Debate on the Address — House of Commons, 2015-05-27
Topic: Macroeconomics
Christopher James Evans (Labour, Centre-left): Thank you for calling me, Mr Speaker, and may I say what a pleasure it is to see you back in your place? Those of us who were Members of this House on the last day of the last Parliament remember how shabbily you were treated by some Members on the Government Benches. It is indeed fortunate that you are back as Speaker of the House of Commons. No one has been a greater champion of Back Benchers and no one has done more to promote this place and demystify it to the public, and for that service I thank you, sir. Five years ago this very day, Mr Speaker, you called me to make my own maiden speech. I still remember the terror and chill running up my spine as I watched the then hon. Member for Argyll and Bute make his speech. As I watched him, I remember thinking how bad my speech was, how I wanted to bury it forever and forget it ever happened. What we have seen today is the emergence of someone who I believe will be a great parliamentarian and will make a great contribution to this House. I for one welcome the new hon. Member for Argyll and Bute (Brendan O’Hara) and his colleagues to this place Like other Members, I pay tribute to the proposer of the Humble Address—it seems like a long time ago now. As one whose political awakening began with a book on President Kennedy, it was good to hear so many references to the great man by Parliament’s greatest Kennedy devotee, the right hon. Member for Chelmsford (Mr Burns). The seconder of the Humble Address, the hon. Member for South East Cornwall (Mrs Murray) demonstrated an abiding love for her home village and a passion for the fishing industry. No one in this House has a greater understanding of the tragedies that fishing communities often face, and I am sure that her husband would have been rightly proud of her contribution today Like other Members, I pay tribute to the brave members of our armed forces. The job they do should be rightly honoured and celebrated. However—coming to the Gracious Speech—we cannot talk about jobs, growth or indeed the economy without mentioning what I believe is the elephant in the room: welfare reform. Whatever their political persuasion, the question any Government face is this: how can society move forward when human talent, potential and resources are wasted through worklessness and a lifetime on benefits My attention was immediately drawn to the full employment and welfare benefits Bill. It is important that Ministers report to this House annually on job creation and apprenticeships, and I support the annual household welfare cap being reduced from £26,000 to £23,000. Work should always pay more than benefits. That, I believe, is a cornerstone of the benefits system. However, I am concerned that measures such as the full employment and welfare benefits Bill only pay lip service to the problems, treating the symptoms and not addressing the causes. The present welfare system teaches the wrong values, rewards the wrong choices and, worst of all, hurts those it should be helping In recent years, there has been a trend of jobs being created only in the highest-paid and the lowest-paid industries; those in between are hollowed out. Too many young people leave university only to find no job opportunities in their field of expertise. People in their 50s and 60s find themselves redundant and are unable to return to work, and those who want to retrain to secure a better life find little or no support. To put it bluntly, our system is letting them down. That, to me, is not just a Government failure; it is a moral one Since the early 1970s, the UK Government have tried 34 different schemes to get long-term unemployed and young unemployed people into work. Since 1983, more than £13 billion has been allocated in Government funding to tackle youth unemployment. Flagship programmes have inevitably resulted in failure. In 1983, the Thatcher Government launched the youth training scheme, which included two years of training and planned work experience for 16 and 17-year-old school leavers. There was an allowance of £29.50 a week for participants in the first year, and £35 a week in the second year. However, research by the University of Newcastle in 2004 found that women who participated in the scheme saw little or no impact on future job prospects. For men, those who were on YTS spent more time unemployed later in life than those who did not participate in the scheme Successor schemes such as the Labour Government’s new deal for young people created a mandatory employment programme for all young people aged 18 to 24. However, the 2007 National Audit Office report, "Helping people from workless households into work", found that the net cost to the Exchequer in 2005-06 was £390 per participant. This means that the Government spent £390 more per participant than they got back in benefit savings, increased tax revenue and reduced tax credit costs payable to people who move into work. The Institute for Fiscal Studies found that for all this cost, the new deal for young people increased employability by only 7% or 8% The problem persists, even with the Work programme. Long-term unemployment remains stubbornly high at 32% of the unemployment rate. At present nearly 200,000 young people have been unemployed for over a year. Between 2010 and 2015 there was a 50% increase in the number of young ethnic minority people out of work. We can move forward only by understanding that throwing billions and billions at the problem has not worked. The figures speak for themselves But it is no good standing here and setting out the catalogue of failure, for which both major parties must take their share of the blame. Anyone who cares about the future of our country and the lives of our constituents must seek solutions to this problem. To me, welfare reform regardless of political consequences is morally the right thing to do. Welfare dependency tears apart the ties that bind communities. Joblessness damages families for generations. It sets people and groups against each other. It divides people into tribes with no common purpose. Reversing this will take a generational effort. We cannot and should not accept that some people will be trapped on welfare for life. We cannot and should not accept that a certain number of people will be unemployed. We cannot and should not accept that long-term unemployment is here to stay We can solve this problem, but there needs to be a new approach to the worlds of welfare and work. It requires a fundamental shift to a system based on the principle of something for something, as William Beveridge wrote years ago. We cannot forget that the tension in the welfare system is that people in work like the insurance of the safety net that the welfare system gives them, but they do not want that insurance to be abused by people who are not really seeking work. People who lose their jobs should have a fund available to keep them going while they find work. They will get out what they have paid in. We must remember that the money paid in taxes belongs not to the Government, but to the people, and it should be there for them when they need it Based on the contributory principle, we need to see individual top-up welfare accounts running alongside universal benefit, providing people with a fund that is there for them if they lose their job. Also, we need a new approach to people who are searching for work. Jobcentre Plus, which was originally founded as a labour exchange under Winston Churchill when he was a Liberal, is not fit for purpose. Although 75% of jobseeker’s allowance claimants move off benefits within six months, only about half of them are still in work eight months later, while a third are claiming benefits again The goal should be to support claimants into sustainable long-term employment, and that should be delivered by providing targeted, local, individual support for jobseekers, not after six months, but from day one. If someone loses their job on Friday, their first appointment on Monday should be with a personal adviser from Jobcentre Plus. Unfortunately, as we have seen today, the OECD report found that the UK has the worst skills gap in the developed world between NEETs and young people in employment. Even with job creation, the skills gap is too great to get young people into long-term employment. The current one-size-fits-all model is wrong. People are leaving university or further education, increasing their skills in childcare, engineering and so on while they are working, and coming to jobcentres for help but not finding the jobs they need It has been shown that locally based schemes work best. What is needed in future is a partnership between local business, people and charities which put together personalised plans that can overcome the barriers for people coming back into work. It is time to change the terms of the welfare reform debate. What has gone before has not worked. We now need a new approach, and I hope we can debate that when the Bill comes before the House.