Youth Unemployment (Hansard, 23 May 2000)

§ 1. Mr. Brian H. Donohoe (Cunninghame, South)
If he will make a statement on the impact of the new deal on the level of youth unemployment. [121870]

§ The Secretary of State for Scotland (Dr. John Reid)
Youth unemployment has fallen by 71 per cent. since April 1997, and the new deal has made a significant impact in achieving that improvement.

§ Mr. Donohoe
I thank my right hon. Friend for that comprehensive answer. [Laughter.] I should like to bring to his attention the fact that, since 1979, there has been an immense drop in youth unemployment in my constituency—in fact, one could say that it has fallen like a stone—but much is still to be done. What is being done under the new deal for over 55-year-olds?

§ Dr. Reid
My hon. Friend will appreciate just what an impact the new deal has had on young people in Scotland. The mockery of Scottish National party Members is the same as they showed when we introduced the new deal. However, it is not a laughing matter for the 23,000 young people in Scotland who have benefited from it. If this Government had said in 1997 that we would slash youth unemployment by almost 75 per cent.—by 71 per cent.—in three years, no one would have believed us.
My hon. Friend is right that not only the young faced the terrible spectre of dole queues under the previous Government. I am glad to say that my hon. Friend the Minister of State, Scotland Office only yesterday 844 extended the new deal so that those aged over 50 will be able to benefit, as our young people have. That is another step forward in recognising that, although we have made major achievements, there is still much to be done.

§ Sir Robert Smith (West Aberdeenshire and Kincardine)
Does the Secretary of State recognise that the success of the new deal is about getting people fit for work and helping them to find work when it is available? Therefore, crucial to the long-term prospects of the young unemployed and over-50-year-olds is investment by manufacturing, agriculture, the oil industry and tourism in job creation for such people in the Scottish economy. Does he therefore recognise, like the Secretary for State for Northern Ireland, that that investment is put at risk by the stresses of the high pound on those industries?

§ Dr. Reid
The hon. Gentleman is correct that the Government themselves cannot create jobs; we can only create the economic framework in which those jobs are created. That is why I am extremely pleased that that is exemplified in Scotland by the highest employment for more than 30 years—2.3 million—the lowest unemployment for 25 years and the lowest sustained inflation in generations. We are reducing the national debt and we have a surplus on the current account of £17 billion compared with the £20 billion deficit that the Tory party produced.
The hon. Gentleman is correct that one effect of that strong economy is a strong pound—in the face of a very weak euro. That has caused problems, but I am glad that manufacturing in Scotland has overcome them by increasing its output in the past year, increasing exports by 8 per cent. over the past period and increasing employment. So, I would be the last to say that we cannot do any better, but I think that the hon. Gentleman will recognise just what significant advances have been made.

§ Mr. Desmond Browne (Kilmarnock and Loudoun)
My right hon. Friend will be aware that, although unemployment in my constituency has fallen by more than 25 per cent. in the past three years and youth unemployment has more than halved, there is still a systemic difference between local unemployment in some areas, including east Ayrshire, and the Scottish average of about 2 per cent. That is despite the many thousands of job vacancies in the market. It is for that reason that the Chancellor announced the special initiative for certain areas, including east Ayrshire, of job action zones—special targeted help to match unemployed people to jobs. Will my right hon. Friend cheer up the people of east Ayrshire by giving a general indication of when they may expect some action in the job action zone?

§ Dr. Reid
My hon. Friend is right that, despite the success of the new deal, we are not content that enough has yet been done. We introduced it for the long-term unemployed and, as I said, have extended it to those aged over 50 and to the partners of those who are out of work. In addition, the Chancellor has announced that we shall be introducing employment action zones. I obviously do 845 not wish to pre-empt any decision on that, but I do not think that the people of east Ayrshire or my hon. Friend will have long to wait for that decision.

§ Mr. John Swinney (North Tayside)
Is the Secretary of State aware of the report of the Education and Employment Committee, which calls for greater decentralisation within the New Deal so that it can respond to local needs? Will he reflect on the contents of that report? Does he believe that it strengthens the case for devolving responsibility for the new deal to the Scottish Parliament?

§ Dr. Reid
First, I welcome the hon. Gentleman to Westminster again.
The new deal has been an outstanding success in Scotland, but we are always considering ways to improve it. I am glad to be able to tell the hon. Gentleman—he probably has not noticed—that we are establishing a Scottish task force on the new deal. We also work hand in glove and in partnership with the Scottish Executive on this, as on many other issues. We genuinely believe that devolution is a constructive partnership of the Parliaments within the United Kingdom. That is why so many of our areas are covered by British and Scottish Ministers working together.
I fully understand that that is not the view of the hon. Gentleman, that he wants the two Parliaments to be in confrontation, and that every subject he raises, from the boxing ring to the unemployed, will be raised with one objective, which is to push the Parliaments apart and set them in confrontation. In that context, I am surprised that he was not here yesterday, when my right hon. Friend the Home Secretary was at the Box. After all the shouting by members of his party last week, they could not even be here to take up the matters in question. It is the usual old story: all talk in Scotland from the SNP and no action at Westminster.

§ Mr. Ian Davidson (Glasgow, Pollok)
Is my right hon. Friend aware that in my constituency since the election unemployment among young people has dropped by two thirds and unemployment generally has dropped by a third? That is very welcome. But is my right hon. Friend also aware that unemployment there is now the worst in Scotland? Does he accept that the removal of assisted area status from a large sector of my constituency is unlikely to be helpful in generating jobs, and that it is important that Govan shipbuilders be given a clear assurance that work will be found to make sure that that yard remains in operation until the new orders come through for the type 45 frigates? Would he further agree, since he himself mentioned boxing, that Mike Tyson coming to Glasgow gives exactly the wrong impression—

§ Madam Speaker
Order. These questions are far too long. We have not even reached the end of question 1 yet.

§ Dr. Reid
In deference to what you have just said, Madam Speaker, I shall answer only the first three points that my hon. Friend raised.
First, I thank him for his congratulations on the reduction of unemployment in his constituency.
846 Secondly, the decisions on assisted areas were very difficult, because we had to negotiate them with the European Union. But I think that Scotland has had a good deal out of that.
Thirdly, everything possible is being done to make sure that fair and full consideration is given to Govan when it comes to the placing of Ministry of Defence orders.

§ Mr. Dominic Grieve (Beaconsfield)
We welcome the reduction in the level of unemployment, but we are not wholly convinced that the new deal, rather than the overall revival of the economy that started under the last Government, has had a great part to play in it, Will the Secretary of State confirm that of those going through the new deal some 36 per cent. either go back on to welfare or disappear from the system, so that it does not appear that they are traceable? Will he also confirm that about a quarter of those who obtain work come out of work shortly thereafter, whereas the whole purpose is to reduce long-term unemployment, and that all this costs £19,000 per person found a job? Would he, then, agree that the new deal's success is in fact far less than he seeks credit for?

§ Dr. Reid
It is significant that in the face of a huge cut in youth unemployment the hon. Gentleman chooses not to talk about that, but to have a philosophical discussion on the factors potentially underlying it. It would have been better simply to say that we are all very pleased that three out of four young people who were on the dole under his Government are no longer on the dole under the present Government.
As for those young people who go on to the new deal and do not immediately enter a full-time job, it is of course a high percentage—higher than we would like. But it still means that we get 64 per cent. of them in a job. We have a client group that is very difficult precisely because the new deal is targeted at those who, for generations under the Tory Government, were not in jobs. They are a very difficult group to place. They are being placed only because of the economic climate, which is allowing jobs to be created, and because of the assistance the Government are giving to them. By anybody's standards, a 71 per cent. cut in three years is not a bad figure.

§ Mr. Grieve
The Secretary of State misunderstands the role of the Opposition, which is to welcome the reduction in unemployment but to question the method and the credit that he claims. I shall try to illustrate one of the difficulties so that we may have a sensible question and answer session. It was said about the new deal that the Scotland Office and the Scottish Executive would take 50 trainees. In fact, they have never managed to take more than 12. What is the reason for that?

§ Dr. Reid
The reason is that my total staff has been reduced from 4,200 to 86. The hon. Gentleman may not have noticed that, but as he is always the first to accuse me of empire building, that is a bit cheeky.

§ Madam Speaker
Order. I hope that we can make a little faster progress. Both questions and answers are far too long. It has taken us 15 minutes to deal with one question.