeking jobs for those who are unable to get them.

Mr. Willetts

It would be wrong to count every person who leaves the gateway and goes into employment as a success for the new deal. As evidence submitted to the Select Committee shows, 80 per cent. of young people who had been unemployed for six months moved off benefit in the following year anyway. I guess that that is one reason for recommendation 5 in the eighth report. It is a good recommendation. It begins: We question whether the numbers recorded as entering unsubsidised employment should all be registered as outcomes from the Gateway. That is an important point. We cannot assess the success of the programme without reflecting on what would have happened without it.

We think that the programme is an expensive way in which to deal with youth unemployment, because, once it is recognised that a significant proportion of those involved would have got off benefit anyway, we are left with a large sum of money being spent on small numbers of extra young people—if any—moving into work. The figures change almost every week, but we are talking about roughly 21,000 people moving into unsubsidised jobs and 9,000 moving into subsidised ones.

If we took the approach hinted at in recommendation 5 in the Select Committee report and did not count the people moving into unsubsidised jobs from the gateway as successes of the new deal, but only the 9,000 moving into subsidised jobs, we would have an even higher cost per job for the new deal than the £11,000 calculated by my hon. Friend the Member for Ashford (Mr. Green) in the pamphlet published by the Centre for Policy Studies. We need to consider exactly what the new deal delivers in terms of employment opportunities in addition to what would have happened anyway.

The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith)

Does the hon. Gentleman concur with the figure that was published by the Centre for Policy Studies and the means by which it was calculated?

Mr. Willetts

I am the deputy chairman of the Centre for Policy Studies and I was very proud of that publication. If anything, it is an underestimate. The costing of £11,000 is reached on the basis of those entering subsidised and unsubsidised jobs. If my hon. Friend the Member for Ashford had followed recommendation 5 and counted only the subsidised jobs, he would have calculated an even higher cost per job under the new deal. He went out of his way to be generous to the Minister. It is a pity that he did not read the report in the spirit in which it was written.

Mr. Derek Foster

The hon. Gentleman heard me say that the economy can be run more successfully with more employable people and more adaptable organisations. I admit that that is incalculable, but the hon. Gentleman ignores that factor completely in his rather narrow concept of costing.

Mr. Willetts

I appreciate that that is one argument for the new deal. Over time we have been offered various arguments. We were told that it would save money that could then be released into education, but the profile of expenditure in the new deal does not appear to anticipate any savings during the lifetime of this Parliament. It certainly does not appear to be tailing off. Rather than spend the remaining few minutes on that, perhaps I can refer the right hon. Gentleman to a separate pamphlet on welfare to work in which I tackle precisely that point, which Professor Layard, now one of the Minister's advisers, is very keen on.

I now turn to priorities. If Ministers believe that the new deal is so effective, why is money distributed in the way that it is? There are nearly twice as many long-term unemployed as there are young people unemployed for more than six months, yet young people get five times the budget. Ten times more per person is being spent on the young unemployed than on the long-term unemployed. As the hon. Member for Pontefract and Castleford (Yvette Cooper) said, even less per person is being spent on single parents. Recommendation 8 in the seventh report was that the New Deal for Lone Parents should offer a full-time education and training option". If Ministers believe in the effectiveness of the new deal, it hardly seems equitable to distribute the resources between young unemployed, long-term unemployed and single parents in the way in which they are allocated in the new deal programme over the next four years.

Statistics suggest that the long-term unemployed have a lower chance of getting back into work. Young people, even if they have been unemployed for six months, are particularly mobile and have a relatively good record of moving off benefit. The problem is older people who have lost contact with the labour market for longer.

Let me raise some specific points. We are told that personal advisers are an important part of the new deal. I have enjoyed visiting several new deal projects in different parts of the country, and if the hon. Member for Falmouth and Cranborne—

Ms Atherton

It is Falmouth and Camborne.

Mr. Willetts

I do not know why that name sprang to mind. In fact, my hon. Friend the Member for Ashford cannot be here this evening because he is attending his association annual dinner at which Lord Cranborne was supposed to have been the guest of honour.

As I was trying to say, the hon. Member for Falmouth and Camborne (Ms Atherton) invites me to Cornwall every time that we debate this issue. At this rate, I shall indeed end up going to Cornwall to inspect the new deal there.

Ms Atherton

I am happy to invite the hon. Gentleman to Cornwall, as long as he meets the young people and the employers whom the Select Committee met—they might change his attitude significantly. If he wants only to visit the Falmouth and Camborne Conservative association, then forget it. If he wants genuinely to learn, however, I should be delighted to escort him personally.

Mr. Willetts

There is a limit to this, but I am sure that something could be arranged.

Mr. Keetch

May I suggest that, if the hon. Gentleman visits Cornwall, he does more than the Select Committee did? Despite the fact that we flew into north Cornwall and spent an hour driving across Cornwall, we visited only one constituency—Falmouth and Camborne.

Mr. Willetts

The purpose of the debate is not to discuss regional tours, so let us move on.

Personal advisers represent a labour-intensive way in which to deliver services. The wider introduction of the gateway, which a recent Government document says is a fundamental feature of the welfare reform agenda, means that many people will operate as personal advisers in the Employment Service. Will the Minister give figures showing how many people in the service are working on the new deal, how many personal advisers he believes need to be recruited to deliver the gateway for existing new deal groups in the years ahead, and how much extra effort and how many extra staff will be needed to deliver the further proposals for an intensive personal service for the many people who are not registered as unemployed but who may, in labour force survey terms, be seeking work?

I mentioned firms that have signed up for the new deal but have not yet taken on any new dealers. It will not do for the Minister, 18 months into office, to laud the success of the new programme but, when put under pressure, to blame what he calls the rotten statistical systems that he inherited from the previous Government. The new deal is a new programme and we were told that it would be properly appraised—the Government should be able to offer the information for which I ask.

The media have identified the problem of paedophiles in the programme, outlining some disturbing cases in which serious sex offenders have been referred to work that involves children. I thank the Minister for his letter of 8 December; it was courteous of him to write to explain the position. He said in the letter:

The primary responsibility for checking the suitability of applicants lies firmly with employers. The Government cannot entirely wash their hands of the matter, however. There is a rather disconcerting tendency for new dealers to be offered almost indiscriminately to fill any gap in the labour market. The Under-Secretary of State for Wales, the hon. Member for Neath (Mr. Hain), I think, believed that they would all be classroom assistants; we have also been told that they will all be child minders. We must be careful in allocating new dealers to positions with such sensitive responsibilities. I would be grateful if the Minister could say in rather more detail than he was able to do in his letter what steps are being taken to prevent sex offenders from being referred to jobs involving children.

The Select Committee report made helpful and interesting comments on the gateway, but there seems to be a problem of people becoming stuck. I should be grateful if the Minister would tell us how many new dealers, especially in pathfinder areas, are still in the gateway four months after entering it. There seems to be a problem of people being left in the gateway. There are theoretical powers to move them on, but it is not clear how often these are being used.

I hope that the Minister will be able to answer some practical questions. If we are to assess the effectiveness of the new deal, the celebration of individual achievements will not do as the basis for appraising expensive new policy options.

9.40 pm

The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith)

We have had a good and a cheerful debate—and so it should be, because the new deal is a cheerful programme, bringing hope and opportunity to people. I speak as one who has visited Cornwall and seen the excellent work that is being done there on the new deal. In fact, I have visited the constituencies of all my hon. Friends who have spoken in the debate. I join everyone who has paid tribute to the Employment Service, to the new deal personal advisers and to everyone else who is working so hard to make a success of this important and ambitious programme.

I join my hon. Friends in finding it disappointing—although, perhaps, all too revealing—that not a single Conservative Back Bencher has taken part in the debate. I accept that my right hon. Friend the Member for Bishop Auckland (Mr. Foster) apologised on behalf of the Conservative member of the Select Committee. However, it shows a dismissive attitude towards one of the most pressing social challenges confronting this country.

The hon. Member for Havant (Mr. Willetts) made a few amusing remarks and sniped here and there at the new deal. However, we had not a scintilla of a suggestion as to what the Conservatives might do differently, or what they might argue ought to have been done differently. They have a right nerve to talk about the priorities of allocating expenditure on new deal programmes when there would have been no new deal if, by some mischance, the Conservatives had won the general election and they had had their way.

The hon. Member for Havant made an important and serious point about sex offenders. I have written to him, to the Chairman of the Select Committee—my right hon. Friend the Member for Bishop Auckland—and to the hon. Member for Hereford (Mr. Keetch) spelling out the position. The hon. Member for Havant said that the primary responsibility had to be on employers to have appropriate procedures to ensure protection for children and other vulnerable people.

The Employment Service follows common-sense procedures, and lists are held manually by a senior officer in each jobcentre. Staff are advised and reminded that referrals to vacancies should be made where appropriate. Clearly, there will be cases where it is not appropriate to refer particular people who come into a jobcentre to particular things. I assure the hon. Gentleman that, from a senior level right down through the Employment Service, no one would knowingly refer anyone who was likely to offend to a position where he or she would be working with children or other vulnerable people.

There is no doubt that the present system is not absolutely foolproof, and that is why the Government have an interdepartmental working party to examine precisely these matters. My right hon. Friend the Home Secretary will be making a statement shortly on the establishment of a criminal records agency to set out new and better procedures which, I hope, will command the support of the whole House.

I wish to refer to the Select Committee recommendations. A great number of tributes were paid, rightly, to the work of personal advisers. The report referred to the importance of following up the work of advisers, monitoring the case load and ensuring that the very best was made of the innovation—so important to the new deal—of the continuity and support that personal advisers give. The Government have acted on that recommendation, and we are monitoring the case load.

Moreover, we have given advice throughout Employment Service offices—involving training and a series of meetings with personal advisers—to focus their role and responsibilities on what is important, and to ensure that people are progressing in terms of enhancing their employability, moving into jobs or moving into other options that are right for them.

I find these debates and the Select Committee interviews and reports enormously helpful. As my right hon. Friend the Member for Bishop Auckland rightly, and kindly, said, we are a listening and learning Department. We have been flexible, and we have been responsive to the Select Committee recommendations.

The hon. Member for Havant referred to the publication of information on the destinations towards which people are moving at different stages of the gateway. Recommendation 5 said that that should be disaggregated, and we have done that. The information is there for all to see in table 11 of the Government Statistical Service statistics.

We acted on recommendation 18 on capacity building in the voluntary sector, and on recommendation 22 on ethnic minorities. That recommendation also informed a large range of initiatives that we have taken to promote the involvement of, and extend opportunities for, ethnic minorities. Several of my hon. Friends referred to that important issue—notably my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott)—as did the hon. Member for Hereford.

It is not the case that such issues were not anticipated at the outset as crucial to the new deal. I am on record as saying right at the beginning of the new deal, rather as my hon. Friend the Member for Hackney, North and Stoke Newington said, that an acid test of its success or otherwise is whether ethnic minorities get full and fair opportunities through it.

That is precisely why we said right at the outset that there had to be ethnic monitoring—for the first time in any Employment Service programme—so that we could see what progress people were making, and assess which initiatives were working and which areas were not delivering opportunities for ethnic minorities.

Ms Abbott

If an understanding of those issues was built into the programme from the beginning, why was not more about them written specifically into Reed's contract, and why was not more care taken to ensure that Reed worked side by side with organisations that had some knowledge of labour market conditions in Hackney and other inner-city areas?

Mr. Smith

It was made clear to all contractors in the process that they would be judged against the viability of the programmes that they initiated to meet the needs of the area that they were proposing to serve. Clearly, in Hackney, as in some other areas, especial importance will need to be attached to the opportunities that the programmes will extend to ethnic minorities.

The Government attach great importance to that, and we have taken a range of initiatives: there is an ethnic minority advisory group to assist the national advisory task force; after widespread consultation throughout the country with ethnic minorities, as well as the general public, we have drawn up an ethnic minority strategy: and we regularly review the membership and work of the partnerships throughout the country, which have such an important role in involving ethnic minorities and ensuring that programmes are sensitive to their needs.

I do not go to a meeting with partnerships or local providers—today, I attended meetings in Manchester, Bolton and Stockton to see at first hand how the new deal is working—without raising the question of the work that is done to ensure fair opportunities for ethnic minorities.

We have to be constantly vigilant. The levels of youth and long-term unemployment among ethnic minorities in this country are a scandal. As my hon. Friend the Member for Hackney, North and Stoke Newington said, they are as much as two or three times higher than the average. That shows the failure in the past to provide the necessary training and opportunities, and to challenge the stereotypes and discrimination that so often stand in the way of progress.

There can be no room for complacency, and the Government are certainly not complacent. We can start to judge progress by the statistics that we have published; they show that ethnic minorities are moving into unsubsidised jobs from the new deal at very nearly the same rate as the total population. Ethnic minorities are disproportionately over-represented on the full-time education and training and the voluntary sector options of the new deal, but they are under-represented on the employment and environmental task force options.

We are analysing that to see how far the under-representation on the employment option results from a lower rate of referral to employer option vacancies and how far it results from a lower rate of acceptance into those vacancies by employers. We will be able to compare how different areas are doing, see what is working best and take corrective action where necessary.

Mr. Keetch

rose—

Mr. Smith

I am sorry, but time is limited and I wish to cover many points that arose during the debate.

My hon. Friend the Member for Hackney, North and Stoke Newington referred to Reed and its contract. I assure her that that contract was let with absolute propriety, as were all the other new deal contracts, and with the same procedures being followed in every case. The criteria were applied fairly and properly, and the decisions were made by officials.

I hope that my hon. Friend will accept that assurance and, equally, my assurance that performance will be scrutinised closely, whether a partnership is led by the private sector or by the employment sector or is a joint venture. They will all be judged by the same standards, and corrective action will be taken to tackle under-performance. That approach is at the heart of the continual improvement strategy for the new deal. We have consulted the partnerships about that strategy, and it is important in turning, already good programme into an even better one for the future.

It is an enormous accomplishment to have helped 38,500 young people off benefit and into jobs, and it is a great achievement that some 30,000 young people have been placed in high-quality training and work experience options and some 5,500 lone parents have been helped into work. However, we are in the early stages. The Committee's report underlines the fact that it is too early to start drawing conclusions about the success or otherwise of the programmes, but the progress that has been made so far is very heartening.

The hon. Member for Havant accused my hon. Friends of being so swept along by their enthusiasm for successful case histories that they neglected the dispassionate analysis that he attempted. I would accuse him of the converse failure: he was so concerned to stick to what he thought was dispassionate analysis that he wholly overlooked the human and real benefits of a programme that is bringing hope and opportunity to many thousands of our fellow citizens. For example, my hon. Friend the Member for Amber Valley mentioned a constituent who said that her experience of the new deal was that it was the first time that she had ever been taken seriously. That is typical of the comments that I have heard from many new deal participants and their advisers.

I commend my hon. Friends for the energy that they have put into promoting the new deal programme and understanding how it is working locally. They have worked with employers, the voluntary sector and the Employment Service to make the new deal better. It is an innovation of the new deal that it has involved Members of Parliament—especially my hon. Friends, but also Liberal Democrat Members and even some Conservative Members—in actively supporting and promoting the programme in their areas. That is a valuable and—to the clients, employers and the Employment Service—valued role for Members of Parliament.

My hon. Friend the Member for Wentworth (Mr. Healey) raised the important question of the scope of the new deal to generate additional jobs. I was struck by the evidence that the Committee found, especially from its studies in Cornwall, of small businesses taking on people whom they would not have employed before because they could not have taken the risk without the support of the new deal.

That is certainly being studied as part of our evaluation strategy for the new deal. My hon. Friend the Member for Wentworth asked for details of the surveys. Two will be undertaken: a qualitative survey in May and June 1999, which will be published in September; and a quantitative survey next September, which will be published in April 2000, or by July at the latest. A further important milestone in new deal evaluation, which will address the questions of several hon. Members, including the hon. Member for Havant, is the macro-analysis of the effectiveness of the new deal, which will be published next September. It would greatly surprise me if that had nothing to say about the issues raised.

I am a little sceptical of the argument by my hon. Friend the Member for Wentworth that it would make sense to probe employers at the point at which they sign a new deal agreement or take on a new deal recruit as to whether an extra job had been generated. Some employers might suspect the motive behind that question, feeling that, if they gave the wrong answer, the subsidy might be withdrawn. We must be careful. Like my hon. Friend, I want to collect all available evidence and to publish an unprecedented amount of it. I thank my hon. Friends who have paid tribute to the publication of information about the new deal. My right hon. Friend the Secretary of State and I shall continue to be much more open about publication than any of our predecessors ever were.

Mr. Willetts

The Minister has claimed that new deal jobs cost £1,000 per extra job. On what basis does he make that calculation if he is claiming that he does not have the statistics?

Mr. Smith

The estimate is based on the unit cost of the different steps that people took to get on to the new deal. For example, for those going into unsubsidised jobs, the estimate is based on an estimate of the cost of the help that they received in the gateway before entering the job. For those who have moved into subsidised jobs, the estimate is based on the cost of the gateway plus the cost of the subsidy and their support in the job.

The hon. Member for Havant and his hon. Friends will regret having slung around their necks the ridiculous millstone of an £11,000—plus cost of new jobs. That is like waiting until week two of the operation of the channel tunnel and claiming that every passenger going through it on a train is costing millions of pounds. The hon. Gentleman loads the whole budget against the first people.

Mr. Willetts

Will the Minister give way?

Mr. Smith

No, let the hon. Gentleman listen to a lecture in elementary economics. He is fond of lecturing us on that. His figures are a ludicrous, extravagant, cynical fabrication, and they do a disservice to all the people throughout the country who are working hard to make a success of the new deal. They do a grave disservice to new deal participants, who appreciate the new hope and opportunity that the programme is bringing.

My hon. Friend the Member for Pontefract and Castleford (Yvette Cooper) made an important point. I was pleased to hear my hon. Friend and others refer to the success and the revolutionary approach that the new deal for lone parents represents. I can assure my hon. Friend that there is no difference in philosophy between our approaches to the two programmes. Both are about employability, about helping people forward and about helping people into work if work is the appropriate option and choice for them. Both programmes are bringing new hope and opportunity to thousands of people who were denied it so badly by the Conservative party.

On the letter and advice being sent to new parents under the new deal, let me assure my hon. Friends that we shall send out new information in the new year. It will give even more emphasis to the range of help available, training opportunities, help with child care and transport costs and much more. As for the text of the letter, the publication of our other promotional material will provide an opportune moment at which to revisit the wording on the education and training opportunities that are available to see whether it can be made still clearer.

We are proud of the new deals. We are proud of the new deal for young people, the new deal for older, long-term unemployed people which is coming on stream, the new deal for lone parents, and the new deal for disabled people, because they give new hope and opportunities to our country.

It being Ten o'clock, MR. DEPUTY SPEAKER proceeded to put forthwith the deferred Questions which he was directed by paragraphs (4) and (5) of Standing Order No. 54 (Consideration of estimates) to put at that hour.