The Committee consisted of the following Members:
Sarah Davies, Alison Groves, Committee Clerks
† attended the Committee
The following also attended, pursuant to Standing Order No. 102(4):
The Chair: Welcome to the Welsh Grand Committee. I have a few announcements to make. First, I thank the people of Wrexham, the local council and everyone who has helped to facilitate our visit, including the hon. Member for Wrexham (Ian Lucas). This is the first Welsh Grand Committee to sit formally in Wales for 10 years, since 12 March 2001 when it was held in Cwmbrân in south Wales, so this is quite an important meeting, not only in itself but because it is taking place in Wales and outside Parliament.
I need to explain the domestic arrangements. The microphones are controlled by Westminster Sound as part of the normal process with which hon. Members will be familiar. You do not—repeat, not—need to press the button; just feed the dog and leave the controls alone. As for Welsh translation, you have simultaneous translation equipment. It is already set to the right channel; do not interfere with it but use it as and when you need to. Water can be consumed in here; there is tea and coffee outside, but it must remain outside. I will suspend the sitting at 1 o’clock. We are working off the clock that you can all see on the wall. The debate will resume in the afternoon.
Hon. Members may speak in Welsh if they so wish. There will be a simultaneous translation, which Hansard will record. The Minister will make a statement on which there will be questions, and then we will move to the main debate.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): On a point of order, Mr Havard. I very much welcome the fact that we are sitting in Wrexham in Wales; I hope this will be a pattern for the future. That is to the good, I am sure, but I hope that in future the Minister will extend to us the courtesy of supplying a copy of his speech. That will enrich and inform our proceedings and it would be a courtesy to all members of the Committee.
The Secretary of State for Wales (Mrs Cheryl Gillan): Further to that point of order, Mr Havard. I echo the thanks you gave at the beginning of our proceedings to the people of Wrexham and everyone who has facilitated the Welsh Grand Committee meeting outside Westminster for the first time since 2001. I am pleased that it is being done in agreement with Her Majesty’s Opposition. I believe that by coming out of Westminster and into Wales, we no longer sit inside the Westminster bubble and we make ourselves more accessible, but I hope that we will have good feedback from all members of the Committee, so that we can decide whether it is something that we do in future. In the interim period, I have been very pleased with the arrangements that have been made and I echo your thanks to everyone.
The Chair: I think we will need to learn a series of lessons from the experience—practical and financial, and about how we facilitate such things. Parliament has met in Wales in different forms through Select Committees and other bodies. This body—the Grand Committee—has not met here for a while, but we need to learn from the experience. Mr Llwyd, I am sure that the Minister heard what you said about future activities. We will now move to the Minister’s statement.
I congratulate the Committee and all those who have been involved in organising today’s sitting. It is extremely important that the Welsh Grand Committee should meet in Wales. That is a statement of the commitment of both the UK Parliament and the Government to the people and economy of Wales. I hope that this is the first of many occasions on which UK Government Ministers address the Committee in Wales.
I apologise to the right hon. Member for Dwyfor Meirionnydd for not having brought a speech; I have come to talk. He is very welcome to read Hansard afterwards, but I tend to prefer to talk from my own experience and about my own views than to read a statement prepared by officials.
Committee members will be aware that the Work programme marks a significant step forward in how we operate welfare-to-work programmes in this country. We have learned lessons from what was done under the previous Government and what has been done in other countries, and we have shaped a contract that will give the long-term unemployed the best possible opportunity to get back into the workplace.
I stress that the focus is on the long-term unemployed. I regard all unemployment as a challenge. I regard current levels of unemployment as unacceptably high, and as a challenge—a problem that we will have to work very hard to solve. In particular, I regard the challenge of long-term unemployment as one that should be right at the top of a Government’s priority list. The monthly unemployment figures, which we rightly look at with concern, have two features: first, the majority of those who find themselves on jobseeker’s allowance move back into work relatively quickly, but, secondly, a minority do not. They are the ones most likely to benefit from the Work programme and all that it involves, and they are right at the top of our priority list.
The Work programme will provide support to adult jobseekers over the age of 25 who reach the 12-month point in their search for a job. That figure will be nine months for young people under the age of 25. Those from more challenging backgrounds—for example, former offenders or people who have been out of work for 22 out of the previous 24 months—may enter the Work programme earlier, after three months.
The Work programme is different, in that we are no longer making any attempt to design from the centre. The providers that we have contracted have complete freedom to operate. They can do what works, and they can respond and adapt to best practice. That is particularly important because giving them that freedom means that they will be looking for best practice—the best ways to help the long-term unemployed.
Crucially, we will pay providers only when they are successful. On the payment structure, for the first three years of the seven-year contracts, providers will receive an up-front 10% payment of their potential eventual fee, and they will receive nothing after three years. The next time they are paid anything will be when someone has been in work for six months, and thereafter they will be paid only in instalments, typically over a period of another 12 months. There is therefore a real incentive for providers not only to find employment for someone, but to find the right employment for them, because if they simply shoehorn them into any old job, the chance of them staying in it for more than 18 months is pretty slim. As well as getting people into work, a crucial part of the Work programme is making it essential for providers to deliver post-employment mentoring and support.
Providers have complete freedom to operate, and the payment-by-results system goes further than any that has been tried anywhere in the world. In total, providers throughout the UK are investing £580 million of their money in the Work programme, and they will lose that money if they are not successful. That offers the long-term unemployed the best possible opportunity that we can give them of having the best support for getting into work.
In Wales, we have a good mix of prime contractors and organisations working with them. We have divided the whole UK into 18 geographical areas, with two or three prime contractors being involved in each area. In Wales, there are two—Working Links, which has a long-established track record in Wales and is familiar with the challenges of the Welsh labour market, and Rehab JobFit, which is a partnership between the private sector and the voluntary and community sector. Rehab JobFit is one of our two voluntary sector prime contractors. I have been very impressed so far by what they have been doing. I have had a lot of dealings with Rehab JobFit, in particular.
I have been very impressed so far by what they have been doing. I have had a lot of dealings with Rehab JobFit, in particular. My right hon. Friend the Secretary of State for Work and Pensions has been to south Wales to see the initial work that it is doing. We are optimistic; the two organisations have good ideas and the right approach to try to make a real difference to the long-term unemployed in Wales. If they are not successful, they will not be paid. They will not receive the funds that they will need to pay off their investment. There is therefore a real incentive for them to work as effectively as possible to help people throughout Wales.
I encourage right hon. and hon. Members on both sides of the House to visit the two organisations and local providers, whether it is prime contractors doing the work or local organisations doing the work on their behalf. Please visit them and form a partnership with them. We Members of Parliament have an important role to play in our areas. One of the things that will determine the success of the Work programme is the way in which local employers and Work programme providers operate together in partnership.
I have described the Work programme as almost a giant employment dating service. It is about finding the right individual for the right job. We can make quite a difference to small businesses by helping to remove the challenges of recruitment. An advert in the local paper
Hon. Members on both sides of the House can play an important role by working with their local providers and their local business communities to bring the two together. Ultimately, we all share the same goal. It is all about tackling the problem of long-term unemployment, and helping those on sickness benefits who have the potential to get back into work—perhaps doing something different from what they did before—to do so. If we all work together as individuals within our communities, and really encourage and support the providers in doing the job that we all need them to do, we can make a difference, which fundamentally is what the Work programme is about. We all need it to succeed, because the human cost of it not succeeding is just too great.
The Chair: Before we take questions, I have been asked whether supplementary questions can be asked. I am told that the rules are as they are at Westminster: there will be single questions to the Minister at this point.
Mr Peter Hain (Neath) (Lab): Does the Minister know how many people on jobseeker’s allowance are chasing every job vacancy in the Rhondda? I ask because the answer is 33 people for every vacancy in the Rhondda constituency, compared with fewer than three for each vacancy in his Epsom constituency. He likes to talk tough about making work pay but, if there are no jobs, what does he expect people to do? What does he say to the 2,500 people in the Rhondda who are looking for work, when their unemployment plight is 10 times worse than it is in his constituency? Does he expect them to get on a bike and head for Epsom?
Chris Grayling: Of course, there are different challenges in different places in Wales. In Wrexham, where we are today, there are about three times as many people on jobseeker’s allowance as there are vacancies. The right hon. Gentleman will know from his experience as Secretary of State for Wales that the labour market is not static. Each year throughout the United Kingdom, Jobcentre Plus takes in about 4 million to 5 million vacancies. Even at present, in what are clearly more difficult times economically because of the difficult events happening throughout the world, about 90,000 job vacancies are advertised by Jobcentre Plus each week. The estimates have always been that that represents only about half the total number of vacancies in the economy.
My message to the right hon. Gentleman is that we are looking for 650,000 or so people to be on the Work programme by the end of the financial year. We want to ensure that the people whom we are helping—the long-term unemployed—are in the best possible position to take advantage of the vacancies. He will know from his own
Mr Llwyd: The Minister said earlier that, where possible, he would like people who have been on long-term sickness benefits to go back into work. We would all agree with that, but I urge on him the need for great sensitivity. All our offices are inundated with people who are now subject to the relevant checks and appeals, and many of them will not be able to go into any kind of work. I urge on him the need for sensitivity in practice. There is an idea in the tabloid press that if people are not in work they are scroungers; that is unacceptable.
Chris Grayling: I share the right hon. Gentleman’s view. People on long-term sickness benefits are not, and should not be characterised as, scroungers. There are many people for whom life has gone badly wrong, and who are not able to continue their previous career, but who could, with the right help, do something else. I accept also that the assessment system that we inherited 18 months ago was not fully fit for purpose. That is why I commissioned Professor Malcolm Harrington to review the way the work was being carried out, and to make recommendations about how we could improve the situation.
We implemented all Professor Harrington’s recommendations in time for the start of the national roll-out of the incapacity benefit reassessment earlier in the year. He is about to produce his second report for us. It is my desire and goal to ensure that the system is as fair and accurate as it can possibly be. I do not want to try to force people who cannot work into work, but I want to challenge many people who may think that they cannot work to believe that they can do something more with their lives. I think that the right hon. Gentleman and I share that aspiration, and I certainly share it with the groups who represent the individuals in question. The issue is one of finding the right balance, and I assure the right hon. Gentleman that we shall do all we can to find it.
Jonathan Evans (Cardiff North) (Con): Will my right hon. Friend help the Committee to understand his definition of long-term unemployment? Would that be unemployment just in the course of the last year or so, or would it encompass many of the young people in Wales who have never had a job, as I understand it to do? That would cover not just the past 12 months, but many years in which the right hon. Member for Neath was responsible for those matters.
Chris Grayling: My hon. Friend is right to make that point. I make two points in response. First, listening to the Opposition, one would believe that youth unemployment was the creation of the present Government, and has come about in the past 18 months. One would not believe that it had been rising steadily since the early part of the previous decade, under the previous
Ian Lucas (Wrexham) (Lab): The Social Market Foundation produced a useful report on the Work programme in August, and I am sure that the Minister is familiar with it. It pointed out, first, that unemployment—on the claimant count—has risen by 110,000 since December 2010. It went on to say that as a result of the increase in the number of people out of work under the present Government, and because of their policies, there are
Chris Grayling: I was interested, when I read that report, to read the narrative that went with it, which said that the Social Market Foundation had been one of the authors of the Work programme, through its research work. At the time I was not even aware that it had done any. I have great respect for the Social Market Foundation as an organisation, but on this occasion it is just plain wrong. It was saying that somehow we should provide more money to a group of organisations, which, four months previously, had signed contracts for the programme. Those are serious international organisations, which will have looked hard at the Work programme, what it needs to achieve, and whether they would get a return. They did that in April, and they were signing contracts as late as early June. I hope that the hon. Gentleman is not trying to tell me that, come August, the world had changed so much that those decisions were invalid.
Roger Williams (Brecon and Radnorshire) (LD): All of us, whatever side we are on in these matters, will be very concerned about young people who find it difficult to gain employment, and who start their lives in difficult circumstances. The Minister has set out the criteria for access to the Work programme. Will he consider giving earlier access to young people, because it is so important that they gain that routine in their lives and that engagement with employment?
Chris Grayling: I very much agree with my hon. Friend. Let me set out briefly how we are approaching the problem of youth unemployment. We recognise that it is a very serious issue. We examined carefully the patterns of unemployment among young people—the amount of time that they spend on benefits, and the time at which they move back into employment and sign off benefits—and we formed a view that there was a period of time when what they needed more than anything else was a chance to get into the workplace and gain their first experience of the work environment. In particular, we need to try to break down what I
What we have done was prompted by an e-mail that I received from a woman soon after I became a Minister. It said, “My daughter has just sorted out a month’s work experience for herself with a local firm. The jobcentre has said she can’t do it, because the rules say that she has to sign off benefits if she does.” That was the crazy system that we inherited, and we took immediate steps to change it, but we have gone further than just changing it. We have made it clear that people can do work experience while still on benefits, and we are using the Jobcentre Plus outreach teams—the employer liaison teams—to identify work experience opportunities for young people. As part of a nationally organised work experience scheme, we are finding tens of thousands of places, through which young people can get into the workplace for up to eight weeks, and there is a clear link between that scheme and the potential to move into an apprenticeship; mechanisms have been created to move people from one to the other. My hon. Friend will be aware that we have launched 100,000 new apprenticeships since the election.
We have just launched a sister scheme to our work experience scheme, which is called sector-based work academies. That combines a short training module with a period of work experience, so if someone is going into the hospitality industry, they might do a two-week food hygiene course at the local further education college and then move into a period of work experience. We hope and believe—and certainly there are some signs that this is the case—that once a young person has got into the workplace, they are valued and kept on in a way that would not happen if they were applying cold.
If we take the combination of the Work programme support for young people—which, for the hardest-to-help young people, comes after three months, and for young people without the same level of challenges, after nine—and, in the interim nine months, the work experience programme and the sector-based work academies, we think that in the next couple of years we will be providing support to about 350,000 young people who are struggling to get into work. I think that we have got the right mix. If we find that there are other things that we can do to strengthen that mix, we will certainly do them. This issue is a priority for us. We regard it as a real challenge for the UK. The headline figures are slightly distorted by the fact that almost 300,000 young people in full-time education who are looking for a Saturday job show up in them, but that does not diminish the scale of the challenge, particularly in such places as Wales, and it must remain a priority for us.
Chris Ruane (Vale of Clwyd) (Lab): In my constituency, 46% of workers work in the public sector, as do 45% of workers in the neighbouring constituency of Clwyd West. The Tory theory is that when those workers are sacked by the Tory Government—up to 25% of them will be sacked—private industry will automatically move in and take them on, and everything will be hunky-dory. That is not happening. Where are the jobs coming from for the public sector workers and, specifically, the young people in my constituency? The future jobs fund put 420 young people back into work in an 18-month period. How many will the Minister’s proposals put back to work in the next 18 months?
Chris Grayling: The problem with the future jobs fund was that it involved temporary placements in public sector roles. We believe that sustainable employment is created in the hon. Gentleman’s constituency and elsewhere in Wales by supporting and encouraging the growth of the private sector to create long-term, sustainable jobs that are not funded by a deficit that we cannot afford. Our goal is to do everything that we can to support and encourage business growth and to provide schemes—apprenticeships, for example—that bring young people into a work environment. [Hon. Members: “It’s not working.”] Well, I have looked at the unemployment figures month by month over the past year, and we have seen ups and downs in the labour market in Wales. However, there have also been increases in private sector employment, which is what we need. Through the new enterprise allowance that I launched earlier this year, which is in the process of going nationwide, we aim to support people into self-employment, too.
I say this to the hon. Gentleman: continuing to borrow more money than we can afford to, in order to fund a bloated public sector that we inherited from the previous Government, is not an option. One reason why he and his colleagues were unsuccessful at the general election was that they had introduced unsustainable economic plans, and the British people realised it.
Karen Lumley (Redditch) (Con): What discussions has the Minister had with the Welsh Assembly about bringing private investment into Wales? He will know that inward investment to Wales has fallen dramatically as a result of the previous Labour Government.
Chris Grayling: My colleagues and I have regular discussions with the Welsh Assembly Government and with Members of the Welsh Assembly. My colleague, Lord Freud, who is responsible for liaison between our Department and the devolved Administrations, also has regular meetings with them. I have had meetings with Carwyn Jones and other Administration members in Cardiff. We regard working in partnership as crucial if we are to try to secure investment and skills for Wales and help ensure that Welsh business has access to the right people; this is a team effort. Although the Assembly Government in Cardiff are controlled by our political opponents, there are times and places in which political differences are irrelevant and in which we must work closely in partnership together. It is certainly the goal of the Government at Westminster to do everything that we can to work with the devolved Administration to encourage employment growth, and economic growth, in Wales.
Chris Grayling: We will in due course. Our key measures only really kick in after six months, because that is when we start to make payments, and get reports and requests for payments from providers. We have started to make a small number of payments to providers. For people on employment and support allowance, payments start after three months; for jobseeker’s allowance it is six months. Our plan is to publish, shortly, initial documentation and information about referral levels.
From next year, on a three-monthly basis, we will publish details of what has happened to each cohort of people that joins. The Work programme is, of course, a two-year scheme, and we want to publish data to reflect, as closely as possible, the progress that it is making. From next year, we will track the first three-monthly cohort, then the second, third and so on. Will we track that progress as national statistics, so monitoring will be organised and published formally under the auspices of the Office for National Statistics. Once the first cohort has completed its first year of the programme and we have a real sense of how it is working, we will publish information on a regular basis. We will be as transparent as we can, not only to Members of Parliament, but to providers, because I want them to see how well the others are doing to give them an incentive further to chase after best practice.
Stuart Andrew (Pudsey) (Con): Andrew. Diolch yn fawr, Mr Cadeirydd. Unemployment is a problem that has faced successive Governments. To hear some of the Opposition Members speak, one might be forgiven for not realising that it went up by 270,000 since the Labour Government came to power. I welcome the Work programme. Does the Minister agree that the voluntary sector has a wealth of knowledge, a great deal of expertise and a successful track record of getting young people back into work, and that that is the valuable part of the programme?
Chris Grayling: That is certainly so. I am pleased that so many significant players in the voluntary sector, and some local projects, are involved in the Work programme. Rehab is a very good example of the welfare-to-work sector and the voluntary sector coming together as one, but as well as Rehab at the prime contractor level, there is, at subcontractor level, a variety of organisations that either provide complete welfare-to-work packages for the unemployed or introduce specialist skills into the Work programme to deal with issues such as homelessness. I hope and expect that the voluntary sector’s role will be a crucial part of the programme’s success. When we move on to develop the payment-by-results principle in other areas where Government operate, I expect to see the voluntary sector continue to play an important part in the delivery of the support that we provide.
The Chair: Order. I apologise to you, Mr Andrew; I was thinking of something else. I know that your first name is Stuart and your surname is Andrew. I am sorry about that slip of the brain. I call Nia Griffith—I have got that one right.
Nia Griffith (Llanelli) (Lab): Indeed, Mr Havard. The Minister rightly identified the important role of post-employment mentoring. Will he therefore explain why, whereas under previous Labour programmes, success criteria demanded that the person be in almost continuous employment for six months, under his new Work programme, success can be claimed if they are in and out of work and have numerous short periods of employment? How will that help a person’s employment, and how will that build up confidence and give them the opportunity to be in a proper job?
Chris Grayling: We thought carefully about that. The hon. Lady makes a fair point. The question is whether to rule out a situation where a provider finds a three-month contract for somebody who has been out of work for three or four years, takes them back to find another job at the end of that contract, having clearly taken them a step further towards long-term employment, and does not receive any reward for it.
There was a problem with the structure of the previous contracts. The flexible new deal, which was partially up and running when we took office, is the only example we have that from period. It still had a number of the constraints that applied to the previous new deal, so it was not a complete black-box approach. It had adopted a payment scheme after three months and six months. We took two decisions: one was to extend the payment period dramatically, so that it could go up to 18 months. That makes it difficult for a company to maximise its return by providing lots of little jobs over an 18-month period. However, it does reflect and respect the fact that in some cases there may be a real reason for finding somebody a three-month or two-month placement or whatever in employment, and then taking them back and finishing the job. At the end of the flexible new deal, the person concerned would not go back to the provider for the work to continue; that was the end for them.
Providers are clearly responsible for that individual for a two-year period. They cannot earn a success fee until that person has had six months’ employment, but that success fee is still only 35% of what they could potentially eventually earn, if they succeed in getting someone into sustainable employment over the 18-month period. We thought that was the right balance.
Mrs Siân C. James (Swansea East) (Lab): What has the Minister been doing to tackle female unemployment in Wales? That is a particular issue. In my constituency of Swansea East, for example, we have 4.5 people chasing every job, and 26% of the total unemployed are women. That means one in four of those seeking work are women, and I am very concerned about that.
Chris Grayling: The hon. Lady is right to be concerned. I regard any unemployment as unwelcome, male or female, young or old. There is clearly a challenge as regards female unemployment at the moment. I hope that one of the groups that will particularly benefit from the new enterprise allowance is women who are out of work. My experience is that women often find self-employment a valuable way to balance the different challenges in life. One reason why female unemployment has risen is the reduction in the number of part-time jobs. An encouraging sign over the past year has been that the number of full-time jobs has grown. What has been discouraging is a fall-off in the number of part-time jobs; that is why, I think, we are seeing women particularly affected. Real help to get them into self-employment is a positive part of the measures.
The other thing that we are doing, with the introduction of universal credit, is creating a much simpler, more flexible and appropriate benefit structure to help women back into the workplace, and back into part-time work, without the rigidity of the 16-hours cut-off, which I think provides a disincentive for many women to get into work. Beyond that, what we need and will continue to work towards is economic growth.
Chris Ruane: On a point of order, Mr Havard. I think the Minister might have inadvertently misled the Committee, because he said that he has been monitoring the number of private sector jobs in Wales carefully over the past 12 months, and that they have increased. According to the nifty little machine owned by my hon. Friend the Member for Wrexham and Channel 4’s FactCheck, the number of private sector jobs in Wales over the past year has gone down by 52,000.
I want to address Mr Hywel Williams’s request to be allowed to ask a question. He was not here for the statement, so, strictly, under the rules of “Erskine May” the answer is no, but we had a discussion earlier, and as he is leading for Plaid Cymru today and did not make a statement, I am minded to balance the argument a little by allowing him to ask his question. I am sure that the Minister will be able to respond. We will do that before I take Mr Lucas’s point of order, should it be one.
I apologise to the Committee. I was on the same train as the hon. Member for Clwyd South, but her knowledge of the road from Crewe to Wrexham is clearly far superior to mine, which led to my being delayed.
I am interested in the Minister’s answer to the hon. Member for Vale of Clwyd. We would all be very happy to see growth in the private sector and in the number of jobs. What mechanisms are in place to monitor the growth of the private sector in Wales? At what point would the Minister be satisfied that the private sector is growing sufficiently, or growing insufficiently, thereby requiring the implementation of a plan B?
Chris Grayling: The hon. Gentleman has misunderstood me. Two, three, four, five months ago there was a period in which we were seeing monthly growth in private sector employment. The private sector in Wales can and does create jobs. I fully accept that right now we are going through a difficult period in the labour marker. The private sector in Wales is crucial, and it can create jobs, it does create jobs and, over the past 12 months, it has created jobs. We need to see more of that. We have to get the economy in Wales growing and creating jobs. I do not believe that the private sector can compensate, or should try to compensate, for what Wales really needs, which is growth and a thriving public sector.
On what we do and how we do it: it is about the partnership that needs to exist between the Welsh Assembly Government and the national Government; it is about national measures that can make a difference, such as a reduction in corporation tax and targeting that reduction on the creation of intellectual property; and it is about the creation of enterprise zones, on which I believe the Welsh Assembly Government are moving to adopt a similar approach to the Government at Westminster.
Our job as a Government is to sort out the deficit. The hon. Gentleman talks about a plan B, which actually means that Britain should borrow more. My belief is that if Britain borrowed more, there would be a loss of confidence in the business community, a reluctance to invest and a reduction in the willingness to invest, and ultimately, higher unemployment. Alongside that we need measures for growth, such as the measures I have set out today. We need to try to ensure that we provide the best possible support to the unemployed and to the employers that may hire them. We need to bring them together and to ensure that we have people who are motivated, skilled and ready to move into jobs as and when they become available.
Ian Lucas: On a point of order, Mr Havard. One of the great benefits of the parliamentary system is its interactivity and the ability to intervene on speeches; one of the disadvantages of statements is that I am unable to address the many issues that I would have loved to debate with the Minister this morning because I cannot intervene to put such matters to him. When further issues are considered, particularly when a Minister does not provide a written commentary on the statement, which is the normal format for ministerial statements, would it not be preferable for the Minister to make a speech so that interventions may take place?
The Chair: I commented earlier on this being the first time that the Grand Committee has met in Wales for 10 years. We can learn lessons about how we do our business in future. The hon. Gentleman has made some valid suggestions on how we might structure discussion to better facilitate Ministers and Members. There is a formal process for making statements, and we have agreed to that today. Under the rules, a statement does not have to be made. It is at the discretion of the Chair to allow the statement at all. Under the current system, I had to agree that the statement could take place. We need some discussion and revision of how we agree to conduct the Welsh Grand Committee in the future in any event. The suggestion that the hon. Member for Wrexham makes is sensible, fruitful and productive.
May I just say that I should have declared an interest before we started? My grandfather came from Brymbo and my mother was born there, so I have form in this part of the world. There is a willingness to try to engage the Committee with the people of Wales and the people of Wales with the Committee. Some discussion and revision would be welcome, so that we could do that in the future.
The Chair: The short answer today is no. That is what I was alluding to earlier. If we decide that in future we can do that, we will. The Minister is welcome to stay and listen to the discussion, should he wish, but we are constrained by the discussion we have agreed.
Mrs Gillan: On a point of order, Mr Havard. It may be of assistance to you in the Chair that we have exchanged some views on the Government Benches. The Minister who I have invited here to answer questions on the Work programme, which is his area of expertise, is willing to take further questions if you feel that that is allowed.
The Chair: I am advised that on this occasion the answer has to be no, because of how the rules are constructed and the advice we have given on how we can conduct the Committee today, which may be unfortunate, but I am constrained by the rules. The Minister can stay, as I offered, and speak in the debate should he wish. People can make interventions in the way that Mr Lucas wished. We can do that. That is what the rules allow today.
Hywel Williams: On a point of order, Mr Havard. If I am fortunate enough to catch your eye in this meeting, I wish to speak in Welsh. I want to ask about the official record, which I understand will be a record of the translation, rather than of the original Welsh. Is there any facility for my speech to appear in its original Welsh, as is done in the Welsh Assembly? Readers could then compare texts. That takes care of any worries that people may have about mistranslation or inaccuracies, which naturally creep in when translation is simultaneous. No offence to the translator, of course, who is a wonderful man.
The Chair: I am like Father Christmas, because the answer is no. The reason I say that is that facility does not currently exist. What I will say is that you have the facility to correct the record and see it before it is published and before it goes into the formal record at the end of the year. That is the system, no matter whether you are speaking English or Welsh. It will not appear in Welsh, but you can ensure that the English translation is a fair reflection of what you said in the medium of Welsh. Are there many more points of order, while I am here?
Chris Grayling: On a point of order, Mr Havard. This may not classify as a point of order, but I apologise, because I have to go back for a meeting with the European Commissioner responsible for oil and gas exploration, so I cannot stay for the debate. My apologies to the Committee.
The Chair: Clearly we have until 1 o’clock for the discussion to take place and then the meeting will suspend. This is your Committee, so I am largely in your hands on how you allow yourself sufficient time to speak. So, more interventions will mean less opportunity to make those wonderfully chiselled speeches that you have crafted on the train on the way up. That is a matter for you and I will try to facilitate the situation as best I can.
I will start by saying again how delighted I am that we have brought the Welsh Grand Committee out of Westminster and into Wales. Already, judging from some of the contributions that have been made, I think that people are pleased that we are here. I also thank the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), who is departing to go off to greater meetings, because he has enriched these proceedings. What I have been trying to do, right from the beginning, is to bring in those ministerial colleagues who are experts on matters that concern Wales, so that MPs in Wales have the opportunity to question them and to discuss those matters in a formal setting. I am most grateful to the Minister for coming today and I wish him a safe journey back to London.
One of the things that I have been trying to do with the Welsh Grand Committee—as the shadow Secretary of State knows—is to try to find a forum in which we can have meaningful debates and discussions about matters such as the Work programme. Indeed, the Minister who has just spoken to us follows the Chief Secretary to the Treasury, the Economic Secretary and the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), all of whom have come to the Committee to discuss their areas of responsibility in relation to Wales.
The hon. Member for Newport East makes a very good point. We should consider, if we can, with the authorities and the House authorities, and in agreement across the parties, how we can develop this process so that it is meaningful and reflects what we need to discuss in terms of the responsibilities that UK Government Ministers hold for matters in Wales. I would be very willing to engage in that discussion, not only with members of other parties but with the House authorities, on ways in which we can make this process more meaningful and perhaps on whether we take this Committee out from London more often, or to any other places.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): The right hon. Lady is right and I agree with everything that she has said, although I am a little concerned because a few months ago everyone in my party and many in her own were craving and asking and begging for a meeting of this Committee to discuss the boundary issue in Wales and other urgent matters. So I hope that what she
Mrs Gillan: It was not a Welsh Grand Committee, no, because I thought it was more urgent than that. It was a special meeting for all Welsh MPs to talk directly to the Minister responsible for that issue. I think it was felt that there was plenty of opportunity during the passage of the Parliamentary Voting System and Constituencies Act 2011 through the House of Commons. Any Member had the opportunity to speak in those debates and indeed I believe that several Members did. So we felt that there were enough forums in which Members could make their views known. However, I again take that point on board. I do not mean to be curmudgeonly about these things. I am trying to ensure that the business of this Committee reflects some of the matters concerning Wales that we need to discuss.
Ian Lucas (Wrexham) (Lab): I am grateful to the Secretary of State for giving way and I do not want to detain her, but I cannot let her get away with the statement that there was adequate time to discuss the part of the 2011 Act that applied to Wales. There was not—I know, because I was there for most of the debates—and many of the clauses dealing with Wales were not even discussed. If she had been there—she was not there—she would know that. The reality is that those clauses were never discussed and, frankly, her failure to hold a Welsh Grand Committee to enable us to talk about boundary changes just shows how embarrassed the Government are about their own policy.
Mrs Gillan: No, I am not embarrassed about the policy in the slightest. In fact, I disagree with the hon. Gentleman, if it is all right to disagree with one’s host—I am grateful to him for hosting us in his constituency. The truth of the matter is that I watched those debates and I have certainly read the record of them, and not everyone in this room today attended them.
It was interesting to see the very lengthy speeches and amazing contributions that unfortunately forced out the groups of amendments that would have enabled us to discuss the matter. I feel, therefore, that contributory factors from Members prevented the amendments being debated in full.
Mrs Gillan: Interestingly, I thought that this was of such importance to Wales that I asked my hon. Friend the Under-Secretary of State for Wales to sit in during the passage of the 2011 Act, and he was on the Front
The Chair: Order. That was a useful exchange in the spirit of what was discussed earlier, but as we are now in the main debate, I call everyone back to the subject under discussion and ask for interventions about the Work programme as it applies to Wales. We can have these other discussions at another time in another location.
To pick up another point, I am particularly keen on the Welsh language, and the points made by the hon. Member for Arfon are very valid. I want to ensure that the Welsh language has proper status and recognition, and if I can do anything to help and sustain that, I will be pleased to do so. Many people are employed in Wales because of their knowledge of the language. It helps them gain employment, and I have spent many happy hours discussing how we promote and sustain the Welsh language with the director of the Welsh Language Board, who, of course, has just been appointed Welsh language commissioner. I would be delighted to engage in discussions on that matter.
I am pleased that once again we have been able to have a Minister here who is an expert in this area. I therefore intend to keep my remarks to a minimum, because I am pleased with the turnout and want to ensure that the Government hear what people have to say. I hope that Members will make their views known on behalf of both their constituents and Wales.
The Work programme is vital for Wales and I want to put it in context today. Before doing so, however, I would like to thank Linda Badman, someone whom many Members of the Committee know. Until recently, she was director of Jobcentre Plus Wales, and over many years she has put in a lot of hard work and been very dedicated. Members may be pleased to know that she has moved on to a new role as head of medical services with the Department for Work and Pensions, and I am sure that we all wish her the very best.
I have spoken to Linda’s successor, Martin Brown—indeed, we have an official from Jobcentre Plus Wales here today—and I was pleased that he is very engaged with his new role, and he brings fresh thinking to this area. In fact, on 9 November there will be a meeting on jobcentres in the House of Commons, to which all Welsh Members will be invited. For the purposes of discussing this and other programmes, that might be of assistance. It is also interesting that Mr Brown is looking at how we can get efficiencies into the system so that we can do an even better job, although in my experience of visiting Jobcentre Plus, tremendous work is being carried out right across Wales.
We are radically reforming the welfare system, which is vital to tackling the blight of long-term unemployment that has dogged Wales for many generations. A long-term approach is absolutely necessary. The Committee heard earlier that the Work programme replaces a complex range of employment support, from the new deal to employment zones to pathways to work, because much of it failed to sustain people in long-term employment and failed to solve the problems of the long-term unemployed. We must try to tackle this, and as the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell, said, this is of interest to us all, across the political divide. It concerns every one of us, wherever our constituency may be.
The number of households in Wales without jobs and dependent on benefits is now 198,000, which is three percentage points lower than the same quarter last year, but the numbers are still far too high. We need to ensure that being in work pays. Under the system established by the previous Government, 35% of people in workless households in Wales would have lost more than 70% of their increased earnings if they moved into work of 10 hours per week, so the introduction of universal credit, strengthening work incentives and helping to tackle worklessness, will encourage people to work rather than put them off. The particularly valid question of where the jobs would come from was raised.
The Government are passionately committed to growth as the best means of delivering jobs. Last year, we launched the growth review and our approach will ensure that all parts of Government work to create the right climate for business to develop and take people on. We want to return Wales to sustainable, balanced economic growth, and that is our first priority. We need to free up our businesses. It is particularly important in Wales, where there is so much scope for the private sector to grow.
Last night I was at the reception in the House of Commons for Flintshire business week, which is in its fifth year. It celebrates what Flintshire has to offer, shows it to the rest of the UK and showcases it to the rest of the world. The private sector took that initiative, but we see many such initiatives across Wales. They should have cross-party support, as there was last night.
Chris Ruane: I was at that meeting, too, last night. The powerhouse of the Flintshire economy is Airbus. Airbus was primed by a Labour Government in 1998 with £450 million in launch aid. As a result, 6,500 jobs have been created—650 apprenticeships. That shows what can happen when the state intervenes. It was not a gift. It was a loan. It was launch aid. It was paid back. The Government’s philosophy of separating the two is wrong. We need them to work in conjunction.
Mrs Gillan: I think the hon. Gentleman fundamentally misunderstands. I have no problem with the Government intervening in that instance, and I think a Government of either political complexion would have done so. I am not sure if he was there, but I was present when the Prime Minister opened the north factory last week, which again, with the A350—
Mrs Gillan: I am sorry but I do not think that remark is worth acknowledging. The Prime Minister of the United Kingdom went to open a factory at one of our prime aerospace companies. It is to be celebrated, but there are plenty of other drivers in the economy up here, for example Sharp and Toyota. I have been to Deeside college and seen the wonderful co-operation and the apprenticeships on offer. Although Airbus is a major company here, we hope to encourage more companies into the area, and of course the supply chains attached to larger companies are exceedingly important.
Hywel Williams: I am grateful to the right hon. Lady and I hope to make a positive point about Flintshire business week. I took part in the CBI business breakfast question time on behalf of Plaid Cymru. I was on time for that one and the bacon sandwiches were excellent. It is clearly a model that has worked very successfully for Flintshire and I have been to the business meetings there before. What steps can be taken to generalise that sort of enthusiasm for growing the private sector throughout Wales? What ideas does she have?
Mrs Gillan: I am grateful for that intervention. I certainly talk about Flintshire business week because it is an example of a county council, with cross-party support, getting together with private investors and private industry to push what they have in their area. As the hon. Gentleman knows, one of the things I am passionate about is showing what we have in Wales and what we can do.
We in Wales are doing plenty of things to showcase our private sector. Tonight, for example, I am going down to Cardiff—I do not know whether any other Members will be joining me—for the “Made in Wales” dinner, which is exceedingly important. It is the inaugural “Made in Wales” event. Only a few weeks ago, I was at the “Fast Growth 50”, which showcases some of our most brilliant companies; they are gazelles and growing fast. I visited a particularly good medium-sized company here called Cats & Pipes. There are plenty of opportunities. We need to make sure that we talk up what we have in Wales and show that to other people, because in that way we will attract more inward investment.
We as a Government have always acknowledged, as was mentioned earlier, that the present international situation means that the recovery remains choppy, but I am pleased that against that background and in the context of the discussion of the private sector thriving, we have restored confidence and stability by taking the difficult decisions to get to grips with the debts. What is so important, of course, is the triple A rating that we have sustained when others have lost it. Despite the
Governments do not create jobs, contrary to popular opinion; their job is to create the right environment in which businesses can grow. We are boosting manufacturing, growth and jobs by cutting corporation tax, scrapping burdensome regulations and having a plan for growth —for example, launching the red tape challenge, exempting small and medium-sized enterprises from audit requirements, exempting micro-businesses and start-ups from new domestic regulation until 2014 and creating enterprise zones.
Ian Lucas: On the key question of job creation, I give credit to the Government that in May this year they created 72,000 extra private sector jobs; unfortunately, however, that was completely wiped out by the loss of 89,000 jobs in June. That figure of 72,000 is also outweighed by the 129,000 jobs that were created under the previous Labour Government. If the right hon. Lady talks to business in the private sector in Wrexham and in the construction sector in particular, she will learn how the Government’s policies are working. The facts prove it.
Mrs Gillan: I am grateful to the hon. Gentleman for making that point. I was looking at these figures. He must have been very disappointed in the performance of the Labour Government in his own constituency. I have been looking at the total claimant count level in Wrexham: in 1997, when the Labour Government came in, it was 1,465; by May 2010, when they left office, it had gone up to 1,740. I believe that was a period of unprecedented economic growth and success. I hope that he will make constructive suggestions rather than carp from the sidelines because, as I have said before in this Committee and I repeat, these matters are too important to play games with. They need to be studied together.
Jonathan Evans : I caution my right hon. Friend against being drawn down this road by the Opposition, who are a bunch of people who have never created jobs in their lives. The reality is that I have held senior roles in four organisations and have been involved in the creation of
Mrs Gillan: I agree entirely with my hon. Friend. I hear from businesses across Wales and the United Kingdom that they want a Government who are on their side and who are tackling the barriers to growth and the non-tariff barriers to growth. That is what this Government are doing and continue to do.
Devolution means, of course, that the enterprise zones and the powers and economic levers that contribute to the economic environment belong to the Welsh Government. I welcome the recent announcement on the five Welsh enterprise zones, although I regret that it took more than six months to reach that position and that even now we still do not have details on how those zones will operate in Wales. As one of them is to be in this area, I very much hope that Opposition Members will be pressing the Labour-led Administration in Cardiff Bay to let us know what the details are, so that prospective investors are able to set up in Wales and in this area. That shows how important it is that the right policies are developed and that both Governments work together to try to solve the problems.
I have talked for some time and have been generous in taking interventions. As I have said, there is no bottomless purse on which the Government can draw to fund jobs. We must ensure that, where we do intervene, we are effective in finding routes into work for people in Wales. There are 12,638 job vacancies in Wales at the moment, and the Work programme is being carried out by organisations such as Working Links, Rehab JobFit and Jobcentre Plus. In addition, there is also Careers Wales, which largely comes under the Welsh Government, as a note I received the other day reminded me.
A visit with the Prime Minister to the Working Links office in Caerphilly this summer demonstrated to me the excellent work that is going on in Wales. People are producing tailored plans to enable those who have been unemployed for a long time to get back into work.
Jessica Morden (Newport East) (Lab): Before the Secretary of State concludes her remarks, will she talk about a group referred to by the right hon. Member for Dwyfor Meirionnydd—people coming off incapacity benefit? They will comprise a significant number of those entering the Work programme. I cannot be alone in seeing cases where people who are seriously ill have been declared fit for work, but turned down by employers on the grounds of ill health. Does she understand that that is a real problem?
Mrs Gillan: I do understand and I have a great deal of sympathy. As the hon. Lady knows, the full roll-out of the reassessment began nationally on 4 April 2011 and about 11,000 claimants a week are being contacted. She will be aware, as I am, that the reassessment programme will take at least three years to complete. The reassessment is being carried out not to save money, but to ensure that current claimants, if they can return to work, are given the opportunity to receive the support they need.
Wales is at the heart of our plans to rebalance the UK economy, and working with the Welsh Government is crucial. Continued engagement between our two Governments is vital for economic success and to ensure that Wales thrives and prospers. Business and industry cannot operate in isolation from other markets and our future is about co-operation and collaboration, not competition and confrontation. By taking the best of decisions made in Wales and at Westminster and working effectively with the Welsh Government, I hope that we can deliver new models of working that really deliver results for Wales.
Mr Peter Hain (Neath) (Lab): I welcome you to the Chair, Mr Havard, and thank the people of Wrexham and the county council for hosting us. I echo the Secretary of State’s praise for Linda Badman, whom I met on many occasions when I was Secretary of State for Work and Pensions and Secretary of State for Wales. She is a dedicated and an outstanding public servant.
The Secretary of State invited comments on holding this Welsh Grand Committee in Wrexham and I would like her to consider a number of points. First, she should assess the number of members of the Committee who are otherwise active on Committees in Westminster and unable to come here. If we had held this sitting at Westminster, they would have been able to come to at least part of it. Secondly, this should not in any sense be seen as a rival to the National Assembly for Wales or to the Welsh Government. Thirdly, we should assess the additional costs to the taxpayer of holding this session here. Fourthly, if, as the right hon. Member for Dwyfor Meirionnydd indicated, she wants meaningful discussions about the future of the Welsh Grand Committee, she must listen. She should have listened to the demands from Members across all parties, including her own, to have a proper discussion about the demolition of Welsh representation in Parliament and the destruction of traditional communities and community identity in north Wales and right across Wales that will occur as a result of the reduction by a quarter of the number of Welsh MPs in Parliament, which her Government have driven through. Her offer to listen and to have a meaningful consultation would be taken much more seriously if she had listened in the first place, when there was a demand for a sitting of the Welsh Grand Committee.
There is an ominous work crisis in Wales. Forgive me, but I feel really angry about the Secretary of State’s speech and the soothing and sultry words uttered by the Minister of State. What they describe bears no resemblance to the desperate situation in all our constituencies of young people who have no hope at all, of older workers who are losing their jobs and who have no prospect of finding another one, and of people whom my hon. Friend the Member for Newport East described as being frogmarched off incapacity benefit. They face a cut in their benefits and are being forced to look for work when employers do not want them. That disjunction between the reality on the ground and what the Government are saying in meetings such as this makes me wonder whether they are living on a different planet from the communities that we represent in Wales.
This time last year, in October 2010, unemployment in Wales was falling. I welcomed that drop in this Committee last December, but warned that the figures
Last week’s quarterly unemployment figures were a devastating verdict on the Government’s economic strategy. In Wales, the number of people in work fell by 26,000 on the previous quarter, and unemployment increased by 16,000 on the quarter to reach 131,000. The number of people claiming jobseeker’s allowance increased by 800 on the previous month, and youth unemployment has never been higher since records began. One in five youngsters is out of work and there is every prospect of a lost generation similar to the one in the 1980s, which is a shocking indictment of this callous Government’s callous indifference and its obsessive dogma of cutting the deficit regardless of the economic and human consequences.
The Minister of State, who at least talked about the Work programme, denigrated the future jobs fund. I find that insulting, as do many of my colleagues whose constituencies I visited to see the excellent work that the future jobs programme was doing, giving new hope and opportunity to thousands and thousands of young people in Wales. Because it paid the minimum wage for a set part of the week, those young people were given a lifeline and an opportunity, and they were queuing up to get into the programme. That is a very different picture from the one that we find under the Work programme.
Mr Llwyd: I support the right hon. Gentleman’s remarks, but I ask him to address the cuts to the public sector, which is disproportionately represented in Wales, so a different approach must be taken. An overall approach for the whole of the UK is simply not fair.
Mr Hain: I could not have put it better than the right hon. Gentleman has and I completely agree with him. For all sorts of reasons, in terms of both jobs and GDP, the public sector makes up a much larger proportion of our economy than it does elsewhere in the UK, so we will be hit disproportionately, with no prospect—despite the warm words and the soothing phrases of the Secretary of State and her ministerial colleague—of the private sector making up the difference. When the right hon. Lady returns to future Welsh Grand Committee sittings, she will find that the public sector has been cut right
Although the UK average number of claimants per vacancy—unemployed people on jobseeker’s allowance per vacancy—stands at 5.2, in Wales the average is almost one person higher at 6.1. In the Secretary of State’s Chesham and Amersham constituency approximately three people are chasing each vacancy, and in the constituencies of the Prime Minister and the Chancellor of the Exchequer there are fewer than two claimants per vacancy. Compare that with most constituencies in Wales: in my constituency, Neath, the number of unemployed claimants per vacancy stands at 7.5—above the national and Welsh averages and way above the figure in the Secretary of State’s constituency. Across Wales, the latest figures show that every job is being chased by six jobseekers: a total of only 12,638 jobcentre vacancies are being chased by 76,859 jobless claimants. In Cardiff West, Caerphilly, Cynon Valley, Clwyd South, Ogmore and Ynys Môn, every job is being chased by more than 10 jobseekers. That is no Work programme at all. In Blaenau Gwent every job is being chased by 18 jobseekers, and in Merthyr by 19. In the Rhondda, the jobless plight is even worse; every job is being chased by 33 jobseekers.
I ask the Secretary of State not to continually insult people in those areas of Wales by cutting their benefits and telling them to get a job when there are no jobs to get. Do not instruct them to get on their bikes either, because almost everywhere in Wales there are nothing like enough jobs to go around. The Government’s work plan is hurting, but it is not working.
Unemployment is falling in the eurozone, America and Japan, yet in Wales and Britain it is rising because of the Government’s decision to cut too far and too fast. Front-loading the fiscal squeeze has led to a flatlining economy. Everybody is rapidly revising their growth forecasts downwards as the economy runs out of steam. The only area of growth is in the rate of public sector job losses, which far exceeds private sector job growth, as my hon. Friends have pointed out. We urgently need a change in direction and an alternative, such as Labour’s five-point plan for jobs and growth in north Wales that I announced this morning.
Even the Government’s single-minded target of reducing the deficit at all costs is not working. The Secretary of State has made great play of that, as did the Minister of State. The Secretary of State should look at the latest Office for Budget Responsibility figures, which show the benefits bill rising by £12 billion and borrowing rising by £46 billion. The Government are obsessed with cutting the deficit at all costs, but the deficit is rising as a result of their policies. That is clear evidence of what we have been saying all along: without a plan for jobs and growth, it becomes even harder to get the deficit down. In fact, the Government’s misguided right-wing dogma is pushing the deficit up. With families feeling the squeeze, more people on the dole and borrowing set to be £46 billion higher than planned, Britain cannot afford to carry on with a reckless Tory plan that, as I said, is hurting but not working.
With families across Wales feeling the squeeze, no growth in our economy and unemployment rising again, it is clear that Wales now faces a real jobs and growth crisis, just as we did under the previous Tory Government. It took a Labour Government to rescue Wales from the misery of mass unemployment and it will take Labour’s policies to rescue Wales again.
Unfair tax rises and spending cuts that go too far too fast crushed confidence and choked off the recovery well before the eurozone crisis of recent months. Instead of sitting on their hands, it is time for the Chancellor and the Secretary of State for Wales to make a plan for jobs and growth. We have suggested one. As I said, I announced today Labour’s five-point plan for jobs and growth in north Wales, which includes building on the success of the Labour Welsh Government’s jobs fund; bringing forward long-term investment projects, such as schools and roads; tax breaks for small businesses taking on extra workers; a temporary VAT cut, which will give every north Wales family a boost of around £450; and a tax on bank bonuses to fund thousands of jobs for young people across Wales.
Mr Hain: As my hon. Friend says, it will cost a lot less than the £46 billion rise in the deficit. We have costed it: a £2 billion tax on bank bonuses, which the Government are not introducing, will fund most of the programme. The rest of it, however, is funded by economic activity. The hon. Lady is not heeding the lesson of the 1930s. Keynes pointed this out to the world, but his policies were not adopted until we had to fight the second world war: growth cannot be created and the deficit cannot be brought down without investment.
During Labour’s term in office, employment hit record highs. The jobless claimant count halved and poverty fell. Inflation and interest rates were low, and we enjoyed a record 10 years of growth. The deficit and debt were low and were reduced from levels under the Tories—so much for the big deceit of so shamelessly blaming the previous Labour Government’s economic stewardship. It was not Labour’s public investment in Wales—the new hospitals and schools and the tens of thousands of extra Welsh nurses, teachers and police officers—that triggered the global banking crisis; it was the banks, and they need to recognise that and learn that lesson.
Jonathan Evans: Surely the right hon. Gentleman is not alleging that the Joseph Rowntree Foundation or the Prince’s Trust are deceitful when they point out that between 2004 and 2008 youth unemployment in Wales increased fivefold. Why did that happen?
Mr Hain: There was a serious problem with young people not in education, employment or training. We introduced the education maintenance allowance and special programmes, such as the future jobs fund, to bring their number down and, indeed, we were starting
Chris Ruane: I thank my right hon. Friend for giving way. I have a document here from the WCVA on youth unemployment. The hon. Member for Cardiff North is right. Youth unemployment rose steadily until April 2010, but it started to come down because of measures that we put in place. Under the future jobs fund, 7,000 young people went back to work in Wales, but as of April 2011, youth unemployment is shooting back up.
Mr Hain: My hon. Friend’s evidence, which the Secretary of State and her colleagues are inadvertently or deliberately ignoring, is absolutely clear. The same banks that strangled the economy are still not lending to businesses in Wales, even healthy businesses that have orders. What are the Government doing about that? They are all talk and no action. Their so-called Work programme is not about work because there is hardly any work available in Wales. Their so-called Work programme seems to amount to little more than a right-wing welfare programme that hits the poorest hardest. It is reactionary, stigmatising and self-defeating compared with our work programmes, which were firm, fair and effective, as my hon. Friend says.
Although we support the principle of universal credit, which aims to simplify the benefits system, it is being delivered in a discriminatory and unfair way to cut welfare costs rather than to make work pay. We support employment support to get people back into work and we support insisting that those who can work must work, but those reforms could build on Labour’s reforms in government that made work pay.
There is cross-party consensus that the welfare system needs reform, but the Secretary of State has failed fundamentally to listen to our arguments and, more importantly, the concerns of thousands of people throughout Wales who will be hurt by her Government’s reforms. At every step of the way, her Government refused to accept Labour amendments to the Welfare Reform Bill to introduce important safeguards. Let us be clear why we opposed that Bill: it was not because we are soft on scroungers, nor because we do not want work to pay. We oppose the Government’s plans, including the Work programme, because they are a disgraceful attack on benefits for cancer patients, patients who have helped to pay for those benefits. This Government want to cut off contributory employment and support allowance after just 12 months, which will hit people throughout Wales who have worked all their adult lives and who are recovering from cancer and hoping to resume work.
Mrs Gillan: I have been listening carefully to the right hon. Gentleman and he is wrong to caricature any Government Member as not having great concern for those who are unemployed, particularly long-term unemployed. I cannot allow him to get away with what
Mr Hain: The Secretary of State is simply not aware of the facts on the ground. They are exactly as I have described them. She is wrong, and her intervention bears me out. There is the world in which the Government are living, inside the Westminster bubble, and there is the world that all our constituents are having to inhabit and cope with as a result of this Government’s reactionary policies. It is wrong to ask people in Wrexham who are battling cancer to start filling in job applications while their benefits are being cut. That is not part of any cancer recovery programme that I have heard doctors recommend.
We oppose the Government’s plans to remove the mobility component of disability living allowance for those who live in residential care homes, which will affect some of the most vulnerable people in Wales, in towns and cities such as Wrexham. We oppose the Government’s arbitrary and punitive 20% cut in DLA, which could result in a cut of £14 a week for 125,000 DLA claimants in Wales—a total cut of £90 million a year in Wales alone, or more than £700 for each DLA claimant. The Government’s policy on disability benefits is chaotic, confusing and unfair. Welfare reform can help to cut the deficit, but it should be done only by getting unemployed people into work, not by pushing disabled people into poverty.
We oppose the Government’s plans also because they will penalise savers and act as a disincentive to save. Universal credit will be taken away from anyone in Wales with savings of £16,000 and more. That will act as a disincentive to save for life-changing opportunities, such as putting down a deposit for a mortgage or paying a child’s higher education fees. The independent Institute for Fiscal Studies has confirmed that
That will happen under a Government who trumpet their support for marriage and family. The Social Market Foundation has shown that across Britain, about 400,000 families with children currently receiving tax credits will lose their entire eligibility for financial support under universal credit. That suggests that about 20,000, or perhaps more, families in Wales will be affected.
Stuart Andrew (Pudsey) (Con): Does the right hon. Gentleman not agree that the Government’s plans will remove the 16-hour rule, which means that it will be easier, particularly for lone parents, to fit in work?
Mr Hain: I agree with removing the 16-hour rule. The hon. Gentleman makes a fair point. The problem, as has been pointed out by various expert, independent judges of such matters, is that the way that the universal credit works means that it will particularly affect partners seeking work. That could hit women disproportionately—a point that he needs to bear in mind, although he made a legitimate point about the 16-hour rule.
Why is the policy punitive? It is because one cannot make the reforms work fairly and effectively while cutting the total cost of benefit entitlement by £80 billion, as
Even the Secretary of State’s colleague, the Minister with responsibility for welfare reform, Lord Freud, has said that Labour delivered “remarkable” progress on welfare reform. The Secretary of State referred to the number of people on out-of-work benefits, but failed to mention that under Labour, between 1997 and 2008, that number did not rise. In fact, it fell in Wales, rising thereafter simply because of the banking crisis and the recession that followed. In addition, Labour halved unemployment before the recession and reduced the number of people on incapacity benefit significantly for the first time since it rocketed under Mrs Thatcher and John Major. The Secretary of State for Wales and the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell, are plainly suffering from political amnesia in failing to recognise that incapacity benefit, above all, went through the roof under the Conservatives, when it was seen as a means of getting people off the claimant count, thereby disguising the high level of unemployment.
To conclude, I am afraid that the Government’s work plans fail both the fairness and effectiveness tests. They are not working, and they will not work. Thousands of people across Wales will be much worse off, suffering, as in the past, under the same old Tories.
The Chair: Order. I intend to call Mr Hywel Williams next. You indicated earlier, Mr Williams, that you wish to speak in Welsh. I would be grateful if people could take that into account and use the simultaneous translation machinery.
First, let me say how excellent it is to be back in Wrexham, although I arrived late, and apologise once again for that. Since the Eisteddfod, Wrexham has been very close to my heart; I stood for the constituency of Clwyd South in an Assembly election and enjoyed the experience greatly, even though I was not elected. In the history of our country, this has been a central constituency. There were people who supposed that the area looked too far eastwards, but I am glad that the way that the people of this area voted in the recent referendum clearly confirms that they feel very much part of the national project.
We should not only consider the Wrexham motto— labor omnia vincit—but remember what the poet, the Rev. O. M. Lloyd, said many years ago in a poem at an Eisteddfod. He said in a beautiful and interesting cynghanedd-groes that Wrexham is the direction; I, too, would say that it is. That is a cynghanedd that clicks if nothing else.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): The hon. Gentleman has commented on the crest above your head, Mr Havard. It is worth recording that “labor omnia vincit” translates, very appropriately for this debate, as work conquers all. Less felicitously, it might also be translated as labour conquers all, but I would rather avoid that particular translation.
Hywel Williams (Translation): If I may say so, I was tempted to make the same joke, but I decided it was wiser not to. It is a poor joke anyway. Let me turn to important matters and the subject of our debate. I hardly need say that we are all of the view that work is good for people, and that needs to be stressed at a time when there is so much concern about unemployment. It is stating the obvious to say that its benefits go beyond just the financial; all kinds of other benefits accrue. There is a purpose and order to life when people have the opportunity and satisfaction of attending work daily, and experience the value that goes with that.
It is a great shame, therefore, that so many of the citizens of Wales are unable to share in those benefits. All of us on the Committee are of the view that our main task is to ensure that we achieve a resolution to the problem that we are discussing. It is a shame that it has been part of an ongoing, permanent pattern in our national life for so many decades. We have to face up to the fact that things have been this way for many a decade, under whatever Government.
It is also important to remember, however, that things were not always this way. Wales is not predisposed to be in this position. We used to be a prosperous country, with plenty of work. Some people made a fortune out of steel and coal, as we have seen in this area, and from agriculture and commerce, but those benefits were not shared with the people of the country in general, and they certainly were not invested back into the country. That is part of the reason why we now have the problems that we do. I am not trying to find excuses, but it is important that we understand the context.
Roger Williams (Brecon and Radnorshire) (LD): Intervening in English on a speech in Welsh is, I have found, a bit like driving a right-hand drive car on the right-hand side of the road in France. The hon. Gentleman made a serious point about how work adds to the quality of life, but another issue is the quality of employment—not all work adds to the quality of life. In encouraging employment and economic activity in Wales, we want the best jobs. I am sure that he agrees.
Hywel Williams (Translation) : Yes. I was driving in Sicily, Italy, this summer, and I can guarantee that it is not half as difficult to put up with simultaneous translation as it is to get around places such as Palermo. My point is that it is not a personal failure of the people of Wales that was responsible, although the hon. Gentleman’s point about quality jobs is also important.
We want a high-quality economy that pays well and that invests for the future, which is why fixing our economy is a duty for us all, and one of our main duties. It is therefore appropriate for the Committee to discuss the Government’s Work programme today. It is claimed that the programme will tackle the basic problems of our economy and transform the prospects of hundreds
I do, however, find basic faults in how the Government are going about things in the Work programme. First and fundamentally, there is the claim that the main problem is changing people’s attitude to work. There is that business about the people of Merthyr having to get on their bikes to look for work. It is clear that some people are like that, but we ought not to generalise in that way, as the tabloids tend to do, and to find fault with those who are unemployed, when so many people in Wales find themselves in that situation. The headline is attractive and includes an element of truth, as do all popular ideas with a superficial attraction.
However, I do not need to lecture about that old idea today, or refer Members to the concept, which has been around since the age of Elizabeth I, that a group of people refuse to work and need to be disciplined, and that something should be done about it. Of course, there is such a group; the social security system has a way of dealing with them for their own sake, but what is often lost in the general discussion about getting people back to work is that that is not just for them, but for their children. As someone who has supported the Child Poverty Action Group for many a decade, I can say that it is the children who often lose out in such situations. A third of children in Wales live in poverty, and that is a disgrace to us as a nation.
The modern social security system has tried to respond to since the days of Beveridge with basic levels of benefit for people. There is a disciplinary system for those who reject the system and refuse to seek work, but that is not where the emphasis should be. The emphasis should be on people who want to work—who are keen to work—and there is surely enough work that needs to be done there. We are not talking about a weakness of the individual or a personal fault; most people want to work, for the good reasons to which I have alluded. That is one of the basic faults in the Government’s Work programme: it tackles a problem but gives only a partial picture, and we will not make progress if we focus on that.
I am completely in favour of encouraging people to take up training; it is a good thing. As a former trainer at a university, I know that it improves people’s skills and attitudes. There is room for that, of course, but I fear that sometimes the current system is not particularly successful. The reality is that many people want work, not training, but work is short. Research shows how the social security system can be improved—a point referred to by the former Secretary of State, the right hon. Member for Neath. I will not go down that road today, Mr Havard, but there is a lot that could be done.
[Continued in English] “Claimants’ interactions with both Jobcentre Plus and Atos…are often impersonal, mechanistic and lack clarity. The Jobcentre Plus decision makers do not in practice make decisions, but instead typically “rubber stamp” the advice provided through the Atos assessment…Some conditions are more difficult to assess than others. This appears to be the case with more subjective or fluctuating conditions, such as mental health. other. Communication and feedback between the different agencies and organisations involved is often fragmented and in some cases non existent.”
[Continued in Welsh] Clearly, the Government have a major programme of work to do here and now to respond to such criticism if we are to have a social security system that works. The majority of unemployed people want to get back to work.
That brings me to the second fault that I find with the Government’s perception. There is the claim that the jobs are there if people just go looking for them. The right hon. Member for Neath referred to that, and to the need for people to look for work. Of course, there is nothing wrong with people looking for work and getting on their bikes, or whatever. I left the university of Bangor to look for work. If I may share a personal tale with the Committee, I left university to set up as a freelancer. It was the first time that I had claimed unemployment benefit, and in the first week, I went down to Cardiff to look for work. I was not at home to sign on and never got a penny, because I did not know how the system worked. The system at the time did not help me to get on my bike—or in my car—and go down to Cardiff to look for work, and I never got a penny. I am sorry to tell a personal tale, but it is significant.
The figures are clear. As the right hon. Member for Neath said, the number of people seeking work, and the number of people who are economically inactive, is high; the number of jobs advertised in jobcentres is low. I will not bore the Committee with the details that came out yesterday, but I will just mention three small examples. In my constituency of Arfon, 436 jobs have been advertised in the past month, and there are more than 1,300 people looking for jobs—a ratio of 3:1. However, the number of people in the economically inactive category is more than 5,500, which means a ratio of 13:1. If we are to get people who are economically inactive into the labour market, we will cause problems for ourselves, in a sense; the jobs are not available. I have two more examples. We are in Wrexham, where 680 jobs are advertised. There are more than 1,800 jobseekers and 7,500 economically inactive people—a ratio of 11:1.
Mr Hain: I thank the hon. Gentleman for allowing me to intervene; diolch yn fawr. He makes a valid point. If the Government are going to force and frogmarch people off disability benefits of one kind or another, there have to be jobs for them to go to; that is his point. It is not sufficient to consider only those currently on jobseeker’s allowance, which is what the figures show; we must also consider the potentially significant number of those who are classified as economically inactive.
Hywel Williams (Translation) : The right hon. Gentleman makes an excellent point. I shall address it later when I refer to Sheffield Hallam university’s report on unemployment in Wales. I will give one other set of figures—the most frightening of all. In the Rhondda, 153 jobs have been advertised in the Jobcentre Plus office, and there are almost 2,500 jobseekers, which is a
Chris Ruane: I can confirm that, according to an answer to a parliamentary question that I tabled, that was also the case on 1 May 2011. On that date, the figure for people looking for a job in the Rhondda was 83.6.
Hywel Williams (Translation) : As I said earlier, this is a long-term problem and we need long-term answers, which is why making people unreasonably look for work when there are no jobs available is a waste of their energy. Some would say that it is almost a penalty for their unemployment, but I hope that that is not the case.
Mrs Gillan: Like the hon. Member for Brecon and Radnorshire, I feel as though I am driving on the right-hand side of the road. Does the hon. Member for Arfon agree that programmes such as the electrification of the valley lines would help address his concerns? We are looking carefully at that. The ability to get people rapidly to jobs as they are created in a city centre would bring good employment to areas that have suffered from long-term unemployment for a very long time.
Hywel Williams (Translation) : I welcome that point. Improvements to infrastructure are important, but we have not had the necessary investment in Wales for decades. The railway goes in two directions, and if people wish to go to Cardiff to look for jobs, there is, as the hon. Member for Cardiff West pointed out—he is not present today—unemployment in west Cardiff as well. That would, however, be a way in. I hope not just for investment in areas such as the Rhondda to counter unemployment but, as the hon. Member for Swansea East has said, the extension of railway electrification to Swansea to bring equal benefits to west Wales. I would like the Government to move in that direction.
Roger Williams: There is some truth in the hon. Gentleman’s point, but often people are unemployed when employment is available because they do not have the relevant skills. I am not criticising them personally; it is a criticism of our education system that they may not have the skills to engage in employment.
[Continued in Welsh] We must promote and boost the private sector, but it is not enough to expect it somehow naturally to pick up just because the public sector is being reduced. The report also states:
Alun Cairns (Vale of Glamorgan) (Con) (Translation) : The hon. Gentleman mentioned promoting the private sector to create jobs. Does he agree that it is disappointing that the Welsh Government have delayed establishing enterprise zones? They would have supported different parts of Wales and helped them to gain jobs.
Hywel Williams (Translation) : That is an interesting point, but research from the ’80s shows clearly that one of the main impacts of establishing enterprise zones was to take jobs away from other areas. About 85% of jobs created in the zones came from adjacent areas, so there was no growth in jobs, only a shift of jobs from one area to another. There might be an opportunity to do things differently this time, and I hope that things will be different. I am glad to see the Welsh Assembly moving in that direction. I would rather there was sectoral growth, with a focus on certain aspects of the economy; that would be better than it being geographically limited.
Hywel Williams (Translation) : I am sure that if we carry on with that kind of comment Mr Havard will intervene. It is not my intention to complain, or to harp on about Wales. In many of these Committee sittings, my party has been accused of whingeing for Wales. We are not whingeing, and I have, hopefully, positive things to say. I praise the efforts of the staff at the Jobcentre Plus in Caernarfon—and in Wrexham, with which I regularly have links. They work very hard in very difficult circumstances.
I shall put forward a few answers that people will be familiar with, because they have been part of our policy for a long time. The first is a reduction in VAT, targeted at certain sectors of the economy. I was glad to see in the House the other night the Labour party’s proposal for a reduction in VAT and, having discussed the matter
Hywel Williams: (Translation) It is lovely to speak again under your chairmanship, Mr Caton. I shall be brief because I have already spoken—an opportunity for which I am grateful. Before the Committee adjourned, I was referring to targeting cuts in VAT at certain areas, such as the construction industry. There is no VAT on new build, which is very advantageous given the need to build hundreds of thousands of homes, as is the intention in south-east England.
However, VAT is payable on repairs and that is disadvantageous in Wales, where so many houses are in need of repair and the deterioration in housing stock needs to be corrected. As I said earlier, since 2009 the European Union has allowed states to reduce VAT to 5% for such work. Some countries have already taken advantage of this opportunity, and Italy, for example, has found that the reduction in the VAT rate has led to an increase in the amount of money they get in. It is the famous Laffer curve—if the rate is cut, people start businesses, pay their tax and the sum increases, so there are advantages. I am strongly in favour of cutting VAT for small businesses, especially builders who employ many people. That is also the view of the Federation of Master Builders, which has been campaigning to that end for many years.
Mr David Jones: I hear what the hon. Gentleman is saying about VAT. Does he agree that builders are particularly worried at the moment about the imposition of increasingly onerous planning obligations as well as building regulations? Does he also agree that something must be done about that to ease the lives of Welsh builders?
Hywel Williams: (Translation) I declare an interest. I intend to repair my house in the near future. Building regulations and planning rules are quite onerous, but they are there for a reason. I intend to build in the middle of Caernarfon, which is full of registered buildings. I would be opposed to any thoughtless development, as is unfortunately likely to happen in parts of the United Kingdom. All I wish is for the Government to consider targeting cuts in VAT, specifically in respect of construction, repairs and—this is particularly relevant to this area—tourism, which is a big employer.
I tabled a ten-minute rule Bill earlier this year on devolving certain Jobcentre Plus duties to Cardiff. The argument is clear—the Government in Cardiff are responsible for education, skills, lifelong learning, the economy in the business portfolio, IT and science, transport, industry, tourism and the programme of social inclusion, which has an element of employment. Despite that, the responsibility for finding people to fill job vacancies is given to an agency that is responsible to the London Government. In practice, it would be better if that part of the agency were able to speak directly to the Assembly and the Assembly were made responsible for the matter. It is common sense.
The Scottish Government are calling for the same policy. Such a system already works in Northern Ireland. Members of the Northern Ireland Assembly, both Unionists and others, who represent constituencies in Northern Ireland, have all confirmed to me that the system works well. In their terms, even the different system in Northern Ireland offers no threat to the unity of the United Kingdom. I ask the Government to look again at those particular aspects. There is a lot more that I could say about child care and the third sector, but I thank you, Mr Caton, for the opportunity to speak and I shall be quiet from this point.
To respond to the point made by the hon. Member for Arfon about selective VAT reductions, jobs cannot be disaggregated from the economy, and it would be prudent to consider making selective reductions or cuts in VAT now to get more life into the construction industry.
I reiterate the sentiment that I am pleased to be in Wrexham. Being here is becoming a bit of a habit. I was here for the Eisteddfod on a glorious day in the summer, and this is the second time in a week that I have been in Wrexham, because I was here over the weekend when the Welsh Liberal Democrats had a very encouraging conference. It was very confident and bullish, a statement which I am certain no one can contradict because, looking round the room, I cannot see any other Liberal Democrats.
Although I am pleased to be in Wrexham, we sometimes have difficulties reconstructing our diaries to ensure that we have a good turnout, so I encourage the usual channels to ensure that everyone is aware that we should put dates such as these in our diary. From a Liberal Democrat point of view, we would certainly have been pleased to hear from my hon. Friend the Member for Cardiff Central, because of her role as co-chair of the Liberal Democrat parliamentary party committee on work and pensions. With her co-chair Lord German, she supports and encourages the Department for Work and Pensions in the coalition Government and, given her expertise on the Work programme and DWP affairs, she would have made a very knowledgeable contribution. I know that, under the coalition Government’s protocol, she works very closely with her Department. Not only diaries, but matters such as child care arrangements cannot be altered at short notice, and we need more information so that all that can be put in place.
I am particularly concerned about the unemployment of young people, as I have been for many years. The hon. Member for Montgomeryshire and I worked on the Development Board for Rural Wales for several years, trying to bring employment into rural Wales, particularly in manufacturing. One of the directors was a Scottish gentleman, Professor Jim—I cannot think of his name at the moment. However, I always remember that he said there are two approaches to encouraging jobs or to looking for inward investment. We can look either for the high-quality skilled jobs that will be there for the duration or for the more easily attracted types of employment, such as the so-called “screwdriver” or manufacturing jobs that do not need many skills. He used to say, “Sometimes you can shoot at anything that flies and claim anything that falls.” His message was that we have to be more selective about attracting inward investment to Wales, and that has proved to be the case in relation to employment.
Many of the jobs that we attracted into Wales—not just into mid Wales, but into south Wales, in particular—were manufacturing jobs. Those jobs were there while companies could see the financial sense in maintaining them, but when they could get cheaper labour those jobs were very often lost from Wales to low-cost countries in the far east or eastern Europe. All the work that the Government do in encouraging employment and encouraging people into employment, must be seen against the background of the general economic and business environment.
If we are to ensure more prosperous times and have better employment opportunities in Wales than at the moment, we must invest in the education and training of our young people. Employers looking to invest are looking not only for facilities and accommodation for the business, but people with the necessary skills, the people they want to recruit. Sadly—and I am not making a political point—we have seen educational qualifications and attainment in Wales going backwards over the past few years. We have just seen the PISA report, which puts us fairly low down the pecking order, below our colleagues in the other countries of the United Kingdom. Our results at GCSE have now fallen below those in England, Northern Ireland and Scotland.
Alun Cairns: I draw my hon. Friend’s and the Committee’s attention to figures on GCSE performance published today, which show that the gap between Wales and England has got even wider. In England, 58.3% of pupils achieve five good GCSEs, but in Wales that figure has fallen to 49.6%. Those data have been published only today.
I believe that the Welsh Assembly Government are determined to invest in and improve education in Wales. I will support them in some tough decisions that I know they will have to take. Those tough decisions will sometimes be in the face of the teaching profession, which, though very caring in its approach to pupils, is sometimes not radical enough in the necessary change of approach to education.
I am particularly concerned that more children in Wales are encouraged to go into the so-called STEM subjects of science, technology, engineering and maths. It is in those subjects that we will have—[ Interruption. ] Is that the Deputy Prime Minister on the phone? Have I gone down the wrong line? Tell him we are under control.
Obviously, a number of pupils will want to study the humanities, such as languages, and those subjects are very important. However, unless we have a strong cohort of our young people in Wales engaged in science, technology, engineering and maths, Wales as a location for business will not be as attractive as it should be. We have lots of good universities in Wales. I am particularly impressed whenever I visit Cardiff university: its life sciences departments are very strong and it has other opportunities for young people to acquire the right skills to go into employment.
I want to emphasise this point: in Wales we have discriminated too long against vocational education as a role for young people. The approach of the Government of Wales should be to ensure that vocational education sits on a par and has equality with academic education. We need technicians just as much as any other role within the economy and businesses, and we need to promote and encourage such an approach as much as we can. I am very pleased that the Government have invested in more apprentices because it is at that level of skill that we can make a real difference to the economy in this country.
In conclusion, the future jobs fund achieved what it set out to achieve, but it was rather limited in its ambition. The European funding regulations meant that the fund could not support or subsidise jobs that might displace existing jobs in the UK or other parts of the European Union. I hope that the Work programme will give opportunities to young people and to adults to have real sustainable, permanent jobs. If we can achieve that, it will make a difference to the opportunities of all people in Wales.
I am certain that each and everyone of us in attendance here today is a realist. We all recognise that it is the duty of any Government, of whatever political persuasion, to make every effort to mitigate the worst effects of economic recession on the work force and those who are seeking work. In addition, Governments are charged with promoting growth and identifying equitable ways and measures to ensure that the unemployed can find their way into sustainable new employment. That is never more important than when attempting to tackle long-term unemployment, when generations of families have been forced, through different circumstances, to regard state benefits as the only readily obtainable form of income. If the Government ignore the factors behind that trend and simply legislate without recognising the accompanying social factors, their flagship Work programme is doomed to become beached on the high tide, as economic realities take hold and employers begin to shut up shop when growth gradually shifts into reverse gear.
Like many hon. Members, I have grave concerns that the proposals for universal benefit have not been adequately thought through, especially in terms of the semi-automated methods used to assess disability and fitness for work. More to the point, it is clear that DWP staff themselves are confused over the expectations and outcomes when interviewing current claimants. We have growing evidence in our casebook files of stark differences in approach and instances of inflexibility that have left vulnerable people who are desperate to return to work on a realistic time scale feeling demoralised and worthless.
What cannot be ignored here in Wales is that ever since the dismantling of traditional industry, such as coal, steel and manufacturing, our communities and the local economies that underpin them have become overwhelmingly dependent on public sector employment, whether we like it or not. My constituency is no different. There, employers such as the Driver and Vehicle Licensing Agency are playing a pivotal part in the local economy. The DVLA has a significant presence in the city, where gross disposable household income is £13,447, which is almost equal to the national figure for Wales of £13,484. That is still substantially below the UK figure of £15,350.
The economic gearing is such that, for every job in the public sector, another one and a half jobs are linked to the service and supply industries in the region. The belief that the private sector will replace jobs lost in the public sector is a forlorn hope. Figures published today show that, over the past year, 110,000 jobs have been lost in the public sector, yet only 41,000 new job opportunities in the private sector have been created. To use the analogy that the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell, mentioned this morning, someone somewhere will be left without a partner or, in this case, a job.
As a result, when Ministers talk about the downgrading or externalisation of local operators, they not only create massive uncertainties in morale and productivity, but adversely affect private sector investment decisions in the retail and transport sectors.
In Swansea East there are four people chasing every vacancy. That is perhaps not as bad as some Welsh constituencies, but none the less, it is unacceptable. The majority of the public sector work force are women, who, despite constant efforts to redress inequalities, still remain on a lower pay scale than their male colleagues. Evidence provided by the Public and Commercial Services Union demonstrates that the difference in salaries can be as much as 50% where employers think they can take advantage of the low-wage economy.
It should come as no surprise to anyone here today that in Swansea we are already seeing the effects of public sector efficiencies—female unemployment has risen by 26% over the past year. The vast majority of those women possess specialist skills and years of experience that cannot easily be transferred to the private sector.
It is hard to imagine where these so-called job opportunities are to be found. This morning the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell, mentioned the opportunity for self-employment, but I do not think that will help to solve the problems on the estates and within the communities of my constituency of Swansea
It will take more to reverse the growing problem than the Government’s proposed black box contracts, whereby providers are left to decide for themselves how best to deliver the Work programme and to manage on their own terms the targets and standards to be met. In my opinion, it is time for the Government to start thinking outside the box. Our communities deserve something more, something better, than unworkable regulations driven by an ideology that, for many, is only a few steps removed from the ideology of the workhouse.
We need a means of equipping unemployed people and youngsters with a trade or transferable skills to help them into the jobs market. We need robust and reliable economic drivers that encourage employers to hire and develop staff, and that will encourage personal growth and new skills, not a series of short-term incentives that treat workers almost as a disposable asset that comes with a one-off, one-size-fits-all prescribed training grant.
Women in my constituency tell me—I am sure many hon. Members share this experience—that they want opportunities and a clear pathway towards securing employment that will allow them and their families to get out and stay out of the benefit trap. There are few things worse than being unemployed, but one of them is being an unemployed woman. What makes their situation all the more tragic is that it only requires a flexible, creative strategy to meet their needs and to create real opportunities.
A major economic policy review is not required to see the comparatively small yet significant employment opportunities that could be created by introducing modest cuts in VAT and adopting national insurance contribution holidays for small firms. The Government resist such advice, even when it comes from the Federation of Small Businesses, and it is clear that Ministers remain wedded to the idea that low wages and employment insecurity are sufficient tools to dig our way out of stagnation. That is not only a great shame, but an indictment of the Government’s policies.
It would be remiss of me not to mention the great rugby game tomorrow, and I am sure that the whole Committee backs the Welsh team in their effort to finish third in the world cup after last week’s particular disappointment.
This debate is extremely important. The unemployment level and inactivity rate are difficulties that have dogged Wales for many years. Having heard the right hon. Member for Neath assess the situation earlier, I think it was somewhat rich of him to make such sweeping statements about the current state of the economy and the current state of employment, unemployment and
The hon. Member for Brecon and Radnorshire mentioned that I had some statistics in front of me. They are the monthly economic statistics published by the Welsh Government, which include all key economic data on unemployment among men, women and the under-25s. They refer to inactivity rates and out-of-work benefit claimants. At every measure over the past 10 years, Wales has performed much worse than the rest of the United Kingdom, so I do not accept the claim made by the right hon. Member for Neath that such difficulties have happened over the past 18 months. The difficulties have arisen over a long period of time. If we look at the trends over the past decade, the situation has got even worse in Wales. That demonstrates the failure and underlines the lack of success, in spite of the spending of huge sums of public money.
Alun Cairns: I am grateful to the hon. Lady for raising that point, because I will be coming on to it, particularly in relation to the success or failure of the levers that have been made available to Wales over the past 10 or 11 years, particularly in relation to European aid. I will come on to the lack of progress against comparable regions—not only in the UK—and I will invite any Opposition Member to pick one unemployment statistic out of the monthly bulletin that shows Wales is performing better or has performed better than the rest of the UK over the past 10 years or so.
Alun Cairns: The Thatcher years completely transformed the economy and structure in Wales in a positive way. I was nine years old when Margaret Thatcher became Prime Minister, so it is hardly fair to start holding me to account for what happened when I was in school. This debate is about looking forward and looking to the future rather than harping back to the past.
David T. C. Davies (Monmouth) (Con): Will my hon. Friend cast his mind back to when the entire country was on strike and on the brink of bankruptcy in 1979 before Mrs Thatcher took office? I am very proud of the legacy of Mrs Thatcher in transforming the economy into a modern, outward-looking, export-driven one rather than one with the old-fashioned, state-run industries that were in decline all over the world.
When we hear Opposition Members go through their diatribe of difficulties, we need to remember how long they were in power and how Wales became the poorest part of the United Kingdom under a Labour Government both in Cardiff bay and in Westminster. A cultural change and new approach were needed; a no-change situation was not an option. In spite of the significant sums of money that they spent, the previous Government did not make a difference and did not close the gap between Wales and the rest of the UK.
This Government are therefore taking a different approach. They are introducing some strong, business-friendly policies and are seeking to help and support individuals in getting back to work. Far too many people—one, two, or even three generations in some places—have not had the opportunity to contribute economically to the country.
The work capability assessment is a positive step. It is not about letting people lie on the benefits scrap heap, as some people would see it; it is about supporting them, encouraging them and giving them the ability—the skills—and support needed to return to the work force. We must give credit to the way in which the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), has supported and used the work capability assessment, and has taken a pragmatic approach.
I was made aware of a concern relating to a constituent with mental health illnesses, who was called about support before they had received the letter from the Department for Work and Pensions stating that they would have to go through a work capability assessment. That call was made on a Friday evening, when the mental health charity, Mind, which supports a group of individuals in my constituency, was closed until the following Monday. The anxiety that built up over that period was significant, and it complicated and exaggerated my constituent’s mental health condition.
I raised that matter with the Minister, who responded positively and immediately. As a result, that practice has been changed wherever possible, and I am delighted not to have heard of such a situation again. I urge hon. Members of all parties who have concerns with the work capability assessment to raise them with the Minister because, from my experience, he wants to take a positive approach, to make changes, to be pragmatic and to make the system work for individuals and for the economy.
The universal credit will be introduced at some stage and will operate alongside the work capability assessment. That benefit will make a real difference and will make work pay for the first time. It cannot be right that people working that extra hour pay, effectively, a marginal rate of tax of 98%. Again, that is the situation that this Government have inherited from the previous one. Significant changes are required, therefore, to encourage
Alun Cairns: I certainly will. I point to the Jaguar Land Rover investment in the midlands as one success. I spoke to Jaguar Land Rover in early June, when it was considering what options to take, and it was looking hard at south Wales. An enterprise zone had been established in the midlands, however, and that factor would have been taken into account. That demonstrates where the policy is working. A major international investment project might have come to south Wales, but it certainly did not, and the Welsh Government must accept part of the responsibility. They are unable to attract large inward investment projects as they did in the Conservative years, when, despite making up only 5% of the UK’s population, Wales attracted 20% of its international investment.
The Welsh Government have approached enterprise zones on a sectoral basis, which is a needless complication that adds to the delay. There is no enterprise zone west of the Vale of Glamorgan. There is no enterprise zone in some of the neediest parts of Wales. One has been set up in Cardiff. I am delighted that Cardiff has been successful, but on the day that they announced it, they could not produce a map of where it was. Barry, just a short distance away from Cardiff, is a part of my constituency that needs regeneration, needs that focus and needs to diversify the employment base. It was unsuccessful, despite being a strategic regeneration area, where clearly the policies need to be dovetailed together to ensure that we get the biggest bang for our buck. I hope that the Government will seek to develop the enterprise zone benefits and that the enterprise zone will become a fundamental building block of future budgets where incentive enhancements can be built upon. I hope that the Assembly Government will accept that and consider that it may well be a possibility as the Treasury and the Department for Business, Innovation and Skills continue to develop policy.
There is a problem with definitions in the sectoral approach to enterprise zones. The Jaguar Land Rover project that I mentioned and the enterprise zone that has been set up in Cardiff or in St Athan in my constituency will not have made any difference to attracting that major international investment to South Wales because of the sectoral approach that the Welsh Government want to take. If a major manufacturing plant operates in aerospace and in the motor industry, does the benefit of the enterprise zone apply only to the aerospace operation if it sets up in the Vale of Glamorgan? It is an ill thought out plan. It was announced the day Jaguar Land Rover went to the midlands and demonstrated that the delay potentially cost millions of pounds of investment and a significant number of jobs.
It is quite obvious that the Welsh Government have many of the levers. They need to accept some of the responsibility and work positively with my right hon. Friend
The hon. Member for Llanelli mentioned the comparable places across the rest of the UK when we are considering employment statistics and unemployment data. With regard to European aid and objective 1, which then developed into cohesion funding, Wales’s performance has been extremely damning over the last 10 years. In 2000, the GDP of west Wales and the valleys compared with the rest of Europe was 66.8%. It is down to 64.4% in the latest data that are available which relate to 2008.
West Wales and the valleys was one of 66 regions of Europe that would have received significant sums of European aid, supported by the UK Government at the time. But it is one of eight that have not progressed economically. There has been a relative decline in performance. Despite millions of pounds being made available to encourage people into work and to try to encourage more employment and entrepreneurship and to overcome the difficulties, Wales is one of only eight of the 66 that have not developed positively economically within that period.
Chris Ruane: On objective 1, why did the hon. Gentleman’s Conservative Government not put in for this objective 1 funding in the 1980s and 1990s when they were closing down the steel mills and the coal mines? If we had had it 10 or 12 years earlier, Wales would have been recovering. It is a long slow process of decline that has hit Wales and that objective 1 money would have been welcomed then. They were too proud and anti-European.
Alun Cairns: I am grateful for that question because I can nail it once and for all. It could not have happened before then because local government reorganisation had not taken place. It was local government reorganisation under the Conservative party that allowed the new area—west Wales and the valleys—to be formed which made us eligible for this European aid. That is why there was none before that time. It took the local government reorganisation to create the NUTS 2 area that effectively led to forming the region that could qualify.
To finish on a positive note, a cultural change is needed. This Government are creating that through the Work programme, the changes in the benefit system and business-friendly policies. Much red tape is being removed to encourage employers to employ more people and be less frightened about the risks of tribunals. The Ministry of Justice is helping reduce the risks of challenges and vexatious claims by employees. That is all positive, and more needs to be done.
My hon. Friend the Member for Brecon and Radnorshire discussed the skills gap. I highlight the figures published earlier today. Investment in higher education in Wales is welcome, but the approach is completely wrong. We will end up with second-class universities as a result of an unsustainable policy that funds students rather than universities. A shift is needed in entrepreneurship. The policies that this Government will introduce, if the Welsh Assembly Government step up to the plate, will
Much is going on and there is more to do. I look forward to the ongoing steps in the Wales Office and other Whitehall Departments to ensure that Wales is not left behind, as it was by the last Administration.
Chris Ruane: I will start positively, from a local perspective, and discuss the successful back-to- work initiatives in my constituency. In 2002, I noticed that two of Denbighshire’s 34 wards had 50% of the unemployment. Along with the careers service, Denbighshire county council and the Welsh Assembly Government, we formed an unemployment working group. Over the five-year period to 2007, it morphed into the Rhyl city strategy, part of a national pilot of 15 cities and one seaside town, Rhyl. We co-operated and had consensual meetings; 180 people from 90 different organisations took part in the city strategy.
My right hon. Friend the Member for Barking (Margaret Hodge), who set up the city strategy, said that when she visited Glasgow, 200 organisations were trying— some in competition, some in co-operation, some in ignorance—to get people back to work. The city strategy was supposed to supply unity, and it has in the Vale of Clwyd. We have had excellent results. The usual pattern of employment in my county is that rural areas have the least unemployment and the urban area of Rhyl has the most. That has been reversed by our success.
There are numerous reasons for that success. The Rhyl city strategy is led by the private sector. The manager, Barry Mellor, is general manager of Arriva Buses Wales. We set up lots of different initiatives, using novel ways to engage people at a grass-roots level, rather than just chasing them back to work with a stick or calling them scroungers or workshy. We engaged them on a positive level, using Rhyl football club to work with lads and dads or lasses and dads. We used football as a hook to bring them in, gave them confidence, training, skills and certificates that they could feel proud of and then put them into volunteering or back into work.
We have used a Jamie Oliver-type restaurant called Taste Academy, teaching 22 young people at a time all aspects of restaurant work, including cooking, front and back of house and so on. They receive qualifications over a six-month period and then go into employment.
Mrs Gillan: When I was in Rhyl market, I had the opportunity to taste the products of the Taste Academy. I thought it an excellent initiative that gave confidence to young people. It puts them into an environment where they obviously thrive and produce some great work.
Chris Ruane: I thank the right hon. Lady for that positive contribution. She mentioned Rhyl market, which we set up last year in Rhyl town centre, and we are going to expand it and tie it in with Rhyl college, which
I agree with the Government that we need more private enterprise, but we need proper support for it. The enterprise clubs, which were much heralded, are an example of the Government’s gimmicks. I thought, “This is great; I can establish one in my home town,” but the budget across the whole of the UK for enterprise is £3 million, which is approximately £1 per person for those who are unemployed.
We need help to make local initiatives succeed. We have the Dewi Sant centre, which works with people who have drug and alcohol problems by taking them out of the urban community to a farm six miles away where they produce honey in an apiary and grow local produce, which they sell to the Rhyl Taste restaurant, keeping all those pounds pinging around locally.
We also have the Hub, which is a youth club in Rhyl with 1,000 people on its books. Private back-to-work companies want access to those young people. The Prince’s Trust, Want2Work, Working Links and Serco have paid for office space at the back of the Hub, so it is almost self-financing. That model could be copied across Wales and the UK. It is an excellent initiative, which has been visited by, among others, Irish Senators, Irish TDs, British Ministers, my right hon. Friend the Member for Neath and Carwyn Jones. It is such a good project that I think it should be copied.
The Rhyl city strategy could not exist without the help of the college—a college that was built by a Labour Government. Until the 1990s, anyone in Rhyl who wanted to improve themselves had to make a journey of 40 miles a day to Deeside college or to Llandrillo college. Colleges have been set up in the middle of the poorest communities in Rhyl, in Denbigh and in Abergele, which is in the constituency of the Under-Secretary of State for Wales.
In our organisation, we have maximised co-operation, minimised competition and almost eliminated ignorance. We have meetings three or four times a year, which are well attended with 50 or 60 people present. If a jobs initiative is happening in the area, at the end of the meeting the relevant person will stand up and explain what they will be doing over the next three months. People will meet afterwards to help that individual or organisation to improve the project that they are undertaking.
The hon. Member for Vale of Glamorgan mentioned objective 1, and I have some sympathy with what he has said. The Welsh Assembly Government believe in the devolution of objective 1, the implementation of which was devolved to county halls. In my constituency in Denbighshire, the money was pepper-potted up and down the county. I was only able to get objective 1 for my county and for the county of the Under-Secretary
In the first seven years under objective 1, that money was not spent wisely. I am pleased that the Welsh Assembly Government recognised that and brought the convergence funding back to Cardiff. That money is now being spent strategically as structural funds to alter the economic structure of specific areas in Wales. The areas that have suffered in Wales are mining, steel, rural and inner-city communities. Seaside communities have probably suffered more than any others however, and the Welsh Assembly Government have had the good sense to recognise that and to form a strategic regeneration area based around five seaside towns in Clwyd West and the Vale of Clwyd. That money is now being ring-fenced and spent exactly where it should be: in struggling towns.
Alun Cairns: I am grateful to the hon. Gentleman for making that point, but does he not recognise in the data that I have published that that also includes the second tranche of European aid? It goes to the end of 2008 and the first tranche finished in 2007. The impact of the current round was therefore also in the data that I published. On seaside policy, should there not be a dovetailing of policy between the enterprise zones and the strategic regeneration areas? Would that not give an extra boost to his community, as it would to Barry and the Vale of Glamorgan?
Chris Ruane: Policy should be dovetailed with every initiative. As I was saying on the Rhyl city strategy, when 60 or 70 groups are in one room from the public, private and voluntary sectors, we do get that perfect dovetailing. That is why we have had such a success.
One of our biggest successes was with the future jobs fund: 7,000 18 to 24-year-olds across Wales have been put back into work, and 450 of them were in my constituency in the Vale of Clwyd. It was fantastic to see those young people, and we had a great record: 55% found employment and 25% went back to college. Admittedly, some of them did go back on the dole, but even they were primed with a bit more respect, energy and enthusiasm.
That successful programme in Rhyl, in Wales and in the UK was ended by the current Government within their first six weeks. They said that £6,000 was too much to spend on turning a young life around. I am not accusing any Government Member of sending their children to Eton, but some of them spend £30,000 a year to turn their own youngsters’ lives around. What is good enough for them is good enough for us and our communities. It was political spite that ended the future jobs fund.
Stuart Andrew: However, when the hon. Gentleman turns the argument on something so important into that sort of personalised attack, he really does miss the point. My father experienced long-term unemployment under both Governments, and I experienced long-term unemployment under the previous Labour Government. We know what it is like, and it really does not help the argument when he cheapens it in that way.
One of the dangers of the Work programme is with the language and the terminology. We feel that some within the Conservative party—not necessarily hon. Members here—and the Conservative press look upon such people as workshy and as scroungers. The actual number of people who are prosecuted or convicted for benefit fraud—I have the answer from a parliamentary question in my bag—is 0.04%. It is a small amount. I have come across many decent people in my 10 years of working at the grass roots of the back-to-work agenda in my home town who are not like that. They want to get on. They want employment and to provide security for their families.
Mrs Gillan: May I put the hon. Gentleman right on the future jobs fund? I would not want him to leave this Committee with the impression that we used political spite to get rid of the future jobs fund. Half the recipients were back on benefits seven months later, when the six-month placement ended. The cost was more than five times that of other employment initiatives. Hardly any of the jobs were in the private sector. It was poorly targeted, and some one in five jobs went to graduates. It was not working. That is why we scrapped it, and that is why we want to do things differently.
Chris Ruane: I do not know what the Secretary of State has against graduates getting jobs. If lots of time has been spent from the ages of three to 21 giving them a good education, a little £5,000 primer to get them back into employment would be a good return on that investment. I thank her for that helpful intervention.
We need proper jobs, because there cannot be a jobs policy without jobs. The “Panorama” programme that I quoted before was titled “A Job to Get Work”. It certainly is a job to get work under this Conservative Government, when 83 people, as I quoted before, are seeking one job in the Rhondda. Establishing jobs fairs is one thing—or is it jobs unfair?—but is it fair if 83 people are being taken along for one job? People’s hopes are being raised and dashed. They are being taken on a point of a stick.
We have proved in the Vale of Clwyd that such things can be achieved in a co-operative and collegiate way. If the language and terminology that is eking and seeping out of the Conservative party is used, it will affect the 70 partner organisations on Rhyl city strategy, including state ones such as Jobcentre Plus and the careers service. Many of the organisations are from the voluntary sector and the public sector. They will pull away if they think that it will be forced upon them and rammed down people’s throats. It can be demoralising and dehumanising.
Let us look at the macro picture. It is interesting that the Secretary of State for Business, Innovation and Skills has now said, in today’s or yesterday’s press, that the coalition will have to get a package of capital investment together to prime the economy. Is that too little, too late? Have the Government gone too far, too fast? I think that they have. We cannot cut our way to growth. An old capitalist maxim is that we have to speculate to accumulate. We have proved it here in north Wales with the example I that gave of Airbus, where £450 million in launch aid, to be paid back, resulted in 6,500 jobs rising from the ashes of Shotton steelworks, which suffered the biggest single lay-off in not only the UK, but the whole of Europe, when 7,000 men were sacked on one day in 1981. Now, owing to Labour’s investment in that area, it has one of the most successful micro-economies in the whole country.
We need to invest. The Under-Secretary asks, “Chris, where are we going to get the money from?” but where are we going to get the £46 billion of additional borrowing that we have had to go in for because the figures are wrong? The figures that were forecast last year are wrong, so the Government will have to do another £46 billion of borrowing. On top of that, the figure for inflation in September, which came out yesterday, was 5.2%. The September figure is used to uprate benefits. Everybody on benefits will have them uprated by 5.2%. That is an extra £4 billion or £5 billion. The more people that are put on the dole, the more dole the Government have to pay. That is basic economics.
The Conservative party was not left with a golden legacy, but it was left with a nascent recovery, where unemployment was going down and growth was going up. All the statistics for the past 15 months, since the coalition was put in place, are heading south, and they will all go even further south.
David T. C. Davies: Does the hon. Gentleman not accept that any growth was based entirely on borrowing and that we cannot borrow our way out of difficulties indefinitely? That is the only policy that Opposition Members have.
Chris Ruane: The hon. Gentleman is speaking as though unemployment is a price worth paying. I have been reminded by my hon. Friend the Member for Wrexham that I am going on a bit, so I will curtail my speech.
My final point, which is one that has not been answered by any of the Front-Bench team here or back in Parliament, relates to their theory of the private sector taking up the slack from the public sector. Some 46% of workers in my constituency—13,000 people—are in the public sector. Up to 27% of them, depending on which area of the public sector they work in, will be sacked. The Welsh cuts have not yet started; they start next April. We have had the police cut by 369 people in north Wales. Of those 13,000 workers, 3,000 will be put on the dole. Where are the jobs coming from for those 3,000 people? The Conservatives may point to Labour’s record. In 1997, there were 23,000 people working in my constituency; by 2008, there were 30,000. That is a record that I am proud of and a record that the Government are undoing.
Ian Lucas: On a point of order, Mr Chairman. Is it in order that two Members who were not here at the beginning of the debate have both been called to speak, when four Opposition Members who have been here throughout have not?
The Chair: That is not really a point of order. Who is called is up to the Chair. I hope that everybody who has indicated that they want to speak will have the opportunity to do so, but that is in your hands as Committee members.
Simon Hart: Thank you, Mr Caton. As I attempted to make clear, I apologise to the Committee for my late arrival, which was thanks to one or two transport problems, but I will not delay proceedings any further by dwelling that point.
In Carmarthen West and South Pembrokeshire, there are 1,285 jobseekers—up precisely 28 on this time last year, in an area that is 40% dependent on public sector employment. In Pembroke Dock, 249 vacancies were advertised yesterday at Jobcentre Plus. It has been an uneven season for one of our major employers, the tourism industry—it is okay in some parts, with secondary spend good and primary spend not so good. The picture in agriculture, another major employer in the area, has been a bit lumpy, and it would be fair to say that most of the constituency’s retailers find the present climate particularly challenging. However, as I entered the Chamber earlier to hear the end of the speech by the right hon. Member for Neath, I wondered whether I had stepped back in time. I say to him and other Members that the small and medium-sized enterprises in west Wales—I can speak for nowhere else, obviously—were nothing like as heartbroken by the 2010 general election result as he would have us believe.
I cannot help wondering whether to trust the view of the right hon. Gentleman, a former Secretary of State for Wales, or the view of the many small and medium-sized businesses that are struggling to improve and grow in challenging conditions. If they are listening to the debate—not many will be, I confess—they will have been frustrated by one or two of the speeches, in particular the one given by the hon. Member for Vale of Clwyd, who was revelling in gloom and almost expressing disappointment that things may ever get better. Businesses in my area would have been profoundly irritated by that, just as they are by the sometimes over-complication of the challenges ahead. It is on that point that I will make a short speech, using five simple examples and five simple questions that the Minister may wish to comment on, if he has time. I will illustrate my points using situations from my constituency.
First, a popular refrain is that of credit flow, and I use the example of a local manufacturing company in Pembroke Dock called Ledwood engineering, which is known to both the Secretary of State and the Under-Secretary of State for Wales, both of whom have engaged
The only thing standing between Ledwood engineering and success in the tendering process is an improvement of its own infrastructure that should cost somewhere between £2.5 million and £3 million, but can Ledwood find anybody who is prepared to look in its direction from the lending or banking sectors at the moment? No, it cannot. Has the Welsh Assembly come to its rescue, recognising the incredible value that would be brought to the area? No, it has not. I put that example to the Secretary of State and the Minister of State as one in which a simple solution to a relatively simple problem would bring us and Wales huge prosperity and growth.
The second issue is bureaucracy, which has been touched on by other speakers. My area is one of significant agricultural activity. Farmers in west Wales are frustrated that some of the bureaucratic obstacles that have been stripped away successfully by the coalition Government in England are not being stripped away with quite as much vigour and enthusiasm in Wales, putting Welsh farmers at a disadvantage to their English counterparts.
Nia Griffith: Is the hon. Gentleman aware that the Farmers Union of Wales is most perturbed that the Agricultural Wages Board for England and Wales is being threatened with abolition under the Public Bodies Bill in the coming week? So many farm businesses and farm workers alike depend on that board to answer inquiries that can be very difficult when only one or two people are employed on an isolated farm. Does he realise that, far from cutting red tape, all such action will do is land confusion on our farmers and drive down wages in rural areas?
Simon Hart: The hon. Lady has obviously not had the same conservation with the FUW that she had with NFU Cymru. I must say that, in Pembrokeshire and Carmarthenshire, if there was one single thing on the shopping list that I was asked, when elected, to do for agriculture, it was to get rid of the Agricultural Wages Board. Everyone thinks that it is outdated and that it provides no back-up and comfort for people in the agricultural industry, and I support those farmers who championed its removal. If the hon. Lady thinks that the future of agriculture depends on the preservation of an outdated wages board, I think that I have answered her question.
Let me deal briefly with tourism and bureaucracy. Throughout the coastal area of south-west Wales, there is frustration that, where progress is tantalisingly within grasp, bureaucratic planning hurdle after bureaucratic planning hurdle prevents businesses from being able to grow and expand in a way that will enable them to generate economic activity and thus employment opportunities. I have an awkward relationship with the Pembrokeshire Coast national park. Each time I mention it in Parliament, I am bombarded with a mixture of
Another example of a major employer in the area is RWE npower and its nearly complete power station in Pembroke, which is now held up as a consequence of the apparent inability of the Environment Agency to grant it a licence to operate. It is now beginning to cost a significant amount and, worse still, as each day goes by, messages are beginning to be sent out to large inward investors such as RWE that perhaps Wales is not the place in which to invest and that there may be other places where bureaucratic hurdles are lower. Surely that is not an encouraging position to be in.
My third point is about infrastructure. What good news it was to hear that the main line from Paddington to Cardiff was to be electrified and what might follow a few years after that. How disappointing it was to hear the former Secretary of State rubbish that, as though it were some sort of negative announcement, whereas we all—even those who will not be immediately affected in west Wales—know that it was nothing but a positive announcement. Faced with a four-and-a-half hour train journey from here to Port Talbot later this afternoon, perhaps Wrexham to Haverfordwest might also be on the cards.
Simon Hart: I was about to say something that the hon. Gentleman might find helpful. There is worry that an area that might not be covered by the universal broadband proposals and that almost certainly by definition will be rural, will suddenly find itself increasingly disadvantaged. I take the hon. Gentleman’s point, and it is something that I have said to the Secretary of State back at Westminster, but I shall say it again publicly: we do not want the gap between urban and rural to get any larger. Even bearing in mind the fact that welcome improvements will be made to urban broadband, we in rural areas do not want to be left behind, because that will have a negative knock-on effect.
My other plea when it comes to broadband is not to forget mobile phone coverage. The Government have not. I find it extraordinarily frustrating, given that I could communicate by mobile phone from Port Stanley earlier this year and from my sister-in-law’s house in the Alps without any difficulty—I think Kurdistan has better mobile phone coverage than Canterbury—that, oddly, I could not ring from my office in Whitland to the office in Brecon of my hon. Friend the Member for Brecon and Radnorshire because we do not have mobile phone coverage. That seems to be an increasingly difficult problem. As I have said in the House, I cannot even get a babysitter: none of the 16 to 18-year-olds in my area want to come to my house, because they cannot text their friends as there is no mobile signal. If for no other reason, may I suggest that we should not be left behind in terms of mobile phone coverage?
Fourthly—and penultimately, you will be pleased to hear, Mr Caton—is education, which my hon. Friend the Member for Brecon and Radnorshire touched on. A small manufacturing company, which I will not name,
Finally, to expand on the points made by the hon. Member for Arfon about VAT, I cannot understand why—the Under-Secretary may be able to explain—there is such resistance in the Treasury to the adjustment of VAT rates, particularly those on holiday accommodation. We are one of only a handful of countries in the European Union that have not reduced VAT rates on holiday accommodation to generate economic activity. Every tourism lobby group, if we can still use that expression, makes the same point and about 19 European countries have come to the same conclusion. Deloitte has come up with a compelling piece of research showing that a lower VAT rate on holiday accommodation, as long as it encourages incomers from abroad, would have the positive effect of creating up to 100,000 direct jobs throughout the UK and goodness knows how many indirect jobs. I am not sure why the Treasury is so nervous, because the loss in the short term would be for a very short period, even on the most pessimistic estimates, and the long-term gain would be absolutely huge.
We sometimes get lost in the jargon of the catchy phrases that are used about employment regeneration. I think south and west Wales, Pembrokeshire and Carmarthenshire are enterprise zones in their own right that are simply waiting for the key to unlock their potential. Lots of people have positive stories to tell and want to employ other people and to do real things in the real economy. They just tear out their hair when they hear us talk about all the fancy schemes and curious-sounding initiatives, because they are already there and, more often than not, all we need to do— I aim my words partly at the Welsh Assembly Government—is to get out of their way and to enable them to do what they are good at. If such people were able to do that well, it would have positive economic effects and result in other people getting jobs for life, which all members of the Committee are keen to see. It would also further the regeneration prospects of not only my little patch of south-west Wales, but the rest of Wales too.
The Chair: I want to start the winding-up speeches at 3.35 pm, and three hon. Members have indicated that they still want to contribute to the debate. I am sure that you can do the arithmetic and, if everyone shows some self-discipline, they will all be able to speak.
Ian Lucas: I am pleased to have the opportunity to discuss the Work programme, which is an important issue, and employment specifically. First, though, I formally welcome all Members to Wrexham today. This is an important initiative; I am only sorry that we did not have more notice and that the Members who have taken the trouble to come here have not had the opportunity to see more of the town. More engagement with the local community is an innovation that might have been discussed with me. Unfortunately, we have a Secretary of State who does not do that and did not discuss the matter with me before she came to my constituency.
Employment and the Work programme is a more pressing topic, however. The job situation is difficult and it is important, first, that we have a Government who are committed to creating economic growth and jobs, and, secondly, that we have a Government who facilitate opportunities for those who have found it difficult to get into work.
Growth is important. We are in an area of the country—this is not well known enough—that has been extremely successful at generating economic growth. This is the home of one of the UK’s greatest industries, the aerospace industry. The British aerospace industry is No. 1 in Europe and second only to the United States in importance. We have already heard about Airbus, which is at the head of an important supply chain for this area that includes Magellan, Tritech and Cytec. They are all within the Wrexham constituency and provide high-quality jobs to my constituents and to young people who want to develop tremendous, eye-opening careers with massive potential. Many chief executives in such industries began with apprenticeships and worked hard in those apprenticeships to develop powerful manufacturing strategies for UK manufacturing.
There are massive opportunities in this area. I am delighted that Toyota on Deeside opened its doors last week to invite local schools to see what a tremendous automotive industry we have locally, too. That industry, too, will offer tremendous opportunities to those people and drop the scales from the eyes of young people who have an out-of-date attitude towards manufacturing and the opportunities that it presents.
We have companies beyond aerospace in Wrexham, including JCB, Redrow in the construction sector and Sharp, which does tremendous work in renewable energy. We have Pirelli, which supplies cabling for offshore wind. In pharmaceuticals, we have companies such as
All those companies have tremendous local support from Deeside college, Yale college and Glyndwr university, which are building up important infrastructure for training and developing the skills that will be essential to making those businesses competitive. That is why those businesses are in this area. We are proud to have had a university in Wrexham since 2008. We fought hard to secure that university and we are determined to hold on to it, because that level of skill and education is the only way that Wales and the UK will compete going forward.
It has been an historical weakness in north-east Wales that some of the jobs we have attracted, which tend to be short-term, have been low skill and low wage. Companies such as Tetra Pak have recently moved away from manufacturing in the Wrexham area. Tetra Pak came here in the 1980s and, unfortunately, how now left because it thinks it can produce items more cheaply elsewhere. By contrast, Sharp came here in the 1980s and has stayed. The company secured tremendous inward investment under a Labour Government in 2004, when it began to manufacture photovoltaic cells.
That is the backdrop and those are the opportunities for the local economy, but we have a major problem: the attitude of the UK Government. Businesses and industries were developed in recent years because we had a Government who supported aerospace and supported the automotive sector through innovations such as the car scrappage scheme. They stood by Toyota at a very difficult time and kept it going. We have a deficit because we had a world economic crisis that required immediate action, which it got from a UK Government.
The Tories did not oppose the car scrappage scheme when it was introduced. They are now reinventing history and have been talking down the British economy since they were elected. They have been doing that because it is in their political interests so to do. As far as they are concerned, all the problems of the British economy can be laid at the door of the Labour Government. That is completely untrue—[ Interruption. ] They are braying like donkeys because they have a political interest in maintaining that message. The reality is that they are talking down the British economy and talking down local jobs.
In riposte to the hon. Member for Cardiff North, let me say that I worked in the private sector for my whole life before I came to Parliament. I ran my own business employing 12 people and I will not take patronising lectures from him about running businesses. If he talked to them, he would know that in reality small businesses—the Federation of Small Businesses—support cuts in VAT. I was interested to hear for the first time a Tory Back-Bencher support that here today. When the shadow Chancellor first suggested it, he was described as mad, but the proposal is becoming accepted faith. I predict that in due course the Chancellor of the Exchequer will come round to that view, too.
What is happening now is what happened in the 1980s. The reason why Waldorf and Statler over here feel passionately about politics and why we believe that the Tory Government, propped up by the Liberal Democrats, are so wrong is that we saw what happened in the 1980s. We are old enough to remember that there
Ever since the Tories came to power, they have told the British people that their jobs are threatened. Why are they now surprised that people do not spend money, do not move and do not buy items in their high street? Shops such as TJ Hughes in Wrexham are closing down because of the atmosphere of fear and worry created by the Government. It is in their political interest to try to drive home to the British people that it is all Labour’s fault.
In the 1930s, Herbert Hoover favoured cuts; the result was the great depression. The Government need to wake up and see that they are leading us down a corridor of despair and hopelessness. The young people I saw at Yale college at lunchtime have a tremendous opportunity and future ahead if they have a Government who support them. Fortunately, they have a Welsh Government who let them have education maintenance allowance. Young people in England, who do not have a Labour Government, have had that cruelly taken away from them. At the same time, we have had cuts in corporation tax for the bankers who created the problem in the first place.
We all know where the Tories stand. They are the same old Tories: the party of big business funded by hedge fund managers who have no interest in small business and no interest in the future of our young people. I am sorry to say that the policies they are pursuing will not create any opportunities to fill the Work programme. It has already been criticised because increases in unemployment are making the position impossible for the programme to be successful. I am afraid that unless the Government change course, all the good work and all the good companies that I listed earlier will be threatened. They will go elsewhere to find a Government who work with business to support them and who do not pursue an ideological mantra that will lead to horror shows.
Jessica Morden: I shall be extremely brief and speak fast to allow my colleague the right hon. Member for Dwyfor Meirionnydd to speak. The hon. Member for Arfon mentioned the Sheffield Hallam report published this summer, which looked at the Government’s welfare changes. It forecast that 60,000 people in Wales would be moving off incapacity benefit, with half of them—30,000 people—leaving the benefits system with no work to go to. The long-term solution is obviously the revival of the Welsh economy, but with no plans for jobs and growth, Wales faces a real crisis because of how welfare is being reformed.
Last week the Wales Audit Office forecast that 21,000 jobs could be lost in the public sector over four years, a year after the Chancellor’s budget cuts announced in
None of us wants to see people trapped on benefits. We all want to fight poverty, support vulnerable people and break the cycle of benefit dependency, but as my hon. Friend the Member for Vale of Clwyd asked earlier, where will the jobs come from? The Prime Minister has boasted that the Work programme is the biggest back-to-work scheme in the country’s history, but the Social Market Foundation has estimated that three quarters of those picked up by the Work programme will simply flow through it and back on to the dole. I apologise for repeating this today, but it is all programme and no work.
One of the biggest problems for this Government will be working with the large number of people who have been on incapacity benefit who will make up one of the most challenging and significant groups coming on to the Work programme. Reassessments started in April and the process is to end in 2013-14. There are undoubtedly people on incapacity benefit who could work, but there are also some genuine cases. I appeal the Secretary of State: I cannot be alone in seeing harrowing constituency cases of people with mental illnesses and with progressive conditions who have been declared fit for work. The anxiety of the members of the Newport Multiple Sclerosis group I met recently is palpable. People are truly terrified. They live with pain, fatigue and cognitive problems; they may cope one day, but not another; they may be able to walk the 50 metres required, but may be in huge pain afterwards.
Last week a man came to see me who suffered from deep vein thrombosis. He desperately wanted to work but was no longer allowed to drive, which used to be his job, because of his condition. He was now looking in supermarkets but was failing to find work. That issue was highlighted very well by “Week In Week Out” this week, where a man declared fit for work described how he was repeatedly turned down by employers because of his ill health. I urge the Secretary of State to watch that programme.
That is because the appeals take so long—six months on average, and it can be up to a year. That is stressful for the claimants and a huge waste of resources for the Government. Last week, the New Statesman reported that the Minister for Employment had suggested that ESA could be withdrawn from claimants as they appeal decisions. With the huge backlog, the suggestion was that receipt of the benefit could be seen as acting almost as an incentive to appeal. I hope the Secretary of State can tell us that that is wrong because it is a lifeline for many people.
When he launched the Work programme, the Minister of State told the media that he was keeping his fingers crossed. I hope that the Government are willing to do a little bit more than keep their fingers crossed for the benefit of my constituents. If not, what do the Government plan to do instead?
Mr Llwyd: (Translation) One of the problems we have with economic policies prepared in Westminster is that they do not take factors that are particular to Wales into account. For example, in the south-east and in London there are usually plenty of jobs for people who want them. It is not the same in Wales. It has not been so and I am saddened to say that it is not likely to change soon.
I support what my hon. Friend the Member for Arfon said in his interesting and perceptive speech this morning. I draw attention to the fact that the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell mentioned the self-employed. Although that sector is important, he did not mention small and medium-sized enterprises in Wales. Of those working in Wales, 90% do so in SMEs, so we must focus on that sector and make life smoother for it. Until recently, figures showed that if each SME in Wales were to take one person on board, there would be no unemployment in the country.
[Continued in English] That might not be so in present circumstances. We must acknowledge, however, that the private sector in Wales is not as developed as it could or should be; it accounts for approximately 70% of employment in Wales. We must grow the private sector, but we will not do so by slashing the public sector, because, as everyone knows, there is an all-important, symbiotic relationship between them. On the private sector, I say as generously as possible to the hon. Member for Cardiff North that I, too, felt a little patronised this morning. I employed 29 people in my legal practice before I was elected. I do not mean to be rude, because I know the hon. Gentleman did not mean to patronise—I know him well enough.
If public sector jobs are cut in Wales at the same rate as over the border, it will hit us disproportionately badly, because common sense dictates that if we are more dependent on such jobs, cuts will have a greater effect.
We must consider UK Government agencies, such as the passport agency in Newport, or the coastguard, and the ripple effects of cuts on Wales. We talk about stimulating the economy, but we keep cutting, and that has a definite and obvious knock-on effect. Members will recall that on 28 June, the House divided on an amendment tabled by my hon. Friend the Member for Carmarthen East and Dinefwr to lower VAT. Unfortunately, there was no assistance from any party, but I know now that Opposition Front-Bench Members have taken that recommendation on board. I echo what my hon. Friend said about home renovations and VAT, which is very important—I have long argued for that.
Oddly enough, I agree with the hon. Member for Carmarthen West and South Pembrokeshire, who spoke at huge length about the VAT cuts on tourist accommodation. Our two nearest rivals, France and Ireland, made such cuts years ago, and they seem to be faring reasonably well as a result. Tourism is a huge industry in Wales, but we are trying to run it with one hand tied behind our back, which is worrying.
We referred to sectoral policy for developments such as renewal plans and so on. It is important to consider such policies, because that is how to cluster experts together, which makes things grow. The hon. Member for Wrexham referred to the important aviation industry in this part of the world, which is an example of clustering that has made this area of Wales world class.
To conclude, unless and until we take a sensible approach to the way in which economies and/or cuts are made in Wales, and unless and until we acknowledge the special case in Wales relating to the huge number of public sector jobs, we will not expand the private sector either. As I have said, that sector largely depends on public sector contracts. I make this plea: we have several very experienced and excellent civil engineering firms in north Wales, which employ people of the highest calibre. I hope that the Government intend to advance public sector projects and that they will look to such firms to provide the work. We are proud of firms such as Jones Bros., and there are plenty of other examples in this locality of people who do excellent work. We must nurture such people through public sector investments.
I am grateful for being given an opportunity to speak, Mr Caton, and I am happy to rely on what my hon. Friend the Member for Arfon said. It is a great pleasure to be in Wrexham. I was a season ticket holder here for many years and I hope to be again. I am not giving up on them; nor should I. I was corrected when I did “Newsnight” from Wrexham a few weeks ago. I was tweeted by a very generous man who said that Wrexham football ground is not one of the oldest international grounds in the UK; it is the oldest. I will finish on that note.
Nia Griffith: It is a great honour to be here in Wrexham under the motto, “Labor Omnia Vincit”—“Work conquers everything”. We have heard today how the Government’s policies are sadly hurting but not working. We have heard a catalogue of woes from across Wales. We have heard considerable concerns from the hon. Member for Arfon about how the work capacity assessment programme works, as well as the effects on child poverty of some of the Government’s policies. Indeed, my hon. Friend the Member for Newport East has told us tragic tales of people affected by those capacity assessments and how that is impacting on people’s lives and the difficulties that they face.
We heard from the right hon. Member for Dwyfor Meirionnydd about the importance of SMEs, the crossover between private and public and the importance of sectoral policies, clustering, tourism and repairs, which was echoed by the hon. Member for Brecon and Radnorshire. My hon. Friend the Member for Swansea East spoke about the difficulties of women, who are often the key earners in their families. While she was talking about four people in her area chasing every job, which is bad
We heard from the hon. Member for Vale of Glamorgan about English enterprise zones. He could not tell us one advantage that they gave. Neither could he produce one single comparative figure between an area like the north-east of England and Wales. He simply gave some waffle about European figures.
I will move on and mention that we have also heard from two outstanding Opposition Members. They have done the most fantastic job of putting into practice what they believe in. My hon. Friend the Member for Vale of Clwyd is outstanding. He has some of the most deprived areas in the whole of Wales in his constituency, yet there he is out with the hub, the Dewi Sant food and honey project and the Taste project. You name it; he has tried it. He is making it work.
Nia Griffith: My hon. Friend will be leading the next Iceland or marketing or whatever it is. We heard from my hon. Friend the Member for Wrexham about the tremendous importance of manufacturing industry and how Labour has fostered new industries, how we have helped the car industry through the scrappage scheme and how we have developed skills. I must pay absolute credit to him, because he has done an enormous amount of work to establish the university here.
It can be done. People can help their areas. MPs can help, but we need strong Government policies. The hon. Member for Carmarthen West and South Pembrokeshire, who was a bit greedy with his time, considering that there were several other people waiting to speak, seemed to me to be extremely muddled. One minute he wants Government intervention and lower VAT on tourism and the next he does not want people to learn how to manage golf courses. One minute he wants infrastructure investment, he wants broadband, mobile phones and electrification; the next minute he seems to be decrying any Government attempt to do anything at all and wants a laissez-faire approach. There is a lot of muddled thinking there.
I want to move on to mention briefly one or two points that have not yet been made as clearly and as fully as I would like. We appreciate the good intentions of the Work programme, which like its predecessors—Labour’s flexible new deal and pathways to work—recognises that people need help and support to get a job, particularly if they have been out of work for a long time. For those who are able to work, work should offer the best chances for people to improve their lot.
The latest unemployment figures are shocking —a massive increase of 16,000 in Wales, bringing the total to 131,000. As we look round our constituencies, we see people losing their jobs because of the Government’s savage cuts to public services, which impact disproportionately on Wales. We see people losing their jobs because the private firms that have thrived on public procurement are seeing their order books empty. We see people losing their jobs in the private sector because consumer confidence is low and demand is down. You just need to look at our high streets and town centres to see shops closing, including both big household names and local businesses—T J Hughes here in Wrexham to name but one.
If the Work programme is going to work and if people are going to have a chance to get a job, the Government need to get their act together and get a growth strategy now, before it is too late. Now, before any more firms go bust. Now, before any more shops on our high streets close. Now, before any more families suffer the scourge of unemployment. We see nothing from the Secretary of State for Wales and her Cabinet colleagues that will stimulate consumer confidence and demand. On the contrary, we see the shameless coalition Government hike VAT up to 20% in spite of the fact that, just before election in April 2010, both Conservatives and Liberal Democrats were vigorously denying any intention to increase it. The Lib Dems were parading about with their Tory VAT bombshell poster, and the right hon. Member for Tatton (Mr Osborne) was telling us that the Conservatives had no plans to increase VAT. The right hon. Member for Witney (Mr Cameron), when he was leader of the Opposition, described VAT as a very regressive tax, which hits the poorest hardest.
We see nothing from the Government that will release the finance for growth. On the contrary, time after time, we hear of successful, viable businesses unable to get the finance they need to expand. That is the message that the Flintshire businesses gave me last night, and I had the same message on Monday from Vertec in Bala. Indeed, we hear from the Governor of the Bank of England that lending to companies has continued to fall. The Federation of Small Businesses has described the Government’s abysmal attempts at a growth strategy as
We do not see the long-term strategies and certainty that firms need to be able to invest. We do not see certainty about future energy strategy or energy pricing—far from it. Far from the certainty and consistency that companies need to be able to invest, we see the Government moving the goalposts on feed-in tariffs, so that firms such as Sharp, which has a solar panel factory here in Wrexham that expanded on the basis of a clear commitment to feed-in tariffs from the then Labour Government, have been subject to a year of confusion and uncertainty. In the meantime, the Tory-Lib Dem coalition Government have been dithering around and then deliberately choosing to reduce demand for solar panels by restricting eligibility for feed-in tariffs to micro-scale projects.
Far from coming forward with policies to encourage our energy-intensive industries to invest for the future here in Wales, the Chancellor totally ignored the consultation responses from companies such as Tata and set the carbon floor price too high. All we are getting now is shilly-shallying about some possible help package for energy-intensive industries, with a very real danger that it will be too little, too late, and that such industries will be driven out. The super-tax on manufacturing makes the UK uncompetitive even compared to our European neighbours, it is no surprise that such companies are going.
We have serious concerns about the Work programme, as do the Work and Pensions Committee, the Social Market Foundation and, indeed, the Tory peer Lady Stedman-Scott. The programme will help fewer people than the previous Government’s programme did; that is what the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell, actually told the Committee. We had some 800,000 people in programmes in 2009-10, but the current programme will only take on board some 600,000 people. There is a 25% cut in funding, compared with previous programmes, and the Social Market Foundation questions the viability of the scheme and whether the providers will actually be able to deliver.
There are also delays in getting people on to the programme. Only last week, the Employment Related Services Association pointed out that the backlog of work capability assessments to be conducted by Atos means that fewer people are actually being referred to the programme. The Tory peer Lady Stedman-Scott has said that under the Work programme, commercial firms will not take on the hard to help, and that most of the specialist charities that could help such people did not win any of the Work programme contracts. The Work programme is supposed to be funded from future benefit savings, but the benefit bill is rising as unemployment rises. It will continue to rise relentlessly if the Government stubbornly persist in refusing to develop a growth strategy.
The Secretary of State for Business, Innovation and Skills admitted today that we may well be in for a double-dip recession. With that spectre hanging over us, I call on the Government parties to act now; take responsibility for their decision to cut too far, too fast, which has crushed our economy; and work out what they need to do to get our economy growing again in Wales.
If the Government do not know what to do, let me explain to them again Labour’s five-point plan for jobs and growth. Let me tell them what they could be doing: introducing a £2-billion tax on bank bonuses to fund 100,000 jobs for young people and build 25,000 more affordable homes; bringing forward long-term investment projects in schools, roads and transport to get people back to work and strengthen our economy; temporarily reversing January’s damaging VAT rise, to provide immediate help for our high streets and for struggling families and pensioners; making a one-year cut to 5% VAT on home improvements, repairs and maintenance to help home owners and small businesses; and implementing a one-year national insurance tax break for every small firm that takes on extra workers, which would help small businesses to grow and create jobs. Before Government Members ask where the money will come from, they should remember that their policies have generated an additional £46-billion deficit.
If the Government want to avoid condemning the people of Wales to a repeat of the 1980s, and want to give the Work programme a chance of success, they must act now to get the economy growing here in Wales.
Mr David Jones (Translation ): I am sure that I speak on behalf of the whole Committee when I say that it is a pleasure to be here in Wrexham today. It is also a pleasure to hear members of the Committee addressing us in Welsh, because we are in Wales and it is important to use the language. I have great pleasure in coming here today, because this is the area where I was brought up.
[Continued in English] On behalf of the entire Committee, I thank Wrexham county borough council for making us feel so welcome here. As I remarked earlier when you were not in the chair, Mr Caton, it is perhaps appropriate that we should be discussing the Work programme, not only because the motto of this fine borough is “labor omnia vincit”—work conquers all—but because Wrexham is an old, historical town with a huge industrial past, and has been significant in the industrial history of this country. In fact, the industrial revolution started partly here in Wrexham. It was in Bersham that John Wilkinson—“Iron-mad” Wilkinson—started his foundry, which made the cannons that won the battle of Trafalgar. Subsequently, this area proceeded with its industrialisation.
I was brought up here in the village of Rhosllanerchrugog, which is a Welsh enclave in what was in those days an English-speaking area. I remember well that when I was a boy, most male employees worked in the coal industry, in steel, in tanneries or in one of the two breweries established in this town. All those industries have gone, but as the hon. Member for Wrexham pointed out, they have been replaced by the
Wrexham has changed, and it is living proof, as the hon. Member for Wrexham points out, that it is possible to move from the old dirty and heavy industries to the new high-tech industries on which the future of this country depends. We will not compete with the far east in turning out low-value, high-volume products. The future of this country depends on high-tech, high-value-added industries and, significantly, as many hon. Members have pointed out, for that we need proper education and training. We have that here in Wrexham. We have Glyndwr university, which is a tremendously important educational institution. I was glad to see the right hon. Member for Neath praising Glyndwr in the newspapers this morning. It is so good that I sent my son there to read for a business degree, but I hope that the right hon. Gentleman will talk to his colleague in the Welsh Assembly and point out that Glyndwr wants to be an independent institution, rather than being absorbed by other institutions. If he were to sign the campaign launched by The Leader, it would be of great benefit to him and his party.
Several tribal noises have been made by the Labour party today, and those noises were not helpful. The hon. Member for Llanelli closed for the Opposition. She asked the rhetorical question, “Where is the Government’s growth strategy?”—I am surprised at her because I know she is a highly intelligent and sensitive person—and suggested that we do not have one. The first aspect of our growth strategy is to address the appalling level of debt that her Government bequeathed to us. Were it not for our taking strong and vital steps to clear the deficit, our international credit rating would be slashed, as countries such as the United States have experienced.
Mr J ones: The credit card was heavily used under Labour. Furthermore, we have created regional growth funds, cut corporation tax and stopped Labour’s job-destroying tax on jobs. We have simplified the tax system, developed new enterprise zones, cut red tape and created a green investment bank.
Mr Jones: No, I will not. The hon. Lady would not give way and little time is left to me. The fact is that the Government are going for growth and have confidence in the future of this country, while the hon. Lady’s party does not. Her party has spent most of the debate
I am intrigued by the contribution of the hon. Member for Vale of Clwyd, because he spoke convincingly on the initiatives adopted by his local area. He talked about the private-public-voluntary sector partnership in his town. Well, that sounds awfully like Tory policy. In fact, it sounds remarkably like the big society. I am glad to see that he welcomes it. [ Interruption. ] Frankly, the noises off from the hon. Member for Wrexham lead me to wonder whether the Labour party fully understands the significance and the depth of the challenges faced by the country.
There is a large mass of young people in this country who have never worked. They need to be helped into work. Sadly, the Labour party, rather than wanting to create new high-value private sector jobs for them, is quite happy to see them festering on long-term unemployment and sickness benefits. That is something that the Government are unprepared to tolerate. The hon. Member for Arfon is right that it is not simply a question of money; it is a question of social good and self-respect. People need work. The Government’s tailored approach to unemployment is the right approach. What young people need is the individual help that they will receive under the Government’s Work programme. There can be nothing more depressing than to listen to the noises that come from the Opposition, who seem to think that it is entirely appropriate that such people should remain on unemployment and incapacity benefit for ever.
We are determined that every single unemployed person in the country should have the targeted care that he or she needs to get back into employment. We are prepared to make sure that they have work experience and training, and in that respect I must point out that, as has been said by colleagues, many of the levers reside in the hands of the Welsh Assembly Government. We are quite happy—in fact, we are determined—to do our best to work with the Welsh Assembly Government to ensure that the necessary training is provided, but the economic levers are in their hands.
I was disappointed that the enterprise zones that the Labour-controlled Welsh Assembly Government now intend to set up were established so very late. I was also disappointed by the sneering remarks of the hon. Member for Wrexham when my hon. Friend the Member for Vale of Glamorgan drew attention to the benefit of enterprise zones. The hon. Member for Wrexham actually disputed the fact that Tata had been attracted to the midlands by the prospect of an enterprise zone. If, after our sitting is concluded, he cares to check his records, he will see that the development is in the i54 enterprise zone, and that the local authority praised the fact that the zone had been established to attract a £750 million investment by Jaguar Land Rover into the area. That is something that can be undertaken in Wales and, sad to say, the Labour Welsh Assembly Government have dragged their feet. Now that they actually have the economic lead and the primary powers, and now that they have been equipped by the Conservative party with what they need to get on with the job, I hope that they will.
I believe that Wales can have a bright future. There is scope for regeneration and more employment in Wales, but what that requires is not politicking or the making of cheap political points but, frankly, all parties working together and, more importantly, Westminster and Cardiff working together. The Conservative party is prepared to do that; we now wait to see what the Welsh Assembly Government will do.