§ Motion made, and Question proposed, That this House do now adjourn.— [Mr. Woolas.]
12.57 pm§ Ann McKechin (Glasgow, Maryhill)I welcome the opportunity to speak on a subject of great importance to my home city and my constituency. Only this week my hon. Friend the Member for Glasgow, Anniesland (John Robertson) secured a debate on inner-city policy that considered the same problem. That is a measure of the depth of feeling and commitment of Glasgow Members on this matter, and their desire to find solutions to remove this scar from our communities.
Glasgow, like many other urban areas dependent on heavy industry in the United Kingdom, suffered dreadfully during the economic recession of the 1920s and the 1930s, and our older generation still live with memories of applying to the parish for money, going without meals and the threat of eviction.
Although the post-war years until the mid- 1970s were tough for many, at least we enjoyed relatively full employment, and social progress was achieved for the vast majority. Undoubtedly the economic transition away from traditional industries that characterised the next 20 to 25 years would have been difficult in any circumstances— but it was the utter complacency of the Conservative Government in tackling its consequences, and their failure to provide new opportunities, that permanently marred the lives of so many in our communities and led directly to so many of the problems that Glasgow faces today.
Glasgow has the highest concentration of heroin injectors in Europe, and the Greater Glasgow health board estimates that we have 15,000 drug users— four times the national average. It also has rising suicide rates among the young, continuing alcohol misuse and chronic health statistics that are among the worst in Europe. According to the latest statistics, seven of Glasgow's constituencies are in the top 100 UK employment black spots.
Problems of that nature are not unique to my city, but the sheer scale and concentration of deprivation mark Glasgow out as a place that deserves special treatment. I commend the Government on the programme introduced in the past five years which has already made a significant contribution towards Glasgow's renewal. In the last year alone in my constituency the number of unemployed claimants fell by more than 17 per cent., and in the past five years the total unemployed count in Glasgow has fallen by more than 15,000.
Many of the measures introduced have been specifically targeted at the lowest income groups. Steps such as the introduction of the minimum wage, the tax credit system for working families and increases in child benefit, together with our success in providing a stable economy and increasing investment in public services, have obviously borne fruit, but I am sure that the Minister agrees that now is not a time for complacency. I trust that he shares my goal of achieving full employment throughout the UK for all our citizens. That is not an easy task, but we in Glasgow have a unique opportunity in the next few years to rid the city of the problem of long-term unemployment.
580 Glasgow is enjoying substantial expansion in its commercial centre, and the Scottish financial services sector anticipates further growth with upwards of 10,000 jobs in the next few years. The consequent new build of office space in the city centre, together with substantial capital investment in our schools, housing and hospitals, has led to many additional jobs in the construction industry— although there are already skills shortages in that sector.
The proposed transfer of the city council's rented housing stock— the largest in western Europe— to the new Glasgow housing association will offer the basis for substantial new capital investment in rebuilding and repairs, which will create even further demand in the construction sector. In addition, our commitment to quality public services in schools, child care, community care and hospitals will inevitably lead to further job opportunities.
The challenge we face is to harness those opportunities for the benefit of Glasgow's own citizens and to tackle the social problems that afflict so many of them. In substantial areas of the city, the majority of the adult population is not in work: either they are on the unemployed register, or they are on some other form of benefit. In some areas, that group comprises as much as 70 per cent. of the total population. I warmly welcome the Government's proposals to merge the Employment Service and the Benefits Agency into Jobcentre Plus, to offer an increasingly personalised service and to target the hidden unemployed in such areas.
I am also pleased to note the Government's recent announcement of a new start-up initiative aimed at the hardest-to-help applicants. There is no such project yet in Glasgow, but perhaps the Minister might offer some help with that today. I am aware that Glasgow city council is considering applying for funding for a similar initiative based on specific geographical areas, but covering a longer, three-year period. We need to be imaginative and bold in our approach to the problems. I hope that if the models prove successful, they will be spread throughout the country.
More public funding will be required if we are to assist applicants back into the world of work. Many suffer from chaotic lifestyles and drugs or alcohol abuse. Many have no direct family experience of a work routine. Most suffer from low competence, poor communication skills and low education standards. There is no easy fix, but the alternative of continuing with a permanent underclass living outwith normal society is much more expensive to our communities. We have to ensure that all appropriate agencies, whether private, public or voluntary sector, work together and effectively to focus on the issues. There are still too many gaps into which people can disappear.
Glasgow's black economy must be tackled if legitimate work is to be rewarded. There has been too little quality training— especially in the construction sector, which has for too long relied on "the lump", artificial self-employment and shoddy standards— and too little support for small and medium-sized enterprises, which provide the vast majority of employment opportunities for our work force. Both should be integral to all our development plans.
People need to see work going on around them if our city is to beat the spectre of depressed, soulless housing schemes. Even in my own constituency, which suffers 581 from the eighth highest unemployment total in Scotland, there is a shortage of small industrial units for private firms or traders, and of space for community-run industries. We need to focus on spreading job opportunities throughout every part of the city and not just in the centre. It does not suit every worker to travel to work, especially those who have dependants, either young or old, who require the convenience of living near their place of work.
We also need to ensure that our public transport system supports our workers. There need to be more services across the city rather than routes revolving around the city centre. I am aware that the local authority has little control over bus routes following the deregulation of services— I certainly appreciate the services offered on London buses in comparison— and I have every sympathy with the council's frustration over that, but surely we need the Government to consider every hindrance to the opportunity of work and to take appropriate action where possible.
I should also like to take this opportunity to raise the problem with making work pay in Glasgow, which specifically afflicts those in the city, particularly our lowest earners. A study carried out by the development and regeneration services department at Glasgow city council in January 2000 demonstrated the steep withdrawal of housing and council tax benefit that occurs when households move from unemployment to work, and how that acts as a significant barrier to residents in the city who have historically paid higher rents and council tax than those elsewhere in the country. I should like to give the Minister a specific example of that.
When one partner in a couple with two children under the age of 16 takes a job at £170 a week, total weekly income, taking into account the working families tax credit and child benefit, is about £276. In comparison with benefits received while out of work, the family appears to be about £115 better off. However, when revised rent and council tax are taken into account, the net benefit per week of working is less than £14— about £2 a day. The situation is even worse for a couple with no children. In addition, the example disregards any additional costs for travel or food that might be incurred while working.
Obviously, the figures will change to some extent once the new tax credit system is introduced next year, but the so-called work-poverty trap will largely remain and hit hardest those very people in our city who need the most help and support. In particular, as the rules stand, such a low net benefit is further reduced if there is any increase in rent or council tax, as that needs to be met in full by the individual households.
I am aware that the Government rejected the council's original proposals in 2000 to carry out a pilot scheme that would have allowed the working families tax credit to be disregarded as income for the purposes of assessing entitlement to housing and council tax benefit. I appreciate the Government's concerns about marginal deduction rates that may act as a disincentive to work. I also realise that the issue raises a number of technical problems for the Department. But I urge it to initiate dialogue with the council and other public bodies in order to identify mechanisms to remove that barrier to employment as far as possible.
582 In July last year, the council proposed to increase the earnings disregard to £92.90, which is in line with the working families tax credit income threshold, and to reduce the tapers of 65 per cent. for housing benefit and 20 per cent. for council tax benefit to 55 per cent. and 10 per cent. respectively. That would result in households being on average £75 better off, as opposed to about £12 to £14 better off under the current system. Although that appears to involve an initial loss to the Exchequer, all our statistics point to the fact that people obtain better paid work if they are already in a job. The change would also act as an incentive, to encourage people back into work, which in turn provides significant savings in benefits paid out by the Department. I appreciate that the Minister may have different solutions to the problem, but dialogue is essential if we are to make progress.
I urge the Government to give Glasgow the resources that it needs to tackle this running sore and to engage in a constructive dialogue with the city council and the Scottish Executive. The opportunities have never been better and the rewards to our society for overcoming long-term unemployment are enormous. I ask the Department to be bold and have the courage to take risks. The people of Glasgow have put their faith in this Government and they are entitled to social justice. They deserve nothing less.
§ 1.9 pm
§ The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks)I congratulate my hon. Friend the Member for Glasgow, Maryhill (Ann McKechin) on securing this debate on a crucial subject. I have listened carefully to the points that she made. She acknowledged progress but, perfectly properly, dwelt on the social and economic ills that continue to affect Glasgow and, indeed, a large part of our country. She talked with great authority and feeling about structural and social changes that have affected her constituents.
Our approach is to put work first. For people who can work, the job represents the best social security policy of all. For both individuals and families, paid work is the best form of welfare, and the most secure means of lifting them out of poverty and dependency. It is also the best way to give people back a sense of dignity and self-esteem. Instead of just passively paying out benefits— the welfare state could be accused of that in the past— our task is to deliver a system that works in partnership with individuals, employers and communities to get people back into the labour market.
My hon. Friend rightly noted the importance of making sure that work pays. While much of our policy is about making work possible, it is essential to make it pay. The measures that we are taking are not only helping break down the barriers to work, but ensuring that work pays when people take it up. The working families tax credit is part of the first stage of our modernisation of the tax and benefit system to make work pay and tackle child poverty. By August last year, the WFTC was helping more than 120,000 families in Scotland. The national minimum wage has benefited about 110,000 workers in Scotland. The combination of the national minimum wage and the WFTC guarantees that a family with one person in full-time work has a minimum income of £225 a week or almost £12,000 a year.
583 We recognise that much more needs to be done. I share my hon. Friend's belief that there is no room for complacency. We have made clear our commitment to increase and improve the support available to families; to make work pay; and to tackle poverty. The WFTC is a decisive step towards achieving those goals. The introduction of the new tax credits in 2003 is the next stage of reform, and will allow the Government to make further progress in delivering our objectives. The new credits will integrate child support into one payment, delivering a simpler, seamless system for all families, both in and out of work. They will also extend the principle of in-work support to people without children.
I recognise the wider proposals put forward by Glasgow city council to reduce unemployment, poverty and social exclusion in the city; we fully share those objectives. Indeed, in responding to a debate earlier this week on inner-city poverty, my right hon. Friend the Minister for Pensions assured my hon. Friend the Member for Glasgow, Anniesland (John Robertson) that we will arrange for officials from the council and the Scottish Executive to meet officials from my Department to explore those proposals further. I repeat that commitment to my hon. Friend the Member for Glasgow, Maryhill.
I am sympathetic to the objectives of the council's proposals for housing benefit, which my hon. Friend noted. We must tackle unemployment and poverty traps in our systems. She talked about savings in benefit expenditure that would result from the council's proposals, but it would not be appropriate to go into the detail of those proposals now, as much of their content is complex and technical; I do not wish to strain the patience of the House by dealing with technical matters. This is difficult territory, and in seeking remedies, we must not accidentally create new problems. We have a technical quarrel with the council's proposals on that score.
We agree that it is vital to tackle the barriers to work caused by housing benefit. However, the best way of doing so is not to impose more complexity on the scheme, but to improve standards of administration, so that people can have confidence that they will get the money that they are entitled to, on time. Although housing benefit administration varies greatly across our countries, I am determined, as the Minister responsible for housing benefit, that a decent housing benefit system becomes part of the solution in enabling people to get to work and not, as is sadly sometimes the case in some areas, part of the problem.
We have built and are still building a strong, stable economy. There are problems and uncertainties in the world economy, but the United Kingdom economy as a whole is coping well. The economy is growing, and although the labour market has weakened a little since the summer, activity continues at high levels. Employment in Scotland is certainly high. The employment rate is 73.4 per cent., with 2.38 million people in work— an increase of more than 100,000 in the past four years. We have the right policies in place to deal with change so that those who lose their jobs can return to work quickly, and those who have been out of work for some time are given the chance to reconnect with the world of work.
With the support of the new deals, nearly 70,000 people in Scotland have been helped into work. In Glasgow, nearly 6,500 young people have found work through the new deal. Another 1,000 long-term unemployed people have moved into work through the new deal 25-plus.
584 Because we have built a strong economy and introduced measures such as the new deals, unemployment in Glasgow has fallen by more than a third, and long-term youth unemployment by more than three quarters in the past four years. That represents a major victory for those young people, their families and their communities. We all agree that there is nothing worse than starting one's adult life workless, rather than in work.
We are constantly improving the new deals to help people match their current skills to vacancies in the labour market. The new deals also help clients to gain new skills through education and training to meet the needs of local employers. The Government's skills, education and training agenda is crucial to reducing unemployment. We want people in work and we want work that pays, but in the knowledge economy of the 21st century, we want work that is skilled.
As we announced in November, we will soon be launching pilots for our new StepUp programme. In April, a pilot will start in East Ayrshire and another will begin later in Dundee. I noted my hon. Friend's suggestion that one should be in her constituency. The pilots will test the provision of transitional jobs to act as a stepping stone for long-term unemployed people moving from benefits into work.
As part of our wider approach to helping those facing greatest disadvantage in the labour market, we are investing some £40 million over three years to help people who are facing problems of drug misuse into work. My hon. Friend spoke with great force about the appalling scourge of drug— often hard drug— misuse in Glasgow. Although that has echoes across the countries and in my constituency as well, we are aware of the problems that there have been in her city.
That investment will fund the "progress2work" project which will provide targeted, specialist support and provision for those people. Pathfinders for the project will begin operation in early April and include the Glasgow north and Glasgow south areas.
We have introduced employment zones to help long-term unemployed people in some of the most economically deprived areas of the country. Employment zones are looking at innovative ways to find local solutions to local problems. That represents the Employment Service at its most local, speaking face to face with local communities to find solutions. The employment zone in Glasgow works with local organisations such as the Wise Group, and has already helped nearly 2,000 people find work.
We are determined to ensure that everyone who can work has the opportunity to do so, and not only those who get jobseeker's allowance. We all know that there is too much economic inactivity in our community that JSA statistics do not illustrate. The majority of lone parents say that they would like to work with the right sort of support. The Disability Rights Commission cites the labour force survey, which shows that 1 million people with disabilities are not in work but would like to be. I heard some of the earlier debate about people with learning disabilities and difficulties. I know from personal experience that many such people would dearly like the opportunity that the rest of us expect of being able to join the labour market. They are right to have that expectation and we are right to support them.
585 Our job is to ensure that aspirations become reality. That is why we need a clear work-first approach. Our new Jobcentre Plus service, which my hon. Friend noted, is operating in 56 pathfinder offices and will give all benefit claimants the opportunity to find out about the help and support that is available to allow them to move into work through a work-focused interview. In such an interview, the individual can sit down with one of our personal advisers and talk about all the issues and problems that he or she has in terms of getting into work, whether they relate to child care or anything else. The pathfinder offices include sites in Aberdeen, Livingston, Greenock and Port Glasgow. A few months ago, while visiting Scotland, I had the opportunity to visit the Livingston pathfinder office— a modem, bright 21st century approach to these issues. It is situated in the middle of a shopping centre. Nothing could be more accessible. I should like to pay tribute to the manager of that office, Barbara McManus, and her colleagues, for their excellent work for the local community.
Lone parents with a youngest child of school age already benefit from having a work-focused interview at the start of their claim to income support. From April, the interviews will be extended nationally to lone parents with a youngest child of three years or older. All lone parents who are out of work can benefit from our new deal for lone parents, which offers specialist help and advice to enable the lone mother— or sometimes lone father— to take up work. By the end of last October, the scheme had already helped more than 2,200 lone parents in Glasgow to get a job, including 199 in Maryhill.
Specialist help is also available for people on incapacity benefits through our new deal for disabled people. During the pilot phase, more than 8,200 people were helped into work. In the summer, we began to launch a national network of job brokers who work with people on incapacity benefit to help them access the labour market. These national programmes are complemented by our action teams for jobs, which work with local organisations to find innovative solutions to the problems faced by people who often come from the most disadvantaged 586 backgrounds, including those suffering from disability, as well as lone parents, homeless people and people with drug or alcohol problems.
Action teams take their services to the heart of their local communities and work closely with employers. They also work closely with other agencies such as social inclusion partnerships in Scotland to ensure that regeneration of the physical environment is underpinned by social regeneration. The action team in Glasgow has been so successful that, at the start of this year, it was split into four. Its collective budget has been increased by more than 700 per cent. When I visited the action team working in Clydebank— the West Dunbartonshire action team— I saw again at first hand the excellent way in which my colleagues in the Employment Service are working with others to help people to find work, sometimes when they have not been in work for many years.
Our objective is to ensure that everyone who can and wants to work has the opportunity to do so. Not enough was done in the past, and too many people have found themselves written off.
We are offering more support through Jobcentre Plus and the new deals. We have introduced tax and benefit changes to make work pay, and we are providing more help with preparation and training to make work skilled.
Our new approach, backed by Jobcentre Plus, will make a major contribution to tackling exclusion, combating poverty, and providing more opportunity and choice for all.
Again, I congratulate my hon. Friend, who works energetically for her constituents, on raising an important matter that affects her constituents in Glasgow and too many people throughout our land. We shall meet colleagues from Glasgow city council and consider some of their proposals.
The debate has been a useful opportunity to raise important issues. We have made progress, but none of us is complacent. I am sorry to say that there is much to do, and we shall get on with that in the years to come.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-five minutes past One o'clock.