Long-Term Unemployment

HC Deb 28 October 1999 vol 336 cc1076-9

2. Mr. Malcolm Savidge (Aberdeen, North)

If he will report on progress under the New Deal in tackling long-term unemployment. [94250]

The Secretary of State for Education and Employment (Mr. David Blunkett)

The latest figures released this morning show that 144,600 young people have found work through the new deal. Bearing in mind that these young people have been unemployed for more than six months, I believe that that is a very substantial contribution to the 700,000 people who have work under this Government and who would not have had that work under the Conservative Government. More than 92,000 people have benefited from the various options under the new deal, including more than 20,000 on the voluntary option and 20,000 on the environmental option. There has been a 60 per cent. fall in the number of young people who are unemployed, and youth unemployment is at its lowest level for 25 years.

Mr. Savidge

Has my right hon. Friend assessed the financial and social costs that would be incurred if the Government adopted the policies proposed by the Conservative party of scrapping the new deal and replacing it with daily signing-on for benefit claimants?

Mr. Blunkett

I am aware, of course, that the shadow Secretary of State for Social Security, the hon. Member for Havant (Mr. Willetts), has proposed those ideas as Conservative party policy. It is impossible to detail the calculations that he has made, but we calculate that it would cost more than £540 million a year to force all job seeker's allowance claimants to sign on each day. That money could be used to get people jobs, implement the programmes that we have put in place, and ensure that people have the opportunity to work and to gain the skills necessary to hold down jobs.

Mr. Michael Fallon (Sevenoaks)

Do not this morning's figures show that at least a third of people who have left the new deal have done so for what are called unknown destinations? As they are neither working nor not working, they seem to be the new disappeared. If the new deal really is working as the Secretary of State claims, why has the Secretary of State for Social Security proposed toughening up benefits sanctions?

Mr. Blunkett

The survey work being undertaken shows that many of the people to whom the hon. Gentleman referred in fact go into jobs. Ironically, it is the new deal that has winkled out people from the sub-economy—the black economy—more effectively than any other measure this century. It has ensured that people are not drawing benefits and working on the side. We are achieving the goals that the shadow Secretary of State for Social Security seeks to achieve, but we are doing so in a way that is positively improving the life chances of thousands of men and women.

Ms Linda Perham (Ilford, North)

I welcome the Government's measures to help the long-term unemployed. In my part of north-east London, by the end of July, 1,030 people were participating in the scheme for the over-25s. Almost one third of those people are over 50. Does my right hon. Friend have any plans to reduce the qualifying period for the new deal for older people? Six months is a long time to be unemployed, and particularly so for anyone over 50. Two years is a very long time indeed.

Mr. Blunkett

We have 28 pilots—plus Northern Ireland—for the over-25s. My right hon. Friend the Chancellor of the Exchequer and I announced earlier this year that we would pilot the programme for the over-50s, and more will be said soon about that. We intend to roll out that programme across the country to ensure that, in addition to the 24,000 people who have gained jobs under the programme, others may benefit, and we are evaluating the pilots that currently monitor unemployment of more than 12 and 18 months to determine which date is most effective in ensuring that people can return to work. That will meet precisely my hon. Friend's correct analysis that the sooner we get people back to work, the more likely they will be to hold down the job.

Mr. John Bercow (Buckingham)

Is the Secretary of State aware that most new deal leavers do not succeed in gaining sustained unsubsidised work? Does he know that almost three quarters of those aged over 25 do not get jobs, and that no less than 41 per cent. of those who leave the advisory process on the scheme are simply left to traipse through the revolving door of benefits dependency? This week's Employment Policy Institute report shows that YMCAs across the country are complaining that they have to subsidise the over-bureaucratic wheeze introduced by Ministers. Why does the right hon. Gentleman not admit that the new deal is an expensive white elephant which has done little but spray cold water over the legitimate hopes of thousands of jobless people the length and breadth of Britain?

Mr. Blunkett

It is not surprising that the hon. Gentleman takes that view because he has been against the new deal since it began. He has opposed the measures we have taken which have succeeded in getting young people back into work. Let me offer him some statistics. Out of 144,600 people who have gained a job, 106,000 are in what is clearly identified as a sustained and long-term job. That entirely refutes the hon. Gentleman's figures.

Mr. Bercow

Wrong.

Mr. Blunkett

Those are independent figures from the Office for National Statistics, which the Conservatives were happy to defend when they were in government. If they want to take up the matter outside Parliament, they are welcome to do so.

The YMCA programmes are funded on a basis and to an extent never before achieved in the voluntary sector. Some 21,000 people across the country have benefited from the voluntary sector option. The sector has contracted voluntarily for that option in the full knowledge of what it was taking on. It is also reinforced by our intention, as I said at the Labour conference in Bournemouth, to extend the intensification of the gateway so that we can deal with the real problems that young people face. None of that would be supported if the Conservatives had their way.

Judy Mallaber (Amber Valley)

Will my right hon. Friend encourage other areas to follow the example of the southern Derbyshire new deal joint venture partnership, which yesterday published its annual accounts and report on activities that have helped 2,500 young long-term unemployed adults into training and employment? Will he congratulate the five young adults who gained special awards at yesterday's launch in recognition of their outstanding work on the new deal programme, including Simon Carrier, who has undertaken a voluntary sector option at the Stepping Stones day centre in Amber Valley? Simon, who previously had a poor school attendance record, no educational qualifications and little work experience, has gained unsubsidised evening employment and will soon be a trained cook.

Mr. Blunkett

I am pleased to be able to congratulate Simon and his colleagues on what they are doing. One of the most encouraging things about the new deal programme is the pride and confidence that it is returning to young people who, after six months or more of unemployment, had lost expectations and confidence in themselves. The partnership that has developed between the private and voluntary sectors and the Employment Service is unique, as are the training and qualification measures, which are being carried out in ways that previous job schemes never achieved. Young people themselves are committed to the new deal, and they welcome what we are doing. They are the best judge and jury of the new deal.