HC Deb 28 January 1987 vol 109 cc337-54 3.36 pm
The Paymaster General and Minister for Employment (Mr. Kenneth Clarke)

I wish to make a statement on a new package of training and employment measures. I apologise in advance to the House because the statement is on the long side, but these are important matters. This is a large package and I know that the House would wish to be fully informed sbout it.

Unemployment has fallen for five consecutive months and is now down by more than 100,000. Vacancies are standing at their highest levels this decade. Our unit wage costs are now rising more slowly than the rate of inflation and are beneath those of our principal overseas competitors. We shall shortly enter our seventh successive year of economic growth.

All this, building on the firm foundation of the million new jobs the economy has created since 1983, can only be good for employment. But with some skill shortages already emerging and unemployment at its present level there is no room for complacency. The Government have therefore reassessed the scope and direction of the employment, enterprise and training measures within existing departmental programmes. As a result my noble Friend the Secretary of State for Employment is writing to the chairman of the Manpower Services Commission to ask the commission to undertake further measures that will give priority to our task of motivating and training unemployed people, particularly the younger generation, to fill the jobs that are now becoming available.

First, restart is a success. By the end of March this year the Manpower Services Commission staff should have interviewed all the 1.25 million people who will have been out of work for over a year. This has been an enormous task. I would like to pay tribute to our staff in the MSC, not only for the forty thousand interviews a week that they have undertaken but for the enthusiastic and sensitive manner in which they are completing their task of offering advice and help to long-term unemployed people.

We can see already that this programme is bringing help and assistance to the long-term unemployed. In the latest figures, long-term unemployment fell in three months by 7,000 when in the previous year it had risen over the same period by 25,000. I am confident that this improvement will be maintained as the programme develops and as the economy continues to strengthen.

No other industrialised nation provides such a package of individual help to each and every long-term unemployed person. But even this is not enough. Last October we announced that the Manpower Services Commission would pilot, in nine areas, restart interviews being offered to those out of work for six months or more. We thought that the earlier the help was received the more effective it would be. The results of these pilots have convinced us of the need to extend the restart counselling in two ways.

First, there will be an additional earlier interview. From the end of March, everyone who becomes unemployed for more than six months will be invited to attend a restart interview. But we have decided to go further, and our second extension is to offer a restart interview at regular six-month intervals. In the future there will be regular contact between Manpower Services Commission staff and unemployed people, to help them, at different times and in different ways, back to work.

The counselling interview is, of course, only the first step—although a vitally necessary one—in the process of getting the unemployed back into work. That brings me to the second of the new measures I am announcing today.

Last October we also announced that the Manpower Services Commission would commence piloting an entirely novel training scheme designed specifically to meet the needs of those who have been out of work for six months or more. This scheme has three essential elements. It applies to those who have been out of work for the requisite period, it takes place on employers' premises and it must lead to recognised vocational qualifications.

The Manpower Services Commission has considered the pilots and last week the commission endorsed the report of a working party on the shape of the new scheme. We wish to accept its recommendations in full.

The commission is concerned that quality should be pre-eminent, and I agree completely. It is further concerned that quality should dictate the speed of any extension, and I again agree, as I agree that qualifications from recognised examining and validating bodies must be part of every individual programme. Indeed, these will be conditions of the job training scheme which will be available for people who come to their first six-month restart interview.

The reskilling of Britain is vital if we are to maintain our current economic progress and achieve the decline of unemployment. We have therefore decided that the new job training scheme should be expanded on a national basis to coincide with the extension of the restart programme from March this year provided that the Manpower Services Commission can maintain quality in each area. With that very important proviso we will ask the Manpower Services Commission to provide up to 110,000 places by September of this year. This will mean that in a full year nearly a quarter of a million unemployed people will be given high quality training in skills that will enable them to compete, and to compete successfully, for jobs in today's labour market. This will offer a fresh start in particular to the under-25s. They must be our priority.

I have visited too many areas with high unemployment and heard too often many employers complain that they cannot find people with the right skills. I hope that this new training measure will play a major part over the next few years to provide the skills necessary to maintan our place in the world. It will, if the Manpower Services Commission can maintain the necessary quality of provision. I have every confidence that it can achieve that.

The job training scheme is for adults. My third announcement concerns young people. We are already ahead of most other countries in the steps we have taken in the last four years to train school leavers, but there is a further step that I can announce today. The successful introduction of a two-year YTS last year enabled us to guarantee a place to every unemployed 16-year-old school leaver. Indeed, this year out of 475,000 school leavers, only 2,376 were still awaiting the offer of a place on this training programme by Christmas.

We therefore now propose to extend the guarantee of a place to every unemployed 17-year-old school leaver. This will mean that each and every unemployed young person under the age of 18 is now guaranteed high quality training leading to a recognised qualification. This guarantee is unequalled by any of our principal competitors. For the first time, from this Easter there will be no unemployment under 18 and anyone under that age who remains unemployed will have chosen to remain unemployed.

Finally, there will be a further increase in the enterprise allowance scheme which is our scheme for subsidising the first year of self-employment for someone previously unemployed. Over the last three and a half years more than 200,000 unemployed people have started to work for themselves under this programme. Self-employment is rapidly increasing in all parts of the country. Far from a north-south divide, I might point out that the increase in the number of self-employed since 1979 has been greater in Yorkshire and Humberside—77 per cent. —than it has been in any other region. The 43 per cent. increase in the northern region is close to the 46 per cent. increase in the south-east.

We are presently expanding the enterprise allowance scheme towards an annual target of 100,000 unemployed people setting themselves up in business. We are raising that target and next year it will be increased to 110,000—an expansion of 10 per cent.—but here again we shall be asking the Manpower Services Commission to pay attention to quality and to the amount of help the new business men and business women will have to help them succeed.

The measures we have announced today constitute a major redirection of our labour market programmes to help the unemployed back into real jobs. Unemployed people need practical help to get back into work, not empty promises to create millions of jobs on local authority payrolls. They need help and training to compete successfully for the jobs which are already becoming available. We need to have a work force with tomorrow's skills to compete in tomorrow's world. That is what these new measures will help accomplish, and I commend them to the House.

Mr. John Prescott (Kingston upon Hull, East)

The House and the country will be in no doubt that a general election is near, following this further example of a Government who are obsessed with reducing unemployment figures rather than creating real jobs. Not one real job is proposed in the package announced this afternoon.

The Government's statement must be seen against today's political background and seven years of Tory policies on employment and training. Despite the many fiddles with the unemployment figures, the registered unemployed total stands at 3.25 million, with 30 people for each vacancy and with the worst trained labour force of any developed economy—[HON. MEMBERS: "Get to the point."] That is what I am doing. A major deskilling of our labour force has occurred since 1979, with this Government abolishing 16 of the 23 training boards and closing 30 of the skillcentres. That has contributed to a massive shortage of every sort of skill in this country, and has affected very many of our companies, based on the evidence that they have given.

Training is regarded by many companies as a cost rather than an investment, with the result that we now have a deplorable record of expenditure on training compared with our major competitors. They invest seven times—even as much as 14 times—more than Britain on the training of their labour forces.

This much-heralded job training scheme was born at the Tory party conference last October, much to the amazement of the Manpower Services Commission, and is built on a training pilot scheme that affected 10 areas in the United Kingdom and involved 1,000 people. There was little assessment in the 10 weeks that it operated before now being launched into a scheme affecting 110,000 places in six months—twice as many as the MSC thought it could handle. Is the Paymaster General convinced that those places, even on the terms that he set out, can be provided by industry under present circumstances?

I must make it clear immediately that, of course, we welcome the counselling and advice that are given to the long-term unemployed. I have suffered periods of unemployment — [HON. MEMBERS: "You soon will again."] — that have not been suffered by Tory Members. We welcome any advice that can be given—[Interruption.]

Mr. Speaker

Order. This is an important statement of great interest to the House.

Mr. Prescott

We are used to Tory yobbos in the House by now, Mr. Speaker. The debate is being broadcast on the radio and the electorate can judge who is giving serious consideration to the problems of the unemployed.

The restart programme is largely about marshalling people into dead-end schemes of limited effect. Can the Paymaster General confirm that the estimated 250,000 places in one year, which he mentioned in his statement, can be found? Can he estimate the effect that he thinks the scheme will have on the figures for the registered unemployed?

Secondly, what is the estimated cost of the schemes, and will extra resources be devoted to them? Can he assure us that they will not be at the expense of the existing alternative training schemes, as the expansion of the youth training scheme was at the expense of the adult training schemes?

What level of allowance is to be paid to people on the schemes? Are we correct in believing that it will be precisely the same as the levels of benefit? Will it include, as the MSC report requested, at the very least out-of-pocket expenses and help with extra training requirements for the individual?

Are these job training places now to be provided at half the cost of the existing community programme, thus breaking any attempt to adjust payments to proper levels of pay? [HON. MEMBERS: "Read it again."] The community programme made a clear commitment to bear some relationship to trade union rates of pay. Nothing in the scheme bears any resemblance to such pay and it is a major step to the workfare programme for which many Conservative Members have been calling.

Will the schemes be compulsory? Will there be a loss of benefit to those who are offered places on such schemes, or will they be allowed to take alternative employment schemes which pay more than these schemes without facing penalties?

Is not the limited six hours a week for job training on a six-month scheme completely inadequate to make any contribution to the high quality training, as the Paymaster General has claimed? Will more resources be made available for monitoring the schemes and for judging the qualifications and standards achieved by them? What are the estimated effects of—[HON. MEMBERS: "Get on with it."] The Paymaster General made a lengthy statement which raised many questions which I am entitled to ask. I hope that I will be given time to ask those legitimate questions to which not only we but the long-term unemployed want replies from the Paymaster General.

Finally, it is typical of the Government's arrogance to assume that jobs provided by local authority services, such as house building and helping the mentally handicapped and old people, as in the statement about local authority jobs, are simply a payroll contribution. They are as real as the jobs done by anyone working in industry. However, that shows the true political nature of the statement, which cruelly exploits the desire of the unemployed to have work. It does nothing to reduce the deskilling of our labour force. It is one further attempt to massage the unemployment figures downwards and it is a major step towards an industrial conscripted labour force working solely for their meagre benefits.

Mr. Clarke

At one point the hon. Member for Kingston upon Hull, East (Mr. Prescott) read a prepared part of his question explaining his concern about the level of training and skill in our economy.

Mr. Barry Sheerman (Huddersfield)

The Minister read his.

Mr. Clarke

He obviously accepts, as we do, that we need to improve our record of training, that in some parts of Britain and in some industries skill shortages are emerging and that some of the unemployed need further training to polish up existing skills or to acquire new ones to improve their chances of entering the labour market.

Therefore, I cannot for the life of me understand why he cannot bring himself to welcome the announcement of a major training scheme, aimed particularly at the under-25s, providing on-the-job and off-the-job training in specific skills for those who have been out of work for over six months.

The hon. Gentleman asked me a number of questions about the way in which the scheme will work. Perhaps I shall be able to reassure him because I think that the scheme will, on the whole, receive a widespread welcome in industry and among the general public. First, he asks whether the places can be provided. He is apparently worried about our setting a target—it is a target—of 110,000 by September. Of course, that is quite an ambitious target and we shall achieve it only if we have a good quality scheme and maintain that pace of progress. A quicker rate of progress was achieved when YTS was first introduced. In the first eight or nine months of the YTS programme, 400,000 places were provided. We are proceeding at a slower rate than that. We have a good flow of managing agents coming forward to take part, a good flow of employers who are interested in the scheme, and of bodies that are responsible for qualifications. We believe that we must go ahead and aim at that sort of figure, and I am confident that the MSC will get there.

The hon. Member asked about the cost and the extra resources. Obviously, the cost of the YTS programme depends on the extent to which we achieve the rate of progress that the Government would like to see. If we reach the sort of figure that I am talking about, the cost will be about £200 million, some of which would be switched from programmes elsewhere and will therefore be new money to the Manpower Services Commission. Some of that money will be found by switching funds within my Department's budget. [HON. MEMBERS: "How much?"] My Department is spending £4 billion on schemes of one kind or another, £3 billion of which is spent on schemes run through the MSC. [HON. MEMBERS: "How much new money?"] For the MSC that figure is over £100 million.

I know that Opposition Members are stronger on the amount of money that they wish to spend than they are on how they should spend it. They are committed to a £6 billion programme, but they have not explained how on earth that is meant to take 1 million off the unemployment figures. We are talking about new resources for the Manpower Services Commission and that will be achieved by switching resources within Government. That is how we shall proceed.

Mr. Frank Cook (Stockton, North)

More window dressing.

Mr. Clarke

The level of allowance received by each trainee will depend on his personal circumstances, because we shall ensure that those people who are at the moment receiving benefit will not lose money as a result of going on to the scheme. Therefore, as the level of benefit will vary, so will the average available allowance, which will be equivalent to the benefit that trainees were getting. The amount received by a young single man, will differ from that received by a married man with children who is a householder. In answer to the hon. Gentleman's query, there will be an addition for travel and out-of-pocket expenses incurred by those who take part in the scheme.

The hon. Gentleman also asked whether there would be any element of compulsion. There is no element of compulsion in any work, or training scheme in this country. We wish to encourage those who come to the restart interviews to go on to the scheme. Nobody will lose his benefit entitlement solely as a result of refusing to go on the job training scheme. As we have had to explain on previous occasions, it is true, in this as in every part of the employment world, that people who continue to receive benefit must demonstrate that they are available for work. That has always been the rule.

The hon. Gentleman was concerned about the quality of the training and the amount of knowledge that could be acquired in six months. Of course, some skills can be acquired and tested in six months, but others require longer. We are now moving over, not only in this scheme but generally, to training based on a measurement of standards, rather than time-served training. Of course some standards cannot be achieved in six months, but one can take a step towards those standards and devise skills tests suitable for the scheme, if existing skills tests cannot be accomplished within six months—but many can.

We are in contact with the agencies that determine qualifications, such as the Business and Technician Education Council, the Royal Society of Arts, and the City and Guilds of London Institute, which will welcome this announcement wholeheartedly. We shall discuss with those bodies how the training course can achieve a quality that will lead to a recognised qualification, or to a step that is definitely towards qualifications, in the period that we are discussing.

The hon. Gentleman also asked about the effects Of the scheme on the unemployment figures, which features so largely in the barracking from his hon. Friends. Its effect on the unemployment figures will depend on the extent to which we successfully continue to reduce unemployment. It is a sad truth, from the point of view of Opposition Members, that, as the number of unemployed people steadily reduces, the figures go down. I realise that Opposition Members are worrying as the election gets near. [HON. MEMBERS: "They are on schemes."] If Opposition Members are asserting that the growth in new jobs in the economy and the reduction in unemployment are directly related to our schemes, they are grossly exaggerating the size of the Department of Employment's schemes, and their mathematics is gravely in error. I did not give my statement a political tenor.

Mr. Sheerman

As if you would.

Mr. Clarke

It was the hon. Member for Kingston upon Hull, East who mentioned the run-up to a general election. It is quite clear to me that, in the run-up to a general election, Opposition Members are getting into a desperate panic about the obvious reduction in unemployment figures, to the extent that their only reaction to employment and training measures is to attack each and every announcement that we make, simply because they are frightened that we are demonstrating that unemployment is now going in the right direction.

Mr. Peter Thurnham (Bolton, North-East)

I welcome the fact that existing funds are being used more productively for these positive measures. Is my right hon. and learned Friend aware that the job training scheme in Preston, contrary to what the hon. Member for Kingston upon Hull, East (Mr. Prescott) said, has been so successful that everybody who wanted a place was able to get one, and a job afterwards?

Mr. Clarke

I quite agree with my hon. Friend. I think that the people of whom we should take notice are the unemployed who need help to get back into work, and employers who are happy to train people. We should take their opinion and experience, and not that of a panic-stricken Opposition. We have found in our pilot areas no lack of people who wish to be trainees on the course. Nor did we experience any lack of managing agents or employers who are willing to provide the training required. It is the success so far of the pilot schemes that has led us to say that we must go national as quickly as quality allows.

Mr. Malcolm Bruce (Gordon)

Is the Paymaster General aware that we share his anxiety at the skills shortages which are emerging in the United Kingdom? To the extent that the scheme will help solve that, we welcome it. It will also provide some outlet for the long-term unemployed.

The Minister will be aware that there is worry and scepticism about the value of such training schemes in terms of meeting skill requirements and providing long-term jobs. Can he therefore give an assurance that the MSC will not advance these schemes simply to meet Government targets if it cannot be assured that they are meeting proper skill and training requirements? Can he give an assurance that unemployed people will not be forced into schemes which they do not think are relevant to them? Can he assure us that they will not suffer any loss of benefit in those circumstances? Will he explain why the Government can find substantial sums of money for training schemes such as this when they are cutting aid to industry and regional development grants, which would help to create the new industrial base and jobs that would help the unemployed in the long term?

Mr. Clarke

I think that I can give the hon. Gentleman the assurance that he asks for in the first part of his question. I agree that it is important to emphasise that we are offering unemployed people training which is of genuine use to them and a potential employer. It is important to realise that the training will be geared to the individual's needs. The person concerned will be assessed—his or her needs will vary considerably according to educational attainment, the level of skills that have been achieved and the type of previous job. Each person will be offered a place for a varying length of time. It might be three months or as long as 12 months. Six months is an average that we have in mind.

Each training programme will be geared to the needs of the individual and aimed at a qualification which, I accept, may not always be achieved, but the idea is that there will be a recognisable marked step towards a qualification. It will be attainable by the individual and useful to him. We agree with the MSC that we should go ahead as quickly as achieving that level of quality requires.

I note the hon. Gentleman's comments on other Government programmes to bring new investment and industry to the regions. I agree that they are important. We have cut spending in that area because we have targeted it more sensibly. We have concentrated on jobs and chosen not to subsidise capital developments everywhere, which was always wasteful and ineffective. We are now getting near to having doubled expenditure in real terms on training and employment because we give it a very high priority.

Mr. Ralph Howell (Norfolk, North)

I congratulate my right hon. and learned Friend on this most excellent statement. It will be well received by people throughout the country. I congratulate him on being able to offer a new training scheme place to everyone aged under 18. Will he explain why we are to continue to give people who turn down such a place the option of drawing benefit? I congratulate him on the success of the restart scheme. Will he consider urgently the introduction of a pilot workfare scheme?

Mr. Clarke

I agree with my hon. Friend about the public reaction to the announcement. There will continue to be incredulity outside the House at the reaction of the Official Opposition to such an announcement. Anybody aged under 18 who says that he is unemployed after this measure has been introduced has decided of his or her own volition to be unemployed and not to take a training scheme place. Certain benefit arrangements already apply to youth training scheme trainees, but I do not think that it is right to say automatically that somebody should lose benefit just because he or she declines to take part in a scheme. It is important to emphasise that anybody who continues to claim benefit has to continue to demonstrate, as Parliament has always required, that he or she is available for work and is taking active steps to find it.

As for my hon. Friend's advocacy of workfare, he knows that I am not persuaded that it would be right to start providing programmes for unemployed people as a condition of receiving benefit. We are offering extremely attractive training schemes and work experience, and I cannot believe that sensible people will continue to turn them down. All the evidence suggests that, with YTS, the number of 16-year-old school leavers who choose to stay out of work now is very low. The number of unemployed school leavers by Christmas this year was far lower than in previous years.

Several Hon. Members


Mr. Speaker

Order. I remind the House that this is an Opposition day and that a very large number of right hon. and hon. Members want to take part. I ask for brief questions, please.

Mr. Ron Leighton (Newham, North-East)

Would the Paymaster General give an account of his recent meeting with the MSC? Can he confirm that it went to see him to express its concern and reservations about the standard of training in the job training scheme and about the speed at which he wants to produce it?

Mr. Clarke

The Manpower Services Commission has written to my right hon. and noble Friend the Secretary of State setting out its views, and he has written back agreeing about progress under the JTS. The MSC endorsed the report of its sub-group, which asked for an extension of JTS, saying that it should be extended as quickly as quality allows. That is the arrangement on which we are proceeding.

We are in complete agreement with the MSC in the correspondence that we have had, subject to one or two Trades Union Congress reservations about the level of allowances. We are, however, in agreement on JTS. That includes the TUC commissioners who are Ron Todd, Roy Grantham and Ken Graham—not insignificant figures in the Labour movement. I find it difficult to engage in this exchange of correspondence with the MSC and then come here and meet a band of hooligans carrying on about everything that we propose.

Mrs. Elizabeth Peacock (Batley and Spen)

May I thank my right hon. and learned Friend on behalf of people throughout the country, and especially people in my constituency, who will welcome this news? We recently had an opportunity to see more than £20 million of investment in manufacturing in my constituency—and we need the skills to go with it. Many people will welcome the opportunity to take part in a training course which will lead to a recognised and approved qualification. All will welcome the fact that £100 million will be spent on training rather than on keeping people at home.

Mr. Clarke

I am grateful to my hon. Friend. I was with her in her constituency yesterday visiting two firms that are engaging in major investment and expansion.

Mr. Prescott

It is a marginal.

Mr. Clarke

It was a marginal seat in which a great deal of investment is taking place. New jobs are being created. The choice for an unemployed person is between being paid benefit for doing nothing and being paid an allowance for good quality training. I have no doubt that most unemployed people know which is in their best interests.

Mr. Hugh Brown (Glasgow, Provan)

Which industries in Glasgow and the west of Scotland are suffering from skills shortages?

Mr. Clarke

I agree that skill shortages are most acute in parts of the south and the midlands. The shortage tends to be limited to certain industries further north. In areas that have suffered rapid change, particular skill shortages are found. There is no general skills shortage in west central Scotland, but one can find employers in all parts of England—I have not been to that part of Scotland for about 12 months—who cannot find people with certain skills.

Employment is increasing throughout the country and unemployment is falling. The skill shortages that are obvious already in the south-east will become more apparent elsewhere. In the 1990s we shall obviously require a more skilled labour force than we had in the 1950s and 1960s. It is a positive policy to raise the level of skill of those who have been out of work for six months or more so that they are more able to take the jobs that are emerging. In doing so, we shall provide a much more skilled work force for future generations.

Mr. Michael Hirst (Strathkelvin and Bearsden)

May I urge my right hon. and learned Friend to disregard the Opposition's pathetic reaction? They seem always to denigrate every effort that is made to improve skills and job prospects. May I welcome the further expansion of the enterprise allowance scheme? Does he agree that this will give young people especially the opportunity to acquire skills and to go into business on their own account?

Mr. Clarke

I realise that we have many schemes and that their numbers become bewildering. Through our Action for Jobs campaign we try to present the differences between them. Of all the schemes, I commend the enterprise allowance scheme most firmly to overseas visitors and to others. It is the most successful scheme and it has enabled many to set up in business on their own account. The majority of them survive and go on to provide jobs for others. For every 100 people we subsidise who go into self-employment, about two or three years later there are 190 jobs in the economy that are not being sustained by public funds. That is why we are expanding so rapidly. The scheme supports the welcome growth in self-employment in our community.

Mr. Ernie Ross (Dundee, West)

I represent a part of one of the areas that has been involved in one of the pilot projects for the scheme. Having listened to the Minister and having had experience of the pilot project in Dundee, it seems that there are two different worlds. It is clear that the Minister does not live in the world of which Dundee is a part.

Is the right hon. and learned Gentleman aware that our experience in Dundee is that the scheme was introduced far too rapidly to allow the necessary liaison that was required between trainers, the unions and the possible employers? The only real employment that we in Dundee see in the immediate future lies in the numbers of those who are looking for places whom the skillcentres will have to take on. The Minister has talked about an expansion of 110,000 places, but I suggest that when he returns to this issue in two or three months, he will confirm that only those who were looking for places were taken on. Experience in Dundee shows that he has succeeded only in dramatically reducing—from 12 to one—job choice or the menu that could be offered to unemployed 18 to 25-year-olds. He has ensured that it is no longer possible to offer the community programme or the restart scheme to these people. Dundee's experience is that the Minister's offer is not a very good one and is not a real improvement.

Mr. Clarke

Over 1,000 people are engaged in the pilot projects for the job training scheme and they appear happy with the training that they are receiving. About one in six drop out, some for the good reason that they have obtained a job elsewhere or have been taken on by the employer who began to give them on—the—job training. Our experience in Dundee and elsewhere does not match the hon. Gentleman's description. We shall have to ensure as we go along that we achieve quality and maintain it. I accept that some wrinkles may have to be removed.

The hon. Gentleman has said that there was not time for liaison between the unions, the trainers and the employers. The House will recall that the hon. Member for Kingston upon Hull, East contended that we were proceeding at a terrible rush. It should be understood that the unemployed are facing a serious problem and that, if someone has been out of work for six months or more, he will consider unemployment to be 100 per cent. It is obvious why the Opposition wish to delay making progress. They seem suddenly to have lost their sense of urgency in tackling the unemployment and training problems.

Mr. Geoff Lawler (Bradford, North)

Does my right hon. and learned Friend agree that all the evidence is that most young people would rather do something useful with their time than spend it idly? This means that the extension of the JTS will be welcomed. Does he agree that the description of the YTS as a dead duck by the hon. Member for Kingston upon Hull, East (Mr. Prescott) shows how out of touch he is with the views of trainees and of young people generally? There are skill shortages in Bradford, for example, where there is above average unemployment. There is a shortage of joiners, skilled sewing machinists and Asian chefs. Will my right hon. and learned Friend seek to ensure that JTS placements are sensitive to the needs of the local economy?

Mr. Clarke

I agree with the first part of my hon. Friend's question. I declined to enter to into a discussion with the hon. Member for Glasgow, Provan (Mr. Brown) about his constituency in the west of Scotland, and I am grateful to my hon. Friend for using his knowledge of Bradford to explain what the problems are there. It is an essential feature of the JTS that the employer provides on—the—job training. This helps to ensure that training is provided in areas where employers feel that there will be scope for employment. It is training that is aimed at the jobs market in the locality. I agree with my hon. Friend that that is a vital feature of the scheme.

Mr. Allen McKay (Barnsley, West and Penistone)

Will the Minister assure us that none of the schemes will be used as a source of cheap labour? If they were used in that way, they would be killed stone dead. I admit that some of those who are participating in the schemes are happy with what they are doing, but I am concerned about the training element. I trained for seven years, during which time I was seconded to various places. I was given day release and I participated in sandwich courses in training for a skill. For what skills will people be trained in the Barnsley area, when there is currently 22 per cent. unemployment and a decline in traditional industries? What has the Minister in mind for the area?

Mr. Clarke

I have already said that the allowance will be set at a level that will not cause a loss of income for any of those who take part in the scheme. It will include travelling expenses for example. The quality of training will depend on the particular skill, how long it will take to acquire it and how the training is organised. We shall begin by designing a training programme for an individual. Depending on the skill involved, some individuals will achieve proficiency in six months. Others will be taken in the direction of a good qualification in six months.

We shall be considering with the RSA, BTEC and all the other validating agencies how we can ensure that the scheme produces a level of skill or is a worthwhile step towards a qualification that can be attained with work experience afterwards. The seven years that the hon. Gentleman spent training for his trade is not the norm in obtaining trade skills. There are many skills in the economy that can be learned in the way that I have described.

Mr. Paul Marland (Gloucestershire, West)

Does my right hon. and learned Friend agree that there are two aspects of this afternoon's proceedings that should be much more widely known outside the House? First, before his important statement, there was only the meagrest handful of Labour Members in their places. Secondly, Labour Members have shown breathtaking contempt for well tried and tested training schemes.

Mr. Clarke

I agree with my hon. Friend, but the few Labour Members present include some of the noisiest. I have no doubt that they are able to make up for the absence of their colleagues.

Mr. Martin Flannery (Sheffield, Hillsborough)

This a serious subject—[Interruption.]—despite the laughter that is coming from the Government Benches. I want to ask the Minister, if Conservative Members will be quiet and listen to what I consider to be a reasonable question, whether he and some of his colleagues who are making all the noise will visit the great industrial cities of the morth to see the extent of the brutalising and terrible unemployment that the Government have created, and try to understand the pervasive cynicism that dominates young persons who are out of work towards the umpteen schemes that have been introduced to take them off the unemployed list so that they can be treated as working people? Does the Minister realise that we understand that this is obviously another method of massaging the unemployment figures, no matter what he says, that everyone knows this except those who are blind and those who will not accept it, and that there is no hope of getting young people back to work by this means.

Mr. Clarke

I was in one of the great cities of the north yesterday.

Mr. Flannery

Come to Sheffield.

Mr. Clarke

After leaving Batley and Spen, I went to Leeds, not Sheffield. I announced support for a new venture capital fund for inner-city businesses, I provided money to enable some training and work experience to start, based on the Jamaica Society headquarters, and I financed a training scheme for youngsters who get into trouble. I realise the scale of the problems and so do my right hon. and hon. Friends, many of whom, like Labour Members, represent our great northern cities.

I agree with the hon. Member for Sheffield, Hillborough (Mr. Flannery) that one of the problems is cynicism. There is an element of opinion that takes the view:"Oh! It is all a waste of time," They say that it is all PR, all a con trick and that nothing can be done by the schemes. The Labour movement in Sheffield, and some parts of the Labour movement elsewhere is responsible for encouraging that feeling. They tell people to march behind the old banners and listen to the music of the old bands. They come here to barrack the training schemes. Unemployment is falling more quickly in the north than in the south and eventually the cynicism of the Labour movement in those great cities will be exposed.

Mrs. Virginia Bottomley (Surrey, South-West)

Will my right hon. and learned Friend confirm that, in recent years, a series of reports from the MSC and NEDO have consistently highlighted the need for further job training to improve our skills base? Does he agree that anyone with a serious interest in the future of our industry and a true concern for the needs of the unemployed can only regard those sniping jeers of the Labour party as showing a callous disregard for the needs of the unemployed and the needs of industry?

Mr. Clarke

I agree with my hon. Friend. In addition to our job training schemes, we must press employers and others to step up our training efforts in other ways. We must improve our record in adult training and today's announcement heralds an important new scheme that will give training to those who have been unemployed the longest and need it most.

Mr. Greville Janner (Leicester, West)

How much new money do the Government intend to pout into this scheme? Surely the answer is that they intend to spend no new money. Is it not right that this scheme, like so many other Government schemes will reduce the number of people on the register of unemployment without creating even one real job or even one real apprenticeship?

If there is no new money and if there is no reduction in true unemployment through the creation of jobs, is this not just one new string on the Government's election fiddle —to be recognised precisely for that by the electorate?

Mr. Clarke

The total level of public expenditure will not be raised by today's announcement. New money has been given to the MSC; it has been switched there from other programmes and other departments. It is quite absurd for the hon. and learned Gentleman to argue that, unless one increases public expenditure as a whole, nothing has been done.

I said earlier that the empty hole in the middle of Labour party policy is that it is extremely clear that the party will borrow £6 billion to finance its employment measures but it cannot explain what those measures will be. The only measure of which we are aware is the Southwark scheme. Perhaps the Labour party intends to build upon that scheme, which provides that three quarters of all jobs to be created in Southwark will be local council jobs provided by an already over-manned local authority.

These Government schemes do not contain a job, but they steer the unemployed towards the growth in real jobs that is taking place. There are now over 1 million more jobs in the economy than there were in 1983 and we are witnessing a steady and continuing increase in the number of jobs in the economy. The people we are dealing with today—those out of work for more than six months—are especially disadvantaged when it come to getting those new jobs, and that is where today's schemes fit in.

Mr. Spencer Batiste (Elmet)

Is my right hon. and learned Friend aware that the important announcement he has made today will be widely welcomed in the industrial cities of the north where this scheme and its predecessors have substantially contributed to the record job creation of the Government since 1983? Does he accept that the Labour party's clearly hysterical and negative opposition to his proposals is clear evidence that the only genuine commitment of the party opposite is a commitment to failure and hoplessness?

Mr. Clarke

My hon. Friend may have noticed that Opposition Members are getting quieter, no doubt as they reflect upon the import of this statement. No doubt Opposition Members will also reflect upon what measures they will put forward to deal with the problems. Unless they come up with something soon they may, eventually, be grudgingly driven to agree that they do approve of restart, YTS, JTS and the enterprise allowance scheme that we are expanding today.

Mr. Jim Craigen (Glasgow, Maryhill)

The right hon. and learned Gentleman seemed surprised—his words—that skill shortages were emerging. Why, after seven years, have the Government's training policies got it wrong? How many of the unfilled vacancies will be filled as a result of the training policies he has announced today?

Mr. Clarke

I am not surprised by the emergence of skill shortages, as I am afraid that the history of the British economy is that, whenever we enter a period of expansion, that expansion is restrained by skill shortages. That is already beginning to happen again, especially in the south. That is why we have been pursuing the adult training strategy in recent years and have increased the number of people supported by adult training programmes, encouraged employers to expand their training efforts and introduced YTS for young people. YTS is the best training scheme of its kind introduced by any advanced industrial country for young people previously unemployed.

The scheme announced today is the latest addition to those programmes. I think that, with the change of climate in British industry, we now realise that to expand the economy we must provide the skills that are needed by industry. This scheme is a positive response to the needs of industry and the needs of the unemployed. How many vacancies will be filled depends on the success of the MSC in expanding the scheme as we wish and maintaining the quality required to produce people that industry need to fill the jobs that are becoming available.

Mr. Tom Sackville (Bolton, West)

Does not my right hon. and learned Friend agree that if Labour Members persist in attacking every new measure designed to make jobs through training places and to address the problems of skill shortages, they will give a clear impression to people outside that the last thing that the Labour party want is a reduction in unemployment.

Mr. Clarke

I always think they have got round to supporting YTS, which the TUC has certainly supported for a long time, until intemperate remarks are occasionally made by Labour Members. I thought that the hon. Member for Kingston upon Hull, East began to say that he approved of all this counselling and advice, which is rather different from the response that he gave, two months ago, to the restart programme—

Mr. Prescott

It is the motive.

Mr. Clarke

Oh, it is the motive—he fears that we are doing the right thing for the wrong reason. I think that steadily, Labour Members will come round to understanding that no responsible Opposition party can go to an election or look beyond it by solely promising to dismantle all the employment and training schemes which it has been bitterly opposing for the past three years.

Mr. Allan Roberts (Bootle)

Is the right hon. and learned Gentleman aware that I am inundated with the parents of young people who are on those schemes, and indeed by those young people themselves? They come to my advice bureau and write to me every week, to complain about four things — first, the inadequate supervision; secondly, the lack of any kind of real training; thirdly—this is very serious — the exploitation of many of the young people by employers who, for instance, force them to work unacceptable overtime on the threat of being sacked; fourthly — the real thing that they complain about—the fact that, at the end of the scheme, there is no lasting or permanent job in an area like Merseyside for someone who has been through this so-called training. Why do the Government borrow money to pay the equivalent of the nation's weekly food bills—unemployment and social security benefits —and not borrow to build things like council houses which would create real jobs, provide real apprenticeships and create jobs in the private as well as the public sector?

Mr. Clarke

Within YTS, which appears to be what the hon. Gentleman is describing, we have now established a system in which training is provided only by approved training organisations. The monitoring quality of the training is satisfactory and those principles will be applied to the new JTS.

I suggest to the hon. Gentleman that it is no good getting up to produce that sort of criticism of YTS—it is somewhat out of date—and apparently suggesting, as an alternative, that there should be no training provided and where it is provided people should be encouraged not to take advantage of it. I do not agree with the idea that, in Liverpool, the only prospect for employment is achieved by giving money to Liverpool city council to build more council houses rather than adding to the skill level of the unemployed. I cannot believe that people in Liverpool agree with that idea.

Mr. Roberts

I meant Sefton.

Mr. Tony Baldry (Banbury)

Does my right hon. and learned Friend agree that a large proportion of the unemployed are under 25, unskilled and unqualified? Any scheme that gives people the opportunity to gain skills on employers' premises and gain real vocational qualifications must be worthy and welcome to anyone who wants to see the unemployment level come down and the number of skilled people in Britain rise?

Mr. Clarke

It is also worth bearing in mind that a minority of the people under 25 do have some skill. About a quarter have an A-level or the equivalent, but what they need is for that skill to be topped up in a situation that will make them more attractive to employers. Those people should have a three-month training programme that would readily convert them into employable people in the local community, but, at the moment, for six months they have found themselves unemployable. That is why we have an individual training arrangement from three months to 12 months, fitted to the individual person, to try to give him or her a skill that will be useful in the labour market.

Mr. Michael Grylls (Surrey, North-West)

Is my right hon. and learned Friend aware that there will be a warm welcome for the expansion in the enterprise allowance scheme, which has been uniquely effective in encouraging people, often those who have lost jobs in the large-scale older industries, to set up their own businesses? The hon. Member for Kingston upon Hull, East (Mr. Prescott), in a rather snide remark, said that these are not real jobs. If he said that to those 300,000 people who have set up these new businesses, he would get a pretty dusty answer. Will my right hon. and learned Friend keep under review, under the scheme, the adequacy of the training to prepare people to set up their own firms? That, over the long term, could improve the success rate of those new businesses?

Mr. Clarke

My hon. Friend has considerable expertise in small businesses, and in particular I endorse his last point, that it is important to keep up the level of support. It is no good giving an unemployed person £40 per week and letting them run their business on their own. We have taken steps to make sure that not only the initial counselling sessions, but steady advice, are available, as that greatly improves the success rate. I agree with my hon. Friend about the reaction of Labour Members. They make wild remarks, in trying to denigrate the figures, about so-called "skivvy schemes" and the figures of those whom they say are unemployed, but ignore the 110,000 people who will run their own businesses, who, according to the Opposition, should be included among the unemployed. It rather makes clear what their intention is towards both reality and the presentation of it over the next few months.

Mr. Ivan Lawrence (Burton)

Is not the miserable reaction of Labour Members to my right hon. and learned Friend's excellent statement yet more evidence that what is good news for the unemployed is thoroughly bad news for the Labour party? Will my right hon. and learned Friend take this opportunity to nail yet again the lie that is being spread by the Labour party, that the YTS and the job training scheme do not lead to permanent jobs?

Mr. Clarke

Over 60 per cent. of those who participate in YTS go on into employment. That is the average—some schemes are less successful, and some are very much more successful, and it is possible to get a good scheme with up to 100 per cent. placement from those taking part. I agree with my hon. and learned Friend that that point needs to be made, not just to win the political argument but because we do not want young people and their parents to be deterred from taking part in good schemes by political propaganda. My hon. and learned Friend will have observed that, in the political battle, we seem to have driven our opponents from the field.

Mr. Tony Marlow (Northampton, North)

Now that every 16 to 18-year-old will have the opportunity of education, training or employment, is it not mind-boggling to every body, except for the menagerie of ostriches on the Benches opposite, that they should still have an option of state-supported idleness? Will my right hon. and learned Friend think further that 16 to 18-year-olds who are not looking for employment do really need a kick up the backside?

Mr. Clarke

We are not proposing to change the rules of entitlement to benefit, nor that the refusal to take part in the scheme should, in itself, disqualify anyone from benefit. The fact remains that Parliament has always said that people, to get benefit, must demonstrate that they are unemployed, seeking work and taking active steps to obtain it. We must insist on that, despite the fact that yet again, we are always criticised by the Labour party when we try to make that rule more effective.

Mr. Sheerman

The Paymaster General and the House know that the Labour party supports the creation of real jobs and proper skills training. However, the background of today's statement is seven years of the collapse of proper skills training, and the fast creation of schemes that have more to do with getting people off the register than with providing proper training. The register effect has been the main thrust of the Government schemes over the past few years. We know for certain that in west Yorkshire, we call those schemes shoddy, as they do not provide jobs and training. [Interruption.] The hysterical over-reaction from the marginal seats represented on Conservative Benches persuades me that the Paymaster General should answer the following questions.

He has rather evaded the first question. Have all the guarantees for which the MSC sub-group asked been met? Everything that I have heard this afternoon shows that they have not been met. There are no genuine extra resources. There is no effective monitoring, the quality will not be assured, and people will be worse off on this scheme. In the pilot areas, one of which is in my constituency, if one goes on a job training scheme, one cannot go on a community programme and get a proper rate for the job. Is that to be the case in the expanded scheme?

Secondly, why has the scheme been piloted for only nine weeks before the decision was made? Is the right hon. and learned Genteman aware that, in every pilot area that we have contacted in the past week, the people running it have said that there is chaos? There is withdrawal of labour and a resignation of supervisors because people are so discontented with the programmes.

Thirdly, will the right hon. and learned Gentleman answer this question, because it is most important? Is it not the case that, in the pilot areas, this has led to an undermining of the youth training programme and of the community programme, and that agents are fighting for placements?

Fourthly, is three weeks' training in six months' experience what the Government stand for? The mot to of the Government is, "Good figures, shame about the jobs, tragedy about the training."

Mr. Clarke

In that series of questions, I was searching to find whether the hon. Gentleman agrees with the MSC letter to us and with the recommendations of the subgroup, because that was not clear, Obviously, the hon. Gentleman cannot answer that question today. The implication was that he does. He said that we had not complied with them. I am not surprised if that is his position, because that group includes some powerful figures in the trade union movement, acting on behalf of the TUC. The MSC is an independent commission, better placed than I am to comment on the impact on its other programmes, such as community programmes, about which the hon. Gentleman makes the wildest allegations about the impact in the pilot areas. I remind him of the sub-group's report, which was endorsed by the MSC, which begins by saying: the commission should now make arrangements for measured and deliberate extension of new JTS to all MSC Areas. The MSC does not take the hon. Gentleman's view that we should not go ahead. It recommends that we should expand now and says that measured expansion, meeting certain requirements, particularly of quality, is needed.

My noble Friend has written back to the MSC agreeing with its letter and its recommendations, and setting a target that we believe to be realistic and compatible with its wishes and ours. That is the best test of how this statement will be judged in the light of day. That is a measure of the importance that those seriously interested in the subject attach to this. We shall achieve a good quality scheme from the base on which we are insisting.

Several Hon. Members


Mr. Speaker

I am sorry that I have not been able to call all hon. Members who are rising. I think that they were called during Question Time today.

Mr. John Butterfill (Bournemouth, West)

On a point of order, Mr. Speaker.

Mr. Speaker

The hon. Gentleman was called on Trade and Industry Questions.

Mr. Butterfill

On a point of order, Mr. Speaker. I accept what you say, but is it correct to curtail what is obviously a matter of great interest simply because the Labour Benches are so denuded and—

Mr. Speaker

Order. That is very unfair, because the hon. Gentleman will know that hon. Members on his side had greater opportunities this afternoon.

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