HC Deb 10 December 2001 vol 376 cc587-9
10. Mr. John Baron (Billericay)

If he will make a statement as to the effectiveness of the new deal in reducing unemployment among young people.[19151]

The Secretary of State for Work and Pensions (Mr. Alistair Darling)

Up to September 2001, the new deal had helped over 333,000 people into work. Since 1997, youth unemployment has fallen by over 40 per cent., and long-term youth unemployment has been cut by almost three-quarters. Independent research has estimated that, without the new deal, long-term youth unemployment would have been about twice as high.

Mr. Baron

Is the Secretary of State aware that the National Institute for Economic and Social Research has estimated that up to 70 per cent. of those who it is claimed the new deal has helped would have found work anyway? This means that over the last Parliament, there has been a cost of about £15,000 per job. Does the Secretary of State accept that this initiative is too expensive and that taxpayers' money could be spent more effectively on relieving poverty in this country? Will he reform this wasteful policy?

Mr. Darling

No, I will not. What the hon. Gentleman says might have some credibility if he could point to anything that his party did during 18 years in power that provided a systematic attack on poverty or did anything to provide the number of measures that we have put in place to get people into work. During the Conservatives' time in office, unemployment was over 3 million for far too long. On the new deal, I should have thought that the fact that long-term youth unemployment in the hon. Gentleman's constituency was down by 80 per cent. might cause him to reflect before speaking to the House this afternoon. The new deal and other measures are doing a great deal to get people into work. Until the hon. Gentleman's party comes up with an alternative policy that would begin to deal with some of the problems, I suggest that a period of reflection would do him some good.

Mr. Bill Tynan (Hamilton, South)

Is my right hon. Friend aware that long-term youth unemployment in Hamilton has been reduced by 69 per cent. since 1997 because of the introduction of the new deal initiative? What steps are being taken to ensure that more employers and businesses participate in this scheme? Are statistics available, showing the benefits to young people in terms of education and training?

Mr. Darling

My hon. Friend represents a constituency that was devastated by the steel closures in the 1980s. It is just one of many that has benefited through the new deal and other measures which are helping people to get back into work. Perhaps I should have made this point in response to the hon. Member for Billericay (Mr. Baron), but the cost of the new deal is about £4,000 a head. When we compare that with the cost of keeping someone unemployed, it is money very well spent.

My hon. Friend also asked what we are doing to encourage more employers to become involved. Each new Jobcentre Plus office will have someone whose sole job it is to contact local employers, to make sure that we do far more than we have done in the past to match individuals with specific jobs. I hope that my hon. Friend will welcome that measure, because I think that it will be of great help, particularly in areas where, although we have reduced unemployment, a number of other people would still like to get into work.

Mr. Paul Goodman (Wycombe)

Is the Secretary of State aware that in my constituency, out of the 522 people who left the new deal during the past 12 months, only 201 went on into unsubsidised employment? Is that not an indication that, whatever the merits of the new deal, it is not very effective at moving young people into full-time work? Will the right hon. Gentleman kindly bear that in mind before delivering sanctimonious lectures to Conservative Members?

Mr. Darling

But those 200 people would have been unemployed had it not been for the new deal. No one in the House would say that it is easy to get people into work, especially those who have been unemployed for a long time. However, independent research has shown that the new deal and other measures have done a great deal to get people into work who, but for the new deal, would have been unemployed, on the dole and costing billions of pounds in benefit. 1 believe that the measures that we have taken, which are built on a strong economy—including tax and benefit reforms and changes to the conditionality of receipt of unemployment benefit—have all combined to ensure that it is now more likely that we get people into work. If the hon. Gentleman is considering the alternative, which the Conservative party is flirting with—the Australian style of getting rid of all that help—he might want to reflect on the fact that the unemployment rate in this country is the lowest of that of any of our major competitors.

Lawrie Quinn (Scarborough and Whitby)

Youth unemployment in my constituency was reduced by some 80 per cent. because of the new deal, but we still have pockets in rural areas. Is my right hon. Friend proposing to introduce any extra support to help with transportation problems in the most rural areas, where people have problems in getting to placements?

Mr. Darling

Again, I believe that we can do more here. I am aware of cases in which the Employment Service has teamed up with employers some distance away from its catchment area and they have, through a variety of means, provided transport to get people from where they live to work. For example, people regularly travel from north London to Stansted airport, and measures have been put in place to make it easier for them to do so. My hon. Friend is right to highlight the fact that people who are unemployed and live away from main centres of employment face additional difficulties. That is one reason why we are introducing measures such as the step up programme to see what else we can do to ensure that people who have been disadvantaged in the past are given the same opportunities as everybody else.

Mr. David Willetts (Havant)

The Secretary of State refers to research, but if he really cares about research, he will have looked at the report produced today by the Joseph Rowntree Foundation, "Monitoring Poverty and Social Exclusion". It says about youth unemployment: the unemployment rate amongst those aged 18 to 24 is still more than twice that for older workers and this gap has widened somewhat in recent years.

That is the evidence about the Secretary of State's new deal. Despite his new deal, the gap between youth unemployment and unemployment for other groups has increased. The Government never take account of the evidence, when it starts coming in, about how their policies are not delivering what is promised.

Is the Secretary of State still committed to reducing the gap in unemployment rates between young workers and the rest? If he is, why is the direction of change—the gap—getting wider? It is another example of the gap between rhetoric and reality.

Mr. Darling

The reality is that the new deal has involved a huge reduction in youth unemployment that would not have taken place but for the new deal and other measures. The hon. Gentleman is always quoting selectively from reports. Clearly, he has had trouble sleeping in the past few days, to judge by the number of volumes of research that he has brought into the Chamber. Of course, he neglects to mention the fact that many of those reports have not yet picked up the full effects of the policies that we have introduced in the past two to three years, but the difference between us is that, during the past four years, we have begun to put in place measures that are producing a systematic reduction in long-term unemployment, not just for young people, but for older people as well. On top of that, we are introducing further measures to help those people who have been unemployed for extremely long periods, despite all the measures that have been put in place.

I return to the same point: what are Conservative Members suggesting as the alternative? They do not have an alternative, other than the wholesale break-up and privatisation of the Employment Service, of the kind that we have seen in Australia, as well as in other countries. I believe that the measures that we are putting in place are making a huge difference to the number of unemployed people in this country and, year by year, there will be a steady improvement in the situation because of the reforms that we have introduced.